The IB Welcomes the German Government's Agreement on a Supply Chain Law

"The proposed legislation is a first, important step in the right direction."

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The Internationaler Bund (IB) welcomes the German government's agreement on a supply chain law. The project obliges companies to comply with human rights and environmental standards at their suppliers abroad. Child and forced labor, starvation wages and the destruction of nature are to be prevented in this way. The draft stipulates that the entire supply chain must be investigated. Suppliers will also be scrutinized.

The law, which is still planned for this legislative period, strengthens companies that already pay attention to certain standards in their supply chain and at the same time ensures greater fairness in competition. For this reason alone, more than 60 renowned German companies have been calling for such a regulation for some time.

The proposal on which the coalition has now agreed is a compromise that will gradually make corporations and companies accountable. According to current plans, it will apply from January 2023 for companies with more than 3,000 employees and from 2024 for those with more than 1,000 employees.

Non-governmental organizations and trade unions will be able to take legal action in Germany if human rights violations are suspected abroad that affect suppliers to German companies. A state inspection authority is to be able to investigate reported violations of due diligence on site. In the event of violations, there is a threat of coercive sanctions and fines. In addition, affected companies can be excluded from public tenders.

"The proposed legislation is a first, important step in the right direction toward decent working conditions and sustainable business. As a public welfare-oriented company, we are happy to support this. After all, we deliberately chose the slogan 'Strengthening humanity'," says Thiemo Fojkar, Chairman of the IB Executive Board.


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