BERLIN—Germany is set to force companies to screen suppliers for environmental violations and human rights abuses, such as illegal mining and child labor, in a move that some corporations says will be hard to enforce and could make them less competitive internationally.
The bill is part of a broader movement in Europe to force corporations to ensure that European legal, environmental and rights standards are upheld by suppliers outside the bloc.
European governments are reacting to pressure from human rights and environmental lobbyists, who have pressed them to do more to force companies to police their supply chains and weed out abuses in the manufacturing of products from batteries for electric cars and smartphones, to apparel from sporting goods brands.
“From today, it is clear that high standards apply not only to German workshops and German factories,” said Finance Minister Olaf Scholz. “We are protecting workers throughout the globe-spanning supply chains.”
Under the bill, adopted by the government Wednesday and which must now be approved by parliament, any company based in Germany with 3,000 employees or more has two years to set up compliance procedures to monitor and stop abuses within its supply chains. They must also create an alert system that would allow third parties and victims to safely report any abuse.
