Controversial project passed Bundestag decides Supply Chain Act

Status: 11.06.2021 11:58 a.m.

In the future, large German companies will have to pay more attention to compliance with human rights and environmental standards by their suppliers – otherwise they face fines. The opposition criticized the Bundestag resolution. The Bundestag has passed the Supply Chain Act, which makes large companies more responsible than before for conditions at their global suppliers. 412 MPs voted for the law, 159 voted against it and 59 abstained. During the final deliberations in parliament, the Greens announced that they would vote with the government factions of the CDU / CSU and SPD. The FDP and AfD spoke out against it, the left wanted to abstain. The controversial project had been wrestled for a long time.

There is a risk of fines of two percent of sales

From 2023, large companies in Germany will be obliged to take action against human rights violations and environmental violations at their suppliers. Failure to do so can result in fines of up to two percent of annual sales. It initially applies to corporations with more than 3000 employees. According to the coalition, there are more than 925 companies. From 2024, companies with more than 1000 employees are also to be included, which would be around 4800 companies.

“Children belong in schools and not in mines”

Federal Labor Minister Hubertus Heil (SPD) said that politics must take action against child labor. “Children belong in schools and not in mines,” he said. Around 160 million children are currently working around the world, half of them in particularly dangerous conditions. That is why we need clear standards.

For Development Aid Minister Müller it is “the most important law for more justice between rich and poor”. Image: dpa Development Aid Minister Gerd Müller (CSU) said the law was “certainly the most important law for more justice between rich and poor”. He emphasized that it came about against strong lobby pressure. In the interests of business, the Union had enforced that there is no additional civil liability for companies. Corporations would have legal and planning security, so representatives of the Union parliamentary group.

AfD: Law harms German economy

The FDP and AfD, however, accused the regulation of harming the German economy. The AfD criticized that competitors of German companies were the winners of the law. Greens and leftists welcomed the law as a first step, but criticized it as inadequate. The left argued that because there was no civil liability, the law was too weak and made too few companies accountable.