Agreement reached on weakened EU supply chain law

The EU is set to weaken its European supply chain law, designed to protect human rights, even before its implementation. Negotiators from EU member states and the European Parliament have agreed in Brussels that the regulations will now apply to a much smaller number of large companies, as announced by both parties. The amendment still requires approval from the Parliament and EU member states, which is usually a formality.

In future, the regulations will only apply to large companies with more than 5,000 employees and an annual turnover of at least 1.5 billion euros. The original threshold was set at 1,000 employees and a turnover of 450 million euros.

Additionally, companies that violate the rules will no longer be subject to civil liability at the EU level. This removes the possibility for victims of human rights abuses to file lawsuits. Companies failing to comply with the regulations could face a penalty of up to three percent of their global net turnover. Furthermore, according to the Parliament and EU member states, there will no longer be a requirement to develop action plans for climate targets.

Merz called for complete abolition

This move was preceded by a fierce political debate. Nearly a month ago, the conservative European Parliament group, including the CDU and CSU, paved the way for weakening the regulations with support from right-wing and far-right parties. EU member states had also previously advocated for less stringent rules.

Chancellor Friedrich Merz (CDU) had even called for the complete abolition of the directive during his inaugural visit to Brussels. When an initial compromise to weaken the EU supply chain law failed in the European Parliament, Merz called it “unacceptable” and demanded a correction.

The aim of the supply chain law is to strengthen human rights globally. Large companies are to be held accountable if they profit from human rights violations such as child or forced labour. The proposal was vehemently criticised by companies. They argued that the bureaucratic burden of monitoring potential violations along often complex supply chains was unreasonable.

Controversial majority in parliament

The right-wing majority in parliament in favour of weakening the supply chain law was heavily criticised by the Liberals, Social Democrats and Greens. The decision was controversial because the conservative European People's Party (EPP), which includes the CDU and CSU, had sought and found a majority outside of the usual alliances.

Typically, the EPP, Social Democrats (S&D) and Liberals work together in an informal coalition. They hold a narrow majority in Parliament. The supply chain law, however, is now likely to be the first major legislative project to be passed by Parliament with a clear right-wing majority. The impact this will have on future cooperation between the EPP, S&D and Liberals remains unclear.

Criticism from SPD and Greens

SPD Member of the European Parliament (MEP) Tiemo Wölken described it as a dark day for Europe, stating that human rights and climate protection have clearly become mere bargaining chips. “A compromise with the democratic forces in Parliament would have been possible, but it failed due to the blackmail tactics of the conservatives,” said Wölken.

“Tonight, the conservatives in the European Parliament and the EU member states have driven the final nail into the coffin of the EU supply chain law,” criticised Green MEP Anna Cavazzini.

This article was translated to English using an AI tool.

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