EU member states aim to significantly dilute supply chain act

EU member states sought to significantly dilute the European Supply Chain Act. A majority of countries voted to apply the human rights protection law only to companies with more than 5,000 employees, instead of the previous threshold of 1,000, the member states announced. In addition, the turnover threshold was to be raised from 450 million euros to 1.5 billion euros of annual net turnover.

Poland’s Minister for Europe, Adam Szlapka, stated this would create a decisive step towards a more favourable business environment "that will help our companies grow, innovate and create high-quality jobs". Poland currently held the rotating six-month presidency of the EU member states and, in this role, prepared meetings of ministers, among other things.

EU directive aims to protect human rights

The Federal Ministry of Labour, responsible for the law, did not initially respond to a request from the German Press Agency (DPA) regarding the German government’s position on the EU member states’ stance. The European Supply Chain Act was actually passed last year.

The aim is to strengthen human rights worldwide. Large companies should be held accountable if they profit from human rights violations such as child labour or forced labour. Following criticism from companies, parts of the directive were to be simplified even before they were applied.

Negotiations in european parliament ongoing

Discussions were still underway in the European Parliament to determine its position on the reform of the Supply Chain Act. Final negotiations with the EU member states could then begin. The chair of the Internal Market Committee in the European Parliament, Anna Cavazzini (Greens), said the EU member states were making themselves "accomplices of the lobbyists".

The EU member states also advocated that companies should no longer have to focus on their suppliers in principle, but only on areas "where actual and potential adverse impacts are most likely". Companies should no longer be obliged to carry out a comprehensive inventory, but instead conduct more general investigations.