After postponing the vote several times, the EU Council today approved the European Supply Chain Act. However, the law has been drastically watered down compared to the agreement reached between the Commission, Council and Parliament in December 2023. Following the Council's approval, the European Parliament's Legal Affairs Committee must discuss the text so that the law can be passed in the Parliament's plenary session in April.
Armin Paasch, Misereor expert on responsible business and human rights, welcomes the approval as a "sign of hope for human rights and the environment", but at the same time criticises "drastic watering down" in the legal text:
"The Council's approval is a sign of hope for human rights and the environment. The EU supply chain law would finally oblige companies to effectively prevent exploitation, child labour, displacement, repression of trade unions and environmental destruction in their global business. Those affected would finally have a realistic chance of claiming damages from polluters in the EU under civil law.
It is shameful that the German government has not agreed to the directive, even though it has been massively watered down compared to the trilogue agreement of December 2023. The drastic narrowing of the scope of application is a serious step backwards. While the German Supply Chain Duty of Care Act currently covers over 4,500 companies, the EU directive would only make between 800 and 1,500 companies in Germany liable, depending on estimates, and only from 2032.
The reason: under pressure from France, the directive would only apply to companies with 1,000 employees or more instead of 500 employees or more, as initially planned. In addition, the turnover threshold would be raised from 150 million to 450 million euros. The German law also applies from 1,000 employees, but without a turnover threshold. In the first three years of application, only companies with 5,000 employees or more would be covered under the EU directive.
It is also highly problematic that companies would only have to deal with direct business partners acting on their behalf when exporting. Exporters of toxic pesticides or surveillance technologies would therefore not have to take preventative measures to ensure that customers respect human rights and the environment when using hazardous products or disposing of waste. The already weak climate protection regulations have also been further weakened.
The main responsibility lies with the German government, which had called for and negotiated the EU Supply Chain Act, but then cancelled the EU consensus of December 2023 in January 2024. As a result, other governments also backed away from the compromise and subsequently pushed through demands that the German government had previously resisted.
Despite the weakening, we appeal to all MEPs to quickly approve the directive in plenary so that people and nature are better protected in European companies' global operations in the future."
