While the discussions on sustainable corporate governance and supply chain due diligence continue at EU level and a proposal for a directive has been postponed several times, Germany is sending a strong signal.
On many crucial points, policy-makers weren’t able to withstand the massive pressure to weaken the text exerted by business associations and some political representatives. As a result, the act risks losing effectiveness and falls short of upholding and implementing the standards set in UNGPs on important points.
On 22 July 2021, the act was published in the Federal Law Gazette. This represents the first time that the responsibility of German companies to respect human rights in global supply chains has been given a legal foundation.
Initiative Lieferkettengesetz welcomed the German Government's announcement but criticised that the proposal does not include additional civil liability. They are now calling on MPs who still need to vote on the proposal to ensure the due diligence requirements are UNGP-aligned.
A position paper on the key elements for a Due Diligence Act has recently been leaked in Germany. Relevant companies may face potential civil liability for damages for any human rights violations occurring where they have failed to take adequate steps. In this post, Mina Aryobsei and Marius Scherb look at the main aspects of this new draft law and the wider context in which it has been published.