STRASBOURG — Members of the European Parliament on Wednesday rejected a landmark proposal to cut red tape for businesses.
The decision sets up a clash with EU leaders and the European Commission, who are on a drive to roll back legislation quickly to help the bloc become more competitive under intense pressure from industry.
It means that MEPs will have to vote again on whether they back the Parliament’s compromise proposal during the next plenary session in November, which delays the process of getting the omnibus approved.
It’s a surprise after the Parliament’s centrist political groups reached an agreement to support the deal two weeks ago. Out of 661 lawmakers who voted on Wednesday, 318 were against, 309 in favor and 34 abstained.
Proposed last February, the omnibus bill aims to reduce reporting obligations for companies under the bloc’s sustainability disclosure and supply chain transparency rules. It’s the first of a series of proposals from the Commission aimed at cutting red tape for businesses under Ursula von der Leyen’s second term as Commission president.
Earlier this month, the Parliament’s major centrist groups — the European People’s Party, Renew and the Socialists and Democrats — had agreed to roll back reporting obligations for companies after intense negotiations that nearly made their ruling coalition collapse.
The groups had major disagreements on how far to roll back the rules, including on whether companies should be legally liable for human rights and environmental violations in their supply chains under EU law, and whether they need to have a transition plan outlining how they intend to meet the emissions reduction objectives of the Paris climate agreement.
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