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Insights German Supply Chain Law: Monitoring employment practices and environmental issues in Singapore

German Supply Chain Law: Monitoring employment practices and environmental issues in Singapore

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last updated on 31 August 2023 | reading time approx. 5 minutes



Which risks occur along supply chains in Singapore?

The Supply Chain Due Diligence Act (SCDDA), which came into force in January 2023, will require German companies to pay particular attention to potential risks in their supply chain. This will become even more important when the proposed EU directive on the supply chain comes into force. Singapore is not only one of the EU's most important trading partners, but also a hub for supply chains in Southeast Asia. Specific local risks are therefore worth considering.

The risk of working conditions that violate the SCDDA is considered lower than in other countries in Asia as Singapore already meets high standards comparable to Western legislation in many areas of worker protection. However, despite a minimum standard, there is still room for improvement in the area of environmental protection.

Singapore has ratified eight of the 14 conventions  on human rights and certain environmental standards listed in the annex to the Supply Chain Act.

Singapore is one of the few countries in the world, however, to have signed neither the Covenant on Civil and Political Rights, nor the Covenant on Economic, Social and Cultural Rights.

Discrimination in the workplace

Singapore has not yet ratified International Labour Organisation (ILO) Convention 111 on the elimination of discrimination in respect of employment and occupation. By ratifying ILO Convention No. 100 on Equal Pay for Male and Female Workers, Singapore has taken an important step against discrimination against women in the workplace. However, this is currently only implemented in practice through the so-called "Tripartite Guidelines for Fair Employment Practices", which, among other things, provide for fair and performance-related pay, but do not have the force of law.

A law against discrimination in the workplace is due to come into force in 2024. The Singapore government adopted the recommendations of the relevant committee on the draft law in August 2023 and now intends to work on its timely implementation. The bill covers age, nationality, gender, marital status, pregnancy and caring responsibilities, as well as race, religion, language, disability and mental health, but not sexual orientation.
There is therefore still a risk of discrimination in this area. In addition, the draft law currently provides for companies with fewer than 25 employees to be exempted from the law, so there is still a regulatory gap here too.

Forced labour and exploitative working conditions

Singapore has not yet implemented the Protocol to ILO Conventions Nos. 29 and 105 concerning the strength­ening of protection against forced labour and the abolition of forced labour. However, Singapore has ratified ILO Convention No. 29 concerning the protection against Forced labour and has prohibited forced labour in Article 10 of the Constitution. In addition, a comparatively high standard of decent working conditions is set by the Prevention of Human Trafficking Act and comprehensive worker protection provisions, including the Employment Act, the Employment of Foreign Manpower Act, the Workplace Safety and Health Act and the Work Injury Compensation Act. These laws give workers rights to wages, breaks and rest days, require employ­ers to take measures to ensure workplace safety, and provide compensation for workplace injuries.

Child labour 

The risk of child labour in Singapore is very low compared to other countries in Southeast Asia.

This is partly due to Singapore's strict Employment Act, which prohibits employing children under 13 and allows only limited employment for those aged 13-16. In addition, Singapore has a strong school system with compul­sory education for all Singaporean children born after 1 January 1996, where children usually attend school until at least the age of 16. Furthermore, given the high per capita income in Singapore, unlike other countries in Southeast Asia, it is usually not necessary to supplement the family income through the employment of chil­dren.

Environmental protection

Basic environmental protection is ensured through the implementation of the Minamata Convention on Mercury in 2017 and the Stockholm Convention on Persistent Organic Pollutions in 2005 to protect human health and the environment. The Environmental Protection and Management Act regulates air, water, and soil pollution, among other things.

According to the Climate Action Tracker (CAT), despite revised targets in November 2022, Singapore's climate policies and commitments still represent minimal action that is not in line with the Paris Agreement's 1.5-degree limit. As part of its overall emissions reduction strategy, Singapore became the first country in South­east Asia to introduce a carbon tax on 1 January 2019. Through its Green Plan 2030, the Singapore government aims to become carbon neutral by 2050.  Various measures, including the promotion of renewable energy, waste reduction and a "greener" economy, are expected to achieve this goal. It remains to be seen what con­crete steps will be taken in this direction.

Freedom of Association / Trade Unions

Singapore has not ratified ILO Convention 87. However, freedom of association is guaranteed in the Consti­tution and protected by the Trade Unions Act. However, under Singapore law, trade unions must be registered, or they will not be recognised.

Conclusion

Despite the higher overall standard in Singapore, a risk assessment must always be carried out on a case-by-case basis. In particular, companies that are exposed to a higher sector-specific risk should put in place sufficient control mechanisms in Singapore.


Which industries appear particularly vulnerable to adverse impacts of human/labor rights or environmental issues in your jurisdiction?

Human/labour rights issues are concentrated in industrial sectors such as construction, shipbuilding and ship repair, or manufacturing in general. 

In the service sector, domestic workers are particularly vulnerable to exploitative working conditions and violation of workers’ rights due to limited monitoring. As foreign domestic workers in Singapore are not covered by the Employment Act, the only protection for them is provided by the Employment of Foreign Manpower Act. Since 1 January 2013, they have been entitled to one day's rest per week, which they can, however, waive in return for payment. It is only since 1 January 2023 that the employer has been obliged to guarantee at least one day of essential rest per month.

Other problems, particularly where foreign workers are employed, include debts to recruitment agencies, non-payment of wages, restrictions on movement and withholding of passports.

Environmental issues include industrial pollution, limited freshwater resources, seasonal smog, and waste dis­posal. Therefore, manufacturing companies need to pay particular attention to compliance with environmental legislation, especially about pollutant emissions and waste management.


Is there any legislation in Singapore jurisdiction which addresses these risks? To what extent is it enforced in practice?

With reference to the legislation outlined above, it should be noted that Singapore has a fairly comprehensive legal framework for working conditions and worker protection, as well as a solid legal basis for environmental protection.

Singapore's administration is known for its efficiency, so it can generally be assumed that compliance with the law is monitored and enforced. The World Justice Project's Rule of Law Index ranks Singapore seventh out of 140 countries in the category of de facto law enforcement (Germany is fourth). This is probably not least due to the fact that Singapore often imposes harsh penalties on those who break the law, ranging from heavy fines to imprisonment.

Corruption is generally seen as a potential cause of non-compliance, particularly in the area of environmental protection. According to the Corruption Perceptions Index 2022, Singapore is one of the five least corrupt countries in the world, meaning that the risk in this area is considered low.


Can you provide a case example (e.g. taken from local media coverage) in which a foreign or local company had to deal with such adverse impacts?

In early 2023, three local companies in Singapore, including a membrane manufacturer and two toxic industrial waste disposal companies, were fined S$ 3,000, S$ 8,500 and S$ 13,000 respectively for discharging pollu­tants into Singapore's sewerage system. This endangered the health of workers carrying out maintenance work on the sewer and polluted the environment.


In August 2023, a Singapore court awarded damages to an Indian workman who suffered a serious and perma­nent knee injury in a fall from a truck in 2021. As is common in the industry, the worker was transported by his employer, along with at least 24 other workers, in the back of a truck from his home to a construction site. As he was getting off the truck, he fell due to an inadvertent shove from one of his fellow workers. The court found that the employer's conduct was negligent, as the truck was not designed to carry so many people and safe entry and exit was not guaranteed.

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