Can Germany’s New Act on Corporate Due Diligence in Supply Chain Deter Human Rights Violations, Specifically Forced Labor?

A blog post by Luis Evangelista, Junior Associate.

The International Labor Organization (ILO) defines forced labor (or forced labor) as all work or services involuntarily done under threat of a penalty. [1] This definition includes slavery, debt bondage, as well as newer forms of forced labor that have emerged such as human trafficking or the trafficking in persons. According to a report presented by the ILO at Geneva in 2017[2], on any given day in 2016, 40 million people worldwide were victims of forced labor. Children made up 25% of victims of modern slavery[3]. Women and young girls accounted for 71% of modern slavery victims[4].

Forced labor is a global prominent human rights violation and an ongoing international problem which many countries have attempted to address through different forms of criminal and civil legislation.  However, victims have been underserved with criminal prosecutions and convicted traffickers have faced minimal consequence.  In Germany, for example, in 2018, 72% of the individuals convicted of trafficking in persons received either a fully suspended sentence, a fine, or less than a year in prison.[5]

On June 11, 2021, the German Federal Parliament passed the Act on Corporate Due Diligence in Supply Chain (The Act).[6] The Act requires all German companies with three thousand (3,000) or more employees ensure as of January 1, 2023 that their corporate entities and their direct suppliers are not committing any human rights or environmental rights violations.[7]  Companies must create risk management systems within their companies and report annually to the Federal Office of Economic Affairs and Export Control (Bundensamt für Wirtshaft und Ausfuhrkontrolle).[8] If a company fails to comply with these requirements, the German authorities can fine it depending on the severity of the violation[9]. While the Act does not create a separate civil cause of action for victims of forced labor, it does provide a way for the aggrieved to bring a complaint against the company with the Federal Office of Economic Affairs and Export Control (Bundensamt für Wirtshaft und Ausfuhrkontrolle).[10]

My essay will focus on whether Germany’s new Act on Corporate Due Diligence in Supply Chain serves as an effective tool to minimize trafficking by empowering or encumbering corporate actors to eliminate their part in supporting forced labor.

 

 

 

[1]  https://www.ilo.org/global/topics/forced-labour/definition/lang–en/index.htm

[2] ILO, Global estimates of Modern Slavery: Forced Labour and Forced Marriages, Geneva 2017. wcms_575479.pdf (ilo.org)

[3] Id.

[4] Id.

[5] Department of State, Office to Monitor and Combat Trafficking in Persons, 2021 Trafficking in Persons Report: Germany, https://www.state.gov/reports/2021-trafficking-in-persons-report/germany/, (last visited Feb. 15, 2022).

[6] Overview on Germany’s Supply Chain Due Diligence Act and how it compares to other similar laws. https://www.natlawreview.com/article/new-german-supply-chain-due-diligence-act-view-across-border

[7] Id.

[8] Id.

[9] Id.

[10] Id.

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