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EU fails to pass law requiring human rights and environmental audits on Chinese suppliers
- The rules did not name China directly, but major EU firms would have been required to carry out detailed audits on foreign business partners
- European Parliament’s top negotiator ‘outraged at the political games being played’ on due diligence law
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Finbarr Berminghamin Brussels
The European Union failed to secure agreement on Wednesday on a controversial law that would hold big companies responsible for human rights and environmental abuses in their supply chains.
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The rules would have required EU firms with more than 500 staff and €150 million (US$162.7 million) net turnover worldwide to conduct detailed audits of their suppliers and partners, including those in China.
Three years after first coming into force, they would also then be extended to cover non-EU companies who have over €150 million net turnover generated in Europe.
However, a Wednesday vote of the bloc’s 27 members in Brussels fell short of the qualified majority required to adopt the rules.
Big member states including Germany and Italy abstained along with 10 other countries, diplomatic sources confirmed, while Sweden voted against the rules – leaving them below the required threshold of 14 member states with populations representing at least 65 per cent of the union’s citizens.
A French diplomat confirmed that Paris had suggested raising the threshold of firms in the directive to those employing more than 5,000 employees, a motion that may now need to be examined as negotiators go back to the table.
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