Published: Oct 7, 2021 by Mark Campbell
The Supply Chain Laws will affect all countries that manufacture for German companies. Below is a small selection of countries and their current situation.
Ivory Coast and Ghana
West African cocoa plantations have for years been exploiting child labour that is utilised for the harvest of cocoa. It has been reported that more than 2 million children are working in this industry currently. (The International Labour Organisation estimates around 10 million child slaves are being exploited worldwide.) From 2023 German confectionery companies sourcing cocoa from these West African jurisdictions will need to undertake a risk analysis under the Supply Chain Law to ensure that child labour is not being exploited for the supply of cocoa for their products.
Slavery is officially banned in the northwestern African country but people are still being inherited or sold as property within its borders. An estimated 600,000 women, men and children in Mauritania are currently exploited as domestic workers or in the agriculture sector, the latter which supplies products finding their way onto German shelves.
Forced labour has been much reported in the media, due to the long hours, poor pay and abysmal living conditions of the imported foreign workforce. A number of human rights abuses have been levelled at the Gulf State of Qatar as a consequence of its preparations for the 2022 World Cup, which has involved the building of large-capacity football stadiums in record time, utilizing a foreign labour force at the expense of human rights.
China, Xinjiang province
Western media in recent years has reported the plight of the Uyghur Muslim population in north-west China. Despite the Chinese government restricting media access to this remote part of China, forced labour camps have been much reported where Uyghurs and other Muslim minorities are reportedly being persecuted. German industrial concerns Volkswagen and BASF produce goods in Xinjiang and accordingly will be required to ensure compliance with the Supply Chain Law if they continue to source and manufacture products from this region in China after 2023. Germany imported over 1 trillion euros-worth of goods in 2020, with China its largest source of imports. The German regulatory authorities will be taking a close interest to business practices going on in Asia’s largest economy regarding compliance with the Supply Chain Law, which will have a ripple-effect upon the DAX-listed companies that are dependent on Chinese imports.
Democratic Republic of Congo (DRC)
With the transition of the global car industry moving away from combustion-powered to electronic battery-operated vehicles, a number of rare mined minerals are utilized in car batteries. One common mineral is cobalt, where 60% of the world’s production is found in the DRC. 20% of cobalt has been alleged to be mined using child labour. Car manufacturers sourcing cobalt from DRC producers will be required to check compliance under the Supply Chain Law when sourcing from a country that has a poor record in relation to exploiting children.
The above examples are only a small illustration of countries and industries serving the German economy, where there will be potential infringement under the German Supply Chain Law, if these exploitative business practices continue once the law is enacted. Human rights abuses taking place in the Indian subcontinent and in Central and South America with companies supplying to German customers are also commonplace and also will fall within the scope of the law once it comes into force in 2023.