The non-profit ECCHR filed a case against car manufacturers Volkswagen, BMW and Mercedes-Benz for alleged human rights violations in their supply chains in the Xinjiang Uygur Autonomous Region. ECCHR’s case was based on a Sheffield Hallam University report documenting the companies’ alleged supply chain connections to Uyghur forced labour.
About the case
- On 26 June, the non-profit organisation European Center for Constitutional and Human Rights (ECCHR) reported that it had filed a case under the German Supply Chain Due Diligence Act against Volkswagen (VW), BMW and Mercedes-Benz. It accused them of failing to take appropriate measures to identify, prevent or remediate alleged human rights violations in their supply chains in the Xinjiang Autonomous Uyghur Region (XUAR). The complaint is supported by the World Uyghur Congress (WUC) and the Association of Ethical Shareholders Germany.
- According to the ECCHR
- There is widespread documented evidence of Uyghur forced labour in automotive supply chains in XUAR.
- The system of state surveillance and repression in the region makes it impossible to carry out reliable factory inspections to ensure compliance with human rights standards. Companies cannot rely on audits to fulfil their human rights due diligence.
- VW, BMW and Mercedes-Benz have not detailed how they are addressing these risks as part of their human rights due diligence.
- ECCHR is demanding that the companies cease their business practices in the region unless they are able to demonstrate that adequate due diligence assessments are being conducted and that their operations are free of human rights violations.
- The complaint was filed with the Federal Office of Economics and Export Control (BAFA), the regulator for the German Supply Chain Due Diligence Act.
- ECCHR called on BAFA to investigate how VW, BMW and Mercedes-Benz are monitoring human rights standards within their suppliers’ facilities in XUAR and working to ensure adherence thereto.
- BAFA will now decide whether to take further action against the companies. BAFA may make recommendations or issue administrative sanctions if it finds the companies have failed to take appropriate preventive and remedial measures.
- The case is based on a report by Sheffield Hallam University documenting the companies’ alleged supply chain connections to suppliers involved in the forced labour of ethnic minority Uyghurs. ECCHR also referenced OHCHR’s Assessment of human rights concerns in the Xinjiang Uyghur Autonomous Region, People’s Republic of China.
Additional context on the case
- Sheffield Hallam University reports are highly influential and have also been used by the US government to target and detain shipments with potential linkages to XUAR under the US Uyghur Forced Labor Prevention Act. Sheffield Hallam University’s Helena Kennedy Centre for International Justice conducts research on forced labour, modern slavery and human trafficking. Their current research focuses on the forced labour of minority groups in the Xinjiang Uyghur Autonomous Region (XUAR). Sheffield Hallam has published various reports tracing alleged forced labour supply chain linkages with the garment, automotive, solar and financial sectors.
About the German Supply Chain Act
- The German Supply Chain Due Diligence Act was adopted in June 2021 and came into force for companies in January 2023. It imposes a corporate duty on Germany-based companies to establish and implement due diligence processes for human rights and certain environmental violations.
- The Act applies to companies with a registered office or principal place of business in Germany, and to foreign companies with a branch office in Germany. The German Supply Chain Act applies to companies with 3000 employees in Germany, changing to 1000 employees from 2024.
- The Act includes sanctions for non-compliance, including pecuniary sanctions based on company turnover. Companies with average annual sales of more than €400 million can be issued fines of up to two percent of their average worldwide annual sales.
- The Act includes a special provision which allows for German-registered trade unions or NGOs to bring civil cases on behalf of parties that have suffered human rights violations within the scope of the law. Although the law expressly clarified that it does not give rise to any new liability under civil law, this procedural feature will likely increase the number of lawsuits for alleged human rights violations in German courts.
About the parties
- ECCHR is a not-for-profit legal and advocacy organisation. It has several current legal cases against companies in Europe, including for human rights practices in the XUAR. In 2021, ECCHR filed criminal complaints against European fashion brands and textile companies in Germany, France and the Netherlands for allegedly benefitting from forced labour in XUAR. We have tracked these cases in our Responsible Business Conduct brief on litigation.
- As noted in our Alert on 27 April, the first case under the German Supply Chain Due Diligence Act was filed against Tom Tailor, Amazon and IKEA for an alleged failure to meet due diligence obligations, primarily for occupational health and safety. Although the complaint was filed by workers, it was supported by ECCHR.