BUSINESS AND HUMAN RIGHTS / Šturma, Mozetic (eds)

their size, the sector in which they operate, and their position in the supply and value chain. Compliance will be reviewed annually from 2018. In the absence of adequate compliance, the Government will consider further action, which may culminate in legislative measures and in the widening of the circle of enterprises to be reviewed. The goal is that at least 50% of all enterprises based in Germany with more than 500 employees will have incorporated due diligence standards by 2020. 35 3.2 The European Union and international human rights obligations Under Article 5 of the Treaty on the European Union, the limits of EU competences are governed by the principle of conferral, and therefore, the EU shall act only within the limits of the competences conferred upon it by the Member States in the founding treaties to attain the objectives set out therein. Competences not conferred upon the Union in the founding treaties remain with the Member States. Most EU competences have the character of the so-called shared competence. When the EU decides to adopt measures within the scope of shared competence, the Member State loses its power to take decisions. In such a case EU legislation replaces the content of a corresponding national legal act. With a view to human rights issues, shared competence can be relevant e.g. in the following areas: internal market, social policy, environment, consumer protection, and migration. When both the EU and its Member States enter international agreements on human rights, the limits of EU competences also influence the EU’s responsibility with regard to international obligations. The problem of shared EU and Member States’ international accountability for the implementation of international agreements is of course not new. Clarifying the question of who is responsible for the commitments is important not only in terms of the internal relationship between the EU and its Member States as parties to an international treaty. The scope of responsibility is also crucial from the perspective of third countries which are bound by the respective treaty. With regard to the protection of the interests of a third country, legal doctrine argues in favour of shared responsibility between the EU and its Member States. From an external perspective, the definition of EU and Member States’ competences in the implementation of an international treaty can be very complex and a third party cannot be realistically expected to always correctly assess whether a measure falls within the competence of the EU or of a Member State, or whether the EU or a Member State are acting ultra vires . 36 Therefore, the third party should be able to choose whether to assume responsibility for non-compliance of an international obligation with the EU or its Member States. Only after the division of responsibilities has been clarified in the internal relationship between the EU and its Member State, a third party may be referred to a dispute settlement with the subject that is really competent. 37 35 National Action Plan: Implementation of the UN Guiding Principles on Business and Human Rights; German Federal Foreign Office, Berlin, 2017, p. 10. 36 On the doctrine of shared responsibility between the EU and the Member States and its modification by means of a bona fide argument, see in more detail BJÖRKLUND, M. Responsibility in the EC for Mixed Agreements – Should Non-Member Parties Care? Nordic Journal of International L aw, 3/2001, p. 373-402. 37 PACHE, E., BIELITZ, J. Das Verhältnis der EG zu den völkerrechtlichen Verträgen ihrer Mitgliedstaaten. Europarecht , 3/2006, 316-339, p. 320.

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