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By now virtually everyone with an interest in a number of related fields--business and human rights, supply chains, surveillance, systems theory and regulatory governance, national security, data and tech, and macro-economic policy within national and international domains--has heard of and probably tried to digest the European Commission's innocuous sounding "Omnibus Simplification Proposal." (for official explanations and justifications, built around a "competitiveness compass" produced to facilitate those ends, see, Commission proposes to cut red tape and simplify business environment; Questions and answers on simplification omnibus I and II; Simplifying EU rules and boosting competitiveness – Omnibus I; InvestEU - European Union – Omnibus II; Clean Industrial Deal; Press
release: Commission simplifies rules on sustainability and EU
investments, delivering over €6 billion in administrative relief). Omnibus I was released (after the usual leakage common to hot-house self-reflective techno-bureaucratic cultures and serving as an instrument of its internal politics) on 25 February 2025 and had in its cross hairs the essence of the global business and human rights regulatory project hubbed in Europe: the Corporate
Sustainability Reporting Directive (“CSRD”), the Taxonomy Regulation, the Corporate Sustainability Due
Diligence Directive (“CSDDD”), and the Carbon Border Adjustment Mechanism (“CBAM”) (text may be accessed here).
On its face, an effort to simplify (and sold that way for as long as possible), the project has always been about reformulating the years long regulatory projects that had been enacted over the last decade or so. Yet, perhaps, the easiest way to understand the path from regulatory cages developing over the last quarter century (including its increasingly orthodox academic theorization to enhance both authority and legitimacy within Europe) to retrenchment is fear. What sort of fear? The fear expressed by EU Commission President von der Leyen in her speech at Davo (considered here) that flowed from the (official) warning in the Draghi Report, “The Future of European Competitiveness," a 400 or so page document detailing what might be understood as a notice of a potential hard turn in the regulatory project of Europe, and thus in the template for the construction of the structures of a policy driven regulatory governance of economic activity more broadly). It was a fear that was the grandchild of the fear of Europe in 1945, stuck between largely intact powers with an appetite for consuming lesser states within new structures of dependence and inter-connection. It was a fear, as well, of the long term relevance of Europe as a near apex power within whatever was emerging as the post-global global order. And it was a fear that in an environment in which Europe would be shrinking the resulting political. social, ethnic and religious instabilities would increase in prominence in ways that could spiral out of control in the absence of foreign intervention of some sort of other.
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It is with this in mind that one might read the extremely useful analysis of The European Commission’s ‘Omnibus Simplification Proposal’: Shift’s Preliminary Reflections, prepared by Shift--an organization that John Ruggie helped create and that has remained an influential voice in the evolution and adaptation of the UN Guiding Principles for Business and Human Rights in an altering environment (certainly an environment which is in some respects has been radically altered from that taken for granted during the rime of the development of the UNGP). The analysis follows below and may be accessed online. A few brief analytical points worth considering perhaps.
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1. Timelines matter. Radical change generally is undertaken gradually. That had been the approach advocated by John Ruggie and embedded in the UNGP)--principled pragmatism. But impatience can be a potent political force. Radical change, then, also might be undertaken swiftly. Yet that requires a sufficient enough control of the power apparatus to enforce radical change; and the ruthlessness to let nothing stand in the way of change. The European seeking accelerated change chose a middle ground--moderate speed and the suffocation of regulatory compliance that might have been complex enough to effectively shift discretionary authority either from the private to the public sector, or to transfer it to interlocking compliance bureaucracies in public and private entities to which overall decision making authority would be vested. One speaks, of course, of political risk in framing regulatory objectives. It was a pity, ironically of course, that those responsible for the cluster of measures now in the cross hairs of simplification that no one bothered to undertake the sort of risk-based due diligence with respect to regulatory reform strategies the implementation of which is the critical at-risk element of the simplified regulations. Perhaps they did; in that case the suggestion that risk based assessments are neither perfoect nor can they avoid catastrophe is made clearer.
2. Complexity as a political instrument. It might follow, then, that regulatory complexity is not a "thing" in itself but rather a means to an ends. One might, then, wish to consider the value of complexity--layered regulations that might or might not align, traps for the unwary, shift of operationalization from regulatory text to officials and decision making bodies, assessment and sanctions schemes that mask shifts in authority and risk allocation, and the like. In this sense the debate about complexity may actually be a debate about something quite different--a debate about the face of power and the means of its assertion in the service of higher objectives. In addition, time as a function of measurement also represents a political choice when reduced to regulation. This mirrors the challenge in the field of corporate governance through the nudging of financial reporting rules. Focusing on immediate effect and immediate right in relation to a narrowly defined event will produce quite distinct consequential risk avoidance behaviors, and value assessment, than one in which the focus is on middle to long term risk effects across a broader scope against which effects are measured.
3. Risk is not a single layered concept. The object of the regulatory projects now subject to simplification was, as Shift correctly notes, was straightforward and in its own way quite simple--to manage risk-based due diligence. That is true enough. Nonetheless thee are a number of risk distinctions that merit some consideration. One touches on the assignment of risk bearing and risk controlling functions. To some extent, the business and human rights project sought an alignment between risk bearing and risk controlling, placing both within an entity engaged in economic activity. The alignment, of course, could not be perfect, but it might be workable in markers. The alignment becomes mroe complex where the state tales to itself a measure of risk control functions. And that risk control function becomes more difficult still where what is controlled is both the nature of risk controlling decisions and the quantum of tolerable risk that may be taken. From an international human rights environment, especially one in which one starts from the premise that the risk negative human rights impacts must be prevented in the ideal state, the trajectories are toward risk avoidance cultures. That produces a conflict with risk taking cultures sometimes necessary for (1) innovation and (2) development. To sort that out a more nuanced se o distinctions between tolerable and less tolerable risks is required, but more importantly, the acceptance of the idea that one sort of negative human rights impact (short term, specifically contextual, etc.) might be balanced against positive human rights impacts (the argument of some in the "development first" camp). The idea here isn't to argue among these but rather to suggest that "risk-based" measures cover a substantial amount of ground. Indeed that is the essence of the dialectic between the Draghi Report, on the one hand, and the vision of human rights and sustainability organization, on the other. They necessarily talk past each other because they have not yet been able to align their language, objectives, goals, and the way in which "things," events, actions, consequences, are identified (much less measured). But this disjunction is as old as the Norms project on the ashes of which John Ruggie sought to find a bridge.
4. Outcomes are also not a single layered concept. The idea here mimics that of risk. It is true enough that if the sole or paramount objective was risk based due diligence measured against reductions in negative impacts (in whatever form agreement about the meaning of all of these terms is achieved, and further assuming agreement on the allocation of authority to define and to apply those meanings), then the idea of simplification ought to be equally straightforward. The difficulty here is the lack of alignment between the objectives against which measurement is possible. The case of the oppositional nature (sometimes) between a more absolutist human rights impacts objectives measured in the short or long term) and a more development oriented approaches are clear. Yet simplification in this case also suggests that the binary--positive/negative human rights impacts--is itself deeply complicated by the environment in which it is meant to have an effect.
5. At the end of any simplification process lies complexity. That is not because simplification is impossible; the challenge is that even simplification, in context, is complex and produces complexity. That is the case even when one starts from the proposition that simplification requires or is a process of shedding. Shedding might be understood as an exercise in essentialization and reduction. That produces either less detail, or a narrowing of scope. With less detail there is a shift from rules based to discretionary decision making (as well as interpretation). In either case, shedding also requires a delegation of authority to create and interpret between the elements retained. And delegation itself produces what appears be be order at the level of simplification and a devolution of complexity down (or aside) to those spaces in which what has been shed now appears. The complexity of simplicity is as much an issue in the evolution of virtual governance tools as it is in the organization of human to human regulatory structures (eg Hermann Kopetz, Simplicity is Complex (2019)).
6. What next? Shift, like many organizations committed to an architecture of business sustainability/ human rights focus on saving what they can, pushing back, arguing from logic, history or values--the values and narratives of which would appeal more to them than to their opponents. In that respect Shift offers an excellent set of ideas. Perhaps there is a little room for bargaining; that will depend less on the power of their logic than on the reality and risk of the circumstances in which Europe now finds itself. Events have overtaken, to some extent, that long and steady human rights project which needed as a base, a stable global system. It also requires a willingness to confront the larger issues within which this regulatory framework is bit a part--the question of the forms, ideologies, purposes, and manifestations of regulation (and with it the relationship between a regulatory state and autonomous individuals whose autonomy is exercised in economic, social, cultural, religious, and political market places (platforms today). I can only hoe there is a space within which both important social objectives might be aligned within a European normative space.