Following months of negotiations, on June 11, 2021, the German parliament passed a new law on human rights in the supply chain. The introduction of the law has been applauded by many people. Juliane Kippenberg, associate director, children's right division, at human rights watch, an international organization which conducts research and advocacy on human rights, was quoted saying," the German government has taken a critical step to ensure that companies operate responsibly."
According to the law,
Companies will be required to regularly and systematically identify and address human rights and environmental risks in their direct supply chain.
They will be asked to report annually on the steps taken by them to avoid human rights risks.
Companies that fail to carry out this procedure will be fined up to 2percent of their international revenue.
Violation of the law might also cause them to be excluded from public procurement for three years.
The above rules apply only to companies having employee strength of 3000 or more, beginning in 2023, and to companies having employee strength of more than 1000 from 2024.
According to human rights watch, though the law is an important step towards meaningful corporate accountability, it does not incorporate the highest international standard. The new law is a step in the right direction but it still has many weaknesses.
The law doesn't require companies to undergo any kind of steps in regard to indirect suppliers, which is where most of the abuses occur.
The law also doesn’t create any liability for companies that have been held for human rights in the past.
Since the companies do not have to conduct any due diligence, there is a chance of abuse of human rights further down the global level.
Abuse within companies having less than 1000 employees is also a matter of concern.
With the next government being elected in September 2021 there will be a chance to strengthen the law.
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