Consultation on the Implementation of the German Supply Chain Due Diligence Act

Measures for Supply Chain Management and Procurement

The new law on the protection of human rights in global supply chains poses new challenges for supply chain management and procurement departments. We summarized the essential facts for you and help you fully comply with your due diligence obligations and improve your supplier and risk management.

1. What Does the German Supply Chain Act Include?

The German Supply Chain Due Diligence Act (Lieferkettengesetz), which came into force on January 1, 2023, requires companies to traceproduction processes and working conditions in their supply chains that violate human rights and to take measures to eliminate abuses. This applies not only to activities within your own company, but also to the business units of your suppliers and upstream suppliers at all stages of their supply chain.

2. Whom Does the Supply Chain Act Affect?

  • Since January 2023 companies with more than 3,000 employees
  • From January 2024, also companies with more than 1,000 employees. In addition, the EU Commission is currently working on a draft that would include companies with 500 or more employees.

This means that many medium-sized companies will also be affected by the law. These companies will now be subject to strict due diligence and liability rules.

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3. How Must Procurement and Supply Chain Management React?

Procurement managers and supply chain executives urgently need to review and, if necessary, readjust their supply chain to meet not only regulatory requirements but also the high demands of consumers. They also need to implement the following measures:

  • Develop procedures to identify risks to human rights violations in the supply chain
  • Take appropriate countermeasures for prevention and remediation
  • Establish a complaints procedure
  • Report annually and publicly on how human rights violations are prevented

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4. How Can We Support You in Implementing the Supply Chain Act?

In just four project steps, we identify and design suitable measures for you to implement the new requirements:

  • Analysis of all relevant structures and actions in the company regarding compliance with human rights
  • Risk analysis at commodity group and supplier level for the optimal derivation of individual and targeted measures
  • Identification and conception of measures, e.g. a joint initiative with suppliers
  • Implementation planning and realization of the measures

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