EU supply chain legislation aims to strengthen human rights worldwide – impact on Switzerland unclear. Federal Council elections with disruptive maneuvers

Negotiators from the European Parliament and EU countries have agreed on a supply chain law. The aim is to hold large companies liable if they benefit from child or forced labor outside the EU.

This was evident from communications from the European Parliament and the EU countries on Thursday. Larger companies must also put in place a plan to ensure that their business model and strategy is compatible with the Paris Agreement on climate change, as announced by EU states.

Under the planned rules, companies will be responsible for their business chain, including business partners of the company and, in some cases, for downstream activities such as sales or recycling. The financial sector should initially be excluded from the requirements. In principle, the rules apply to companies with more than 500 employees and a turnover of at least 150 million euros.

The law also applies to companies from outside the EU

Companies not established in the EU are subject to the law if they have a turnover in the EU of more than EUR 300 million. The European Commission should publish a list of affected non-EU companies.

It is also intended that companies can be held accountable in European courts if human rights violations occur in their supply chains. The agreement still needs to be confirmed by Parliament and EU countries, but that is usually a formality.

The impact on Switzerland is not yet completely clear

The chair of the Internal Market Committee in the EU Parliament, Anna Cavazzini, spoke of a good day for human rights, but she would have liked to see even stricter rules for climate and environmental protection. The Green politician also emphasized that the EU supply chain law goes further than German law.

In the future, more and more companies will have to register risks throughout their supply chain. The EU Supply Chain Act is a so-called directive that the federal government has yet to convert into national law; A supply chain law has been in force in Germany since the beginning of this year.

The impact on Swiss companies is not yet completely clear. Large business associations first want to analyze the law, they told the AWP news agency.

Criticism of the law came from business representatives: they feared that it would create too much bureaucracy for companies and therefore put them at a competitive disadvantage compared to companies from third countries that are not affected by the rules. After the agreement, German employers’ president Rainer Dulger said: “The result is a hasty and poorly drafted compromise.” He called on Germany to reject the compromise and spoke of a threatening European bureaucratic monster.

Millions of minors suffer from child labor

According to the German Federal Ministry for Economic Cooperation and Development (BMZ), almost 80 million children worldwide work under exploitative conditions in textile factories, quarries or on coffee plantations. “Also for our products,” says the ministry. According to aid organization Terre des Hommes, many products can be affected by child labor. This includes flowers, clothing, computers, tobacco, fireworks, footballs, cosmetics and food. (saw/sda/awp/dpa)