Controversy over Supply Chain Law: Habeck's Proposal Faces Resistance from the SPD

The idea of Federal Minister of Economic Affairs Robert Habeck to suspend the German Supply Chain Act for two years is causing significant waves within the governing coalition. While business associations welcome the initiative, it faces sharp criticism from the SPD. The German Supply Chain Act is already in effect, while a comparable EU directive still needs to be transposed into national law. This implementation phase is expected to take a good two years. The EU directive aims to prevent human rights violations such as child or forced labor. There is a significant difference from the German regulation: under EU law, companies can be held liable for due diligence violations, which the German law does not foresee. SPD parliamentary leader Rolf Mützenich vehemently rejected Habeck's proposal, arguing that it undermines long-standing efforts towards a human rights-oriented economic policy. In his view, the Minister of Economic Affairs has done a "disservice" to the efforts of enforcing fundamental human rights and wage standards. Mützenich made it clear that the SPD would not agree to a blanket suspension of the law. He also expressed his displeasure that Habeck apparently wants to unilaterally override existing law. In contrast, employer associations are pleased with Habeck's initiative. Steffen Kampeter of the Confederation of German Employers' Associations (BDA) emphasized that the suspension of the law would provide the German economy with a much-needed breathing space. Wolfgang Große Entrup from the German Chemical Industry Association also praised the proposal, highlighting the necessity not to overload the European standard with additional national regulations. The ball is now in the court of Federal Minister of Labor Hubertus Heil (SPD), whose ministry is responsible for the Supply Chain Act. Whether an agreement between the coalition partners is possible remains to be seen.