MANDATORY HUMAN RIGHTS DUE DILIGENCE: WHAT’S NEXT?

MANDATORY HUMAN RIGHTS DUE DILIGENCE: WHAT’S NEXT?

There is no more doubt about it: Germany will introduce legislation on human rights due diligence. Companies have to be prepared for the new legislation to be passed by summer 2021 at the latest. In this article, we have summarized the latest developments regarding the human rights due diligence law.

In 2016, the German government introduced a National Action Plan (NAP) on business and human rights. The action plan set the framework for human rights due diligence, but lacked legal, enforceable requirements for businesses. In order to find out whether additional regulation was needed, the government ordered a large-scale survey (NAP-monitoring). In the course of this survey, German-based organisations with more than 500 employees were asked whether they have integrated the five so-called core elements defined in the NAP.

The five core elements of due diligence

  1. A public policy statement on respect for human rights is available
  2. There is a process for identifying actual and potentially adverse effects on human rights (risk analysis).
  3. Corresponding measures to prevent and control their effectiveness have been introduced.
  4. The company reports on its impacts
  5. The company establishes or participates in a grievance mechanism.

The results of the survey were presented in August, with a sobering result: just 13 to 17 percent of all companies surveyed fully meet the requirements of the NAP. This means that over 80 % of the companies surveyed have failed to implement at least one of the five key elements of the human rights due diligence model as presented in the NAP.

THE CONTENT OF THE SUPPLY CHAIN LAW

The content of the human rights due diligence law (in German: Lieferkettengesetzt) is not yet clear. Handelsblatt, one of the leading media outlets, reports on a tiered liability: “The closer the relationship with the supplier and the greater the possibility of influence, the greater the responsibility for implementing corporate due diligence”.

TIME SCHEDULE

Germany wants to use its EU Council Presidency to draft a European supply chain law. Whether the six months will actually be enough to push through the initiative remains to be seen.

But even if regulation at EU-level falls through, observers expect that Germany will pass a law in this legislative period anyhow, out of concern that a possible next government with the participation of the Green party will push for stricter forms of regulation.

We will be happy to keep you up to date on further developments. Contact us if you have any questions and sign up for our newsletter to receive regular updates!

HOW DQS CAN SUPPORT YOU:

As an independent audit and assessment provider, we can support your due diligence processes with the following services:

– Gap analysis and validation of your due diligence procedures

– Human Rights Assessments

– Social and environmental compliance audits

– Supplier audits across the globe

– Training and capability building

– Verification of sustainability reporting

 

Source: DQS CFS website (https://dqs-cfs.com/2020/09/mandatory-human-rights-due-diligence-whats-next/). For more information, please send email to info@dqs.com.my