Nachrichten & Pressemeldungen - 09 November 2022 Statement of the Supply Chain Act Initiative on the ARD Monitor Report of 27.10.22 The report of the ARD magazine Monitor clearly shows how behind the scenes economic and political actors are influencing and trying to dilute the proposal for an EU supply chain law. A loophole for businesses. Because if they join certain industry initiatives, such as the Textile Alliance, or use state-approved certifications of due diligence, they should only be liable for damages that they have committed intentionally or grossly negligently. "Such a dilution of the EU draft would render the law toothless and must under no circumstances exist", says Gisela Burckhardt, CEO of FEMNET. The Supply Chain Act initiative, in which FEMNET is a member together with 130 NGOs, comments on the report of the ARD policy magazine and the Federal Government's attempt to influence the EU Supply Chain Act. Below is the opinion of the Supply Chain Act initiative of 04.11.22 Response to ARD’s Monitor contribution of 27/10/2022 A recent article by ARD magazine Monitor and other media reports have shown how the Federal Government is trying to weaken the draft EU Supply Chain Act. As an initiative of the Supply Chain Act, we strongly oppose this attempt – here is our response to the contribution. 4 November 2022 – Last Thursday, the ARD policy magazine Monitor addressed the German government’s position on the EU Supply Chain Act, which is currently being negotiated in Brussels. The European Commission presented a draft for this earlier this year. Although this still offers room for improvement overall, it would bring decisive improvements compared to the German Supply Chain Due Diligence Act in some respects. In their coalition agreement, the SPD, the FDP and the Greens had agreed to advocate for an ‘effective’ EU supply chain law, but the ‘Monitor’ contribution showed that: With its current positions, the Federal Government does not live up to this promise during the negotiations in Brussels. As an initiative of the Supply Chain Act, we strongly oppose the attempts of the Federal Government to further dilute the draft of the EU Commission in several places. For a supply chain law to be effective, it is necessary that companies adequately assess human rights and environmental risks in their value chains. These include, for example, the risks of forced labour or water pollution at suppliers. Specifically, this means: Companies must weight these risks on the basis of their severity and probability of occurrence. Other criteria must not play a role here – such as the question of the ability of the company to influence the supplier. Otherwise, companies could simply dedicate themselves to the risks that lie within their direct sphere of influence – and leave out other, heavier risks. Companies can also achieve improvements in their deeper supply chain if they have no direct influence on the company in question, for example in combination with other companies. It would be a direct contradiction to the guidelines of the United Nations and the OECD to make risk assessment dependent on the ability to influence – and yet the Federal Government takes exactly this position. The effect of a supply chain law would thus be considerably weakened. A major step forward in the Commission's draft compared to the German Supply Chain Act is that companies should be liable for damage caused by breaches of their due diligence obligations. However, according to the Monitor, Germany is now calling for several loopholes with regard to civil liability. For example, according to the will of the federal government, companies should not be liable for damages that they caused, but had not prioritized in their own risk analysis. This allows companies to decide through their own risk analysis for which damages they are liable and for which they are not. Two years ago, a monitoring carried out on behalf of the German government found that only a quarter of the German companies surveyed carried out appropriate risk analyses. For us it is clear: Where due diligence breaches cause avoidable and foreseeable damage, companies must also be liable, regardless of their own risk prioritisation. Another demand from the federal government: Companies that join certain industry initiatives or use state-approved due diligence certifications should only be liable for damage caused intentionally or through gross negligence. This type of arrangement operates under the name safe harbour – it is intended to be a ‘safe haven’ for businesses. Not for those affected: Many disasters have occurred in the past despite certifications, such as the devastating collapse of the Rana Plaza textile factory, the broken dam in Brumadinho or the collapse of Ali Enterprises’ production site. It became clear that certifiers often work superficially and are economically dependent on the companies they are to certify. All previous experiences show: Neither industry standards nor certifications guarantee human rights. They must therefore not offer any relief from liability. It is incomprehensible why the federal government is bringing this exception into play. The Supply Chain Act initiative rejects such liability relief for companies. If anyone needed relief, it would be the plaintiffs. After all, even under the EU Commission's proposal for a directive, they must prove that the culpable breach of due diligence by a company has caused causal damage. This means: Aggrieved parties must prove that a company has taken certain measures. not This inaction, in turn, has led to concrete human rights violations or environmental pollution. In fact, it is almost impossible to provide such evidence, as these are internal transactions and processes in which injured parties have no insight. Conversely, the company should have to prove that it has taken the necessary measures. Unfortunately, the Federal Government is not yet expected to advocate such a fair distribution of the burden of proof. A particularly questionable position of the Federal Government, which was unfortunately not taken up in the Monitor contribution, concerns the climate plans, which companies are to be obliged to draw up according to the Commission's draft. They will describe measures to bring their business model into line with the Paris Agreement. Describe – nothing more, because the Federal Government explicitly opposes sanctions for companies that do not implement their plans. There is already a huge discrepancy between companies' climate promises and their actual investments. Such a toothless regulation would ultimately be nothing more than greenwashing on the part of the legislator. As a civil society alliance of more than 130 organisations, we call on the Federal Government to reflect on its promise in the coalition agreement to work for a effective The Supply Chain Act. Effective means that those affected by human rights violations have the opportunity to successfully claim damages against companies in European courts – i.e. without legal exemptions from liability or insurmountable procedural obstacles. And effective also means that the environment and climate are fully protected and not more remote. Further information Contribution of the ARD programme Monitor of 27.10.2022 (on the topic from minute 20) The Supply Chain Act initiative is supported by: Arbeitsgemeinschaft der Eine Welt-Landesnetzwerke in Deutschland e.V. (agl), Brot für die Welt, Bund für Umwelt und Naturschutz Deutschland e.V. (BUND), Christian Initiative Romero e.V. (CIR), CorA Network for Corporate Responsibility, German Trade Union Confederation (DGB), European Center for Constitutional and Human Rights (ECCHR), FEMNET e.V., Forum Fairer Handel e.V., Germanwatch e.V., Greenpeace e.V., INKOTA-netzwerk e.V., Bischöfliches Hilfswerk MISEREOR e.V., Oxfam Deutschland e.V., SÜDWIND e.V., ver.di – United Services Union, WEED – World Economy, Ecology & Development e.V., Weltladen-Dachverband e.V., Werkstatt Wirtschaft e.V. A further 110 organisations support the Supply Chain Act initiative.
