Globalisation has many faces. On the one hand, it generates enormous economic fortunes and determines the flow of international trade. This is a truly positive aspect of globalisation, and it affects our lives every day. On the other hand, globalisation often means the decoupling of producers and consumers, those who earn low wages so that others can pay low prices. This is a more pernicious aspect of globalisation. And although it is easy to overlook – never mind convenient to ignore – this reality affects our daily lives, too.

The need to balance these dual effects of globalisation has emerged as a pressing concern for national legislators across the globe. The task entails holding international corporations and businesses responsible to pay fair wages, adopt decent labour practices, and guarantee human rights along their supply chains. While the British “genocide amendment” is still stuck between the two chambers of parliament, things seem to be moving forward in Germany. After months of negotiations, the Federal Ministry for Labour and Social Affairs announced on 12 February that the so-called “supply chain law” (Lieferkettengesetz) would be passed before the current legislature ends in autumn.

The announcement was preceded by years and months of fierce debate about the topic. As early as 2011, the United Nations adopted Guiding Principles on Business and Human Rights, which set out state obligations and corporate responsibilities to respect human rights in global supply chains. In the following years, there was a broad societal coalition of fair-trade shops, labour unions, and charities pushing for the incorporation of the UN principles into German law. A petition to Chancellor Merkel was signed by more than 220.000 people. Yet, unsurprisingly, most influential corporates and industrial lobby groups opposed any such law which they saw as attaching strings to their position as competitors on the world market. Reconciling profit-oriented commercial interests with the obligation to respect international human rights norms is perhaps the biggest challenge for every attempt to regulate global supply chains.

For a long time, these competing interests were reflected in conflicting party positions within the German government coalition and divergent agendas among its ministries. For the most part, the dispute was between the labour ministry, led by Social Democrat (SPD) Hubertus Heil who advocated for an ambitious supply chain law, and the ministry of economy under Christian Democrat (CDU) Peter Altmeier, who advocated on behalf of Germany’s trade industry. In the end, it was the development ministry led by Christian Socialist (CSU) Gerd Müllerheaded that aligned itself with the Social Democrats and, in doing so, tipped the scales. Dr Müller, a member of the CDU-CSU Conservative union, appears to regard the supply chain law as his personal legacy before he ends his political career later this year–a legacy disdained by fellow Conservative Bavarians who seem to see little good in strict adherence to the UN principles.

The envisaged law is thus a compromise between distinct domestic political and economic positions. Weakening the first drafts, the compromise will hold firms responsible to ensure human rights compliance from only their first line of suppliers rather than the whole chain. It also only applies to companies with more than 3000 employees in Germany, a margin which is to be lowered to 1000 employees by 2023. Maybe most importantly, every individual along the supply chain will be given the right to file a complaint at a German court if labour standards are infringed or human rights are breached. In such a case, the companies would have to offer compensation and stop the human rights violation immediately. Despite its controversial character, the draft law has the potential to ensure that the firms’ responsibility for human rights stretches beyond the factory gates.

The consequences of the German supply law are likely to reach beyond German factories, too. Described as Europe’s most ambitious law of its kind, the legislation puts Germany in the driver’s seat of reform. In fact, development minister Müller made clear in an interview that the next step will be to push for common standards on the European level. “This is a qualitative leap, but it is just the first step. When climbing a mountain, the first step is always the most important one”, said the minister one day after the breakthrough in the negotiations was announced.Although the UK is no longer part of the European single market, the law could equally be a source of inspiration for Britain as well. According to its Foreign Secretary, “Global Britain” seeks to be a champion of human rights and free trade at the same time. Surely the draft law is yet far from perfect. But given the fact that only 20% of companies adhered to the voluntary self-binding principles of UN soft law, it is nevertheless a step forward. A small one, admittedly, but hopefully not the last one.