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Importance and objectives of monitoring

Between 2018 and 2020, the Federal Government is conducting a survey in accordance with academic standards to assess the extent to which companies based in Germany comply with the due diligence obligation set forth in the NAP. For the NAP monitoring, the National Action Plan has set as a target to find out to what extent at least half of all companies in Germany with more than 500 employees will have integrated the core elements of human rights due diligence into their business processes by 2020. This group comprises a total of around 7,400 companies. The Federal Government reviewed the implementation status in two survey phases from July to October 2019 and spring 2020. The outcome of the analysis will determine which steps the Federal Government takes in the area of business and human rights after 2020, including legislative measures.

The current coalition agreement has this to say: "We are committed to the consistent implementation of the National Action Plan on Business and Human Rights (NAP), including in public procurement. If the effective and comprehensive review of the NAP 2020 concludes that the voluntary commitment of companies is not sufficient, we will take national legal action and work towards an EU-wide regulation." (p. 158)

Only if companies provide information as part of the monitoring process can meaningful results be achieved concerning the NAP implementation status. The Federal Government therefore asks all companies included in the samples to actively participate in the survey. It is also requested that the trade associations, chambers of commerce and industry and the social partners promote participation in the monitoring by their member companies. In November 2018, the Federal Minister for Foreign Affairs, the Federal Minister of Finance, the Federal Minister for Economic Affairs and Energy, the Federal Minister of Labour and Social Affairs and the Federal Minister of Economic Cooperation and Development wrote to all companies in Germany with more than 500 employees with information about the upcoming NAP monitoring process.

The Federal Government has commissioned the accounting company Ernst & Young, which won the EU-wide tender for the contract in May 2018, to do the surveys. Ernst & Young leads a consortium including Systain Consulting, Adelphi consult and Focusright.

The Federal Government considers it essential to ensure that the monitoring process is transparent and methodologically sound in accordance with academic standards. The contractor is to develop an evaluation methodology for the assessment of the implementation status of the core elements by the enterprises. The assessment system ensures that the requirements for the design and implementation of the core elements by the companies are appropriate. The analyses are to be carried out anonymously and in accordance with the applicable data processing legislation.

Within the Federal Government, the monitoring process receives guidance from the inter-ministerial committee on business and human rights (IMC), which comprises ten ministries and is led by the Federal Foreign Office.

The participation of the various stakeholder groups is ensured through the involvement of the business and human rights working group. This involvement includes both setting up the monitoring system and participation in the key stages of the process. The working group is a multi-stakeholder body of the Federal Government's National CSR Forum in which associations, trade unions and civil society groups take part. It actively gives input on the design and implementation of the monitoring. In addition to this, the contracting authority, the Federal Foreign Office, and the implementation consortium around Ernst & Young presented the approach and interim results of the monitoring to a broader public in a dialogue event.

Interim report: initial results and further procedure

Initial interviews were held with 30 companies in the fall of 2018 ("explorative phase"). Statistically representative results were not sought in this phase. There were also discussions with nine representatives of stakeholder groups, i.e. social partners, business associations and non-governmental organisations. The so-called "Inception Report" of September 2018 served as the working basis for the procedure in this phase.

The interviews provided valuable insights into how the comprehensive company surveys of 2019 and 2020 should be structured. The first interim report on the NAP monitoring of July 2019 presents the findings and methodology for the quantitative surveys in detail. This also includes the questionnaire. A summary at the beginning of the interim report provides a quick overview. After intensive consultations, all ten ministries on the Interministerial Committee (IMC) for Business and Human Rights approved the interim report. The Business and Human Rights Working Group of the National CSR Forum was involved in the drafting phase of the interim report.

Survey phases 2019-2020 of the NAP-Monitoring - active participation as the foundation

In the years 2019 and 2020, representative samples of companies with 500 or more employees based in Germany form the basis of the surveys. The first quantitative survey ended on 31 October 2019. In it around 460 questionnaires were evaluated, so that the interim results are representative - within certain ranges. EY has analysed the data in accordance with the methodological guidelines of Germany's Federal Government. One of the key findings is that 17 to 19 percent of the companies were able to demonstrate that they adequately implement the NAP's requirements for human rights due diligence ("fulfillers"). EY has also identified nine to twelve percent of companies that do not fulfil the requirements but have good practices overall ("companies on the right track"). The second interim report of February 2020 provides a comprehensive explanation of the findings and methodological aspects. It was discussed with associations, social partners and civil society within the framework of the Business and Human Rights Working Group.

The final quantitative monitoring survey ran from 2 March to 29 May 2020. This was the second round of planned surveys. Of the total of the more than 7,400 companies that were the focus of NAP monitoring, around 2,200 companies selected at random in 2020 were invited to complete the questionnaire. The survey period had been extended until the end of May because of the difficult situation of many companies in Germany and worldwide and the strain on their resources caused by the COVID-19 pandemic. At least 365 responses are required for the results to be representative. This quorum was achieved. On 11 August 2020, the results of the 2020 survey were presented in detail to the Federal Government: The target of half of the companies implementing these core elements adequately was not achieved. According to the survey, 13 to 17 percent of the companies fully meet the requirements of the NAP. That means 83 to 87 percent of the companies do not comply with them. Within the latter group, 10 to 12 percent of the companies are well on the way to meeting the NAP requirements. A further one percent or so will have an adequate implementation plan by the end of 2020 at the latest. For statistical reasons, the results can only be given as a range.

Evaluation of the monitoring and handling of the results

The result of the 2020 survey will be decisive for assessing whether the implementation status has reached the target set down in the NAP. The survey report was presented on 11 August 2020 to the relevant inter-ministerial committee on business and human rights, which then discussed the draft. The results were also discussed with stakeholders (social partners, business associations and non-governmental organisations). Please find here the third interim report of September 2020.

At the end of the current NAP period, the Federal Government will also prepare an updated status report which includes the results of the NAP monitoring as well as information on the implementation of the approximately 50 measures to which the Federal Government committed in the NAP.