In a controversial move, the European Union (EU) is facing sharp criticism for its latest legislative proposal that seeks to dilute existing regulations designed to ensure human rights and environmental protections in corporate supply chains. According to Human Rights Watch (HRW), this step could significantly weaken the Corporate Sustainability Due Diligence Directive (CSDDD) established under the European Green Deal in 2024.

The CSDDD was initially enacted to enforce stringent checks on the environmental and human rights practices of companies within EU borders. However, the newly proposed Omnibus I package aims to simplify these regulations, purportedly to boost EU competitiveness, encourage business growth, and enhance job creation. Critics, including HRW, argue that this simplification could lead to a major rollback of critical protections, allowing companies to overlook problematic areas in their supply chains that are indirectly linked to them.

This development has also drawn criticism from the EU Agency for Fundamental Rights and the United Nations Working Group on Business and Human Rights. Both organizations have expressed concerns about the potential weakening of safeguards that are crucial for maintaining corporate accountability. An open letter signed by experts in human rights and EU law has labeled the EU’s proposal a "deeply worrying backward step," challenging the notion that corporate competitiveness must come at the cost of sustainability and human rights.

Amidst growing discontent, the European Ombudswoman has initiated an inquiry into the European Commission’s handling of the legislative process. The inquiry focuses on allegations that the Commission neglected to conduct a public consultation or an impact assessment, potentially breaching its Better Regulation Guidelines.

HRW supports the Ombudswoman’s investigation and emphasizes the importance of thorough scrutiny before the CSDDD’s adoption. The organization has called on the European Parliament to take a stand against the dilution of these vital laws, underlining that both victims of corporate abuses and EU consumers deserve robust protections.

As negotiations continue, with further discussions scheduled between the EU Parliament and Presidency, the outcome will determine how the EU balances corporate interests with its human rights and environmental responsibilities. The decision will be pivotal in shaping the EU’s global image as a leader in sustainable and ethical business practices.