The government of Germany is considering pausing the country's supply chain due diligence law for two years to ease the bureaucratic burden on companies until a European directive takes effect, Economy Minister Robert Habeck said on June 7, reports Reuters.

The German supply chain act, which mandates that companies with more than 1,000 staff implement due diligence procedures to monitor suppliers' human rights and environmental protection standards, came into effect in January 2023.

But many German businesses say the law causes unacceptable costs and bureaucratic burdens, harming their global competitiveness.

A similar European Corporate Sustainability Due Diligence Directive (CSDDD) was approved by the EU parliament in April 2024, and is due to come into effect in 2026.

Germany will have to redraft its own supply chain law once the European law comes into effect.

"We can pause it. That would be the best thing. I think that is absolutely feasible," Habeck said at an event for family-run businesses, adding that suspending the national law could be a liberating move for companies.

A final decision on the issue is expected in two to three weeks, he added.