(Not) an Honorable Merchant at Lachin Airport?

Report on

The Deutsche Flugsicherung GmbH, Azerbaijan Airlines, and the German Public Governance Code

(Not) an honorable Merchant at the Airport in Lachin?

After the expulsion of over 100,000 Armenians from Nagorno-Karabakh in the fall of 2023 by Azerbaijan, cooperation partners were quickly sought to help connect the infrastructure to the rest of the country. Azerbaijan Airlines found their partner for the modernization of the airport in Lachin in DFS Aviation Service GmbH, a 100% subsidiary of DFS Deutsche Flugsicherung GmbH. The sole shareholder of DFS is the Federal Ministry for Digital and Transport of Germany. Thus, the application of the German Public Corporate Governance Code applies to this private sector enterprise.

This is a set of rules with guidelines for good corporate governance. It states that companies with federal participation must not only act in accordance with the law but also ethically and in accordance with the principles of the "honorable" merchant; thus, they must be aware of their overall social responsibility. The forced expulsion of Armenians from Nagorno-Karabakh was addressed in the European Parliament resolution of October 4, 2023 (2023/2879(RSP)) and classified as ethnic cleansing, which corresponds to crimes against humanity under section 7 of the German Code of Crimes against International Law. Even though the German Supply Chain Due Diligence Act (LkSG) is not applicable here, the principles of the "honorable merchant" do not apply to this business relationship. For cooperation with business partners who commit or tolerate obvious violations of international law, it cannot be assumed that societal due diligence is exercised through one's own economic actions. Furthermore, such actions cannot and should not be considered honorable.

DFS should have carefully examined or terminated the cooperation of its subsidiary with Azerbaijan Airlines last year. The same applies to the Federal Ministry for Digital and Transport. Further information can be found in this report.