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German Government Considers Pausing Supply Chain Law for Two Years
The German government is contemplating putting a hold on the country's supply chain due diligence law for two years, according to Economy Minister Robert Habeck. This move aims to alleviate the bureaucratic burden on companies until a European directive takes effect. The supply chain act, which came into force in January 2023, requires companies with over 1,000 employees to implement due diligence procedures to monitor suppliers' human rights and environmental protection standards. However, German companies have expressed difficulties in meeting the cost and bureaucratic burden of the law, claiming that it has been detrimental to their global competitiveness. The European Corporate Sustainability Due Diligence Directive (CSDDD) is set to be rolled out in 2026, and Germany will have to revise its own supply chain law once the European law comes into effect. Habeck's proposal has received mixed reactions from the government coalition partners, with the Social Democrats party rejecting the suggestion, while FDP lawmaker Carl-Julius Cronenberg welcomed it. A final decision on the issue is expected in two to three weeks.
