On 14 July, Federal Ministers of Economic Cooperation and Development, and Labour and Social Affairs, Gerd Müller and Hubertus Heil respectively, confirmed that the draft law on companies’ due diligence as regards compliance with social minimum standards and environmental standards in supply chains would be submitted to the German Bundestag before the current parliamentary term ends in September 2021. The main thrusts of the draft have already leaked to the press (c.f. article No. 12028). Nonetheless, the announcement on 14 July was greeted with enthusiasm. The drafting Ministers had agreed to make adoption of the law conditional on empirical evidence of practice operating in the German economy and a survey was conducted to establish the numbers. Only 18% of the 7,200 companies (those with >500 employees) surveyed responded to what ultimately a first round survey because a second round survey was consequently launched to compensate for the poor results of the first. The Ministers presented the results of the second survey on 14 July. The second survey results were as disappointing as those from the first and with only a marginally better a response rate this time of 20%. In light of the results, the Ministers, in accordance with governing coalition agreements, announced that the law would soon come into force. The major companies in Germany’s corporate community have not welcomed the move, with the textiles and garment sectors particularly upset. The relevant sectoral federations and the Federation of German Industries (BDI) have protested vehemently, claiming that the first survey was poorly carried out (technical issues) and that the second was carried out during the pandemic (not an accurate reflection). Federal Minister for Economic Affairs and Energy, Peter Altmaier appeared to show some sympathy for the their cause by calling for a new review of practices and by proposing that overarching European legislation would be preferable to multiple national laws. However, the determination shown by his Ministerial colleagues, (i.e. Economic Cooperation and Development, and Labour and Social Affairs), the coalition contract that provides for this avenue for legislation action that they have adopted, as well the support given to the project by a significant part of the Conservative parliamentary group, all together imply that this legislation will soon see the light of day.
As a Berlin correspondent for the French and Swiss press since the late 1990s, I cover a wide range of economic, political and social issues, with a particular focus on the German business and labour market. My areas of interest include co-determination, digitalisation, demographics and ESG/DEI policies.