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Supply Chain Act: Economist Lars Feld fears major damage to German economy

2020-08-26T05:43:23.688Z


The federal government wants to force German companies by law to take responsibility for human rights violations by their suppliers. Lars Feld and business associations do not think so.


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Production at the electronics manufacturer Foxconn: Criticized for poor working conditions

Photo: YM YIK / picture alliance / dpa

With a view to the planned law for good working conditions in global production, the head of the "Wirtschaftsweise", Lars Feld, has warned of massive burdens for the German economy. "With a supply chain law, the ax will be laid on the previous successful model of the German economy with strongly internationalized value chains and strong production abroad," said Feld of the German press agency.

"I look at the supply chain law with great horror," said Feld. "How should companies ensure that human rights are really respected in the value chains in the individual countries?" This is a political task and lies in the sovereignty of states. "That leads to a massive burden. The whole thing has the potential to burden us so much over the years that economic development is significantly weakened."

Social minister Hubertus Heil (SPD) and development minister Gerd Müller (CSU) are in particular campaigning for the law. It concerns larger companies with more than 500 employees. The aim is to ensure that human rights are observed in global supply chains for the manufacture of clothes, chocolate and electrical appliances, for example. Neither states nor companies can shirk responsibility for observing human rights, Heil had said: "We are talking about the fight against child poverty and exploitation."

"The opposite of reducing bureaucracy" 

According to an original plan, the key points of a supply chain law should actually be decided by the cabinet this Wednesday. There is still no agreement within the federal government. According to reports, economics minister Peter Altmaier (CDU) in particular has concerns about liability regulations.

With regard to the Supply Chain Act, Feld said: "This is the opposite of what should be done in terms of promoting innovation with the reduction of bureaucracy and deregulation. The Corona crisis serves to enforce long-held political wishes."

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This also includes the ban on work contracts and temporary work in the meat industry. "Regardless of the misconduct of the meat industry: The contracts for work and services have nothing to do with the outbreak of Covid-19 at Tönnies. Obviously, the ventilation in the slaughterhouses is what you would expect there to be conditions for sensible ventilation systems or for them Accommodation. "

Negative role model Italy

Feld said he could only hope that Minister Altmaier would continue to oppose the supply chain law. "A possible liability cannot be enforced without great damage to the German economy. It does not help if this only applies to larger companies. Companies do not grow in Italy because they are then subject to stricter regulations. Germany should not deal with additional regulations than the Italian ones Bargain for illness. "

Feld is Professor of Economic Policy and Regulatory Economics at the University of Freiburg and Director of the Walter Eucken Institute. Since March 2020 he has been chairman of the Advisory Council for the Assessment of Macroeconomic Development, of which he has been a member since March 2011. The Expert Council advises politics. The experts are colloquially referred to as the "economic modes".

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mik / dpa

Source: spiegel

All business articles on 2020-08-26

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