Text · Opinion parliamentary committee draft
On the proposal for a directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937
Document ITRE-PA-736458 · COM(2022)0071 – C90050/2022 – 2022/0051(COD)
- Kind
- Opinion parliamentary committee draft ITRE-PA-736458
- Date
- 21 September 2022
- Committee
- Committee on Industry, Research and Energy
- Rapporteur
- Martina Dlabajová
- Dossier
- 2022-0051
More facts (2)
- Formats
- Official page PDF Word
- Reference
- COM(2022)0071 – C90050/2022 – 2022/0051(COD)
Text
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Short justification
In general, the rapporteur supports the long-term aim presented in the Commission’s proposal that must be however aligned to current needs of businesses, especially SMEs and the “one in, one out” principle. There is a clear need to provide a harmonised legal framework and level playing field, if we want to improve trust in companies’ commitments for human rights’ enforcement and environmental protection while incentivising sustainable investment, however the legislative proposal should not create new unnecessary burdens, especially for SMEs in existing and future supply chains. On the other hand, there is a need to avoid distortive discrepancies emerging between Member States to improve predictability and certainty for the industry.
The rapporteur strongly supports the Commission’s proposal to keep SMEs and Microenterprises out of the proposed rules. The financial and administrative burden to set up and implement a due diligence process would be too high for small and family businesses that will be already indirectly affected by obligations stemming from large companies amongst their customers. Accordingly, the proposal's requirements to assess potential adverse effects on them and to provide them with appropriate support are justified and needed. Only such an approach can achieve the goal of supporting SMEs not only from the Member States and the EU, but also from companies within supply chains outside the EU.
The rapporteur is nonetheless of the opinion that the introduction of the proposed rules along the value chain should be gradual and therefore suggest to focus on the supply chain instead of the whole value chain. The Commission´s proposal also contains numerous unclear legal concepts that are open to interpretation, and thus considers in contradiction to legal certainty and harmonisation intentions. Any obligation should only occur in the context of activity related to a company’s own operations or through a direct business relationship. The proposal would only cover companies contributing to the production of goods, including their development, or the provision of services, as "direct partners". The directive should not apply to downstream companies that only use or receive products up and/or take them to their end of life. This would represent excessive burden for those companies, who usually operate with many suppliers compared to upstream companies with a reduced number of suppliers. This change should also be reflected in the definition of established business relationship in order to provide legal certainty to companies and ensure that only direct relationship is concerned.
Finally, on liability, the rapporteur is of the opinion that it should be left to the Member States to align to already existing civil liability regime. Given the impact this could have on companies, some Member States exclude specific liability regime and favour an obligation of mean rather than an obligation of result. This possibility for Member States of using their own tests to consider accountability and appropriate remedy should remain.
The Committee on Industry, Research and Energy calls on the Committee on Legal Affairs, as the committee responsible, to take into account the following amendments:
| Text proposed by the Commission | Amendment |
|---|---|
| (14) This Directive aims to ensure that companies active in the internal market contribute to sustainable development and the sustainability transition of economies and societies through the identification, prevention and mitigation, bringing to an end and minimisation of potential or actual adverse human rights and environmental impacts connected with companies’ own operations, subsidiaries and value chains. | (14) This Directive aims to ensure that companies active in the internal market contribute to sustainable development and the sustainability transition of economies and societies through the identification, prevention and mitigation, bringing to an end and minimisation of potential or actual adverse human rights and environmental impacts connected with companies’ own operations, subsidiaries and supply chains. |
| (This amendment applies throughout the text and is related to the amendment of the definition in Article 3(1), point (g). Adopting it will necessitate corresponding changes throughout.) |
| Text proposed by the Commission | Amendment |
|---|---|
| (17) Adverse human rights and environmental impact occur in companies’ own operations, subsidiaries, products, and in their value chains, in particular at the level of raw material sourcing, manufacturing, or at the level of product or waste disposal. In order for the due diligence to have a meaningful impact, it should cover human rights and environmental adverse impacts generated throughout the life-cycle of production and use and disposal of product or provision of services, at the level of own operations, subsidiaries and in value chains. | (17) Adverse human rights and environmental impact occur in companies’ own operations, subsidiaries, products, and in their value chains, in particular at the level of raw material sourcing, manufacturing, or at the level of product or waste disposal. In order for the due diligence to have a meaningful impact, it should cover human rights and environmental adverse impacts generated throughout the life-cycle of production of product or provision of services, at the level of own operations, subsidiaries and in supply chains. |
| Text proposed by the Commission | Amendment |
|---|---|
| (18) The value chain should cover activities related to the production of a good or provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of established business relationships of the company. It should encompass upstream established direct and indirect business relationships that design, extract, manufacture, transport, store and supply raw material, products, parts of products, or provide services to the company that are necessary to carry out the company’s activities, and also downstream relationships, including established direct and indirect business relationships, that use or receive products, parts of products or services from the company up to the end of life of the product, including inter alia the distribution of the product to retailers, the transport and storage of the product, dismantling of the product, its recycling, composting or landfilling. | (18) The supply chain should cover activities related to the production of a good or provision of services by a company, including the development of the product or the service as well as the related activities of established business relationships of the company. It should encompass upstream established direct and indirect business relationships that design, extract, manufacture, transport, store and supply raw material, products, parts of products, or provide services to the company that are necessary to carry out the company’s activities, and also downstream relationships, including established direct and indirect business relationships, that use or receive products, parts of products or services from the company up to the end of life of the product, including inter alia the distribution of the product to retailers, the transport and storage of the product, dismantling of the product, its recycling, composting or landfilling. |
| Text proposed by the Commission | Amendment |
|---|---|
| (19) As regards regulated financial undertakings providing loan, credit, or other financial services, “value chain” with respect to the provision of such services should be limited to the activities of the clients receiving such services, and the subsidiaries thereof whose activities are linked to the contract in question. Clients that are households and natural persons not acting in a professional or business capacity, as well as small and medium sized undertakings, should not be considered to be part of the value chain. The activities of the companies or other legal entities that are included in the value chain of that client should not be covered. | (19) As regards regulated financial undertakings providing loan, credit, or other financial services, “supply chain” with respect to the provision of such services should be limited to the activities of the clients receiving such services, and the subsidiaries thereof whose activities are linked to the contract in question on the supply side. Clients that are households and natural persons not acting in a professional or business capacity, as well as small and medium sized undertakings, should not be considered to be part of any part of the supply chain. The activities of the companies or other legal entities that are included in the supply chain of that client should not be covered. |
| Text proposed by the Commission | Amendment |
|---|---|
| (39) So as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this Directive, companies should be required to take the following actions, where relevant. They should neutralise the adverse impact or minimise its extent, with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. Where necessary due to the fact that the adverse impact cannot be immediately brought to an end, companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. Companies should also seek to obtain contractual assurances from a direct business partner with whom they have an established business relationship that they will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s value chain. The contractual assurances should be accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or minimising the extent of adverse impact, provide targeted and proportionate support for an SMEs with which they have an established business relationship and collaborate with other entities, including, where relevant, to increase the company’s ability to bring the adverse impact to an end. | (39) So as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this Directive, companies should be required to take the following actions, where relevant. They should neutralise the adverse impact or minimise its extent, with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. Where necessary due to the fact that the adverse impact cannot be immediately brought to an end, companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. Companies should also seek to obtain contractual assurances from a direct business partner with whom they have an established business relationship that they will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s supply chain. The contractual assurances should be accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or minimising the extent of adverse impact, provide targeted and proportionate support for SMEs which, despite being exempt, decide to comply with the obligations under this Directive and with which they have an established business relationship and collaborate with other entities, including, where relevant, to increase the company’s ability to bring the adverse impact to an end. |
| Text proposed by the Commission | Amendment |
|---|---|
| (48) In order to complement Member State support to SMEs, the Commission may build on existing EU tools, projects and other actions helping with the due diligence implementation in the EU and in third countries. It may set up new support measures that provide help to companies, including SMEs on due diligence requirements, including an observatory for value chain transparency and the facilitation of joint stakeholder initiatives. | (48) In order to complement Member State support to SMEs which, despite being exempt, decide to comply with the obligations under this Directive, the Commission should build on existing EU tools, projects and other actions helping with the due diligence implementation in the EU and in third countries. It may set up new support measures that provide help to companies, including SMEs on due diligence requirements, including a helpdesk for SMEs, an observatory for supply chain transparency and the facilitation of joint stakeholder initiatives. |
| Text proposed by the Commission | Amendment |
|---|---|
| (57) As regards damages occurring at the level of established indirect business relationships, the liability of the company should be subject to specific conditions. The company should not be liable if it carried out specific due diligence measures. However, it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken, including as regards verifying compliance, would be adequate to prevent, mitigate, bring to an end or minimise the adverse impact. In addition, in the assessment of the existence and extent of liability, due account is to be taken of the company’s efforts, insofar as they relate directly to the damage in question, to comply with any remedial action required of them by a supervisory authority, any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains. | (57) As regards damages occurring at the level of established indirect business relationships, the liability of the company should be subject to specific conditions in accordance with the relevant national law. The company should not be liable if it carried out specific due diligence measures. However, it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken, including as regards verifying compliance, would be adequate to prevent, mitigate, bring to an end or minimise the adverse impact in accordance with the relevant national law. In addition, in the assessment of the existence and extent of liability, due account is to be taken of the company’s efforts, insofar as they relate directly to the damage in question, to comply with any remedial action required of them by a supervisory authority, any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its supply chains. |
| Text proposed by the Commission | Amendment |
|---|---|
| (59) As regards civil liability rules, the civil liability of a company for damages arising due to its failure to carry out adequate due diligence should be without prejudice to civil liability of its subsidiaries or the respective civil liability of direct and indirect business partners in the value chain. Also, the civil liability rules under this Directive should be without prejudice to Union or national rules on civil liability related to adverse human rights impacts or to adverse environmental impacts that provide for liability in situations not covered by or providing for stricter liability than this Directive. | (59) As regards civil liability rules, the civil liability of a company for damages arising due to its failure to carry out adequate due diligence should be without prejudice to civil liability of its subsidiaries or the respective civil liability of direct and indirect business partners in the supply chain. Also, the civil liability rules under this Directive should be consistent with Union and national rules on civil liability related to adverse human rights impacts or to adverse environmental impacts. |
| Text proposed by the Commission | Amendment |
|---|---|
| The nature of business relationships as ‘established’ shall be reassessed periodically, and at least every 12 months. | The nature of business relationships as ‘established’ shall be reassessed at least every 12 months. |
| Text proposed by the Commission | Amendment |
|---|---|
| (g) ‘value chain’ means activities related to the production of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. As regards companies within the meaning of point (a)(iv), ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan, credit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. The value chain of such regulated financial undertakings does not cover SMEs receiving loan, credit, financing, insurance or reinsurance of such entities; | (g) ‘supply chain’ means activities related to the production of goods or the provision of services by a company, including the development of the product or the service as well as the related activities of upstream established business relationships of the company. As regards companies within the meaning of point (a)(iv), ‘supply chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan, credit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. The value chain of such regulated financial undertakings does not cover SMEs receiving loan, credit, financing, insurance or reinsurance of such entities; |
| (This amendment applies throughout the text. Adopting it will necessitate corresponding changes throughout.) |
| Text proposed by the Commission | Amendment |
|---|---|
| (d) provide targeted and proportionate support for an SME with which the company has an established business relationship, where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the SME; | (d) provide targeted and proportionate support for an SME which, despite being exempt, decides to comply with the obligations under this Directive and with which the company has an established business relationship, where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the SME; |
| Text proposed by the Commission | Amendment |
|---|---|
| (e) provide targeted and proportionate support for an SME with which the company has an established business relationship, where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the SME; | (e) provide targeted and proportionate support for an SME which, despite being exempt, decides to comply with the obligations under this Directive and with which the company has an established business relationship, where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the SME; |
| Text proposed by the Commission | Amendment |
|---|---|
| (a) persons who are affected or have reasonable grounds to believe that they might be affected by an adverse impact, | (a) persons who are directly affected or have reasonable grounds to believe that they might be affected by an adverse impact, |
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Sources & citation
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- Data source
- Licensed CC BY 4.0.
- Retrieved
- 25 September 2026
Cite as
European Parliament (2022). “DRAFT OPINION on the proposal for a directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937”. Text, 21 September 2022. docId ITRE-PA-736458. EU Parl Watch Research. https://news.eu-parl.st-solutions.dev/texts/ITRE-PA-736458 (retrieved 25 September 2026). Data: EP Open Data API: document record, https://data.europarl.europa.eu/api/v2/documents/ITRE-PA-736458 (CC BY 4.0).
BibTeX
@misc{epw-text-itre-pa-736458,
author = {{European Parliament}},
title = {{DRAFT OPINION on the proposal for a directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937}},
year = {2022},
date = {2022-09-21},
howpublished = {\url{https://news.eu-parl.st-solutions.dev/texts/ITRE-PA-736458}},
url = {https://news.eu-parl.st-solutions.dev/texts/ITRE-PA-736458},
urldate = {2026-09-25},
publisher = {EU Parl Watch Research},
note = {Text. docId ITRE-PA-736458. Data: EP Open Data API: document record (CC BY 4.0)}
}