“Global IT Outsourcing and Supply Chain Law” – Dr. Franziska Lietz at the Responsible Innovators Meetup

On 29.02.2024, Dr. Franziska Lietz from the Responsible Innovators initiative was invited to speak about globalized IT services, the limits of labour law protection and human rights.
The title of her presentation was “Global IT Outsourcing and Supply Chain Law – How does Regulation Shape the Globalization of IT Services?”. Her presentation was attended not only by members of Responsible Innovators Germany, but also by interested parties from Kenya, as part of a kick-off event for the establishment of a corresponding local initiative on the topic of responsible innovation. Fun fact: they had rented a movie theater to watch the event on a big screen. The second, also very interesting presentation of the Meetup was given by Yannik Hirt, who talked about “Green IT”.

Precarious working conditions and “outsourcing worst case” using the example of Daniel Motaung

In her presentation, Dr Lietz first addressed the topic of IT outsourcing and the globalization of the remote working world as well as the gig economy.
Due to the great interest of the Kenyan participants, the case of Daniel Motaung, a Facebook moderator from South Africa, who was brought before a Kenyan court, was also discussed.
Daniel Motaung, supported by the law firm and organization Foxglove, filed a lawsuit against the outsourcing client Meta and his direct employer, the outsourcing company Sama.
The lawsuit was based on the moderator’s psychological stress caused by PTSD resulting from the moderation of extreme content.
Ultimately, the Kenyan court ruled that Meta, like an employer, was liable for the damages suffered by the presenter as a result of his work for Meta.
The case is very instructive as it highlights many facets of the problem of outsourced activities, where the clients primarily award individual contracts (so-called micro-gigs) and generally show neither knowledge nor interest or a sense of responsibility towards the people carrying out the tasks.
As a result, the achievements of occupational health and safety, which are now established in most jurisdictions, are not effective in such cases.

Does “human rights leakage” exist and what can be done about it?

Another focus of the presentation was the comparison of cross-border dumping of occupational health and safety regulations with the phenomenon of “carbon leakage”, known from climate protection law.
In both cases, the point is that in more advanced economic nations, or the global North, there are already many differentiated environmental and occupational health and safety laws.
If production is relocated physically or through remote outsourcing to other regions of the world where such high standards are not yet established, there is a risk of not only carbon leakage but also human rights leakage.
As the challenges are similar, the solutions could also be similar.
Based on the CBAM (the Carbon Border Adjustment Mechanism), which provides for the taxation or financial burden of goods imported into the EU that were produced in countries without emissions trading, the question arises as to whether, for example, taxation of purchased services that are provided in countries without a minimum wage is worth considering.

Conclusion: You cannot outsource your responsibilities – At least not for good

Based on these considerations and the increasing case law in this area, the presentation comes to the conclusion that responsibility cannot be permanently outsourced in the area of human rights or working conditions (“You cannot outsource responsibilities”).

Rather, the developments described indicate that binding regulations will become established over time.
Companies are therefore well advised to prepare for this now.
They should also be aware of their fundamental responsibility when outsourcing activities and take at least basic protective measures for the people who work for them.
After all, they make a significant contribution to the success of the company.