After long negotiations, the… European Parliament and the Member States of the European Union we have agreed on one Supply Chain Act, according to the German media review. Consequently, large companies can be sanctioned if, for example, “benefit from child or forced labor outside the EU«.
On your side, Larger companies also need to create a plan to ensure your business model and strategy are compatible with the Paris Agreement on Climate Change.
The law also stipulates that companies will be held responsible in European courts if human rights violations occur in their supply chains. The agreement still needs to be confirmed by Parliament and member states.
According to the media mentioned above René Repasi, Professor of European law and SPD MEPhas stated that “The law makes German companies responsible for failing to comply with their duty of care«. This has so far been excluded in the German supply chain law. For example, companies could be held civilly liable and claims for damages could be asserted.
The Union politicians and business representatives have criticized the new regulationsbecause they are afraid «an excess of bureaucracy for companies” and therefore, “a competitive disadvantage compared to third country companies that are not affected by the rules«.