The Federal Government vigorously promotes the implementation of the National Action Plan for Business and Human Rights (NAP). In order to bring business and human rights issues into line with each other and ensure proper implementation of relevant guidelines and frameworks, it has created various institutional structures such as the Interministerial Committee on Business and Human Rights and the National Contact Point for the OECD Guidelines for Multinational Enterprises.
The Federal Government has also launched a range of multi-stakeholder initiatives with business and civil society stakeholders to advance both human rights and environmental issues. The following pages look at how the initiatives differ in focus and also at the differences between the various measures.
Interministerial Committee on Business and Human Rights
For implementation of the National Action Plan, the Federal Government has appointed an Interministerial Committee on Business and Human Rights chaired by the Federal Foreign Office. The task of this committee is to review the measures taken to implement the NAP and to advance the further development of the NAP process. Action areas to be reviewed notably include measures around the state’s duty to protect and further elaboration of the due diligence requirements, including plans for sector-specific requirements and related support. Recommendations of the National CSR Forum Working Group on Business and Human Rights are taken into account in this connection.
The Committee comprises ten ministries (the Federal Foreign Office, the Federal Ministry of Finance, the Federal Ministry of the Interior, Building and the Community, the Federal Ministry for Economic Affairs and Energy, the Federal Ministry of Justice and Consumer Protection, the Federal Ministry of Labour and Social Affairs, the Federal Ministry of Food and Agriculture, the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth, the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, and the Federal Ministry for Economic Cooperation and Development). The Federal Chancellery has observer status.
The Committee generally meets every two months. At its meetings, the ministries report in a regular cycle on the status of government projects to strengthen business and human rights as provided for in the NAP. Another of its central tasks is to initiate, support and guide the evaluation of companies’ progress in implementing the human rights due diligence elements described in the NAP (NAP monitoring and to advance the development of the revised NAP.
Subsidies
Subsidies always require special justification and regular assessments of their effectiveness because arrangements that benefit some at the expense of the general public usually have adverse effects in the long term. To increase the transparency of subsidisation, the pressure to justify it and the scope for controlling it, the Federal Government follows subsidy policy guidelines, which constitute a voluntary commitment undertaken by the Federal Government in connection with subsidy measures under its remit. The Guidelines from 28 January 2015 require the Federal Government to conduct sustainability assessments as part of its reporting duties.
Their focus is on weighing the impacts of measures from an environmental, economic and social perspective, paying particular attention to goal conflicts. This is based on the targets, indicators and principles of the German Sustainable Development Strategy and on the UN Agenda 2030 and its Sustainable Development Goals (SDGs). Sustainability impact assessments consequently cover the requirements of the UN Guiding Principles on Business and Human Rights. The Federal Government will examine how companies that receive significant subsidies can be required in future to apply the due diligence elements described in the NAP.
National Contact Point for the OECD Guidelines now the central grievance mechanism
The National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises was established in 2001 as an extrajudicial grievance mechanism. It is attached to the Federal Ministry for Economic Affairs and Energy and has the task of distributing information about the OECD Guidelines, raising awareness of them and promoting compliance with them. The OECD Guidelines for Multinational Enterprises are a code of conduct for responsible corporate behaviour in international contexts. As part of the OECD Declaration on International Investment and Multinational Enterprises, the OECD Guidelines are not legally binding.
However, they correlate with the Federal Government’s expectations for the conduct of German companies in their international activities. The Guidelines call upon enterprises to, for example, "respect the internationally recognised human rights of those affected by their activities". The NCP examines incoming complaints, with regard to insufficient respect for human rights, among other things. When a complaint falls within its purview, it offers to mediate between the parties. In the course of the implementation of the National Action Plan, the NCP will be upgraded to be the central grievance mechanism for external trade promotion projects. Enterprises wanting to make use of foreign-trade promotion instruments are required to participate in any grievance proceedings initiated against them before the German National Contact Point. Constructive participation in grievance mechanisms of the National Contact Point for the OECD Guidelines may taken into account for companies’ participation in high-level ministerial visits by the Federal Ministry for Economic Affairs and Climate Action (BMWK).
Assistance offered to companies
The Federal Government wishes to help small and medium-sized enterprises in particular implement the comprehensive requirements and expectations for corporate due diligence in the area of human rights. It therefore supports various measures and activities through a wide range of institutions and contact points that provide information, training and advisory services on the implementation of human rights due diligence. The National CSR Forum ensures that information about what support companies need to successfully implement due diligence is continuously communicated to the Federal Government so that it can make adjustments accordingly if possible.
There is also a special award for responsible supply chain management that has been awarded as part of the Federal Government's CSR awards since 2017. The award is intended to get a learning process in companies started. Each company that participates in the competition receives an individual evaluation of its activities in the field of sustainability. Further information on the Federal Government's CSR awards can be found on the German CSR website.
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Sector dialogues
The Federal Ministry of Labour and Social Affairs conducts sector dialogues as part of the implementation of the National Action Plan for Business and Human Rights (NAP). The aim of these dialogues is to provide companies in sectors that are subject to particular human rights challenges with guidance and to support them in suitably implementing the NAP requirements on human rights due diligence. In this way, the dialogues contribute towards improving the human rights situation in global supply and value chains.
Currently, sector dialogues are being held with the German automotive and the German energy industry. Dialogues with other sectors are planned.
The Green Button
More than 60 million people around the world work to make our clothes – most of them in developing and emerging economies. In many producer countries, people still work 16-hour days, are paid wages that are barely enough to live on, face dismissal in the event of pregnancy or illness, breathe polluted air and have access only to contaminated water. The coronavirus crisis has made the situation even worse in many places.
Safety standards are often inadequate, as was seen in 2013 with the collapse of the dilapidated Rana Plaza garment factory in Bangladesh. Over 1,000 lost their lives in that disaster. Such a tragedy must never happen again.
So that consumers can consciously buy sustainable clothing, the Federal Ministry for Economic Cooperation and Development has introduced the Green Button (“Grüner Kopf”), a government garment label. What is special about the Green Button is that, for the first time, it combines requirements for textile products with requirements for the entire company. External audits are carried out to verify that a company assumes responsibility for its textile supply chain. It is not enough to present just a few products ‘for show’.
Where is the Green Button found on clothes?
The Green Button – in the form of a logo – is highly visible, either on the price tag, on the product itself or on the packaging.
Are there not already enough fair trade labels?
That’s just the problem. With all the different labels in use, many consumers no longer know what they all stand for. Some focus on fair working conditions and others on strict environmental criteria. The Green Button provides clarity, building on existing, demanding labelling schemes to ensure that a product meets high social and environmental requirements. The entire company is also audited. Does it have local complaint mechanisms for seamstresses? Does the company disclose risks in its supply chain? Does it address grievances? That is what is special about the Green Button. It is not enough to present just a few products ‘for show’. The whole company must commit to sustainability.
Is the Green Button a purely German label?
No, the Green Button is an international label that is registered as a European Union trade mark. It complies with EU and WTO law, and the audits are carried out on the basis of harmonised international standards. The Green Button is also available with German or English wording.
What criteria must be met?
A product, such as a tee shirt or a backpack, has to meet 26 social and environmental criteria ranging from water pollution limits to non-use of forced labour. The Green Button does not itself audit producing companies in the supply chain. Instead, compliance with the criteria is demonstrated by presenting other recognised certification.
In addition, the entire company is audited against 20 further criteria. Does it meet its human rights and environmental due diligence requirements in the garment supply chain? Does it address grievances? Does it have local complaint mechanisms for garment workers?
How is the Green Button certified?
Independent certification bodies verify compliance with the criteria. Before they are allowed to audit for the Green Button, auditors have to complete a comprehensive training programme with accreditation testing on the topics of corporate due diligence and the Green Button audit process. The German Accreditation Body (DAkkS) provides advice on how to ensure reliable audits.
Can the Green Button be used for public procurement?
Yes. The Green Button can be used for sustainable public procurement in the EU. Hospitals, police stations or municipal authorities can utilise the criteria of the Green Button label to ensure sustainable procurement of articles such as doctors’ coats, shirts and other textiles.
The Green Button helps procuring entities incorporate the sustainability criteria of the government label into the procurement process in various ways.
Also, the Green Button office provides advice for procuring entities to help them build sustainability criteria into tendering procedures. For example, they can make use of tested sample forms and a quick start guide as an aid for integrating the criteria.
Do the product criteria cover the entire supply chain?
Version 1.0 of the Green Button was launched in late 2019. This version includes product criteria for the “cutting and sewing” and “bleaching and dyeing” (wet processing) production stages. The social and environmental challenges here are immense:
- 75 million people work in these production stages.
- All of the 100 billion garments produced each year go through them.
- Day after day, dye works flush an average of 2.5 tonnes of chemicals, often untreated, into wastewater systems.
- It was in this stage of production that the Rana Plaza textiles factory collapsed.
A revised version of the Green Button will be presented at the end of 2021. Version 2.0 of the Green Button will incorporate additional criteria.
Partnership for Sustainable Textiles
The Partnership for Sustainable Textiles (Bündnis für nachhaltige Textilien), initiated in 2014 by German Development Minister Gerd Müller, works for social and environmental improvements in the garment industry along the entire product life cycle. The guiding principles of its work are respect for human rights and operating within the planet’s limits. Its goals and approach are based on international standards and on UN, ILO and OECD guidelines on corporate due diligence. The Partnership is a multi-stakeholder initiative that brings together companies, industry associations, non-governmental organisations, standard setting organisations, unions and the German Federal Government. Its approximately 130 members (as of September 2021) work together, pooling their expertise and strengths. Partnership for Sustainable Textiles also cooperates with European and international initiatives to share best practices, leverage its impact and avoid duplication of effort. Its top-level decision-making body is the steering committee, in which the Federal Government is represented by three ministries: the Federal Ministry of Labour and Social Affairs, the Federal Ministry for Economic Cooperation and Development and the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety.
Improving the situation in producer countries
Various members of different stakeholder groups take part in Partnership initiatives in producer countries. Coordinated, joint action enables progress that could not be achieved by organisations acting alone. In September 2021, four Partnership initiatives were underway on living wages, wastewater management, grievance mechanisms and improving working conditions in Tamil Nadu, southern India. Further initiatives are planned.
The Partnership is also a platform for learning and dialogue. Members connect within their own stakeholder groups and with members of other groups, share knowledge and work together on best practices.
Making progress visible
The Partnership for Sustainable Textiles helps companies in the implementation of corporate due diligence requirements by translating UN, ILO and OECD requirements and recommendations into suitable formats and tools. Examples include an implementation framework and a reporting format for due diligence requirements (review process), which will also reflect future regulatory requirements. The review process represents the commitment of small, medium and large companies in the garment industry to assume individual responsibility for their supply chain. Based on a risk analysis, they work step by step to prevent and mitigate the most serious social, environmental and corruption risks in the value chain. The Partnership publishes reports by individual members on its website. The review process ensures continuous target tracking, transparency and commitment.
Adapted reporting obligations apply for Partnership members from five stakeholder groups: the Federal Government, unions, industry associations, non-governmental organisations and standard setting organisations.
German Initiative on Sutainable Cocoa
Cocoa is highly popular in Germany. With 430,000 tonnes in 2020, Germany is the world’s third-biggest importer of raw cocoa and also the largest exporter of chocolate products. Per-capita consumption of chocolate products in Germany was 9.2 kilograms in 2019. In some cases, however, the cocoa fruit is grown under difficult conditions. Child labour on plantations, non-living wages and discrimination against women comprise major human rights challenges in the cocoa supply chain.
Multi-stakeholder alliance for sustainable cocoa
Launched in 2012, Forum Nachhaltiger Kakao – the German Initiative on Sustainable Cocoa (GISCO) – is a joint initiative of the Federal Government, represented by the German Ministry for Economic Cooperation and Development (BMZ) and the German Ministry of Food and Agriculture (BMEL), the German sweets and confectionery industry, the German retail grocery trade, and civil society. GISCO currently has about 70 active members.
Its aim is to support cocoa farmers in producer countries on their way to sustainable cocoa cultivation and to bring together existing measures. These includes improving living conditions of cocoa farmers and their families and contributing to a secure living, and conserving and protecting natural resources and biodiversity in producer countries. GISCO also aims to increase the cultivation and commercialisation of cocoa produced according to sustainability standards. The target is for a share of at least 85% of cocoa in cocoa-containing end products sold by the producing members in Germany to be certified by sustainability standards or equivalently independently verified (such as with Rainforest Alliance or Fairtrade certification) by the year 2025. This figure was 74 percent in 2019 and 83 in 2020.
In the long term, all cocoa in cocoa-containing end products sold in Germany is to come from sustainable cultivation (see the GISCO sustainability definition).
Working with partner countries to promote sustainable cocoa cultivation
GISCO members are committed to supporting investment in substantial and sustainable training for cocoa farmers, promoting the development and implementation of sustainable cultivation systems and eliminating abusive forms of child labour in cocoa production. In this connection, GISCO provides a platform for experience sharing and networking among members in order to further develop and apply good practices. Measures are embedded into international initiatives to help partner country governments improve production. Together with international partners, GISCO members currently have 125 projects underway in 25 cocoa producer countries. 66 of these are in Côte d’Ivoire. The latter is the world’s most important cocoa producer and the source of about 50 percent of Germany’s total raw cocoa imports. A major GISCO project is PRO-PLANTEURS, in which the Federal Government cooperates with the Côte d’Ivoire government with the aim of professionalising 30,000 cocoa farmers and their families. Women in particular are to be provided with means of improving their own income, and cocoa farming is to be made more attractive and viable again for young people.
Forum for Sustainable Palm Oil
Palm oil is ubiquitous in everyday products and has long been one of the world’s most important renewable resources, being used in food, cosmetics, detergents, candles and many industrial products. Hardly any sector of the economy can do without palm oil, as its properties make it ideal for industrial processing. However, oil palm cultivation can be problematic. Rainforests are cleared to create new land for palm oil plantations, smaller farmers are displaced, endangered species such as orangutan lose their habitat and the ground becomes polluted with pesticides.
Multi-stakeholder initiative including business, civil society and the Federal Government
In view of the ubiquitous presence of palm oil in everyday products and the questionable cultivation conditions, the Federal Government supports Forum Nachhaltiges Palmöl e.V. (the Forum for Sustainable Palm Oil, or FONAP). A multi-stakeholder initiative, FONAP was launched in 2013 at the initiative of the Federal Ministry of Food and Agriculture (BMEL), a number of companies, and WWF. The Federal Ministry for Economic Cooperation and Development (BMZ) joined FONAP in 2020. FONAP is a German registered association with over 50 members including companies that process palm oil, trade associations in the food, sustainability and certification sectors, the Federal Ministry for Economic Cooperation and Development, the Federal Ministry of Food and Agriculture and non-governmental organisations. All FONAP members commit to using only certified, 100 percent sustainably produced palm oil and palm kernel oil in their products.
Promotion of certified, sustainably produced palm oil in Germany
FONAP’s aim is to promote sustainable agricultural supply chains with emphasis on palm oil. A key focus is on supply chain transparency and fact-based dialogue around this commodity. Visible involvement in producer countries, conservation of biodiversity and the restoration of ecosystems are also among FONAP’s objectives. This includes strengthening local employment rights and supporting small-scale producers. FONAP currently accepts four certification schemes and aims to improve their transparency and supply chain sustainability requirements: Roundtable on Sustainable Palm Oil (RSPO), International Sustainability and Carbon Certification (ISCC PLUS), Rainforest Alliance (RA) and Roundtable of Sustainable Biomaterials (RSB). Among other things, FONAP members work for supply chain traceability to ensure that palm oil is produced in accordance with the law. They also advocate compliance with additional criteria such as doing without toxic pesticides and applying strict reduction targets for greenhouse gas emissions, most of which are now covered by certification schemes or by RSPO.
Environmental and social challenges in the supply chain
According to the latest FONAP study of the palm oil market, a total of 1.26 million tonnes of palm oil were consumed in Germany in 2019, with 83 percent certified sustainable. There are still some challenges associated with oil palm cultivation, however. As oil palms only grow in a tropical climate, large areas of rainforest are often cleared for plantations and illegal slash-and-burn cultivation releases greenhouse gas emissions. Oil palm cultivation frequently also involves human rights violation, poor working conditions and social inequity. Due to their work, plantation workers and their families often live on the palm oil plantations themselves, as a result of which their children have no access to education. There are cases of indigenous peoples being evicted from their lands and small growers having to compete with local agribusinesses for water and other basic resources. How to support companies in implementing human rights due diligence is therefore a major issue for FONAP and its members.
Alongside ordinary members, companies involved in producing, processing and trading in palm oil can commit to promoting sustainable palm oil production as FONAP supporters (see www.forumpalmoel.org for details) by increasing the proportion of certified palm oil each year in a verifiable and ambitious manner. They support members in fulfilling their voluntary commitment, including the additional criteria, and in ensuring the traceability of palm oil by engaging in dialogue with suppliers to ensure transparency and hence legality within the supply chain.
Commitment with impact
Commitment with impact With their initiative and voluntary commitment, FONAP and its members send out a clear signal to producer countries, certification schemes and the public that palm oil-consuming companies in Germany deliver on their responsibility in global supply chains and aim to improve social, economic and environmental conditions in the countries where oil palms are cultivated.
Initiative for Sustainable Supply Chains
The Initiative for Sustainable Agricultural Supply Chains (Initiative für nachhaltige Agrarlieferketten, or INA) unites more than 70 actors from the private sector, civil society and politics. It sees itself as an open platform and works across the various supply chains. Together, the stakeholders aim to take holistic approaches in order to improve the living conditions of small-scale farmers and to add to the sustainability of agricultural supply chains around the world. INA focuses primarily on protecting natural resources and implementing a living wage.
Impacts across all commodity sectors
More than 400 million people live from the cultivation of agricultural commodities such as coffee, cocoa, bananas, palm oil or cotton. Most such commodities are cultivated in small-scale farming structures. Smallholders are thus the basis for a secure, sustainable supply of food to the world’s population. However, poverty, child labour, environmental problems and outdated cultivation methods continue to be major challenges in the cultivation of agricultural commodities.
In recent years, several commodity-specific multi-stakeholder partnerships (MAPs) have been set up to make agricultural supply chains more sustainable. Many companies are members of the relevant MAP platforms and also invest in their own sustainability programs. Certification to voluntary sustainability standards also makes an important contribution to the development of sustainable agricultural supply chains.
Low wages and incomes and deforestation nevertheless continue to be a problem. A common approach by all actors across the borders of their supply chains promises greater impact. INA works independently of individual raw materials. It is committed to the development of sustainable regions where a cross-commodity approach comes into play.
Expertise on agricutural commodities
INA has many years of expertise in individual commodities, including coffee, cocoa, banana, palm oil and natural rubber. Its cross-commodity orientation also means it has expertise on various cross-cutting issues. These include deforestation-free supply chains, living wages and digitalisation.
Through close interaction with commodity-specific multi-stakeholder partnerships – such as the German Initiative on Sustainable Cocoa and the Forum for Sustainable Palm Oil – INA creates synergies to effectively combat deforestation and low wages and incomes.
Action and knowledge community
As a multi-stakeholder partnership, INA performs various functions for stakeholders. It is both a knowledge community and a network. To this end, it operates through various formats, including INA workshops, podcasts and regular newsletters. In all of these formats, topical issues of relevance to sustainable supply chains are presented in a practice-oriented manner and made available to the INA network. As well as working with private-sector and civil society stakeholders, INA also makes use of its expertise in communication with consumers. INA raises awareness and provides information on issues related to sustainable consumption in social media channels and campaigns with influencers.
Support in readiness for the Act on Corporate Due Diligence Obligations in Supply Chains
Following the adoption of the Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichengesetz – LkSG), INA plans a wide range of support for interested stakeholders. This includes a series of events presenting various tools and resources to help companies meet their human rights due diligence obligations. The events take place in a one-hour lunch break format on the first Friday of each month. They also go beyond the legislation in Germany and anticipate potential new stipulations at international and EU level that could result in additional requirements. A further focus is on the agribusiness and food sector. There will also be webinars for stakeholders in partner countries on the importance of legislative measures for provenance in agricultural supply chains.
Building local alliances
Aside from these formats, INA also supports the establishment of local alliances and collaborations through its network. Numerous projects have arisen as a result of this since its launch. In Rwanda, for example, INA is working to digitalise the supply chain of a speciality coffee grown solely by Rwandan women. INATrace, the open-source blockchain solution used for this purpose, enables the coffee to be traced all the way back to producers. The fact that the coffee is traceable significantly enhances its market potential and value. That in turn leads to higher incomes for the women producing it.
Another INA project underway since the summer of 2019, Sustainability and Value Added in Agricultural Supply Chains in Ethiopia (SUVASE), focuses on a previously neglected commodity: beeswax. The main crop grown in the Woreda Nono Sale region of Ethiopia is coffee, but many of the smallholder families practice beekeeping in parallel, and some also grow spices. New sales markets are now to be opened thanks to the open and active cooperation of major wax and coffee companies within INA. This enables smallholder families to improve their incomes from the sale of different commodities.
More success stories can be found on the INA website. INA operates without formal membership and is always open to interested stakeholders who wish to work together across commodities. Contact INA at any time: ina@giz.de