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Businesses need the help of a supply chain

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to create their products or services.

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But supply chains can be complex, spanning continents.

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Often, they have limited visibility of who is in their chain

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and where sub-tier suppliers are located.

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And unfortunately,

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not all businesses operate to the same standard.

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How they treat their staff,

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or the environmental impact of their operations

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can vary drastically.

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Heightened consumer and investor attention

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against substandard supply chains operations,

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means businesses have to take

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their human rights responsibilities seriously

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to safeguard their longterm success.

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However, despite this attention,

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expecting businesses to address this area voluntarily

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hasn't achieved the appropriate level of action.

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So, some governments have turned to legislation.

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In Germany,

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the recently introduced

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Corporate Due Diligence in Supply Chains Act,

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will force businesses to ensure

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that social and environmental standards

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are observed and understood

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within their extended supply chain.

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From January 2023,

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the act will impact all companies

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with their registered or principal office in Germany

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that have more than 3000 employees.

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From 2024 onwards,

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this threshold will reduce to 1000 employees.

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Foreign businesses with a branch office in Germany

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must also comply.

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The act expects businesses to implement

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risk management processes, develop a policy statement,

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implement preventative and remedial measures,

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develop a complaints procedure,

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and maintain documentation

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to report on their activity annually.

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Failure to comply can result in fines

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of up to 800,000 Euros

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or up to 2% of average annual turnover,

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and exclusion from public contracts in Germany

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for up to three years.

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The Supplier Assurance Platform

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is designed to help businesses

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meet the obligations of the act

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and provide a structured and compliant way

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to manage supply chain risk.

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Contact us today.