Spectaris calls for improvements to the Supply Chain Act
The German industry association Spectaris sees a clear need for improvement in the Supply Chain Due Diligence Act for companies with more than 3,000 employees, which came into force at the turn of the year. Spectaris Chairman Ulrich Krauss said: "It is a matter of concern that companies alone bear the responsibility for compliance with due diligence obligations and that SMEs are overly affected by the bureaucratic burden."
Companies could not set an international standard, that would only be possible with state support, he said. "The effect of the law will fizzle out if the German government itself does not also work towards compliance with minimum social standards in sourcing countries. It can combine this with development policy incentives and thus avoid the tiger remaining toothless and creating nothing more than another reporting obligation", says Krauss.
Politicians must also recognise the difficult situation of small and medium-sized enterprises with regard to the Supply Chain Sourcing Obligations Act and take countermeasures. A study by the EU Commission had already shown in 2020 that the relative administrative burden of SMEs is around fifteen times greater than that of larger companies. Furthermore, due to the large administrative burden, SMEs could suffer from the strict contractual obligations to provide evidence imposed on them by large corporate clients, without themselves being originally covered by the scope of the law.
According to the association, small and medium-sized enterprises, as part of the supply chains of large companies, are already confronted with a wide range of verification and reporting obligations and a corresponding administrative burden. Often, a wide variety of data per customer has to be reported several times via different portals. In addition, SMEs often do not have the necessary influence to obtain the required information from their partners in the supply chain, especially if their supply chain is internationally branched or is purchased centrally.