BDA AGENDA 04/21 | TOPIC OF THE WEEK

Last week, the Federal Ministers Heil, Altmaier and Müller announced the agreement within the Federal Government on the introduction of a new supply chain law. According to this, new comprehensive legal due diligence requirements on global supply chains are to be introduced for certain companies.

For employers, one thing is clear: German business is fully committed to its human rights responsibilities. Many companies have been active abroad for years, making a significant contribution to higher standards, better education and thus to growth and prosperity. Studies show that companies from Germany make significant contributions to sustainable development in foreign locations through their local presence. Employers from Europe and Germany are in high demand among employees worldwide and are considered particularly attractive.

The current impact of the Corona pandemic is placing a considerable burden on the economy and on the functioning of cross-border supply chains. Against this backdrop, we therefore need a moratorium on burdens now and no more obstacles being placed in the way of the economy, thus making an economic upturn more difficult. Although the announcement by the three federal ministers that no new civil liability will be created and that there will only be a limited supply chain obligation for companies is to be welcomed, the concrete proposals from a draft bill by the BMAS circulating in Berlin go in the wrong direction. The announcements made are simply not being implemented.

According to the draft, it is not only about human rights - as provided for in the National Action Plan for Business and Human Rights (NAP) and the coalition agreement - but also about environmental agreements as well as the topics of wages and labour protection. Furthermore, obligations are to be imposed on companies for the entire global supply chain, not just for the first supplier stage (tier-1). They must implement a comprehensive catalogue of measures "without delay" upon becoming aware of possible violations and thus have a legally binding obligation to influence the supply chain. This is flanked by the fact that NGOs and trade unions are to be given the right to assert claims in their own name (legal standing).

And finally, the new due diligence requirements are to apply not only to global supply chains, but also to the companies' entire "own business" here in Germany as well. So it is not just about a law to regulate global supply chains, as announced.

In short, key corrections are urgently needed to ensure that the announcements made and the requirements set out in the coalition agreement are actually implemented. As always, a law must be practicable and implementable for companies in their daily practice. There is still a long way to go until then.