FEMNET and public eye: Our answer to the BMZ

This article refers to our press release and the response of the BMZ dated 07.01.2021

Gaps in public reporting

The BMZ writes:

“In addition, public reporting should be distinguished from the actual audit by independent auditors. Companies have to fill in any gaps during the audit at the company headquarters. This means: If there are gaps in public reporting, it cannot be concluded that these aspects were not taken into account in the audit. In this respect, we strongly reject the criticism on this point.”

Our answer:

As the BMZ itself notes, the investigation focuses on the public reporting of companies. Contrary to what the opinion suggests, however, public communication is by no means just one of several possible sources of information in the audit process. Rather, at least annual and systematic public communication on engagement and management systems, material risks, measures, complaint mechanisms and communication with stakeholders with precise, clearly understandable and easy-to-read information is itself a mandatory independent requirement of the standard. (Indicators 4.1.1 to 4.1.7, see p. 9ff of the report). It is therefore not sufficient for companies to provide further information to the verifiers in the audit process. In order to meet criterion 4.1, they must be public.

In the conclusion of our study (p.32), we discussed two possible explanations of this deficit: (1) lack of communication coupled with overly generous interpretation by verifiers and (2) inadequate implementation of the UN Guiding Principles on Business and Human Rights and the OECD Guidance. Both declarations underline the urgent need for the BMZ to backtrack on this issue.

The Green Button as a voluntary certification program

The BMZ confirms in the statement that the Green Button is a voluntary certification program, the BMZ sees it as part of a smart mix of measures. We do not see this as contradictory to our statements. We welcome the fact that the BMZ also supports a binding supply chain law.

Green button as a blueprint for a supply chain law

The BMZ writes:

‘The Due Diligence Act and the Green Button have the same basis as the UN Guiding Principles, making the Green Button the blueprint for a Due Diligence Act.’

Our answer:

We share the BMZ's view that the UN Guiding Principles should form the basis for a Due Diligence Act. In addition, the OECD guidelines and guidelines should provide guidance, which represents a concretization of the guiding principles recognized by the Federal Government and many other countries. The Green Button also refers to these principles. However, our research shows that the current implementation of the Green Button falls significantly short of the public communication requirements for human rights due diligence formulated in the OECD Guide. If this inadequate implementation were now also transferred to a supply chain law, an inadequate supply chain law would emerge.

Derogation for production in the EU

The BMZ writes:

“The corporate criteria of the GK apply to all companies, regardless of whether the textiles were produced in Germany, the EU or outside the EU. Under these requirements, a company needs to identify and address risks in its supply chain – this can include, for example, insufficient wages or excessive working hours when producing in Europe. In this respect, it is simply not true that companies producing in the EU are exempted from social requirements.”

Our answer:

The BMZ misquotes the research report. The search report does not claim that goods produced in the EU are exempt from all social requirements. However, it should be noted that according to the GK standard no additional evidence is required for compliance with the product-related (!) green button criteria in the social field, provided that companies can demonstrate that products have been manufactured entirely in the EU. In other documents, the BMZ does not deny this fact, so we are surprised at this false or abbreviated representation. With regard to the company criteria, the BMZ represents theIt states that any EU-producing company must "know, analyse and take effective countermeasures to the risks in the EU-producing countries". This could theoretically address the lack of product-related criteria, but our study shows that the reported risk analyses and measures are too non-specific and insufficient to effectively address problems in EU production, such as poverty wages. We maintain our criticism of the EU exception in the product-related criteria and also note that the current implementation fails to address this problematic deficit through the company-related criteria.

Payment of living wages

We welcome the fact that the BMZ makes it clear in its opinion that the issue of living wages should be a priority in the upcoming standard revision.

Zurich, Bonn 11/01/2021