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Yesterday, EU ambassadors approved the planned military operation in the Red Sea: European warships are set to protect merchant vessels from attacks by the Houthi rebels from Yemen in the future. The operational headquarters of Operation Aspides will be established in the Greek city of Larisa.
For EU standards, the EU is responding swiftly to the threat to the most important sea route between Asia and Europe. Europeans realize that they also need to do more militarily to safeguard their interests in the neighborhood and guarantee their own security. After all, Russia is heavily arming itself, and Europe may no longer be able to rely on the protective power of the USA after the presidential elections in November.
The offer for the campaign dates back to Dec. 2, 2016, and was addressed to the Erdgas Mobil Association. Table.Media has obtained the concept for it. It comprises nine pages and is signed by Jürgen Resch, head of the Environmental Action Germany. Erdgas Mobil is now called Zukunft Gas and is supported by leading companies in the gas industry.
The campaign was supposed to be titled “Clean air through clean drives“. Before submitting the proposal, there were reportedly personal negotiations between leading representatives of the DUH and the gas association. In the end, the association decided against financing the campaign.
Upon inquiry, the DUH confirmed: “At the end of 2016, we sent a project outline ‘Clean air through clean drives’ to Erdgas Info, along with the expected costs for this three-year project.” The DUH emphasizes that “It is not an offer.” It is merely a “project outline”. Furthermore, they state: “We ask you to consider this legally significant difference.”
The fact that the DUH considered launching a lobbying campaign to promote fossil gas in exchange for money is surprising: The organization is recognized by tax authorities as charitable and holds high moral standards for authorities and companies.
The DUH has significantly contributed to holding cities legally accountable for the massive and prolonged exceedance of EU air quality standards: Stuttgart and other municipalities were legally compelled to impose driving bans on diesel vehicles. The DUH branded cars with diesel engines as the main culprits for high nitrogen oxide levels in urban areas. The campaign for gas as a fuel in cars aimed to promote a less environmentally damaging drive.
It specifically targeted the diesel engine, which had also fallen into disrepute due to the emissions scandal. To improve air quality in cities, consumers needed to be convinced of less environmentally harmful alternatives to the diesel engine. Purely battery-electric vehicles were hardly present on the EU market at the time. The DUH advertised the “environmental benefits” of vehicles powered by fossil gas: “Natural gas vehicles emit low levels of nitrogen oxide and thus virtually no particulate matter from exhaust emissions.” Moreover, CO2 emissions were lower than those of petrol- and diesel-powered vehicles.
Experts acknowledge that gas-powered vehicles have slightly lower CO2 emissions. However, at the time, new diesel cars meeting the Euro 6dtemp emission standard emitted significantly fewer fine particles and methane emissions than many natural gas vehicles powered by fossil gas.
The “project outline” is very precise. It provides insight into the working methods of the environmental organization. “For the implementation of the outlined activities, we estimate a financial expense of €750,000 in 2017, €700,000 in 2018, and €650,000 in 2019,” the document states. Furthermore, it says, “The annual funding support should be transferred to the DUH in two equal parts on Feb. 1 and Aug. 1 of each year.”
The DUH talks about a “campaign” at several points. For example, it states: “The campaign is flanked by various vehicle measurements, expert discussions, public relations, and political work on natural gas as a clean alternative drive in the transportation sector.” The campaign would be nationwide. The “project work” could rely on the “existing excellent network of the DUH in the fields of air purification, climate action and transportation”.
The DUH also promises: “The relevant German environmental and transportation associations support the cause.” They would be closely involved in the campaign by the DUH. Furthermore, “Our networks also include NGOs from other member states.” At the EU level, the DUH collaborates primarily with the EU environmental umbrella organization “Transport and Environment” (T+E).
Additionally, the DUH offers to lobby for tax privileges for fossil gas. It promises to “support the extension of the tax advantages of the fuel” as part of the “regular top-level discussions between the DUH and leading environmental politicians in Germany”.
The DUH planned to “conduct measurements with test vehicles on the road to support the climate and air quality benefits compared to diesel engines.” The “Emissions Control Institute” (EKI) of the DUH is mentioned in this context. The “technical management is the responsibility of Dr. Axel Friedrich,” a former employee of the Federal Environment Agency (UBA) who joined the DUH after reaching retirement age.
The DUH also makes it clear that it claims to be a certification body. There is a “clear gap between test stand and real emissions of nitrogen oxides,” writes the DUH. The consequence is “great uncertainty and disillusionment of the customer about credible manufacturer information”. An “independent label” could help regain customer trust.
Then it says: “In combination with on-road measurements of various vehicles, Environmental Action Germany has the opportunity to initiate such a label.” The calculation did not include the item to push through a new label for gas-powered motor vehicles. The client would have had to pay an additional fee for this. The offer states: “Proposal for an extension module, not yet calculated”.
The DUH detailed not only the costs, such as a total of €240,000 for press and public relations work (“regular press releases, press conferences, presentation of successful examples”). The document also includes “travel expenses/honoraria” of €30,000 each annually.
The DUH, known for its readiness to litigate, also wanted to invoice substantial amounts for possible legal disputes to its client. For 2017 and 2018, the DUH estimated costs for “lawsuits/legal opinions” of €70,000 each, decreasing to €50,000 in 2019. Under the item “miscellaneous”, €20,000 were to be billed annually.
The client of the campaign should have the option to terminate the contract: The DUH was ready to grant “the sponsors the right to announce the termination of the funding no later than four months before the end of the 1st calendar year, by Dec. 31, 2017 (…).”
According to the DUH, the idea originated during the “Round Table on Gas Mobility” of the Federal Ministry of Economics. They followed the invitation because “at that time, as today, the gas engine was a less CO2- and above all less pollutant-generating drive technology compared to diesel.” The DUH was asked at this round table “whether we would do further project work on gas drives (…)” and showed openness to it. The representative of the Ministry for Economic Affairs regretted not having a budget for such a project. Therefore, the project outline was then sent to Erdgas Info.
Upon inquiry by Table.Media, the DUH did not provide information on how many offers it has submitted since 2016 for the financing of campaigns by third parties. Upon request, it also refused to disclose how much money it may have earned through similar campaigns since 2017.
The move came as a surprise at first glance: Pieter Omtzigt, formerly a Christian Democrat and now leader of the newly formed New Social Contract Party (NCS), withdrew from the exploratory talks for a right-wing government under Geert Wilders this week. The timing, in particular, raises questions: On Monday, the parliament-appointed moderator Ronald Plasterk is expected to inform the Second Chamber about the status of the exploratory talks. It was anticipated in The Hague that the moderator would cautiously draw a positive conclusion and announce the start of the actual coalition negotiations.
Now everything seems to be up in the air again, with Pieter Omtzigt not ruling out ultimately tolerating a minority government from a distance. Although Geert Wilders won the election on Nov. 22 with a significant lead, he still needs at least three partners with his 37 out of 150 seats in the fragmented Second Chamber.
During the exploratory talks, Pieter Omtzigt’s NCS, the center-right VVD of Dilan Yesilgöz, and the Farmers-Citizens Movement BBB of Caroline van der Plas were at the table. Former Christian Democrat Omtzigt justified his withdrawal by stating that he received confidential information about the allegedly precarious financial situation too late.
Observers consider the justification to be pretextual. Instead, there are hardly bridgeable differences of a substantive and personal nature behind the withdrawal. Geert Wilders is known for insisting on absolute control. In his far-right Party for Freedom (PVV), this has never been a problem, as the populist has been the sole member since its inception, thus formally securing his absolute power. But can someone like that govern, especially in a coalition?
This is a question that potential partners are also asking themselves. The question remains open whether Geert Wilders, with his one-man club, is capable of teamwork and organizationally and personally able to fulfill the role of the largest governing party, writes the left-liberal newspaper “de Volkskrant”.
Geert Wilders has always been a loner, reinforced in recent years by security measures. The critic of Islam receives constant death threats from Islamist extremists and must, therefore, be under constant protection. In the parliamentary building in The Hague, the parliamentarian works in a wing, secured like a bank vault and inaccessible to outsiders.
Internal party democracy is a foreign concept to Geert Wilders. His MPs do not enjoy much freedom. Wherever the right-wing populist appears, the focus must be on him. A PVV parliamentarian said upon his resignation last year that anyone who appears in the headlines too often has a problem.
Geert Wilders stands for no party but for a facade behind which nothing is hidden, two former PVV MPs from the Utrecht City Council are quoted by the conservative “NRC Handelsblad”. There is nothing organizational about it. They also wonder where Geert Wilders will now find the personnel and expertise needed for governance.
In addition to practical concerns, despite progress in the exploratory talks, substantive reservations have not been dispelled. Initially, Geert Wilders offered to “put on ice” his criticized anti-Islam positions. Later, the right-wing populist withdrew three of his legislative proposals, which aimed to ban mosques, the Quran and Islamic schools in the Netherlands. The clearly unconstitutional demands have always been considered part of the DNA of Wilders’ Party for Freedom and remain unchanged in its program.
It’s no wonder that potential partners are skeptical. The major differences in finances only broke open at the end. Wilders and the Farmers’ Party insist on implementing their costly campaign promises. Pieter Omtzigt and the center-right demand, however, a balanced budget.
Above all, Dilan Yesilgöz faces an insurmountable dilemma. A majority of her center-right VVD has no qualms and wants to be part of the government. However, a strong minority also urgently warns against getting on board with Wilders and “normalizing” the far-right. Dilan Yesilgöz appears as a tragic figure in this scenario. The 46-year-old has succeeded Mark Rutte at the helm of the party, who, as prime minister, is still in office in an acting capacity and has insisted on a cordon sanitaire in recent years.
Rutte’s successor has, without reason, called into question this distancing from the far-right in the final sprint of the November election campaign and no longer ruled out cooperation with Geert Wilders. Dilan Yesilgöz, once a refugee child of a Kurdish activist from Turkey to the Netherlands, could now empower a politician who, according to the party program, would not have allowed her into the country.
The Netherlands has always been seen as a laboratory for new socio-political developments. Soon, it may be possible to see what happens when conservative parties break down the barriers to the far right.
Letting the coalition talks fail and seeking fortune in fresh elections doesn’t seem like an attractive option. A majority in the country wants this very right-wing government with Wilders, according to pollster Maurice de Hond’s calculations. Letting the talks fail is “playing with fire”, he warns. Because according to the latest polls, the PVV would now even come with an even larger lead of 50 seats in fresh elections.
For now, time is on Geert Wilders’ side. “We are proud, grateful and confident,” commented the right-wing populist on the short messaging service X on the latest poll. Now, it is clear that the PVV is the only people’s party in the Netherlands.
Every European company bears a special responsibility to ensure that human rights are not violated and production meets high social and ecological standards in its factories around the globe. This applies even to an industrial sector like mechanical and plant engineering, and especially the European industrial middle class fulfills this demand in its production facilities.
However, a completely different question arises regarding how much control these same mid-sized companies can have over the conditions in their supplier companies and their suppliers’ suppliers. Unlike many consumer goods commissioned by large, market-powerful corporations, machinery and equipment consist of thousands, sometimes very complex components that a medium-sized company can only obtain through intermediaries in the global market. The idea that such a company could know and control all stages of its supply chain is entirely unrealistic.
For these reasons, the German Mechanical Engineering Industry Association (VDMA) considers the emergency brake of the FDP, not to approve the current draft of a European Supply Chain Act, to be correct. The VDMA has been fighting for a Europe-wide, manageable and effective regulation long before the Supply Chain Act was passed. However, the result of the trialogue shows no traces of it.
For instance, the size thresholds of the scope of application were further reduced compared to the German Supply Chain Act. Besides the fact that smaller companies in their supply and value chains have little market power to exert pressure on business partners, this tightening is not conducive from the VDMA’s perspective. The planned phased implementation of the regulation does not solve the described problem; it merely postpones it.
A meaningful regulation would have taken into account the limited influence of smaller companies by only including large companies in the scope of application and introducing turnover thresholds. Only then do companies have leverage.
Additionally, a relief for small and medium-sized enterprises in countries with corresponding legislation through the introduction of so-called “white lists” would have been sensible and also risk-free. Whom else should we trust if not our European partners? However, as a recent survey by the Federation of German Industries (BDI) on the implementation of the German Supply Chain Due Diligence Act unfortunately shows, companies affected by the law often do not proceed on a risk-based approach in their supply chains. This leads to their suppliers being inundated with questionnaires and customer requirements from multiple sides, even though there is no risk potential. Yes, it is possible that there are isolated human rights violations in Europe as well. But for such cases, there is already a functioning legal system – in line with the United Nations Guiding Principles (UNGP): “The primary duty of protection rests with the state.”
Moreover, the envisaged due diligence would simply overwhelm many medium-sized companies. Value chains in the investment goods industry are highly complex: The number of suppliers multiplies quickly from tier to tier. It is entirely unrealistic to expect every company to conduct due diligence for every part of its value chain, especially when it comes to the final use or disposal of products by the end customer.
Moreover, it seems that Brussels has not drawn the right conclusions from the coronavirus crisis, Russia’s invasion of Ukraine and the overall very tense geopolitical situation. Because the planned directive does not allow companies any considerations that could be partially useful and necessary for the safety of their own population – for example, when urgently needed products must be procured to protect the health of the population. Instead, it is accepted that the risk and competitive position of European companies deteriorates compared to other countries.
The situation is further exacerbated by the fact that companies should be liable for damage caused in their supply chain by suppliers if they cannot prove that they have adequately fulfilled the obligations of the directive. However, both the German Supply Chain Act and the UN Guiding Principles on Business and Human Rights rightly do not provide for civil liability.
Therefore, the VDMA has consistently demanded that due diligence obligations be limited to what companies can actually control and influence – their own operations, subsidiaries and first-tier suppliers in the upstream supply chain, where influence is possible due to market power and turnover. If all large European companies were to fulfill their due diligence obligations in this way, the chances of successfully combating human rights violations in the workplace would be significantly higher – and this in an effective and not overly ambitious way.
Judith Herzog-Kuballa is the sustainability, ESG, CSR, and sustainability initiative “Blue Competence” expert at the German Mechanical Engineering Industry Association (VDMA).
Yesterday, EU ambassadors approved the planned military operation in the Red Sea: European warships are set to protect merchant vessels from attacks by the Houthi rebels from Yemen in the future. The operational headquarters of Operation Aspides will be established in the Greek city of Larisa.
For EU standards, the EU is responding swiftly to the threat to the most important sea route between Asia and Europe. Europeans realize that they also need to do more militarily to safeguard their interests in the neighborhood and guarantee their own security. After all, Russia is heavily arming itself, and Europe may no longer be able to rely on the protective power of the USA after the presidential elections in November.
The offer for the campaign dates back to Dec. 2, 2016, and was addressed to the Erdgas Mobil Association. Table.Media has obtained the concept for it. It comprises nine pages and is signed by Jürgen Resch, head of the Environmental Action Germany. Erdgas Mobil is now called Zukunft Gas and is supported by leading companies in the gas industry.
The campaign was supposed to be titled “Clean air through clean drives“. Before submitting the proposal, there were reportedly personal negotiations between leading representatives of the DUH and the gas association. In the end, the association decided against financing the campaign.
Upon inquiry, the DUH confirmed: “At the end of 2016, we sent a project outline ‘Clean air through clean drives’ to Erdgas Info, along with the expected costs for this three-year project.” The DUH emphasizes that “It is not an offer.” It is merely a “project outline”. Furthermore, they state: “We ask you to consider this legally significant difference.”
The fact that the DUH considered launching a lobbying campaign to promote fossil gas in exchange for money is surprising: The organization is recognized by tax authorities as charitable and holds high moral standards for authorities and companies.
The DUH has significantly contributed to holding cities legally accountable for the massive and prolonged exceedance of EU air quality standards: Stuttgart and other municipalities were legally compelled to impose driving bans on diesel vehicles. The DUH branded cars with diesel engines as the main culprits for high nitrogen oxide levels in urban areas. The campaign for gas as a fuel in cars aimed to promote a less environmentally damaging drive.
It specifically targeted the diesel engine, which had also fallen into disrepute due to the emissions scandal. To improve air quality in cities, consumers needed to be convinced of less environmentally harmful alternatives to the diesel engine. Purely battery-electric vehicles were hardly present on the EU market at the time. The DUH advertised the “environmental benefits” of vehicles powered by fossil gas: “Natural gas vehicles emit low levels of nitrogen oxide and thus virtually no particulate matter from exhaust emissions.” Moreover, CO2 emissions were lower than those of petrol- and diesel-powered vehicles.
Experts acknowledge that gas-powered vehicles have slightly lower CO2 emissions. However, at the time, new diesel cars meeting the Euro 6dtemp emission standard emitted significantly fewer fine particles and methane emissions than many natural gas vehicles powered by fossil gas.
The “project outline” is very precise. It provides insight into the working methods of the environmental organization. “For the implementation of the outlined activities, we estimate a financial expense of €750,000 in 2017, €700,000 in 2018, and €650,000 in 2019,” the document states. Furthermore, it says, “The annual funding support should be transferred to the DUH in two equal parts on Feb. 1 and Aug. 1 of each year.”
The DUH talks about a “campaign” at several points. For example, it states: “The campaign is flanked by various vehicle measurements, expert discussions, public relations, and political work on natural gas as a clean alternative drive in the transportation sector.” The campaign would be nationwide. The “project work” could rely on the “existing excellent network of the DUH in the fields of air purification, climate action and transportation”.
The DUH also promises: “The relevant German environmental and transportation associations support the cause.” They would be closely involved in the campaign by the DUH. Furthermore, “Our networks also include NGOs from other member states.” At the EU level, the DUH collaborates primarily with the EU environmental umbrella organization “Transport and Environment” (T+E).
Additionally, the DUH offers to lobby for tax privileges for fossil gas. It promises to “support the extension of the tax advantages of the fuel” as part of the “regular top-level discussions between the DUH and leading environmental politicians in Germany”.
The DUH planned to “conduct measurements with test vehicles on the road to support the climate and air quality benefits compared to diesel engines.” The “Emissions Control Institute” (EKI) of the DUH is mentioned in this context. The “technical management is the responsibility of Dr. Axel Friedrich,” a former employee of the Federal Environment Agency (UBA) who joined the DUH after reaching retirement age.
The DUH also makes it clear that it claims to be a certification body. There is a “clear gap between test stand and real emissions of nitrogen oxides,” writes the DUH. The consequence is “great uncertainty and disillusionment of the customer about credible manufacturer information”. An “independent label” could help regain customer trust.
Then it says: “In combination with on-road measurements of various vehicles, Environmental Action Germany has the opportunity to initiate such a label.” The calculation did not include the item to push through a new label for gas-powered motor vehicles. The client would have had to pay an additional fee for this. The offer states: “Proposal for an extension module, not yet calculated”.
The DUH detailed not only the costs, such as a total of €240,000 for press and public relations work (“regular press releases, press conferences, presentation of successful examples”). The document also includes “travel expenses/honoraria” of €30,000 each annually.
The DUH, known for its readiness to litigate, also wanted to invoice substantial amounts for possible legal disputes to its client. For 2017 and 2018, the DUH estimated costs for “lawsuits/legal opinions” of €70,000 each, decreasing to €50,000 in 2019. Under the item “miscellaneous”, €20,000 were to be billed annually.
The client of the campaign should have the option to terminate the contract: The DUH was ready to grant “the sponsors the right to announce the termination of the funding no later than four months before the end of the 1st calendar year, by Dec. 31, 2017 (…).”
According to the DUH, the idea originated during the “Round Table on Gas Mobility” of the Federal Ministry of Economics. They followed the invitation because “at that time, as today, the gas engine was a less CO2- and above all less pollutant-generating drive technology compared to diesel.” The DUH was asked at this round table “whether we would do further project work on gas drives (…)” and showed openness to it. The representative of the Ministry for Economic Affairs regretted not having a budget for such a project. Therefore, the project outline was then sent to Erdgas Info.
Upon inquiry by Table.Media, the DUH did not provide information on how many offers it has submitted since 2016 for the financing of campaigns by third parties. Upon request, it also refused to disclose how much money it may have earned through similar campaigns since 2017.
The move came as a surprise at first glance: Pieter Omtzigt, formerly a Christian Democrat and now leader of the newly formed New Social Contract Party (NCS), withdrew from the exploratory talks for a right-wing government under Geert Wilders this week. The timing, in particular, raises questions: On Monday, the parliament-appointed moderator Ronald Plasterk is expected to inform the Second Chamber about the status of the exploratory talks. It was anticipated in The Hague that the moderator would cautiously draw a positive conclusion and announce the start of the actual coalition negotiations.
Now everything seems to be up in the air again, with Pieter Omtzigt not ruling out ultimately tolerating a minority government from a distance. Although Geert Wilders won the election on Nov. 22 with a significant lead, he still needs at least three partners with his 37 out of 150 seats in the fragmented Second Chamber.
During the exploratory talks, Pieter Omtzigt’s NCS, the center-right VVD of Dilan Yesilgöz, and the Farmers-Citizens Movement BBB of Caroline van der Plas were at the table. Former Christian Democrat Omtzigt justified his withdrawal by stating that he received confidential information about the allegedly precarious financial situation too late.
Observers consider the justification to be pretextual. Instead, there are hardly bridgeable differences of a substantive and personal nature behind the withdrawal. Geert Wilders is known for insisting on absolute control. In his far-right Party for Freedom (PVV), this has never been a problem, as the populist has been the sole member since its inception, thus formally securing his absolute power. But can someone like that govern, especially in a coalition?
This is a question that potential partners are also asking themselves. The question remains open whether Geert Wilders, with his one-man club, is capable of teamwork and organizationally and personally able to fulfill the role of the largest governing party, writes the left-liberal newspaper “de Volkskrant”.
Geert Wilders has always been a loner, reinforced in recent years by security measures. The critic of Islam receives constant death threats from Islamist extremists and must, therefore, be under constant protection. In the parliamentary building in The Hague, the parliamentarian works in a wing, secured like a bank vault and inaccessible to outsiders.
Internal party democracy is a foreign concept to Geert Wilders. His MPs do not enjoy much freedom. Wherever the right-wing populist appears, the focus must be on him. A PVV parliamentarian said upon his resignation last year that anyone who appears in the headlines too often has a problem.
Geert Wilders stands for no party but for a facade behind which nothing is hidden, two former PVV MPs from the Utrecht City Council are quoted by the conservative “NRC Handelsblad”. There is nothing organizational about it. They also wonder where Geert Wilders will now find the personnel and expertise needed for governance.
In addition to practical concerns, despite progress in the exploratory talks, substantive reservations have not been dispelled. Initially, Geert Wilders offered to “put on ice” his criticized anti-Islam positions. Later, the right-wing populist withdrew three of his legislative proposals, which aimed to ban mosques, the Quran and Islamic schools in the Netherlands. The clearly unconstitutional demands have always been considered part of the DNA of Wilders’ Party for Freedom and remain unchanged in its program.
It’s no wonder that potential partners are skeptical. The major differences in finances only broke open at the end. Wilders and the Farmers’ Party insist on implementing their costly campaign promises. Pieter Omtzigt and the center-right demand, however, a balanced budget.
Above all, Dilan Yesilgöz faces an insurmountable dilemma. A majority of her center-right VVD has no qualms and wants to be part of the government. However, a strong minority also urgently warns against getting on board with Wilders and “normalizing” the far-right. Dilan Yesilgöz appears as a tragic figure in this scenario. The 46-year-old has succeeded Mark Rutte at the helm of the party, who, as prime minister, is still in office in an acting capacity and has insisted on a cordon sanitaire in recent years.
Rutte’s successor has, without reason, called into question this distancing from the far-right in the final sprint of the November election campaign and no longer ruled out cooperation with Geert Wilders. Dilan Yesilgöz, once a refugee child of a Kurdish activist from Turkey to the Netherlands, could now empower a politician who, according to the party program, would not have allowed her into the country.
The Netherlands has always been seen as a laboratory for new socio-political developments. Soon, it may be possible to see what happens when conservative parties break down the barriers to the far right.
Letting the coalition talks fail and seeking fortune in fresh elections doesn’t seem like an attractive option. A majority in the country wants this very right-wing government with Wilders, according to pollster Maurice de Hond’s calculations. Letting the talks fail is “playing with fire”, he warns. Because according to the latest polls, the PVV would now even come with an even larger lead of 50 seats in fresh elections.
For now, time is on Geert Wilders’ side. “We are proud, grateful and confident,” commented the right-wing populist on the short messaging service X on the latest poll. Now, it is clear that the PVV is the only people’s party in the Netherlands.
Every European company bears a special responsibility to ensure that human rights are not violated and production meets high social and ecological standards in its factories around the globe. This applies even to an industrial sector like mechanical and plant engineering, and especially the European industrial middle class fulfills this demand in its production facilities.
However, a completely different question arises regarding how much control these same mid-sized companies can have over the conditions in their supplier companies and their suppliers’ suppliers. Unlike many consumer goods commissioned by large, market-powerful corporations, machinery and equipment consist of thousands, sometimes very complex components that a medium-sized company can only obtain through intermediaries in the global market. The idea that such a company could know and control all stages of its supply chain is entirely unrealistic.
For these reasons, the German Mechanical Engineering Industry Association (VDMA) considers the emergency brake of the FDP, not to approve the current draft of a European Supply Chain Act, to be correct. The VDMA has been fighting for a Europe-wide, manageable and effective regulation long before the Supply Chain Act was passed. However, the result of the trialogue shows no traces of it.
For instance, the size thresholds of the scope of application were further reduced compared to the German Supply Chain Act. Besides the fact that smaller companies in their supply and value chains have little market power to exert pressure on business partners, this tightening is not conducive from the VDMA’s perspective. The planned phased implementation of the regulation does not solve the described problem; it merely postpones it.
A meaningful regulation would have taken into account the limited influence of smaller companies by only including large companies in the scope of application and introducing turnover thresholds. Only then do companies have leverage.
Additionally, a relief for small and medium-sized enterprises in countries with corresponding legislation through the introduction of so-called “white lists” would have been sensible and also risk-free. Whom else should we trust if not our European partners? However, as a recent survey by the Federation of German Industries (BDI) on the implementation of the German Supply Chain Due Diligence Act unfortunately shows, companies affected by the law often do not proceed on a risk-based approach in their supply chains. This leads to their suppliers being inundated with questionnaires and customer requirements from multiple sides, even though there is no risk potential. Yes, it is possible that there are isolated human rights violations in Europe as well. But for such cases, there is already a functioning legal system – in line with the United Nations Guiding Principles (UNGP): “The primary duty of protection rests with the state.”
Moreover, the envisaged due diligence would simply overwhelm many medium-sized companies. Value chains in the investment goods industry are highly complex: The number of suppliers multiplies quickly from tier to tier. It is entirely unrealistic to expect every company to conduct due diligence for every part of its value chain, especially when it comes to the final use or disposal of products by the end customer.
Moreover, it seems that Brussels has not drawn the right conclusions from the coronavirus crisis, Russia’s invasion of Ukraine and the overall very tense geopolitical situation. Because the planned directive does not allow companies any considerations that could be partially useful and necessary for the safety of their own population – for example, when urgently needed products must be procured to protect the health of the population. Instead, it is accepted that the risk and competitive position of European companies deteriorates compared to other countries.
The situation is further exacerbated by the fact that companies should be liable for damage caused in their supply chain by suppliers if they cannot prove that they have adequately fulfilled the obligations of the directive. However, both the German Supply Chain Act and the UN Guiding Principles on Business and Human Rights rightly do not provide for civil liability.
Therefore, the VDMA has consistently demanded that due diligence obligations be limited to what companies can actually control and influence – their own operations, subsidiaries and first-tier suppliers in the upstream supply chain, where influence is possible due to market power and turnover. If all large European companies were to fulfill their due diligence obligations in this way, the chances of successfully combating human rights violations in the workplace would be significantly higher – and this in an effective and not overly ambitious way.
Judith Herzog-Kuballa is the sustainability, ESG, CSR, and sustainability initiative “Blue Competence” expert at the German Mechanical Engineering Industry Association (VDMA).