Sustainable Supply Chains

In search of smart regulations for sustainable supply chains in the commodities sector

10.03.2019 |

More and more people are wondering where and under what conditions the products they consume are produced. The raw materials for our everyday goods such as coffee or textiles, but also for cell phones, computers and automobiles are still being mined and processed under sometimes inhumane conditions. Sustainable global supply chains are an important building block to improve the lives of millions of people in producing countries. Politicians and the private sector have various, partly binding, partly voluntary approaches to implementing corporate due diligence obligations. To be effective, these approaches need to be meaningfully and efficiently linked together. What is needed is an intelligent mix, a "smart mix" of legal provisions, voluntary standards, multi-stakeholder partnerships and development-accompanying measures.

On this topic, the Federal Ministry for Economic Cooperation and Development (BMZ) organized the 5th Future Forum, Make Globalization Fair, entitled "For Sustainable Supply Chains: Separate Responsibilities - Shared Responsibility" from 20.-21.02.2019. The prelude was an evening panel discussion with the two Federal Ministers for Development, Dr. Gerd Müller, and for work and social affairs, Hubertus Heil, as well as invited guests from business and civil society. The next day, as part of a symposium with three parallel workshops, various aspects of sustainable supply chains and corporate diligence were intensively analyzed and discussed.

One of the workshops focused on the cocoa and conflict minerals industries. Approximately 90 representatives from politics, administration, business, science and civil society discussed the question of what constitutes an intelligent mix of approaches to promoting environmental, social and human rights standards in global supply chains. The two industries are well suited for comparison: While the conflict minerals tin, tantalum, tungsten and gold are the subject of mandatory regulatory regulation, the cocoa sector is more strongly marked by voluntary initiatives and programs. Experts from OECD and BGR, the NGOs Südwind und Fern, as well as BMW and Mars Wrigley Confectory provided input for the lively discussion at a high level.

The participants largely agreed that it is difficult to find cross-industry blueprints for a smart mix in the regulatory area. The challenges, elements and specifics of the respective supply chain are too different. However, many representatives of the cocoa industry advocated a similar due diligence system in their sector, as in the EU Regulation on Conflict Minerals for the Commodities Sector. A particular problem identified in the implementation of due diligence in the extractive sector has been identified as the low impact on the key player China. In addition, many participants called for improved auditing and methodologies for measuring the effectiveness of certification systems. Finally, it emphasized the need to flank legal provisions in the context of bilateral development cooperation. The responsible mining and financial authorities in the producer countries would have to promote and ensure good raw material governance on the ground.

For further information please contact Ankenbrand Christina.

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