Written answers

Wednesday, 24 April 2024

Department of Enterprise, Trade and Employment

EU Directives

Photo of Gerald NashGerald Nash (Louth, Labour)
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45. To ask the Minister for Enterprise, Trade and Employment if he intends to support the current scope of application of the EU Corporate Sustainability Due Diligence Directive, which would exclude the vast majority of Irish companies; and if he will make a statement on the matter. [18146/24]

Photo of Gerald NashGerald Nash (Louth, Labour)
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46. To ask the Minister for Enterprise, Trade and Employment his views on the current lengthy approach to the transposition of the EU Corporate Sustainability Due Diligence Directive, which would delay the administering of justice; if he will commit to ensuring that the Directive is transposed into Irish law as soon as is possible; and if he will make a statement on the matter. [18147/24]

Photo of Gerald NashGerald Nash (Louth, Labour)
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47. To ask the Minister for Enterprise, Trade and Employment if he will support the ‘value chain’ definition based on internationally agreed standards from the UN Guiding Principles on Business and Human Rights and the OECD guidelines and work to ensure that serious downstream human rights impacts are not excluded when it comes to transposing the EU Corporate Sustainability Due Diligence Directive into Irish law; and if he will make a statement on the matter. [18148/24]

Photo of Gerald NashGerald Nash (Louth, Labour)
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48. To ask the Minister for Enterprise, Trade and Employment the steps he is taking to ensure that the financial sector in Ireland is held to account for its impact on human rights and the environment; and if he will make a statement on the matter. [18149/24]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I propose to take Questions Nos. 45, 46, 47 and 48 together.

Ireland has consistently been supportive of the objectives of the proposed Directive on Corporate Sustainability Due Diligence (CSDD). I have been seeking to ensure that the proposal has ambition while striking the right balance of providing effective protections for stakeholders and ensuring that the measures to be implemented by companies are clear, proportionate, and enforceable.

At the outset, it is important to clarify that the proposal has yet to be formally adopted at EU level. The final compromise text was recently agreed by Council and I understand that sign-off by the European Parliament is expected at the plenary session this week. However, it is expected that the finalised Directive will not come into effect for a number of months.

In relation to the thresholds to determine companies in scope, I had supported the lower thresholds as set out in the original proposal. Despite the scaling back of the companies in scope to very large companies, it should be noted that such companies are key drivers of behavioural change not just in relation to their own extensive supply chains but also across the markets in which they operate.

The proposed directive provides for a two-year transposition period, which is not unusual for a Directive, in order to provide Member States with sufficient time to implement the proposals. Work is progressing within my Department to ensure that this proposal can be transposed in a timely fashion. However, it is important to point out that companies within scope are also likely to come within the remit of the Corporate Sustainability Reporting Directive (CSRD) with the first reports due under that Directive in 2025.

The original proposal, as published, had sought to address adverse impacts wherever they arise in the value chain, whether upstream (to source) or downstream (to end user). However, negotiations on this concept of a value chain were difficult and the compromise reached provided for a new concept of “chain of activities”. This encompasses both upstream and certain elements of downstream activity, i.e. distribution, transport and storage.

I considered that it was appropriate that the proposal applied to all sectors of the economy, including the financial sector. Obtaining agreement regarding the treatment of the financial sector proved to be one of the more challenging aspects of the negotiations. The final compromise provides for a review clause which requires the European Commission to submit a report within two years on how the financial sector due diligence measures could be incorporated into the CSDD.

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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49. To ask the Minister for Enterprise, Trade and Employment if he supports or opposes the changes to the Corporate Sustainability Due Diligence Directive which reduces the number of companies covered under the Directive to companies with more than 1,000 employees and €450 million annual turnover. [18153/24]

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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50. To ask the Minister for Enterprise, Trade and Employment regarding the Corporate Sustainability Due Diligence Directive, if he supports the lengthy approach to transposition of the Directive which would delay the provision in the Directive; if not, if he will commit to ensuring that cross-departmental work is initiated as soon as possible to transpose the directive into Irish law as quickly as possible. [18154/24]

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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51. To ask the Minister for Enterprise, Trade and Employment if he will commit to supporting the value chain definition based on the internationally agreed standards (UN Guiding Principles on Business and Human Rights and the OECD Guidelines for MNCs) and work to ensure that serious downstream human rights impacts are not excluded when it comes to transposing the Corporate Sustainability Due Diligence Directive into Irish law. [18155/24]

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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52. To ask the Minister for Enterprise, Trade and Employment if he supports the agreed compromise in relation to the Corporate Sustainability Due Diligence Directive which excludes the financial sector from carrying out due diligence on its clients; and if not, the steps is he willing to take to rectify this domestically. [18156/24]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I propose to take Questions Nos. 49, 50, 51 and 52 together.

Ireland has consistently been supportive of the objectives of the proposed Directive on Corporate Sustainability Due Diligence (CSDD). I have been seeking to ensure that the proposal has ambition while striking the right balance of providing effective protections for stakeholders and ensuring that the measures to be implemented by companies are clear, proportionate, and enforceable.

At the outset, it is important to clarify that the proposal has yet to be formally adopted at EU level. The final compromise text was recently agreed by Council and I understand that sign-off by the European Parliament is expected at the plenary session this week. However, it is expected that the finalised Directive will not come into effect for a number of months.

In relation to the thresholds to determine companies in scope, I had supported the lower thresholds as set out in the original proposal. Despite the scaling back of the companies in scope to very large companies, it should be noted that such companies are key drivers of behavioural change not just in relation to their own extensive supply chains but also across the markets in which they operate.

The proposed directive provides for a two-year transposition period, which is not unusual for a Directive, in order to provide Member States with sufficient time to implement the proposals. Work is progressing within my Department to ensure that transposition can take place in a timely fashion. However, it is important to point out that companies within scope are also likely to come within the remit of the Corporate Sustainability Reporting Directive (CSRD) with the first reports due under that Directive in 2025.

The original proposal, as published, had sought to address adverse impacts wherever they arise in the value chain, whether upstream (to source) or downstream (to end user). However, negotiations on this concept of a value chain were difficult and the compromise reached provided for a new concept of “chain of activities”. This encompasses both upstream and certain elements of downstream activity, i.e. distribution, transport and storage.

I considered that it was appropriate that the proposal applied to all sectors of the economy, including the financial sector. However, obtaining agreement regarding the treatment of the financial sector proved to be one of the more challenging aspects of the negotiations. The final compromise provides for a review clause which requires the European Commission to submit a report within two years on how the financial sector due diligence measures could be incorporated into the CSDD.

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