Unfair wages, exploitation or child labor. When German companies do business with African countries, human rights sometimes fall by the wayside. Berlin wants to change that.
German companies, like others in industrialized nations, also procure raw materials from Africa - be it platinum, cobalt or cocoa. But local working conditions are often poor. "The [labor] conditions where the supply chain begins are still unbelievable," Gerd Müller, German Development Minister said. "Over 150 million children worldwide have to work. Forced labor and meagre wages are still prevalent in many places."
Germany now wants to prevent this through a "National Action Plan for the Economy and Human Rights", which the Federal Government adopted in 2016. It obliges German companies to comply with human rights standards when doing business abroad, but only on a voluntary basis. The response so far has been rather restrained.
Müller is now threatening to introduce new legislation. If necessary, it will force German companies to adhere to basic human rights standards when doing business abroad. But first, the development minister plans to ask 4,000 German firms if they are complying with the action plan.
"We will evaluate the response and if it turns out that less than 50 percent of the companies participate voluntarily, then this so-called Due Diligence Act will come," Germany's Parliamentary State Secretary, Norbert Barthle, told DW.
Thousands of German companies targeted
Berlin is thus planning to make some 14,000 companies from what it refers to as "high-risk sectors" obligated to do so. These include agriculture, mining, food, textiles, electrical appliances and energy supply. Companies from these sectors should ensure that their suppliers do not violate human rights when doing business in Africa and elsewhere. Environmental protection should also be taken into account.
Such legal regulations are long overdue, says Eva-Maria Reinwald of the development policy institute "Südwind" in Bonn. "We note that the previous approaches, which were based on voluntarism, have not borne fruit. Companies have been saying for decades that they are taking action. But we are not achieving the changes that we want for the local employees," Reinwald told DW.
Local laws ineffective
Proponents of the bill refer to the 2012 "Marikana Massacre" in South Africa as an example. During a labor strike against low wages and poor working conditions, police opened fire, killing 34 miners from the platinum mine. The Marikana mine belongs to the Lonmin Group, which is also the most important platinum supplier to the German chemical company BASF.
The German firm, which is also the world's largest chemical producer, rejected responsibility for the strike and its consequences even though the working conditions of the workers was previously known. The United Nations holds companies that purchase platinum responsible for compliance with minimum standards by their suppliers.
"The Marikana case shows that it is a risky undertaking to rely on local security forces and local police, and that there is shared responsibility," Reinwald said. In her opinion, a transparency law could therefore be a major step forward, especially in Africa. "In many African countries, local laws are not formulated accordingly or there is a lack of controls to enforce them," Reinwald added.
Resistance from German investors
Industry players, however, strictly reject the plans. "A rigid legal regulation for human rights diligence can lead to a withdrawal of German companies from the challenging markets on the African continent and thus endanger investments and business activities," said the German-African Business Association, an entrepreneurial business network comprising mostly German businessmen and women.
The German Textile + Fashion Association agrees with the German-African Business Association. "Our global competitors will simply sweep us out of the market," it said.
The development ministry does not share such fears. "Of course, there is concern that the penalties contained in the bill could have a deterrent effect. But this does not mean that companies will no longer operate in Africa if they get their resources from there. It is not so easy to find cobalt in this world," said Parliamentary State Secretary Barthel.
Status quo until 2020
According to the plans by the German government, it would still take a long time before the law comes into effect. Labor Minister Hubertus Heil wants to wait until 2020 in order to discuss corresponding rules at EU level. This is too late for Reinwald. "We therefore call on the Federal Government to take the lead now and pass such a law in Germany and for Heil to get the ball rolling in Europe in the near future."
Companies still have time to voluntarily improve the working conditions of their suppliers. Barthle is optimistic that it will work without a law. "We are counting on enough companies to voluntarily agree to align their supply chains with fair-trade goods." This effort is also in the interest of the companies. After all, more and more consumers are attaching great importance to knowing how their shoes, chocolate or coffee has been produced.
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