Supply Chain Due Diligence

Supply Chain Due Diligence Law: Corporate Responsibility for Human Rights Compliance

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

Essential elements of due diligence obligations include:

·          Establish a risk management system to identify, prevent or minimize the risk of human rights violations and damage to the environment.

·          obligation to comply with the prevention and remediation measures specified in the law.

·          Complaints and Regular Reporting Procedures.

Due diligence obligations apply to:

·          company business processes.

·          actions of a contractual partner.

·          actions of other suppliers (indirect).

The law initially applies to companies that have:

·          At least 3,000 employees in Germany as of 2023.

·          at least 1000 employees from 2024.

The Supply Chain Act contains a comprehensive index of eleven internationally recognized human rights conventions, including:

·          prohibition of child labor, slavery and forced labor.

·          ignoring occupational health and safety.

·          withholding appropriate pay.

·          Omission of the right to form unions or representatives of employees.

·          Denial of access to food and water.

·          Illegal deprivation of land and livelihoods.

Fines can be imposed if companies fail to comply with their legal obligations. These can amount to €8 million or up to 2 percent of global annual sales. The sales-based penalty framework applies only On companies with annual turnover of more than €400 million.

The Federal Office for Economics and Export Control implemented (BAFA) Supply Chain Law in its new field office in Porna as of January 1, 2023. enjoys BAFA with long-range monitoring authorities, such as :

·          Enter premises.

·          Request information and examine documents.

·          Require companies to take concrete action to meet their obligations and enforce this by imposing fine payments.

To support companies in carrying out their due diligence obligations, <span dir="LTR"> BAFA Develop and disseminate alms. Availability BAFA alms on site Law Its supply chain.

How can it help you ComplageMarket:

·          Develop a risk management system and conduct risk analysis

·          Adoption of a corporate human rights policy statement

·          Establishment of preventive measures

·          Immediate implementation of corrective measures in case of detected legal violations

·          Establishment of a complaints procedure

·          documentation and reporting requirements to meet due diligence requirements

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