The new law primarily applies to German companies with more than 3,000 employees, says Tanja Lindel, assistant director of the Business Association Sector of the Serbian Chamber of Commerce.
Companies from Serbia, domestic or foreign, that export raw materials, components, semi-finished products and services to the German market from January 1, 2023, will have to respect human rights and prove that they are not polluters of the environment, as required by the new law on supply chains in Germany . This regulation does not apply to our companies that export finished products, but only to suppliers.
Tanja Lindel, assistant director of the Business Association Sector of the Serbian Chamber of Commerce, says that the new law primarily applies to German companies with more than 3,000 employees, and from January 1, 2024, it will apply to German companies with more than a thousand employees.
- German companies that have their own activity are subject to this law, and the law is transferred to direct and indirect suppliers of semi-finished products and services in the production chain, that is, all companies that have a contractual supplier relationship with local companies - Lindelova says. He adds that they do not have information on how many of our companies this applies to because they do not know what kind of contracts they have. About 3,000 companies from Serbia export to the German market, but some of them export finished products.
According to her, our companies will have to fulfill that part of the responsibilities and obligations from the law that is transferred to them by the end customer, the German partner. The law only defines what a German company must fulfill. And what and what part of the obligations the German company will transfer to its direct supplier will be defined by the contract. The law requires the company to make a risk assessment, to regularly analyze the success and to publish reports that are public.
- This law requires German companies to make a risk assessment, to designate a person who is responsible for implementing risk measures, to establish a complaint procedure and to document the submission of reports. And that in the areas of child labor, forced labor and slavery, discrimination, non-respect of the right to association, denial of the application of earnings, illegal confiscation of land, abuse of private security. In the area of environmental protection, three conventions are referred to, on polluting substances, the use of mercury and the cross-border movement of hazardous waste and their disposal - notes Lindelova.
According to her, the German law is an overture and prepares companies for the EU directive that is being announced and is already being worked on. It will be much stricter than the German law. In the first quarter of 2023, PKS will launch an office to help Serbian businessmen whose goal is to better inform and adapt our companies, which are part of German supply chains, to the new law on supply chains in Germany.
Dragoljub Rajić, from the Business Support Network, says that in the first year of application of this regulation, a large number of our companies will not be affected. But from next year they will, especially logistics companies that transport raw materials. He adds that our exporters will not be affected by the fact that German companies will not be able to work with companies that violate human rights in any form, engage in forced labor, and keep workers illegally. This mostly applies to companies from Asia and Africa that participate in German supply chains.
- The second segment is much more important for us. All companies that export raw materials or semi-finished products will have to prove through their operations that they are not polluters of the environment. This means that in production or work processes they will have to emit the amount of carbon dioxide at the level of what is prescribed in Germany for a certain economic branch. If our producers use diesel tractors and export food to Germany, they will have to use other fuels or Euro five engines in a certain percentage. Or if they work on machines that emit a certain amount of carbon dioxide, they will have to prove that the production share is minimal or zero. Logistics companies will have to start buying hybrid-powered trucks, and railways will have to switch to hydrogen. This is all that awaits us in the future - explains Rajić.
Germany, as the largest economy, initiated this, but similar steps are being taken by France and Great Britain, and soon there will be an obligation at the level of the European Union. A big challenge for Serbia will be the railway, as the greenest mode of transportation. Our railway is not a competitor, because it is slow. This is precisely why the Austrian cargo group announced its entry into our market.