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European supply chain law: “EU must take into account limits of SMEs”

Date

25 Jan 2022

Sections

Innovation & Enterprise

Brussels/Frankfurt, 25 January 2022 – The European Parliament is discussing future legislation on sustainable corporate governance. VDMA President Karl Haeusgen comments:

"It is imperative that an EU supply chain law, such as the one currently being drafted by the EU Commission, is manageable and implementable for medium- sized and often family-run companies. It is therefore important that the EU Parliament and the EU Commission debate the impact of a European supply chain law on international trade. Machinery and plant manufacturers respect human rights. At the same time, unrealistic requirements for due diligence in the supply chain could cause internationally networked SMEs in particular to withdraw from certain markets in order to avoid risks. This would do no service to the global enforcement of human rights - on the contrary. Moreover, the competitiveness of European companies would also be jeopardized.

Uniform rules on sustainable corporate governance in Europe make sense in order to prevent a patchwork of different national requirements. Due diligence must be limited to what companies can control and where there is an obvious risk in the supply chain. Limiting due diligence to the first stage of the supply chain would be a conceivable solution to make the legal requirements more manageable for SMEs. This is the only way industry can make a difference and further increase its contribution to sustainable business management."

A photo of VDMA President Karl Haeusgen can be found here.

The VDMA represents more than 3,400 German and European companies of the mechanical engineering industry. The industry stands for innovation, export orientation and medium-sized businesses. The companies employ around four million people in Europe, more than one million of them in Germany. Mechanical and plant engineering represents a European turnover volume of around 800 billion euros. With a net value added of around 270 billion euros, it contributes the highest share of the entire manufacturing sector to the European gross domestic product.

Best regards

Tanja Kotschedoff

Communications

VDMA European Office

Boulevard Reyers 80

B-1030 Brussels

Phone     +32 2 706 8123

E-Mail     tanja.kotschedoff@vdma.org

Internet  vdma.org

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