Supply Chain Legislation: Germany Sets Dangerous Precedent for the EU
On June 21, 2021, the German Bundestag passed the government’s proposal for introducing into the country’s industrial supply chains strict ecological and social standards. The new law obliges all German companies and businesses to ensure that such standards (for instance concerning female and child labor) are respected in all the firms from which they import, or face fines and bans. Berlin is now pushing the rest of the European Union to adopt similar legislation as soon as possible.
Officially presented as only applying to large companies with over 3,000 employees from 2023 on, and those with over 1,000 employees from 2024 on, the law in fact also affects the tens of thousands of their suppliers in small and medium- sized firms. The latter are faced with receiving lengthy questionnaires by the major companies providing documentation of compliance with the new standards –otherwise, their products will not be accepted. Since most of the smaller firms do not have the possibility (or the financial means) to provide such documentation on the conditions existing in their partner countries, or to demand changes if they are unacceptable, the new law signifies the collapse of traditional supply chains and therefore of continued business for German firms in many parts of the world.
In sum, the new law is a severe blow to the functioning of international economic cooperation and to the industrial development of any nation in the world. Contrary to the solemn objectives it proclaims against child labor and for the fair treatment of female workers, the intent is not really to to improve conditions for such people, but rather to advance implementation of the notorious “Green Deal” in the developing sector.
This became evident in testimony given by German Development Minister Gerd Müller at the Bundestag in May 2020 during hearings on the new law. He stated there that it was important to prevent Africa from striving for the same level of development as Europe, because it would take three Earths, rather than one, to provide the amount of natural resources thus required. Müller endorsed a Europe-Africa Green Deal, which was subsequently proposed by Commission President Ursula von der Leyen as well. The message to African countries is: It is in your best interest –and that of mankind –to remain underdeveloped!
Such propaganda is also a key theme in preparations for the upcoming “Climate Summit” COP26 in Glasgow later this year. But it has run into fierce opposition, particularly on the question of fossil energy sources, in many nations, such as India, that are not willing to sacrifice their legitimate right to economic development to the anti-industrial goals of the Europeans. In the same way, they are unlikely to accept the new standards for supply chains imposed arbitrarily and unilaterally. However, it is mainly up to industrial companies in Germany and Europe, particularly the smaller, independent ones, to wage the political battle needed against such measures.