Sections of the European economy are fighting openly or behind the doors against the planned European supply chain law. The organizations “Corporate Europe Observatory” and the “European Coalition for Corporate Justice” have written a study that makes transparent how the economy has tried to influence politics in their favor in the last few months in order to achieve a possible binding European regulation dilute.

Among other things, the conclusion of the study says: The industry “that rather than covering global supply chains, the law should be limited to tier one (ie just the companies’ immediate suppliers, rather than those further down the supply chain). It also lobbies for ‘safe harbours’ that strip away liability, rejecting measures that would improve access to justice for victims.” Instead, it must now be a matter of creating a law “that actually ends environmental and human rights violations, holds companies accountable if they do violate these rights, and brings justice to victims and the environment.” The prerequisite for this, however, is that the drama from Germany is not repeated at EU level, as a result of which an actually very well-written law was massively watered down after a lobby battle. Much remains to be done on the way to a good EU supply chain law!

Please refer: Off the hook? How business lobbies against liability for human rights and environmental abuses

After months of negotiations, the federal government has agreed on a supply chain law. From XertifiX’s point of view, this is basically a step in the right direction. However, the initial limit of 3000 employees, for whom the law will apply from 2023, is a disappointing limitation. The initiative supply chain law, of which XertifiX is a member, evaluates the law accordingly.

In our view, a more effective law would have been possible and desirable. But apparently the lobbying work of the business associations prevented an effective protection of human rights and the environment. The lack of civil liability means that victims of serious human rights violations are denied improved legal protection before German courts.

In the dispute (between the Ministry of Labor and Development on the one hand and the Ministry of Economic Affairs on the other), Ministers Heil (SPD) and Müller (CSU) presented a compromise proposal for a supply chain law. As can be seen in today’s Handelsblatt, the compromise offer only provides for fines and administrative penalties, such as the exclusion of a company from public contracts. This actually fulfills one of Altmaier’s central requirements. This compromise proposal should now go to the coalition committee.

According to Handelsblatt, Minister Altmaier is still sticking to his blockade: according to this, companies should only be responsible for the first link in the supply chain, i.e. their direct suppliers. The suppliers of the suppliers, e.g. raw material suppliers, would then be left out. The Supply Chain Act initiative, of which XertifiX is a member, is correspondingly critical of this initiative by Altmaier:

“The limitation of the duty of care to direct suppliers, which Altmaier also called for, would finally reduce the law to absurdity, since it would then neither cover child labor on cocoa plantations nor environmental damage in raw material extraction […] Such a law would run counter to any idea of corporate human rights responsibility . This would mean that Germany would lag far behind international standards and would also thwart the current negotiations at EU level. We therefore expect Angela Merkel, Armin Laschet and the other members of the coalition committee to finally make a clear commitment to the coalition agreement and to pass the present compromise for a supply chain law now without further watering it down and delaying it.“, said Johannes Heeg, spokesman for the civil society alliance “Initiative Supply Chain Act”.

Please refer: Gegen Kinderarbeit und Umweltzerstörung: Wirtschaftsminister Altmaier blockiert Lieferkettengesetz  (German)

“The Legal Affairs Committee of the European Parliament yesterday voted for a European supply chain law. … The committee has thus voted in favor of a proposal on what a European supply chain law should look like – namely effectively. Companies should be obliged to avoid human rights violations and environmental destruction along their entire value chain. If companies fail to comply, they should be able to be sanctioned and made liable.

So is that all good? Can we lean back in Germany now because the EU is now taking care of everything?

No, on the contrary. A German supply chain law is more important than ever. Because the EU supply chain law is everything, just not a sure-fire success. The way there is still long, full of obstacles and will probably take several years. It is therefore crucial that Germany lead by example. If the largest economy in Europe gives its companies clear rules on human rights and environmental standards, then it is very likely that the EU will follow suit: The German supply chain law could become a blueprint for a European solution. That is why an effective, far-reaching law is so important in Germany – and a weak law so fatal.”

Siehe: EU macht großen Schritt für Menschenrechte und Umwelt – was heißt das für das Lieferkettengesetz?

The EU Commission is currently conducting the public consultation on “Sustainable Corporate Governance”. Among other things, it also deals with corporate human rights and ecological due diligence.

In order to increase the pressure and maximize our chances of the Commission coming up with a strong proposal for a directive, it is important that as many individuals as possible also support the project.

“Raise your voice to hold business accountable!”

“We need as many people as possible to convince the European Commission to change the rules of the game to end corporate impunity and enforce human rights.

The clock is ticking.

Help us build pressure and have your say until 8 February 2021!

Companies and NOGs can enter their position directly on the EU website.

Again and again representatives of the economy raise the accusation that the economy in Germany is exposed to incalculable liability risks due to a supply chain law (SCL) or that the economy is disadvantaged compared to international competition. In this way you try to discredit the concerns of an SCL from the outset.

The Supply Chain Act initiative has taken a closer look at such allegations and examined what is actually in them. The aim of the fact check is to objectify the debate. It is shown that the question of liability is primarily “about reparation for serious individual cases”. The SCL is intended to close a legal loophole that arose in the first place through global cross-border trade, and is based only on the principles that are already customary in case law, such as the duty of care under tort law. And instead of causing a wave of lawsuits, an SCL should primarily have a preventive effect and instruct companies to set up “preventive management systems”. If a company fulfills its due diligence obligations adequately, it does not have to expect legal action. In part 2, the fact check presents specific examples (such as “copper mine in Peru”) where the company can be assumed to be liable, and those for which a company based in Germany does not have to reckon with legal action despite damage (such as “pineapple plantation from Costa Rica “).

Plese refer: “Verhältnismäßig und zumutbar: Haftung nach dem Lieferkettengesetz” (German)