Cutting down on red tape to help boost companies’ competitiveness is the aim of a European Commission proposal to simplify corporate reporting obligations. But critics of the so-called Omnibus package claim the proposal is a step back for human rights and the environment.
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00:00Cutting down on red tape to help boost the company's competitiveness. This is the aim
00:22of the European Commission's proposal to simplify corporate reporting obligations. But critics
00:29claim it is a step back in terms of human rights and the environment. The so-called
00:35Omnibus Package is the theme of this week's EU Decoded.
00:39The so-called Omnibus Package aims to simplify four rulebooks. One imposes an obligation
00:45for companies to report their performance on environmental and social issues. Another
00:51makes companies ensure that their supply chains are operating within the rules. There is also
00:56a levy that companies pay on imports to offset polluting emissions. And a programme to mobilise
01:02private investment.
01:03The idea is to lighten the loads of these rules by spreading a balance. The business
01:09sector welcomes these moves. However, trade unionists and environmental organisations
01:14fear for the consequences. We went to hear what European citizens think about this balance.
01:22There is still a lack of resources. Employees don't give in and we have a lot of problems
01:28with permissions, with responses, with audiences. It's quite complicated.
01:33I don't think the company's competitiveness is a problem. When people have a collective
01:39awareness that we have to preserve the environment, things start to go the way they should.
01:44It depends on the time you take. Many times, bureaucracy is repeated. Justifying the same
01:51I just think that if companies are doing things that are detrimental to the environment, then
01:57the law should deal with it. I don't really want an extra layer of reporting to government.
02:03Companies already report on so many financial matters. It wouldn't be a big drop-in just
02:09to include something on their responsibility to the world at large.
02:13It's in the interest of everybody that there is some kind of a reporting on it, but it
02:17needs to be feasible. So if in the end companies end up not being able to do anything because
02:21it's so complicated, it doesn't make sense.
02:23With us is Gregoire Laurie to help unpack a bit this omnibus package. To what extent
02:30is this proposal related to the new plan to increase European competitiveness?
02:37Competitiveness is the new motto from this commission, as the Green Deal was the motto
02:42from the previous mandate from Ursula von der Leyen. So the idea is simple, is to reduce
02:49or I would say to slash the red tape by 25% for companies and at least 35% for SMEs.
02:58The commission says it is not deregulation, it's only simplification.
03:05You mentioned the Green Deal and trade unionists and environmentalists speak of serious risks
03:11to that deal that aims to make the economy more sustainable and fair for workers. Why is that?
03:19The idea is to free businesses from requirement on sustainability or reporting or to make
03:28sure that there is no human rights abuses or environmental deterioration on their supply
03:35chains. So it means less reporting on their requirements. And also the trade unions said
03:41that the consultations that took place were heavily weighted by trade associations. According
03:49to Leaks, there were ten civil society organisations in the consultations, two unions umbrellas
03:56and two dozens trade associations.
03:59The package will have to be negotiated with the governments of the 27 member states and
04:05also with the European Parliament. What is expected of these negotiations?
04:09On the paper, the EPP, which has pushed for this omnibus package, is the leader. It holds
04:16the commission's presidency, it has the biggest group in the parliament and it has the most
04:22leaders at the European Council. However, the EPP, the centre-right, will need a majority.
04:27So with whom the EPP is going to get closer? Will it be with the radical right and far-right
04:33or will the EPP turn to its long alliance with the social democrats and renew Europe?
04:40That's going to be the question.
04:41Only one in five companies would need to make environment reports. Checks on supply chains
04:47is limited to the 10,000 largest companies. It claims 6.3 billion euros in annual admin
04:54costs would be saved and that 50 billion euros in additional public-private investment would
05:00be mobilised.
05:08Economic growth and competitiveness cannot be an end in themselves. They need to serve
05:14a purpose and that purpose should be the long-term wellbeing of the people and of the
05:19environment as well. Protect the environment we live in, protect public health. Decarbonisation
05:25and competitiveness need to go hand in hand.
05:28We can see that companies need to dedicate more and more time to filling in reports,
05:36trying to fulfil all the requirements, which leads to the situation where they have to
05:43reallocate the resources to reporting, meaning away from innovating, creating jobs and also
05:51advancing on the sustainability goals.
06:02The weakening of the due diligence requirement by imposing these requirements only for the
06:09direct suppliers, for example, that's really concerning because in a very significant number
06:17of cases the harm happens beyond the EU. Around 80 to 90% of environmental and human rights
06:26abuses actually take place outside of the EU because of EU production.
06:31What they are doing is they have another look at the existing legislation and what they
06:37are trying is they try to simplify it. They are not advocating of stepping away from the
06:42Green Deal objectives. What they are doing is they try to align competitiveness with
06:48sustainability under one overarching growth strategy.
06:53It's actually short-termism and not strategic at all in the long run. The climate, the biodiversity,
07:07the pollution crisis won't stop just because of the Trump administration and so the EU should
07:14actually stick to its values, to its laws, to its principles.
07:20Of course we have many other challenges as well which we can also elaborate on such as
07:26high energy costs and also the skills shortages but the Omnibus proposal is certainly one
07:34important step that we need to take now.
07:38The European Commission asked the co-legislators to treat this package as a priority but this promises
07:44to be a heated political debate. It will therefore be an important test to President Ursula von der Leyen's
07:51ability to forge alliances in the European Parliament.