NAP monitoring process officially ends – results sobering

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The final report of the monitoring process for the National Action Plan for Business and Human Rights (NAP) was published on October 8, 2020. This officially ends NAP monitoring, which checked whether and to what extent companies comply with their human rights due diligence obligations.

The NAP wants to make sure that companies based in Germany take responsibility for ensuring that human rights are protected and respected. In a globally networked economy, this also means ensuring that appropriate standards are adhered to by suppliers and customers. Over three years, the NAP monitored progress in three phases between 2018 and 2020. The final report provides information on the overall results of the three survey phases and presents the analysis and evaluation criteria as well as the overall methodological approach. adelphi was involved in the three-year project as a consortium member.

The goal: 50 percent minimum

The specific aim of the monitoring process was to review the NAP’s requirement that at least 50 percent of all companies based in Germany with over 500 employees implement the core elements of human rights due diligence. The coalition agreement, which explicitly specifies this goal, also provides that if the goal is not achieved, legal measures should be taken to get companies to fulfil their human rights due diligence obligations. The results of the monitoring process are clear: Well under 50 percent of the relevant companies comply with their due diligence obligations voluntarily.

According to the NAP, corporate due diligence comprises five key elements:

a policy statement on respect for human rights;
a process for identifying actual and potentially adverse effects on human rights (risk analysis);
measures to avert potentially negative effects and to remedy actual negative effects, as well as a review of the effectiveness of these measures;
reporting; and
a complaint mechanism that is open to all (potentially) affected parties.

The results: room for improvement

In the relevant representative survey of 2020, only 13 to 17 percent are considered to be “fulfilling”, while 83 to 87 percent are considered to be “non-fulfilling”. Less than one percent are classified as “companies with an implementation plan”, i.e. companies that are not yet rated as “fulfillers” at the time of the survey, but have already been able to present a plausible plan on how they want to implement the core elements of human rights due diligence by the end of 2020. Furthermore, 10 to 12 percent of the companies within the “non-compliant” group are “on the right track” to meet the NAP requirements. This means that while they do not yet meet all the requirements, they have already introduced important company practices to be able to do so in the future.

A three year process

In the exploratory phase in autumn 2018, qualitative interviews were initially conducted with representatives of 30 companies and with relevant stakeholder groups from business and civil society. This exploratory survey phase served to acquire critical knowledge for the design of the representative surveys.

These began with the first quantitative survey from August to October 2019, followed by the final survey phase from March to May 2020. The first survey phase in 2019 had already shown that only a small proportion of companies meet the NAP requirements (17 to 19 percent – see the interim report on survey phase 2019, page III ff.). Due to the core question of the monitoring process, namely whether at least half of the companies based in Germany will comply with their human rights due diligence in 2020, the last survey phase in 2020 is of particular importance.

Sophisticated methods, careful research

The company information was obtained via an online questionnaire. To design this, the NAP core elements were first analysed and the interview results from the exploratory phase were taken into account. The evaluation criteria were developed on this basis. A detailed description can be found in the interim report on the exploratory phase 2018 (page II).

The questionnaire was designed in such a way that companies had the opportunity to justify why they are not affected by individual risks and consequently do not have to initiate due diligence processes for them, or why they are unable to implement certain measures. The evaluation team carefully checked and considered these explanatory options (the so-called “comply or explain mechanism”). In addition, the company information was checked as part of a multi-stage plausibility check. Among other things, media reports were consulted and human rights issues typical of the industry were researched. The information was then examined for contradictions.