The German Supply Chain Act is coming - that much is already certain. Companies must be prepared for a law to be passed before the end of this legislative period. So by summer 2021 at the latest. Why, why, why? Here you will find all the information on the latest developments regarding the Supply Chain Act.
In the course of the so-called NAP survey, companies that have more than 500 employees and are based in Germany were asked whether they implement the five so-called core elements defined in the NAP (National Action Plan):
The five core elements of due diligence
- A public policy statement on respect for human rights is in place
- A procedure for identifying actual and potential adverse impacts on human rights is in place (risk analysis).
- Appropriate mitigation measures and controls of their effectiveness are in place.
- Reporting is carried out.
- The company establishes or participates in a grievance mechanism.
The results of the survey were presented in August, with a sobering result: just 13 to 17 percent of all companies surveyed fully meet the requirements of the NAP. 83 to 87 percent of the companies do not meet them. To the (German language) results
The discussion then flared up between business associations, unions, lobbyists, NGOs and federations. From corona-related wrong timing to the loss of competitiveness of German companies - the arguments and pretexts for ignoring the results of the NAP monitoring were manifold. Even Economics Minister Peter Altmaier (CDU) resisted a law for a long time - without success. Now a spokesman let it be known "For the Federal Ministry of Economics, respect for human rights is an important concern."
The contents of the Supply Chain Act
What exactly is to be in the supply chain law is not yet clear. The German Handelsblatt reports, of a graduated liability: "The closer the relationship to the supplier and the higher the possibility of influence, the greater the responsibility to implement corporate due diligence."
Germany wants to use its EU Council presidency to draft a European supply chain law. Whether the six months will actually be enough to push the initiative through, however, remains to be seen.
Even if there is no European directive for the time being, observers expect a law to be passed before the end of this legislative period - probably out of concern that a possible next government with the participation of the Greens will raise the bar on human rights.
How DQS can support you:
As an independent certification and audit service provider, we can support your due diligence processes in the following ways:
- Gap analysis and validation of your due diligence processes.
- Human rights assessments
- Social and environmental compliance audits
- Supplier audits around the world
- Training and capacity building
- Sustainability reporting reviews