European Union governments backed a proposed law requiring large companies in the bloc to check if their supply chains use forced labour or cause environmental damage after Italy dropped its opposition.
A 'qualified majority' of 15 EU countries making up 65% of the EU population had been required for the corporate sustainability due diligence directive (CSDDD) to proceed to a final vote in the European Parliament, where lawmakers are expected to support it.
On Friday (15 March), a sufficient number of ambassadors from the 27 EU countries backed the law.
Belgium, which holds the six-month rotating presidency of the European Union, had twice tried unsuccessfully to secure EU backing for the law as Germany and other EU members, including Italy, abstained.
Burden Of Excessive Bureaucracy
Germany's pro-business Free Democrats (FDP) had led opposition, arguing it would burden business with excessive bureaucracy. Given it is part of the three-party governing coalition, it meant the government could not back the law.
Under the CSDDD, due to enter force in 2027, large companies in the European Union will have to identify and take remedial action if they find their supply chains employ forced or child labour or damage the environment, such as through deforestation.
The rules will apply to EU companies that have more than 1,000 employees and a net worldwide turnover above €450 million ($489.9 million).
In February, cocoa producer Ivory Coast said it has handed out electronic cards that allow for the tracking and tracing of cocoa to nearly three-quarters of farmers as it prepares to comply with an EU law banning the import of commodities linked to deforestation.
