Enterprises have to demonstrate compliance with human rights along their global supply and value chains. Over recent years, these requirements have become ever more stringent. The Federal Government’s adoption of a National Action Plan for Business and Human Rights (NAP) reinforces that expectation. Implementing human rights due diligence requirements is a continuous and long-term process that is specific to each enterprise. It is also one that raises a large number of practical questions.
The Federal Government organises NAP sector dialogues to improve human rights along global supply and value chains. The dialogues offer guidance to enterprises operating in sectors with particular human rights challenges and support their efforts to implement the NAP’s human rights due diligence requirements.
Germany’s economy is highly integrated into global procurement and sales markets. This creates many human rights challenges. However, against a worldwide background of increasingly stringent human rights due diligence obligations, the sector dialogues can help German enterprises maintain a strong competitive position in international trade.
Whether through their own business activities or the business relationships they establish along their global supply and value chains, enterprises can impact human rights either positively or negatively. By developing new production and sales markets, for example, they can help to create jobs and prosperity. At the same time, however, complex and opaque supply and value chains spanning multiple countries may place those enterprises at risk of contributing to human rights violations. That risk is particularly high in countries where there is little or no attempt to uphold the rule of law.
Over recent years, enterprises have faced ever-increasing demands to systematically identify, prevent and mitigate any adverse impacts their activities may have on human rights. The UN Guiding Principles on Business and Human Rights are now recognised as the leading international standard. The due diligence obligations set out in frameworks such as the OECD Guidelines for Multinational Enterprises and the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy are themselves based on the UN Guiding Principles on Business and Human Rights.
The Federal Government adopted the National Action Plan for Business and Human Rights (NAP) as a mechanism for implementing the UN Guiding Principles on Business and Human Rights in Germany. The NAP sets out the Government's expectation that all enterprises based in Germany will take appropriate steps to fulfil their human rights due diligence obligations. The Federal Government establishes sector dialogues in order to help German companies meet these requirements, and to improve the wider human rights situation. The Federal Ministry of Labour and Social Affairs (BMAS) is responsible for organising and coordinating the dialogues in collaboration with the Interministerial Committee on Business and Human Rights (IMA).
German enterprises are highly integrated into global procurement and sales markets and are therefore confronted with many human rights challenges. The nature of the risks involved depends on the size of an enterprise, the industry in which it operates and its position in the wider supply and value chain. Implementing human rights due diligence requirements is a continuous and long-term process that is specific to each enterprise. It is also one that raises a large number of practical questions.
- What do human rights due diligence obligations entail for each enterprise, and how can they be integrated into corporate culture and processes?
- How can enterprises systematically identify human rights risks and take effective measures to prevent or mitigate them?
- What form should grievance mechanisms take to ensure that complaints are properly addressed?
- How can enterprises work together within a sector to pool resources, increase transparency and exert a greater overall influence?
NAP sector dialogues support the efforts of German enterprises operating in sectors with particular human rights challenges to address these and other issues. By working together, individual enterprises can identify potential obstacles to implementation and develop appropriate solutions. The process offers a number of concrete benefits, including industry-specific guidelines and best practice examples.
Ultimately, the purpose of the dialogues is to help more enterprises in sectors with particular human rights challenges find appropriate ways of implementing the National Action Plan for Business and Human Rights (NAP). In this way, the dialogues can help to improve human rights in global supply and value chains. Against a worldwide background of increasingly stringent human rights due diligence obligations, the sector dialogues can also help German enterprises build a stronger competitive position in international trade.
Many of the human rights challenges in supply and value chains are complex and diverse. The underlying causes are often structural, and improvements can only be achieved through a concerted approach by industry stakeholders. With this in mind, each sector dialogue is organised as a participatory multi-stakeholder process that brings together enterprises, business associations, trade unions and non-governmental organisations.
Each sector dialogue is divided into four phases. These are facilitated by industry and human rights experts.
- Phase 1: Adopt a dialogue agreement. The first step is for all participants to formally adopt a dialogue agreement. This provides the basis for a successful dialogue through a series of binding and transparent agreements on objectives, roles, procedures, collaboration and outcomes.
- Phase 2: Identify priorities. All relevant stakeholders are involved in deciding which issues the dialogue should address. The key factors here are the industry-specific needs and realities of the participating enterprises.
- Phase 3: Develop guidelines. Based on the issues identified in phase 2, the participants develop guidelines and best practice examples in the area of human rights due diligence. Here too, the key factors are the industry-specific needs and realities of the participating enterprises.
- Phase 4: Begin implementation. The guidelines developed by participants can now be applied and tested in practice. Enterprises maintain regular contact to share their experiences. Best practice examples can then be used to highlight the progress made and the lessons learned.
Right from the start, each dialogue is designed to enable greater collaboration within that sector. This will be achieved for instance by setting up new industry-wide initiatives and joint projects that allow enterprises to exert a wider influence.
The success of the dialogues depends on the support and engagement of relevant stakeholders in each sector. Their role is to offer constructive input and participate actively in the dialogue process.
The NAP sector dialogues are specifically aimed at those sectors of the German economy with particular human rights challenges. To identify these, the Federal Ministry of Labour and Social Affairs (BMAS) commissioned a study by independent experts.
Based on the study, the Ministry engages with social partners, enterprises and other relevant stakeholders in order to determine the level of interest in and best approach to establishing an NAP sector dialogue. Talks may also be held before the study’s findings are published in the case of sectors where there is a clear enthusiasm for dialogue and a greater need for action.
Duplicating the work of long-standing industry initiatives and multi-stakeholder partnerships (MSPs) already supported by the Federal Government is avoided. These include the German Initiative on Sustainable Cocoa, the Round Table on Human Rights in Tourism, the Partnership for Sustainable Textiles, the Action Alliance for Sustainable Bananas and the Forum for Sustainable Palm Oil.