The German Bundestag has adopted a law that will force companies to respect human rights in their supply chains, despite opposition from some political parties and industry. EURACTIV Germany reports.
“We cannot build our prosperity permanently on the exploitation of people, so this law is an important step,” Labour Minister Hubertus Heil said as the Due Diligence in Supply Chains Law – whose aim is to stop human rights abuses by suppliers of German companies – was adopted on Friday (11 June).
Development Minister Gerd Müller referred to it as an “important step towards enforcing standards in global supply chains” while SPD MP Bärbel Kofler called it a “paradigm shift.”
Companies will have to analyse human rights risks throughout their supply chain, take preventive and corrective measures, and set up complaints mechanisms and report on their activities at regular intervals, the new law states.
According to the text, companies will also be obliged to comply with environmental due diligence standards, especially with regards to the avoidance of harmful chemicals in global production processes.
However, the new law will only apply to large companies.
“We have been careful to find a balanced solution for business. The Due Diligence Act will not impose an immediate additional burden on our small and medium-sized enterprises,” the government’s representative for SMEs, Thomas Bareiß, told EURACTIV Germany.
”The law only applies to larger companies and branches of foreign companies with 3,000 or more employees, or later with 1,000 or more employees. It is not possible to pass on the due diligence obligations to small and medium-sized enterprises,” Bareiß added.
Failure to comply with the legal obligations can result in severe penalties.
Companies will have to implement the law’s requirements with regard to their direct suppliers, though indirect suppliers will also be covered if the German companies become aware of their human rights violations.
The original full article can be found at euractiv.com