A tiny glitch like a minor navigational deviation or a factor that is barely controllable, such as the excessive crosswind that hit the container ship Ever Given in the Suez Canal in 2021, can bring an entire supply chain to a standstill. Recent years have shown how sensitive globally interconnected value chains are to disruptions. The blockage of the Suez Canal in 2021 became a symbol of how strongly the global economic system depends on smooth supply flows.
At the same time, new legal requirements have changed the rules of the game. With national and international supply chain laws, pressure is growing on companies to assume responsibility for human rights, environmental, and social standards in their global networks.
However, this development is not without controversy these days. While some see it as a necessary step towards greater sustainability and resilience, others are now warning of growing bureaucracy, competitive disadvantages, and a shift away from global efficiency.
This article highlights the most important international developments, highlights the opportunities and risks of the new regulations, and provides concrete recommendations for sustainable, resilient value networks.
Global Wave of New Regulation
Political pressure is growing worldwide to hold companies more accountable for their supply chains. The goal is to avoid sacrificing human rights and environmental standards to global cost pressures. Binding laws now exist in many regions:
- European Union: The Corporate Sustainability Due Diligence Directive (CSDDD) was adopted in 2024. It obliges large companies to identify, mitigate, and report risks in their global supply chains. National laws such as the German Supply Chain Due Diligence Act (LkSG) and the French “Loi de Vigilance” remain in force until the EU directive is fully implemented.
- United Kingdom: The Modern Slavery Act has been in force since 2015. Companies must disclose how they combat forced labor in their supply chains.
- USA: The Uyghur Forced Labor Prevention Act (UFLPA) of 2022 prohibits imports of products linked to forced labor in the Chinese region of Xinjiang. Since then, US authorities have intensified controls, particularly in the electronics, textile, and solar industries.
- Other regions: Countries such as Japan and Norway are implementing transparency laws. In Brazil, there are currently legislative initiatives preparing for stricter standards.
Global Supply Chain Laws: Between Overwhelm and New Beginning
Global supply chain laws have long been a symbol of a global movement for greater transparency and accountability. However, a trend is now reversing: While the EU is moving forward with ambitious regulations such as the CSDDD, some EU countries are slowing down. Concerns about competitiveness and bureaucratic burdens are weakening or postponing existing requirements – globalization is turning into regulatory frustration.
The situation remains complex for companies. International supply chains often encompass hundreds of suppliers across multiple continents. Establishing transparency is a significant effort: audits, monitoring, and reporting requirements cost time, personnel, and capital. Different national and international regulations – such as reporting requirements in Australia, import bans in the US, and due diligence rules in the EU – lead to a patchwork of requirements. Anyone who loses track of these risks fines and reputational damage. At the same time, opportunities are emerging for those who act proactively. A thorough risk analysis not only uncovers human rights or environmental problems, but also operational weaknesses. Companies that support their suppliers instead of simply controlling them build trust and strengthen their resilience in times of crisis. Global supply chain regulations – despite their complexity – thus become an impetus for making networks more resilient, transparent, and future-proof.
Recommendations for Resilient Global Supply Chains
To ensure that global supply chain regulations do not become a burden and require constant responses to changes, internationally active companies should follow a few strategic guidelines:
- Develop a centralized compliance framework
Instead of considering each country individually, companies should create a global framework that integrates EU, US, and other international regulations. Local specifics can then be incorporated without constantly redesigning the basic structure.
- Consistently use digital tools
Without modern technologies, this complexity is unmanageable. AI-supported risk scores, supplier databases, real-time monitoring, and automated reporting are crucial.
- Treat suppliers as partners
Smaller suppliers in emerging markets, in particular, are quickly overwhelmed. Companies should support them through training, joint audits, or technical assistance. This builds trust and sustainably reduces risks.
- Continuously monitor political developments
Laws are evolving – such as the current debate on the specific design of the EU directive. Companies need flexible structures to be able to react in a timely manner.
Conclusion
Supply chain laws were long considered a symbol of a global movement for greater responsibility and transparency. More and more countries are introducing regulations on human rights and environmental standards – from Norway to Japan to the EU. Companies should ensure fair and sustainable value creation worldwide.
But these developments are not without controversy. Under pressure from costs, bureaucracy, and geopolitical tensions, many countries are curbing their ambitions. Regulations are being relaxed and postponed. The EU is increasingly standing alone with its CSDDD. What was once intended as a global harmony is developing into a patchwork of national interests – with protectionist undertones.
For companies, this means: Instead of uniform standards, regulatory uncertainty is growing. Those who view supply chain regulations as a burden will be overwhelmed by complexity and costs. Those who embrace them as an opportunity for transparency, digitalization, and partnership can build more resilient, credible, and sustainable supply networks amid the trend reversal.
