Austria's responsibility: EU-OMNIBUS endangered supply chain law!

Austria's responsibility: EU-OMNIBUS endangered supply chain law!

Laimgrubengasse 10, 1060 Wien, Österreich - On March 12, 2025, the EU faces an enormous challenge: The new Omnibus Ordinance of the EU Commission could threaten to also loosen fundamental sustainability requirements for companies. The human rights organization Südwind urgently warns that these regulations endanger the EU climate goals and to undermine a binding corporate liability in human rights offenses. This could bring responsible companies in a disadvantaged position, while ruthlessly acting companies could benefit from a factual license. Stefan Grasgruber-Kerl, supply chain expert at Südwind, criticizes: "This cannot be in the interest of a fair and sustainable economic policy!" The organization calls on the Austrian government not to agree to the Omnibus Ordinance in the EU Council so as not to further endanger the basics of sustainable economic policy, as [ots.at] reported.

This is done against the background that the Omnibus initiative, which was presented on February 26, 2025, provides for adjustments to the corporate sustainability diligence Directive (CSDDD). This regulation came into force on July 25, 2024 and is intended to oblige companies to protect human rights and environmental standards along their entire supply chain. The omnibus initiative now proposed a deadline extension for the implementation of the CSDDD into national law by a year until July 26, 2027. Although there are claims on civil law, Member States also receive more freedom, which could lead to uncertainties. The obligations of the companies remain and require careful preparations, according to [pwc.de].

Next steps for companies

The upcoming changes that are initiated by the Omnibus initiative illustrate the need for companies to revise their risk management. The focus on direct suppliers in particular is reinforced and entrepreneurial diligence is specified. This could mean that companies will be forced to address potential risks of indirect suppliers in the future in order to avoid civil liability. "The structure of the Omnibus initiative could lead to the fact that a more regular view of the entire supply chain for risk analysis is no longer required," warns Südwind and emphasizes that the implementation of human rights and environmental standards could also have massive effects on the reputation of companies.