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The passing of EU Supply Chain Directive by the EU Parliament has been a lengthy process. Our new publication looks at what it means for the European market.
Eleven years after the devastating collapse of the Rana Plaza textile factory in Bangladesh, the European Parliament has voted in favour of the EU Supply Chain Directive. This clears the way for one of the EU’s most controversial projects in the area of corporate due diligence. Formally, the European Council must now also give its approval. But after all the battles and concessions of recent months, no further obstacles are to be expected. [editorial note:The EU Council has given its final approval on 24 May 2024.]
The EU Supply Chain Directive requires large companies operating on the European market to respect human rights and environmental protection in their global supply chains. Non-European companies trading in the EU are also covered by the directive. The EU Supply Chain Directive thus heralds a paradigm shift for which trade unions and civil society actors in the EU and around the world in particular have been fighting for. They have been supported in this endeavour by progressive politicians and business leaders. Instead of voluntary self-commitment, the directive relies on binding due diligence obligations for companies, which can be monitored and sanctioned in the event of non-compliance. This is an important EU response to the worldwide outcry following the collapse of the Rana Plaza textile factory, which led to a global debate on responsibility, human rights and exploitation.
With its own Supply Chain Due Diligence Act (LkSG), Germany is an important point of reference for many EU member countries. Social democratic forces in Germany have been particularly instrumental in driving the project forward at the European level. The European directive will now also lead to important changes in Germany:
The process leading to the passing of the EU Supply Chain Directive took a total of three years and could only be concluded by making far-reaching concessions to its opponents. Germany also made a drastic U-turn towards the end of the negotiations and ultimately abstained in the European Council because of liberal opposition within the government. Many myths have been created in the course of these conflicts. The EU’s Supply Chain Directive is not a ‘bureaucratic monstrosity’, nor will it lead to an avalanche of civil lawsuits against companies. Instead, we must all recognize that the Directive is a long overdue attempt to adapt the global economy to the environmental and social challenges of the twenty-first century. It will make our globalization not only fairer and more sustainable, but also more resilient. The Directive is therefore also beneficial for the economic development of the EU and manufacturing countries worldwide.
In our publication, lawyer Robert Grabosch, LL.M., analyses in detail what obligations companies have under the EU Supply Chain Directive, the protections for people and the environment that must be guaranteed in the future, and the differences between the European Directive and the German Supply Chain Act.
Grabosch, Robert
Global protection for people and the environment / Robert Grabosch ; Issuing department: Division for International Cooperation, Global and European Policy. - Bonn : Friedrich-Ebert-Stiftung e.V., June 2024. - 13 Seiten = 1,6 MB PDF-File. - (Perspective). - (Work and social justice)Einheitssacht.: Die EU-Lieferketten-Richtlinie . - Electronic ed.: Bonn : FES, 2024ISBN 978-3-98628-493-0
Download publication (1,6 MB PDF-File)
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