Germany to apply supply chain law in “restrained and business-friendly” way
Clean Energy Wire
The German economy ministry (BMWE) has ordered a “restrained and business-friendly” application of supply chain rules designed to improve social and environmental standards. In coordination with the labour ministry (BMAS), the economy ministry instructed the responsible federal authority BAFA to abolish reporting duties and cut the list of administrative offences, as part of the coalition government’s promise to cut red tape.
The coalition agreed the reform in early September. Reporting duties are scrapped retroactively, and ongoing offence investigations no longer relevant are dropped, according to the BMWE. Imposing fines will now be subject to tight conditions, such as in cases of “especially grave” human rights violations, the ministry said. However, the economy ministry told BAFA to handle reported cases of administrative offences “very restrictively.”
In a next step, Germany's Supply Chain Act will be replaced by the EU’s Corporate Sustainability Due Diligence Directive (CSDDD). The economy ministry said the government would aim to keep compliance burdens "as small as possible.”
Chancellor Friedrich Merz has promised to ease supply chain reporting duties, which many companies criticise as overly time-consuming. Industry lobby groups also criticised the European CSDDD for similar reasons. Critics say sustainability requirements in the CSDDD aimed at increasing transparency for green finance lending criteria are also being watered down as the EU prioritises industrial recovery over environmental concerns.
