The Due Diligence Act: Making globalisation more socially just

Textile Industry in Bangladesh, © dpa

03.03.2021 - Article

Today the German Government adopted an act on corporate due diligence in supply chains. One of the reasons it has been put in place is the outcome of the business and human rights monitoring procedure, through which the FFO has examined respect for human rights in the business world.

Today (3 March 2021), the Federal Cabinet adopted an act on corporate due diligence. The Bundestag will now decide on this draft bill. The act provides that companies have an obligation to actively and transparently tackle risks such as forced and child labour in their supply chains. Certain environmental obligations also form part of this risk management. The act is intended to foster international stability and peace: fair globalisation provides people around the world with better prospects in their home countries, alleviates poverty and guarantees rules-based international cooperation. The act highlights how governments and companies can work together to ensure greater sustainability.

Monitoring of respect for human rights

For more than four years now, the Federal Foreign Office has been steering the implementation of the National Action Plan (NAP) for Business and Human Rights. The NAP brings together state and corporate efforts with the aim of breathing life into the UN Guiding Principles on Business and Human Rights. The UN Guiding Principles are the key international compass.

Within this framework, the Federal Foreign Office also investigated to what extent companies pay attention to human rights in their supply chains. To this end, between 2018 and 2020 companies in Germany with more than 500 employees were asked how they have anchored human rights due diligence in their management processes. Less than one in five companies were able to show that they adequately meet the requirements. The coalition agreement stated that a national law should be drafted if the companies’ voluntary commitment was insufficient. This step is now being taken.

Further development of the National Action Plan for Business and Human Rights

In the coming months, the Federal Foreign Office will advance the revision of the National Action Plan with partners in the Federal Government, the business community and society. Special attention is to be paid to particularly vulnerable groups, including women and girls as well as human rights defenders. The new Due Diligence Act will thus be anchored in a coherent overall strategy incorporating, for example, the meaningful coordination and visibility of support for companies. Germany is also advocating that an instrument similar to the new act and the action plan be adopted at EU Level.


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