The EU supply chain law is coming, that is now certain – even if it goes less far than originally planned. To whom the rules for the protection of human rights apply.

The EU states have finally passed the European supply chain law. On Friday in Brussels they agreed to plans to strengthen human rights worldwide, according to information from the Belgian EU Council Presidency. The aim is, among other things, to ensure that large companies can be held responsible in European courts in the future if they profit from human rights violations in their supply chains, such as child labor or forced labor. The European Parliament cleared the way for the project a month ago. 

Companies must also create climate plans. These are intended to ensure that their business model is compatible with the goal of limiting global warming to 1.5 degrees compared to pre-industrial times.

The new EU rules were weakened during the negotiation process, so that fewer companies are affected than originally planned. Instead of applying to companies with more than 500 employees and at least 150 million euros in sales, they should apply to companies with 1,000 employees and 450 million euros in sales, after a transition period of five years. 

After three years, the requirements will initially apply to companies with more than 5,000 employees and more than 1.5 billion euros in sales worldwide. After four years, these limits will then drop to 4,000 employees and 900 million in sales. 

There was also open debate in the federal government about the plan, with FDP representatives in particular saying it goes too far. They fear bureaucracy and legal risks for companies. Politicians from the SPD and the Greens, on the other hand, are in favour of the regulation. Germany already has a supply chain law, and the EU regulation goes beyond this in certain aspects – for example with regard to the liability of companies.

The text of the law now only needs to be published in the Official Journal of the EU. The EU states then have a good two years to implement the new rules into national law.