EU Supply Chain Law: Further tightening needed | Attac Austria

After being postponed three times, the EU Commission finally presented the draft for an EU supply chain law today. Austrian civil society demands that those affected by human rights violations and environmental damage be better supported.

With the EU Supply Chain Act presented today, the EU Commission set an important milestone to protect human rights and the environment along global supply chains. “The EU supply chain law is an essential step to finally end the age of voluntary commitments. But for human rights violations, exploitative child labor and the destruction of our environment to no longer be the order of the day, the EU directive must not contain any loopholes that make it possible to undermine the regulation,” warns Bettina Rosenberger, coordinator of the “Human Rights Need Laws!” campaign. which also belongs to Attac Austria.

Supply chain law will apply to less than 0,2% percent of companies

The EU supply chain law will apply to companies with more than 500 employees and an annual turnover of 150 million euros. Companies that meet these criteria will have to implement human rights and environmental due diligence in the future. This is a risk analysis, which is an important tool for preventing human rights violations and environmental damage. The guideline covers the entire supply chain and all sectors. In high-risk sectors such as the clothing industry and agriculture, the supply chain law applies to 250 employees and more and a turnover of 40 million euros. SMEs will not be affected by the Supply Chain Act. "Neither the number of employees nor sales are relevant to the human rights violations that companies hide in their supply chain," Rosenberger reacted with incomprehension.

“Thus, the EU supply chain law will apply to less than 0,2% of companies in the EU area. But the fact is: companies that do not meet the specified criteria can also be involved in human rights violations, exploit workers and destroy our environment, so long-term measures are needed that affect all companies,” says Rosenberger.

Civil liability important but hurdles remain

Significant progress has been made, however, by anchoring liability under civil law. Only civil liability can ensure that those affected by human rights violations in the Global South are compensated. Affected parties can file a complaint before an EU court. Pure penalties go to the state and do not represent a remedy for those affected. Such liability is currently missing in the German supply chain law. However, other legal hurdles remain that are not addressed in the draft, such as high court costs, short deadlines and limited access to evidence for those affected.

“In order for human rights and the environment to be protected in global supply chains in a really sustainable and comprehensive manner, the EU supply chain law still needs extensive fine-tuning and comprehensive application for all companies. Civil society will advocate for this in the subsequent negotiations with the EU Commission, Parliament and Council,” says Bettina Rosenberger, giving an outlook.

The campaign "Human rights need laws!" is supported by the Treaty Alliance and calls for a supply chain law in Austria and in the EU as well as support for the UN agreement on business and human rights. The Social Responsibility Network (NeSoVe) coordinates the campaign.