{"id":1455,"date":"2023-10-03T15:10:48","date_gmt":"2023-10-03T14:10:48","guid":{"rendered":"https:\/\/nielsonsmith.com\/?p=1455"},"modified":"2024-01-11T14:35:28","modified_gmt":"2024-01-11T14:35:28","slug":"the-german-supply-chain-act-lksg","status":"publish","type":"post","link":"https:\/\/nielsonsmith.com\/fr\/the-german-supply-chain-act-lksg\/","title":{"rendered":"Quelles sont les implications de la loi allemande sur la cha\u00eene d'approvisionnement (LkSG) pour les cha\u00eenes d'approvisionnement mondiales ?"},"content":{"rendered":"

Germany\u2019s Supply Chain Due Diligence Act (also known as LkSG in German) entered into force on January 1 this year, impacting companies with at least 3,000 employees. This threshold will change to companies with more than 1,000 employees on January 1, 2024, but it is already creating legal and reputational woes for companies not in compliance. The law imposes extensive due diligence obligations on companies with central administration, principal place of business, administrative headquarters, statutory seat, or branch office in Germany. It aims to identify, prevent, or address human rights or environmental violations in global supply chains.<\/p>\n\n\n\n

There is a growing international emphasis on accountability and sustainability. The Act broadly defines the \u201csupply chain\u201d to encompass all steps required in producing a company\u2019s products and providing its services \u2013 from extraction of raw materials to delivery to the end customers. LkSG protects human rights areas including child labour, forced labour, slavery, torture, discrimination, wage withholding, and occupational health and safety violations. Protected environmental harms include the use of mercury and the handling of certain types of hazardous waste.<\/p>\n\n\n\n

\"Navex<\/a><\/figure>
\n

NAVEX has several resources for companies seeking guidance on meeting the LkSG\u2019s due diligence obligations, a good starting point for Chief Compliance Officers looking to create a more sustainable and ethical supply chain.<\/strong><\/p>\n<\/div><\/div>\n\n\n\n

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7 Requirements of the German Supply Chain Due Diligence Act<\/strong>:<\/h2>\n\n\n\n

At the heart of the regulation are the due diligence obligations it places upon companies.<\/p>\n\n\n\n

1. Risk analysis must be carried out at least once a year, and on an ad hoc<\/strong> basis<\/strong><\/h3>\n\n\n\n

Section 5 of the LkSG requires companies to conduct an \u201cappropriate risk analysis\u201d to identify human rights or environment-related risks in its own business and at its direct suppliers. The law directs that such risks be \u201cappropriately\u201d weighted and prioritised. Risk analysis must be carried out at least once a year, as well as on an ad hoc basis upon any significant change in the supply chain \u2013 such as the \u201cintroduction of new products, projects, or a new business field.<\/p>\n\n\n\n

2. Set-up grievance mechanisms<\/strong><\/h3>\n\n\n\n

Section 8 outlines that companies must have a complaint mechanism in place for reporting human rights or environmental violations. It states that an external grievance procedure is allowed, provided the service provider can guarantee impartiality; accessibility and implementation of the complaints procedure is publicly available; the identity of those who report violations remains confidential; and effective protections are ensured against \u201cdisadvantage or punishment as a result of a complaint.\u201d<\/p>\n\n\n\n

3. Public reporting and documentation on activities and remedies (min 7 years retention)<\/strong><\/h3>\n\n\n\n

Section 10 states that companies must annually submit a report to Germany\u2019s Federal Office of Economic Affairs and Export Control (BAFA<\/a>) on the fulfilment of their due diligence obligations, no later than four months after the end of the fiscal year. To comply with this obligation, companies must \u201ccompletely and truthfully\u201d answer an extensive questionnaire, which contains open and closed questions and multiple-choice options. Additionally, the report must be published on the company\u2019s website for a period of seven years.<\/p>\n\n\n\n

\"Supply<\/figure>\n\n\n\n

4. Required risk management is based on the principle of proportionality<\/strong><\/h3>\n\n\n\n

Section 4 of the German Supply Chain Due Diligence Act requires companies to establish an \u201cappropriate and effective risk management system\u201d to identify, prevent, mitigate, and eliminate human rights or environment-related risks and violations. It also outlines the need to appoint a Human Rights Officer, or equivalent role, to monitor risk management.<\/p>\n\n\n\n

5. Issuance of a policy statement on its human rights strategy<\/strong><\/h3>\n\n\n\n

Section 6, in part, requires companies to issue a policy statement on its human rights strategy. This includes defining human rights-related and environmental- related expectations placed upon employees and suppliers. They must adopt appropriate preventive measures, like the \u201cdevelopment and implementation of appropriate procurement strategies and purchasing practices that prevent or minimise identified risks,\u201d the \u201cdelivery of training in the relevant business areas,\u201d and \u201crisk-based control measures to verify compliance with the human rights strategy.\u201d<\/p>\n\n\n\n

6. Remedial action<\/strong><\/h3>\n\n\n\n

Section 7 states, if the company discovers a violation, it must \u201cwithout undue delay take appropriate remedial action to prevent, end, or to minimise the extent of the violation.\u201d Termination of a business relationship may be required in certain circumstances, as outlined in the law.<\/p>\n\n\n\n

7. Due diligence for indirect suppliers<\/strong><\/h3>\n\n\n\n

Section 9 of the LkSG requires that parties are able to use the complaints procedure to report violations related to the actions of an indirect supplier. This means that the company must carry out risk analysis and preventative measures on an indirect supplier if it has \u201csubstantiated knowledge\u201d of a human rights or environmental- related violation.<\/p>\n\n\n\n

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\"Legal:<\/figure>\n\n\n\n

Penalties<\/strong><\/h2>\n\n\n\n

Failure to comply with the due diligence obligations could result in steep administrative fines. Businesses that become aware of violations and take no remedial action face a financial penalty of up to \u20ac50,000 and administrative fines of up to \u20ac8 million, or 2% of their average annual revenue if it is more than \u20ac400 million. Exclusion from the award of public procurement contracts for up to three years is also possible.<\/p>\n\n\n\n

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Legal and reputational damage can result as well. On April 18, 2023, the National Garment Workers Federation (NGWF), in collaboration with ECCHR and FEMNET, filed the first- ever legal complaint with BAFA against the garment industry for violations of the LkSG. The complaint cited a continued lack of safety inspections and labour rights violations in Bangladesh clothing factories, a decade after the collapse of the Rana Plaza textile factory that killed more than 1,100 people.<\/p>\n<\/div>

\"Businessperson<\/figure><\/div>\n\n\n\n

An ethical roadmap<\/strong><\/h2>\n\n\n\n

Chief Ethics and Compliance Officers, Chief Risk Officers, and senior management teams should not be misguided or disheartened by regulatory obligations. As companies can deploy smart software to make staying compliant, avoiding fines, and protecting humans and the environment easier than ever before.<\/p>\n\n\n\n

Furthermore, the LkSG\u2019s due diligence obligations should be viewed holistically in conjunction with the human rights laws of other jurisdictions \u2013 such as France\u2019s Duty of Vigilance Law<\/a>, the United Kingdom\u2019s Modern Slavery Act<\/a>, and California\u2019s Transparency in Supply Chains Act<\/a> in the United States.<\/p>\n\n\n\n

\n
Duty of Vigilance Law<\/a><\/div>\n\n\n\n
Modern Slavery Act<\/a><\/div>\n\n\n\n
Transparency in Supply Chains Act<\/a><\/div>\n<\/div>\n\n\n\n
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ARTICLE BY:<\/p>\n\n\n\n

FLORIAN HAARHAUS<\/strong><\/p>\n\n\n\n

International General Manager at NAVEX<\/p>\n<\/div>

\"FLORIAN<\/figure><\/div>\n\n\n\n

As International General Manager, Haarhaus is responsible for leading NAVEX\u2019s international business, spearheading strategic initiatives to extend NAVEX solutions across high growth markets. Prior to joining NAVEX, Haarhaus was the General Manager and Vice President, Sales EMEA at Nintex \u2013 a Seattle-based process automation leader \u2013 where he directly oversaw all go-to-market activity across Europe, the Middle East and Africa. Haarhaus has 30 years of international experience in the software and SaaS industry, having built and run teams across Europe, the Middle East and Asia for companies like Oracle, Lotus-IBM, Salesforce, Box and most recently Nintex. His key areas of focus include setting international go-to-market strategies, M&A integrations, international expansion and developing partner ecosystems.<\/p>\n\n\n\n

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T\u00e9l\u00e9charger le PDF<\/a><\/div>\n<\/div>\n\n\n\n

\u00c9v\u00e9nements connexes :<\/strong><\/p>\n\n\n\n

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Conf\u00e9rence sur la conformit\u00e9 douani\u00e8re en Europe<\/a>
7-8 novembre 2023
D\u00fcsseldorf, Allemagne<\/p>\n<\/div>\n\n\n\n

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\"Sanctions<\/figure>\n\n\n\n

Conf\u00e9rence sur les sanctions et la conformit\u00e9 des exportations au Royaume-Uni <\/a>
1-2 novembre 2023
Londres, Royaume-Uni<\/p>\n<\/div>\n\n\n\n

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\"European<\/figure>\n\n\n\n

Sommet strat\u00e9gique sur la conformit\u00e9 des contr\u00f4les commerciaux en Europe
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<\/p>","protected":false},"excerpt":{"rendered":"

Germany\u2019s Supply Chain Due Diligence Act (also known as LkSG in German) entered into force on January 1 this year, impacting companies with at least 3,000 employees. This threshold will change to companies with more than 1,000 employees on January 1, 2024, but it is already creating legal and reputational woes for companies not in […]<\/p>\n","protected":false},"author":3,"featured_media":1995,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"German Supply Chain Act: Implications on Global Supply Chains","_seopress_titles_desc":"The law imposes extensive due diligence obligations on companies with central administration, principal place of business, ","_seopress_robots_index":"","footnotes":""},"categories":[9,1],"tags":[],"hf_cat_post":[],"class_list":["post-1455","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-knowledge","category-news"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/posts\/1455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/comments?post=1455"}],"version-history":[{"count":20,"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/posts\/1455\/revisions"}],"predecessor-version":[{"id":2005,"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/posts\/1455\/revisions\/2005"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/media\/1995"}],"wp:attachment":[{"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/media?parent=1455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/categories?post=1455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/tags?post=1455"},{"taxonomy":"hf_cat_post","embeddable":true,"href":"https:\/\/nielsonsmith.com\/fr\/wp-json\/wp\/v2\/hf_cat_post?post=1455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}