Responsibility of transnational companies for their supply chains: the new German legislation – Warehouse of Law

By Kai Ambos

Just a few days in the past the so-called Regulation of Due Diligence in Provide Chains got here into drive in Germany (Supply Chain Due Diligence Act, LkSG). The federal government project has undergone substantial adjustments within the framework of your discussion in parliament. The results of this may be defined by way of the next theses:

First. With this regulation, Germany complies with its obligations underneath worldwide and European regulation. These come up, specifically, from United Nations Guiding Principles on Business and Human Rights of 2011, politically carried out by way of the National Action Plan on Business and Human Rights, adopted in 2016, in addition to secondary regulation of the European Union (EU) (specifically, the Directive on Corporate Social Responsibility 2014 and Regulation on certain raw materials extracted in conflict zones 2017). In precept, the recipients of those obligations are the States. Nevertheless, the accountability of transnational firms in provide chains has develop into an autonomous and legally binding responsibility of care. This may be summarized – in a simplified manner – in that firms should be cautious to not take part in severe human rights violations or worldwide crimes (see on this regard, Both of them, Polit. Crim. (16) 2021, 358, 367). Consequently, the UN Guiding Ideas converse of a company accountability to “respect” human rights and the Nationwide Motion Plan speaks of a human rights responsibility of look after German firms.

Second. On this sense, the regulation implements on the nationwide degree the present requirements on the worldwide degree; consequently, it doesn’t make, as is commonly claimed, the German requirements the worldwide benchmark.

Third. The explanation for this legislative exercise on the worldwide, regional and nationwide ranges is the failure of enterprise self-regulation (compliance).

Quarter. In essence, the availability chain laws – and in addition the LkSG – all the time revolves across the accountability of supervision of the transnational consumer firm that operates in a global provide chain and that, due to this fact – within the sense of the aforementioned obligation above – you should take care that worldwide requirements should not violated within the framework of that offer chain. In different phrases, the LkSG refers back to the management over overseas suppliers exercised by the (German) consumer firm inside the framework of its supervisory responsibility and to not the imposition of unenforceable manufacturing circumstances for overseas suppliers by way of extraterritorial laws. .

Fifth. The regulation serves the prevention and punishment of sure dangers to human rights and the setting (§ 2 LkSG). In different phrases, it has a preventive and a repressive element. These aims should be achieved (§§ four to 10) by finishing up sure duties of diligence (§ 3), particularly by conducting threat evaluation (§ 5) and establishing a grievance mechanism (§ 8). The Federal Workplace of Economics and Export Management (Federal Workplace of Economics and Export Management, BAFA, § 19) should guarantee compliance with the aforementioned duties of diligence; acts ex officio or on the idea of a grievance (§ 14, in addition to §§ 15-18) and may, above all, impose fines (§ 24).

Sixth. It ought to particularly be famous that the LkSG doesn’t impose accountability for the consequence (Success legal responsibility, obligation of consequence), however an obligation of means or exercise (Obligation of means) (§ 3, paragraph 1), which has been clarified by the legislator by including to § 3, paragraph 1, first sentence, in keeping with which firms “they’ve to look at correctly”The aforementioned duties of diligence and – in keeping with the added sentence – “With the intention of stopping or minimizing dangers to human rights or the setting or placing an finish to the violation of duties associated to human rights or the setting”. In line with the explanatory memorandum of the regulation (see here, p. 37), the duties of diligence regulate “a due-diligence, that’s, an obligation to behave: firms should not obliged to ensure a consequence, however to hold out the particular measures listed in § 3, paragraph 1 … inside the framework of what’s concretely possible and applicable”. The scope of the required measures “no [es] inflexible, however should be evaluated based mostly on varied components listed in § 3, paragraph 2. (…)… no firm will be required to do one thing inconceivable from a authorized and factual viewpoint“, That’s, a habits that”infringes present regulation“Or one with which the corporate reaches”its limits, as a consequence of its incapability to affect it”(Cfr. § 3, paragraph 2, quantity 2) (emphasis added).

Seventh. The parliamentary dialogue has additionally led to the exclusion of a selected civil legal responsibility. Right here too you will need to take into account the precise wording of § 3, paragraph 3: “A breach of the duties established by this regulation doesn’t set up a civil legal responsibility. The civil legal responsibility established independently of this regulation is just not affected ”. In line with the explanatory memorandum (see here, p. 38), this provision “was adopted with the intention and concept of ​​not creating further dangers of civil legal responsibility for firms with respect to the present authorized state of affairs”. Reasonably, the brand new diligence duties ought to be “ssupervised and their offense sanctioned inside the framework of the executive sanctioning regulation«. This ought to be clarified, above all, in view of the § 823, paragraph 2, of the German Civil Code (BGB). «When, whatever the lately created diligence duties, civil legal responsibility is already based on some other authorized norm in drive, civil legal responsibility should be required. no modification and, in circumstances particularly severe, facilitate its utility.” (emphasis added). On this manner, the wording makes it clear that the LkSG shouldn’t be thought-about a norm in whose scope of safety the property broken by its infringement are included (within the sense of § 823, paragraph 2, BGB); the explanatory memorandum even explicitly warns about it. Consequently, legal responsibility claims may come up at most from § 823, paragraph 1 (referring to civil legal responsibility for illegal acts), however following the criterion of the explanatory assertion, solely “in particularly severe circumstances”.

Eighth. The regulation distinguishes between direct and oblique suppliers (§ 2, paragraphs 7 and eight). This distinction – in contrast to the scope of the corporate’s personal business exercise (§ 2, paragraph 6) – should be seen in relation to the target of attaining a discount of the businesses’ legal responsibility. Within the case of oblique suppliers, with whom the consumer firm doesn’t have contractual relationships (§ 2, paragraph 7 ec), the corporate should perform sure diligence measures solely when it has “well-founded data” about an infringement authorized (§ 9, paragraph 3).

Ninth. Exactly, the final three factors appear problematic within the context of worldwide provisions. These provisions shall be concretized within the close to future in a (new) EU directive. On this sense, on March 10, 2021, the European Parliament (EP) introduced a proposal on this regard, which was permitted with 504 of the 695 votes. Nevertheless, the comparability provided within the graphic obtainable here It exhibits that the LkSG is just not as formidable as that proposal in a number of respects. Due to this fact, changes could must be made as soon as the aforementioned directive is adopted.

Foto: @thefromthetree

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