This contribution is part of our joint online symposium with the Völkerrechtsblog on the topic: “Tackling Human Rights, Environmental Protection and Business – A Multilevel Approach“
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A contribution from Grzegorz Paciecha*
The CSDDD was a landmark attempt to enforce corporate accountability. However, a deregulatory counter-movement, culminating in the recent JURI committee vote, is systematically dismantling its core enforcement mechanisms, leaving the promise of justice for victims unfulfilled.
A Paradigm Shift on Shifting Sands
The adoption of the Corporate Sustainability Due Diligence Directive (CSDDD) in July 2024 marked a watershed moment in European corporate law. It represented the culmination of a decade-long normative journey to transition from the voluntary, soft-law model of Corporate Social Responsibility (CSR) to a new paradigm of mandatory corporate accountability. For decades, the dominant approach, rooted in instruments like the United Nations Guiding Principles on Business and Human Rights (UNGPs), proved insufficient to alter corporate behaviour or provide effective remedies for victims of abuse. The CSDDD was conceived to remedy this failure by transforming the core tenets of the UNGPs into binding, enforceable legal duties for companies operating within the Union’s single market.
This legislative project, however, was politically fragile from its inception. Its ‘turbulent road to adoption’, marked by significant last-minute compromises that drastically narrowed its scope, rendered it vulnerable to the very deregulatory currents it sought to overcome. The February 2025 ‘Omnibus I’ proposal, tabled by the European Commission under the guise of ‘simplification’, represents a successful counter-revolution systematically deconstructing the Directive’s core enforcement mechanisms. The subsequent political compromises in the Council of the EU and the European Parliament have only accelerated this retreat.
The European Parliament’s Committee on Legal Affairs (JURI) voted on 13 October 2025, formalising a political consensus that signals a fundamental rollback, threatening to reduce the CSDDD to a largely symbolic gesture and leaving the promise of effective justice for victims of corporate abuse unfulfilled.
The CSDDD’s Fragile Architecture of Accountability
The CSDDD, in its adopted 2024 form, sought to operationalise a comprehensive concept of accountability as the benchmark for corporate conduct. This normative baseline was built on three interdependent pillars. Proceduralaccountability aimed to democratise corporate decision-making by mandating ‘meaningful engagement with stakeholders’ and establishing a powerful, bottom-up complaints mechanism that could legally trigger a company’s substantive obligations. Substantive accountability was reflected in the calibrated, risk-based nature of the due diligence duties, requiring companies to take ‘appropriate measures’ proportional to their specific circumstances and leverage. This model was, however, already weakened in the 2024 text by a narrowed definition of the ‘chain of activities’, which curtailed obligations for the downstream value chain.
The third and most potent pillar was remedial accountability, which created concrete pathways to justice for victims. Its cornerstone was the civil liability regime under Article 29, establishing a harmonised tort for damages resulting from a negligent or intentional failure to comply with core due diligence obligations – a feature notably absent from Germany’s earlier national law (LkSG). The linchpin of this remedial structure was Article 29(7), which gave the liability provisions the status of an ‘overriding mandatory provision’ (loi de police). In transnational litigation, where harm occurs outside the EU, private international law rules (such as the EU’s Rome II Regulation) would typically point to the application of the law where the damage occurred (lex loci damni). Article 29(7) was designed to override this default rule, ensuring that claimants from third countries could access justice under the harmonised EU standard, preventing corporate defendants from evading liability by arguing for the application of a less protective foreign law.
The Omnibus Counter-Revolution: A Problem of Liability and Leverage
Even before the Omnibus proposal, the CSDDD’s liability engine was designed with significant fault lines that made its structure deeply ambivalent. The regime is fault-based, placing a heavy burden on claimants to prove a company’s negligence, the damage, and causation. Furthermore, the definition of ‘damage’ was narrowly constructed to align with traditional domestic tort law, effectively excluding pure environmental damage and specific human rights violations not recognised as a ‘protected legal interest’. This created a paradox where a directive focused on both human rights and the environment offered a private remedy primarily for the former.
The controversial ‘safe harbour’ clause in Article 29(2), exempting liability for damage ‘caused only by its business partners’, further created ambiguity, offering a potential escape route for companies in complex value chains. The provision meant to be the core of private enforcement was thus riddled with features that made that enforcement extremely difficult, suggesting a political compromise designed to offer the appearance of strong liability while severely limiting its practical application.
The February 2025 Omnibus I proposal, presented as a ‘simplification’ package, initiated a systematic dismantling of this already fragile accountability architecture. The most critical element is the targeted removal of the civil liability regime. The Commission proposed deleting Article 29(1), which establishes the harmonised liability standard, and Article 29(7), the overriding mandatory provision. The stated justification – respect for national legal traditions and increased legal certainty – is a fallacy. A close analysis reveals that this move introduces profound legal uncertainty. The proposal re-fragments the legal landscape by removing the single, predictable EU-wide standard, replacing a harmonised regime with a chaotic patchwork of over 200 different national and sub-national tort regimes worldwide. This leads to the „disturbing result“ that EU companies complying with the CSDDD could still face litigation based on unpredictable non-EU law. The deletion of Article 29(7) is a targeted strike at the heart of remedial accountability, effectively rendering the Directive toothless for transnational harms.
The proposal also hollows out the CSDDD’s substantive duties by shifting from a comprehensive ‘chain of activities’ assessment to a limited due diligence duty focused on direct ‘Tier 1’ business partners. In-depth assessments of indirect partners are to be triggered only by ‘plausible information’ of harm, a weaker standard mirroring that of the German Supply Chain Act (LkSG). While framed as a more pragmatic ‘risk-based’ approach, this creates a paradox. Subsequent legislative proposals, particularly the European Parliament’s negotiating position, actively discourage companies from requesting information from their value chain partners during the initial risk-scoping phase. A company is thus expected to manage risks across its value chain, but is simultaneously denied the tools to gather the information needed to identify those risks. This architecture effectively creates a system of structured ignorance, further compounded by removing the obligation to terminate a business relationship as a last resort. Other key rollbacks further dilute the Directive’s impact, including narrowing the definition of ‘stakeholders’ and removing the crucial requirement for companies to ‘put into effect’ their climate transition plans.
A Political Retreat: The Deconstruction of a Directive
The legislative process following the Commission’s proposal has been characterised by a three-stage retreat, progressively watering down the CSDDD’s original ambitions. This trajectory highlights the tensions and conflicts of interest between the EU institutions, Member States, and powerful lobbying interests. First, the Commission’s February 2025 proposal served as the opening move, proposing the critical deletions to the civil liability regime and the shift to a Tier 1-focused due diligence. Second, the Council’s General Approach, agreed in June 2025, went even further. It endorsed the removal of harmonised civil liability and proposed drastically higher thresholds for the Directive’s scope, raising them to companies with over 5,000 employees and a net worldwide turnover of €1.5 billion.
The final stage was the European Parliament’s concession. Following ‘tense’ negotiations and threats from the centre-right EPP group to ally with far-right parties to further weaken the law, a political compromise was reached on 8 October 2025. The major pro-European groups aligned with the Council’s much weaker position, a move that prompted the lead negotiator for the Socialists and Democrats to resign in protest. The JURI committee’s formal adoption of this compromise text on 13 October 2025 confirmed this retreat, setting a very low bar for the final trilogue negotiations. The removal of the harmonised civil liability regime is no longer a point of contention but a point of consensus among all three EU institutions. As originally envisioned, the core pillar of remedial accountability has been effectively abandoned before the Directive’s obligations have even come into force.
The Contested Future of Corporate Accountability
The legislative trajectory of the Omnibus amendments, confirmed by the JURI committee’s vote, constitutes a fundamental rollback of the CSDDD’s normative goals. The elimination of the harmonised civil liability regime undermines the principle of remedial accountability, leaving victims with fragmented and uncertain paths to justice. Paradoxically, this move creates more legal uncertainty for businesses than the original Directive, exposing them to a multitude of foreign tort laws instead of a single, predictable European standard.
The CSDDD’s multilevel legal structure, intended to project EU standards globally via the ‘Brussels Effect’, has proven to be a vulnerability. Political pressures from Member States and external actors have flowed upwards, leading to a ‘hollowing out’ of the regulation at the EU level. Should the final trilogue agreement reflect the current inter-institutional consensus, the CSDDD will be transformed from a potential game-changer in corporate accountability into a framework with a drastically limited scope and severely weakened enforcement. The promise of a harmonised, effective system for holding corporations accountable for harms in their value chains will remain, for now, unfulfilled.
* Grzegorz Paciecha holds an MA in Law and a BA in International Relations from the University of Warsaw (Poland). He is currently completing an LL.M. in European and International Business Law and pursuing studies in Information Law and Legal Tech at LMU Munich (Germany). His academic interests focus on European private and procedural law, comparative law, access to justice, and human rights in global supply chains.
Suggested Citation: Grzegorz Paciecha, Factual Silence as Rule of Law Evasion: Adverse Inference and the Evidentiary Collapse of EU Accountability, jean-monnet-saar 2025.
DOI: 10.17176/20251027-093013-0
Funded by the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation) – Project No.: 525576645
