On the occasion of the European Parliament’s Legal Affairs Committee voting in favor of the current compromise text on the EU Supply Chain Act (Corporate Sustainabilitiy Due Diligence Directive), the German Retail Association (Handelsverband Deutschland, HDE) has raised the alarm that the proposed supply chain regulation will overburden small and medium-sized businesses. According to the association, the compromise creates a noticeable competitive disadvantage for German and European companies compared to companies from third countries. If small and medium-sized enterprises themselves fall within the scope of the directive, they would have to fulfill all due diligence obligations arising from the directive directly and, if necessary, provide separate resources for this purpose.
“The proposed civil liability increases […] the risk that companies will be exposed to a considerable additional time and financial effort by dealing with pending lawsuits. On top of that, it creates an incalculable liability risk,” said Antje Gerstein, HDE managing director for European policy and sustainability. In view of the upcoming vote in the plenum of the European Parliament at the beginning of June, HDE believes that the focus must once again be on the competitiveness of European companies in a global context and on relieving companies of additional bureaucracy. “The European Supply Chain Act should be based on the German Supply Chain Act and its scope of application. Maximum harmonization is important to create a level playing field,” Gerstein said. Additional civil liability should be eliminated, he said. “Retailers should be supported in their efforts to create sustainable supply chains and not be subject to additional burdens.”
