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15 Jul 2020

Mina Aryobsei & Marius Scherb, Freshfields Bruckhaus Deringer

Commentary: Germany takes a step closer to mandatory human rights supply chain due diligence

The proposed criteria for a Due Diligence Act are based on the requirements of the UN Guidelines for Business and Human rights and the OECD Guidelines for Multinational Enterprises. It would require companies that are based in Germany and have more than 500 employees (approximately 7,280 corporates) to analyse whether their activities have a potential or actual adverse effect on internationally recognised human rights. As well as a comprehensive risk analysis, the companies would be expected to take adequate prevention measures and provide access to remedies...

Under the Due Diligence Act, any violations of the requirements would create a cause of action and provide the basis for damage claims brought by private parties before the German courts. However, the liability risk for companies would be limited in several ways. The companies would only be liable if the damage was foreseeable and avoidable if appropriate due diligence had been carried out. The burden of proof will be on those bringing the claims and liability is limited to essential legal interests such as life, body, health, freedom, property and the general right of personality...

Above all, the Due Diligence Act creates an obligation to take steps to prevent adverse human rights impacts rather than an obligation to prevent all such impacts—even where adverse impacts arise, a company will not be liable if it has taken adequate steps to identify and prevent this risk. Adequacy downstream in the supply chain will be measured, in particular, on the proximity to the suppliers and the company’s ability to influence such supplier’s behaviour...

Siehe auch Kommentierung des inoffiziellen Eckpunkte-Entwurfs durch Norton Rose Fulbright