Corporate Accountability

The sector dialogues within the National Action Plan for Business and Human Rights (NAP) are used as a support for the German Government to implement human rights due diligence. After five years in operation, this particular format has certainly proved effective. In our paper, the participating civil society organisations try to provide an overall view, and present a generally mixed picture.

Since January 2023, the rules of the Supply Chain Act in Germany have applied to all companies above a certain size. This also includes financial institutions. However, the Federal Office for Economic Affairs and Export Control (BAFA), which is responsible for enforcing the law, argued in its guidance published in August 2023 that the law's due diligence obligations are not binding for financial institutions with regard to their core business. Contrary to the guidance, our legal opinion concludes that a correct interpretation of the LkSG clearly shows that financial institutions have a supplier relationship within the meaning of the LkSG with their customers for a number of financial products.

The EU has recently adopted a number of regulations to facilitate the extended use of products as well as product repairs and reuse. However, these regulations fail to address a key obstacle to repairs: The costs. This is why we are calling for subsidised consumer repairs. To achieve this, the Extended Producer Responsibility must be fundamentally reformed.

On 25 July 2024, the EU Corporate Sustainability Due Diligence Directive (CSDDD) entered into force. The member states will now need to transpose the directive into national law. Germany already has sustainability due diligence legislation, the Act on Corporate Due Diligence Obligations in Supply Chains (LkSG). This raises the question as to how the CSDDD influences the scope of application of the LkSG.

In this Opinion Paper, Fabián Andrés León Peñuela and Valentina Muñoz Bernal from the Business and Human Right Resource Center in Colombia take a look at the Critical Raw Materials Act (CRMA) that was passed by the EU in March 2024. The Act aims to ensure a secure, diversified, affordable, and sustainable supply of 37 minerals considered critical or indispensable for strategic sectors of the Union, such as renewable energy, digital, space, defence, and health industries.

The EU’s strategic raw materials diplomacy and partnerships are on the rise, not just since the EU has adopted the Critical Raw Materials Act to secure the supply for its renewable energy, digitalisation, defence, and space industries. Kazakhstan and the EU have initiated a Critical Raw Materials partnership in 2022. The two Kazakhstani transparency experts Mariya Lobacheva and Tatyana Sedova trace how the partneship was set up without properly informing and consulting with the public.

Multi-stakeholder initiatives (MSIs) in Germany aim to strengthen corporate due diligence. Their dialogue formats primarily bring together governmental, economic, and civil society actors based in Germany. They therefore tend to exclude, or only selectively involve, stakeholder groups (rights holders) who are (or may be) adversely affected by corporate activities. This paper illustrates the different dimensions of meaningful rights holder engagement in MSIs and highlights best practices developed by different German MSIs, thus showcasing how MSIs can contribute to due diligence implementation, at least in theory.

Today, eight years ago, the Peruvian mountain guide and small farmer Saúl Luciano Lliuya filed his civil lawsuit against RWE at the regional court in Essen in Germany. What began back then has now become one of the world's most recognised precedents for the question of whether individual major emitters must pay for protection against climate risks.

In this brief, BUND and Germanwatch examine cases of environmental degradation in value chains of European companies, for example impacts of land use, pesticides, or gas and oil operations. We also provide analyses of how proposals for the EU Corporate Sustainability Due Diligence Directive cover these impacts and highlight the pivotal role of the European Parliament in this matter.

Global consumption of raw materials at this point is not sustainable for the Earth. Germany consumes an above-average of resources compared to other countries. If they were to consume as much as Germany, it would take three Earths to satisfy global demand. We therefore welcome the German government’s initiative of a National Circular Economy Strategy to reduce raw materials demand, but press for adverse effects for the Global South to be addressed.