An article by Prof. Dr. Dr. Ulrich Hemel on corporate diligence and responsibility in the supply chain. It burns. On April 24, 2013, more than 1000 people died in the fire at an eight-story factory called “Rana Plaza” near Dhaka, Bangladesh. Due to a lack of precautions for occupational safety, they could not save themselves. At the same time, this fire sparked the issue of human rights in business. It has now taken eight years for a draft law on “due diligence in the supply chain” to be presented (28.2.2021). That is time enough to ask ourselves: Who has what responsibility? What obligations arise from this for companies, for politicians, for consumers? The question of the scope of responsibility Responsibility is the other side of the power to act and shape things. This starts with power in private consumption: Should we support an animal welfare levy if we don’t like the way industrial meat is produced? Should we support a social standard levy on T-shirts if we want to avoid cheap textile goods? Or do such demands go too far? After all, even in Germany there are about 15% of households that have to turn over every penny. Aren’t politically majority-acceptable goals being transformed into legal restraints that unduly restrict our freedom? Some business representatives argue similarly when it comes to the Supply Chain Act. It is worth taking their questions seriously, even if someone takes a different position. Can the German state alone intervene in global supply chains and control them effectively? Isn’t that an overestimation of its possibilities? If we don’t try, things will never get better, one could argue. After all, voluntary action alone won’t help. And finally, as consumers, we want to be sure that – quite literally – there is no blood on our fingers when we buy clothes. What responsibility do companies have? If you talk to entrepreneurs, you’ll hear another side of the story. Because where does responsibility begin, where does it end? “How are we supposed to implement human rights where government influence fails?” one ethically committed entrepreneur tells me. “We have more than 2,000 products in our range, the components of which we can’t even know in detail,” reports the owner of a trading company. In a private household alone, we have an average of more than 10,000 items in Germany, from paper clips to ballpoint pens, from clothes hangers to coffee machines, from aluminum paper for butter to cell phones. In addition, there are other aspects. After all, well over 90% of the economy consists of “small and medium-sized enterprises” with often less than 10, rarely more than 50 employees. In this context, the establishment of a “human rights officer” in the company is an extraordinary effort. After all, free competition ensures that trees do not grow to the sky and that most companies have to struggle to make ends meet – contrary to popular belief. This is what the Corona pandemic has shown: many small self-employed people are attacking their reserves or their retirement provisions, and quite a few are quietly giving up their businesses. But those who have existential worries of their own find the politicians’ demand for a human rights representative in the company to be a bureaucratic imposition. The distribution of burdens in social interaction This leads directly to the second question. How do we deal with each other? A late consequence of neoliberal exaggerations today is an image of business in the public eye that is often not supported by reality. “Business has heard the shot,” a high-ranking manager of a very large German corporation told me. “What we invest in the ecological transformation of the economy is not even noticed!” Even if every responsible person promotes his or her own company, it can be stated: Many companies today are interested in bridging the gap between business and society. Not only their own insight contributes to this, but also the need caused by the shortage of skilled workers. After all, talented people today are looking for a job that allows them to realize their personal values. “Employer attractiveness” also has to do with the value orientation practiced in companies. This leads directly to the second question. How do we deal with each other? A late consequence of neoliberal exaggerations today is an image of business in the public eye that is often not supported by reality. “Business has heard the shot,” a high-ranking manager of a very large German corporation told me. “What we invest in the ecological transformation of the economy is not even noticed!” Even if every responsible person promotes his or her own company, it can be stated: Many companies today are interested in bridging the gap between business and society. Not only their own insight contributes to this, but also the need caused by the shortage of skilled workers. After all, talented people today are looking for a job that allows them to realize their personal values. “Employer attractiveness” also has to do with the value orientation practiced in companies. Consequently, companies are increasingly seeing themselves as “civil society players. In the background, then, is a conception of civil society that I have had the privilege of elaborating since 2009 at www.institut-fuer-sozialstrategie.org and which distinguishes itself both from the state and from organized crime, but sees broad areas of society such as sports, the churches, and also companies as actors in civil society. Whoever is an actor also has responsibility and must assume it! A fundamental distrust of “the economy” is not enough. On the other hand, politics in democracy must implement what society demands: greater respect for human rights. What risks could arise from the Supply Chain Act The difficulty of voluntary regulations in business life is that committed businessmen and women have to make an additional effort, which first of all entails costs. Those who “save” these costs have a financial competitive advantage. So if you don’t want to reward black sheep, you really need a legal regulation. Of course, this raises the question of what form it should take. How much effort is acceptable? To whom should the law apply? What side effects can be expected? It should not be overlooked that the additional task of risk management for the observance of human rights in supply chains undeniably entails additional expense for companies based in Germany. This does not make “Germany as a location” more attractive for investors when alternatives are available. In addition, the interpretation of human rights varies considerably from one socio-cultural point of view to another. Those who only allow their own glasses to apply quickly have to deal with the accusation of a new form of paternalism or even “neo-colonialism”. After all, the influence of smaller companies in particular is limited to suppliers. This can lead to countries with problematic human rights situations being avoided. The population in these countries does not benefit from this. They have fewer opportunities than before to use their skills in business. How quickly a human rights situation can tip can be seen in Myanmar, where in 2020 the military seized power from the democratically elected government in a coup. Anyone who buys goods from there will probably try to end such supply relationships. This will not benefit the local population. In this case, the opposite of what is sought would be achieved. The opportunities outweigh the risks Despite justified criticisms in detail, the opportunities of a supply chain law outweigh the disadvantages. If we stand up for values in economic life, this does not end at the factory gates. Purchasing and procurement must be re-evaluated today. They are part of living ethics in companies. This includes something like a “Good Procurement Practice” with an analysis of ethical criteria as early as the product planning stage, but also in the review of ethical minimum standards at suppliers. At the same time, a sense of what is feasible must not be lost. Only companies of a certain size can afford differentiated forms of risk management in procurement. But the German Supply Chain Act also only applies to companies with more than 1,000 employees. And of course, consideration must be given to the limits within which any influence at all can be exerted on suppliers: Therefore, it is a matter of an “obligation to make an effort,” nothing more and nothing less. But this is reasonable for all parties involved!