Ref. Ares(2022)1789387 - 10/03/2022
KOMPAKT
MARCH 2021
Supply Chains Act: Do not overburden
SMEs
STATUS
The EU Commission wil present a proposal on sustainable corporate governance
in the second quarter of 2021, which is to regulate corporate due diligence
obligations in supply chains and related liability issues. In paral el, a German
supply chain law is being discussed at the federal level, which is foreseen to be
adopted by the end of the current legislative period.
EVALUATION
The skilled crafts sector stands for sustainability. Supply chains in skilled crafts
are often local and regional, and customers and suppliers work together in a
trustful and long-term relationship. Many crafts enterprises are also committed
locally to the quality and safety of products and services. However, legal
regulations for providing evidence and sharing information in the supply chain are
mostly created with industrial value chains and users in mind. For crafts
enterprises, this often means additional bureaucratic burdens which not only
impede good approaches, but are not at al proportionate to the market position
or the possibilities of these enterprises.
Duties must remain proportionate and feasible. Most crafts enterprises obtain
their products and goods through intermediaries in the EU. As a result, they
usual y have no direct contact with international suppliers. Obligations to provide
supporting documents must therefore be limited to the import of goods when
entering the European internal market. However, the further processing of goods
in Europe should not be subject to those obligations.
Disclosure and evidence obligations also affect crafts enterprises
indirectly. An obligation for large companies has an impact on suppliers and
downstream service providers, as they often are contractual y obliged to comply
with existing rules and regulations as well. That is why there is a strong need to
limit the scope of application by means of a high SME threshold and to limit these
reporting obligations to the first supplier stage („tier-1“).
2
New regulations can hinder sustainable approaches, for example in the
field of the circular economy. German organ builders, for example, import tin
from Indonesia to make metal pipes. To be as sustainable as possible, old tin
pipes are melted with new tin and cast into new metal pipes. There is no need for
elaborate obligations to prove, which tin batch is to be assigned to which metal
pipes, as they run counter to this resource-saving approach.
Take existing industry solutions into account. Crafts enterprises that can
prove with existing sectoral quality seals that the materials they are processing
do not originate from conflict regions or were produced under working conditions
that violate human rights should be exempted from the planned control and
verification obligations („white list“).
DEMANDS
Given the severe economic consequences of the Corona pandemic, a supply
chain law must not lead to unnecessary burdens, especial y for small businesses
in the skil ed crafts sector. Therefore, a future supply chain law
- should in general be proportionate and consider already established
sectoral sustainability and CSR labels;
-
should identify bureaucratic burdens for SMEs by means of applying a
thorough impact assessment;
- should
only
be
introduced
at
European
level
(
level playing-field);
-
should be practical y limited to the first supplier stage (tier-1);
-
must not foresee civil or even criminal liability;
-
should not only focus on an SME exemption; because even with a high
threshold, reporting obligations can be shifted to SMEs; and
-
should at least respect the criteria for exempting SMEs laid out in of the
CSR Directive 2014/95/EU.
Status: 22 March 2021
Responsible:
Phone: