Germany

1.1 Basic rules of economic policy

Bi- and multilateral economic relations [page 17-18]

“Under Article 207 of the Treaty on the Functioning of the European Union (TFEU), commercial policy lies within the sphere of competence of the EU. Within the Federal Government, the Federal Ministry for Economic Affairs and Energy is responsible for formulating German positions in the realm of commercial policy and advancing them in European and global forums. For the export-driven German economy, particular importance attaches to the elimination of trade barriers and reinforcement of the multilateral trade system. Trade, moreover, can make a major contribution to sustainable development. In this context, it is important that trade should be shaped in a development-friendly way. This means, for example, that environmental, social and human rights standards should firmly underpin free-trade agreements, which should be accompanied by impact-assessment and monitoring mechanisms.”

The current situation

“The institutions and Member States of the EU are also bound by their human rights obligations when implementing Union legislation. Germany supports the EU practice of agreeing on provisions designed to safeguard human rights in framework agreements with trading partners and using sustainability chapters in all new free-trade agreements to enshrine high labour, social and environmental standards. Germany is committed to the negotiation of comprehensive binding standards for inclusion in these sustainability chapters. The EU ‘Trade for All’ strategy which was presented in the autumn of 2015 also emphasises that commercial policy should advance sustainable development and human rights throughout the world. At the same time, freetrade agreements also guarantee the right to regulate, which preserves the necessary leeway for states to protect human rights.

The Federal Government supports further development of the range of instruments for human rights impact assessment of trade and investment agreements.”

Measures

• “The Federal Government is pressing for the inclusion of an ambitious sustainability chapter in the planned TTIP agreement with the United States.
• The Federal Government advocates and supports further development of the range of instruments for human rights impact assessments of the EU’s trade and investment agreements. Moreover, comprehensive impact assessments should be conducted before negotiations begin, so as to guarantee that the findings of the assessments can influence the negotiations.
• In the framework of the Aid for Trade initiative, the Federal Government supports developing countries’ efforts to improve their trading opportunities. In the future, the Federal Government will focus even more sharply on supporting compliance with labour, social and environmental standards.
• The EU Special Incentive Arrangement for Sustainable Development and Good Governance (‘GSP+’) can be used as a format for promoting the observance and application of human rights standards by governments of developing countries. In the forthcoming review process of 2018, the Federal Government will press for further strengthening of that instrument.”

1.3 State support

Export credits, investment guarantees and other instruments for the promotion of external trade [page 23-25]

“The instruments of external-trade promotion in Germany provide assistance for German enterprises in accessing and safeguarding foreign markets. The range of instruments includes the provision of advice by German diplomatic and consular missions, the network of German Chambers of Commerce Abroad and the Germany Trade & Invest (GTAI) agency. The Federal Government also supports participation in trade fairs abroad, arranges visits by delegations and funds hedging instruments such as export credit guarantees, known as Hermes guarantees, to insure export transactions, federal guarantees for direct investments abroad (DIAs) and untied loan guarantees as insurance for banks against the risk of default.”

Measures

• “In addition, it is planned to introduce human rights due diligence reports into the assessment procedures of the insurance instruments for foreign trade in cases where there is a high probability of serious implications for human rights.
• The National Contact Points for the OECD Guidelines (see subsection 4.2 below) will be upgraded to become the central grievance mechanism for external trade promotion projects.
• The detailed procedure for assessing applications for the provision of export credit guarantees, guarantees for direct investments abroad and untied loan guarantees will be further reinforced as regards respect for human rights; this will entail measuring the procedure against the specific requirements set out in the NAP. To this aim, human rights will be treated as a separate point in future project assessments. The aim is to ensure that enterprises which avail themselves of foreign trade promotion instruments exercise due diligence. In particular, this includes participation in grievance proceedings initiated against them before the German National Contact Point for the OECD Guidelines for Multinational Enterprises.”

2.1 Ensuring the protection of human rights in supply and value chains

Measures [page 30]

• “The Federal Government will support the systematic inclusion of sustainability chapters in free-trade agreements, which will prescribe, among other things, compliance with the ILO Core Labour Standards.”

2.3 Business activity in conflict zones [page 32]

“In fragile or war-torn countries, there is often a danger that trade in raw materials is cornered by destabilising players, who will use it for their own ends and thereby fuel existing conflicts.”

The current situation

“In 2011, the OECD published a guide to corporate responsibility along supply chains in which minerals from conflict zones are traded and handled. The guide, entitled OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, has also been available in German since 2015. The primary aim of the Guidance is to curb the funding of armed conflicts from the proceeds of trade in raw materials; in addition, compliance with its recommendations would help to prevent serious human rights violations, especially child labour.”

3. Available means of practical implementation support [page 34]

Measures

“I. Helpdesk and initial consultation

• The Federal Government will significantly increase the reporting and consultation output of German diplomatic and consular missions in collaboration with the other pillars of external-trade promotion, namely the Chambers of Commerce Abroad and Germany Trade and Invest. …”

VI. Monitoring [page 41]

• “The interministerial committee will verify the implementation and coherence of the adopted measures and drive forward the development of the NAP implementation process. The main areas of activity to come under its scrutiny will be the measures relating to the state duty to protect (public procurement, promotion of external trade, etc.) and the fleshing-out of due diligence obligations (chapter III above), including the planned definition of sectoral specifications and the corresponding support services.”