Supply Chain Due Diligence

Supply Chain Due Diligence Act: Corporate Responsibility for Compliance with Human Rights

Supply Chain Due Diligence Act (LkSG) 1, 2023. It regulates corporate responsibility for human rights compliance in supply chains for the first time.

The basic elements of due diligence obligations include:

• identification of risks of human rights violations and harm to the environment, Establish a risk management system to prevent or mitigate.
• obligation to comply with the law-defined prevention and preventive measures.
• Complaint process and regular reporting.

Obligations due to diligence apply:

• A company's own business operations.
• Action of a contractual partner.
• actions of other (indirect) suppliers.

The law initially applies to companies:

• 20233,000 Functionary.
• 2024 less than 1,000 staff.

The Supply Chain Act includes an exhaustive list of eleven internationally recognized human rights conventions, which includes:

• child labour, On slavery and forced labor." Restriction.
• Neglect of occupational health and safety.
• o withholding a fair salary.
• Disregard of the right to form trade unions or employee representatives.
• Denial of access to food and water.
• Unlawful Lack of Land and Livelihoods.

Fines can be imposed if companies fail to comply with their legal obligations. These 8 million euros or 2 percent. turnover-based fine framework only 400 million euros.

Federal Office of Economics and Export Control (BAFA) ne 1, 2023 implemented the Supply Chain Act at its new field office in Borna. BAFA has far-reaching powers of control, eg:

• Business Premises.
• Demand information and inspect documents.
• Companies are requested to take concrete action to meet their obligations and enforce the same by imposing penalty payments.

To support companies in implementing their due diligence obligations, BAFA Develops and publishes Handouts. BAFA Provides handouts on its own Supply Chain Act website.

ComplyMarket How can we help you:

• Establishing a risk management system and performing a risk analysis
• Adopting a policy statement of a corporate human rights strategy
• Establishing preventive measures
• Immediate implementation of corrective measures in case of detected legal violation
• Setting up a complaint process
• o Documentation and reporting requirements to meet due diligence requirements
• ComplyDoC: Supply chain sustainability to collect information from suppliers, An intelligent IT and first-ever open source code cloud solution for chemical and product compliance management.