While we welcome that due diligence is now an obligation enshrined in the law, we also have to acknowledge that the law has serious shortcomings. In a joint statement released with other eight human rights and environmental NGOs today, we outline some of these shortcomings. Clean Clothes Campaign International Office, European Coalition for Corporate Justice, Amnesty International, Friends of the Earth Europe, European Center for Constitutional and Human Rights, Anti-slavery International, Global Witness, International Federation for Human Rights appreciate that the German supply chain law adopted today will oblige certain German companies to undertake human rights - and to a limited extent environmental - due diligence.
The German law however fails to acknowledge the importance of making German companies legally liable through civil procedure for harm occurring to victims in their value chains. It also exempts a large number of companies and does not cover the full supply chain. Despite these limitations, the legislative development in Germany reflects the broader trend across the EU away from voluntary corporate social responsibility towards legally binding due diligence obligations and improved access to justice for victims. As the European Commission is shaping its upcoming Sustainable Corporate Governance directive proposal, it must seize this momentum by including all key elements that NGOs are calling for as necessary for an effective and harmonized EU framework and go further than the German law. This includes
Access to justice: civil liability rules for companies, extending to their supply chains.
Environmental protection: recognising the urgency of the environmental crisis.
Company Scope: covering all companies, including SMEs, in recognition of the key role such business entities will play in the sustainability transition, as well as their impacts on human rights and the environment.
The proposal before the German Parliament was notably weaker than a previous (leaked) proposal. This leads us to fear that the most obstructive parts of the business community have gained a strong foothold in the policy-making process. This lobby predominantly comes from business associations, whereas some companies are voicing their support for legislation which includes enforcement.
Read the full statement here.