It took just 87 days for the new College of Commissioners to hack through a large portion of the European Union’s environmental and due diligence legislation. This is impressive for an institution often maligned for its lack of speed.
There is a dark side to that tempo. Removing long-debated policy initiatives without consultation or explanation reveals a democratic deficiency in EU decision-making.
Trade unions are not against simplification. Our members, after all, are the ones that carry out reporting obligations, supply-chain checks and manage the changes that new regulations govern. We welcome efforts to make this work easier.
On this occasion, simplification comes at workers' expense and without their input.
Profits over transparency
The omnibus proposals read like a corporate wish list. They mimic Americanised political-speak and abandon evidence-based lawmaking. “Cutting red tape” is code for excluding 80% of companies from the scope of the Corporate Sustainability Reporting Directive. “Simplifying rules” is a synonym for cutting sector-specific standards.
That Commission President Ursula von der Leyen went to Antwerp on the day of the omnibus unveiling was a not-so-subtle nod to the business groups that brought about this regulatory about-face. Before that, at the World Economic Forum in Davos in January, she highlighted that we are “not in a race against each other, but we are in a race against time,” regarding climate change.
Yet the omnibus pits the Commission and corporations against workers, civil society and the planet, sacrificing environmental and health and safety checks throughout supply chains in the interests of business. At first glance, this may seem like a win for the bottom line, but it could have costly consequences.
Workers make clear they want to work for companies that align with their values. Climate change remains a critical issue for many of them. A gap in vision between employees and employers could worsen the skills gap the latter need to remain competitive. Part of attracting skilled and new talent requires an alignment with workers' values.
The costs of deregulation
At a time of political instability, dismantling a predictable business framework at breakneck speed will not bring companies the certainty they crave. Moving the goalposts to a deregulation agenda will only serve to punish those that have already invested in worker- and climate-friendly measures.
Conversely, those that have refused to do so will get rewarded thanks to the Commission contradicting itself.
Workers will not benefit from the omnibus. Data from various sources show that climate change will have a profound impact on supply chains. A watered-down focus on supply-chain management, replaced by more voluntary reporting proposed in the omnibus, will derail efforts to mitigate risks and give no respite to workers already in precarious situations.
Berlaymont’s decision to rush to the aid of business is all the more unbelievable given the wider context. Despite record-low unemployment, about one-fifth of European citizens were at risk of poverty or social exclusion in 2023. At the same time, European companies regularly post record-breaking corporate profits.
Can we realistically expect to deliver a green and digital transition, encompassing the needs of at-risk workers and communities across the bloc, when policy is based on corporate needs alone? How can legislation that advances social progress be considered a burden?
Yes, the EU must boost its competitiveness, but competitiveness is not just about corporate profits. It is about better living standards, high-quality jobs and a cleaner economy.
The Rana Plaza collapse was an example that the Commission frequently cited to underscore the importance of corporate sustainability and due diligence directives. In light of the omnibus, Von der Leyen is unlikely to mention this tragedy on Saturday, International Women's Day, despite the 50 million women who work in the precarious textiles and garment sectors globally.
Socioeconomic inequality and record profiteering are our reality, no matter what business leaders say. Democratic policymaking should reflect the needs of societies, not shareholders. If companies want to divest from the single market — the world’s second-largest economy and biggest trading sector — due to onerous regulation, let them justify it to their shareholders.
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