German companies fret about a new supply-chain law

Peter BokelmannvDMA has had a busy few months. The chief counsel at Trumpf, a maker of machine tools, oversees the firm’s efforts to comply with the new law on the due diligence of supply chains that came into force on January 1st. Mr Bokelmann has been at it since the law was passed in mid-2021. “The enormous effort needed is underestimated,” he sighs.No kidding. Many German businesses are only waking up to the new rules, which require those with more than 3,000 employees in Germany to monitor whether their suppliers around the world meet human-rights and environmental standards. From 2024 the law will extend to firms with 1,000 German workers. Misbehaviour by suppliers could lead to fines of up to €8m ($8.6m) or 2% of the German firms’ global sales, whichever is higher. Bosses warn this puts their firms at a disadvantage, creates more red tape in a country that already has tangles of it, and could harm not help workers in emerging markets. The law is “well meant, lousily done”, sums up the , the mechanical-engineering industry’s main lobby group.