Merz quits the abolition of the supply chain law - what now?

Merz quits the abolition of the supply chain law - what now?

Deutschland - Chancellor Friedrich Merz called for the abolition of the EU supply chain directive in a current statement. Despite the clear contradictions on the part of the SPD boss Lars Klingbeil, who indicates the reform approaches recorded in the coalition agreement, Merz remains that the supply chain assistant law must be completely canceled. Klingbeil emphasizes that the Federal Government continues to be an effective EU supply chain law that aims to prevent exploitation and inhumane working conditions in global value chains. According to the Institute for Human Rights

Merz ’position is in contrast to the goals of the corporate sustainability due diligence directive (CSDDD), which came into force on July 25, 2024. This guideline obliges large companies to comply with human rights and environmental standards in their global value chains. This is intended to encourage companies to identify risks and to promote social justice and ecological sustainability, which is also confirmed by CSR in Germany . The responsible EU member states now have time until July 25, 2026 to transfer this guideline to national law.

The potential influence on companies

The CSDDD applies to companies with more than 1,000 employees and annual sales of over 450 million euros. Companies outside the EU that generate accordingly in the EU are also affected. The regulation includes the entire spectrum of entrepreneurial activities and also extends to the front and after delivery chains. It is important that companies have to establish a risk-based system to avoid human rights and environmental damage, which is viewed by the business associations. These fears to suffer from disadvantages to international competitors should fall, such as "https://www.welt.de/politik/deutschland/article256102492/union-und-spd-merz-widerspricht-werden-werden-das-beaufen-liveicker.html"> Welt reported.

In the event of violations of the regulations, there are considerable fines that can be up to 5 percent of the global net turnover of companies. The EU directive therefore has far-reaching implications for corporate management and places high demands on the reporting obligations that are to be designed uniformly and less stressful for smaller suppliers. Compliance with these standards could be a challenge for many companies, especially since they are already investing in human rights care.

political tensions and economic forecasts

The political tensions within the Union seem to be depicting, while the SPD faction leads, among other things, a move to involve civil servants in the statutory pension insurance. Economic Minister Katherina Reiche also criticizes the energy policy of the coalition partner and announces a realignment of the energy transition. At the same time, Union representative Jens Spahn predicts economic growth from 0.2 to 0.3 percent by the new government, while the Union is discussing an inconsistent handling of the left party.

The dispute over the supply chain law and the associated labor law framework could be the decisive issue in the upcoming political arguments, while employers reject an increase in the minimum wage and the planned rejections of asylum seekers at the German limits based on national law are discussed. The political and economic climate remains tense and could significantly influence the implementation of the guidelines and reforms.