The Supply Chain Act (LkSG) is a German law. Various terms are used synonymously for it: LieferkettenSorgfaltspflichtengesetz or Sorgfaltspflichtengesetz.

The video on the right explains the LkSG concisely in German.

The Supply Chain Act applies to all German companies with more than 3,000 employees. These must implement the law from 01 January 2023. From 01.01.2024, companies with 1,000 or more employees must also implement the law. That is the current situation - if the EU were not also working on a supply chain law.

The EU draft goes further here. If the EU draft is adopted, small and medium-sized enterprises (SMEs) will also have to implement the EU requirements.

In doing so, the European Union wants small and medium-sized enterprises (SMEs) in high-risk sectors and listed SMEs operating in the domestic market to test their upstream products as well. High-risk SMEs are to be defined by the EU Commission. See the article available from the BDI in the download area.

However, a supply chain law is not new. Such a law was already enacted in France and the Netherlands before Germany.

The German law is sometimes portrayed on the Internet as being too soft - but if you read the text of the law carefully, you will see that companies will have a lot of work to do.

The law provides for administrative offenses and fines. These are based on the Data Protection Regulation (DS-GVO) and can amount to up to 2% of the annual turnover of the group of companies.

From 175,000 euros, the company can be excluded from public contracts.

The law requires due diligence on issues of human rights violations and environmental damage from companies. The list of points includes:

The requirements are not to be met just once, but through interrelated processes - referred to in the law as procedures. In principle, therefore, it is a matter of organizational design with processes, regulations and evidence in order to fulfill the duty of care.

You can read more about the individual requirements on the next page.

If you are interested in how due diligence can be structured and verified on the basis of international standards, please contact us.

We have solutions - from a process model, a training concept with an e-learning portal, the procedure (process) descriptions and a document management system for verification. For this, we use international ISO standards and thus make you safe in terms of due diligence.

Here you can download the overview of help for the LkSG in PDF format in German.

What is the Supply Chain Due Diligence Act | LkSG?

Does such a law also exist at European level - what are the differences?

The Supply Chain Act - in the context of other requirements

Who has to implement the law - and who is also affected, although not directly mentioned?

What are the requirements by the LkSG for the company?

What is a human rights officer?

What are the possible solutions?

To open the whitepaper, please click on the cover page with the tanker.