'Due diligence law will help global competition of systems, says German minister*, 3 Oct 2022

With negotiations on the due diligence directive still pending at the EU level, what do you see as the key points, and what do you want from the law?

We support the Commission’s proposal because we believe that Europe as an economic and social model can prove that values and value creation are not contradictory. In addition, it is a question of credibility that we do not build our prosperity and trade relations in international supply chains on child or forced labour.

We have done pioneering work with our German Due Diligence Act. We want there to be clear rules and a level playing field for companies in Europe as well...

Are there specific provisions where the German Due Diligence Law would diverge from the EU one? 

I believe we have an opportunity to develop common rules and strengthen access to civil compensation for those affected. Under international law, people who have had their human rights violated by an EU company also have the right to sue in EU courts. But in practice, this is a highly complex undertaking because according to the rules of private international law, the law of the country where the damage occurred applies.

If, for example, a Pakistani textile worker’s rights are violated by a German company, she can currently only sue in German courts under Pakistani law. The Commission’s proposal wants to change this. In future, the textile worker could sue in German courts under German law for damages. This greatly improves their access to legal redress and is an important step forward.

Secondly, in addition to human rights due diligence, we also want to focus more on the ecological consequences of economic activity by significantly expanding environmental due diligence.  The entire German government and I want this directive to be a success for Europe...

Is it challenging to diversify supply chains while making them more sustainable and value-based?

No, if you do it sensibly, they are not contradictory; they are mutually dependent. We don’t want to engage in protectionism or roll back world trade, but it is about creating reasonable foundations...

You have already mentioned the strategic underpinnings of the Due Diligence Law. Does this also play a role in the international competition of systems, or is it primarily about values?

It is both. Europe is more than a single market; it is also a political community with values that tries to combine democracy, a market economy, and the welfare state. We know that politically and economically, we are in systemic competition with other states.

We are challenged by how we deal with other economic areas in South America, Africa and Asia. We have the task of building fair partnerships with mutual benefits and not turning a blind eye to forced labour and child labour...