An alliance of business associations has called for improvements to the EU supply chain law. The associations are fundamentally in favor of an EU-wide regulation to protect human rights – but reject the current draft because of “serious technical defects”. Medium-sized businesses in particular will be far overburdened by the planned regulations. Tuesday’s announcement comes from eight associations, including the foreign trade association BGA, Gesamtmetall, the Family Business and Politics Foundation and the chemical association VCI.
If Germany abstains due to a disagreement in the traffic light coalition, the entire EU supply chain law could fail. Since there is no apparent majority among the member states, a planned vote has been postponed.
The EU supply chain law is intended to hold large companies accountable if they profit from child or forced labor outside the Union or if their production causes environmental damage there. A national supply chain law has been in force in Germany since 2023.
The business associations emphasized that the EU Supply Chain Directive pursues a correct and important goal, but is “simply not implementable” in practice for European companies. The associations appeal to the federal government and other EU states to stick to their position of abstention. The aim must be to present a legislative proposal that works in practice and combines the protection of human rights and the legitimate interests of companies.
The associations spoke of serious craftsmanship deficiencies in the EU supply chain directive that is now being voted on. This could lead to German and European companies withdrawing from markets and countries. “Then the field would be open to other market participants with significantly lower standards. This would do a disservice to the actual goal of the EU Supply Chain Directive.” What is needed is regulation with more practical relevance and a sense of proportion. (dpa)