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EU States Back Major Rollback of Supply Chain Due Diligence Law

Member states have stripped the measure of its broad due diligence requirements, leaving only the largest firms subject to narrow human rights checks.

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Ein Mann schneidet eine Kakaofrucht ab
Die EU-Mitgliedstaaten setzen sich beim Lieferkettengesetz für weitere Zugeständnisse an die Wirtschaft ein. Die Regeln sollen für deutlich weniger Unternehmen gelten.

Overview

  • Member states agreed to raise coverage thresholds from companies with more than 1,000 employees and €450 million in turnover to those with over 5,000 employees and €1.5 billion, removing most firms from the law’s scope.
  • The proposed reforms restrict due diligence to direct suppliers in high-risk sectors, replacing the original broad requirement to monitor entire supply chains.
  • Governments plan to remove EU-wide civil liability for supply chain breaches, making cross-border lawsuits against corporations more difficult.
  • Business lobby groups and influential leaders such as German Chancellor Friedrich Merz successfully pressed for the dilution, arguing stricter rules would harm competitiveness.
  • The European Parliament must still adopt a negotiating position while NGOs and human rights advocates warn the changes will gut the law’s effectiveness.