On September 11, 2012, 258 people burned and suffocated to death in Karachi, Pakistan while making clothes for a German discount retailer. The causes of the factory fire, the deadliest in Pakistan’s history, are still the subject of a court case, but the official reports agreed on the causes of many of the deaths: sealed windows and blocked doors and the factory’s all-round failure to comply with labor and safety standards.
The plant was run by a Pakistani company named Ali Enterprises, but its main customer on the day of the fire was KiK — a budget clothing chain familiar to every German high street. Four parents of the victims brought a compensation lawsuit against KiK, but it was dismissed in January this year, on the grounds that the crime had exceeded its statute of limitations.
That left the question of KiK’s liability for the deaths open, and that legal uncertainty is everywhere: Is TÜV SÜD, the German inspection company, responsible for the 248 deaths in a toxic mudslide in Brazil in January caused by a ruptured dam it had certified as safe?
Is Germany’s most-loved candy-maker Haribo responsible for the slavery-type conditions on the palm tree plantations in northern Brazil from which it sources the carnauba wax that makes the gummy bears shiny? Is construction giant HeidelbergCement responsible for the rural livelihoods destroyed by its new cement plant in Indonesia?
Read more: KiK fire in Karachi: a timeline
A new law to force responsibility
A new campaign was launched last month to try to force companies to find their own answers to those questions before disasters happen. The plan is to pressure the government into introducing a new “supply chain law” that would oblige German companies to monitor human rights on their foreign operations. In other words, the firms would have a duty of care for their suppliers’ workers, and, in the case of a violation, a German court would decide on their responsibility.
The campaign, supported by several nongovernmental organizations and trade unions, is being coordinated by Johanna Kusch, a corporate accountability adviser at the NGO Germanwatch.
Kusch insists that in the case of the Pakistan fire, the law her initiative has proposed would have made a difference: “Because the duty of care would have included things like: What is the fire protection in the factory?” she said. “Of course that might have a preventative character, because in that case KiK might have considered more thoroughly whether everything in the factory was okay.”
Too hard, too expensive
Of course, many businesses take a different view of this. The Confederation of German Employers’ Associations (BDA) is critical, and rolled out classic arguments in a statement to DW: “[Legal measures] underestimate the complexity of the global supply chains and demand a practical impossibility from businesspeople: they have to be personally responsible for the actions of third parties in foreign states and even other continents, even though they have no influence on these,” it read.
Even if they did have influence, the statement added, its scope “varies greatly, and depends on the number of suppliers, the structure and complexity of the supply chain, and the market position of the company.”
That much is certainly true: Global trade has now become so bewilderingly complex that there are hardly any consumer products on the average industrialized high street that are not assembled out of parts from all over the world. Meanwhile, according to the United Nations’ International Labour Organization (ILO), some 40 million people live in slavery.
Raw materials are a particular problem. “A textile factory needs cotton, and some textile manufacturer in Vietnam might not even know itself where it is buying cotton from — it might just be buying it from exchanges,” Michael Windfuhr, deputy director of the German Institute for Humans Rights, told DW. “So you can imagine it’s not that easy to work out how to organize your entire supply chain so that you can be sure that no children are working somewhere along the line to produce that cotton.”
That means you have to negotiate with that textile manufacturer in Vietnam to make sure they know where their cotton is coming from. There are of course “fair trade” firms that try to build an ethical supply from scratch, but it is much more difficult for large firms with long supply chains to rejig those chains. “It’s not that easy.”
But human rights organizations say that’s just all the more reason to regulate them, and Windfuhr says there’s an urgent need to regulate all kinds of questions: “What are the working conditions at the locations? How does the company deal with security forces and protesters? Does the company pass on data of employees to local secret services? Are women allowed to have children, or will they be sacked? If a law comes in, the firm has to start dealing with all these things.”
The government solution: Delay and compromise
In a moderate way, the debate is being carried out within the government, with the Economy Ministry favoring self-regulation and the Development Ministry pushing for a law. In February this year, Development Minister Gerd Müller even teamed up with Labor Minister Hubertus Heil to urge companies to regulate themselves — or else expect regulation from the government. And a new “green button” initiative was launched last month to safeguard human rights in the textile industry.
In its latest coalition contract, the government promised to introduce a “National Action Plan for Economy and Human Rights” (NAP). At the moment, this action plan is in its “monitoring” phase, which involves questionnaires being sent to 7,000 companies, who can choose to answer the questions or not.
The assessment of these answers will be published in mid-2020, when the government will reveal how many of those companies it thinks have an ethical supply chain. Should that assessment come to the conclusion that voluntary self-regulation isn’t working, the government has promised to draw up a law.
But as yet the government has not actually presented a draft supply chain law. That’s largely because of opposition from the Economy Ministry, which would only tell DW in a statement that the monitoring would provide the government with a “basis” for “further steps, including possible legal regulations.”
By that time, the debate may even have turned. KiK for its part told DW that while it would in no way accept responsibility for the Karachi fire, it would actually welcome a supply chain law in Europe “to level the playing field.” It isn’t alone: as part of its campaign, Germanwatch has collected a host of statements welcoming better regulation from various companies, including carmakers BMW and Daimler, retailer Tchibo, and multinational food producer Danone. Sometimes, it seems, even corporations like legal stability.