Criticism of plans for EU supply chain directive

There has been criticism of the EU's plans to make companies more responsible for protecting human rights and the environment. The draft of a corresponding guideline provides that companies take responsibility along the entire supply chain from the raw material to the finished product.

In a current analysis, the business-related Center for European Politics (cep) criticizes that the draft law is unclear and therefore anti-business. The unpublished analysis is available to WELT AM SONNTAG.

“Many companies deny their responsibility for human rights and the environment. Due to cross-border supply chains, they are of great importance," says cep lawyer Lukas Harta, who wrote an analysis of the draft directive with economist Matthias Kullas. Values ​​represented by the EU must also apply to the economy, but Brussels waters down this goal and makes it more difficult for companies to meet the requirements.

In particular, the accumulation of vague legal terms creates confusion. The law should apply to “established business relationships” without it being clear what that means. For medium-sized companies in particular, there would be a disproportionately high administrative burden if they were to identify "established" business partners on the basis of vague definitions and guarantee compliance with human rights and environmental protection.

The authors warn that other aspects of the draft law are also unclear. “In its definition of human rights alone, the EU bases itself on 19 international legal conventions and declarations, which often not even democratic states adhere to,” said Harta. It is so unclear for managers which standards would apply. The right to fair and favorable working conditions is also viewed completely differently in many countries.

Just last week, the industry association BDI declared that it was unrealistic for companies to monitor the entire value chain. Mandatory legal requirements must be limited to direct suppliers. Otherwise they cannot be implemented in daily practice.

Supporters of stricter regulations recently criticized the fact that the federal government was trying to weaken the draft law at crucial points. In the negotiations with the other EU member states, Berlin is apparently demanding that companies be able to buy themselves free of responsibility with expert opinions. According to this, companies should, for example, have their products or production certified as flawless by external auditors.

Such certifications would severely limit corporate liability. According to experts, they would then only be liable in the event of gross negligence or intent. That could lead to courtesy reports and certificates and thereby reduce the law to absurdity. The European Parliament and the 27 EU member states are currently deliberating on the draft law.