The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD) has been rejected by Germany and snubbed by others, leaving it stalled, according to Reuters.

The law, holding companies liable for human rights and environmental abuses in their supply chain, was already watered down, as part of a last-ditch effort to persuade Germany and Italy to support the contested regulation, said The Financial Times.

Only companies with more than 1,000 employees and €300 million ($327 million) in revenue would now be affected, up from 500 employees and €150 million revenue previously.

The law was voted down February 28, after Germany and Italy withdrew their support at the last minute. European Union presidency Belgium has proposed diluting the law and setting a longer phase-in for rules that would require big companies to disclose whether their supply chains harm the environment or employ child labor.

Germany has its own version of the due diligence directive but the liberal FDP party under  Chancellor Olaf Scholz said the CSDDD would create too much legal uncertainty and red tape for companies. Italy’s government also sided with business representative groups, warning that the law would hurt small and medium enterprises. References to downstream activities such as recycling and disposal of goods have also been removed from the text in an effort to address Italian concerns, according to the draft circulated on March 6 by Belgium.