Trade policy | Supply chain law is being relaxed

Berlin. In the future, companies will be required to submit fewer reports on issues such as compliance with human rights standards or environmental pollution in their supply chains . Violations of due diligence obligations will only be sanctioned in serious cases, according to a draft bill on the Supply Chain Act approved by the Federal Cabinet in Berlin.

This avoids "double reporting obligations" arising from EU and German legislation. The German Supply Chain Due Diligence Act will continue to apply seamlessly until it is replaced by a law that transposes the European Supply Chain Directive into national law, according to the Federal Ministry of Social Affairs. Amendments are currently being negotiated in the EU .

The Supply Chain Act, in force since 2023, is intended to ensure that certain labor and environmental standards are met for products manufactured abroad for the German market. Companies were required to regularly publish reports on their compliance with these due diligence obligations. The easing of the law now underway is based on proposals from the coalition agreement to reduce bureaucracy.

Criticism: “Inadmissible under international law”

The new regulations introduced by the cabinet met with criticism from various quarters. Steffen Kampeter, General Manager of the Confederation of German Employers' Associations, told the German Press Agency: "Instead of abolishing the Supply Chain Act, as repeatedly promised, its burdensome effect is being confirmed."

Human rights expert Armin Paasch of the aid organization Misereor, however, criticized the amendment as a "step backward in human rights protection in business, unacceptable under international law." The human rights organization Oxfam criticized the change as a "dramatic hollowing out." Reporting requirements and sanctions are key tools used to hold companies accountable. The Greens accuse the coalition government of watering down existing supply chain regulations.

Labor Minister Bärbel Bas (SPD) emphasized: "By abolishing the reporting requirement under the Supply Chain Due Diligence Act, we are swiftly implementing the coalition agreement to further ease the burden on companies."

Oxfam also criticized the process of amending the German law on Wednesday, saying the government had shortened the deadline for submitting comments in advance to a single day. "True democratic participation is not possible this way." With agencies