EU supply chain law to strengthen human rights worldwide
Published: Thursday, Dec 14th 2023, 10:50
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Negotiators from the European Parliament and the EU member states have agreed on a supply chain law. This is intended to hold large companies accountable if they profit from child or forced labor outside the EU, for example.
This emerged from communications from the European Parliament and the EU member states on Thursday. Larger companies must also draw up a plan to ensure that their business model and strategy are compatible with the Paris Agreement on climate change, according to the EU states.
According to the planned rules, companies are responsible for their business chain, including business partners of the company and, in some cases, downstream activities such as sales or recycling. The financial sector will initially be excluded from the requirements. In principle, the rules apply to companies with more than 500 employees and a turnover of at least 150 million euros.
Law also applies to non-EU companies
Companies that are not based in the EU are subject to the law if they generate a turnover of more than 300 million euros in the EU. The EU Commission is to publish a list of the non-EU companies affected.
It is also envisaged that companies can be held accountable before European courts if human rights violations occur in their supply chains. The agreement still has to be confirmed by Parliament and the EU member states, but this is usually a formality.
Effects on Switzerland not yet entirely clear
The Chair of the Internal Market Committee in the EU Parliament, Anna Cavazzini, spoke of a good day for human rights, but she would have liked to see even stricter rules for climate and environmental protection. The Green politician also emphasized that the EU supply chain law goes beyond the German law.
In future, more companies will have to record risks across their entire supply chain. The EU Supply Chain Act is a so-called directive that the German government still has to transpose into national law; in Germany, a supply chain law has already been in force since the beginning of the year.
The impact on Swiss companies is not yet entirely clear. Major business associations want to analyze the law first, as they told the news agency AWP when asked.
The law was criticized by business representatives, who feared that it would be too bureaucratic for companies and therefore put them at a competitive disadvantage compared to companies from third countries that are not affected by the rules. Following the agreement, German employers' president Rainer Dulger said: "The result is a hasty and poorly crafted compromise." He called on Germany to reject the compromise and spoke of a looming European bureaucracy monster.
Millions of minors suffer from child labor
According to the German Federal Ministry for Economic Cooperation and Development (BMZ), almost 80 million children worldwide work under exploitative conditions in textile factories, quarries or on coffee plantations. "Even for our products," says the ministry. According to the aid organization Terre des Hommes, numerous products can be affected by child labour. These include flowers, clothing, computers, tobacco, fireworks, footballs, cosmetics and food.
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