Businesses need the help of a supply chain
to create their products or services.
But supply chains can be complex, spanning continents.
Often, they have limited visibility of who is in their chain
and where sub-tier suppliers are located.
And unfortunately,
not all businesses operate to the same standard.
How they treat their staff,
or the environmental impact of their operations
can vary drastically.
Heightened consumer and investor attention
against substandard supply chains operations,
means businesses have to take
their human rights responsibilities seriously
to safeguard their longterm success.
However, despite this attention,
expecting businesses to address this area voluntarily
hasn't achieved the appropriate level of action.
So, some governments have turned to legislation.
In Germany,
the recently introduced
Corporate Due Diligence in Supply Chains Act,
will force businesses to ensure
that social and environmental standards
are observed and understood
within their extended supply chain.
From January 2023,
the act will impact all companies
with their registered or principal office in Germany
that have more than 3000 employees.
From 2024 onwards,
this threshold will reduce to 1000 employees.
Foreign businesses with a branch office in Germany
must also comply.
The act expects businesses to implement
risk management processes, develop a policy statement,
implement preventative and remedial measures,
develop a complaints procedure,
and maintain documentation
to report on their activity annually.
Failure to comply can result in fines
of up to 800,000 Euros
or up to 2% of average annual turnover,
and exclusion from public contracts in Germany
for up to three years.
The Supplier Assurance Platform
is designed to help businesses
meet the obligations of the act
and provide a structured and compliant way
to manage supply chain risk.
Contact us today.