The German government has flipped on supply chain due diligence. Once at the forefront of due diligence regulation, Germany has rapidly changed course, advocating repealing key due diligence laws. After elections ushered in a new government earlier this year, plans were announced to repeal the German Supply Chain Due Diligence Act. Now Germany’s new chancellor has signaled to the EU that he wishes to see the European Supply Chain Due Diligence Act (CSDDD) abandoned. Euractiv reports:
“In February, the European Commission proposed that companies should get an extra year before they must comply with the CSDDD. These changes are now being implemented in the Brussels law-making machine, with EU countries and MEPs in agreement. The new German chancellor wants more. ‘Postponement is at best a first step,’ he said during his first trip to Brussels, adding that ‘the complete repeal of some directives is the next logical step that must follow.'”
The CSDDD faces an uphill political battle as the ongoing Omnibus negotiations also seek to gut the law. It’s unclear if Germany’s influence is likely to lead to a full CSDDD repeal, but political pressure is mounting that will substantially water down the law. At a minimum, we’ll likely see scoping requirements for CSDDD expanded, meaning fewer companies will be subject to the law’s requirements. We could also see the law’s climate transition plan requirement removed and reductions or deletions of provisions establishing EU-wide civil liability for due diligence infractions.
Members can read more about supply chain due diligence here.
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