As reported by German newspaper TAZ (“Die Tageszeitung”) on 10 February 2019, the German Federal Ministry for Economic Cooperation and Development (BMZ) has drafted a law on mandatory human rights due diligence for German companies and their supply chains. The draft text dated 1 February 2019 lays out in detail the human rights responsibilities of German companies with regard to subsidiaries and contractors abroad as well as containing proposed changes to the Commercial Code. Key elements of the draft law are reported to include:

• The law is to apply to companies with over 250 employees and more than 40 million Euros annual turnover. Specific sectors mentioned include agriculture, energy, mining, textile, leather and electronics.
• The law would require companies to carry out internal supply chain risk assessments, appoint a compliance officer to monitor compliance with the law’s requirements, as well as establish an effective complaints mechanism for foreign workers.
• The Labour Inspectorate, the German Federal Institute for Occupational Safety and Health and the Human Rights Commissioner of the German Government are to be responsible for enforcement and monitoring. Potential sanctions are to include fines of up to five million Euros, imprisonment and exclusion from public procurement procedures in Germany.

German civil society organizations have broadly welcomed the news, although they have cautioned against a restrictive interpretation of the law with regards to other human rights concerns beyond labour rights. Questions have also been raised as to whether and how the law would improve access to justice for foreign workers in German courts. According to TAZ, the German Federal Ministry for Economic Cooperation and Development has said the draft law is an initial reflection on the topic and will feed into further discussions with key partners.

The Development Ministry's draft law could serve as a basis for a legislative initiative on mandatory human rights due diligence in Germany, although the draft would still need approval from other German ministries and cabinet members.

Read more in our blog on the potential significance of the draft law here. Further information is also available in German here.