Battleground Brussels: the EU and the regulation of multinationals

Vlag van de Europese Unie met op de achter grond het gebouw van de EU © iStockphoto.com/artJazz
© iStockphoto.com/artJazz

Recently, the news has been full of civilian and governmental actions and attempts to regulate multinational corporations. Historian Koen van Zon wrote a blog for Professor of International History and the Environment Liesbeth van de Grift's Vidi-project in which he analyses this phenomenon by looking at the history of the EU.

Dr. Koen van Zon
Dr Koen van Zon

The EU and multinationals

By their very nature, multinationals are difficult to regulate. Their scale allows them to move their production sites and offices to the regimes which best suit their search for profits. In places, this has resulted in precarious working conditions, endangered environments and consumer safety, as well as missed corporate tax revenues. In Europe, it became clear that this problem required joint efforts, preferably through the European Economic Community (EEC). The EEC, however, has always had an ambiguous relation with multinational corporations.

The Vredeling directive

The debate about regulating multinationals came to a head at the turn of the 1980s, when European Commissioner Henk Vredeling, a Dutch social democrat, introduced a proposal for protecting the rights of workers in multinationals which were (partly) based in the EEC. The Vredeling directive sparked much debate and was eventually not accepted. It shows that there was, then as now, no such thing as the EEC or EU dictating anything: its legislative process is one of checks and balances – a complexity that corporate lobbies understood very well.

We tend to think of the EU as a single entity, but those who know their way around Brussels’ corridors understand that the EU’s legislative process is intricate, and that big plans do not mean that anything has been decided yet.

Due diligence

Since the Vredeling directive, the EU has largely refrained from such ambitious regulations of multinationals since, until recently. the European Parliament has called upon the European Commission to come up with proposals for a directive on ‘due diligence’, legislation that will make large corporations directly responsible for respecting human and environmental rights all along their supply chains. These proposals face much opposition, which reveals an irony at the heart of European integration: we tend to think of the EU as a single entity, capable of regulating multinationals if it decides to. Yet those who know their way around Brussels’ corridors understand like none other that the EU’s legislative process is intricate, and that big plans do not mean that anything has been decided yet.

Consumers on the March

This blog is part of Liesbeth van de Grift's Vidi project 'Consumers on the March: Civic Activism and Political Representation in Europe, 1960s to 1990s'. This research project analyses the claims of representativeness of consumer organizations and the strategies they use to substantiate these claims, and what these organizations describe as 'consumer interest'. It highlights the inextricable intertwining of regional, national and global governance in the second half of the twentieth century.

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Read the full blog here