Patricia Stephenson (Social Democrats)

I thank the Leas-Chathaoirleach. I also thank the committee for inviting members of the foreign affairs committee to join the meeting.

It is important to highlight that no assessment was done on the impact of the omnibus on the CSRD and the CSDDD at European level. A complaint has been filed and an inquiry is under way into the fact there has been no impact assessment. It was noted that the changes to the CSDDD will significantly reduce the administrative burden. That is not a read-out I agree with. These changes completely undermine the directive's policy objectives and, rather than reducing administrative burdens, tear apart the very foundations of the CSRD and the CSDDD, which we have not seen. It has not been transposed yet so we do not know the impact of that, but the core of those provisions is being stripped away.

We have heard the word "simplification" quite a lot but that is a misrepresentation of what the omnibus will do. Under the omnibus, the limitations to the due diligence duty to direct business partners would increase the volume of due diligence paperwork without improving its quality or effectiveness. We talked at length about the risk-based approach of the CSDDD, that companies will not have to apply the same checks to every supplier, will focus their due diligence checks on where it matters and that this risk-based approach will be more efficient and more strategic. The European Central Bank said that the omnibus changes regarding the due diligence duty would increase the complexity and the regulatory burden rather than reducing it and simplifying compliance. As that has come from the ECB, I will push back on the analysis that the CSDDD will reduce the regulatory burden for companies. In fact, what I am hearing today highlights that the omnibus due diligence duties would be more complex than the CSDDD responsibilities, especially for SMEs, because of the risk-based approach.

Article 5 was talked about but the omnibus proposal's changes to Article 8 of the CSDDD significantly weaken and compromise the effectiveness of the due diligence duty established in Article 5. That Article 8 piece changes that. What we are seeing is a shift away from the risk-based, tier-agnostic approach to a very tier-restricted compliance one in the omnibus in respect of Article 8. It guts the spirit of Article 5 in many ways and also undermines the risk-based approach required by the UNGPs and the OECD guidelines, which call for proactive due diligence throughout the entire value chain.

I am also very concerned about this focus on tier 1. As many of us will know, human rights abuses and violations happen much further down. It is never the tier 1 partner. Most companies will not see the human rights abuses in their supply chain. This will render the legislation completely meaningless in addressing the human rights violations we have seen, such as the Rana Plaza incident, which was such a big thing for many of us in terms of the supply chain.

I will highlight a few other areas we have not addressed yet. First, the omnibus proposal seeks to remove the EU-wide civil liability regime, which would mean that the civil liability framework in the CSDDD would be made optional for member states and, under the omnibus, would fragment its enforcement. Second, the omnibus removes the obligation for companies to put their climate transition plans into effect. That will seriously weaken the CSDDD alignment with the Paris Agreement and our EU climate goals. Third - I am so sorry but I will get to get to a question - the omnibus curtails stakeholder engagement by narrowing the definition of stakeholders. I am very concerned about that as it relates to civil society perspectives and NGOs down the supply chain that are responsible for advocating on behalf of workers in the supply chain who are facing human rights violations.

What is Ireland's position on the substantive provisions of the CSDDD, which are under threat by the omnibus, specifically, risk-based due diligence and that Article 8-Article 5 piece, the civil liability regime, climate transition plans and stakeholder engagement? I am so sorry for speaking so quickly; I can clarify if the officials have not heard. If the Government's position is that we do not want to see human rights or environmental protections undone, will Ireland take a clear vocal stand in defining the core provisions of the CSDDD at ongoing negotiations in Brussels, including today's? A meeting of the committee of the permanent representatives is happening today. What is the language that will be used by departmental officials when they are in those negotiations on those pieces in respect of human rights and the environment that the Government said it would not want to see maintained? Right now, we do not see that feeding into the discussions happening during the negotiations in the room.