Some EU member states have already introduced corresponding laws. Since June 65438+ 10 this year, the German Supply Chain Law (LkSG) came into effect. This law applies to enterprises with at least 3,000 employees in Germany, and about 700 enterprises are affected. From 2024, it will be applicable to enterprises with at least 1000 employees in Germany, and about 2,900 enterprises will be affected. In February last year, the European Commission announced the draft supply chain law at the EU level. At present, the difference between the EU- level supply chain method and the German supply chain method is that the former has a wider scope of application: for EU enterprises, the threshold is set at more than 500 people, the annual net sales are at least 65.438+0.5 billion euros, and about 9,400 enterprises are affected. Textile, agriculture and other high-risk industries have more than 250 employees, annual net sales of at least 40 million euros, and about 3,400 affected enterprises. For non-EU enterprises, the scope of application is either to be active in the EU market or to meet the above two conditions. The number of enterprises affected is 2,600 and 1400 respectively. In terms of strength, German legal requirements focus more on the direct suppliers of enterprises, while EU legislation may cover the whole supply chain.
Human rights and environmental protection organizations and other forces call for stricter laws in the name of sustainable development and fairness, but enterprises and economic circles are extremely headache about this, trying to weaken and dilute the power of such a law to safeguard the competitiveness of European enterprises, even in the name of globalization. In such a game of interests of all parties, whether to give consideration to human rights and the environment or just choose one, whether to cover every link of the supply chain, how to set the severity of the duty of care of enterprises, and whether to establish a positive list are all controversial points.
130 The basic position of the supply chain law initiative initiated by more than 30 NGOs is that the German supply chain law has confirmed the possibility of legislation, but there are loopholes and deficiencies in the law, and the legislation at the EU level must be corrected. They worry that the final law is just a paper tiger.
According to the report jointly issued by Misereor, a relief organization, and GPF, a global policy forum, the publication schedule of the European Commission's case proposal has been repeatedly postponed due to the boycott of Bretton, the EU internal market commissioner, and the Regulatory Review Board (RSB). In Germany, German economic associations, including the German Employers' Association (BDA) and the German Federation of Industries (BDI), tried to weaken the laws at the EU level and prevent the introduction of German laws. They demanded the introduction of special rules. According to the non-public documents disclosed by the German news investigation media Correctiv and SWR, the German Employers' Association believes that the German economic community expects to introduce a regulation in Europe, and its implementation must be operational and moderate, with clear boundaries: the obligation to protect human rights should belong to state power and government agencies, rather than being easily outsourced to enterprises. The Chamber of Commerce also believes that such a law will cut off the global supply chain and lead to de-globalization. Economic interest groups, including Denmark, Sweden and especially Germany, are exerting pressure.
In EU legislation, the position of the German government is remarkable. In the alliance agreement of 20021at the end of the year, the German federal government promised to support the supply chain laws that are effective at the EU level, conform to the guiding principles of the United Nations on enterprises and human rights, and are affordable for small and medium-sized enterprises. In Germany's three-party alliance, the Social Democratic Party and the Green Party prefer stricter legislation, while the Liberal Democratic Party is the opposite. At the beginning, one of the campaign slogans of the Green Party was to better protect human rights. At the beginning of 20021,Chabeck, then chairman of the Green Party, said that child labor and exploitation were not allowed to be part of the production of clothes or shoes we bought, but a supply chain law with teeth and bites could guarantee all this. At the beginning of 2022, the labor minister from the Social Democratic Party also expressed a similar position, saying that there would be no "ifs and buts" without compromise. However, the internal documents of the German federal government in September 2022 disclosed by a German TV monitoring channel show that Germany is trying to weaken and dilute the EU supply legislation, especially in terms of corporate civil liability. In the original draft of the EU supply chain law, the victims can file a lawsuit against the fault of the enterprise in the EU court. Germany proposed a "safe harbor" scheme to reduce corporate responsibility. In other words, an enterprise can let a third party certify a product or a production process, and only when there is gross negligence or intention will the enterprise bear the responsibility. During the fire in Pakistan, the factory was certified as safe by a certification body. Critics believe that through the safe harbor, enterprises can put aside their responsibilities.
In addition to special rules, there is also a discussion point about risk analysis. According to Monitor, the draft of the European Commission requires enterprises to report the risk of serious human rights violations that may exist in their supply chains, while the German government hopes to limit the risk of corporate responsibility to the range that enterprises may have an impact. In other words, if an enterprise can prove that it cannot influence the working conditions of a mine or factory in a certain country, it does not have to fulfill its duty of care in this respect.
What does such a law mean to enterprises? Entrusted by IMPULS Fund of German Machinery and Equipment Manufacturing Federation, Kiel Institute for World Economics (Ifw) evaluated the impact of supply chain laws on German machinery and equipment manufacturing industry, and released the evaluation report in August 20021. The report pointed out that the supply chain law will increase the supply risk of enterprises, and enterprises tend to choose to reduce suppliers in order to reduce risks, and at the same time transfer the supply chain from high-risk countries to industrial countries, thus increasing production costs, weakening competitiveness and increasing dependence on remaining suppliers. From the perspective of suppliers, especially those from developing countries, their export costs will increase, which will lead to the loss of exports and even the elimination of the market. Generally speaking, export enterprises, including those in developing countries, must pay higher wages, hire more skilled employees, and pay more attention to corporate social responsibility than enterprises that are only active in the local market. In view of this, the supply chain law will only bring the opposite consequences. It is suggested to establish a negative list as an alternative, that is, a list of enterprises that cannot establish trade relations due to human rights and environmental conditions, which can not only reduce the burden on enterprises and suppliers, but also protect the human rights and environment of the countries where suppliers are located more effectively.