Focus on supply chain – EU Parliament urges companies to be more sustainable

In concrete terms, the European Parliament’s text includes companies, regardless of their sector, with more than 250 employees and a worldwide turnover of more than EUR 40 million, as well as parent companies with more than 500 employees and a worldwide turnover of more than EUR 150 million, according to a broadcast.

For companies based outside the EU, a turnover of more than EUR 150 million applies if at least EUR 40 million is generated in the EU.

Negative effects “identify (…) and terminate”
These companies would then be required to identify and, if necessary, prevent, terminate or mitigate the negative impacts of their activities on human rights and the environment, the EU Parliament statement said. They would also “monitor and evaluate their partners in the value chain” – this would include not only suppliers, but also sales, distribution and transportation.

In addition, managers must coordinate their company’s business model and strategy in such a way that the goal of limiting global warming to 1.5 degrees is achieved. According to the EU Parliament, grievance mechanisms should be put in place and due diligence information should be available on the company’s website.

ÖVP voted against – with one exception
If the companies break the rules, they should be able to be penalized by national supervisory authorities – for example with fines of up to 5 percent of global net turnover. Non-EU companies can be excluded from public procurement in the EU.

The negotiating position was adopted by 366 votes in favour, 225 against and 38 abstentions. The ÖVP-EU MPs voted against, with the exception of Othmar Karas. Karas and the three liberal EU mandates abstained. The SPÖ, the Greens and the NEOS voted in favor of this.

The Minister of Economic Affairs calls for more time
Now negotiations on the final legal text between the EU Parliament and the Member States can begin. The EU Member States already agreed on a general approach last December. Austria had abstained. Minister of Economic Affairs Martin Kocher (ÖVP) called for more time to balance protection standards on the one hand and practicality on the other.

Criticism of the parliamentary position came directly from ÖVP-EU delegation leader Angelika Winzig. This is “not expedient, but includes measures and burdens on our operations that cannot be performed,” Winzig said, according to the announcement. “In principle, it should be the duty of each state to ensure through its laws that violations of human rights, environmental standards or social rights are avoided or punished.”

SPÖ satisfied: “A lot achieved”
Meanwhile, there was joy among the Social Democrats, the Greens and the Labor Chamber. SPÖ-EU MP Evelyn Regner spoke of a “paradigm shift”. The Social Democrats “would have liked to go further in some areas”, but today’s report “has already achieved a lot”. Green MEP Thomas Waitz sees the vote as a “historic step towards more transparency for consumers, more responsibility and more influence in the fight against child labor and the exploitative practices of big companies”.

Waitz sharply criticized the European People’s Party, which is increasingly proving to be an “unreliable negotiating partner”. ÖGB president Wolfgang Katzian sees “important ÖGB demands” implemented in the position of the EU parliament. “Now is the time to fight further dilution attempts by the business lobbyists,” Katzian said in a broadcast.