Germany
NAP Development Process
Status
News on an updated NAP
Germany is behind on developing a 2nd NAP to replace the inaugural NAP which ran until 2020. The mandatory human rights due diligence developments are said to have been one of the causes for this delay. The German Institute for Human Rights conducted a National Baseline Assessment (NBA) for the second German NAP and published it on September 2022.
Process
The first statement of intent to develop a NAP on business and human rights was made in the coalition agreement (page 124, 14 December 2013) (in German), when the government committed itself to implement the UNGP at the national level.
The activity of non-governmental actors was an important stimulus for NAP development. For example, as a result of lobby activities conducted by the coalition CorA (Netzwerk fuer Unternehmensverantwortung / Network for Corporate Accountability) and Forum Human Rights (Forum Menschenrechte) around the 2013 elections, wording was included in the coalition agreement to the effect that the government would implement the UNGP. Additionally, on June 19, 2013, the German Government’s CSR Forum adopted a resolution in which it called on the German Government to “decide on steps for implementing (…) guiding principles in national policy”. The kick-off for the National Action Plan took place at an opening conference on November 6, 2014, at the Federal Foreign Office.
The process of NAP development was coordinated by the Federal Foreign Office and involved:
- The Federal Ministry of Employment and Social Affairs;
- The Federal Ministry for Economic Affairs and Energy;
- The Federal Ministry of Justice and Consumer Protection;
- The Federal Ministry of the Environment, Nature Conservation, Building and Nuclear Safety; and
- The Federal Ministry for Economic Cooperation and Development
The process of drawing up the National Action Plan was led by a Steering Committee comprising representatives of:
- Six ministries (mentioned above);
- The German Institute for Human Rights (DIMR), Germany’s NHRI;
- Econsense (Forum for Sustainable Development of German Business), a trade association representing German multinational companies on sustainability issues;
- Three trade association representatives (from the Confederation of German Employers’, Association of German Industry, Association for Industry and Trade);
- One representative of the Forum Menschenrechte (Human Rights Forum), network of civil society organizations working on human rights issues;
- One trade union representative (from the German Trade Union Confederation); and
- One representative from the VENRO network of civil society organizations working on development policy.
At the beginning, the Steering Committee meetings were organised with all members attending. The German Institute for Human Rights (DIMR) and Econsense were responsible for coordinating the stakeholder consultation process.
The drafting process was planned for two years and comprised three conferences (initially four conferences were foreseen, but one did not take place) and 11 hearings (initially conceived as workshops).
During the opening conference held on November 6, 2014, with over 100 various stakeholders attending, 10 crucial issues were identified (and subsequently approved by the Steering Committee), which were then taken up in eleven expert-led hearings organized between April and September 2015. The results of these hearings were presented at the NAP conference in Autumn 2015.
Stakeholders were extensively involved in the preparations and discussions of the hearings, with each of the hearings jointly organized by organizations from different stakeholder groups (government, trade unions, business, civil society). NGOs, including Amnesty International and Oxfam, were nominated by Forum Menschenrechte and Venro following collective agreement by a coalition of NGOs.
Each stakeholder group selected 10 experts who represented them and their approaches during the meeting. Participants were chosen based on their field of expertise and the main topic of the workshops. Budget for these meetings covered the facilitators fees and catering for the hearings, with the ministries providing the venue for the meetings free of charge.
The NAP itself was drafted in an internal phase within the government and adopted by the government. There was no opportunity for input from other stakeholders or the coordinating organizations (DIMR, Econsense) after the hearing stage, despite earlier communications that such possibility would exist.
Ongoing Process on 2nd NAP
The German Institute for Human Rights conducted the process for Germany’s second NBA published in September 2022. The second NBA was developed through an assessment of implementation deficits of stakeholder contributions in the 2015 meetings in preparation for the first NAP to implement those suggestions which had not appeared in the first NAP. In 2021, the German NHRI considered stakeholder inputs and the German federal report on the implementation assessment of the first NAP and throughout the end of that year to January 2022, further stakeholder meetings were held to include subsequent implementation concerns.
Stakeholder Participation
Stakeholders (civil society, business, trade unions) were extensively involved in discussions, hearings and consultations during which the issues/areas of action aimed to be addressed in the NAP were discussed.
During April and November 2015, 12 expert hearings were held. These were attended by approximately 40 experts from non-governmental organisations, trade unions, business, federal ministries (DIMR and business network econsense as consultants). Additionally, 3 plenary conferences were held: The first was to identify priority issues, the second discussed the NBA and the third presented the results of the 12 expert hearings. Written documentation only exists in German.
Stakeholder representatives were also part of the Steering Committee in charge of the NAP hearing process, which focused almost solely on procedural issues.
Initially the stakeholders’ representatives were also meant to be involved in drafting of the NAP text. However, due to contradictory positions of stakeholder groups, which made it difficult to find common ground, the government took the decision to draft the NAP content on its own. Thus, stakeholders were not given an opportunity to comment on the NAP’s content during the stage when it was being drafted by the relevant ministries in the last year of the process.
No stakeholder events were held outside Berlin.
A timeline (in German) was developed and shared (March 2015). However, due to unexpected changes (e.g. the phase for comments was skipped), the timeline was not completely followed.
In the monitoring process, the participation of the various stakeholder groups was ensured through the involvement of the business and human rights working group. This involvement included both setting up the monitoring system and participation in the key stages of the process. The working group is a multi-stakeholder body of the Federal Government’s National CSR Forum in which associations, trade unions and civil society groups take part. It actively gives input on the design and implementation of the monitoring. In addition to this, the contracting authority, the Federal Foreign Office, and the implementation consortium around Ernst & Young presented the approach and interim results of the monitoring to a broader public in a dialogue event.
National Baseline Assessment (NBA)
• Published in April 2015 and available here.
• Commissioned by the State to inform the first BHR NAP, which was published in December 2016.
• Conducted by the National Human Rights Institution (the German Institute for Human Rights).
• Utilised the DIHR/ ICAR National Baseline Assessment Template. Based on desktop research and stakeholder feedback (three rounds of consultations with all stakeholder groups were held). Contains recommendations from stakeholders made through consultations.
• Published in August 2022 and available here.
• Commissioned by the State (the Federal Foreign Office) to assess the implementation of the inaugural BHR NAP and develop proposals for the second BHR NAP, which is under development as of February 2023.
• Conducted by the National Human Rights Institution (the German Institute for Human Rights).
• Follows its own methodology which included desktop research and stakeholder consultations that took place between November 2021 and mid-January 2022. Contains recommendations from stakeholders made through consultations.
The second NBA focuses on implementation deficits of the first NAP as well as the developing normative framework on mandatory human rights and environmental due diligence (mHRDD) nationally and in Europe. Other developments addressed were the impacts of the Covid-19 pandemic impact on supply chains and an increased awareness of downstream and supply chain impacts of “Vladimir Putin’s war of aggression in Ukraine” (p. 6).
Follow-up, monitoring, reporting and review
Within the Federal Government, the monitoring process receives guidance from the Interministerial Committee for Business and Human Rights, which comprises ten ministries and is led by the Federal Foreign Office.
Between 2018 and 2020, the Federal Government conducted a survey to assess the extent to which companies based in Germany comply with the due diligence obligation set forth in the NAP. For the NAP monitoring, the National Action Plan has set as a target to find out to what extent at least half of all companies in Germany with more than 500 employees will have integrated the core elements of human rights due diligence into their business processes by 2020. The Federal Government reviewed the implementation status in two survey phases from July to October 2019 and spring 2020. The outcome of the analysis will determine which steps the Federal Government takes in the area of business and human rights after 2020, including legislative measures.
The first quantitative survey ended on 31 October 2019. One of the key findings was that 17 to 19 percent of the companies were able to demonstrate that they adequately implement the NAP’s requirements for human rights due diligence. The second interim report of February 2020 provided a comprehensive explanation of the findings and methodological aspects. It was discussed with associations, social partners and civil society within the framework of the Business and Human Rights Working Group.
The second and final quantitative monitoring survey ended on 29 May 2020. The results of the 2020 survey were presented in detail to the Federal Government: The target of half of the companies implementing these core elements adequately was not achieved. According to the survey, 83 to 87 percent of the companies do not comply with the NAP requirements.
The result of the 2020 survey will be decisive for assessing whether the implementation status has reached the target set down in the NAP. The interim (survey phase) report was presented on 11 August 2020 to the relevant inter-ministerial committee on business and human rights, which then discussed the draft. The results were also discussed with stakeholders (social partners, business associations and non-governmental organisations).
A final report has been compiled and submitted to the Interministerial Committee for comment on 29 September 2020. The report covers the analysis and evaluation of the overall survey results (2018-2020), discussion of the methodological approach as well as discussion of the extent to which the NAP monitoring process has proved to be worthwhile and whether it would be effective and efficient to continue it in connection with additional NAPs or legal requirements, where appropriate.
The report was adopted by the Interministerial Committee on 8 October 2020.
Stakeholders views and analysis on the NAP
- CorA, Forum Menschenrechte, Venro, AI, Brot fuer die Welt, Germanwatch, Misereor: No courage to commit. Comments of German non-governmental organizations on the German government’s National Action Plan on Business and Human Rights, Revised version February 6, 2017
- European Coalition for Corporate Justice: Switzerland, Italy, Germany and the US release Business ad Human Rights National Action Plans
- CorA-Netzwerk für Unternehmensverantwortung (CorA Network for Corporate Accountability) and the Forum Menschenrechte (German Human Rights Forum): Position Paper on Business and Human Rights – Expectations of a German Action Plan, Berlin, April 2013
- German Institute for Human Rights: Press Release 21.12.2016, Cabinet adoption of the National Action Plan on Business and Human Rights. A hesitant integration of business and human rights
- German Institute for Human Rights: Stellungnahme: “Zögerliche Umsetzung” Der politische Wille reichte nicht weiter: Deutschland setzt die UN-Leitprinzipien um – mit kleinen Schritten, December 21, 2016
- Zwei Jahre Nationaler Aktionsplan für Wirtschaft und Menschenrechte – eine magere Halbzeitbilanz, December 20, 2018
- Nationaler Aktionsplan Wirtschaft und Menschenrechte: Stellungnahme zum Monitoring der menschenrechtlichen Sorgfalt deutscher Unternehmen, December 20, 2018
- Magere Halbzeitbilanz zum deutschen Aktionsplan für Wirtschaft und Menschenrechte: Gewerkschaften und NRO fordern Gesetz zur Unternehmensverantwortung, December 20, 2018
Additional Resources
Explore NAP by Issue
The current situation [page 15] “The instruments that are now binding in Germany include … the UN Convention on the Rights of the Child” “Germany is also bound by EU Directive 2011/36/EU and has ratified both the Council of Europe Convention of 2005 on Action against Trafficking in Human Beings and the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children.” Measures [page 20] The current situation [page 21] “Germany has fully transformed into domestic law its obligations to protect human rights under international agreements. This applies, for example, to the prohibitions of child labour and forced labour that are imposed by the ILO core conventions.” The German NAP contains a section on conflict-affected areas: “The UN Guiding Principles attach particular priority to assisting enterprises in respecting human rights in areas torn by conflicts. One characteristic of such areas is an especially high risk of serious human rights violations resulting from the frequent total absence of state structures. The Federal Government therefore considers that it has a responsibility to try to ensure that German enterprises operating in such conditions have no part in any adverse impacts on human rights. Enterprises operating in these conditions are to be supported whenever they are able, through their investments and business activities, to contribute to the stabilisation and development of such areas. 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. Importance therefore attaches not only to international commodity diplomacy but also to local contributions in cases where specific interests are affected by the exploitation of raw materials.” The current situation “An important contribution to these efforts is being made by the deliberations, which Germany is backing, on what are known as ‘conflict minerals’, an intense discussion being conducted within both the OECD and EU frameworks. 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. The European Commission has presented a proposal for a regulation setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas. Based on the aforementioned OECD guide, the Commission’s draft regulation would establish a voluntary undertaking to observe due diligence rules within supply chains when importing the minerals referred to above so as to ensure that proceeds from their sale are not used to fund armed struggles in conflict zones or other high-risk areas. The European Parliament, on the other hand, expressed itself in favour of a binding instrument for downstream operators, that is to say along the whole value chain. A basic compromise has now been reached between the European Parliament, the Council and the European Commission on a binding instrument focused on the upstream area, i.e. the supply chain. Further details will now have to be negotiated in the context of the trialogue conducted by the EU institutions. In the quest for targeted improvements in the protection of human rights, the Federal Government is sponsoring a research project that is being conducted by the German Institute for Human Rights. Through the project, selected national human rights institutions in countries with which Germany engages in development cooperation are strengthened in their work in the raw materials sector. In the framework of technical cooperation, human rights analyses are being conducted in the Andean countries. Human Rights Risks in Mining – A Baseline Study, presented by the Federal Institute for Geosciences and Natural Resources at the beginning of 2016, contains an in-depth analysis of the impact of mining on human rights. In addition, the Federal Government is promoting conflict-sensitive management of natural resources, particularly in Africa (Mali and the Democratic Republic of the Congo), in a project in which representatives of government, the private sector, civil society and affected populations are brought together in a dialogue with a view to reconciling their diverse interests in a participative and conflict-sensitive framework.” Measures The German NAP does not make a direct reference to construction. Measures [page 18] The current situation [page 19] “the Federal Government has undertaken to implement the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests and has initiated a number of development cooperation projects to assist governments of developing countries in enforcing the land-tenure rights of marginalised groups, in strengthening stakeholders in civil society and in raising awareness among companies, for example those investing in agriculture, and gaining their support for the application of these guidelines with a view to preventing illegal actions such as land-grabbing.” The current situation “there is a federal regulatory instrument known as the Public Corporate Governance Code of the Federation (PCGK Bund), comprising recommendations and suggestions for good corporate governance and addressed to enterprises in which the Federal Government holds a majority stake. The federal administration of shareholdings is organised on a decentralised basis and is the task of whichever federal ministry is responsible for the company’s area of activity. Section 1.4 of the Public Corporate Governance Code states that the federal ministry responsible for the shareholding should ensure that enterprises acknowledge and comply with the Code and embody it in their corporate rules. The Code is part of the Principles of Good Corporate Governance and Management of Federal Holdings, which were adopted by the Federal Government and published by the Federal Ministry of Finance in its role as the lead body in this field. They form the foundations for responsible management of federal stakes in enterprises and provide for standardised performance of this task by the various federal ministries. Several federal states and municipalities have separate management codes for their own holdings.” Measures “The Federal Government, in cooperation with the Council for Sustainable Development, will expand the training courses of the federal holding management bodies to include sustainability matters and so focus its attention on responsibility for human rights in the enterprises in which it holds a direct majority share. The scope of the training curriculum of the holding management bodies shall be inserted as part of the next revision into the Public Corporate Governance Code of the Federation. At the annual meeting of the bodies managing federal and state holdings, the states shall be urged to follow this federal practice.” Measures [page 38] “The IRZ Foundation established by the Federal Government will include in its consultancy programmes advice for partner states on the areas of procedural and substantive law with a significant bearing on business and human rights, focusing on the need to ensure access to justice. At the Fifth International Conference of the Parliamentary Committees on Legal Affairs of IRZ partner states, held in October 2016, issues of CSR and anti-corruption efforts were among the subjects discussed under the Conference theme of “Politics, business and human rights”.” The German NAP does not make an explicit mention to Data Protection and Privacy. Development Policy [pages 19] The current situation With their environmental and social standards, international financial institutions such as the World Bank and regional development banks set benchmarks for environmental and social regulation. The Federal Government will continue to track the reform processes in international financial institutions with a view to ensuring that their operations are even more sharply focused on human rights. Measures [page 20] The requirements set out in the UN Guiding Principles and in the National Action Plan, in particular in its chapter III, on due diligence with regard to human rights, also apply to the organisations that implement development policy, including bodies that provide financing for development. They also serve as a basis for further assessment and monitoring and, where appropriate, further development of the grievance procedures that state implementing organisations, including financing bodies, have already established. In addition, the Federal Government will continue to track the reform processes in international financial institutions with a view to ensuring that their operations are more sharply focused on human rights. Bi and Multilateral economic relations [page 17] …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 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 …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. The current situation [page 28] Host countries are assisted by means of capacity-building measures in introducing and upholding environmental and social standards. The Federal Government has long been supporting multi-stakeholder initiatives that have been launched in various sectors for the purpose of devising strategies and monitoring procedures. Measures 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. Through its development cooperation programme, Germany supports the application of sustainability standards in host countries, for example through the regional project entitled “Social and labour standards in the textile and garment sector in Asia”, which covers three countries – Bangladesh, Cambodia and Pakistan. Protection within states’ own territory – challenges within Germany The current situation [page 15] The precept of equal rights for men and women is constitutionally enshrined as a fundamental right in Article 3(2) of the Basic Law. Participation by men and women on an equal footing at all levels is a top priority of the Federal Government. Since 1 May 2015, for example, the Act on the Equal Participation of Women and Men in Leadership Positions in the Private and the Public Sector has been in force. The aim of the Act is to increase significantly the percentage of women in executive positions in the medium term with a view to ultimately achieving parity with men. The principle of equal pay for equal work has also been firmly enshrined in the European treaties since the adoption of the Treaty of Rome. The German NAP contains a specific sub-section on export credit: “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.” The current situation The processing of export credit guarantees, DIA guarantees and untied loan guarantees is undertaken on behalf of the Federal Government by the mandated companies Euler Hermes and PwC. Respect for human rights is already an element in the assessment of applications. Where there is reason to do so, environmental and social aspects as well as human rights considerations are closely examined. How closely depends on the potential impact of the project. The minimum requirement for the assumption of a guarantee is compliance with the national standards of the target country. Projects with a considerable impact on human rights are subjected to a more thorough examination. In the case of projects falling within the scope of the OECD Common Approaches and for investment guarantees with far-reaching environmental, social and human rights implications, compliance with international standards such as those of the World Bank Group, particularly its sectoral Environmental, Health and Safety Guidelines, is required in addition. In projects with such implications, compliance with these standards must be checked and confirmed by an independent assessor. The decision to give a guarantee is taken jointly in the competent interdepartmental committees by the Federal Ministry of Economic Affairs and Energy, the Federal Ministry of Finance, the Federal Foreign Office and the Federal Ministry for Economic Cooperation and Development. Depending on the environmental, social and human rights relevance of a given project, enterprises may have to routinely report on the progress of the project as well as on the human-rights situation. If it receives complaints, the Federal Government may require remedial action.” Measures 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.” The current situation “An important contribution to these efforts is being made by the deliberations, which Germany is backing, on what are known as ‘conflict minerals’, an intense discussion being conducted within both the OECD and EU frameworks. 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. The European Commission has presented a proposal for a regulation setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas. Based on the aforementioned OECD guide, the Commission’s draft regulation would establish a voluntary undertaking to observe due diligence rules within supply chains when importing the minerals referred to above so as to ensure that proceeds from their sale are not used to fund armed struggles in conflict zones or other high-risk areas. The European Parliament, on the other hand, expressed itself in favour of a binding instrument for downstream operators, that is to say along the whole value chain. A basic compromise has now been reached between the European Parliament, the Council and the European Commission on a binding instrument focused on the upstream area, i.e. the supply chain. Further details will now have to be negotiated in the context of the trialogue conducted by the EU institutions.” Measures “The Federal Government is pursuing the aim of preventing the use of proceeds from the sale of tin, tantalum and tungsten, of their respective ores and of gold to fund armed struggles in conflict zones and other high-risk areas. It is committed to the establishment of binding due diligence rules, which should be proportionate and should not entail unnecessary red tape, particularly for small and medium-sized enterprises.” Civil remedies in Germany [page 36] “Germany’s judiciary works independently and efficiently. Anyone who considers that his or her rights have been infringed in Germany by the actions of an enterprise can make claims before the civil courts. Anyone, moreover, who considers that his or her rights have been infringed abroad by the actions of a German enterprise, can bring an action in Germany, normally at the court with local jurisdiction for the registered office of the enterprise. Germany’s international civil procedure law also contains additional provisions whereby the German courts may be seized of matters relating to certain offences committed abroad, provided that a sufficient domestic connection can be demonstrated (e.g. specific jurisdiction for tort under section 32 of the German Code of Civil Procedure).” “The consideration of potentially adverse impacts on human rights is a continuous task that accompanies work processes and, in particular, is performed with a sectoral focus. It should take place when new divisions, products or projects are launched as well as in the context of existing business activities. When potential risks are examined, a distinction must be made between the following types of impact: … The current situation “With their environmental and social standards, international financial institutions such as the World Bank and regional development banks set benchmarks for environmental and social regulation. The Federal Government will continue to track the reform processes in international financial institutions with a view to ensuring that their operations are even more sharply focused on human rights.” Measures “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.” 1.1 Basic rules of economic policy: Development policy, The current situation [page 19]: “the Federal Government has undertaken to implement the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests and has initiated a number of development cooperation projects to assist governments of developing countries in enforcing the land-tenure rights of marginalised groups, in strengthening stakeholders in civil society and in raising awareness among companies, for example those investing in agriculture, and gaining their support for the application of these guidelines with a view to preventing illegal actions such as land-grabbing.” The current situation [page 16] “People in vulnerable situations pose a particular challenge in Germany as elsewhere. These include migrants and, in general, employees in precarious work. These groups of people are exposed to a high risk of labour exploitation. The introduction of a general statutory minimum wage in Germany has established an effective instrument against excessively low wages. Since 1 January 2015, a minimum hourly wage of €8.50 has been payable, and its rate is to be adjusted every two years by an independent commission. The minimum wage has increased the earnings of four million people, whose income has risen by an average of 18%. People who are affected by or at risk of labour exploitation need information about their rights and assistance in enforcing them. In recent years, advice and contact centres have been created in various parts of Germany, some with national and some with regional funding. With support from the Federal Government and the European Social Fund (ESF), for example, the German Trade Union Confederation (DGB), through a project called “Faire Mobilität” (fair mobility), provides such advice to employees, especially those from the EU Member States in Central and Eastern Europe. There is no permanent nationwide advisory structure yet for employees from all geographical origins and occupational sectors. In the fight against human trafficking and exploitative employment, Germany is also bound by EU Directive 2011/36/EU and has ratified both the Council of Europe Convention of 2005 on Action against Trafficking in Human Beings and the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children. To coordinate the diverse activities designed to combat human trafficking, the Federal Government established the Federal Working Group on Trafficking in Human Beings in 1997, whose members include representatives of non-governmental organisations. … The Federal Government is currently preparing for the incorporation of numerous international legal instruments into German law. These include the Protocol to the ILO Forced Labour Convention (No 29).” The current situation [page 21] “Germany has fully transformed into domestic law its obligations to protect human rights under international agreements. This applies, for example, to the prohibitions of child labour and forced labour that are imposed by the ILO core conventions. If enterprises break the law in Germany in either of these respects, they can be disqualified from receiving public contracts.” The German NAP makes reference to freedom of association, noting that the ILO Core Labour Standards include freedom of association [page 5]. However elements of freedom of association can also be seen in the numerous references to trade unions and both business and civil society associations and organisations throughout the NAP. The current situation [page 15-17] “The instruments that are now binding in Germany include … the UN Convention on the Rights of the Child” “Germany is also bound by EU Directive 2011/36/EU and has ratified both the Council of Europe Convention of 2005 on Action against Trafficking in Human Beings and the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children. … The precept of equal rights for men and women is constitutionally enshrined as a fundamental right in Article 3(2) of the Basic Law. Participation by men and women on an equal footing at all levels is a top priority of the Federal Government. Since 1 May 2015, for example, the Act on the Equal Participation of Women and Men in Leadership Positions in the Private and the Public Sector has been in force. The aim of the Act is to increase significantly the percentage of women in executive positions in the medium term with a view to ultimately achieving parity with men. The principle of equal pay for equal work has also been firmly enshrined in the European treaties since the adoption of the Treaty of Rome. In Germany there remains a substantial pay gap between women and men. Career choices based on role stereotypes, women in marginal part-time employment and disparities in career prospects because of structural conditions, the effects of material incentives and discrimination – mainly indirect – against women regarding remuneration are still preventing the realisation of equal pay for equal work. Even where men and women have the same formal qualifications and meet other criteria to the same extent, there is still a measurable pay gap of 7%. These pay differentials are a problem throughout the economy, a problem for which all relevant stakeholders must face up to their responsibility. The Federal Government has initiated a dialogue between employers’ and employees’ organisations on this issue and has introduced numerous non-legislative measures such as the Equal Pay Day and a new computer-assisted assessment procedure for the identification of corporate pay discrimination.” The current situation [page 20] “In the G7 framework, the Federal Government is pressing for improvement of the economic position of women. Partners in developing countries are to be assisted in eliminating discrimination and violence against women as well as other cultural, social, economic and legal obstacles to the economic participation of women. One objective is to increase, by 2030 the number of women and girls learning occupational skills by one third. The Federal Government actively supports the Women’s Empowerment Principles and is committed to having as many enterprises as possible subscribe to them.” The current situation [page 26] “Among the matters covered by the report on federal holdings are the implementation of the Public Corporate Governance Code of the Federation, gender equality and the general sustainability of the listed enterprises.” “Small and medium-sized enterprises in particular should make use of the advisory and support services to be offered by the Federal Government and business associations under the National Action Plan. The expertise of organisations within civil society and trade unions should also be brought to bear.” Measures [page 25] The current situation “An important contribution to these efforts is being made by the deliberations, which Germany is backing, on what are known as ‘conflict minerals’, an intense discussion being conducted within both the OECD and EU frameworks. 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.” The Federal Government would like to assist small and medium-sized enterprises in particular in fulfilling the extensive corporate due-diligence requirements and expectations relating to human rights (see chapter III above). The current situation Numerous measures and services are already available for this purpose. A selection of existing and planned measures is described in some detail below: Measures I. Helpdesk and initial consultation II. Information services and best practices III. Opportunities for training and dialogue IV. Creating a global level playing field 1.1 Basic rules of economic policy Development policy [page 14] German development policy actively supports dialogue between governments and enterprises (and their associations), trade unions and civil society on subjects such as vocational training, health and safety at work and minimum wage rates in partner countries. 1.3 State support Export credits, investment guarantees and other instruments for the promotion of external trade The current situation [page 17] In the case of projects falling within the scope of the OECD Common Approaches and for investment guarantees with far-reaching environmental, social and human rights implications, compliance with international standards such as those of the World Bank Group, particularly its sectoral Environmental, Health and Safety Guidelines, is required in addition. The current situation “The protection of whistleblowers is a highly valuable accompanying measure in the detection of exploitative employment. General provisions in the field of labour law (sections 612a and 626 of the German Civil Code and section 1 of the Protection against Unfair Dismissal Act) and in constitutional law (Articles 2(1), 5 and 20(3) of the Basic Law) provide the legal basis for such protection. There are also numerous provisions of special legislation which supplement the protection of whistleblowers guaranteed by the aforementioned provisions in particular areas of activity, examples being section 13 of the Money Laundering Act and section 17(2) of the Occupational Health and Safety Act.” Measures Measures “The Federal Government will also take specific action to step up its wide-ranging commitment to the protection of human rights defenders when applying the UN Guiding Principles. In the field of business and human rights, as elsewhere, development policy is about standing up for the rights of vulnerable groups, such as indigenous peoples or children and youth or persons with disabilities.” The German NAP includes a chapter on due diligence and reference is made to due diligence throughout the NAP. “With regard to corporate respect for human rights, the Federal Government expects all enterprises to introduce the process of corporate due diligence described below in a manner commensurate with their size, the sector in which they operate, and their position in supply and value chains. This applies especially when they operate in countries where the rule of law is not enforced or is only partly enforced. Such expectations are without prejudice to the fundamental duty of a state to guarantee the protection of human rights within its territory. “The responsibility to exercise due diligence applies in principle to all enterprises, regardless of their size, the sector in which they operate, or their operational context within a supply or value chain with an international dimension. The nature and exercise of due diligence for any given enterprise should be commensurate with these factors; it should be possible for the enterprise to incorporate its due diligence obligations into its existing processes in an appropriate manner without the creation of undue bureaucratic burdens. Enterprises should prevent and mitigate any adverse impact of their business activity on human rights. When due diligence in the realm of human rights is defined and exercised, consideration should be given to the beneficial effects of corporate activity and to the diverse perspectives of the company’s own employees, the relevant stakeholders and others who may be affected. Within large enterprises, these include the staff of the human resources, purchasing, compliance and sales divisions. From outside the enterprise, suppliers, customers and trade unions but also bodies from civil society, business organisations and governments should be involved. Particular attention should be given to the rights of their respective employees and to those of local populations who may be affected. Depending 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 operating context, the measures to be taken are likely to vary in scope. It may be appropriate to conduct certain elements of the process in combination with other enterprises within an association or industry, subject to compliance with antitrust legislation. Small and medium-sized enterprises in particular should make use of the advisory and support services to be offered by the Federal Government and business associations under the National Action Plan. The expertise of organisations within civil society and trade unions should also be brought to bear. The elements of human rights due diligence described in binding form in the following paragraphs are not to be understood as a rigid sequence. On the contrary, findings relating to one element should be used continually for the revision and development of the other elements so that learning processes can take place. There must be scope for the incorporation of present and future legal requirements for the exercise of human rights due diligence.” “With the aid of a policy statement, enterprises should state publicly that they are meeting their responsibility to respect human rights. This statement should be adopted by the senior management of the enterprise and be communicated both internally and externally. It should be used, on the one hand, to address human rights issues of particular relevance to the enterprise and/or the sector in which it operates, citing the international reference instruments in the field of human rights and, on the other hand, to describe the procedure used by the enterprise to exercise human rights due diligence. In particular, this includes the clear assignment of responsibilities within the enterprise, underpinned by the necessary training of staff employed in the relevant divisions. The statement should be continually revised and developed.” “Central to the exercise of due diligence is the establishment of a procedure that serves to identify, to prevent or to mitigate potentially adverse effects of corporate activity on human rights. It is not – or not only – a matter of considering risks to the company’s own business activity but is primarily about risks to the human rights of those who may be affected by corporate activity, such as employees of the enterprise itself or of other companies in the supply chain, local populations and customers. The consideration of potentially adverse impacts on human rights is a continuous task that accompanies work processes and, in particular, is performed with a sectoral focus. It should take place when new divisions, products or projects are launched as well as in the context of existing business activities. When potential risks are examined, a distinction must be made between the following types of impact: This systematic approach to identifying key impact factors and risks is nothing new and is already part of established management systems and processes, as may be seen, for instance, in Annex I to Regulation (EC) No 1221/2009 on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), which deals with the internal environmental review to be conducted by participating organisations. The size of an enterprise, the sector to which it belongs and the nature of its business activity directly influence the risk that its operations will have an impact on human rights. The required depth and breadth of the risk assessment depends on these factors. An initial risk analysis on the part of an enterprise should be conducted for each division or each product category and possibly for each location too. The starting point may be a simple overview of the company’s main activities and of the value chains and business relations these activities entail. On the basis of this overview and with due regard to the international human rights standards enshrined in instruments such as the Universal Declaration of Human Rights, the International Covenants on Human Rights, the ILO Core Labour Standards and the OECD Guidelines for Multinational Enterprises, potential risk areas can be identified. Contextual circumstances such as the political framework and the presence of vulnerable groups of people (indigenous populations, for instance) should be factored into the analysis. The choice of method and the assessment of risks can be made on the basis of the analysts’ own research, interviews in-house, in subsidiary enterprises and/or with business partners and input from external specialists. With the aid of this analysis, enterprises should determine whether an in-depth review is needed. This is most likely to be the case if the risk of an adverse impact on the human rights of particular groups is particularly high and fuller information is required before any action can be taken. For this reason, the recognised problem areas should be ranked in order of priority. The risk of a particularly adverse impact arises, for example, in cases where a large number of people may be affected or the potential impact would have serious, unforeseeable, or irreversible consequences. The in-depth review should at least include local dialogue with actually or potentially affected parties and recourse to both internal and external expertise in the field of human rights.” “On the basis of the results of the analysis, measures should be identified and incorporated into business activity. Such measures may, for example, comprise specialised training of particular employees in-house or with suppliers, adaptation of particular management processes, changes in the supply chain and participation in sectoral initiatives. So that potential or actual impacts can be properly addressed, enterprises should define clearly where competence lies for particular issues and establish the corresponding review mechanisms. Depending on the type of impact, an enterprise itself can initiate remedial measures. If the enterprise does not possess sufficient leverage to implement successful measures, it should cooperate with other players to increase its influence. Withdrawal from an area of business activity or from a location should only ever be a last resort in such situations. The enterprise should focus first and foremost on developing remedial measures. To this end, objectives should be formulated and be communicated internally and externally as the relevant measure dictates. With the aid of effectiveness tracking, the enterprise should regularly review the efficacy of the measures it has taken and, to this end, engage in dialogue with affected stakeholders.” “Enterprises should keep information at their disposal and communicate it, where appropriate, to external recipients in order to demonstrate that they are aware of the actual and potential impact of their corporate activity on human rights and are taking appropriate steps to address the situation. The form in which this information is communicated should be tailored to its recipients. Enterprises whose business activity poses a particularly high risk of adverse impacts should issue regular public reports on that subject. Such reporting may be done in the framework of the company’s existing reporting format or take the form of separate reports focused on human rights. At the same time, such reporting obligations should not impose disproportionate administrative burdens on the reporting companies or on the SMEs in their supply chains.” “For the early identification of (actual or potential) adverse impacts, enterprises should either establish their own grievance procedures or play an active part in external procedures. Such procedures may, for example, be established by sectoral associations. The mechanism should be structured to match the target group. Accordingly, the target group should be consulted when the procedure is being devised. When new mechanisms are established as well as when existing mechanisms are used, care should be taken to ensure that they provide a fair, balanced and predictable procedure which is accessible to all those who might be affected (for instance by eliminating linguistic or technical barriers). As an extra measure, consideration should be given to the creation of offices with which complaints can be lodged anonymously. The procedure should provide for maximum transparency for all stakeholders and should comply with international human rights standards. Existing complaints offices within an enterprise or its environment should be screened for compliance with the criteria defined above. The grievance mechanism of each enterprise and its whole process of corporate due diligence should be subjected to regular practice-based reviews to assess their effectiveness.” Measures In relation to the three pillars of the UN Guiding Principles, the following are the primary areas for action: … Measures [page 20] Measures [page 22] “The Federal Government will examine whether and to what extent binding minimum requirements for the corporate exercise of human rights due diligence can be enshrined in procurement law in a future revision. It will draw up a phased plan indicating how this aim can be achieved.” Measures [page 23] “The Federal Government will examine to what extent the sustainability assessment for which the Subsidy Policy Guidelines provide is consistent with the requirements set out in the UN Guiding Principles and how enterprises receiving significant subsidies can be subjected to a future obligation to apply the elements of due diligence described in chapter III above.” Measures [page 25] “Throughout the world, the expectations of consumers, civil society and trade unions in terms of product quality and transparency of production are rising. Their attention is increasingly focused on factors such as environmental protection and social and employment standards along manufacturers’ supply chains. In many cases these supply chains are not transparent, and it is difficult to assess the situation with regard to individual enterprises within the chain. This increases the risk of adverse impacts on human rights and on social, labour and environmental standards in host countries. These countries often lack an adequate legislative basis or state supervision and enforcement of compliance with existing laws. The Federal Government nevertheless expects enterprises to discharge their responsibility to exercise due diligence as regards human rights and therefore to create and apply appropriate management instruments that minimise the risk of involvement in the generation of any adverse impact (see chapter III above).” The current situation In the framework of the German presidency of the G7 in 2015, the Federal Government was a driving force behind the successful proposal to include a chapter on responsible supply chains in the Leaders’ Declaration. In that chapter, the private sector is being urged to exercise due diligence with regard to human rights. Together with the Heads of State or Government of the other G7 nations, the Federal Chancellor declared the Government’s support for the promotion of sustainability standards in global supply chains, including decent working conditions. To this end, the G7 are to: … The Partnership for Sustainable Textiles, which was initiated by the Federal Ministry for Economic Cooperation and Development, has established an obligation to comply with sustainability standards and to guarantee corporate due diligence in the textile and clothing sector. All members of the Partnership are required to pursue its social and environmental objectives. They submit to a review process, which is conducted by an independent third party and is designed to bring about continuous improvement. Individual schedules of measures (road maps) are compiled annually by all members; the first of these is to be produced by the end of January 2017. A robust sanctions regime and regular reporting on the implementation of the road maps will ensure credibility and transparency. The Textile Partnership creates a reference framework and an independent review system of international scope.” Measure “Transparency requirements for corporate activity are an elementary component of due diligence with regard to human rights. These requirements are not limited to formal sustainability reporting but also entail willingness to engage in open dialogue with consumers, customers and actual or potential stakeholders and to share information on request. The current situation “An important contribution to these efforts is being made by the deliberations, which Germany is backing, on what are known as ‘conflict minerals’, an intense discussion being conducted within both the OECD and EU frameworks. 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. The European Commission has presented a proposal for a regulation setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas. Based on the aforementioned OECD guide, the Commission’s draft regulation would establish a voluntary undertaking to observe due diligence rules within supply chains when importing the minerals referred to above so as to ensure that proceeds from their sale are not used to fund armed struggles in conflict zones or other high-risk areas. The European Parliament, on the other hand, expressed itself in favour of a binding instrument for downstream operators, that is to say along the whole value chain. A basic compromise has now been reached between the European Parliament, the Council and the European Commission on a binding instrument focused on the upstream area, i.e. the supply chain. Further details will now have to be negotiated in the context of the trialogue conducted by the EU institutions.” Measures “The Federal Government is pursuing the aim of preventing the use of proceeds from the sale of tin, tantalum and tungsten, of their respective ores and of gold to fund armed struggles in conflict zones and other high-risk areas. It is committed to the establishment of binding due diligence rules, which should be proportionate and should not entail unnecessary red tape, particularly for small and medium-sized enterprises.” Measures [page 35-36] “III. Opportunities for training and dialogue “Among other things, the NCP is responsible for complaints of insufficient respect for human rights and of insufficient consideration for human rights in the exercise of companies’ due diligence as defined in the OECD Guidelines.” “The Federal Government will continue to press in global as well as other forums for a common understanding of due diligence.” “The National Action Plan marks the starting point of a process that will be continuously updated and developed. The process will be shaped by the implementation of the measures for which this Plan provides as well as by a comprehensive procedure for monitoring the implementation of these measures by all players. To this end, the Federal Government is planning, subject to budgetary approval, the immediate execution of the following steps: … “The legal system of the Federal Republic of Germany contains numerous instruments that are focused primarily on the protection of human rights. They are binding on all enterprises. Where the business operations of an enterprise have an international dimension, procedures for identifying any actual or potential adverse impact on the human rights of people affected by its business activity should be developed and implemented.” “Central to the exercise of due diligence is the establishment of a procedure that serves to identify, to prevent or to mitigate potentially adverse effects of corporate activity on human rights. It is not – or not only – a matter of considering risks to the company’s own business activity but is primarily about risks to the human rights of those who may be affected by corporate activity, such as employees of the enterprise itself or of other companies in the supply chain, local populations and customers. The consideration of potentially adverse impacts on human rights is a continuous task that accompanies work processes and, in particular, is performed with a sectoral focus. It should take place when new divisions, products or projects are launched as well as in the context of existing business activities. When potential risks are examined, a distinction must be made between the following types of impact: This systematic approach to identifying key impact factors and risks is nothing new and is already part of established management systems and processes, as may be seen, for instance, in Annex I to Regulation (EC) No 1221/2009 on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), which deals with the internal environmental review to be conducted by participating organisations. The size of an enterprise, the sector to which it belongs and the nature of its business activity directly influence the risk that its operations will have an impact on human rights. The required depth and breadth of the risk assessment depends on these factors. An initial risk analysis on the part of an enterprise should be conducted for each division or each product category and possibly for each location too. The starting point may be a simple overview of the company’s main activities and of the value chains and business relations these activities entail. On the basis of this overview and with due regard to the international human rights standards enshrined in instruments such as the Universal Declaration of Human Rights, the International Covenants on Human Rights, the ILO Core Labour Standards and the OECD Guidelines for Multinational Enterprises, potential risk areas can be identified. Contextual circumstances such as the political framework and the presence of vulnerable groups of people (indigenous populations, for instance) should be factored into the analysis. The choice of method and the assessment of risks can be made on the basis of the analysts’ own research, interviews in-house, in subsidiary enterprises and/or with business partners and input from external specialists. With the aid of this analysis, enterprises should determine whether an in-depth review is needed. This is most likely to be the case if the risk of an adverse impact on the human rights of particular groups is particularly high and fuller information is required before any action can be taken. For this reason, the recognised problem areas should be ranked in order of priority. The risk of a particularly adverse impact arises, for example, in cases where a large number of people may be affected or the potential impact would have serious, unforeseeable, or irreversible consequences. The in-depth review should at least include local dialogue with actually or potentially affected parties and recourse to both internal and external expertise in the field of human rights.” “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 Federal Government supports further development of the range of instruments for human rights impact assessment of trade and investment agreements.” Measures The current situation “The processing of export credit guarantees, DIA guarantees and untied loan guarantees is undertaken on behalf of the Federal Government by the mandated companies Euler Hermes and PwC. Respect for human rights is already an element in the assessment of applications. Where there is reason to do so, environmental and social aspects as well as human rights considerations are closely examined. How closely depends on the potential impact of the project. The minimum requirement for the assumption of a guarantee is compliance with the national standards of the target country. Projects with a considerable impact on human rights are subjected to a more thorough examination.” Measures “The Federal Government will ensure that human rights, which have hitherto been an element of the environmental and social impact assessment, are given more specific consideration and a higher profile in assessment procedures. It will measure the existing assessment procedures against the requirements set out in chapter III above and make adjustments where necessary. One particular priority will be measures for better identification of risks to human rights as part of the assessment process.” The German NAP makes no reference to ICT. Procedure for the identification of actual and potential adverse impacts on human rights [page 9] The size of an enterprise, the sector to which it belongs and the nature of its business activity directly influences the risk that its operations will have an impact on human rights. The required depth and breadth of the risk assessment depends on these factors… Contextual circumstances such as the political framework and the presence of vulnerable groups of people (indigenous populations, for instance) should be factored into the analysis. Protection within states’ own territory – challenges within Germany The current situation [page 16] The Federal Government is currently preparing for the incorporation of numerous international legal instruments into German law. The Federal Ministry of Labour and Social Affairs is planning the examination prior to ratification of …the Indigenous and Tribal Peoples Convention (No 169) as well as of the Optional Protocol of 2008 to the International Covenant on Economic, Social and Cultural Rights and the revised Social Charter. Development Policy Measures [page 20] The Federal Government will also take specific action to step up its wide-ranging commitment to the protection of human rights defenders when applying the UN Guiding Principles. In the field of business and human rights, as elsewhere, development policy is about standing up for the rights of vulnerable groups, such as indigenous peoples or children and youth or persons with disabilities. “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 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.” Read more about Investment treaties & investor-state dispute settlements In relation to the three pillars of the UN Guiding Principles, the following are the primary areas for action: … Measures [page 16] “Germany’s judiciary works independently and efficiently. Anyone who considers that his or her rights have been infringed in Germany by the actions of an enterprise can make claims before the civil courts. Anyone, moreover, who considers that his or her rights have been infringed abroad by the actions of a German enterprise, can bring an action in Germany, normally at the court with local jurisdiction for the registered office of the enterprise. Germany’s international civil procedure law also contains additional provisions whereby the German courts may be seized of matters relating to certain offences committed abroad, provided that a sufficient domestic connection can be demonstrated (e.g. specific jurisdiction for tort under section 32 of the German Code of Civil Procedure). German civil procedure law contains mechanisms that facilitate access to German civil courts. Litigants of limited means, for example, can obtain legal aid. Following a means test and an assessment of the prospects for a successful action, beneficiaries have their court costs and their own lawyer’s fees paid in full or in part, depending on their degree of need. Litigants who are not German nationals can also receive legal aid for German court proceedings. All legal entities based in the European Economic Area – victims’ associations, for example – can also receive legal aid if they fulfil the conditions set out in the German Code of Civil Procedure. The German Code of Civil Procedure also provides for collective remedies in the form of joinder of parties and consolidation of claims.” “Enterprises, moreover, may be held liable under the Regulatory Offences Act for conduct in breach of criminal law on the part of their management, including company-related violations of human rights, for which they may be fined up to €10 million. Higher fines may be imposed if, in addition, the economic benefit derived from the offence is being disgorged.” With regard to potential human rights violations within supply chains, great importance attaches to reinforcement of the rule of law and democracy in the relevant third countries, because that will create conditions for the introduction of effective redress mechanisms in those countries. One contribution to the achievement of this objective is made by the German Foundation for International Legal Cooperation (IRZ), which was established by the Federal Government in 1992. The IRZ is now operating in almost 30 partner countries, providing advice when they reform their legal system and their judiciary. In this context, it also advises partner states seeking to reform their entire system of procedural law, providing advice not only on civil, including commercial, procedural law but also on the law governing criminal procedure, on administrative procedural law, including the creation of an administrative jurisdiction, and on the law relating to the enforcement of judgments. The IRZ also deals at various levels with the question of the best way to structure a system of legal aid so that it will be effective in guaranteeing access to justice. Alternative means of dispute settlement such as arbitration tribunals and mediation also feature in the work of the IRZ. As its name indicates, the IRZ not only provides advice on procedural law but also provides consultancy in the various areas of substantive law, advising on matters of civil and commercial law such as civil codes, intellectual property rights and insolvency provisions as well as on matters of criminal law and more besides. This consultancy is accompanied by numerous in-service training courses for those who apply the law, designed to help ensure that the reformed legislation is actually implemented in everyday practice too. The purpose of this training is to make court judgments more transparent through trackability of judicial activity and through statements of reasons, measures designed to contribute in the long run to greater legal certainty and to more reliability and predictability and hence to greater public confidence in the judiciary.” Measures Development Policy The current situation [page 19] The Federal Government has undertaken to implement the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests and has initiated a number of development cooperation projects to assist governments of developing countries in enforcing the land-tenure rights of marginalised groups, in strengthening stakeholders in civil society and in raising awareness among companies, for example those investing in agriculture, and gaining their support for the application of these guidelines with a view to preventing illegal actions such as land-grabbing. The current situation “People in vulnerable situations pose a particular challenge in Germany as elsewhere. These include migrants and, in general, employees in precarious work. These groups of people are exposed to a high risk of labour exploitation. The introduction of a general statutory minimum wage in Germany has established an effective instrument against excessively low wages. Since 1 January 2015, a minimum hourly wage of €8.50 has been payable, and its rate is to be adjusted every two years by an independent commission. The minimum wage has increased the earnings of four million people, whose income has risen by an average of 18%. People who are affected by or at risk of labour exploitation need information about their rights and assistance in enforcing them. In recent years, advice and contact centres have been created in various parts of Germany, some with national and some with regional funding. With support from the Federal Government and the European Social Fund (ESF), for example, the German Trade Union Confederation (DGB), through a project called “Faire Mobilität” (fair mobility), provides such advice to employees, especially those from the EU Member States in Central and Eastern Europe. There is no permanent nationwide advisory structure yet for employees from all geographical origins and occupational sectors. In the fight against human trafficking and exploitative employment, Germany is also bound by EU Directive 2011/36/EU and has ratified both the Council of Europe Convention of 2005 on Action against Trafficking in Human Beings and the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children. To coordinate the diverse activities designed to combat human trafficking, the Federal Government established the Federal Working Group on Trafficking in Human Beings in 1997, whose members include representatives of non-governmental organisations.” Measures “At the end of 2014 a steering group was appointed. Besides representatives of the six government ministries listed above, it included … two advisory members, the German Institute for Human Rights and econsense. … In May 2015, the German Institute for Human Rights presented a National Baseline Assessment, a review of the current situation based on interviews with experts from the various groups of participants in the process. This assessment was discussed with interested members of the public at a second plenary conference, conducted by the Federal Ministry of Labour and Social Affairs and the Federal Foreign Office in May 2015.” “Germany has ratified most international human rights instruments without reservation and possesses, moreover, an independent national institution dedicated to human rights, the German Institute for Human Rights (DIMR). Among the core tasks of the DIMR are policy consultancy, research, the dissemination of information on human rights issues, education on human rights, and dialogue and cooperation with national and international organisations.” The current situation “Seeking to identify practical approaches to development which will boost corporate responsibility for human rights, the Institute for Development and Peace (INEF) has implemented, on behalf of the Economic Cooperation and Development Ministry, a research programme entitled “Human Rights, Corporate Responsibility and Sustainable Development”. A research project sponsored by the same ministry at the German Institute for Human Rights, moreover, supports national human rights institutions in partner countries in the field of human rights and business.” Read more about National Human Rights Institutions/ Ombudspersons “Enterprises should keep information at their disposal and communicate it, where appropriate, to external recipients in order to demonstrate that they are aware of the actual and potential impact of their corporate activity on human rights and are taking appropriate steps to address the situation. The form in which this information is communicated should be tailored to its recipients. Enterprises whose business activity poses a particularly high risk of adverse impacts should issue regular public reports on that subject. Such reporting may be done in the framework of the company’s existing reporting format or take the form of separate reports focused on human rights. At the same time, such reporting obligations should not impose disproportionate administrative burdens on the reporting companies or on the SMEs in their supply chains.” The Current situation “The annual report on federal holdings lists about 700 enterprises in which the Federal Government has a direct or indirect stake. The Federal Government has direct holdings in 60 companies with business activities (as of 31 December 2014), 41 of these being direct majority holdings. Of the companies in which a direct majority stake is held, 13 have more than 500 employees. Among the matters covered by the report on federal holdings are the implementation of the Public Corporate Governance Code of the Federation, gender equality and the general sustainability of the listed enterprises.” Measures The current situation [page 20] “The Partnership for Sustainable Textiles, which was initiated by the Federal Ministry for Economic Cooperation and Development, has established an obligation to comply with sustainability standards and to guarantee corporate due diligence in the textile and clothing sector. All members of the Partnership are required to pursue its social and environmental objectives. They submit to a review process, which is conducted by an independent third party and is designed to bring about continuous improvement. Individual schedules of measures (road maps) are compiled annually by all members; the first of these is to be produced by the end of January 2017. A robust sanctions regime and regular reporting on the implementation of the road maps will ensure credibility and transparency. The Textile Partnership creates a reference framework and an independent review system of international scope.” “Transparency requirements for corporate activity are an elementary component of due diligence with regard to human rights. These requirements are not limited to formal sustainability reporting but also entail willingness to engage in open dialogue with consumers, customers and actual or potential stakeholders and to share information on request.” The current situation “The number of enterprises that already present regular sustainability reports on a voluntary basis is steadily increasing. For example, the participants in the Global Compact, more than 300 in number, have committed themselves to presenting annual reports. The reports from German enterprises, and particularly from the large enterprises, are mostly based on the voluntary standards of the Global Reporting Initiative (GRI). The Federal Government has also supported the development of a German reporting standard in the German Sustainability Code (DNK). Sponsored by the Federal Ministry of Labour and Social Affairs, the Institute for Ecological Economy Research (IÖW) assesses the quality of sustainability reports from large enterprises and SMEs and draws up a league table for each of these categories. This ranking is intended to stimulate corporate competition in the realm of sustainability reporting and to highlight and propagate benchmarks for high-quality reporting. Through their purchasing decisions, consumers influence the supply of sustainably produced and delivered goods and services. Instruments such as the information platform www.siegelklarheit.de (sustainability standards comparison tool), initiated by the Federal Government, create transparency and help consumers to adopt sustainable purchasing habits.” Measures Measures [page 23] “I. Helpdesk and initial consultation “For the early identification of (actual or potential) adverse impacts, enterprises should either establish their own grievance procedures or play an active part in external procedures. Such procedures may, for example, be established by sectoral associations. The mechanism should be structured to match the target group. Accordingly, the target group should be consulted when the procedure is being devised. When new mechanisms are established as well as when existing mechanisms are used, care should be taken to ensure that they provide a fair, balanced and predictable procedure which is accessible to all those who might be affected (for instance by eliminating linguistic or technical barriers). As an extra measure, consideration should be given to the creation of offices with which complaints can be lodged anonymously. The procedure should provide for maximum transparency for all stakeholders and should comply with international human rights standards. Existing complaints offices within an enterprise or its environment should be screened for compliance with the criteria defined above. The grievance mechanism of each enterprise and its whole process of corporate due diligence should be subjected to regular practice-based reviews to assess their effectiveness.” “In relation to the three pillars of the UN Guiding Principles, the following are the primary areas for action: … Measures [page 20] Measures [page 25] With regard to potential human rights violations within supply chains, great importance attaches to reinforcement of the rule of law and democracy in the relevant third countries, because that will create conditions for the introduction of effective redress mechanisms in those countries. One contribution to the achievement of this objective is made by the German Foundation for International Legal Cooperation (IRZ), which was established by the Federal Government in 1992. … Alternative means of dispute settlement such as arbitration tribunals and mediation also feature in the work of the IRZ.” Measures “The National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises has been operating ever since 2001 as an extrajudicial grievance mechanism. It is based at the Federal Ministry for Economic Affairs and Energy and has a remit to disseminate information about the OECD Guidelines, to raise awareness and to promote compliance with them. The NCP also helps to resolve problems arising in connection with the implementation of the Guidelines. To this end it examines incoming complaints and, if a complaint falls within its responsibility, offers to mediate between the parties. Among other things, the NCP is responsible for complaints of insufficient respect for human rights and of insufficient consideration for human rights in the exercise of companies’ due diligence as defined in the OECD Guidelines. In their revised version of 2011, containing specific recommendations relating to the respect for human rights by companies, the OECD Guidelines are based explicitly on the UN Guiding Principles on Business and Human Rights. This means that the grievance mechanism for which the OECD Guidelines provide serves the implementation of the UN Guiding Principles on Business and Human Rights. The NCP takes its decisions in consultation with the Interministerial Steering Group on the OECD Guidelines and with the “OECD Guidelines” Working Group. The Interministerial Steering Group comprises representatives of the Federal Foreign Office, the Federal Ministry of Labour and Social Affairs, the Federal Ministry of Food and Agriculture, the Federal Ministry of Finance, the Federal Ministry of Justice and Consumer Protection, the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety and the Federal Ministry for Economic Cooperation and Development. The decisions of the NCP are taken in coordination with this Interministerial Steering Group. Besides the aforementioned government ministries, the members of the Working Group also include representatives of the German Global Compact Network, business associations, trade unions and non-governmental organisations. The Working Group provides a forum for discussion about current issues relating to the Guidelines. Its members are also kept informed of the receipt and outcome of complaints. Explanatory notes on the grievance procedure, (including information on complaints received and their processing), are accessible online on the website of the Federal Ministry for Economic Affairs and Energy and were revised jointly with the Working Group in 2014. In the context of the German G7 presidency, the Federal Government in 2015 advocated for the strengthening of mechanisms providing access to remedies in the event of human rights violations. To this end, the G7 encouraged the OECD to promote peer reviews of National Contact Points. The German NCP will undergo a peer review in the second quarter of 2017. Measures The German NAP includes a specific section on the National Contact Point. Measures [page 25] “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 National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises has been operating ever since 2001 as an extrajudicial grievance mechanism. It is based at the Federal Ministry for Economic Affairs and Energy and has a remit to disseminate information about the OECD Guidelines, to raise awareness and to promote compliance with them. The NCP also helps to resolve problems arising in connection with the implementation of the Guidelines. To this end it examines incoming complaints and, if a complaint falls within its responsibility, offers to mediate between the parties. Among other things, the NCP is responsible for complaints of insufficient respect for human rights and of insufficient consideration for human rights in the exercise of companies’ due diligence as defined in the OECD Guidelines. In their revised version of 2011, containing specific recommendations relating to the respect for human rights by companies, the OECD Guidelines are based explicitly on the UN Guiding Principles on Business and Human Rights. This means that the grievance mechanism for which the OECD Guidelines provide serves the implementation of the UN Guiding Principles on Business and Human Rights. The NCP takes its decisions in consultation with the Interministerial Steering Group on the OECD Guidelines and with the “OECD Guidelines” Working Group. The Interministerial Steering Group comprises representatives of the Federal Foreign Office, the Federal Ministry of Labour and Social Affairs, the Federal Ministry of Food and Agriculture, the Federal Ministry of Finance, the Federal Ministry of Justice and Consumer Protection, the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety and the Federal Ministry for Economic Cooperation and Development. The decisions of the NCP are taken in coordination with this Interministerial Steering Group. Besides the aforementioned government ministries, the members of the Working Group also include representatives of the German Global Compact Network, business associations, trade unions and non-governmental organisations. The Working Group provides a forum for discussion about current issues relating to the Guidelines. Its members are also kept informed of the receipt and outcome of complaints. Explanatory notes on the grievance procedure, (including information on complaints received and their processing), are accessible online on the website of the Federal Ministry for Economic Affairs and Energy and were revised jointly with the Working Group in 2014. In the context of the German G7 presidency, the Federal Government in 2015 advocated for the strengthening of mechanisms providing access to remedies in the event of human rights violations. To this end, the G7 encouraged the OECD to promote peer reviews of National Contact Points. The German NCP will undergo a peer review in the second quarter of 2017. Measures Development Policy Measures [page 20] The Federal Government will also take specific action to step up its wide-ranging commitment to the protection of human rights defenders when applying the UN Guiding Principles. In the field of business and human rights, as elsewhere, development policy is about standing up for the rights of vulnerable groups, such as …persons with disabilities. The German NAP contains a specific chapter on policy coherence. “Implementing the UN Guiding Principles on Business and Human Rights will mean pooling the efforts of all stakeholders, creating incentives to improve the human rights situation throughout supply chains and in target countries for investments and preventing serious violations of human rights in the context of business operations. These efforts will complement each other, but they are no substitute for the primary obligation of states in whose territory production facilities are located to provide protection against human rights infringements and to eliminate any adverse impacts that may have arisen from such activities (the state duty to protect, respect and remedy). None of the elements of this Action Plan may be interpreted as implying that jurisdiction lies with the judicature of another state or is to be shared by the domestic and a foreign judicature. Efforts to empower states to discharge of their duties must be continued through support for structures designed to guarantee the general rule of law. To ensure that Federal Government policy in the realm of business and human rights bears fruit, the competent institutions will systematically focus their respective policies on that goal. To this end, the measures taken by the Federal Government will be subject to prior interdepartmental coordination. Care must also be taken to ensure that federal ministries and authorities, but also the state and local authorities, are empowered to act in ways that are consistent with Germany’s human rights obligations and with this Action Plan. The Federal Government will continue to press in global as well as other forums for a common understanding of due diligence. In the 2030 Agenda for Sustainable Development, all states pledged themselves to promote, among other things, sustained, inclusive and sustainable growth and decent work. The Federal Government regards itself as a trailblazer in the implementation of the agenda and is pressing nationally and internationally for a robust monitoring system.” Measures “The National Action Plan marks the starting point of a process that will be continuously updated and developed. The process will be shaped by the implementation of the measures for which this Plan provides as well as by a comprehensive procedure for monitoring the implementation of these measures by all players. To this end, the Federal Government is planning, subject to budgetary approval, the immediate execution of the following steps: … “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.” The German NAP does not make an explicit reference to privatisation. The German NAP includes a specific section on public procurement. “The total value of public procurement contracts amounts to about €280 billion a year. The federal, state, and local authorities bear particular responsibility in this domain, in that they must discharge the state duty to protect human rights and ensure that the use of public funds does not cause or foster any adverse impact on human rights. By placing greater emphasis on sustainability in their procurement transactions, public authorities not only perform their function as role models but can also wield significant leverage in increasing the supply of sustainable products. The 2030 Agenda also makes explicit reference to sustainable public procurement as an instrument in the quest for sustainable development. The current situation “Germany has fully transformed into domestic law its obligations to protect human rights under international agreements. This applies, for example, to the prohibitions of child labour and forced labour that are imposed by the ILO core conventions. If enterprises break the law in Germany in either of these respects, they can be disqualified from receiving public contracts. The Federal Government is already implementing a number of measures designed to promote sustainable public procurement by federal, state and local authorities and institutions: Following the reform of procurement law in 2016, with which three new EU procurement directives were transposed into German law, the new Part IV of the Restraints of Competition Act lays particular emphasis on observance of the law, especially taxation, labour and social legislation (sections 97(3) and 128(1) of the Act). The new legal framework enables procurement bodies to make greater use of public contracting to underpin the pursuit of strategic goals such as social standards, environmental protection and innovation.” Measures “The National Action Plan marks the starting point of a process that will be continuously updated and developed. The process will be shaped by the implementation of the measures for which this Plan provides as well as by a comprehensive procedure for monitoring the implementation of these measures by all players. To this end, the Federal Government is planning, subject to budgetary approval, the immediate execution of the following steps: … “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.” “The UN Guiding Principles attach particular priority to assisting enterprises in respecting human rights in areas torn by conflicts. One characteristic of such areas is an especially high risk of serious human rights violations resulting from the frequent total absence of state structures. The Federal Government therefore considers that it has a responsibility to try to ensure that German enterprises operating in such conditions have no part in any adverse impacts on human rights.” The German NAP includes multiple reference to SMEs. “The responsibility to exercise due diligence applies in principle to all enterprises, regardless of their size, the sector in which they operate, or their operational context within a supply or value chain with an international dimension. … Depending 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 operating context, the measures to be taken are likely to vary in scope. It may be appropriate to conduct certain elements of the process in combination with other enterprises within an association or industry, subject to compliance with antitrust legislation. Small and medium-sized enterprises in particular should make use of the advisory and support services to be offered by the Federal Government and business associations under the National Action Plan.” “The size of an enterprise, the sector to which it belongs and the nature of its business activity directly influence the risk that its operations will have an impact on human rights. The required depth and breadth of the risk assessment depends on these factors.” “…At the same time, such reporting obligations should not impose disproportionate administrative burdens on the reporting companies or on the SMEs in their supply chains.” Measures “It emerged from the process of dialogue and consultation on this Action Plan that the extent to which measures to be adopted to advance the implementation of the UN Guiding Principles would have to be binding would vary between these key areas. In addition to these measures, incentives and support services are to be created which would enable all participants, especially small and medium-sized enterprises, to implement the Guiding Principles successfully.” The current situation [page 28-29] “the G7 are to: … The current situation [page 31] “… Sponsored by the Federal Ministry of Labour and Social Affairs, the Institute for Ecological Economy Research (IÖW) assesses the quality of sustainability reports from large enterprises and SMEs and draws up a league table for each of these categories. This ranking is intended to stimulate corporate competition in the realm of sustainability reporting and to highlight and propagate benchmarks for high-quality reporting.” Measures [page 33] The Federal Government would like to assist small and medium-sized enterprises in particular in fulfilling the extensive corporate due-diligence requirements and expectations relating to human rights (see chapter III above). The current situation Numerous measures and services are already available for this purpose. A selection of existing and planned measures is described in some detail below: … Measures III. Opportunities for training and dialogue Enterprises in public ownership or under state control within the meaning of this subsection comprise all enterprises subject to private or public law in which federal, state and/or local authorities hold a direct majority share. If a business enterprise is under state control, in other words if a majority stake is held directly by the public treasury, or if its actions may otherwise be attributed to the state, such an enterprise bears special responsibility under the UN Guiding Principles to respect human rights. The current situation The general standard of protection given to human rights by enterprises in which the public treasury holds a stake is already very high, since public-private entities in which the state holds a controlling stake and whose organisational form is governed by private law as well as public companies in sole state ownership which are organised in a form governed by private law are directly bound by the enshrined constitutional fundamental rights. The acquisition of shares in enterprises subject to private or public law is done autonomously at the various tiers of government in the federal system – national, regional and local – on the authorities’ own responsibility. Besides being bound by the constitutional fundamental rights in their economic activity, the three tiers of government are also bound by the provisions of ordinary legislation, such as the Federal Budget Code and municipal instruments. In addition, there is a federal regulatory instrument known as the Public Corporate Governance Code of the Federation (PCGK Bund), comprising recommendations and suggestions for good corporate governance and addressed to enterprises in which the Federal Government holds a majority stake. The federal administration of shareholdings is organised on a decentralised basis and is the task of whichever federal ministry is responsible for the company’s area of activity. Section 1.4 of the Public Corporate Governance Code states that the federal ministry responsible for the shareholding should ensure that enterprises acknowledge and comply with the Code and embody it in their corporate rules. The Code is part of the Principles of Good Corporate Governance and Management of Federal Holdings, which were adopted by the Federal Government and published by the Federal Ministry of Finance in its role as the lead body in this field. They form the foundations for responsible management of federal stakes in enterprises and provide for standardised performance of this task by the various federal ministries. Several federal states and municipalities have separate management codes for their own holdings. The annual report on federal holdings lists about 700 enterprises in which the Federal Government has a direct or indirect stake. The Federal Government has direct holdings in 60 companies with business activities (as of 31 December 2014), 41 of these being direct majority holdings. Of the companies in which a direct majority stake is held, 13 have more than 500 employees. Among the matters covered by the report on federal holdings are the implementation of the Public Corporate Governance Code of the Federation, gender equality and the general sustainability of the listed enterprises. Measures The Federal Government, in cooperation with the Council for Sustainable Development, will expand the training courses of the federal holding management bodies to include sustainability matters and so focus its attention on responsibility for human rights in the enterprises in which it holds a direct majority share. The scope of the training curriculum of the holding management bodies shall be inserted as part of the next revision into the Public Corporate Governance Code of the Federation. At the annual meeting of the bodies managing federal and state holdings, the states shall be urged to follow this federal practice. The Federal Government is keen to increase the percentage of enterprises in which it holds a majority share that apply the German Sustainability Code, including its obligation to report on human rights. From the 2018 financial year, the report on federal holdings will list, in its chapter on sustainability, all internationally active enterprises with more than 500 employees in which the Federal Government has a majority shareholding that apply the German Sustainability Code or a comparable framework with compulsory reporting on human rights and those that do not. Read more about State Owned Enterprises/ Public Private Partnerships The German NAP includes many references to supply chains and value chains throughout the NAP, as well as containing a specific section on it. “The “Made in Germany” label stands for high quality and reliability. At the same time, the increasing involvement of German enterprises in global supply and value chains presents both opportunities and challenges. New markets and production facilities are established, which creates employment and prosperity. At the same time, however, companies operating in global supply and value chains are exposed to risks arising from a lack of transparency and the frequently inadequate respect for human rights and for labour, social, and environmental standards. This applies especially to production in developing and newly industrialised countries but also within Germany.” “With regard to corporate respect for human rights, the Federal Government expects all enterprises to introduce the process of corporate due diligence described below in a manner commensurate with their size, the sector in which they operate, and their position in supply and value chains.” “The responsibility to exercise due diligence applies in principle to all enterprises, regardless of their size, the sector in which they operate, or their operational context within a supply or value chain with an international dimension.” “Central to the exercise of due diligence is the establishment of a procedure that serves to identify, to prevent or to mitigate potentially adverse effects of corporate activity on human rights. It is not – or not only – a matter of considering risks to the company’s own business activity but is primarily about risks to the human rights of those who may be affected by corporate activity, such as employees of the enterprise itself or of other companies in the supply chain, local populations and customers. … An initial risk analysis on the part of an enterprise should be conducted for each division or each product category and possibly for each location too. The starting point may be a simple overview of the company’s main activities and of the value chains and business relations these activities entail. …” “On the basis of the results of the analysis, measures should be identified and incorporated into business activity. Such measures may, for example, comprise specialised training of particular employees in-house or with suppliers, adaptation of particular management processes, changes in the supply chain and participation in sectoral initiatives” “…At the same time, such reporting obligations should not impose disproportionate administrative burdens on the reporting companies or on the SMEs in their supply chains.” Measures “By placing greater emphasis on sustainability in their procurement transactions, public authorities not only perform their function as role models but can also wield significant leverage in increasing the supply of sustainable products.” “Enterprises can impact beneficially as well as adversely on the exercise of human rights within their own production processes and in their supply and value chains, both through their own business activity and through their business relationships.” “Throughout the world, the expectations of consumers, civil society and trade unions in terms of product quality and transparency of production are rising. Their attention is increasingly focused on factors such as environmental protectionand social and employment standards along manufacturers’ supply chains. In many cases these supply chains are not transparent, and it is difficult to assess the situation with regard to individual enterprises within the chain. This increases the risk of adverse impacts on human rights and on social, labour and environmental standards in host countries. These countries often lack an adequate legislative basis or state supervision and enforcement of compliance with existing laws. The Federal Government nevertheless expects enterprises to discharge their responsibility to exercise due diligence as regards human rights and therefore to create and apply appropriate management instruments that minimise the risk of involvement in the generation of any adverse impact (see chapter III above). The fact is that every enterprise, through its business activity, has an influence on the living and working conditions of its employees, on its customers and suppliers, on the environment and on the wider economic context. The OECD Guidelines for Multinational Enterprises, to which Germany is committed, call on enterprises, within the context of their own activities at home and abroad, including those of their subsidiaries, to respect human rights and to do everything they can to avoid causing or contributing to adverse human rights impacts. This also offers German enterprises the opportunity to positively shape the operating environment in host countries by joining efforts and so to improve the conditions for stable business activity and for the creation of new markets.” The current situation “In the framework of the German presidency of the G7 in 2015, the Federal Government was a driving force behind the successful proposal to include a chapter on responsible supply chains in the Leaders’ Declaration. In that chapter, the private sector is being urged to exercise due diligence with regard to human rights. Together with the Heads of State or Government of the other G7 nations, the Federal Chancellor declared the Government’s support for the promotion of sustainability standards in global supply chains, including decent working conditions. To this end, the G7 are to: Host countries are assisted by means of capacity-building measures in introducing and upholding environmental and social standards. The Federal Government has long been supporting multi-stakeholder initiatives that have been launched in various sectors for the purpose of devising strategies and monitoring procedures. Measures The current situation “Through their purchasing decisions, consumers influence the supply of sustainably produced and delivered goods and services. Instruments such as the information platform www.siegelklarheit.de (sustainability standards comparison tool), initiated by the Federal Government, create transparency and help consumers to adopt sustainable purchasing habits.” Measures “…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 European Commission has presented a proposal for a regulation setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas. Based on the aforementioned OECD guide, the Commission’s draft regulation would establish a voluntary undertaking to observe due diligence rules within supply chains when importing the minerals referred to above so as to ensure that proceeds from their sale are not used to fund armed struggles in conflict zones or other high-risk areas. The European Parliament, on the other hand, expressed itself in favour of a binding instrument for downstream operators, that is to say along the whole value chain. A basic compromise has now been reached between the European Parliament, the Council and the European Commission on a binding instrument focused on the upstream area, i.e. the supply chain. Further details will now have to be negotiated in the context of the trialogue conducted by the EU institutions.” Measures [page 36] “III. Opportunities for training and dialogue “With regard to potential human rights violations within supply chains, great importance attaches to reinforcement of the rule of law and democracy in the relevant third countries, because that will create conditions for the introduction of effective redress mechanisms in those countries.” “Implementing the UN Guiding Principles on Business and Human Rights will mean pooling the efforts of all stakeholders, creating incentives to improve the human rights situation throughout supply chains and in target countries for investments and preventing serious violations of human rights in the context of business operations. …” The current situation [page 22] “Following the reform of procurement law in 2016, with which three new EU procurement directives were transposed into German law, the new Part IV of the Restraints of Competition Act lays particular emphasis on observance of the law, especially taxation, labour and social legislation (sections 97(3) and 128(1) of the Act).” The Federal Government attaches great importance to worldwide protection and promotion of human rights. The European Commission, in its Communication of 2011 entitled “A renewed EU strategy 2011-14 for Corporate Social Responsibility”, called on all EU Member States to develop their own national action plans for the implementation of the UN Guiding Principles. The Federal Government, in the coalition agreement of 2013, committed itself to implementing the UN Guiding Principles in Germany. Through the present National Action Plan for Business and Human Rights (NAP), it wishes to contribute to improving the human rights situation worldwide and to giving globalisation a social dimension in accordance with the 2030 Agenda for Sustainable Development. Development Policy [page 18] German development policy is value-based and is guided by the principle of human rights, because every individual worldwide must have fair development opportunities. Respecting, protecting and guaranteeing human rights are binding requirements and form a key component of the 2030 Agenda for Sustainable Development, which, in 2015, the international community resolved to implement. With its globally and universally applicable Sustainable Development Goals (SDGs), the 2030 Agenda serves as a compass and reference framework and has been in force since 1 January 2016. The 2030 Agenda underlines the aspiration of the Federal Government to combine economic development with sustainability, with the basic principles of social and green market economics and with decent working conditions. Through its development policy, Germany works proactively at all levels – globally, in partnership with other countries and nationally – to ensure that human rights are upheld by fostering the creation of requisite legal and institutional conditions, pertinent state regulation, and the monitoring of corporate activity. To this end, assistance is given to governments of developing countries as well as to international and multilateral organisations, for example, in aligning their economic and social policies more closely with human rights and sustainability standards. 2.1 Ensuring the protection of human rights in supply and value chains The current situation [Page 20-21] With support from the Federal Government funded German Global Compact Network, the “Round Table on Human Rights in Tourism” was launched in 2012. Its aim is to specify the precise requirements of the UN Guiding Principles on Business and Human Rights for the tourism industry and to develop, in a multi-stakeholder format, solutions to human rights challenges that are specific to tourism. … → The “Round Table on Human Rights in Tourism”, a model initiative for the development of a specific sectoral understanding of due diligence with regard to human rights, will receive increased financial support from the Federal Government. “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 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 Measures [page 30] “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.” Measures “I. Helpdesk and initial consultation The German NAP does not make direct reference to ‘workers’ rights’, but includes multiple reference to relevant human rights treaties, ILO instruments, and indirect reference to workers’ right throughout the NAP. The current situation Germany has ratified major strategic international instruments codifying the protection of human rights, including labour rights, thereby incorporating them into national law. The same applies to the particularly important ILO instruments known as the Core Labour Standards. The instruments that are now binding in Germany include, for example, the International Covenant on Civil and Political Rights, the UN Convention on the Rights of the Child, most of the conventions of the International Labour Organization and major European agreements such as the Convention for the Protection of Human Rights and Fundamental Freedoms and the European Social Charter. People in vulnerable situations pose a particular challenge in Germany as elsewhere. These include migrants and, in general, employees in precarious work. These groups of people are exposed to a high risk of labour exploitation. The introduction of a general statutory minimum wage in Germany has established an effective instrument against excessively low wages. Since 1 January 2015, a minimum hourly wage of €8.50 has been payable, and its rate is to be adjusted every two years by an independent commission. The minimum wage has increased the earnings of four million people, whose income has risen by an average of 18%. People who are affected by or at risk of labour exploitation need information about their rights and assistance in enforcing them. In recent years, advice and contact centres have been created in various parts of Germany, some with national and some with regional funding. With support from the Federal Government and the European Social Fund (ESF), for example, the German Trade Union Confederation (DGB), through a project called “Faire Mobilität” (fair mobility), provides such advice to employees, especially those from the EU Member States in Central and Eastern Europe. There is no permanent nationwide advisory structure yet for employees from all geographical origins and occupational sectors. In the fight against human trafficking and exploitative employment, Germany is also bound by EU Directive 2011/36/EU and has ratified both the Council of Europe Convention of 2005 on Action against Trafficking in Human Beings and the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children. To coordinate the diverse activities designed to combat human trafficking, the Federal Government established the Federal Working Group on Trafficking in Human Beings in 1997, whose members include representatives of non-governmental organisations. The protection of whistleblowers is a highly valuable accompanying measure in the detection of exploitative employment. General provisions in the field of labour law (sections 612a and 626 of the German Civil Code and section 1 of the Protection against Unfair Dismissal Act) and in constitutional law (Articles 2(1), 5 and 20(3) of the Basic Law) provide the legal basis for such protection. There are also numerous provisions of special legislation which supplement the protection of whistleblowers guaranteed by the aforementioned provisions in particular areas of activity, examples being section 13 of the Money Laundering Act and section 17(2) of the Occupational Health and Safety Act. The Federal Government is currently preparing for the incorporation of numerous international legal instruments into German law. These include the Protocol to the ILO Forced Labour Convention (No 29). The Federal Ministry of Labour and Social Affairs is planning the examination prior to ratification of the ILO Minimum Wage Fixing Convention (No 131) and Indigenous and Tribal Peoples Convention (No 169) as well as of the Optional Protocol of 2008 to the International Covenant on Economic, Social and Cultural Rights and the revised Social Charter. Measures “Throughout the world, the expectations of consumers, civil society and trade unions in terms of product quality and transparency of production are rising. Their attention is increasingly focused on factors such as environmental protectionand social and employment standards along manufacturers’ supply chains. … The fact is that every enterprise, through its business activity, has an influence on the living and working conditions of its employees, on its customers and suppliers, on the environment and on the wider economic context.”Children’s rights
1.1 Basic rules of economic policy
Protection within states’ own territory – challenges within Germany
Development policy
Conflict-affected areas
2.3 Business activity in conflict zones [page 32-33]
Construction sector
Corporate law & corporate governance
1.1 Basic rules of economic policy
Bi- and multilateral economic relations
Development policy
Enterprises in public ownership [page 26-27]
Corruption
4.1 Access to justice and the courts for injured parties
Data protection & privacy
Development finance institutions
1. The State Duty to Protect
1.1 Basic rules of economic policy
Energy sector
Environment & climate change
1. The State Duty to Protect
1.1 Basic rules of economic policy
2. Challenges in corporate practice
2.1 Ensuring the protection of human rights in supply and value chains
3. Available means of practical implementation support
Measures
Equality & non-discrimination
1. The State Duty to Protect
1.1 Basic rules of economic policy
Export credit
1.3 State support
Export credits, investment guarantees and other instruments for the promotion of external trade [page 23-25]
Extractives sector
2.3 Business activity in conflict zones [page 32-33]
Extraterritorial jurisdiction
4.1 Access to justice and the courts for injured parties
Finance & banking sector
III. Federal Government expectations regarding corporate due diligence in respecting human rights
Procedure for the identification of actual and potential adverse impacts on human rights [page 9-10]
1.1 Basic rules of economic policy
Development policy [page 19-20]
1.3 State support
Export credits, investment guarantees and other instruments for the promotion of external trade [page 23]
Fisheries and aquaculture sectors
Forced labour & modern slavery
1.1 Basic rules of economic policy
1.2 Public procurement
Freedom of association
Garment, Textile and Footwear Sector
2. CHALLENGES IN CORPORATE PRACTICE
2.1 Ensuring the protection of human rights in supply and value chains
of January 2017. A robust sanctions regime and regular reporting on the implementation of the road maps will ensure credibility and transparency. The Textile Partnership creates a reference framework and an independent review system of international scope. – page 20Gender & women’s rights
1.1 Basic rules of economic policy
Protection within states’ own territory – challenges within Germany
Development policy
1.4 Enterprises in public ownership
Guidance to business
III. Federal Government expectations regarding corporate due diligence in respecting human rights
Scope and practical structuring of due diligence in the field of human rights [page 8]
1.3 State support
2.3 Business activity in conflict zones [page 32]
3. Available means of practical implementation support [page 33-36]
Health and social care
IV. Key areas for action
1. THE STATE DUTY TO PROTECT
Human rights defenders & whistle-blowers
1.1 Basic rules of economic policy
Protection within states’ own territory – challenges within Germany [page 15-16]
Development policy [page 20]
Human rights due diligence
III. Federal Government expectations regarding corporate due diligence in respecting human rights [page 7-12]
Scope and practical structuring of due diligence in the field of human rights
Core elements of due diligence in the field of human rights
Policy statement
Procedure for the identification of actual and potential adverse impacts on human rights
Measures and effectiveness tracking
Reporting
Grievance mechanism
1. Key areas for action [page 13]
1.1 Basic rules of economic policy
Development policy
Public procurement
1.2 State support
Subsidies
Export credits, investment guarantees and other instruments for the promotion of external trade
2.1 Ensuring the protection of human rights in supply and value chains [page 28-30]
2.2 Transparency and communication regarding corporate impacts on human rights [page 30]
2.3 Business activity in conflict zones [page 32-33]
3. Available means of practical implementation support
4.2 National Contact Point for the OECD Guidelines [page 39]
V. Ensuring policy coherence [page 40]
VI. Monitoring [page 41]
Human rights impact assessments
1. Introduction [page 3]
III. Federal Government expectations regarding corporate due diligence in respecting human rights
Procedure for the identification of actual and potential adverse impacts on human rights [page 9-10]
1.1 Basic rules of economic policy
Bi- and multilateral economic relations [page 17-18]
1.3 State support
Export credits, investment guarantees and other instruments for the promotion of external trade page 24-25
ICT & electronics sector
Indigenous peoples
III. Federal Government expectations regarding corporate due diligence in respecting human rights
Core elements of due diligence in the field of human rights
1. The State Duty to Protect
1.1 Basic rules of economic policy
Investment treaties & investor-state dispute settlements
1.1 Basic rules of economic policy
Bi- and multilateral economic relations [page 17-18]
2.1 Ensuring the protection of human rights in supply and value chains
Judicial remedy
1. Key areas for action [page 13]
1.1 Basic rules of economic policy
Protection within states’ own territory – challenges within Germany
4.1 Access to justice and the courts for injured parties [page 36-38]
Civil remedies in Germany
Scope for penalising enterprises under the law governing regulatory offences
Support for remedy mechanisms in third countries
Land
1. The State Duty to Protect
1.1 Basic rules of economic policy
Migrant workers
1.1 Basic rules of economic policy
Protection within states’ own territory – challenges within Germany [page 15-16]
National Human Rights Institutions/ Ombudspersons
1. The process of drawing up the Action Plan [page 6-7]
1.1 Basic rules of economic policy
Protection within states’ own territory – challenges within Germany [page 14]
Development policy [page 19]
Non-financial reporting
III. Federal Government expectations regarding corporate due diligence in respecting human rights
Reporting [page 9]
IV. Key areas for action
1.4 Enterprises in public ownership [page 18-19]
2.1 Ensuring the protection of human rights in supply and value chains
2.2 Transparency and communication regarding corporate impacts on human rights [page 21]
3. Available means of practical implementation support
Non-judicial grievance mechanisms
III. Federal Government expectations regarding corporate due diligence in respecting human rights
Grievance mechanism [page 11-12]
IV. Key areas for action [page 13]
1.1 Basic rules of economic policy
Development policy
1.3 State support
Export credits, investment guarantees and other instruments for the promotion of external trade
4.1 Access to justice and the courts for injured parties
Support for remedy mechanisms in third countries [page 37-38]
4.2 National Contact Point for the OECD Guidelines [page 39-40]
OECD National Contact Points
1.3 State support
Export credits, investment guarantees and other instruments for the promotion of external trade
4.2 National Contact Point for the OECD Guidelines [page 39-40]
Persons with disabilities
1. The State Duty to Protect
1.1 Basic rules of economic policy
Policy coherence
V. Ensuring policy coherence [page 40-41]
VI. Monitoring [page 41]
Privatisation
Public procurement
1.2 Public procurement [page 21-22]
VI. Monitoring [page 41]
Security sector
2.3 Business activity in conflict zones [page 32]
Small & medium-sized enterprises
III. Federal Government expectations regarding corporate due diligence in respecting human rights [page 8-13]
Scope and practical structuring of due diligence in the field of human rights
Procedure for the identification of actual and potential adverse impacts on human rights
Reporting
IV. Key areas for action [page 13]
2.1 Ensuring the protection of human rights in supply and value chains
2.2 Transparency and communication regarding corporate impacts on human rights
2.3 Business activity in conflict zones
3. Available means of practical implementation support [page 33-36]
State Owned Enterprises/ Public Private Partnerships
1. The State Duty to Protect
1.4 Enterprises in public ownership [pages 25-27]
Supply chains
I. Introduction [page 3]
III. Federal Government expectations regarding corporate due diligence in respecting human rights [page 7-12]
Scope and practical structuring of due diligence in the field of human rights
Procedure for the identification of actual and potential adverse impacts on human rights
Measures and effectiveness tracking
Reporting
1.2 Public procurement [page 21]
2. Challenges in corporate practice [page 27]
2.1 Ensuring the protection of human rights in supply and value chains [page 28-30]
2.2 Transparency and communication regarding corporate impacts on human rights [page 31]
2.3 Business activity in conflict zones [page 32]
3. Available means of practical implementation support
4.1 Access to justice and the courts for injured parties
Support for remedy mechanisms in third countries [page 37]
V. Ensuring policy coherence [page 40]
Taxation
1.2 Public procurement
The 2030 Agenda for Sustainable Development
Objectives of the National Action Plan [page 4]
1. The State Duty to Protect
1.1 Basic rules of economic policy
Tourism sector
1. Key areas for action
CHALLENGES IN CORPORATE PRACTICE
Trade
1.1 Basic rules of economic policy
Bi- and multilateral economic relations [page 17-18]
1.3 State support
Export credits, investment guarantees and other instruments for the promotion of external trade [page 23-25]
2.1 Ensuring the protection of human rights in supply and value chains
2.3 Business activity in conflict zones [page 32]
3. Available means of practical implementation support [page 34]
VI. Monitoring [page 41]
Workers’ rights
1.1 Basic rules of economic policy [page 14-16]
Protection within states’ own territory – challenges within Germany
2.1 Ensuring the protection of human rights in supply and value chains [page 28]
