Overwhelmed SMEs “excessively”
German trade criticizes EU supply chain law
5/8/2022 5:07 am
In a fire letter to Commission President von der Leyen, the German trade association warns against the introduction of the planned EU supply chain law. This should be even stricter than the German law – and according to the HDE, could overwhelm medium-sized companies.
Retailers in Germany have warned of the burdens of a planned European supply chain law. In a letter from Trade President Josef Sanktjohanser to EU Commission President Ursula von der Leyen, it is said that a supply chain law that is designed in such a way that it “excessively overwhelms” large parts of medium-sized businesses is currently not communicable – especially in a situation in which worldwide established supply chains collapse. The letter, which is available to the German Press Agency, was also sent to Chancellor Olaf Scholz on the occasion of Europe Day on Monday.
“Medium-sized retailers are simply not in a position to legally monitor their entire supply chains right down to the sub-sub-sub-contractor of the manufacturer on the other side of the world,” it says. “There is an urgent need to improve this by applying the principle of tiered responsibility enshrined in German law, at least at EU level.”
Large companies in the EU should be held responsible for child or forced labor and environmental pollution by their international suppliers. The EU Commission is planning a corresponding EU supply chain law. The directive could become stricter than the German regulation because significantly more companies could be affected by the new rules. The German law will apply from 2023, initially for companies with more than 3,000 employees. From 2024 onwards, this threshold will drop to 1000.
According to the letter from Sanktjohanser, President of the German Trade Association (HDE), trade fully supports the EU’s economic sanctions against Russia. “But what is already clear is that the new world situation requires a comprehensive readjustment of our supply chains: for fossil fuels, raw materials, food raw materials and numerous preliminary products. This reversal is happening now and is associated with enormous costs, uncertainties and logistical effort for our companies.”