In drafting a law regulating supply chains Germany surrendered to the business lobby. The EU must not do the same.

‘The strongest law in Europe.’ That’s what the federal minister of labour, Hubertus Heil, is calling Germany’s proposed legislation on supply chains (Lieferkettengesetz). Is he right?

Well, yes and no. The government plans to introduce a new duty of care for human rights. If approved by parliament, Germany will become only the second country with such a law.

The proposal is a long-overdue step in fixing a broken system, in which globalisation is coming at a devastating cost to the planet and its people, while corporations running the show get away scot-free, regardless of whether they are based in Germany or elsewhere.

It hopes to oblige German companies regularly to identify, mitigate and prevent risks associated with their own activities and those of their suppliers with whom they have a contractual relationship.

But the current formulation risks letting companies off the hook for what happens at the very bottom of their value chains.

Child labour on cacao farms, worker exploitation in cobalt mines or union-busting in Bangladesh are all examples of serious human-rights violations which companies would only be required to examine, and try to prevent, if they are prompted by complaints.

Companies in the extractive industries wouldn’t even have to do a risk assessment. That is a cop-out.

What is needed is a risk-based approach to due diligence, based on international standards. If this is not reflected in the law, the costs of irresponsible business will continue to be felt by those least able to withstand them.