Germany seeks to improve oversight of firms’ delivery chains

Business News

German Chancellor Angela Merkel takes off her mask at the beginning of the Federal Cabinet meeting at the Chancellery in Berlin, Germany, Wednesday, March 3, 2021. (Michael Kappeler/Pool via AP)

BERLIN (AP) — Germany’s Cabinet on Wednesday approved legislation that seeks to make big companies ensure environmental rules and human rights are respected throughout their delivery chains.

The plan, the result of prolonged haggling in Chancellor Angela Merkel’s governing coalition of center-right and center-left parties, is set to take effect from 2023.

It would apply initially to companies with 3,000 or more employees, and from 2024 to companies with 1,000 employees. The intention is to evaluate it after that to see whether more firms should be included. The plan needs parliamentary approval.

Companies are supposed to keep an eye on their delivery chains and, when they find evidence of abuses, work to remedy them. That might include a temporary suspension of business relations while “efforts to minimize risk” take place.

The legislation would require companies to put in place an internal complaints procedure allowing people affected by their or an associate’s activities, or those of an indirect supplier, to register their concerns. They would have to report annually on their compliance with the legislation.

Non-governmental organizations and labor unions would be given the possibility to represent people affected by abuses in delivery chains before German courts.

The plan has drawn some concern from German business groups, which worry about potential competitive disadvantages and want at least to see a level playing field within Europe.

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