First Case of Human Rights Violations is Filed under the German Due Diligence Act

The firm Due Diligence Design reported how Bangladeshi workers represented by the trade union, NGWF, filed the first complaint against Tom Tailor, Amazon, and IKEA under the German Supply Chain Due Diligence Act for not “adequately monitoring” the conditions in their factories and for “endangering the workplace safety for employees.” The complaint was filed with the Federal Office of Economics and Export Control, (BAFA), the regulator for the German Supply Chain Due Diligence Act, which will now decide whether to take further action against the companies.  Due Diligence Design are experts in responsible business conduct due diligence on human rights, labour, and environmental risk. in the area of helping clients, by providing deep intelligence, technical guidance and a systematic and pragmatic approach on high-risk due diligence issues across multiple sectors.

In April, affected workers represented by the trade union, the National Garment Workers Federation (NGWF), with support from the European Center for Constitutional and Human Rights (ECCHR) and NGO FEMNET filed the first complaint under the German Supply Chain Due Diligence Act against Tom Tailor, Amazon, and Ikea. 

The complaint was filed with the Federal Office of Economics and Export Control, (BAFA), the regulator for the German Supply Chain Due Diligence Act. BAFA will now decide whether to take further action against the companies. This can include requiring the companies to take action to fulfil their obligations under the law and financial penalties. BAFA does not have a set timeline to address complaints.

This is a historic development, as it shows how European laws are beginning to have more “teeth”, and are beginning to create litigative events that companies like Amazon, Walmart, H&M, Nike, and other apparel manufacturers will need to navigate more and more in the near future.  This legislation will begin to bring the importance of paying attention to labor rights in supply chains “home”.  Our prior research showed that many supply chain leaders have remained “psychologically distant” from the realities of modern slavery, which requires awareness of its context and complexities. While corporations have increasingly sought to manage modern slavery risk in their supply chains, their understanding of what modern slavery is and what should be managed remains limited. Based on our interviews with supply chain leaders, we argued that a key problem with firms’ efforts to manage modern slavery risk is that it is a psychologically distant concept for them. Impending legislation that prosecutes firms that tolerate labor violations in their supply chain will certainly create greater awareness of this.  A number of other forces are also impacting the tolerance for companies to no longer ignore developments such as the following:

• Inflation Reduction Act: Sizeable incentives to expedite manufacturers’ transition to reduce carbon
• Forced Labor Prevention Act: Onus on companies importing to US to show proof of [tbc] third-party audit
• Uyghur Forced Labor Prevention Act (UFLPA): bans any goods produced, mined, or manufactured in China’s Xinjiang Uyghur
• Germany’s Supply Chain Due Diligence Act
• EU’s Corporate Sustainability Reporting Directive
• Investors, led by BlackRock, increasingly compelling companies to track and report ESG impact
• SEC  transparency and metrics on Scope 1, 2 &3