Germany's new supply chain law omits companies' climate responsibilities – media report
Clean Energy Wire / Tagesspiegel Background
The new supply chain law introduced by the German government to improve corporate compliance with social and environmental standards in sourcing and production largely omits strong commitments to climate action and other environmental aspects. A draft of the law that Germany's cabinet adopted on 3 March, seen beforehand by energy policy newsletter Tagesspiegel Background, only accounted for environmental damages if those directly impacted human rights, Tagesspiegel's Steven Hanke wrote. "Climate change, biodiversity losses or marine pollution are not covered by the law, as these only indirectly impact human rights over a longer period of time," he writes.
Environmental Action Germany (DUH) said "destroying the climate, forests and biodiversity will mostly remain without consequences with this law." The environment ministry, led by the Social Democrats (SPD), initially insisted that environmental aspects are fully covered by the law. But the ministry shifted the blame on the SPD's conservative coalition partner, the CDU/CSU alliance, arguing that they "were unwilling to include compliance with environmental standards." However, the ministry argued it would continue to advocate for a better inclusion of environmental aspects by backing EU efforts to introduce similar regulation at the European level, which is expected later this year. The law that was drafted jointly by the ministries for environment, labour and the economy now includes an "obligation to make an effort" to ensure compliance but falls short of enforcing compliance or spelling out guarantees for accountability. The law will apply to companies with more than 3,000 employees by 2023 and to those with more than 1,000 employees by 2024. Compliance will be monitored by the Federal Office for Economic Affairs and Export Controls (BAFA), which can impose fines of up to two percent of a company's revenue.
In a joint statement, the NGOs Germanwatch, PowerShift and others also lamented that the supply chain law would not live up to UN standards regarding the prevention of human rights violations in the mining sector. The law in its current form would mean that "companies only act when human rights violation has already taken place," Hannah Pilgrim of PowerShift argued. The NGOs said due diligence measures meant to hold supplier companies accountable for complying with standards are not adequately covered by the law, meaning companies could conceal their supply chains and avoid having to act upon violations. Moreover, the law would not provide that those who suffer from insufficient human rights enforcement have a possibility to litigate against them, leading the NGOs to conclude that the law in its current form "will not improve the legal protection of people employed in the mining sector."