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Overview: CSR

Background

Overview: Background

Sustainability and CSR

International frameworks: guides for global business

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Overview: CSR national

National CSR Forum

CSR Policies in Germany

CSR international

Overview: CSR international

The EU's CSR policy

CSR: the global dimension

Overview: Business & Human Rights

NAP

Overview: NAP

About the NAP

Overview: About the NAP

Objectives

Development of the Action Plan

Four action areas of the NAP

Original version of the NAP

Monitoring

UN Guiding Principles

NAP International

Commitment of the Federal Government

Overview: Commitment of the Federal Government

The state's duty to protect

Activities of the Federal Government

Cooperation with stakeholders

Corporate due diligence

Overview: Corporate due diligence

Federal Government expectations

Five core elements of due diligence

Access to remedy and remediation

Supply Chain Act

Overview: Supply Chain Act

Background and development

Implementation by enterprises

FAQ

Europe

Overview: Europe

EU initiative for supply chain legislation

EU regulation on conflict minerals

EU Timber Regulation

G7-Presidency 2022

Implementation support

Overview: Implementation support

Information, advice, training and networks

Overview: Information, advice, training and networks

Information and advice

Networks and training

Guidance documents

Overview: Guidance documents

General guidance documents

Sector-specific guidance documents

An initiative by: CSR

Overview: CSR

Background

Overview: Background

Sustainability and CSR

International frameworks: guides for global business

Benefits for companies

CSR national

Overview: CSR national

National CSR Forum

CSR Policies in Germany

CSR international

Overview: CSR international

The EU's CSR policy

CSR: the global dimension

Business & Human Rights

Overview: Business & Human Rights

NAP

Overview: NAP

About the NAP

Overview: About the NAP

Objectives

Development of the Action Plan

Four action areas of the NAP

Original version of the NAP

Monitoring

UN Guiding Principles

NAP International

Commitment of the Federal Government

Overview: Commitment of the Federal Government

The state's duty to protect

Activities of the Federal Government

Cooperation with stakeholders

Corporate due diligence

Overview: Corporate due diligence

Federal Government expectations

Five core elements of due diligence

Access to remedy and remediation

Supply Chain Act

Overview: Supply Chain Act

Background and development

Implementation by enterprises

FAQ

Europe

Overview: Europe

EU initiative for supply chain legislation

EU regulation on conflict minerals

EU Timber Regulation

G7-Presidency 2022

Implementation support

Overview: Implementation support

Information, advice, training and networks

Overview: Information, advice, training and networks

Information and advice

Networks and training

Guidance documents

Overview: Guidance documents

General guidance documents

Sector-specific guidance documents

Supply chain act

Supply Chain Act

Act on Corporate Due Diligence Obligations in Supply Chains

The Act on Corporate Due Diligence Obligations in Supply Chains (Gesetz über die unternehmerischen Sorgfaltspflichten in Lieferketten) was published in the Federal Law Gazette on 22 July 2021 after completion of the parliamentary procedure. This is the first time the responsibility of German enterprises to respect human rights in global supply chains has been put on a legal footing.

Act on Corporate Due Diligence Obligations in Supply Chains

The Supply Chain Act at a glance:

  • The Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz, LkSG) places enterprises that have their central administration, principal place of business, administrative headquarters, statutory seat or branch office in Germany under the obligation to respect human rights by implementing defined due diligence obligations.
  • The core elements of the due diligence obligations include the establishment of a risk management system to identify, prevent or minimise the risks of human rights violations and damage to the environment. The Act sets out the necessary preventive and remedial measures, makes complaint procedures mandatory and requires regular reports.
  • The due diligence obligations apply to an enterprise’s own business area, to the actions of a contractual partner and to the actions of other (indirect) suppliers. This means that an enterprise’s responsibility no longer ends at its own factory gate but applies along the entire supply chain.
  • From 2023, the Act initially applies to enterprises with at least 3,000 and, from 2024, additionally to enterprises with at least 1,000 employees in Germany.
  • The Supply Chain Act contains an exhaustive list of eleven internationally recognised human rights conventions. The legal interests protected in those conventions are used to derive behavioural requirements or prohibitions for corporate action in order to prevent a violation of protected legal positions. These include, in particular, the prohibition of child labour, slavery and forced labour, the disregard of occupational safety and health obligations, withholding an adequate wage, the disregard of the right to form trade unions or employee representation bodies, the denial of access to food and water as well as the unlawful taking of land and livelihoods.
  • If enterprises fail to comply with their legal obligations, administrative fines may be imposed. These can amount to up to 8 million euros or up to 2% of annual global turnover. The fines system based on turnover applies only to enterprises with an annual turnover of more than 400 million euros. Moreover, if an administrative fine is imposed above a certain minimum level, enterprises may be excluded from the award of public contracts.
  • An authority will be equipped with effective enforcement instruments to monitor an enterprise’s supply chain management. The competent authority, the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle), has far-reaching supervisory powers. It can, for example, enter business premises, demand information and inspect documents as well as demand that enterprises take concrete action to fulfil their obligations and enforce this by imposing financial penalties.

Background and development

On this page you will will find information about the development of the Supply Chain Act and its connection to the National Action Plan for Business and Human Rights.

Implementation by enterprises

Learn more about the due diligence obligations for enterprises to respect human rights which are regulated in the new Supply Chain Act.

Frequently Asked Questions

We have summarised the most important questions about the Supply Chain Act for you.

Further Information

Act on Corporate Due Diligence Obligations in Supply Chains

Supply chain act