23 March 2021
– 2 of 2 Insights
On 3 March 2021, the German Federal Government agreed on the contents of the Supply Chain Act (Act on Corporate Due Diligence to Prevent Human Rights Violations in Supply Chains (Due Diligence Act)), which is to come into force on 1 January 2023 (applicable to German companies of at least 3,000 employees; as of 1 January 2024 of at least 1,000 employees). The new draft bill is already very exhaustive and in particular breaks down the obligations for companies in detail. In legal terms, the draft bill primarily means that companies will need to adapt and update their compliance and sustainable contract drafting, particularly when it comes to purchasing.
This guide makes recommendations in line with the legal duty of care catalogue (= risk management, risk analysis, policy statement, preventive measures, remedial measures, complaints procedure and documentation and reporting obligations), so that companies can comply with the legal requirements.
For an overview on which companies are affected by the law, what the law requires and what sanctions may be imposed for violations, click here.
The current draft bill (status: 3 March 2021) was available to us when preparing this guide. The current regulations may, of course be amended during the legislative process. The law is to be passed by the end of this legislative period (September 2021).
Ofter long and tough negotiations, the German Federal Government has launched the Supply Chain Act on 3 March 2021