BERLIN – German companies found to have poor human rights in their global supply chains will be publicly named by the government next year. Germany is pressing ahead with its National Action Plan (NAP) on business and human rights which sets out the expectation for at least 50 per cent of German companies with more than 500 employees to have introduced effective human rights due diligence measures into their business processes by 2020. According to its coalition agreement on implementing the NAP, the Government has committed to taking legal action if the target is not reached, with potential implications for German businesses sourcing textiles and apparel in Asia. “Germany and the German economy are reaping the benefits of globalisation. That is why we have a particular responsibility to protect the rights of the people working in our global supply and value chains,” said a government statement.
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As part of a monitoring process the Government is currently reviewing to what extent companies are meeting their due diligence obligations, and the Federal Foreign Office recently published the first interim report on the process. Notably, reports from Germany suggest the Development Ministry (BMZ) has stated that in the summer of 2020 a clear distinction will be made between ‘complier’ and ‘non‑complier’.
The NAP contains five core elements on how human rights due diligence is to be effectively included in a company’s management processes, to be centrally monitored. Companies will be rated as “compliers” or “non‑compliers” in the NAP monitoring process, depending on whether or not they have introduced the core elements of human rights due diligence adequately. If a company has not carried out certain procedures and measures, it can state how it intends to meet the targets by the end of 2020 and in early 2021, the German Government will verify whether it has actually put these plans into practice.
The monitoring process provides information on the current status of implementation and on any shortcomings.
The idea of the NAP is to give companies the opportunity to meet their human rights obligations voluntarily. However, should the survey reveal that voluntary undertakings are not enough, the German Government will “consider further action from 2020 onwards that may culminate in legislative measures.”