The German Parliament passed the Supply Chain Act in its session today. Johanna Kusch, coordinator of the civil society alliance “Initiative Lieferkettengesetz”, comments:

“In the fight against human rights violations and environmental destruction in supply chains, we are still far from reaching our goal, but as of today, we are finally at the starting line: for the first time, a law in this country obliges companies to take responsibility for the people in their supply chains. This is a success for civil society and good news for all those who work under exploitative conditions in the supply chains of German companies.

Today’s vote in the German Parliament (Bundestag) was preceded by an unparalleled lobbying battle. Unfortunately, the Ministry for Economic Affairs and many Members of Parliament from the Christian Democratic Union (CDU) have weakened the law in numerous aspects under pressure from business lobbyists. The law covers too few companies and makes too many exceptions to the due diligence requirements. It does not improve the right to compensation for affected people and unfortunately does not set a sign for climate protection in supply chains.

Therefore, this law is only a partial success. Civil society will continue to fight for human rights and environmental protection in the entire value chain: For improvements in the Supply Chain Act, for an effective implementation and for a Europe-wide legislation that goes beyond the German law at crucial points.”

Background:

The “Act on Corporate Due Diligence in Supply Chains”, which the German Parliament passed today, will enter into force in 2023 and will initially cover companies with 3,000 or more employees, and from 2024 onwards companies with 1,000 or more employees. From now on, these companies must identify risks of human rights violations and environmental destruction at direct suppliers and, if necessary, also at indirect suppliers. They must take countermeasures and document them to the Federal Office for Economic Affairs and Export Control (BAFA).

Particularly under pressure from the CDU and the CDU-led Federal Ministry of Economic Affairs, the original draft law has been weakened in numerous aspects. Contrary to what was initially envisaged by Federal Minister of Labour Heil (SPD) and Federal Minister for Development Mueller (CSU), the law applies to fewer companies, severely restricts the due diligence obligations of companies and does not provide for a new civil law cause of action.

A more detailed analysis of the law can be found here.