German Supply Chain Act (LkSG)

The law mandates companies to conduct due diligence to identify, prevent, and mitigate human rights and environmental risks in their global supply chains. This includes assessing risks, implementing measures to address identified risks, and monitoring the effectiveness of these measures. The law focuses on six specific areas of risk: child labor, forced labor, occupational health and safety violations, freedom of association, environmental pollution, and land rights violations. Covered companies are required to prepare an annual supply chain management report, outlining the measures taken to ensure responsible practices in their supply chains. The report should be made publicly available on their websites and filed with the competent authority. The companies concerned must prepare an annual report on the fulfilment of their due diligence obligations in the previous business year. Affected enterprises must submit this report to BAFA no later than four months after the end of the business year.