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Supply chains

Rules for corporate due diligence needed urgently – at both the national and European level


Parliamentary State Secretary Norbert Barthle and Dr. Christine Kaufmann, Chairwoman of the OECD Working Group on Responsible Business, at the virtual forum "Towards a Common Approach to Sustainable Supply Chains and Due Diligence"

Press release of 25.11.2020 |

BERLIN – Shaping a new economic model for the post-COVID-19 world with rules on corporate due diligence in global supply chains – that is what a virtual forum convened by the Federal Development Ministry calls for. 

State Secretary Norbert Barthle said: "How do we want to run our economies in the future? The answer can only be: in a socially and environmentally sound way! Human rights standards and environmental standards have to become established in global supply chains, and they have to be met. That is why, as part of its EU Council Presidency, the German government has committed itself to the goal of working for corporate responsibility in these times of COVID-19 and working for an EU Action Plan to strengthen corporate due diligence obligations in global supply chains. The EU needs a new strategy involving an intelligent approach based on voluntary and compulsory governmental measures, as envisaged in the UN Guiding Principles on Business and Human Rights."

State Secretary Maria Flachsbarth said: "We need a smart mix of binding rules and voluntary initiatives at the national and international levels, especially at the European level to ensure corporate due diligence obligations are fulfilled in global supply chains. The BMZ supports companies through the help desk on business and human rights, showing them ways to better meet their due diligence obligations in our partner countries."

Representatives of the south stressed that swift action is needed urgently. The COVID-19 crisis, in particular, has laid bare the vulnerabilities of global supply chains and the degree to which millions of people depend on these chains being effective and sustainable. They also emphasised that a European regulation could serve as a role model for a global approach.

Company representatives highlighted a number of advantages that legislative measures would have for companies. Companies would, for instance, benefit from legal certainty and the cooperation between suppliers and buyers would be facilitated. Experience has shown that voluntary measures introduced so far have limitations.

Interventions were made by representatives of other EU member countries who support the EU initiative. France, in particular, which already has national rules in place, is supportive of EU legislation on the matter. The Netherlands, too, are working on priorities which will feed into the European debate. Anna Cavazzini, Member of the European Parliament, pointed out that national and European legislative processes can feed off each other.

Background

During Germany's EU Presidency, the German government is advocating an EU action plan to strengthen corporate responsibility so as to promote human rights, social and environmental standards, and transparency in global supply chains.

The conference convened in the context of the EU Council Presidency was to contribute to moderating the debate in Brussels on an EU-wide legislative proposal on corporate due diligence which is to become part of the action plan. Various stakeholders from business, civil society, and partner governments from the North and the South were heard and contributed their views to the process.

In preparation of the conference, the BMZ commissioned the Business and Human Rights Resource Centre (BHRRC) to draw up a comprehensive collection of perspectives which was presented at the virtual forum. It is a compilation of the views of 20 prominent actors from business, civil society and politics from the global South and the North calling on the EU to introduce due diligence legislation to set standards that make globalisation fair. The voices speaking up for legislation within the EU include the European business association Amfori, companies such as Ericsson, H&M and VAUDE and the French and Finnish governments and NGO representatives, to name but a few. As part of Germany's Council Presidency, this compilation of perspectives is to provide input for the consultation process to assess the impact of potential due diligence legislation.

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