National and European regulations on supply chains reinforce each other

30 October 2020

There is no doubt about the urgent need to address the dire issues in global supply chains, such as child labour, deforestation, and systemic poverty. A growing number of CSOs and companies are calling for binding instruments at the EU level. At the same time, several initiatives are focusing their demands for regulation at the national level, and some countries, such as France and the Netherlands, have already developed some legislation on the matter. At Solidaridad, we promote an EU level approach as part of a smart mix of measures, and we also welcome and support national initiatives for mandatory action in supply chains.

We recently joined the Initiative for Sustainable and Responsible Business Conduct in the Netherlands. This coalition advocates for the adoption of legislation to ensure that human rights and the environment are respected throughout the value chains of companies. So what is the most effective approach?

A combined approach to regulation

An EU regulatory framework will without a doubt be more impactful as it will have a much larger scope reaching out to all the firms that operate or have access to the EU market. It will level the playing field and will prevent having a patchwork of different legislations at the national level, thereby providing a single harmonized standard for companies without overlaps, redundancies or inconsistencies. Moreover, despite having regulation already in place or under discussion in a number of EU countries, there is no guarantee that all member states will have the political consensus to adopt legislation on this urgent issue. 

Photo credits: Niels van Iperen

However, these two approaches are in no way incompatible or mutually exclusive.

  • Ambitious and well-designed national regulation can guide the EU towards a robust regulatory framework. It also provides EU policymakers with an opportunity to learn from national legislative gaps, loopholes and shortcomings.  
  • It could also raise awareness of the human rights and environmental issues in supply chains in EU member states, ratcheting up social and political support for a future regional approach. Moreover, it could have spillover effects to other member states, thereby fostering a consensus around a mandatory approach to regulate international supply chains. 
  • Finally, it can help an EU-wide regulatory framework to move faster to the implementation phase, as EU Directives need to be incorporated into the national law of member states in order to be applied, and this process can take years.

A smart mix of measures

A “smart mix” of measures consisting of national, international, voluntary and mandatory measures is needed to adequately address the pressing issues in global supply chains. Nevertheless, the overwhelming majority of governments have been slow to act on their duty to protect human rights. Thus, any concrete and ambitious actions, both at the EU and at member state level, are much welcomed in the urgent need to transform global chains so they actually benefit farmers, miners and workers in production landscapes. 

Solidaridad has recently published a position paper on sustainable and inclusive production that calls for a European regulatory framework that is not limited to one legislative approach but that includes a smart mix of measures including partnerships with producing countries and other complementary measures to support often marginalized actors in supply chains in the Global South. 

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