Foreign trade: European Parliament sets position on EU supply chain law

Foreign trade: European Parliament sets position on EU supply chain law

The negotiations on the legislative plans clear another hurdle: the EU parliamentarians vote on the project. They want to make more companies responsible than originally proposed.

The European Parliament will vote on its position on the planned EU supply chain law this Thursday. Among other things, the draft directive stipulates that large companies in the EU should be held responsible for child or forced labor and environmental pollution by their international suppliers. At the end of last year, the EU states had already decided on their position on the project. After the vote on Thursday, Parliament and the Member States still have to agree on a joint compromise.

According to the current draft, MEPs want to include more EU-based companies in the supply chain law than originally planned. The requirements should already apply to companies in the EU with more than 250 employees and a worldwide turnover of over 40 million euros.

Protection of human rights and environment

Originally, the draft presented by the European Commission at the beginning of 2022 intended that the supply chain law should initially only affect companies with more than 500 employees and a turnover of more than 150 million euros. Stricter rules were planned for corporations working in sectors where the risk of exploitation and environmental degradation is higher – such as the textile industry, mining or agriculture.

The EU regulations could be stricter than the German supply chain law, which has been in force since 2023 and applies to companies with more than 3,000 employees in this country. The aim is to protect human rights and protect the environment in global supply chains.

Tiemo Wölken, legal policy spokesman for the European SPD, sees the EU law as an opportunity to ensure that there are no double standards, “but that we ensure that human rights and environmental protection apply equally all over the world”. In a debate in Parliament on Wednesday, CDU MEP Axel Voss called for the bureaucratic effort to be stopped.

Industry and employers criticize the draft

The German Chamber of Industry and Commerce (DIHK) criticized that the draft law lacked practicality, proportionality and legal certainty. “The supply chain law burdens companies with a new and incalculable liability risk: they are expected to carry out checks that are beyond their own scope of influence,” said DIHK President Peter Adrian. Supply chains often consist of several hundred, sometimes several thousand companies. As a rule, however, only the direct supplier is known to a company. Small and medium-sized companies would be “completely overwhelmed” with the planned guidelines.

The employers’ association BDA warns of additional regulation and the exodus of companies. “In times of crisis, companies need flexibility and scope for innovation – and less bureaucracy from Brussels,” said BDA general manager Steffen Kampeter of the editorial network Germany (Thursday). “But the EU Parliament’s proposal on the subject of supply chains only brings more regulation – and no additional protection for human rights.”

Source: Stern

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