Sinéad Gibney (Dublin Rathdown, Social Democrats)
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13. To ask the Minister for Enterprise, Trade and Employment his Department’s position on the provisions currently contained in the Corporate Sustainability and Due Diligence Directive which may be subject to alteration or removal as part of the EU Omnibus package relating to the risk-based approach to due diligence, harmonised civil liability regime, the requirement to put into effect climate transition plans, and provisions on stakeholder engagement; and if he will make a statement on the matter. [27728/25]

Peter Burke (Longford-Westmeath, Fine Gael)
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I thank Deputy Gibney for her very important question. Ireland supports the simplification and burden reduction agenda at EU level. Specifically, in relation to the Omnibus on sustainability, the proposals are intended to address disproportionate burdens on businesses, in particular on SMEs, whilst retaining key aspects in relation to corporate responsibility. In relation to the necessity to conduct a risk-based approach, the Commission’s proposal retains the requirement for in-scope companies to conduct risk-based human rights and environmental due diligence of their own operations, those of their subsidiaries and their direct business partners. If plausible information suggests the existence or possibility of adverse impacts arising from their operations or those of their indirect business partners, the company will be required to conduct an in-depth assessment.

If that assessment confirms the existence of an adverse impact, further due diligence will need to be carried out. The proposed amendment in relation to civil liability is to remove the EU-wide civil liability regime in favour of a national civil liability regime. My position, which has been indicated at EU level, is that to avoid a civil liability regime which would vary across EU Member States, Ireland sees the benefits of retaining the EU-wide civil liability regime as provided for and published in the directive.

In relation to the climate action proposal, it seeks to simplify the provisions on transition plans by aligning with the provisions of the corporate sustainability reporting directive. In-scope companies will be required to include implementation actions, planned and taken, in their climate transition plans. The design of climate plans must include targets related to climate change and companies will have to report on achieving those targets on an annual basis. The Deputy may wish to note that under the climate action plan, the enterprise sector is committing to a 35% reduction in emissions by 2030.

Irish enterprises are taking climate action seriously. For example, a recently commissioned survey of more than 300 SMEs showed that 83% of businesses consider sustainability important in their daily operations. As for stakeholder engagement, in-scope companies will be required to engage with their workers and representatives, including trade unions, and individuals and communities.

Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I thank the Minister for his answer. I am glad to hear there are some elements still supported by the Government, but by removing the risk-based assessment for suppliers we are not identifying where the problems are. We cannot guarantee, then, that our clothes, food and phones are not made using slave labour or in factories like those at Rana Plaza in Bangladesh, whose collapse killed more than 1,100 garment workers in 2013.

A full assessment of low risk for one supplier is potentially being asked for, and this disproportionately affects SMEs. This is not better regulation. Harmonised civil liability gives certainty to business. That is better regulation. Instead, we businesses face having to navigate countless different legal systems. It has been really difficult to get a straight answer on what the Department wants to keep at EU level and what it is seeking to be simplified. I would appreciate the Minister’s clarity on some of his. I urge him to provide more clarity on exactly what the positions are on this crucial legislation.

Peter Burke (Longford-Westmeath, Fine Gael)
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I am happy to provide the clarity. First, I agree with her on the harmonised approach to civil liability. That would be important. We want to be careful about member states having very different responses, which could present a very significant challenge. We have made our view on this known in the co-legislative process that is under way. There is a lot of territory to be covered in this.

On the risk-based approach, it is key that in-scope companies have an obligation - I want to be very clear on this - in relation to human rights and the environment. It is so important that we hold companies to account with respect to their corporate responsibility. Ireland’s position will be very clear in supporting aims in this regard, but what I am not supporting is the gold-plating of some of the directives, which primary legislation has often done, to ensure proportionate regulation for smaller companies and companies in the supply chain process but whose work is done at the kitchen table. The responsibility of those that are in scope is very significant. I concur with much of what the Deputy said in her contribution.

Sinéad Gibney (Dublin Rathdown, Social Democrats)
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The corporate sustainability and due diligence directive came about after years of collective work, consultation and engagement. My concern and that of the Social Democrats is that the omnibus proposals are really being rammed through without any consideration at the same level. Is the Minister in favour of all the measures cited in my question, particularly the risk-based assessment? Does he support their being removed? If so, why? Since this matter is about to be discussed at European Council level, we need more clarity from the Government on what it wants to happen. I have submitted many parliamentary questions on this because we need the clarity. Without it, we have a huge democratic deficit whereby we do not really know what our Government is going to do to shape this vital EU legislation.

Peter Burke (Longford-Westmeath, Fine Gael)
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I thank the Deputy and appreciate her concern about this issue. We are happy to engage and work with her as the directive is amended through the omnibus measures. I am in favour of the thinking on in-scope companies. It is critical that a risk-based analysis be conducted, particularly regarding human rights, the environment and areas critical to the companies’ supply chains, and to ensure principles of good corporate responsibility are upheld in those companies. We are very much focusing on that.

The Department has met Trócaire, Oxfam, Christian Aid Ireland and all the key stakeholders in this area. Our public consultation, as a country, has been very strong on this. What I am trying to achieve here is a balance to address any possible unintended consequences the due diligence directive may have for some small SMEs that can get carried into the supply chain. I want to be careful about that. However, as a country, we really need to stand up for corporate responsibility and ensure companies operate to the highest standard with regard to all their supply chains. The Deputy quite rightly pointed out serious consequences for workers in other jurisdictions who are very much exploited. Therefore, we need to be very careful about this. I will be happy to work with the Deputy on it as we go forward in the European context.