It's finally done - the German supply chain law is coming! It is intended to ensure sustainable supply chains and also transparent supply chains. In the future, companies should be responsible for their supply chain – from the raw material to the sales product. Sounds great at first - but we want to introduce you to the supply chain law in more detail: Who does the law apply to? How does it protect people and the environment?
The Supply Chain: Who Made My T-Shirt? Have you ever wondered how your t-shirt traveled before it ended up in your closet? How many countries has it traveled through and how many people were involved in the making and delivery of your t-shirt?
The path of a product from the extraction of the raw material, its production and processing to the sale and delivery to the customer is often long and difficult to survey. Several companies and suppliers are often involved in this path, the “ supply chain ”. There are supply chains that are so complex that companies themselves hardly have an overview of who exactly works for them. Most of the production takes place outside of the actual country of sale - and usually even on another continent.
The Sustainable Supply Chain: What Makes a Supply Chain Sustainable? The United Nations have a clear definition of this. It states that all environmental, social and economic impacts that a product has on the environment, social affairs and the economy, from its creation to its sale, must be transparent and justifiable. Human rights and rules for environmental protection must therefore be observed. For example, your T-shirt must not be sewn by children's hands or contain toxins.
Transparency and sustainability in the textile industry - In the textile industry in particular, there has been a lot of discussion about working conditions in the manufacture of clothing in recent years. Some grievances were uncovered and made public. The organization Fashion Revolution, for example, has just commemorated the serious accident in the Rana Plaza textile factory in Bangladesh, in which 1,134 people died, with its week of action on the topic "Who made my clothes" from April 19th to 25th. Customers were asked to ask their fashion companies where they have their clothes produced and to demand a transparent supply chain. Perhaps you have read our posts on Instagram or Facebook on the anniversary of this accident on April 24th. With the question "Who made my clothes?" or "Who made my clothes?" Fashion Revolution calls on fashion chains to make their supply chains more transparent. This then leads to the next questions we should all ask ourselves when we buy clothes: What are the working conditions like? How is the payment? What are the consequences of production for the environment? How can the situation be improved?
Transparency and sustainability at Hoofment - It is a matter close to our hearts to pursue an absolutely holistic, sustainable and transparent concept - from the materials, through production, to packaging and shipping:
- We only use sustainable materials from renewable raw materials or from recycling processes. If you want to find out more about which Hoofment product is made from which innovative materials, you can read about it in our shop in the individual product descriptions.
- Our equestrian fashion is made without the use of toxic chemicals.
- We make sure that the products you can buy from us are of high quality and therefore durable.
- We work closely with our producers and material suppliers to ensure sustainability and fair working conditions in our supply chain. As soon as it is possible again due to Corona, we will also take you to our producers and partners on our social media channels and of course also report in detail here in the blog.
- We only produce in Europe. It is important to us that our supply chains are as short and completely transparent as possible. You can read the supply chain of each of our products on the product pages in our shop. For example, it says exactly which country the material comes from and where the product was sewn.
- Our packaging materials are sustainable and designed with great attention to detail. When you receive a package from us, the shipping box consists of 35% grass paper and 65% recycled waste paper. We only ship with DHL GoGreen.
- We really enjoy letting you participate in our current product development via Instagram and explain the materials and individual steps to the finished product. Here, too, it is important to us that you can see in a transparent manner how our products are made.
We do all these things voluntarily because sustainability is super important to us and because we want our customers to know where the Hoofment products come from and how they were made. Unfortunately, from our point of view, far too few companies still take responsibility for the conditions under which their products are made. It is therefore urgently necessary to stipulate by law that all companies must take responsibility along their supply chains. The sooner that happens, the faster we'll make a difference around the world. Unfortunately, it will not work voluntarily otherwise everywhere. That is why we are in favor of stricter legal requirements so that people, the environment and the climate can be protected more effectively.
That is why we are of course very pleased that there will soon be a supply chain law for Germany and are very excited to see what it will do. We hope that it will not just become a "light" supply chain law. Since it is only a draft so far, improvements can still be requested. You can still contribute your own opinions or start activities.
But what is the planned Supply Chain Act all about? It's actually nothing new: Germany already laid down the requirement that companies take responsibility for protecting human rights in the 2016 National Action Plan. It's sad but true: A survey last year showed that only 13 to 17 percent of the companies surveyed meet the requirements of this plan. A voluntary commitment is definitely not enough. That is why a binding legal framework is now to be created with the Supply Chain Act.
Source: https://www.oxfam.de/unsere-arbeit/themen/lieferkettengesetz
Therefore, the draft of the German supply chain law was approved in March of this year. It is also often referred to as the “Due Diligence Act”. Because it's about companies having to take responsibility - mainly for ensuring that human rights are respected along their supply chain.
Current status of the draft: The draft of the "Supply Chain Act" was approved by the Federal Cabinet on March 3, 2021. The full title of the draft is: Draft of the "Act on Corporate Due Diligence in Supply Chains". If you want to take a look at the draft, you can find the link here. But beware: There are 82 pages! https://www.bundesrat.de/SharedDocs/drucksachen/2021/0201-0300/239-21.pdf?__blob=publicationFile&v=1 Official consultations on the law will soon begin. It is to be adopted by the Bundestag and Bundesrat before the federal elections in September 2021. From 2023, the supply chain law will then be binding in Germany for large companies with more than 3,000 employees (approx. 600 companies) and from 2024 for companies with more than 1,000 employees (approx. 2,900 companies). The EU also wants to discuss plans for a supply chain law at European level this summer.
What is the purpose of this law? For the first time, this law stipulates that companies are responsible for complying with internationally recognized human rights along the supply chain. Companies should better fulfill their responsibility for human rights due diligence. The law is intended to create legal clarity for business and strengthen compliance with human rights by companies. The law is also intended to support companies that are already checking their supply chains and ensuring decent work. So far, the law has only dealt with environmental protection when environmental risks can lead to human rights violations. It also mentions special environmental due diligence: protection against health and environmental hazards from mercury and persistent organic pollutants.
What are the responsibilities of the company? Companies are responsible for the entire supply chain, from beginning to end, from raw materials to the finished product. The company must therefore also keep an eye on the business relationships and production methods of the suppliers. To do this, risk management must be introduced along the supply chain. Companies have to find out where in the production and supply chain there are high human rights and environmental risks. Measures must then be taken to prevent, stop or at least reduce them. The companies must then produce an annual report on the extent to which they have complied with their duty of care.
What awaits companies that do not comply with this law? The Federal Office of Economics and Export Control (BAFA) is to check whether the rules of the Supply Chain Act are being observed. If a company does not comply with the law, it can face large fines. In addition, the company can be excluded (up to 3 years) from awarding public contracts.
What does the supply chain law mean for Europe? The introduction of the supply chain law in Germany is an important signal beyond national borders. Although there are already regulations in other countries, for example in France and the Netherlands, they are not as far-reaching as the German draft. The EU Commission is also planning to introduce binding due diligence requirements for companies this year. The German supply chain law is shaping the debate about EU legislation. Corresponding plans for a European directive are to be presented this summer.
What do critical voices say about this law? Since it is only a draft so far, there are of course still opportunities to revise and improve the law. Therefore, it is currently viewed critically - especially by human rights and environmental organizations. But companies like Tchibo are also in favor of a more effective supply chain law. Because there is still time to act and argue. From the end of April, MPs can request improvements. For example, the "Supply Chain Law Initiative" (an association of human rights, development and environmental organizations, trade unions and churches) collects signatures for improvements. They call for a “strong supply chain law”.
But what are these suggestions for improvement? What is criticized?
We have summarized the most important points for you here:
- One point of criticism is the size of the company: the law initially only applies to companies with 3,000 or more employees. A year later, this also applies to companies with 1,000 or more employees. But what about the smaller companies? Smaller companies can also contribute to serious environmental damage and human rights violations. Therefore, it is demanded that the law should affect more companies.
- The draft contains levels of due diligence and does not apply unconditionally to the entire supply chain. First of all, companies mainly have to take care of their direct suppliers.
However, human rights violations often occur at the beginning of the supply chain. Nevertheless, it is intended that German companies only have to take action with indirect suppliers if there are already concrete indications of violations. But it is precisely at the beginning of the supply chain (on plantations, in factories and in mines) that human rights violations and environmental damage occur. It is precisely here that attempts must be made to prevent them.
- The environment-related due diligence obligations are neglected: environmental protection is only marginally recorded and only discussed in relation to very specific cases (e.g. mercury emissions). It is demanded that even more environmental protection aspects are included in this law
Our conclusion: It remains exciting to see whether the draft will be improved. In any case, there will be innovations for many companies and more and more attention will be paid to sustainability and transparency, both of which are very important to us personally. Something needs to change urgently and the law could be a first step in the right direction. However, it really has to motivate companies to change something, and it can only do so in a stronger version. But of course you are all asked. If you want sustainable, transparent supply chains and sustainable products, you also have to consume sustainably. Therefore our tip to you: Take the time from time to time and inform yourself about the products that you buy. Take a close look at where they are produced, what materials are used and and and. :)
Sources:
https://www.bundesrat.de/SharedDocs/drucksachen/2021/0201-0300/239-21.pdf?__blob=publicationFile&v=1
https://www.csr-in-deutschland.de/DE/Aktuelles/Meldungen/2021/sorgfaltspflichtengesetz.html
https://www.auswaertiges-amt.de/de/aussenpolitik/themen/aussenwirtschaft/wirtschaft-und-menschenrechte/nationaler-aktionsplan-wirtschaft-menschenrechte/205208
https://lieferkettengesetz.de/aktuelles/
https://lieferkettengesetz.de/aktuelles/
https://www.oxfam.de/unsere-arbeit/themen/lieferkettengesetz
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