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Ms Rudloff, what are the benefits of a supply chain law?

2020-09-28

The Federal Government is fine-tuning a law that would require companies to ensure human rights – a supply chain law. What are the consequences for the agricultural sector? Dr Bettina Rudloff from SWP discusses linking policy fields with added value.

A coffee plantation in Peru. © Leslie Searles, GIZ

By Jan Rübel

Jan Rübel is author at Zeitenspiegel Reportagen, a columnist at Yahoo and writes for national newspapers and magazines. He studied History and Middle Eastern Studies.

All contributions

Has the voluntary self-commitment approach failed?

I wouldn’t call it an overall failure: According to a survey, only a fifth of German companies have complied with their voluntary due diligence to ensure human rights standards along the supply chain. But on the other hand, this also means: Some very large companies have complied with them and others have at least given some thought as to how human rights aspects are to be implemented and where the obstacles are.

This 20 per cent also shows that there is huge potential and a lot of options, right?

Exactly. It is important to looks at these experiences in particular. This makes it possible to make improvements in developing the delivery chains so they become more sustainable.

And the 80 per cent?

Here, we need to take a close look at the reasons. Companies do not reject them for no reason, there are some implementation difficulties. These experiences must also be included when adjusting supply chain relationships.

Particularly the smaller companies are currently arguing that they would be overwhelmed with such a law.

This is why it is so important to talk about the implementation to find solutions to the difficulties here and in supply countries: How can they overcome these demands? I think it would be beneficial to have simplified common approaches, branch associations where possible and that already exist as private initiatives, joint inspections or reporting.

When we read media reports about the supply chain law, they often talk about decency and fairness. Is it not short-sighted to only take these values into consideration?

Ethical reasons are an argument. Internationally, a stronger argument may be incentives in order to achieve sustainability in other countries as well. This includes not only human rights but also has ecological and social aims. But how can they be achieved in these countries that are far away and make their own political decisions? What do we do when, for example, states do not comply with climate agreements? This leverage can help. A supply chain law is applicable at the place of consumption, i.e. here in Germany. Here, it may be more important to find a consensus for sustainability - which is difficult enough - that then allows for measures to be decided in our own political processes. Since it is economically attractive to sell goods here, producers in other countries will join in.

Presentation of the 10-point plan for sustainable cocoa: German Development Minister Gerd Mueller with German Agriculture Minister Julia Kloeckner at the International Green Week © Janine Schmitz, GIZ

So companies should do what governments cannot?

That is one of the criticisms: Companies are being given a public political task such as ensuring human rights. I see this as one voice in a concert of different measures - the company is just one player of many, while the state must remain a more important player that makes rules, here in the consumer country and also in the production country. If these rules are not set or implemented by politically sovereign states, it is a good idea to look for other solutions. A supply chain law would be like a piece of the mosaic that has to be embedded: In good relationships with the supply state, for example, so that it also supports the law.

If not, what happens?

This kind of law could drive out very small enterprises if they simply cannot meet certain standards and do not have any local political protection. In this respect, the state is not out. Standards are generally documented with certificates that have to be achieved. For small-scale farmers in Africa, this can quickly become too much. Even compliance with the standards costs money - this can be easier and more cost-effective for larger companies than for small-scale farmers. And ultimately, compliance is also easier to check if only a few large companies are inspected instead of many small companies that are spread out.

Are there any ideas on how to deal with this?

This can be supported by development programmes. But more than anything, the supply countries have to want it. The corona crisis has shown how closely interwoven trade chains are with each other. It is possible that a producer can no longer deliver to Germany but to countries that do not have supply chain laws - which can be cheaper. This would also not help human rights or sustainability.

And what about the responsibilities of the producers in Germany, what are the consequences of a cow in a German stable on African agriculture?

It is important that many small political elements complement each other. When products cross the border, trade policy rules are required. Certifications at the borders could be made easier or tariffs could be reduced if they are attached to conditions such as sustainability. Domestically, products that could pose a risk to sustainability should be looked at more carefully. Animal farming needs feed, for example. Particularly the protein content is imported into the EU in the form of soya. How sustainably is this soya produced? Agricultural policy could also increasingly include indirect consequences for the environment and climate in the costs so that less animals are kept. To eliminate the risks of soybean cultivation, support could be given to farmers in the supply countries that sustainably cultivate soybeans. For German farmers, that would be more expensive; these costs would have to be offset with higher prices as is the case with organic products or with subsidies. It is also important to prevent cheaper competitor products replacing the expensive products at the border. Then nothing would change for the human rights and sustainability aims in the production regions. In addition, trade regulations that support sustainable imports would be required.

Do such trade regulations have to be on a voluntary basis?

This makes it easier because the World Trade Organisation does not like certain rules binding that discriminate against other states. This includes procedural rules, as there often is for sustainability and that do not lead to difference physical product properties.

Is there any leverage for example when trading agricultural products with African countries? The tariffs are already low, if not non-existent.

That’s true, the options to use tariffs as an incentive are relatively limited - particularly for raw products. This is different for processed products: It must usually be ensured that all components come from the country with which a certain tariff rate has been agreed. But this hinders processing. Africans would only be able to deliver chocolate to Europe at a zero tariff rate if they only process sugar and milk from Europe - and not, for example, from Brazil, even through the prices would be better. In these cases, conditional rules on origin could be useful, similar to conditional tariff incentives: So if I can prove that I produce a product sustainably, I can also use other components from other countries. This would also broaden the value added chain in African countries.

Zambia, Chipata, COMACO Processing of peanuts from contract farmers, sorting of roasted peanuts. © Jörg Böthling, GIZ

How exactly would this be implemented? There has been talk about it for years but we are still trying to get rid of our own products.

And that is not a bad thing. The demand that the EU should no longer export anything to developing countries because it is ruining everything there does not go far enough. While there is this risk in some countries with some products, there are other countries that, for example, have never had their own substantial milk sector. So milk products from the EU are useful in this case. Exports also generally lead to cheaper prices, which poor African countries urgently need. But if local production is being pushed out due to exports from the EU, the reasons for this have to be analysed: It is often the costs for feed, energy, hygiene and particularly for logistics and packaging that are unbelievably high. These domestic competitive disadvantages can be offset with development measures, but also have to be a political priority in the countries affected.

Could such measures be taken?

These measures already exist. For example, Ghana has its own programmes to support chicken farmers. It is important that these countries choose and implement these programmes. Development policy can then support them.

Can we really expect an EU-wide initiative on supply chain responsibility soon?

The first proposals are to be put on the table this autumn. The European Parliament is currently preparing them for a big parliamentary debate in autumn. Then there has to be the official proposal from the Commission - and ultimately it goes the typical route of the European legislative initiatives that generally take longer. As with the German supply chain law, there are still some questions to be answered: Is the focus only on human rights or also on other sustainability dimensions? It must also be clarified what company sizes are to be covered and how strict liability and sanctions are to be regulated. Ultimately, this EU-wide approach is the right thing to tackle domestic competitive disadvantages for individual companies and industries and certain EU countries and to have more of an effect.

There are currently so many initiatives: Is this a clear sign that comprehensive supply chain regulations are coming?

The problem with predictions is that they are always about the future. There is a trend towards more sustainability and includes entire supply chains. It is also important to highlight that this can only be one building block. It is not a cure-all and can even distract from other problems. It is always about the import side – i.e. ensuring human rights and sustainability in a country that delivers goods to us; we then process the imported goods. Maybe the situation will be reversed in the future: Maybe we will be large suppliers to regions in Asia. This would not be covered by our supply chain law, it would be up to the Asian countries to ensure compliance.

Is our thinking too one-dimensional?

It is certainly important to also consider the other direction. For raw products, the supply relationships are often very typically from developing countries to developed countries. This is why it is important to also see Germany and the EU as exporters - and the consequences this has for human rights and sustainability. In that respect, trade policy and investment protection policy play a bigger role.

Do you have any examples?

An example would be the human right to food, which could be at risk due to trade bans that are often used and permitted by the WTO and could quickly be seen during the corona crisis. These can be used with no further criteria or deadlines if there are worries about supply shortages. If large exporters do this, they not only limit the range of products, but cause prices to rise so high that economically weak food importers often have to pay exploding prices. Here, the EU and other like-minded countries are attempting to demand stricter rules at the WTO in order to prevent a frivolous rise in prices.

Back to overview

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The Rice Sector in West Africa: A Political Challenge

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One Health – What we are learning from the Corona crisis

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The state of food security in Cape Town and St. Helena Bay

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Post-Covid-19 lockdown: How food governance processes could include marginalised communities - an extract of the results of an SLE study applying digital and participatory methods.

School Feeding: A unique platform to address gender inequalities

A contribution by Carmen Burbano de Lara (WFP)

Besides the well known impacts of Covid19 lockdowns for the adult population, the associated school closures led to 90 percent of the world’s children with no access to schools. However, school meals are in often the only daily meal for children. Without access to this safety net, issues like hunger, poverty and malnutrition are exacerbated for hundreds of millions of children.

How do you campaign “Food Systems”?

Interview with Paul Newnham, Director of the SDG 2 Advocacy Hub.

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What is wrong with our nutrition in Germany, Mr. Plagge ?

An interview with Jan Plagge (Bioland)

Vitamin-poor nutrition must become more expensive, in-vitro meat is not a panacea, and agricultural systems should be more decentralised. Bioland President Jan Plagge in an interview about the challenge of (future) world nutrition.

African Nutrition - 'Try It at Home'!

A Video Series by Agribusiness TV and GIZ

Share in the taste of African Nutrition – Try it at home! The mini-series showcases traditional, nutritious dishes across the African continent.

Diversity Is the Fundamental Principle to Use

An Interview with Shakuntala Thilsted

A conversation with aquatic researcher Shakuntala Thilsted on the long-neglected nutrition benefits of aquatic diets and the empowering qualities of a sustainable aqua-food systems transformation.

Food security is more than production volumes and high yields

A Contribution by Adrian Muller, Catherine Pfeifer and Jürn Sanders (FiBL)

Taking Biodiversity Focus Areas under production or abandoning lower yielding, more extensive production systems is the wrong approach to mastering the looming global food crisis, say the authors of the Research Institute of Organic Agriculture (FiBL).

No dirty dealing

Von Marlis Lindecke

Shit Business is Serious Business: A successful cooperation between research and the private sector.

Support for sustainable start-ups

Companies in Africa that need financing between $20,000 and $200,000 find relatively few investors, as this sector is too large for microcredit and too small for institutional investors. This creates a "gap in the middle" where companies have limited options. A project of the World Resource Institute provides a remedy with the Landaccelerator 2020.

A World Resources Institute project

Africa's rapid economic transformation

A report by T. S. Jayne, A. Adelaja and R. Mkandawire

Thirty years ago, Africa was synonymous with war, famine and poverty. That narrative is clearly outdated. African living standards are rising remarkably fast. Our authors are convinced that improving education and entrepreneurship will ensure irreversible progress in the region even as it confronts COVID-19.

What it takes now

A contribution by Heike Baumüller

Artificial intelligence, big data and blockchain are the hottest topics of our time. The digital transformation of the African agricultural sector is ready for take-off. What will it take for the future of technology to hit the ground running?

Doing More With Less

A contribution by Jochen Moninger

Innovation is the only way to end hunger worldwide by the deadline we have set ourselves. The secret lies in networking and sharing ideas – and several initiatives are already leading by example.

Pesticides – a blessing or a curse?

A debate between Lena Luig and Ludger Weß

What are the consequences of using synthetic pesticides in agriculture? Where do they help, where do they harm? Lena Luig, expert for the development policy organization INKOTA, and science journalist Ludger Weß discuss this controversial topic of international scope.

Innovations for a secure food supply

A contribution by German Agribusiness Alliance

The COVID 19 pandemic is hitting developing and emerging countries and their poorest populations particularly hard. It is important to take countermeasures at an early stage. Companies in the German agricultural sector want to make their contribution to ensuring the availability of urgently needed operating resources.

Human Rights, Land and Rural Development

A contribution by Michael Windfuhr (German Institute for Human Rights)

Land rights are no longer governed by the law of the strongest. That is what the international community has agreed to. Governments and private companies have a duty to respect human rights and avoid corruption.

Continent in an uptrend

A report by Dr. Agnes Kalibata (AGRA)

Partnering for Africa’s Century: Innovation and Leadership as Drivers of Growth and Productivity in Rural Areas

A new attempt at Africa's industrialization?

A contribution by Helmut Asche

Afrika is about ready. There are promising approaches for a sustainable industrialization. However, the path poses challenges to the continent.

Microinsurance against climate change

A contribution by Claudia Voß

Climate change is destroying development progress in many places. The clever interaction of digitalisation and the insurance industry protects affected small farmers.

How can the private sector prevent food loss and waste?

An interview with David Brand (GIZ)

From a circular food system in Rwanda to functioning cooled transports in Kenya: The lab of tomorrow addresses development challenges such as preventing food loss and waste

From lost products to safe food - Innovations from Zambia

A contribution by GIZ

In Zambia, innovative approaches are used to address the problem of post-harvest losses in the groundnut value chain. GIZ's Rapid Loss Appraisal Tool (RLAT) can help to develop more such approaches.

Investing in Healthy Soils: Curse or Blessing?

A Contribution by WWF

How investing in healthy soils provides incentives for more sustainable agriculture even as it demonstrates the need for far reaching changes in the agrisector.

Together towards Sustainable Development: Private Sector Cooperation

A Multimedia-Toolbox by GIZ

Achieving the Sustainable Development Goals through responsible investments in the agri-food sector of emerging countries.

“Healthy ground brings good and many fruits”

Interview with Ben Sekamatte and Boaz Ogola

Africa's cotton production plays a key role in the fight against poverty. The "Cotton Made in Africa" initiative promotes sustainable cultivation - one element of which is the use of organic pesticides. Entomologist Ben Sekamatte and cotton company manager Boaz Ogola talked with Jan Rübel about soil and yields.

A classroom in the Garden of Eden

By Iris Manner

Deforestation harms people and the environment. With nurseries, farmers can earn money and do good. You just have to know how to do it

Climate Adaptation Summit 2021: ‘We can do better’

Event report by Jan Rübel (Zeitenspiegel)

The first Climate Adaptation Summit put climate adaptation at the center of politics for the first time. The virtual meeting united global players with one goal: building resilience is just as important as climate protection itself. Around 15,000 participants discussed direct proposals.

Mr. Samimi, what is environmental change doing to Africa?

Interview with Cyrus Samimi (IAS)

Environmental change is having a particularly strong impact on the African continent. Its landscapes see both negative and positive processes. What is science's view of this? A conversation with Cyrus Samimi about mobility for livelihoods, urban gardening and dealing with nature.

COST-BENEFIT ANALYSES FOR MORE SOIL CONSERVATION

With the help of sustainable farming methods, soils can be preserved and made fertile again. The investment required is also worthwhile from a financial perspective.

A project of GIZ

Resilient small-scale agriculture: A key in global crises

A contribution by Kerstin Weber and Brit Reichelt-Zolho (WWF)

Biodiversity and sustainable agriculture ensure the nutrition of whole societies. But there is more: These two factors also provide better protection against the outbreak of dangerous pandemics. Hence, the question of preserving ecosystems is becoming a global survival issue.

The Forest Maker and his director

Double interview with Tony Rinaudo and Volker Schlöndorff

Tony Rinaudo uses conventional reforestation methods to plant millions and millions of trees – and Volker Schlöndorff is filming a cinema documentary about the Australian. The outcome so far: An educational film on behalf of the BMZ (Federal Ministry for Economic Co-operation and Development).

Can we win the race against deforestation?

Interview with Bernadette Arakwiye und Salima Mahamoudou (World Resources Institute)

Deforestation is leading to a shortage of ressources. What are the options for counteracting? A conversation with Bernadette Arakwiye and Salima Mahamoudou about renaturation and the possibilities of artificial intelligence.

From Berlin to Yen Bai: 10,000 trees for Vietnam

A contribution by GIZ and BMZ

It began with clicks at a trade fair and ends with concrete reforestation: a campaign at the Green Week in Berlin is now enriching the forests of the Yen Bai Province in Vietnam. A chronicle of an education about climatic relevance to concrete action - and about the short distances on our planet.

What do you expect from this Pre Summit, Mr. Haddad?

Interview with Lawrence Haddad (GAIN)

Nutrition experts from all over the world are coming together in Rome. They are not only distilling 2000 ideas to improve food systems - they are also preparing for the big UN summit in New York in September. An interview.

Mr. Campari, how do we create sustainable food systems?

Interview with Joao Campari (WWF)

Journalist Jan Rübel spoke with Joao Campari ahead of the UNFSS Pre-Summit. The Chair of Action Track 3 highlights key challenges in transforming existing food systems towards sustainable production and shares his expectations for the Summit.

Land Rights, Gender and Soil Fertility in Benin

A contribution by Dr. Karin Gaesing and Prof. Dr. Frank Bliss (INEF)

Especially in densely populated areas, land pressure leads to overexploitation of available land and a lack of conservation measures. The West African country of Benin, with heavily depleted soils in many places, is no exception.

Mr. Marí, what happened at the alternative summit?

An Interview with Francisco Marí (Brot für die Welt)

Brot für die Welt (Bread for the World) did not attend the UNFSS pre-summit. Instead, the organisation took part in a counter-summit that took place at the same time. A conversation with Francisco Marí about the reasons, the process - and an outlook for the future

Food System Transformation Starts and Ends with Diversity

A Contribution by Emile Frison and Nick Jacobs (IPES-Food)

While having failed to solve the hunger problem, industrial agriculture appears to be causing additional ones both in environmental and health terms. Emile Frison and Nick Jacobs call for a transformation.

City, Country, Sea: 6 Innovations in the Fight Against Climate Change

A listicle for climate-neutral agriculture

Vertically growing plants, magnetic cotton. Hairy leftovers fertilizing fields, tractors running on algae? These six innovations could lead agriculture’s next Green Revolution!

‘None of the Three Traffic Light Coalition Parties is Close to the Paris Agreement’

An Interview with Leonie Bremer (FFF)

At the climate conference in Glasgow, activists from various groups protested again – Leonie Bremer from ‘Fridays for Future’ was there too. How can climate protection and development cooperation work hand in hand?

‘Preserving and restoring fertile soils is a global responsibility.’

An Interview with Jochen Flasbarth (BMZ)

Healthy, productive soils are a prerequisite for global food security – one of the priorities of German development cooperation. State Secretary Jochen Flasbarth on Germany’s efforts to support sustainable land management and why the VGGT are more important than ever today.

Strengthening food markets across the rural-urban continuum

A Contribution by Thomas Forster

How to maintain functioning food markets in global food supply chains in the face of vulnerability and disruption? Markets that support local and territorial food systems are part of the solution. Thomas Forster presents proposals for these markets to cope with future shocks.

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Ms Rudloff, what are the benefits of a supply chain law?

By Jan Rübel

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