Much not "taken into account": Sharp criticism of the supply chain law

Wednesday, March 03, 2021

Much not "taken into account"
Sharp criticism of the supply chain law

The cabinet has just passed the new supply chain law, which is already causing displeasure. Environmental associations and human rights groups see a lot of room for improvement. People and the climate only played a minor role, they say.

Environmental groups and human rights groups have reacted with sharp criticism to the supply chain law passed by the cabinet and called for improvements. The protection of the environment and the climate are "largely disregarded" in the draft, explained the German environmental aid agency. In addition, the law in its current form releases companies "from responsibility" by restricting them to direct suppliers in the extraction of raw materials.

The WWF also criticized that compliance with environmental standards "only played a minor role". The law does not consider "the entire value chain with the same care". However, human rights and environmental violations occurred precisely at the beginning of the value chain.

The cabinet had agreed on the so-called Due Diligence Act that morning. Large German companies are threatened with fines running into the millions if they disregard the requirements for compliance with human rights along their supply chain. They can also be temporarily excluded from public contracts.

Undermine human rights standards

The Supply Chain Act initiative, to which more than 100 civil society organizations belong, criticized the fact that the draft law undermines current human rights standards of the UN and the OECD. The due diligence obligations of companies would be graduated, because in full "they should only apply to their own business area and direct suppliers". In addition, there is no civil liability. This was also criticized by the Federation of German Consumer Organizations.

The mechanical engineering association VDMA, however, considers the threats of sanctions in the law to be "completely excessive". In individual cases, the fines could "mean ruin" for companies, because it was sufficient that a required risk analysis of the supply chains was "incomplete", criticized the association.

The Association of the Automotive Industry (VDA) also called for "proportionate" sanctions. It is "problematic" that the draft provides for drastic penalties not only for intentional, but also for negligent offenses.