Germany delays Supply Chain Act

Fears that legislation would draw German companies into complex and costly legal action weighs on politicians

Image by PixLord from Pixabay

Proposed legislation that would mean German companies having to carry out due diligence regarding human rights and environmental issues in supply chains globally has been postponed after the Federal Minister for Economic Affairs and Energy, Peter Altmaier, reportedly insisted that the law should only apply to companies with more than 5000 employees. Human rights organisations say this would mean the law applied to a minority of companies.

The proposed Supply Chain Act, warn critics, could make companies liable for health and environmental damage claims made by environmental non-government organisations, exposing them to unlimited financial risk if those companies are unable to force their suppliers to conform to their requirements.

The Association of the German Textile and Fashion Industry has expressed its concern, saying the law would weaken the competitiveness of small and medium-sized companies.

comments powered by Disqus