Ahead of the plenary vote scheduled on 23 October, the FTAO urges the co-legislators to defend a strong Directive that upholds supply chain resilience, safeguards smallholders, artisans and responsible businesses.

As it stands, the current compromise:

• Excludes most companies by limiting due diligence to companies with over 5000 employees and €1.5 billion turnover. This could reduce by 70% the number of companies covered under the Directive from compliance, undermining the Directive’s purpose and penalising those who have already invested in due diligence.
• Fails to reinstate all safeguards on responsible disengagement, despite bringing back protections removed by the Omnibus I proposal, such as requiring companies to engage with stakeholders prior to suspension, and specifying that business suspension cannot be indefinite. This agreement removes protections against ‘cut-and-run' behaviour, where companies disengage from suppliers without attempting to address risks or support improvements. In the fashion sector, for instance, only 24% of global brands disclose a strategy for responsible disengagement. 
• Restricts meaningful dialogue between buyers and suppliers during risk identification, allowing companies to request information from business partners only ‘as a last resort’ during in-depth assessments. Addressing deeply rooted rights violations of living wages and living incomes requires open dialogues on critical issues like pricing, purchasing practices and traceability.

While we welcome the recognition of a risk-based approach and minimal safeguards against irresponsible disengagement, the Committee’s position, negotiated by rapporteur Mr Jörgen Warborn (Group of the European People's Party), falls far short of providing the protections needed to ensure fair and resilient supply chains.  The Fair Trade Advocacy Office is also deeply concerned that, at a time when countries around the world are strengthening due diligence requirements, the EU is moving in the opposite direction.

The Fair Trade Advocacy Office has been an active supporter of the Corporate Sustainability Due Diligence initiative, advocating for its adoption by European legislators in 2024 and defending its ambition since the introduction of the European Commission’s Omnibus Simplification Package. The CSDDD, as originally legislated, could deliver for smallholder farmers, artisans and responsible businesses, providing essential protection against the risks and negative impacts of corporate operations throughout supply chains – if implemented with the needs of these actors at the core, it could help prevent exploitation, ensure fair treatment and guarantee that those working at the base of global supply chains have access to remedies to defend their rights. Once more, we remind co-legislators that this is the level of ambition the European Union is expected to uphold.

Alongside the wider Fair Trade Movement, we remain committed to working with EU institutions to ensure a robust and ambitious due diligence framework. This framework must be aligned with international standards and designed to safeguard long-term supply chain resilience, protect rightsholders and support responsible business conduct across the value chain.

Get in touch:

For more information about the FTAO's work on CSDDD, please reach out to Alena Kahle, Senior Policy and Project Coordinator, at kahle@fairtrade-advocacy.org