On 25 April, the European Parliament's Legal Affairs Committee (JURI) adopted its position on the proposal for a directive on corporate sustainability due diligence.

On 23 February 2022, the European Commission submitted to the Parliament and the Council a proposal for a directive on corporate sustainability due diligence. The aim of this proposal is to oblige certain companies to integrate human rights and environmental impact into their governance.

The European Parliament's Committee on Legal Affairs (JURI) was entrusted with the supervision and direction of the parliamentary work of the various committees with shared competence on this proposal.

On 25 April 2023, the JURI Committee announced in a press release that it adopted a common position on the directive proposal.

In committee, Members of the European Parliament (MEPs) – among other things – extended the scope of the companies covered by the directive. Indeed, MEPs want “EU-based companies with more than 250 employees and a worldwide turnover higher than 40 million euro, as well as parent companies over 500 employees and a worldwide turnover higher than 150 million euro”, as well as “non-EU companies with a turnover higher than 150 million euro if at least 40 million was generated in the EU" to be covered by the directive.

By way of comparison, the French “devoir de vigilance” only applies to companies with more than 5,000 employees in France or 10,000 employees worldwide.

The position adopted by the JURI Committee still needs to be approved at the plenary session of the Parliament, which is expected to take place on 1 June.

Once the position is adopted in plenary, negotiations with the Council on the final text of the directive will start.

On 19 April, the European Parliament announced the adoption of a new regulation on the import of commodities and products associated with deforestation and forest degradation. 

This regulation aims to control the sale of the following products within the European Union (EU): cattle, cocoa, coffee, palm oil and its derivatives, soya and wood, rubber, charcoal and printed paper products. Are also cover by this regulation, products that contain or have been made from these raw materials, such as leather, chocolate and furniture.

Under this regulation, companies will only be allowed to sell products in the EU if the supplier of the product issued a “due diligence” statement confirming that the product is not associated with deforestation and/or forest degradation.

Companies will also have to ensure that products comply with the laws of the country of production, notably on human rights and rights of indigenous people.

The Commission will rank producing countries by risks level (low-, standard- or high-risk) which will determine the level of due diligence that companies will have to perform.

According to the European Parliament’s press release, the maximum fine in case of violation of the regulation must be at least 4% of the total annual EU turnover of the non-compliant company.

The regulation still must be formally endorsed by the Council before being published in the EU Official Journal. It will enter into force 20 days after its publication.