Bloomberg
German companies from BASF SE to Volkswagen AG risk fines if their suppliers around the world breach human rights.
Under new legislation agreed to by Chancellor Angela Merkel’s government, companies will have to ensure their partners don’t engage in harmful practices and exploitation. In addition to penalties, German firms can also be excluded from public contracts.
The so-called Supply-Chain Law, which still needs parliamentary approval, will apply to 600 firms with more than 3,000 employees starting in 2023. Its scope will be widened to nearly 3,000 companies with more than 1,000 workers from 2024.
The plan has been highly contentious, with industry groups arguing that the complexity and length of supply chains means companies can’t be held accountable for actions beyond their control.
The goal of making companies responsible for practices in global supply chains is part of the coalition agreement between Merkel’s conservative bloc and the Social Democrats. They made a commitment to foster “sustainable†supply structures for agricultural goods like palm oil, cocoa and soybeans.
The government initially encouraged companies to prevent abuses on a voluntary basis. However, a survey carried out by the foreign ministry published last year found that only a minority of firms with more than 500 employees had met the requirements. Only a fifth of the 2,250 companies asked to participate in the survey responded.
Merkel Acknowledges Making Mistakes in Pandemic Fight
Chancellor Angela Merkel acknowledged making mistakes in reacting to a spike in coronavirus infections and by not preparing Germany well enough for the vaccine rollout.
The response in the fall was “too hesitant,†and government was too slow to require face masks during first wave of the pandemic, the German leader said in an interview with ZDF television. She defended her strategy of procuring Covid-19 vaccines the European Union, but admitted she should have explained the ramp-up better. Merkel reaffirmed that the EU ordered enough shots and that Germany will have sufficient doses available.
German authorities agreed to loosen some virus restrictions and open a pathway to a return to some semblance of normality after months of stringent curbs.