Supply chain due diligence legislation in Germany: Due diligence standards
Supply chain due diligence legislation in Germany: Due diligence standards
The SCDDA requires regulated enterprises to perform supply chain due diligence to identify, assess, prevent, and address risks to human rights (human rights risks) and environment-related risks.
Article 2(2) and 2(3) Clause 1 define “risks to human rights and related environmental risks” as situations where factual evidence shows all three of the following conditions:
- The possibility of a violation of any of the listed due diligence standards;
- That possibility has a sufficiently high likelihood; and
- The risk is imminent.
The due diligence standards are defined as prohibitions concerning human rights and environment-related issues. These standards are listed directly in the law, and the annex references specific provisions of international conventions ratified by Germany.
Under Article 2(2) Clause 1, the group of human rights standards under the SCDDA includes prohibitions primarily related to labour rights, including:
- Prohibition of child labour;
- Prohibition of forced labour, slavery, torture, and other forms of workplace exploitation/abuse;
- Prohibition of ignoring or violating workplace safety, health, and life standards;
- Prohibition of restricting freedom of association;
- Prohibition of discrimination in recruitment;
- Prohibition of paying wages below living standards;
- Prohibition of causing harmful changes to land, water, air, noise, or excessive water consumption affecting human access to water, food, and healthcare;
- Prohibition of illegal eviction or occupation of land, water, or human habitats;
- Prohibition of hiring or using private/public security forces to protect corporate projects in an uncontrolled manner causing harm to life, health, or freedom of association;
- Prohibition of acts or omissions that violate obligations directly and severely impacting a legally protected right.
Under Article 2(3) Clause 1, environmental due diligence standards cover prohibitions related to chemicals harmful to humans and the environment, specifically:
- Prohibition of producing or using mercury, mercury-containing products/compounds, or treating mercury waste contrary to provisions of the Minamata Convention;
- Prohibition of producing, using, handling, collecting, storing, or disposing of certain persistent organic pollutants contrary to provisions of the Stockholm Convention;
- Prohibition of exporting or importing hazardous waste contrary to provisions of the Basel Convention on transboundary movements and management of hazardous waste.
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Scope of Environmental Standards in the SCDDA Unlike human rights standards, environmental standards in the SCDDA are narrower, limited to the production or use of certain hazardous chemicals directly affecting humans, without addressing other common environmental issues in business activities (e.g., mineral extraction, deforestation, greenhouse gas emissions, water/solid waste pollution, improper waste management). The SCDDA is designed to focus on human rights risks (especially labour rights), and environmental standards only include cases “related” to human rights that may directly cause adverse impacts. The full title of the SCDDA is “Act on Corporate Due Diligence Obligations in Supply Chains to Prevent Human Rights Violations in Supply Chains” (without “environment”). |
Source: Compiled by the TTWTO-VCCI Research Group