Supply Chain Act

Country / jurisdiction: Germany · Year: 2021 · Status: In force · Level: National · Type: Voluntary

The Act on Corporate Due Diligence Obligations in Supply Chains strengthens human rights and environmental protection in global supply chains. It obligates companies in Germany to respect human rights by implementing defined due diligence obligations, including protection against child labour, forced labour, and discrimination, protection against land grabbing, occupational health and safety, the right to fair wages, the right to form unions, protection against environmental violations. These obligations apply to their own business area, the actions of their contracting partners and the actions of other (indirect) suppliers.

Initially, companies must identify, assess and prioritise the risks in their supply chains. Based on the results, companies publish a policy statement and take measures to prevent or minimise violations of human rights and damages to the environment. The law sets out what preventive and remedial measures are necessary. Other obligations include establishing channels for complaints from people in the supply chains and a regular documentation and reporting on supply chain management.

This benefits the people in the supply chains, companies and consumers. Due to this law, they have legal certainty and a reliable basis for a sustainable supply chain management with resilient procurement routes. The Supply Chain Act also provides consumers with the assurance that in particular large companies in Germany now have to focus even more strongly on fair production.

Official source: https://www.bmas.de/EN/Europe-and-the-World/International/Supply-Chain-Act/supply-chain-act.html#:~:text=The%20Act%20on%20Corporate%20Due,rights%20in%20global%20supply%20chains