The Supply Chain Act – an appeal to corporate due diligence

The new Supply Chain Act will come into force on 1 January 2023.
The law regulates the observance of human and environmental due diligence obligations by companies in their supply chains.

Companies based in Germany with at least 3,000 employees (from 1.1.2024 at least 1,000) are obliged to set up a risk management system.

The tasks include:

• regular risk analysis
• Policy statement
• Preventive measures in own operations and towards direct suppliers
• Corrective action
• Complaints procedure
• Due diligence with regard to risks at indirect suppliers
• Documentation and reporting

Furthermore, a company-internal complaints procedure must be established, which gives affected persons the opportunity to point out human or environmental risks or violations.

On 10 March 2021, the EU Parliament adopted key points for a European supply chain law.