EU countries call for massive cuts to ethical supply chain law

All 27 European Union member countries have agreed to push for radical cuts to ethical supply chain rules, setting the stage for tense negotiations with other EU institutions later this year.

It continues a growing trend of cutting back environmental laws to reduce the regulatory burden on business and boost the bloc's sluggish economy.

On Monday evening, EU ambassadors endorsed the Council of the EU's position on the first omnibus simplification bill, a proposal for sweeping cuts to EU green rules that is one of the first major bills of Ursula von der Leyen's second term as European Commission president.

Green groups and some European lawmakers already considered the Commission's original proposal too weak — now, member countries want it to be even laxer.

The Council's final position adopts a French proposal to just ask companies with more than 5,000 employees and €1.5 billion in net turnover to police their supply chains for environmental and human rights abuses. The threshold on the current proposal is 1,000 employees and turnover of €450 million.

If endorsed by the EU as a whole, this would mean that fewer than 1,000 European companies would be subject to the law, called the Corporate Sustainability Due Diligence Directive.

EU countries in the Council also agreed that companies should only have to assess their direct suppliers — and not their entire supply chain, as originally stipulated. They also want to postpone the deadline by which EU countries must transpose the directive into national law by a year.

Denmark, which will take on the presidency of the Council of the EU in July, will run negotiations with the European Parliament and Commission on this.

It comes just days after the Commission announced it would kill anti-greenwashing legislation days before negotiations on the law with Parliament and Council were due to conclude, causing uproar among some groups in Parliament.