Creating responsible global supply chains with fair wages and working conditions is a key theme for Germany’s labour ministry (BMAS) during the country’s EU Council Presidency. On Tuesday (6 October), Labour Minister Hubertus Heil (SPD) made the case for a national and eventually European framework. EURACTIV Germany reports.
“Global supply chains. The time to act is now!” declared an opening video to BMAS’s “Global Supply Chains – Global Responsibility” conference, where Heil addressed a variety of German and European politicians, as well as business representatives and leaders of the International Labour Organisation.
The legislation, which would make companies responsible for ensuring adherence to human rights in their global supply chains, is still in negotiation in Germany’s cabinet, and BMAS has ambitions to bring a framework up to the European level through the country’s EU Council presidency.
“Early-capitalist hell” in Ethiopia
Development Minister Gerd Müller (CSU) is co-sponsoring the legislation on a supply-chain law.
The start of the duo’s push for the law can be traced back to a trip they took to Ethiopia in December 2019. While there, Heil and Müller toured different workplaces and experienced the appalling working conditions in certain factories, which Heil described at the conference as an “early-capitalist hell.”
However, other factories enforced higher labour standards, particularly those working with multinational companies that took responsibility for their supply chain.
“This shows that if German companies take responsibility, it is possible to improve working conditions,” Heil explained.
Müller contributed his full-throated support at the conference, declaring that “We can and we must set an example worldwide…The time is absolutely ripe.”
Some industry support, but also pushback
The idea of a supply chain law is popular among Germans, with 75% supporting such a law in a September, according to a poll by infratest commissioned by Germanwatch.
It is also gaining increasing support from the business community, Heil emphasised frequently during the conference. “There are more and more companies, not just three or four, that demand a supply chain law,” he said.
To put a fine tip on this point, BMAS hosted representatives from major companies around Europe including Daimler, Adidas, and L’Oréal, as well as smaller firms like Tony’s Chocolonely, a Dutch chocolate producer that has long called for responsible supply chains.
“We need legislation because as long as solving problems in your supply chains remains voluntary, companies would rather look away,” declared Paul Schoenmakers, head of impact for the company.
However, the initiative is far from uncontested.
A joint statement the Federation of German Industries (BDI), the Confederation of German Employers’ Associations (BDA) and the Association of German Chambers of Industry and Commerce (DIHK) demanded in September that “a practicable supply chain law…must not impose obligations on companies that even our federal government is unable to enforce in agreements with other countries.”
Heil and Müller are currently negotiating to get support in the government, where Economy Minister Peter Altmaier (CDU) remains sceptical of the legislation. One particular sticking point is the size of companies that will be impacted. Heil and Müller want it to start at firms with more than 500 employees, whereas Altmaier wants to raise that to 5,000.
At the conference, Heil made a direct appeal to the cabinet, saying “I expect the German government to come up with a supply chain law worthy of the name before the end of this legislative period.”
A European framework
However, the push for a supply chain law does not stop at Germany’s borders.
BMAS is pushing the European Commission to create a European Action Plan to ensure respect of human rights and decent work in sustainable supply chains. Portugal and Slovenia intend to continue pursuing this goal in their subsequent presidencies.
Heil intends to use a supply chain law in Germany as a springboard for a Europe-wide framework. “We are not just imposing things on others. We have these rules ourselves,” Heil explained, adding that Germany is Europe’s largest economy, so “the best thing we can do is to have a pillar in Germany.”
[Edited by Zoran Radosavljevic]