On May 23, 2022, the China Chamber of Commerce to the EU (CCCEU) submitted its feedback to the European Commission’s draft proposal for a Directive on Corporate Sustainability Due Diligence (CSDD), thereby presenting the views of the Chinese business community in Europe.

The CCCEU and its members share the view that companies play a key role in building a sustainable economy and society. We recognise the overall importance of promoting sustainable and responsible corporate behaviour throughout global trade and supply chains. As such, we are supportive of all international and multilateral initiatives when it comes to the respect for human rights and environmental protection.

However, after carefully listening to the voices of our members and of other Chinese companies active in the EU, we provided our feedback to the Commission while highlighting that that the proposal, as it stands now, raises a number of concerns. In essence, the proposed CSDD rules are likely to create unbalanced, disproportionate and ambiguous obligations for all business operators, including the CCCEU members, and to eventually impede the Commission’s goal of creating more legal certainty and a level playing field for all businesses in the EU. Therefore, we invited to the Commission to reconsider these aspects and to improve the proposal accordingly.

“Our members stressed the need to harmonise the enforcement of the Directive in the EU Member States, limiting the potential fragmentation across different legal systems,” said Mr. Xu Haifeng, Chairman of the CCCEU. “In fact, this fragmentation could lead to competitive advantages or disadvantages for companies located in the different EU countries, to the detriment of fair competition and of the level-playing field.”

The CCCEU members also voiced serious concerns about excessive administrative burdens and disproportionate liabilities on companies, as well as the insufficient transition period for businesses to adapt to the transposed due diligence rules. For the companies, the most problematic aspect of the CSDD Proposal lies in the fact that it requires subject companies to exercise due diligence along their entire value chains, both directly and indirectly, at a level which goes beyond their control and capabilities.

Our full and detailed position, in which we elaborate on all the issues at stake with regard to the CSDD proposal, is publicly available on the relevant page of the European Commission’s website. We hope that these views can be beneficial for the discussion on the due diligence of supply chains, and for sound and considerate policymaking on the side of the EU institutions.