Foreign Trade Promotion

In addition to the requirements in due diligence laws or in public tenders, there are other mechanisms that can be used to oblige companies to comply with environmental standards and human rights.

Every year, the German government supports German companies in their global business activities with billions in foreign trade promotion funds. The funded projects are located in countries that are characterised by economic risks, but often also by problematic human rights situations and weak regulation. This often enables companies to do business that would otherwise be too risky. So called Hermes guarantees serve to promote exports, investment guarantees secure foreign investments and the German government promotes raw materials projects abroad with guarantees for untied financial loans.

Financing is provided at the start of companies' projects that potentially jeopardise human rights and is therefore a way of ensuring that environmental and human rights standards are met. In order to jointly advance this goal, which we and other CSOs have been working on for a long time but rather sporadically, WEED has founded a working group on foreign trade promotion under the umbrella of the German Corporate Accountability network CorA.

Since 2022, the working group has been in dialogue with the Federal Ministry for Economic Affairs and Climate Protection (BMWK), for example with regard to the introduction of climate policy sector guidelines for export credit guarantees and investment guarantees, but also with regard to environmental and human rights due diligence of the projects for which the German government provides guarantees.

In addition to the effective specification of and compliance with environmental and human rights standards, we demand, for example, more transparency about which projects the German government guarantees in detail (location) and exactly what due diligence obligations the contracts contain. In addition, human rights experts, local CSOs and independent sources must be included in the monitoring and review of abuses, as they can contact those affected independently of the project operator. All demands can be found in this position paper which is unfortunately only available in German language.