The due diligence law in the supply chain: corporate responsibility for the fulfillment of human rights
The due diligence law in the supply chain (LKSG) entered into force on January 1, 2023. The responsibility of companies for the fulfillment of human rights in supply chains in supply chains regulates for the first time.
The basic elements of due diligence obligations include:
- The establishment of a risk management system to detect, prevent or minimize the risks of human rights violations and damage to the environment.
- Obligation to comply with the prevention and repair measures defined by law.
- Procedures for denunciation and presentation of periodic reports.
Due diligence obligations apply to:
- Commercial operations of a company.
- The actions of a contractual partner.
- The actions of other suppliers (indirect).
The law initially applies to companies with:
- At least 3,000 employees in Germany since 2023.
- At least 1,000 employees from 2024.
The supply chain law contains an exhaustive catalog of eleven human rights conventions internationally recognized, including:
- Prohibition of child labor, slavery and forced labor.
- Contempt for health and safety at work.
- Retention of an appropriate salary.
- Ignorance of the right to form unions or workers' representatives.
- Denial of access to food and water.
- Illicit deprivation of land and subsistence means.
Fines can be imposed if companies breach their legal obligations. These can amount to up to 8 million euros or up to 2 percent of global annual sales. The business volume -based framework only applies to companies with annual sales of more than 400 million euros.
The Federal Office of Economics and Export Control (BAFA) implemented the supply chain law in its new Borna office as of January 1, 2023. BAFA has high -range control powers, such as:
- Enter the commercial premises.
- Request information and inspect documents.
Ask companies to take concrete measures to fulfill their obligations and enforce them through the imposition of fines.
To support companies in compliance with their due diligence obligations, BAFA develops and publishes brochures. Bafa makes brochures available on their own siteWebsite of the supply chain law.
How Comleymarket can help you:
- Establishment of a risk management system and a risk analysis
- Adoption of a statement of policy of the human rights business strategy
- Establishment of preventive measures
- Immediate application of corrective measures in the case of legal violations detected
- Establishment of a denunciation procedure
- Documentation requirements and reporting to meet due diligence requirements
- Complydoc: It is an intelligent IT solution and the first open source cloud solution for the sustainability of the supply chain, the management of the fulfillment of products and products to collect information from the suppliers.