Federal Government expectations

The Federal government expects all enterprises – including those not subject to the binding rules under the Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichengesetz – LkSG) – to introduce guidelines and processes to fulfil their human rights due diligence obligations - in Germany and in their operations abroad. This expectation was formulated in the National Action Plan for Business and Human Rights (NAP) in 2016.

When designing and implementing their due diligence processes in the area of human rights, consideration should be given to the beneficial effects of corporate activity and the different perspectives of the company’s employees, relevant stakeholders and others who may be affected. In large enterprises, these include the human resources, purchasing, compliance and sales departments. From outside the enterprise, suppliers, customers and trade unions as well as bodies from civil society, business organisations and governments should be involved. Particular attention should be directed to the rights of their respective employees and to those of local populations who may be affected.

Enterprises should strive to inspect the work of their suppliers and their subcontractors in order to achieve the best possible transparency with respect to production, working and environmental conditions, to identify risks and to develop solutions.

In places where governments fail to adequately enforce legal principles – due to a lack of laws or controls, for example – enterprises operating there have a heightened responsibility to ensure that human rights are respected in their sphere of activity. Here, too, they should take measures to prevent potential human rights violations and redress the human rights violations that they caused.

It should be possible for any given enterprise to incorporate its human rights due diligence obligations into its existing processes in an appropriate manner without creating undue bureaucratic burdens. The scope of the measures to be taken should depend on the size of the enterprise, the nature of its products or services, the potential risk of particularly adverse impacts on human rights and the enterprise's operating context. This is an obligation of conduct, not an obligation of result or assumption of guarantee.

When implementing the National Action Plan for Business and Human Rights, the Federal Government set up additional advisory and support services. Enterprises, the Federal Government, civil society and unions work together in multi-stakeholder initiatives in various sectors. They offer an added value especially when enterprises are confronted with challenges that are too big or complex to tackle them on their own. Joint initiatives with other enterprises may increase the scope and efficiency of activities, pool resources and work together to reach objectives. They serve as platforms for an exchange of experience, provide orientation and prepare potential solutions to effectively improve environmental and social standards. As provided for in the NAP, this has helped enterprises to implement human rights due diligence in a sector-specific way and commensurate with their size and position in the supply chain. The Federal Government has long supported this.