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Vote in the EU Parliament "European due diligence proposal overwhelms businesses"

Date

24 Apr 2023

Frankfurt/Brussels, 24 April 2024 – Commenting on the vote in the European Parliament's Legal Affairs Committee on the European corporate sustainability due diligence directive, VDMA Executive Director Thilo Brodtmann says:

"The European engineering industry is already committed to human rights and environmental protection in supply chains. We support the objectives of the European Union to consolidate social and environmental standards in business relations. However, the European Commission's proposal for a corporate sustainability due diligence and the foreseeable tightening up by the European Parliament go far beyond this goal. The requirements go too far, especially for medium-sized companies, and will not improve the protection of human rights in the world. SMEs cannot control all stages of their supply chains in distant countries because they do not even have the information they need to do so due to their lack of market power.

This applies even more to the EU's plan to control customers as well!

In addition, the enormous bureaucratic effort will overburden medium-sized companies with strong international networks, which are typical of the engineering sector. They will be forced to “play safe” and withdraw from certain regions. They should therefore be excluded from the scope and the employee threshold should be aligned with the German due diligence law.

Furthermore, European due diligence legislation should be limited to what companies can actually control: their own operations, their subsidiaries and their direct suppliers. A "white list" of countries in which we have fundamental confidence would at least create legal certainty in this area and significantly reduce the amount of work involved. Particularly in view of the debate about the deindustrialization of Europe, the European Parliament should set an example and not increase the bureaucratic burden on European companies. We need a manageable due diligence law to avoid further jeopardizing the competitiveness of European companies.”

 

A photo of Thilo Brodtmann, VDMA Executive Director, can be found here

VDMA represents more than 3600 German and European mechanical and plant engineering companies.

The industry stands for innovation, export orientation and SMEs.

The companies employ a total of around 3 million people in the EU-27, more than 1.2 million

of them in Germany alone. This makes mechanical and plant engineering the largest employer

among the capital goods industries, both in the EU-27 and in Germany.

In the European Union, it represents a turnover volume of an estimated 770 billion euros.

Around 80 percent of the machinery sold in the EU comes from a manufacturing plant in the domestic market.

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