The discussion about the passage of a German Supply Chain Act has gained momentum. The German Development Minister Gerd Müller and Hubertus Heil, Minister of Labor and Social Affairs, campaign for stronger regulations and due diligence for companies. With this law, companies would be obliged to ensure compliance with human rights and environmental standards along the entire supply chain – including international production sites.
So far, the German government has relied on the voluntariness of companies to respect social and ecological standards in their supply chains. In the National Action Plan for Business and Human Rights the government had stipulated that at least half of all big German companies must fulfill due diligence obligations. A survey revealed that just 20% meet the requirements. A strong motivation for Minister Müller to speak out for a stricter legal framework. He and Minister Heil plan to draft the most important cornerstones for the law in the coming month. The German Minister of Economics expresses sharp criticism.
The new regulation would force German companies that produce abroad to provide and ensure good working conditions in their entire supply chain. As a result, German companies would be liable for the misconduct of their suppliers. Human rights organizations advocate for the project as an important step towards greater justice and sustainability in a globalized world. Some representatives of the industry fear the loss of competitive advantages.