Pension insurance not included in the scope of application

Following long discussions, the members of the European Parliament's (EP) Committee on Legal Affairs agreed on a compromise on the Corporate Sustainability Due Diligence Directive and adopted the draft report by Lara Wolters (S&D, NL) on 25 April 2023.  This deletes the reference to statutory pension insurance institutions in the scope of application.

On 23 February 2022, the European Commission had submitted a Proposed Directive (Corporate Sustainability Due Diligence Directive) with the aim of protecting human and children's rights along global supply chains and strengthening environmental protection. According to the ideas of the European Commission, the financial undertakings affected by the scope of application should also include the statutory pension insurance institutions within the meaning of Regulation (EC) No. 883/2004 of the (EC) No. 987/2009.

The Council had already agreed on a negotiating position for the proposed EU directive on 1 December 2022 and reworded the inclusion of the statutory pension insurance institutions into an optional provision in it. According to this, the Member States are now to be free to include the statutory pension insurance institutions as financial undertakings. The European Parliament's Committee on Legal Affairs has gone one step further and rejected the inclusion of the statutory pension insurance institutions.

Position of the German Social Insurance system

The German Social Insurance (DSV) had supported in a first opinion that all workers inside and outside the EU have access to healthy working conditions. Child labour and forced labour should also be abolished worldwide. On the contrary, the European Commission's intention to include pension insurance institutions in the scope of application was viewed critically.

In the view of the German Social Insurance system, this would represent a deviation from the previous understanding of the term "undertaking" at European level and in European case law. This also applies to the rewording into an optional provision in the Council's negotiating position.

The statutory pension insurance institutions are institutions of the social security system and not economic undertakings within the meaning of EU law. Therefore, the German Social Insurance (DSV) had in a further Statement proposed to delete the reference to the statutory pension insurance institutions. The deletion made by the European Parliament's Committee on Legal Affairs is therefore welcomed by the DSV.

This is how it continues

On 1 June, the report will be presented to the plenary of the EP. Once the European Parliament has adopted its position, negotiations with the European Council on the final text of the legislation can begin. The aim is to reach an agreement by the end of the year so that the directive can enter into force during the mandate of the current European Commission.