German Bundestag Passes Bill to Repeal Supply Chain Due Diligence Act
On December 3, 2024, the German Bundestag (lower house of parliament) passed a bill (20/14021) entitled “Draft Law on Freedom from Supply Chain Bureaucracy and Repeal of the Supply Chain Due Diligence Act (Supply Chain Bureaucracy Freedom Act – LkBFreiG).”
Background
The Supply Chain Due Diligence Act, passed in 2021, required companies with over 3,000 employees in Germany to ensure that their supply chains were free from human rights violations or environmental damage. The law aimed to hold companies accountable for their operations and to protect workers and the environment in global supply chains.
Key Provisions of the Repeal Bill
The Supply Chain Bureaucracy Freedom Act aims to repeal the Supply Chain Due Diligence Act and replace it with a new set of regulations. Key provisions of the repeal bill include:
- Repeal of the due diligence obligation: The bill repeals the requirement for companies to conduct due diligence on their supply chains for human rights violations and environmental damage.
- Shift to voluntary measures: Instead of a mandatory due diligence obligation, the bill encourages companies to adopt voluntary measures to promote human rights and environmental protection in their supply chains.
- Reintroduction of the “firewall” provision: The bill reintroduces the “firewall” provision, which allows companies to exempt themselves from due diligence obligations for certain parts of their supply chains.
- Simplified sanctions: The bill simplifies the sanctions imposed on companies that fail to comply with the due diligence obligations.
Arguments for and Against the Bill
Supporters of the repeal bill argue that the Supply Chain Due Diligence Act was overly bureaucratic and placed an undue burden on businesses. They believe that voluntary measures are more effective and flexible in promoting human rights and environmental protection.
Opponents of the repeal bill argue that it would weaken Germany’s commitment to human rights and environmental protection. They contend that the due diligence obligation is a necessary tool to hold companies accountable for their actions and to ensure that global supply chains are sustainable and ethical.
Status of the Bill
The bill has passed the Bundestag and is currently under consideration by the Bundesrat (upper house of parliament). It is expected to be signed into law by the President in 2025.
Implications
If the Supply Chain Bureaucracy Freedom Act is passed into law, it will significantly reduce the due diligence obligations of companies in Germany. It remains to be seen whether voluntary measures will be sufficient to ensure that global supply chains are free from human rights violations and environmental damage.
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Drucksachen a new article on 2024-12-03 11:00 titled “20/14021: Gesetzentwurf Entwurf eines Gesetzes zur Freiheit von Lieferkettenbürokratie und zur Aufhebung des Lieferkettensorgfaltspflichtengesetzes (Lieferkettenbürokratiefreiheitsgesetz – LkBFreiG) (PDF)”. Please write a detailed article on this news item, including any relevant information. Answers should be in English.
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