Competitive Fund for the Promotion of Due Diligence
Call for Proposals Round 2 - Application until 19.02.2023

• The German Federal Ministry for Economic Cooperation and Development (BMZ) and INA are promoting promising approaches to fulfilling corporate due diligence with a new competition fund.
• The focus here is on the core topics of the German Supply Chain Act and the forthcoming EU directive on corporate sustainability due diligence as well as the forthcoming EU regulation on deforestation-free products. 
• Together with the agri-food sector and its suppliers, we want to achieve greater sustainability in global agricultural supply chains and improve the living conditions of smallholders and plantation workers. The focus is therefore on practical implementation on the ground in BMZ's partner countries.
• Companies can apply together with one or more non-profit partners until February 2023.
• Projects are funded with a sum of up to EUR 123,000 over a period of up to 12 months.

To the documents

Background 

Many of the products and raw materials that we take for granted in our lives are manufactured or extracted at high risk to human rights and the environment. In June 2021, the German government therefore passed the Supply Chain Due Diligence Act (LkSG), which will come into force on January 1, 2023. The law serves to improve the international human rights situation by setting requirements for responsible supply chain management for companies. The aim is to improve the protection of fundamental human rights in global supply chains. In addition, a directive on corporate sustainability due diligence is being planned at EU level, which will further specify the requirements. Furthermore, there are plans for an EU regulation on deforestation-free products which focuses on the avoidance of deforestation and forest degradation

The adoption of the new government regulations presents companies with new challenges. At the same time, the law offers the opportunity to make supply chains more transparent and resilient.  

The German Federal Ministry for Economic Cooperation and Development (BMZ) and the Initiative for Sustainable Agricultural Supply Chains (INA) support projects to fulfill corporate due diligence obligations in global supply chains:  Through the Due Diligence Fund (DDF), companies in the German agri-food sector, together with non-profit partners, can apply for funding. The focus is on the impacts in the production countries. 

What is the objective?

We want to identify and financially support promising, practical and innovative approaches to corporate due diligence. We want to show that compliance with the Act is feasible - even beyond the specified minimum standards.

The focus is on both human rights and environmental due diligence on the ground in the partner countries. Those potentially affected, such as smallholders and plantation workers, should be specifically involved in the design and implementation of the project and benefit from the measures.

Companies should be supported by the DDF to establish and continuously implement sustainable processes in accordance with the LkSG. Through monitoring and evaluation of the pilot projects and a public presentation of the results, added value is generated for companies. In this way, best practices or piloted approaches are created, which they can adapt for other or their own supply chains. 

Who can apply?  

Project proposals are submitted by a partnership between one or more private sector actors, as well as (at least) one non-profit corporation based in the EU, the European Economic Area, Switzerland, the United Kingdom or in a partner country of the BMZ. Projects are funded with a sum of up to 123,000 EUR over a period of up to 12 months

Which projects are to be funded?  

The DDF funds projects,

• whose methodological approach is suitable for adaptation by other companies in the agricultural and food sector
• which have a particularly high potential to mitigate human rights and environmental risks effectively and sustainably
• which embed the planned measures in a process-oriented implementation logic and do not only achieve selective effect
• which promote gender equality through targeted measures 

How does the competition work? 

The DDFs competition is conducted in a multi-stage process. First, the potential eligibility of a project is determined on the basis of a short application. A project proposal is potentially eligible if all terms and conditions are met. If a short proposal is deemed potentially eligible, the partnership is invited to submit a full project proposal. The full project proposals are then reviewed for actual eligibility by BMZ and GIZ based on established evaluation criteria. Finally, the project proposals found to be actually eligible are submitted to the competition jury, which makes the final evaluation

The jury of the DDF consists of representatives of the BMZ, the GIZ, the Federation of German Food and Drink Industries (BVE), the University of Hohenheim, the German Institute for Human Rights, the Bremer Cotton Exchange and the IG Bauen-Agrar-Umwelt.  

Once the winning partnerships of the competition have been selected, financial support for the project proposals is provided by GIZ within the framework of financing contracts (in the case of project implementation by the non-profit partner) or service contracts (for the acquisition of services for the partnership). 

Here you can find the recording on our Round 2 and respective Q&A: 

Here you can find the recording of our Launch Event: