Completion Test Supply Chain

Complete Complete Testing Act Supply chain: Company responsibility for human rights compliance

The Completion of the Supply Chain Complete Test (LKSG) came into force on January 1, 2023. This law regulates the company's responsibility for human rights compliance in the supply chain for the first time.

The core elements of the complete test obligation include:

• The formation of a risk management system to identify, prevent or minimize the risk of human rights violations and environmental damage.
• The obligation to comply with precautions and remediation actions stipulated by the law.
• Periodic complaints and reporting procedures.

Complete test obligations apply to:

• The company's business operations themselves.
• Contract partner actions.
• Other suppliers (indirect).

This law initially applies to companies with:

• At least 3,000 employees in Germany starting in 2023.
• At least 1,000 employees starting in 2024.

The supply chain law contains a complete catalog of eleven internationally recognized human rights conventions, including:

• Prohibition of child labor, slavery and forced labor.
• Ignoring occupational health and safety.
• Cutting appropriate wages.
• Neglect the right to form trade unions or worker representatives.
• Rejection of access to food and water.
• Illegally grab land and livelihoods.

Fines can be imposed if the company fails to fulfill its legal obligations. The amount can reach 8 million euros or up to 2 percent of global annual sales. The turnover -based fine framework only applies to companies with annual sales of more than 400 million euros.

The Federal Office for Economic and Export Control (BAFA) applies supply chain laws in its new field office in Borna starting January 1, 2023. Bafa has extensive control authority, such as:

• Enter the place of business.
• Ask for information and check the documents.
• Asking companies to take concrete action to fulfill their obligations and enforce them by imposing penalty payments.

To support companies in carrying out their complete test obligations, Bafa developed and issued handouts.Bafa provides the leaflet onwebsiteSupply Chain Act.

How complymarket can help you:

• Prepare a risk management system and carry out risk analysis
• The application of company human human rights strategy policy statements
• Determination of precautions
• Implementation of Immediately Repair Actions If a violation of the law is found
• Determination of complaints procedures
• Documentation and reporting requirements to meet complete test requirements
• Complydoc: is intelligent IT and the first open source code of cloud solution for sustainability of supply chains, management of chemical compliance & products to gather information from suppliers.