Supply Chain Act – with or without sanctions?

Gwendolyn Remmert

More than 130 participants from politics, private sector and civil society discussed the design of the Supply Chain Act at a one-hour dialogue event organized by the Sustainable Agricultural Supply Chains Initiative (INA) on July 30th. The private sector is more open to the law than it often appears. However, there is disagreement on the question of legal sanctions.


In his opening address, Gunter Beger, Head of Department at BMZ, explained that the Supply Chain Act is based on the UN Guiding Principles on Business and Human Rights and will probably apply to companies with 500 or more employees. Several federal departments are currently discussing the form it should take. The key points are to be presented to the cabinet as early as mid-August. "The legal regulations should have a positive effect on the global implementation of minimum social and ecological standards," emphasized Beger. The implementation effort for companies should be designed with a sense of proportion. However, the law should also contain sanction mechanisms. "We do not want a toothless tiger, but rather ensure that companies take responsibility for their supply chains. We must effectively prevent child labor and other human rights violations in global supply chains," he said.


Three experts commented on this statement. Gwendolyn Remmert, representative of Continental AG, emphasized that the law must take into account the entire supply chain and relate primarily to processes. Otherwise, she said, there is a danger that companies would overrun themselves with liability exclusion clauses. She added that the law could only achieve the desired effects if it was embedded in further measures.


Gero Niggemeier of Dr. Bronner's Naturkosmetik sees the challenge for small and medium-sized companies above all in meeting the supplier requirements of the large customers. "We can do this, but many need support here. Generally, however, we have to ask ourselves much more consistently how we deal with the people on site. Transparency is at the heart of this." In conclusion, Frank Zach of the German Trade Union Confederation (DGB) spoke out in favour of not basing the scope of the law exclusively on employee numbers. Furthermore, the legislator should ensure that there are also civil liability mechanisms. The burden of proof should be designed in such a way that even smaller institutions can lodge complaints.


Participants could ask questions to the speakers via chat. In addition to questions of liability and control mechanisms, the chat also addressed the question of which companies should be included in the legal regulation.


In the run-up to the event, 33 organizations and companies submitted a joint statement to Minister Müller. In this statement, they pledged the Federal Government support for a national supply chain law and a demanding European regulation. The joint statement can be found here.


A video record of the online event "The Supply Chain Act - Only as good as its content?” is available right here.