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Tea plantation in Kenya: German law does not yet provide for comprehensive liability for breaches of duty of care

Photo: Joerg Boethling / imago images/Joerg Boethling

Was the FDP's rejection of the EU supply chain law justified? In any case, an alliance of business associations has fundamentally spoken out in favor of an EU-wide regulation to protect human rights - but rejected the current draft because of "serious technical defects" and called for improvements.

Medium-sized businesses in particular will be far overburdened by the planned regulations, according to a statement from eight associations, including the foreign trade association BGA, Gesamtmetall, the Foundation for Family Business and Politics and the chemical association VCI.

Unreliable Germany?

However, last week there was no majority at EU level to approve the directive. The member states' vote on this was postponed due to German concerns. The FDP in particular spoke out against the new regulations within the traffic light government. Foreign Minister Annalena Baerbock (Greens) had criticized that Germany's reliability was at stake.

The directive would have “gone far beyond the German regulations, would have created a lot of bureaucracy and made legally secure foreign trade virtually impossible,” said Gesamtmetall President Stefan Wolf last week. »Complying with and being liable for all due diligence obligations throughout the entire value chain would have completely overwhelmed the companies.«

A new EU supply chain law is intended to hold large companies fully accountable if they profit from child or forced labor outside the Union or if their production causes environmental damage there. Read the SPIEGEL report on the dispute over stricter EU rules here.

A weaker national supply chain law has been in effect in Germany since the beginning of 2023. Since the beginning of 2023, companies have been legally obliged to improve the protection of the environment and human rights along global supply chains. Companies that produce abroad must take responsibility for the processes and working conditions of their suppliers.

As a control authority, the Federal Office of Economics and Export Control (BAFA) must investigate indications of violations of the Supply Chain Act and can sanction companies for violations of due diligence obligations. German car manufacturers, for example, were recently confronted with allegations of forced labor in the Chinese province of Xinjiang, and the European Center for Constitutional and Human Rights filed a complaint with Bafa.

FDP: Common line of the federal government

The business associations now 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 current draft of the EU Supply Chain Directive. 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 be doing a disservice to the actual goal of the EU Supply Chain Directive.”

The FDP Bundestag member Marie-Agnes Strack-Zimmermann also rejected the accusation that the Liberals were refusing. The entire federal government stated that the negotiations on the supply chain law would be conducted with an open mind and that Germany would only agree if the result was correct. This is not the case, among other things because the bureaucratic effort would be so dramatic that many companies would not be able to meet the requirements.

apr/dpa