The EU wants to weaken the European supply chain law to protect human rights before it is even implemented. Negotiators from the EU states and the European Parliament agreed in Brussels that the requirements should only apply to a few large companies, as both sides announced. Parliament and the EU member states still have to approve the change, but this is usually just a formality.
In the future, the requirements will only apply to large companies with more than 5,000 employees and an annual turnover of at least 1.5 billion euros. The original limit was 1,000 employees and a sales threshold of 450 million euros.
In addition, companies that violate the rules should no longer be subject to civil liability at EU level – which means that victims of human rights violations no longer have the opportunity to sue. If companies do not adhere to the requirements, a maximum penalty of three percent of their global net sales can be imposed. In addition, according to information from Parliament and the EU states, there will no longer be an obligation to develop action plans for climate goals in the future.
Merz called for complete abolition
This step was preceded by a heated political exchange. Almost a month ago, the conservative European Parliament faction around the CDU and CSU cleared the way for a weakening of the regulations with the support of right-wing and right-wing extremist parties. The EU states had previously also spoken out in favor of less strict regulations.
During his inaugural visit to Brussels, Chancellor Friedrich Merz (CDU) even called for the directive to be completely abolished. When a first compromise to weaken the EU supply chain law failed in the European Parliament, Merz called this “unacceptable” and called for a correction.
The aim of the Supply Chain Act is to strengthen human rights worldwide. Large companies should be held accountable if they profit from human rights violations such as child or forced labor. The project was vehemently criticized by companies – they particularly criticized the bureaucratic burden being unreasonable if potential rule violations had to be checked along the sometimes complex supply chains.
Explosive majority formation in parliament
The right-wing majority in parliament in favor of weakening the supply chain law was heavily criticized by Liberals, Social Democrats and Greens. The decision was explosive because the conservative EPP, which also includes the CDU and CSU, had sought and found a majority outside of the usual alliances.
Actually, the EPP, Social Democrats (S&D) and Liberals work together in a kind of informal coalition. They have a narrow majority in parliament. The supply chain law is now likely to be the first major legislative project that ultimately passes through parliament with a clear right-wing majority. It is still unclear what impact this will have on the future cooperation between the EPP, S&D and Liberals.
Criticism from the SPD and the Greens
The SPD MEP Tiemo Wölken spoke of a black day for Europe, as human rights and climate protection are obviously just cheap bargaining chips. “A compromise with the democratic forces in parliament would have been possible, but it failed due to the blackmail tactics of the conservatives,” said Wölken.
“Tonight the conservatives in the European Parliament and the EU member states put the final nail in the coffin of the EU supply chain law,” criticizes Green MP Anna Cavazzini.