“Protecting human rights and the environment is beyond question. However, the three-way discussion of the EU Supply Chain Act is completely unrealistic,” warns the German Steel and Metal Processing Industry Association (WSM). The association, which represents more than 5,000 medium-sized German companies, considers the legislative proposal to be alarming, destructive and unhelpful.
“Medium-sized industrial companies who are indirectly affected by the Act will withdraw from the countries concerned, and non-EU companies will take over the territory. This is unsustainable for humans, the climate and for the EU economy,” says CEO Christian Vietmeyer.
Unrealistic: a gapless check
According to WSM, the EU version also harms steel and metal processing companies with fewer than 250 employees. Even now, suppliers have noted that their customers delegate their own responsibility and expect their suppliers to perform gapless checks of countless sub-suppliers, users and logistics providers in the supply chain.
This large task far exceeds the resources and capacities of medium-sized industrial companies. They already bear the burden of massive cost pressure and pressure from the authorities, as well as decreases in orders. In June, their expectations or the coming months fell by another 15 percent. The EU requirements would bring everything to a head.
Alarming: EU plans to penalise offences more severely
The result: Due to their fear of penalties, medium-sized companies are withdrawing from regions struggling with human rights and environmental problems. This is particularly the case as Brussels plans to penalise offences more severely. “Who would risk a gap in a supply chain if there’s a threat of severe sanctions?” opines Vietmeyer.
Destructive: EU is torpedoing global supply chains
The withdrawal forced by the Act would have a doubly negative effect, both on the countries that the Act intends to help and on the European economy. Volker Bockskopf, Consultant for the Environment and Occupational Health and Safety Policy at WSM: “The planned provisions are counterproductive for medium-sized industrial businesses: Withdrawal instead of the commitment they offer will further weaken our ability to compete.”
Unsustainable: people are falling through the gaps in supply chains
The shift away from supply chains will abandon the people in already disadvantaged countries. The empty space left by EU companies may be taken over by those that prioritise workers and the climate less. “What is sustainable about that?” is a question asked not only by the WSM. The WSM’s demand to the responsible politicians is as follows: “The EU Supply Chain Act must not send medium-sized companies as lambs to the slaughter!”
