EU supply chain law + health data and et • Table.Briefings

Dear reader,

There have been repeated delays, but the directive on sustainable corporate governance is finally due to be adopted on February 23rd. This was preceded by two negative assessments by an internal Commission body, the Regulatory Scrutiny Board. Some of the content of the proposed legislation is already known – for example, it appears that the regulation will go significantly beyond the German Supply Chain Act. Charlotte Wirth gives an overview.

A European Health Data Space that enables the secure and transparent exchange of data in the healthcare sector – the European Health Data Space is to be created by 2025. The French Council Presidency has given advanced consideration to the ethical dimension of the digitization of healthcare and has now presented 16 guiding principles. Eugenie Ankowitsch summarizes the principles and uses studies to show how topical the debate about ethical issues in digitization is.

Foreign Minister Annalena Baerbock described Jennifer Morgan as a “dream appointment”. The former head of Greenpeace will be Baerbock’s special representative for international climate policy. Morgan will thus prepare the climate conferences in the future, but her tasks are likely to go far beyond that. Yet, she will have a number of colleagues who are also entrusted with climate issues at the international level. Given the urgency of the task, one can only hope that the ministries will not get tangled up in a tug-of-war over competencies, writes Lukas Scheid in Apéro.

Your
Sarah Schaefer

What to expect from the EU supply chain law

By

Charlotte Wirth

On February 23rd, it is finally to come, the directive on sustainable corporate governance – almost three years after Justice Commissioner Didier Reynders announced a law. Time and again, there were delays. In the end, the Commission also failed due to two negative assessments by the Regulatory Scrutiny Board (RSB), a Commission-internal body that is supposed to check the quality of impact assessments of legislative proposals.

This time, the RSB can no longer be the Commission’s undoing: the RSB’s procedures stipulate that after two negative assessments by the body, the vice president in charge, Maroš Šefčovič, can wave through the legislation. That is what he did in this case.

Whether and to what extent the lead Commissioners Thierry Breton and Reynders have taken the RSB’s assessment into account is unclear: the Commission is keeping the panel’s reports under wraps until the College adopts the relevant legislative project. Despite a request from the EU Parliament’s Trade Committee, the Commission would not release the RSB opinion.

The EU Parliament criticizes the RSB for exceeding its mandate in this case: “the expert opinion is very political,” finds Bernd Lange, who was able to see in the opinion that: “the argumentation of the European business association was taken up very strongly, according to which the law allegedly goes against the free-market interests of companies,” said the SPD MEP in a recent interview.

Parliament fears that the law has been further watered down: “it is essential that the Commission keeps its ambitions high and delivers an efficient law,” says Green Party politician Anna Cavazzini. Human rights and environmental due diligence must run through the entire value chain and SMEs must be covered by the law, at least in high-risk sectors.

No personal liability for directors

At present, the legislative proposal is undergoing a procedural vote within the Commission. Some of the key points are now known. The personal liability of company directors, for example, has been removed. This comes as no surprise, as this was one of the biggest points of contention among the Commissioners. For a long time, it was unclear whether the Commission would outsource this element to a second law. Now it seems clear that it will be dropped altogether.

The import ban on products from forced labor will also not be included in the final text. This was one of Ursula von der Leyen’s demands. Actually, the implementation of the ban would have belonged to the portfolio of Trade Commissioner Valdis Dombrovskis – but he refused to implement the plan. Now, however, he has no choice, and Dombrovskis is already working on a product withdrawal mechanism initiative, according to Europe.Table.

The Commission, however, will argue that the trade ban is implicit in the law: after all, the aim of the law is to prevent products made under human rights violations – hence including forced labor – from entering the European market.

Compromise between Reynders and Breton

Didier Reynders was able to maintain his ambitions, at least in part. Thus, Reynders and Breton agreed on the following compromise: The scope of the law is narrower, but the duty of care for the companies concerned applies to the entire value chain.

Accordingly, around 10,000 European companies will probably have to adapt to a statutory duty of care. The threshold for companies will reportedly be 500 employees and €150 million in annual sales. This would take the European law further than the German Supply Chain Act. The latter applies in the first year to companies with 3,000 or more employees, and then later to companies with 1,000 or more employees. In addition, the due diligence obligation here is limited to Tier 1, i.e. the first stage of the supply chains.

At the same time, then Economics Minister Peter Altmaier had promised the industry associations that the European law would not go any further than the German one. Accordingly, Berlin also exerted strong pressure on Commission President von der Leyen. In the new federal government, however, the SPD is now campaigning at EU level to go further than the law painstakingly negotiated in the German parliament. Resistance to this is most likely to come from the FDP. However, the ministries occupied by the Liberals are not responsible for this at all.

Criticism of the Commission’s plans comes from the machinery and plant engineering sector. “A due diligence law that covers the entire supply chain and a broad scope of application would impose quite considerable burdens on internationally networked SMEs,” says Holger Kunze, head of the VDMA’s Brussels office. “For many of our member companies, it would no longer be feasible at all.”

German industry will therefore not be enthusiastic about the fact that the Commission text provides for civil liability. This would apply to damage and human rights violations that occur as a result of a breach of the due diligence obligation. An article along the lines of the EU Parliament’s proposal is conceivable: in it, there is an exception for “companies that prove that they have taken all due care in accordance with this directive to avoid the damage in question or that the damage would also have occurred if all due care had been taken.”

Civil liability was originally also envisaged in the German law, but Development Minister Gerd Müller had to row back under pressure from Altmaier and industry associations. However, this week around 100 European and German companies and investors have lobbied for a law including a liability rule for those affected. Among them are Ikea, Danone, and Epson.

High-risk industries should also perform due diligence

In addition to companies with 500 or more employees, due diligence will also apply to high-risk industries. It is likely to affect companies with 250 or more employees; according to informed circles, the Commission has not yet made a final decision.

For Richard Gardiner of the NGO Global Witness, that would be a step in the right direction: “the Commission is doing the right thing by including high-risk industries. But companies must then be held truly accountable.” That means plaintiffs should also be able to sue in EU courts.

It is not yet clear exactly which sectors the high-risk industries are. In its report, the EU Parliament demanded that the Commission define these sectors. However, a legal opinion from the Supply Chain Law Initiative, which has broken down such industries, can provide an impression. Advocates cited the 2020 research report by the German Ministry of Labor and Social Affairs on respect for human rights along global value chains and the Statistical Classification of Economic Activities in the European Community (NACE). The legal report lists 16 high-risk industries, including automotive, chemicals, ICT, mining and defense.

Member states decide on sanctions

Instead of liability for company bosses, the law will include a significantly weakened duty of oversight. If deficiencies or problems are identified in the supply chain, the supervisory board is to sign off on a plan to correct them.

In addition, the law provides for administrative sanctions for companies, but also for their directors, if they fail to comply with the due diligence obligation. However, the Commission is handing over responsibility here to the member states. They are to determine which authorities are responsible and how high the penalties can be.

The Commission has taken a similar approach to the Conflict Minerals Regulation, which is already in force (Europe.Table reported). Here, the competent authorities of the member states check, for example, the due diligence reports of the companies concerned. If these are inadequate or completely missing, the member states can impose administrative sanctions.

The differences between the member states are enormous. The penalties range from €50,000 in Germany to €726 in Austria. In Luxembourg, the parliament has still not passed the framework law on the basis of which the penalties can be imposed in the first place.

The extent of the duty of care in terms of environmental protection is not yet entirely clear. The law covers biodiversity and ecosystems as well as environmental damage. Likely to be included as well are the effects on climate change and the goals of the Paris Agreement. With Till Hoppe

Health data: ethics before profit

The European Health Data Space (EHDS) is to be created by 2025. The French EU Council Presidency has presented guiding principles in advance as an ethical framework for digitization in healthcare.

By

Eugenie Ankowitsch

In February 2020, the EU Commission adopted the European Data Strategy. The health data space envisaged as part of this strategy is intended to make it possible to exchange health data securely across the borders of EU countries in accordance with uniform standards. This is intended not only to improve healthcare (primary use), but also to promote the use of health data in research (secondary use). The European Commission is currently working on a legislative proposal to be presented in April 2022.

In the program for the EU Council Presidency, the French already emphasized the importance of demanding ethical standards to protect sensitive health data. At the conference “Citizenship, Ethics, and Health Data,” the French EU Council Presidency presented guiding principles that define an ethical framework for digitization in healthcare.

“The goals we are pursuing with the creation of the European Health Data Space (EHDS) will not be achieved without the trust of the citizens,” said French Health Minister Olivier Véran. “The EHDS will be created for and with the citizens or not at all.”

Humanism, control, inclusivity, and ecology

In total, there are 16 ethical principles that are intended to give expression to European values:

Humanistic value framework for digitalization in healthcare:
- Digital health complements and optimizes personal healthcare
- Information about benefits and limitations of digital health
- Citizens are informed how digital health services work and can easily customize interactions with them.
- AI applications must be explained and non-discriminatory.

Citizens have control over digitalization and their health data:
- Active participation in shaping the European and national framework for digital health and data
- Easy and reliable access to one’s own health data
- Access to information on how, by whom and for what purpose one’s own health data is used
- Citizens can easily and reliably grant and deny access to their data.

Ensure inclusivity of digital health services:
- Digital health services are accessible to all, including people with disabilities or low literacy skills.
- Digital health services are intuitive and easy to use.
- Easy access to digital health training
- Human communication support when needed

An ecologically responsible digitization of healthcare:
- The environmental impact of Digital Health is identified and measured.
- Digital Health services are developed in line with the best eco-design practices.
- Reuse and recycling of digital health devices is ensured.
- Digital health stakeholders commit to reducing their environmental footprint.

The ethical guiding principles intentionally omit aspects of security or interoperability, which are regulated elsewhere, and are to be updated regularly. Modalities for implementing the principles will be worked out by the eHealth network when it meets in Paris on June 1st and 2nd, 2022. The network, founded on the basis of the EU directive on cross-border healthcare, includes the representatives of the EU member states responsible for the digitization of healthcare.

Broad agreement, but doubtful binding force

The participating health ministers of the European Union and the European Commission – represented by the Director-General for Health and Food Safety, Sandra Gallina, and the Deputy Director-General for Communication Networks, Content, and Technology, Roberto Viola – welcomed the French initiative on European ethical guiding principles for the digitization of healthcare. However, the extent to which the guiding ethical principles should be binding for stakeholders remains unclear.

Parliamentary State Secretary Sabine Dittmar (SPD), for example, emphasized that the resolutions of the conference on ethical principles could not give rise to any obligation for the member states to take concrete measures. Rather, the desired alignment of digital health with European values and principles would have to be discussed and fleshed out in other bodies.

Still, Ditmar said, an ethical framework is important, in part to highlight the difference in how digitization is used in other regions of the world. “Neither maximum profit increase nor complete government control options are goals of our digitization efforts,” she said.

The Finnish Minister of Health, Ingvild Kjerkol, emphasized that the implementation of digitalization in healthcare must be accompanied by an intensive discussion of ethical issues. This was shown by the experience in the creation of the Finnish Health Data Space. A unified European position must also be developed with regard to the European Health Data Space.

Only a few countries put ethics on the agenda

Various studies have shown that the issues addressed by the Guiding Principles are still relevant and are gaining in relevance. An as-yet unpublished study by Ernst & Young that France is to show that access to digital technology still varies widely in the European countries.

Only a few countries have ethical issues explicitly on the agenda, as Loïc Chabanier, Partner EY Consulting France, said when presenting the preliminary results. Because technological developments are driven primarily by experts, ethical aspects have been slow to come to the foreground. This also applies to sustainability.

The most important topics relating to digitization are very differently developed in the European countries. While security, data protection, and data management are already very well regulated, governance and ethics are still in their infancy.

Democracy and human rights in focus

Digital transformation can only improve the health of all people around the world if digital technology is governed in the public interest and not by profit motives, stress the authors of a new report titled “Governing Health Futures 2030: growing up in a digital world” by Lancet and the Financial Times. Values such as democracy, equality, solidarity, inclusion, and human rights must be placed at the center.

The report elaborates on how inadequate governance, combined with the accumulation of data and power by big tech companies and governments for the purpose of surveillance, exacerbate health inequities, undermine trust, and threaten human rights.

The Lancet FT Commission, made up of 19 leading experts from 14 countries and the fields of global health, medicine, public health, psychology, digital media, social sciences, economics, and politics, calls for a radical new approach. It says comprehensive reforms are needed to build public trust, rapidly improve the governance of digital technologies and health data, and develop more equitable applications for health care.

Energy crisis: Liese wants to tighten up ETS draft

The share of the European Emissions Trading System (ETS) in the current electricity price development is very small. However, this “small share in the desperate situation of many families and companies” must also be taken into account, said the ETS rapporteur of the EU Parliament, Peter Liese (EPP), to journalists on Wednesday.

The CDU MEP had presented his draft report in mid-January, but now announced his intention to continue working on the ETS “in order to make it more predictable and robust against market manipulation.” Accordingly, it is conceivable that the Commission could intervene in the market if the price increase is too strong. Such a mechanism has already been called for several times, but has not yet been considered by Liese in his draft. The MEP stresses: “Not every solution that looks simple is really helpful. We need targeted interventions after a careful evaluation.”

The announcement is part of a four-point plan proposed by Liese in response to the current energy crisis. The demands also include not raising the ambition level of the emissions trading system any further than envisaged by the Commission. Corresponding demands are coming from environmentalists in particular.

In addition, taxes and levies on energy, especially on renewable electricity, must be significantly reduced and, at best, completely abolished. Investments in renewables and energy efficiency must be increased in order to become less dependent on fossil fuels. til

Innovation council to provide more targeted support

Yesterday, the EU Commission adopted the work program for the European Innovation Council (EIC). This means that it is now clearer how the EU intends to pursue its innovation funding in the third pillar of the Horizon Europe research funding program in the future.

With the work program, the EIC is further on its way to regular operation. Having already been installed as a test run from 2018 to 2020, the body was made permanent in 2021. The main changes in the 2022 work program relate to the way in which applications are submitted. Up to now, the effort for applicants has been enormous, even for the first application, while only a fraction of the applications received a positive decision. In the future, the procedure will be made much easier in the first step.

But there are also significant changes in the funding methods and the research areas specifically focused on by the EIC. EU Research Commissioner Mariya Gabriel was particularly pleased yesterday that the EIC will now also specifically promote “innovation achievements by women and female-led start-ups”.

EIC to promote three-stage to unicorn maturity

The EIC has three different instruments at its disposal to support researchers at universities or companies of different sizes. These are aimed at different “Technology Readiness Levels” (TRL), i.e. the status according to a classification that assesses the respective innovation. The funding is designed in such a way that an innovation can ideally pass through all three instruments.

Researchers can receive up to €4 million in funding for projects from the Pathfinder program, which has a total budget of €350 million. Of this, 167 million is reserved for the so-called “Pathfinder Challenges.” In 2022, these Challenges are research into CO2 and nitrogen management and storage, medium- and long-term energy storage systems, research into the genetic causes of cardiovascular diseases (cardiogenomics), technologies for continuous healthcare, DNA-based digital storage technologies, and new approaches in the field of quantum computing.

The second instrument is funding for the transfer of research into actual application: previously funded research that has already left the experimental stage can receive up to €2.5 million – or more in individual cases – from the EIC Transition pot, which contains a total of €131 million. Of this, €60.5 million are reserved for specific topics.

€1.2 billion in the EIC Accelerator

However, the third area accounts for the largest share of EIC funds: Almost €1.2 billion is available to the EIC Accelerator. This money is basically intended to support SMEs and, under certain circumstances, medium-sized companies with a maximum of 499 employees in scaling their innovation projects.

The EIC Accelerator is not a classic research funding program, but an investment vehicle for equity investments. It is also intended to attract private investors for venture investments. According to the Commission, this has recently been successful: the first 14 investments are said to have achieved a private capital match of 2.7 times the EIC investment.

The Accelerator program also has a fundamentally open section (€630 million) and a second section (€537 million) geared to specific goals. This is available for projects in the fields of pharmaceuticals, strategic health technologies such as gene therapies, sustainability in raw materials, quantum technology, edge computing, data and signal utilization in space technology and space technology as such, security technology, financial and payment infrastructures and services. fst

EP wants special committee on Pegasus affair

The European Parliament now wants to set up a special committee on the use of the controversial Pegasus spy software from the Israeli manufacturer NSO Group in the EU. According to MEPs Sophie In ‘t Veld and Róża Thun, a motion by the Renew Group to this effect has found a majority in principle. The exact decision to set up the committee is still being coordinated between the group chairmen.

In particular, the events in Poland and Hungary, in which opposition members, public prosecutors, and journalists were spied on by state authorities, are likely to be the focus of parliamentary scrutiny in the EP.

Unlike a committee of inquiry in the Bundestag, a special committee of the European Parliament does not have the right to summon witnesses or request files from nation-states. However, previous special committees, for example on the Echelon affair or on NSA spying, have been able to develop public weight. fst

Gas industry hopes for Nord Stream 2

The gas industry in Germany expects further turbulence after drastic price increases last year. “This may well be a glimpse into the future of our energy supply,” Timm Kehler, managing director of the association “Zukunft Gas”, said on Wednesday about the 2021 balance.

Extreme weather and the geopolitical situation are contributing factors. The controversial Nord Stream 2 gas pipeline may not be necessary to supply Europe in terms of capacity alone, he said. “But we certainly expect that this new import route can already have a price-dampening effect,” Kehler said. According to the association, it is also clear that current supplies are not sufficient with a view to next winter: “we simply need more gas than is currently available to fill up the storage facilities,” said trade expert Gregor Pett.

Most recently, Germany had been importing more liquefied natural gas (LNG), but this is usually more expensive than pipeline gas, if only because of the transport costs. According to the Gas Association, this cannot be completely replaced by LNG in Germany. Economics Minister Robert Habeck wants to use government incentives to trigger the construction of LNG ports in Germany as well.

In addition, to ensure security of supply, he wants to ensure that storage facilities are better filled in the future than they were before this winter. To this end, he is considering either a state reserve or requirements for the industry for minimum filling levels. This is met with skepticism by the Future Gas Association: “I clearly warn against intervening too deeply in an established market system here,” said Kehler. rtr

EMA center for real data evaluation launches

The European Medicines Agency (EMA) has set up its new center for the collection and evaluation of public health data from the member states ready for operation. So-called Real World Evidence (RWE), or real data from hospitals and doctors’ offices, has been used before for regulatory medicine review processes. But with advances in data processing, the EMA hopes to leverage significant potential.

In a statement Wednesday, the agency announced that the “Data Analysis and Real Data Query Network Coordination Center” (DARWIN EU) is now able to provide real data to the EMA and member state regulators upon request.

Probably later this year, the center would also be able to respond to requests from national authorities to identify benefits and reimbursement rates for new drugs, Peter Arlett, head of the Data Analysis and Methods Taskforce at the EMA, told Reuters.

The real-world data will include the frequency of the disease being treated, the size of the patient population, and the safety and efficacy of drugs and vaccines. “By 2025, we expect Darwin to be able to conduct more than 100 observational studies with real-world data annually,” Arlett says. These data would complement control group data from research. rtr

VDA calls for active foreign policy on raw materials

In view of the enormous demand for renewable energies and raw materials in the transformation to electric mobility, the German automotive industry is urging alliances with other countries. The volume will not be able to be produced in Europe alone, VDA head Hildegard Müller said on Wednesday during a video conference with journalists.

Germany, therefore, needs committed programs for energy and raw materials partnerships, an active raw materials foreign policy. “The global markets for energy partnerships are already being distributed – currently still largely without Germany. If we don’t act quickly here, we will be left empty-handed,” the VDA boss warned. China, for example, is securing its huge hunger for raw materials in Africa.

Only one sixth of the targeted charging points

Germany must take action more quickly and proceed strategically, Müller stressed. With regard to the restructuring of industry, she called for an end to theoretical debates about climate targets. The focus is now on infrastructure and the framework conditions, she said. Here, too, Germany is not moving forward fast enough. The expansion of the charging infrastructure is not keeping pace with the ramp-up of e-mobility. If Germany maintains its modest pace, it will only have around 160,000 charging points by 2030 – one-sixth of the target of one million.

The German government should therefore invite the public to a charging summit as soon as possible, Müller said, renewing a proposal that had already been made earlier. To this end, all the players should be brought together around one table – from service station operators, the housing industry, parking companies, and retailers to the energy industry, network operators, the logistics sector, local authorities, and the automotive industry.

In order to supply the rapidly growing number of electric cars with energy, the expansion of the power grid also needs to be driven forward more decisively. In terms of digitization, Germany is not able to exploit its potential, as there is still no nationwide 5G network. Europe needs to get a move on when it comes to setting up semiconductor factories and battery production, he said. He said it was important to implement the plans promptly so that value creation for the automotive industry did not migrate to other regions. rtr

Committee: Brexit brings more costs and paperwork

Higher costs, more bureaucracy, many delays: A committee of the British parliament has drawn a negative balance of the EU exit. “One of the great promises of Brexit was to free up British businesses to give them the scope to maximize their productivity,” said the chair of the accountability committee, Meg Hillier, of the Labour Party, of the inquiry presented Wednesday. “But the only discernible impact so far has been increased costs, paperwork, and delays at the border.”

Brexit has left a clear mark on German-British foreign trade. German exports to the United Kingdom fell by 2.6 percent last year, while they increased by 14 percent overall to a record €1,375.5 billion. British exports to Germany actually slumped by 8.5 percent in 2021, while German imports rose by 7.1 percent overall.

Brexit proponents conceded that leaving the EU could result in additional costs in the short term. In the long term, however, there would be significant political and economic benefits. The committee pointed out in its inquiry that the government still had much to do to facilitate cross-border trade.

For a good year now, Great Britain has no longer been in the customs union and the single market. The trade and cooperation agreement agreed with the EU has avoided higher customs duties. However, inspection certificates or further documents and requirements are now demanded, which make border crossing more time-consuming and complicated, thus causing higher trade costs. rtr

Dieter Kugelmann: protector of digital freedoms

Dieter Kugelmann has been the State Commissioner for Data Protection in Rhineland-Palatinate since 2015.

As the owner of a bakery, am I allowed to check the vaccination status of my employees? What is the purpose of the newly installed camera in the marketplace – is the city government even allowed to do that? And what software can be used in schools without hesitation? For questions of this kind, Dieter Kugelmann (58), the Rhineland-Palatinate State Commissioner for Data Protection and Freedom of Information, and his team are the people to contact.

However, the lawyer’s area of responsibility does not only extend to the application of the law. As a member of the Data Protection Conference, he also influences legislative procedures.

In the debate about data protection concerning surrounding software, for example, it looks like this: when using MS Word, all keystrokes are ‘recorded’. If MS Office is used in schools, this data can be used to draw conclusions about the performance of students, which could potentially be to their disadvantage.

It’s important, Kugelmann said, to neither unilaterally alarm that data octopi are exploiting our children nor that excessive privacy measures are making learning more difficult: “We need to look at how we can reasonably balance between the two positions.”

This is also done in consultation with a seemingly overpowering player like Microsoft, which definitely has an interest in cooperating with the Rhineland-Palatinate site because of corporations like BASF.

There are problems with the application of the law

Kugelmann is satisfied when he talks about the substantive legal basis of German and European data protection law. However, it is the application of the law that he and his colleagues need to improve. The General Data Protection Regulation has provided them with a good instrument, “but there is a lack of enforcement, of harmonized enforcement.

While the common guidelines drafted by the European Data Protection Board are promising, cooperation between authorities still needs to be developed. For example, for Ireland and Luxembourg in particular, methods must be found to prevent “the competent authorities from putting procedures on the back burner”.

According to the coalition agreement of the new government, the data protection conference is to be enabled to pass legally binding resolutions – an unusual concession to an independent body. Kugelmann was chairman of the working group last year, which is currently having an expert opinion drawn up on the legal enforceability of this plan. If it succeeds, “speaking with one voice in Germany will allow us to emphasize our voice in Europe even better.”

In this way, the course could be clearly set at an early stage for digitization processes, in which it is always true that data protection is the protection of fundamental rights. For the purposes of reducing emissions for the use of smart grids, however, the use of personal data might be permissible to a certain extent. The specifics, however, have yet to be determined in cooperation with research and industry. Julius Schwarzwälder

With great words of praise, German Foreign Minister Annalena Baerbock yesterday introduced her future State Secretary. As of March 1st, Jennifer Morgan, who is still head of Greenpeace, will formally become the new special envoy for international climate policy at the German Federal Foreign Office. The US citizen has already applied for German citizenship and is to be officially inducted into the office of Secretary of State in the near future.

Baerbock called Morgan’s appointment a “dream appointment” who not only brings many years of experience to the table, but is also very well-connected in international climate politics.

However, now more than ever, the question arises as to how foreign climate policy competencies are distributed in the German government. The appointment of Morgan shows that the Federal Foreign Office will play a role in this area itself. This will probably not be limited to the world climate conferences, where the Foreign Office will represent Germany in a leading role for the first time – until now it has been the Federal Ministry for the Environment

Furthermore, Morgan wants to talk to representatives of other countries, form alliances and, above all, support the weakest countries and those most affected by climate change. This is a task that the Ministry for Economic Cooperation, headed by former Environment Minister Svenja Schulze and long-time climate policy expert Jochen Flasbarth, has also claimed for itself.

Also in the Foreign Office: Minister of State for Europe and Climate Anna Luehrmann. One might think that Luehrmann is responsible for the combination of both terms – that is, for European climate policy. After all, European climate policy has a lot to do with foreign climate policy. But in fact, European climate policy is the responsibility of Robert Habeck’s Ministry of Economics and Climate Protection (BMWK). BMWK State Secretary Patrick Graichen therefore also represented the German government at the EU Environment Council in December – together with Minister for the Environment Steffi Lemke.

And then the BMWK also has European State Secretary Sven Giegold and the experienced European politician and Parliamentary State Secretary Franziska Brantner.

So what does Anna Luehrmann do in her new position? According to government sources, Luehrmann is responsible for international climate policy outside the EU. The title of Minister of State for Europe and Climate does not relate to each other. Well, who in the world is supposed to figure that one out?

The consequence is that virtually every discipline of climate policy is handled by at least two ministries. When asked on Wednesday how the competencies are now distributed, Baerbock gave an evasive answer: There is no competition with other ministries, only cooperation. According to Baerbock, this also includes the Ministry of Agriculture and the Ministry of the Interior.

“Only cooperation”, sounds nice, but it’s also complicated. It wouldn’t be the first time that ministries bickered over competencies. And given the urgency of climate policy action, as the government itself constantly emphasizes, this is something it really doesn’t need. Lukas Scheid

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

There have been repeated delays, but the directive on sustainable corporate governance is finally due to be adopted on February 23rd. This was preceded by two negative assessments by an internal Commission body, the Regulatory Scrutiny Board. Some of the content of the proposed legislation is already known – for example, it appears that the regulation will go significantly beyond the German Supply Chain Act. Charlotte Wirth gives an overview.

A European Health Data Space that enables the secure and transparent exchange of data in the healthcare sector – the European Health Data Space is to be created by 2025. The French Council Presidency has given advanced consideration to the ethical dimension of the digitization of healthcare and has now presented 16 guiding principles. Eugenie Ankowitsch summarizes the principles and uses studies to show how topical the debate about ethical issues in digitization is.

Foreign Minister Annalena Baerbock described Jennifer Morgan as a “dream appointment”. The former head of Greenpeace will be Baerbock’s special representative for international climate policy. Morgan will thus prepare the climate conferences in the future, but her tasks are likely to go far beyond that. Yet, she will have a number of colleagues who are also entrusted with climate issues at the international level. Given the urgency of the task, one can only hope that the ministries will not get tangled up in a tug-of-war over competencies, writes Lukas Scheid in Apéro.

Your
Sarah Schaefer

What to expect from the EU supply chain law

By

Charlotte Wirth

On February 23rd, it is finally to come, the directive on sustainable corporate governance – almost three years after Justice Commissioner Didier Reynders announced a law. Time and again, there were delays. In the end, the Commission also failed due to two negative assessments by the Regulatory Scrutiny Board (RSB), a Commission-internal body that is supposed to check the quality of impact assessments of legislative proposals.

This time, the RSB can no longer be the Commission’s undoing: the RSB’s procedures stipulate that after two negative assessments by the body, the vice president in charge, Maroš Šefčovič, can wave through the legislation. That is what he did in this case.

Whether and to what extent the lead Commissioners Thierry Breton and Reynders have taken the RSB’s assessment into account is unclear: the Commission is keeping the panel’s reports under wraps until the College adopts the relevant legislative project. Despite a request from the EU Parliament’s Trade Committee, the Commission would not release the RSB opinion.

The EU Parliament criticizes the RSB for exceeding its mandate in this case: “the expert opinion is very political,” finds Bernd Lange, who was able to see in the opinion that: “the argumentation of the European business association was taken up very strongly, according to which the law allegedly goes against the free-market interests of companies,” said the SPD MEP in a recent interview.

Parliament fears that the law has been further watered down: “it is essential that the Commission keeps its ambitions high and delivers an efficient law,” says Green Party politician Anna Cavazzini. Human rights and environmental due diligence must run through the entire value chain and SMEs must be covered by the law, at least in high-risk sectors.

No personal liability for directors

At present, the legislative proposal is undergoing a procedural vote within the Commission. Some of the key points are now known. The personal liability of company directors, for example, has been removed. This comes as no surprise, as this was one of the biggest points of contention among the Commissioners. For a long time, it was unclear whether the Commission would outsource this element to a second law. Now it seems clear that it will be dropped altogether.

The import ban on products from forced labor will also not be included in the final text. This was one of Ursula von der Leyen’s demands. Actually, the implementation of the ban would have belonged to the portfolio of Trade Commissioner Valdis Dombrovskis – but he refused to implement the plan. Now, however, he has no choice, and Dombrovskis is already working on a product withdrawal mechanism initiative, according to Europe.Table.

The Commission, however, will argue that the trade ban is implicit in the law: after all, the aim of the law is to prevent products made under human rights violations – hence including forced labor – from entering the European market.

Compromise between Reynders and Breton

Didier Reynders was able to maintain his ambitions, at least in part. Thus, Reynders and Breton agreed on the following compromise: The scope of the law is narrower, but the duty of care for the companies concerned applies to the entire value chain.

Accordingly, around 10,000 European companies will probably have to adapt to a statutory duty of care. The threshold for companies will reportedly be 500 employees and €150 million in annual sales. This would take the European law further than the German Supply Chain Act. The latter applies in the first year to companies with 3,000 or more employees, and then later to companies with 1,000 or more employees. In addition, the due diligence obligation here is limited to Tier 1, i.e. the first stage of the supply chains.

At the same time, then Economics Minister Peter Altmaier had promised the industry associations that the European law would not go any further than the German one. Accordingly, Berlin also exerted strong pressure on Commission President von der Leyen. In the new federal government, however, the SPD is now campaigning at EU level to go further than the law painstakingly negotiated in the German parliament. Resistance to this is most likely to come from the FDP. However, the ministries occupied by the Liberals are not responsible for this at all.

Criticism of the Commission’s plans comes from the machinery and plant engineering sector. “A due diligence law that covers the entire supply chain and a broad scope of application would impose quite considerable burdens on internationally networked SMEs,” says Holger Kunze, head of the VDMA’s Brussels office. “For many of our member companies, it would no longer be feasible at all.”

German industry will therefore not be enthusiastic about the fact that the Commission text provides for civil liability. This would apply to damage and human rights violations that occur as a result of a breach of the due diligence obligation. An article along the lines of the EU Parliament’s proposal is conceivable: in it, there is an exception for “companies that prove that they have taken all due care in accordance with this directive to avoid the damage in question or that the damage would also have occurred if all due care had been taken.”

Civil liability was originally also envisaged in the German law, but Development Minister Gerd Müller had to row back under pressure from Altmaier and industry associations. However, this week around 100 European and German companies and investors have lobbied for a law including a liability rule for those affected. Among them are Ikea, Danone, and Epson.

High-risk industries should also perform due diligence

In addition to companies with 500 or more employees, due diligence will also apply to high-risk industries. It is likely to affect companies with 250 or more employees; according to informed circles, the Commission has not yet made a final decision.

For Richard Gardiner of the NGO Global Witness, that would be a step in the right direction: “the Commission is doing the right thing by including high-risk industries. But companies must then be held truly accountable.” That means plaintiffs should also be able to sue in EU courts.

It is not yet clear exactly which sectors the high-risk industries are. In its report, the EU Parliament demanded that the Commission define these sectors. However, a legal opinion from the Supply Chain Law Initiative, which has broken down such industries, can provide an impression. Advocates cited the 2020 research report by the German Ministry of Labor and Social Affairs on respect for human rights along global value chains and the Statistical Classification of Economic Activities in the European Community (NACE). The legal report lists 16 high-risk industries, including automotive, chemicals, ICT, mining and defense.

Member states decide on sanctions

Instead of liability for company bosses, the law will include a significantly weakened duty of oversight. If deficiencies or problems are identified in the supply chain, the supervisory board is to sign off on a plan to correct them.

In addition, the law provides for administrative sanctions for companies, but also for their directors, if they fail to comply with the due diligence obligation. However, the Commission is handing over responsibility here to the member states. They are to determine which authorities are responsible and how high the penalties can be.

The Commission has taken a similar approach to the Conflict Minerals Regulation, which is already in force (Europe.Table reported). Here, the competent authorities of the member states check, for example, the due diligence reports of the companies concerned. If these are inadequate or completely missing, the member states can impose administrative sanctions.

The differences between the member states are enormous. The penalties range from €50,000 in Germany to €726 in Austria. In Luxembourg, the parliament has still not passed the framework law on the basis of which the penalties can be imposed in the first place.

The extent of the duty of care in terms of environmental protection is not yet entirely clear. The law covers biodiversity and ecosystems as well as environmental damage. Likely to be included as well are the effects on climate change and the goals of the Paris Agreement. With Till Hoppe

Health data: ethics before profit

The European Health Data Space (EHDS) is to be created by 2025. The French EU Council Presidency has presented guiding principles in advance as an ethical framework for digitization in healthcare.

By

Eugenie Ankowitsch

In February 2020, the EU Commission adopted the European Data Strategy. The health data space envisaged as part of this strategy is intended to make it possible to exchange health data securely across the borders of EU countries in accordance with uniform standards. This is intended not only to improve healthcare (primary use), but also to promote the use of health data in research (secondary use). The European Commission is currently working on a legislative proposal to be presented in April 2022.

In the program for the EU Council Presidency, the French already emphasized the importance of demanding ethical standards to protect sensitive health data. At the conference “Citizenship, Ethics, and Health Data,” the French EU Council Presidency presented guiding principles that define an ethical framework for digitization in healthcare.

“The goals we are pursuing with the creation of the European Health Data Space (EHDS) will not be achieved without the trust of the citizens,” said French Health Minister Olivier Véran. “The EHDS will be created for and with the citizens or not at all.”

Humanism, control, inclusivity, and ecology

In total, there are 16 ethical principles that are intended to give expression to European values:

Humanistic value framework for digitalization in healthcare:
- Digital health complements and optimizes personal healthcare
- Information about benefits and limitations of digital health
- Citizens are informed how digital health services work and can easily customize interactions with them.
- AI applications must be explained and non-discriminatory.

Citizens have control over digitalization and their health data:
- Active participation in shaping the European and national framework for digital health and data
- Easy and reliable access to one’s own health data
- Access to information on how, by whom and for what purpose one’s own health data is used
- Citizens can easily and reliably grant and deny access to their data.

Ensure inclusivity of digital health services:
- Digital health services are accessible to all, including people with disabilities or low literacy skills.
- Digital health services are intuitive and easy to use.
- Easy access to digital health training
- Human communication support when needed

An ecologically responsible digitization of healthcare:
- The environmental impact of Digital Health is identified and measured.
- Digital Health services are developed in line with the best eco-design practices.
- Reuse and recycling of digital health devices is ensured.
- Digital health stakeholders commit to reducing their environmental footprint.