As a coalition of NGOs working closely on the EU’s upcoming proposal Sustainable Corporate Governance Directive, we appreciate that the German supply chain law adopted today will now oblige certain German companies to undertake human rights – and to a limited extent environmental – due diligence.
The German law is also intended to strengthen the rights of those affected by corporate abuses, however it does not live up to this intention and fails to acknowledge the importance of making German companies legally liable through civil procedure for harm occurring to victims in their value chains. It also exempts a large number of companies and has limited value chain coverage. Therefore, such significant shortcomings must be addressed in the upcoming EU law on Sustainable Corporate Governance. The European Parliament, NGOs, trade unions, academics and some businesses are calling for the upcoming EU law to be far more ambitious. This EU legislative framework must ensure civil liability for harm and strengthen access to European courts for victims of corporate human rights and environmental harms in global value chains. The EU law must also cover more companies; all internationally recognised human rights and environmental impacts; as well as the entire value chain.