After months of negotiation, the German parliament adopted a new law on human rights in supply chains on June 11, 2021. It requires companies to identify, address, and report on any human rights or environmental abuses in their direct supply chain. Companies violating the law face penalties, which can account for as much as 2% of companies' annual revenue.
Legal liabilities in court are not included in the new law. From 2023 on, it will apply to companies with more than 3,000 employees, and from 2024 on to companies with more than 1,000 employees.
Human rights organizations such as Amnesty International and Human Rights Watch criticized the law for being too weak and having “loopholes”. For instance, companies are not obligated to conduct human rights due diligence on their indirect suppliers.
German Development Minister Gerd Müller welcomed the passage of the law and indicated that he sees it as a step in the right direction for more global justice. On the World Day Against Child Labour on June 12, 2021, Müller pointed to the rising numbers of children working and emphasized the relevance of the new law for the fight against child labor.