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EU passes supply chain audit law!
 Mar 19, 2024|View:119

After weeks of delays and renegotiations, the European Council formally approved the Corporate Sustainability Development Due Diligence Directive (CSDDD) on March 15. Companies must identify, prevent and mitigate "negative impacts on human rights and the environment" in their own, subsidiaries and supply operations.

The final version of the directive will apply to EU companies with 1,000 or more employees and an annual turnover of at least 450 million euros ($490 million). The threshold is higher than initial recommendations, which applied to companies with 500 employees and a global net turnover of 150 million euros ($163 million).

Previously (at the end of February), some EU member states, led by the German Free Democratic Party (FDP), rejected the first version of the CSDDD.

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After ban, PV industry’s attention turns to supply chain


In recent months, the European solar PV industry has turned its attention to the supply chain, and the CSDDD is of great significance to this industry due to growing concerns about transparency in such matters.

Anett Ludwig, head of supply chain at trade body SolarPower Europe, said: "To effectively and efficiently manage compliance requirements, companies need legislative certainty. With these latest decisions, the solar industry now has a legal path to improve supply chain sustainability. the way forward.”

"To ensure legislative coherence and ensure the path is as clear as possible, we ask that reference be made to the CSDDD in the final text of the Ban and in the implementation guidance."

The EU passed the "Forced Labor Ban" earlier this month (March 5), and member states (or the European Commission if a third country is involved) will investigate the supply chains of companies suspected of forced labor in the EU. . There's a deal! EU approves ban on products made with forced labor

The upstream part of the solar supply chain, primarily polysilicon production, will be affected. Most of the world's polysilicon is produced in a certain province and the raw materials are mined there. Both the CSDDD and the new ban are awaiting final approval by the European Parliament.

supply transparency

In the text of the Council's approval, Section 15 states that the Directive "shall not require companies to guarantee under any circumstances that adverse effects will never occur or cease to have adverse effects".

In certain circumstances, such as "adverse effects resulting from state intervention", companies may not be able to ensure supply compliance and should not be required to do so. Instead, the directive should operate on the basis of "means-related obligations", i.e. companies should take "appropriate measures" to address human rights or environmental concerns, but should take into account "the specific circumstances".

For the solar photovoltaic industry, "state intervention" in the supply chain has been a sticking point. At a meeting last month, members of the European Solar Manufacturing Council (ESMC), the European Parliament and other organizations called for a "reversal of the burden of proof" on the solar supply chain, where companies would have to prove compliance with import laws, rather than regulatory agencies Investigate it.

Speakers at the conference said that because outside companies cannot see the "on-the-ground" operations of local polysilicon production, this model - the one used by the UFLPA in the United States - is the only "effective" way to ensure that the solar supply chain is free from human rights issues way.

The EU's "ban" this month does not propose a "reversal of the burden of proof", but will rely on the European Commission's investigation.

EU Energy Commissioner Kadri Simson said the EU recently announced measures to support internal solar manufacturing, an industry facing a "very fragile" situation. However, the EU remains overwhelmingly dependent on imported products, most of which come from China.Trina solar panels


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