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PoliticsSouth Africa

What does the German Supply Chain Act bring to Africa?

June 23, 2023

A recently-introduced German law obliges German companies to review their supply chains — both domestically and abroad — for compliance with human rights and environmental standards. What has it meant for Africa?

People working on a car at Volkswagen's assembly plant in Kigali, Rwanda
The German law also applies to overseas subsidiaries as well as suppliers and subcontractorsImage: Getty Images/AFP/C. Ndegeya

The German Supply Chain Due Diligence Act (German abbreviation: LkSG) requires companies based in Germany to identify human rights, labor, and environmental risks and deficiencies along their supply chains, take measures to prevent violations, and implement appropriate remedial actions.

The law particularly affects companies with more than 3,000 workers.

How does the law protect workers in Africa?

Let's assume a German car manufacturer sources its raw materials — such as metals or plastics for vehicle production — from South Africa.

The German Supply Chain Act requires the company to ensure that the rights of workers in the supply chains of the raw materials are respected.

It must ensure that workers in the mines or production facilities, including those in Africa, receive fair wages and that working conditions comply with international standards. This includes fair payment and protection against exploitation, discrimination, or hazardous working conditions.

Gold miners in Ndassima gold mine, Central African Republic
International labor law standards must be observedImage: Thierry Bresilion/AA/picture alliance

Environmental and human rights standards must also be upheld. The law obliges German companies to ensure that no environmentally harmful production methods or human rights violations occur in the supply chain.

This could include protection against forced labor, child labor, or discrimination. The company must also ensure that its suppliers adhere to these principles.

But how is the German Supply Chain Act perceived in the Global South, particularly in Africa? Do African workers and unions even know about the law? Do unions consider the new requirements for due diligence as an opportunity to protect and organize workers involved in the supply chain?

German Supply Chain Act is largely unknown in Africa

To find answers to these questions, the Friedrich-Ebert-Stiftung (FES), a foundation close to the Social Democrats from the SPD party, commissioned an empirical study on the automotive sector in South Africa, Kenya, and Ghana, which — unsurprisingly — revealed that the law is still largely unknown among African workers and unions.

"The law is still relatively new; it has only been in effect for six months. Even in Germany, it is not yet widely known," said Kathrin Meissner, head of the Sub-Saharan Africa Trade Union Competence Center at the Friedrich-Ebert-Stiftung in Johannesburg, in an interview with DW.

Volkswagen building in Rwanda
German automaker Volkswagen in 2018 started an electric car project in RwandaImage: picture-alliance/dpa/F. Gentsch

The limited knowledge of unions and foreign companies about the Supply Chain Act must be seen as a mandate to address this deficit and deepen the understanding, according to Meissner.

"We should provide unions, including those in African countries, with this Supply Chain Act as a powerful instrument," said Meissner.

"Only if strong unions and worker representatives also utilize the law, it can have an impact. Otherwise, it would only exist on paper, and it would be easy for companies to circumvent risks in their entire supply chain."

Involvement of unions in Germany and Africa is required

The FES study identified a crucial prerequisite for the applicability of the German Supply Chain Act in Africa.

In the event of violations, it is necessary for unions in the respective countries, as well as in Germany, to effectively collaborate. Unions could ensure that any violations are addressed by taking legal action to compel the company to comply with its due diligence obligations. If unions network transnationally, they could use the law to "build the necessary union counterbalance against multinational companies," said Meissner.

"There have been efforts on the African continent, including by the FES, to inform unions about this German Supply Chain Act and provide them with opportunities for its utilization. At the same time, we have also established contacts with German unions because the goal is to strengthen transnational solidarity among unions," Meissner said.

A solar power system in Kenya which has been financed by a German start-up
Several EU member states have enacted similar measures to regulate the responsibility of companies in supply chainsImage: DW

How can workers report deficiencies in supply chains?

"If there are violations according to the Supply Chain Act, the transnational networks of unions are, of course, an important element for remedy," according to Meissner.

"Violations can be reported to the Federal Office for Economic Affairs and Export Control (German abbreviation: BAFA) through the German trade unions. BAFA is the responsible authority for implementing the Supply Chain Act."

However, to her knowledge, there have been no complaints from African countries to BAFA thus far.

Germany, the pioneer?

France introduced the Duty of Vigilance Law ("Devoir de Vigilance") in 2017, which imposes similar requirements to the German LkSG. This law applies to companies with more than 5,000 employees in France or more than 10,000 employees worldwide.

Other EU countries, including the Netherlands and Norway, have also introduced similar national laws or initiatives on supply chain transparency and corporate responsibility.

This article has been translated from German.

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