New European rules on due diligence requirements threaten to strangle SMEs

Today, the EU Member States are once again considering regulations that impose mandatory due diligence requirements on our companies and make them responsible for these throughout the chain. According to MEP Geert Bourgeois, corporate social responsibility is absolutely an ethical obligation, “But the text that Prime Minister De Croo is putting on the European table threatens to become a new stranglehold on our SMEs.”

Instead of promoting a level playing field, legally secure liability and Competitiveness The extent to which companies in one country can compete with similar companies in another country. A law came into force in Belgium in 1996 to monitor competitiveness. This stipulates that Belgian salaries may not evolve faster than the average of those in the three neighbouring countries. The Central Economic Council (CEC) performs an annual measurement to see if the objectives have been obtained. competitiveness , the proposed regulations create a new battery of rules, costs and burdens. Among other things, our companies become responsible for the ethical business practices of all their suppliers around the world. 

Succumbing to the regulatory pressure

More specifically, our SMEs simply do not have the resources to screen and monitor the entire chain. They are already succumbing to the regulatory burden. According to an analysis by Graydon, 30% of our companies are seriously threatened by the ESG Directive’s reporting requirements. 

Cynical

“It is very cynical that our Prime Minister - albeit much too late - is proposing an Industrial Deal, but at the same time, he wants to push through new burdensome rules, reporting and sanctions on our companies behind the scenes, while our competitiveness is under heavy pressure and we are losing industry every day. Just explain that to our companies, the backbone of our Flemish prosperity,” says Bourgeois.