EU Lief Coveret Act: Setting is causing new concerns and opportunities!

EU Lief Coveret Act: Setting is causing new concerns and opportunities!

In a current development in the EU Lief Coveret Act, the European Parliament has approved a shift in the law. This is viewed by many as an important step on the way to a more competitive Europe. However, there are also critical voices that warn that the law builds up considerable bureaucratic hurdles in its current form and thus endangers the international competition for European companies. The Secretary General of the Economic Association, Kurt Egger, expressed his concerns and described the law as a "bureaucratic monster". He calls for a deburring offensive and more economic freedom at Austrian and European level.

Egger emphasizes that the Economic Association basically supports the protection of human rights and the environment along the value chain. Nevertheless, he warns that the implementation of the supply chain law could endanger prosperity and jobs in Europe. The proposed proposals for the simplification of the supply chain guideline aim in particular on the protection of small companies and avoiding excessive regulation, also known as gold plating.

The background of the law

According to a study by the EU Commission from 2020, voluntary standards in the EU hardly progress. Only a third of companies in the EU carry out comprehensive care examinations regarding human rights, environment and work standards. This mismatch is intended to change the EU Lief chain law, which adopted an ambitious negotiating position in June 2023. However, the pressure of economic and industrial associations on the EU parliamentarians led to some MPs swinging over before the vote.

The Chamber of Labor (AK) calls for improvements to the law and has commissioned a study to investigate the economic effects. The investigation, which was carried out by the University of Applied Sciences of the BFI Vienna, Fian Austria and Fundación Sol from Santiago de Chile, shows that a more designed supply chain law could lead to wealth gains in the global south and improve working conditions. Positive economic effects for the global south and the European economy are expected when the law is effectively implemented, whereby it is crucial that the law is "waterproof".

economic effects and challenges

However, some economic researchers warn of negative economic consequences and possible competitive parties for European companies. At the same time, there are concerns that the advantageous effects for the global south could fail. The study concludes that the position of employees can be strengthened both in the global south and in the EU, but only with a tangible and sustainable implementation of the supply chain law.

The current discussion about the EU Lief Chain Act shows how important it is to find a balance between the necessary protection of human rights and environmental protection and the economic interests of EU companies. It remains to be seen whether the upcoming changes can actually make the law more effective and less bureaucratic.

Find out more about the debate about the supply chain law on OTS , SPIEGEL and Chamber of Labor .