A law for human rights
Some of our clothes come from Asia, the cocoa and fruit often from Africa and the coffee mostly from South America. For this reason, it is becoming increasingly relevant for consumers to know under what circumstances the goods they use in their daily lives are actually produced. Far too often there is little or no information on this. However, many consumers want to be sure that the goods they buy were produced under fair conditions. Too often, one hears about child or forced labour, poor payment and violation of environmental standards.
The principle of voluntarily establishing a transparent supply chain has hardly worked so far
Companies have so far hardly complied with the requirements of a transparent supply chain and the principle of voluntariness in the disclosure and control of the respective supply chains has so far worked only marginally. Again, and again, fundamental human rights are violated in trade and production. There is discrimination, child labour, exploitation and a lack of labour rights. There is also little regard for the environment and illegal deforestation, pesticide emissions, water and air pollution continue to destroy the environment. German companies earn very well from the products that are produced for them in other parts of the world, so they should also bear responsibility for the production conditions along the supply chain. For this reason, the German government has now passed a supply chain law that encourages companies to exercise their due diligence and better fulfil their global responsibility.
The aim is to protect people in the global economy.
Companies that have already voluntarily opted for sustainable supply chain management have sometimes been at a competitive disadvantage. This issue is also to be counteracted in the future.
What does the new Supply Chain Act cover?
The chart of the German Federal Government clearly shows what the main components of the new Supply Chain Act are:
- Businesses must ensure respect for human rights throughout the supply chain
- They must, among other things, set up grievance mechanisms and report on their activities
- This applies from 2023 for companies with 3000 employees, later from 1000 employees onwards
The protection of the environment still plays a subordinate role in the new law.
If one reads the provisions of the new law, it quickly becomes clear that environmental protection is not yet a central theme in the regulation at the moment. Sarah Hoesch from the Bund für Umwelt und Naturschutz (Association for the Environment and Nature Conservation) and a team have examined the draft of the new supply chain law with regard to environmental and climate protection and unfortunately come to a sobering conclusion:
“The law currently only covers human rights due diligence. This means that environmental aspects are only taken into account if they have some connection to a human rights violation, for example damage to health,” says Hoesch in response to a query from the portal for renewable energies and the citizen-centred energy transition, energiezukunft.
However, the issue of transparent supply chains is now also being discussed at the EU level. The EU Parliament’s draft for an EU supply chain law goes much further here, to include companies’ impacts on the environment and the climate. However, it has not yet been determined when an EU-wide law will come into force.
Sources:
Cf. Lieferkettengesetz.de, Das Lieferkettengesetz ist da! accessed 15.06.2021
URL: https://lieferkettengesetz.de/
Cf. Die Bundesregierung, Lieferkettengesetz, accessed 15.06.2021
URL: https://www.bundesregierung.de/breg-de/suche/lieferkettengesetz-1872010
Cf. Springer Professional, Das bedeutet das Lieferkettengesetz für Unternehmen, accessed 15.06.2021
URL: https://www.springerprofessional.de/lieferkettenmanagement/corporate-social-responsibility/das-bedeutet-das-lieferkettengesetz-fuer-unternehmen/18860764
Cf. energiezukunft, Was das neue Lieferkettengesetz für Klima und Umwelt bedeutet, accessed 17.06.2021
URL: https://www.energiezukunft.eu/wirtschaft/was-das-neue-lieferkettengesetz-fuer-klima-und-umwelt-bedeutet/