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26 Feb 2021

Josephine Valeske, International Institute of Social Studies Blog

Commentary: German supply chain law should be strengthened to ensure the rights of workers are protected

"Hanging by a thread: what’s right – and wrong – with the new German supply chain law meant to protect human rights", 26 February 2021

...A new supply chain law agreed on by the German government is supposed to change the extent to which participants in global supply chains serving German companies are protected... German CSOs underscored the fact that the mere decision in favour of a supply chain law is a win, but its usefulness will have to be judged by whether it actually yields any change for the affected people on the ground. The law still has to be approved by parliament, which, depending on the MPs’ susceptibility to corporate lobbying, might either strengthen it slightly or weaken it further. What’s clear is that the law in its current form will not change the lives of those toiling under precarious and unsafe conditions in distant countries...

...Here are some of the ways in which the current proposal is failing those it’s supposed to protect:

The law lacks a civil liability provision that enables affected people abroad to directly take legal steps against German companies for human rights violations. Instead, an agency forming part of the German Ministry of Economic Affairs will examine whether companies adhere to their due diligence duties and can fine them for the failure to do so. NGOs and unions will have the possibility to file lawsuits in Germany in the name of victims under certain circumstances, but ultimately the victims cannot take action themselves.

It is still unclear whether the law will extend to more than the first-tier suppliers, which means that a vast number of human rights abuses further down the supply chain will likely remain unaddressed. The law mandates companies to take action further down the supply chain if they have substantiated reasons to believe that there are human rights violations, but it does not define what substantiated reasons are. For example, is it enough to know that children work under horrific conditions in Congolese mines that supply raw materials for batteries, or does a German battery company need to know specific details about its individual supply chain to be compelled to act?

The law will only apply to the roughly 600 companies that employ at least 3,000 staff members from 2023, and to around 2,900 companies with more than 1,000 staff members from 2024. It therefore overlooks more than 99% of German companies that belong into the category of small and medium enterprises (SMEs), many of which are operating in high-risk sectors such as the chemical or the textile industry. Furthermore, it does not include foreign-owned multinationals that conduct business in Germany, even if a large share of their profit comes from the German market.

The law does not reflect the wishes of the German public. The final compromise is disappointing and also blatantly undemocratic, since a survey had shown that 75% of Germans were not only in favour of a due diligence law, but wanted this law to include legal mechanisms to hold corporations liable for human rights violations, which are currently absent.

To top it all off, there’s a massive elephant in the room: apart from being structured by class, nationality and income, global supply chains are racialised, with people of colour dominating the lower value-added positions and supply chains becoming increasingly white as the value-added increases. Thus, people of colour are at the receiving end of the human rights violations the law was supposed to prevent. It’s not just a form of injustice – it’s blatantly racialized injustice...