Negotiators from the European Parliament and the EU states have agreed on a supply chain law. The aim is to hold large companies accountable if they profit from child labor or forced labor outside the EU, according to communications from the European Parliament and the EU states on Thursday. Larger companies must also create a plan to ensure that their business model and strategy are compatible with the Paris Agreement on climate change, EU states announced.
It is also envisaged that companies can be held accountable in European courts if human rights violations occur in their supply chains. The agreement still has to be confirmed by Parliament and the EU states, but that is usually a formality.
The chairwoman of the Internal Market Committee in the EU Parliament, Anna Cavazzini, spoke of a good day for human rights, but she would have liked to see even stricter rules for climate and environmental protection. The Green politician also emphasized that the EU supply chain law goes beyond German law and that more companies are covered by the rules. A supply chain law has been in effect in Germany since the beginning of the year.
The European law professor and SPD MEP René Repasi pointed out that the law makes German companies liable for breaches of duty of care, which has so far been excluded in the German Supply Chain Act. Companies could be held liable under civil law and claims for damages could be asserted, for example.
Union politicians, like business representatives, had expressed criticism of the law in the past. They feared that there would be too much bureaucracy for companies and that this would put them at a competitive disadvantage compared to companies from third countries that are not affected by the rules. (dpa)