Businesses urged to respond to corporate due diligence obligations

Md Saiful Islam, president of the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), emphasised the need for pursuing growth and progress amid increased costs, which would arise from complying with the new due diligence obligations.

"As the world moved towards stricter human rights and due diligence requirements, businesses in Bangladesh will have to respond accordingly," he was addressing a briefing session on Corporate Due Diligence Obligations for the Prevention of Human Rights Violations in Supply Chain at MCCI's Gulshan office on Sunday.

MCCI and Bangladesh Employers' Federation (BEF) held the session to familiarise the business community with the latest developments in Due Diligence Obligations in Germany and their implications for Bangladesh said a press release.

Recently, Germany has enacted an Act on Corporate Due Diligence Obligations in Supply Chains, while the EU has come up with a proposal for a guideline on Corporate Sustainability Due Diligence. The German Act will come into effect in 2023, while the EU guideline was proposed in February 2022.

Ardashir Kabir, president of BEF, said "As a country where over 80 % of its population work in the informal economy, Bangladesh would benefit from introducing the due diligence obligations gradually."

He emphasised how the Bangladeshi employers valued their workers and were committed to protecting them.

Achim Tröster, the ambassador of Germany to Bangladesh, made the keynote briefing on the German Act and the EU proposal on Due Diligence Obligations.

After the briefing, an open discussion was held where grievance handling, reporting, and the overall mechanism were discussed. There were also talks about Bangladesh's road to a Generalised Scheme of Preferences (GSP) Plus.

The Ambassador clarified that the new obligations will directly apply to the German companies. However, Bangladesh will have indirect implications owing to being a supplier country.

German purchasers would inform their subsequent supply chain members in Bangladesh about their requirements, he added.

Tuomo Poutiainen, Country Director, International Labour Organisation, Bangladesh, praised the government for having a roadmap for change in implementing stringent levels of human rights due diligence.

He thought Bangladesh was ready to take ownership of the process of due diligence implementation but needed to improve its reporting standards.

Tapan Kanti Ghosh, senior secretary of the Commerce Ministry, said although the German Act will not directly apply to Bangladesh, it would become a factor to address when its components were incorporated in the GSP Plus incentive.

He believed Germany could help Bangladesh in complying with these obligations.

Md Ehsan-E-Elahi, secretary of the Ministry of Labour and Employment, mentioned the recent actions of the government in improving due diligence standards in the country.

He reiterated the government's commitment to taking care of its working population and ensuring human rights.