Key Export Industry Supports Corporate Responsibility Law, Contradicts Orpo’s Government

Key Export Industry Supports Corporate Responsibility Law, Contradicts Orpo’s Government

The technology industry in Finland, representing many of the country’s largest export companies, has expressed its full support for the adoption of the EU Corporate Responsibility Directive. This stance differentiates them from the Finnish government and their parent organization, Elinkeinoelämän keskusliitto (EK).

In a submission to the large committee, the industry interest organization suggests that Finland should vote in favor of the directive at the upcoming council meeting. If adopted, the Corporate Responsibility Directive would ensure that large EU companies are held accountable for any human rights or environmental violations in their value chain.

While an agreement on the directive was initially reached between the Commission, member states, and the parliament in December, it faced opposition when several countries, including Germany, withdrew their support. Finland was among the countries that considered abstaining from the vote, which would effectively mean opposition if a qualified majority is not reached. The decision to abstain was demanded by a small liberal party in the German government.

The directive’s approval had to be postponed due to the lack of voters, and time is running out. The last session of the EU Parliament before the European elections is in April, leaving little time for text amendments. Furthermore, surveys suggest that the next EU Parliament might not prioritize corporate responsibility. The elections are predicted to favor conservatives and right-wing populists.

Finland had previously supported the idea of an EU-wide corporate responsibility directive, as it was believed that Finnish companies would benefit from the “leveling the playing field”, i.e., the same ethical rules for everyone. However, the Finnish government later joined Germany, Italy, Sweden, and Estonia in demanding changes to the already negotiated compromise.

The government justified its change in position by expressing concerns about a provision in the directive that called for the right of victims of human rights and environmental violations to a class action. The Ministry of Justice worried that class action lawsuits related to human rights and environmental violations by large Finnish companies in third countries could overwhelm the Finnish legal system. The EK, which represents business life, shared this view.

Despite these concerns, the technology industry believes that Finland should not propose any new demands but rather support the directive. They accept the class action and the obligation to present evidence as part of the directive’s goals. They believe necessary changes can be introduced into national legislation in strictly defined separate acts.

Several large companies have already begun preparations for the directive. The industry argues that rejecting or delaying the Corporate Responsibility Directive could create uncertainty about the direction and content of future regulation, negatively affecting investments in clean transition.

Researcher Jaakko Markus, who appeared at the working division of the large committee, argued that while there may be some difficulties, the changes proposed by the directive could be implemented. He asserts that class actions would not overburden the Finnish legal system, and that a broader class action would not pose a threat to law-abiding companies under Finnish conditions.