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Germany: Cabinet debate on key points for a supply chain law postponed

In December 2019, German Labour Minister Hubertus Heil and Development Minister Gerd Müller announced their intention to prepare key points of a supply chain law. 

According to Redaktionsnetzwerk Deutschland, the ministers had planned on presenting these on 10 March 2020, but were at that time prevented by the Chancellery and the Ministry of Economics.

On 25 June 2020, details on draft key points were reported in the German newspaper Handelsblatt. According to the article, the draft provides for a comprehensive due diligence and sanctions regime but limits liability to intent and gross negligence if companies join and implement a state-approved industry standard. NGOs explicitly welcomed the announcement, but called for improvements, especially in relation to the proposed limitation of liability.

At a press conference on 14 July, Federal Ministers Heil and Müller presented the results of a second quantitative survey assessing companies' due diligence efforts in line with the German National Action Plan (NAP) on Business & Human Rights. Only 22% of the 455 companies that submitted a vaild survey response could show that they are adequately meeting the NAP requirements. Under the NAP, the government has agreed to consider mandatory due diligence legislation if less than 50% of German companies with more than 500 employees introduce human rights protections by 2020. The current coalition agreement states that if companies’ voluntary implementation proves insufficient, the government "will introduce appropriate legislation". The results of the second survey mean that the coalition agreement now applies, the Ministers stressed, with the aim being to adopt a law before the current election period ends in 2021. Civil society organisations and coalitions including Germanwatch and the 'Supply Chain Law Initiative' have called on the Federal Goverment and Chancellor Merkel to now follow through with this commitment. Minister Heil as well as NGO statements also stressed that an ambitious German law will give more credibility to Germany's efforts towards EU-level due diligence.

Federal chancellor Angela Merkel reportedly now also supports a German due diligence law (see below). Government spokesman Steffen Seibert confirmed that key points for such a law will be passed in August.

Update: As was reported by various media outlets and NGOs on 26 August, the adoption of key points has been delayed - the reason being that the ministries involved were unable to reach an agreement. According to the CSO coalition Initiative Lieferkettengesetz, Economics Minister Altmeier is blocking the process.

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