The federal government has announced by coalition agreement that if necessary, German companies will be required by law to comply with local labour, social and environmental standards along their supply and value chains. This is sorely needed: according to the findings of a study commissioned by them, the vast majority of internationally operating companies give little to nothing as to whether their products are manufactured under decent conditions. The ministerial tandem of Hubertus Heil and Gerd Müller therefore wants to move quickly to action and bring a so-called due diligence law through parliament in the current legislative period. With the assembled capital lobby and Economy Minister Altmaier as their vicarious agent, they have powerful adversaries. In addition, since March, an invisible and even stronger brakeman has been added: Corona.
Respect for Human Rights in production abroad? During a pandemic? Not with German industry! Whereas the German textile giants do not care in normal times under which circumstances their T-Shirts, trousers and skirts are sewn together in far-off India, Sri Lanka or Ethiopia. Then why start with the corona crisis? No, let’s be good, dear do-gooders, luxury discussions are currently so unsaid-almost like carrot jeans.
At the end of June, a testimony of perfidy landed on the desk of the chairman of the CDU parliamentary group, Ralph Brinkhaus. In the letter, the heads of the leading Associations of German industry complain about the German government’s intention to oblige internationally operating companies to ensure compliance with local labour, social and environmental standards when manufacturing their goods in so-called developing countries. If this happens and a supply chain law is actually passed in “Germany”, disadvantages in global competition can be expected, the authors warn.
The signatories of the letter, from which the “Handelsblatt” quoted on Monday (article behind the payment barrier), are Ingo Kramer for the Federal Association of German Employers ' Associations (BDA), Dieter Kempf (BDI) for the Federal Association of German industry (BDI), Eric Schweitzer (DIHK) for the German Chamber of Commerce and industry (DIHK) and Peter Wollseifer from the Central Association of German crafts (zdh). They explicitly refer to the particular hardships caused by Corona, which would have “plunged the economy into the greatest crisis since the Second World War”. “There is no prospect of a rapid recovery, “it continues,“especially not with additional bureaucratic and financial burdens imposed by a supply chain law.”
As in colonial times
Hear, hear: if an entrepreneur takes precautions that people along his value - added and supply chains are not exploited, not tortured, not enslaved, not physically and psychologically broken, not disenfranchised and their lives and survival are not challenged by excessive overexploitation of nature, then in the logic of capital lobbyists this comes under dispensable, because business-damaging, “bureaucratic” additional burden.
On Tuesday, Development Minister Gerd Müller (CSU) quantified their costs based on two examples. A pair of Jeans produced in Bangladesh according to “fair criteria” therefore has a purchase price of seven euros for the Western clothing label. In case of disregard of the specifications, it is five euros. Does it Ruin H&M, Esprit, ASOS, Zara or Zalando if you spend two euros more on a product that goes over the counter for a multiple?
A tea bag manufactured in India in compliance with the minimum standards applicable there costs two cents in German trade, otherwise it is 1.5 cents. Is half a Cent per cup unaffordable for the German consumer? According to Müller, tea production on the subcontinent resembles that in “colonial times”. The workers earned a Dollar a day at twelve hours of work and heat. Quote: “There were women in chemicals, there was no breathing protection.”
“Process has failed miserably”
It can certainly be taken from the Minister when he speaks of a “dramatic” exploitation of Man and nature in the countries concerned. He was on site and took a picture of the situation. The CSU politician says: “if I don’t know, it doesn’t hurt – that doesn’t apply anymore.“He said this the day before yesterday in Berlin during the presentation of the results of a large-scale business survey to determine how seriously German companies take respect for human rights abroad. The findings are startling: of the approximately 2,250 companies with more than 500 employees, only 455 returned valid answers. Of these, only 91 were able to prove the “fulfilment” of the “core elements of human rights diligence” and prove that they are looking critically and systematically at the working conditions of suppliers in developing and emerging countries. This corresponds to a quota of 22 percent, with a share of just over four percent in relation to the total.
The study carried out by the auditing firm Ernst&Young (EY) was the second of its kind.in the first round, the results of which were presented last December, the rate of “fulfilment” was 18 percent. Even then, a large number of the 2,600 companies addressed had not provided any information at all, which suggests that the vast majority of them do not take it so closely in the supervision and control of their suppliers, or have their reasons for not doing so. In view of a total of 7,600 companies with more than 500 employees, which are the focus of the survey, one has to assume that the proportion of “non-achievers” is well over 90 percent.
For Müller, the process thus “failed miserably” and the need came to take legislative action. In fact, the Union and the SPD had stipulated in the coalition agreement that companies must respect human rights in the form of a supply chain law, provided that the “voluntary self-commitment (…) is not sufficient”. The yardstick for this is provided by said survey. If less than 50 percent of the participants do not meet the requirements, according to the agreement, a corresponding law will be put into effect in the current legislative period.
Müller and federal minister of Labour Hubertus Heil (SPD) are apparently comparatively serious. As they announced together on Tuesday, they want to introduce key points for a corresponding “due diligence Act” into the cabinet by August. According to Heil, this is to ensure that suppliers abroad comply with minimum social and ecological standards and prevent slave and child labour. In doing so, the law is intended to lay the foundation for German entrepreneurs to sue for damages in federal German courts in the event of violations, to exclude them from public contracts or to allow authorities to levy fines against them.
What sounds promising is anything but a self-runner. Not only do the capital associations make a massive Front against it, with Economy Minister Peter Altmaier (CDU) they know a powerful advocate on their side. “Quick shots are forbidden on such important topics as this,” he told a spokeswoman. If there is still a need for optimisation, there will be discussions with the business community and within the government about further measures. There must be no missing the warning about national solo actions. Rather, a solution must be found at EU level, as he told Handelsblatt and promptly received support from the Economic Forum of the SPD. The law must be thought European in order to prevent” a fragmentation of the EU internal market by different national regulations”.
Such moves should only be the prelude to a systematic avoidance manoeuvre in the coming weeks and months. Actually, this has been going on for a long time. Good intentions to institutionalize respect for Human Rights and the protection of nature and resources in the capitalist exploitation process have been around for many years. In 2011, the United Nations Human Rights Council adopted the “UN Guiding Principles for business and Human Rights”, which for the first time highlighted corporate responsibility. However, the discussion only really got underway after the fire disaster in the textile factory Rana Plaza in Bangladesh in 2013, in which more than 1,100 seamstresses and seamstresses lost their lives.
Paper tiger NAP
Since then, there have been at least tentative efforts within the international community to end the system of irresponsibility. Since 2014, the UN Human Rights Council in Geneva has been negotiating a binding agreement on the liability of multinational corporations for human rights violations. The main objectives are the liability of corporations for their entire supply chain, legal protection for injured parties also in the home countries of companies, the primacy of the UN human rights treaties over trade and investment protection agreements and the creation of mechanisms for compliance with the agreement. However, the efforts are largely due to the operation of the so-called emerging countries, while the rich countries of the west slow down the process as usual.
With the sudden increase in awareness caused by the Rana Plaza tragedy of the in large parts unworthy and dangerous working and production conditions under which people in the Far East and other poverty-stricken countries of the world produce the wealth goods of the West, something also got into motion in Germany. In order to implement the UN Guiding Principles, the federal government adopted the “National Action Plan for Economic Affairs and Human Rights” (NAP) in 2016 and has since examined the extent to which companies fulfil their human rights due diligence obligations via “monitoring procedures”. The big catch: the NAP has a purely appellative character and relies solely on the voluntary nature and commitment of the actors. Tangible and dissuasive sanctions, such as fines and production bans, or specific legal liability mechanisms do not apply in the event of violations. Rather, the NAP provides fodder for the marketing departments of transnational corporations to polish up the scratched reputation with beautiful Greenwashing campaigns.
After all, the announcement in the coalition agreement, in the absence of zeal to introduce a law, provided for a residual hope that perhaps a rethinking begins after all. As it turned out, this was blue-eyed. And to think that with a law, if it comes at all, everything will be better, is just as naive. Capitalism – especially the Shareholder-driven one – does not and cannot afford “sentimentalities”. What counts is the Profit alone, and this is all the greater the cheaper raw materials and employees are to be had. The often strained protection claim of German entrepreneurs, they could not watch over each of their suppliers and should therefore not have to be liable for their mistakes, should therefore be confidently ignored.
Look away for Profit
If the textile discounter Kik really wanted to have his Fast Fashion Fashion sewn by decently paid workers, he could unquestionably order his suppliers in Pakistan to do so. Who is sitting on the longer lever? Or: what prevented BASF from ending its business with a platinum mine in Marikana, South Africa, after 34 mates were shot dead in a strike there eight years ago? Perhaps the will to make amends? There was no compensation for the victims ' families after the massacre, nor were the murdering policemen prosecuted. And the workers of the operating company – formerly Lonmin, since 2019 Sibanye-Stillwater – still live and live under the same wretched conditions as in 2012. for this, the German chemical giant continues to generate big profits from the ground.
For business to hum, “looking away” is the first duty of capitalists. Which doesn’t mean that you don’t know anything about the conditions, you just pretend you don’t know anything. This should also be the reason why the majority of respondents to the Ernst&Young Monitoring prefer to hold back on information. Thus, at least, one spares oneself the Stigma of the “non-fulfiller”. Minister Altmaier has ensured this. At his instigation, the questionnaires were revised for the purpose of finalising the results. For example, the valuation-relevant questions were “significantly reduced” and the “important Comply-or-Explain mechanism, which gives companies the opportunity to cure the non-compliance of a NAP feature” was strengthened.
This is stated in a letter from the CDU man to the DIHK in August 2019, from which the “initiative Lieferkettengesetz” quotes in its study presented on Wednesday “dilute-delay – prevent: business lobby against human rights and environmental standards”. According to the report,” the statistical review of the result requested by civil society was postponed in order to prevent a so-called selection bias”. And finally, the Minister has just arranged for “incompletely completed questionnaires” to be taken out of the evaluation, instead of considering the companies concerned as “non-fulfilling” as originally intended.
The result did not get much better as a result, the barrier of 50 percent “fulfills” was clearly broken. However, the analysis of the initiative, which now includes 100 civil society organisations, shows who is in charge at the Altmaier Ministry. The major associations BDA, BDI, DIHK and the German trade association (Handelsverband Deutschland, HDE) were really “leading” in the “careful dilution of monitoring”. Their demands for" improvements " have been met by the Minister almost one to one. He said in his letter to the DIHK that he was “confident that after this important step we will also succeed together in leading the monitoring and the NAP process as a whole to a good result for all parties involved.” For this, the BDI promptly gave a lot of praise: one thanks “that the Federal Ministry for Economic Affairs and energy has contributed to the Department circle especially on these points with high expertise”. The correspondence would leave no doubt, the authors of the study sum up: “the interaction between the business associations and the Ministry of Economic Affairs worked perfectly.”
This does not bode well for the future fate of the “duty of Care Act”. This also against the background that the law should have been long on the journey through Parliament. Müller and Heil actually wanted to publish its key points on March 10. Because of the then looming Corona crisis, they abandoned it – after intervention by Altmaier and the Federal Chancellor. First, the submission of the second part of the EY survey had to be waited for, was the reasoning. In addition, the entrepreneurial camp in the sign of the crisis would not be expected to face any new “burdens” for the time being.
So it could go on indefinitely. The federal government has agreed on a “moratorium on burdens”, according to which individual industries cannot be burdened with new “bureaucratic” and “financial” difficulties until the end of the pandemic. What if soon a “second wave” sweeping over the Land, and later, a third or fourth? In their letter to Brinkhaus, the business bosses explicitly refer to the promised" closure period": “a legal regulation in the supply chain sector would further widen the gap between political decisions and business challenges.”
Liability rules defused
There is also a gap between what was written in Heil’s and Müller’s first cornerstones for a supply chain law and what is left of it. Three weeks ago, the well-informed “Handelsblatt” reported on the draft, which has not yet been officially presented. According to its wording, the companies in question must examine “whether their activities adversely affect human rights and take appropriate measures to prevent and remedy them”. This includes, for example, child labour, discrimination, hunger wages, land conflicts or environmental pollution.
So far, so good. However, the originally planned liability rules were defused at crucial points. So the required risk management must be “proportionate and reasonable”, it is now. The liability should therefore be staggered: “the closer the relationship with the supplier and the higher the possibility of influence, the greater the responsibility for the implementation of corporate due diligence obligations.“An entrepreneur could only be held accountable in the event of an impairment “that was foreseeable and avoidable when the duty of care was fulfilled”. If, on the other hand, there are human rights violations along the supply chain, even though the company has fulfilled its requirements, it would not be held responsible.
In the case of infringements, however, fines and the temporary exclusion from the award of public contracts are threatened. As the “Frankfurter Allgemeine Zeitung” wrote, another point has disappeared in the deliberations: the threat of criminal law. Accordingly, “sinners” should only be prosecuted under civil law, that is, even in cases where, in their at least indirect responsibility, the victims of death are to be lamented. That would be a real licence to conduct business without restraint. The chief executive of a transnational corporation makes a few million euros in compensation quite easy. The threat of jail, on the other hand, would have made more impression. Would, would, supply chain-but even Messrs. Müller and Heil no longer want to go that far. Or they were just paying close attention: after the leak of their first key point paper, BDA boss Kramer had complained that company owners would be “in jail with both legs"if implemented. That was at least a contribution to honesty.
On the very long Bank
The truth is already that a” duty of care law”, if it eventually sees the light of day, will be a veritable paper tiger. The supply chain Act Initiative has also warned against this in a press release. Apart from the question of the substance of the content, the question of practicality arises. Who in the broken German authorities reads all the reports that thousands of companies have to deliver every year, who checks the plausibility of the information, who investigates possible doubts, preferably at the “crime scenes” abroad? Who takes care of the planned complaint mechanisms, who negotiates the upcoming damages actions at the personnel-bled German courts? Or should Capital-friendly private arbitration courts step in?
Either way, a lot of chemical-contaminated water still flows down the rivers of this earth until a law really stands. The fact that there will be a German single-handedness is practically impossible simply because of the corona-Krise wood hammer argument. Certainly not the government will report before the next Bundestag election. Altmaier already knows how things are going. “I am committed to a speedy European solution to avoid a national patchwork and The Associated distortions of competition within the EU.“Note the words “Europe” and “fast” in one sentence. Already laughed today?