The Supply Chain Act addresses the responsibility of German enterprises to respect human rights in global supply chains. Find out more here.
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The BAFA has published a new paper on sector initiatives in the context of the Supply Chain Due Diligence Act (in German). It contains information on antitrust requirements, practical steps and concrete examples with reference to the due diligence obligations under the Act.
BAFA has published a new FAQ paper on the risk-based approach, which provides practical information on the risk-based approach and the risk analysis under the Supply Chain Due Diligence Act as well as on the collaboration in the supply chain. The objective is to further strengthen the risk-based approach and explain how companies can effectively implement their due diligence obligations. The paper also demonstrates the legal limitations of supplier involvement and how BAFA controls this. The FAQ complement BAFA's publications on the risk analysis, collaboration in the supply chain and appropriateness.
BAFA has published a new Guidance on standards, audits and certifications as instruments in the due diligence process. You can find more information on this in our press release (in German).
In light of the developments regarding the implementation of EU legal requirements for Corporate Sustainability Reporting (Directive (EU) 2022/2464), BAFA will revie Collaboration in the Supply Chain w the submission and publication of reports in accordance with the LkSG for the first time on January 1, 2026. Even if the submission of a report to BAFA and its publication in accordance with the LkSG was already due before this date, BAFA will not sanction exceeding the deadline, provided that the report is submitted to BAFA by December 31, 2025 at the latest. Further information can be found here.
The fulfilment of the other due diligence obligations pursuant to Sections 4 to 10 Paragraph 1 LkSG as well as their control and sanctioning by BAFA, for which information from a report may also give rise, are not affected by this deadline regulation.
BAFA has now published its annual report (in German) in accordance with Section 21 LkSG for 2023.
The Act on Corporate Due Diligence in Supply Chains (LkSG) is the first legally binding regulation of corporate responsibility for respecting human rights in supply chains. Specifically, the LkSG obliges companies to respect human rights and certain environmental due diligence obligations in their supply chains in an appropriate manner.
The law applies to companies with at least 3,000 employees from January 1, 2023. From January 1, 2024, companies with at least 1,000 employees are affected.
The LkSG contains a comprehensive catalogue of eleven internationally recognised human rights conventions. The legal interests protected therein are used to derive behavioural guidelines or prohibitions for business activities in order to prevent violations of protected legal positions. The LkSG also takes up certain environmental obligations from three international conventions that companies must comply with.
The due diligence obligations of companies include:
BAFA is responsible for controlling and enforcing the law. It carries out its tasks in the new BAFA branch office in Borna (Saxony).
The specific tasks of BAFA include:
BAFA's control activities follow a risk-based approach and have been carried out on an ongoing basis since the Act has entered into force. The controls include, among other things, an overall assessment of the appropriateness regarding the risk management as well as the appropriate implementation of individual requirements of the Act.
BAFA also supports companies in implementing their due diligence obligations and provides a comprehensive range of information for this purpose.
In order to support companies in implementing their due diligence obligations, BAFA develops and publishes Guidances. In addition, BAFA answers frequently asked questions (FAQs) on the Supply Chain Act in cooperation with the responsible ministries, the Federal Ministry for Economic Affairs and Climate Action (BMWK) and the Federal Ministry of Labor and Social Affairs (BMAS). This FAQ catalog is continuously developed and updated. A wide range of information for implementing human rights due diligence obligations can also be found at wirtschaft-menschenrechte.de/umsetzungshilfen and at https://www.gtai.de/de/trade/specials/lksg (in German).
Sector dialogues of the Federal Government support companies in sectors with particular human rights challenges. As part of the implementation of the National Action Plan for Business and Human Rights (NAP), the Federal Ministry of Labor and Social Affairs organises them as a multi-stakeholder process. This supports companies in adequately implementing the requirements of human rights due diligence.
In the automotive industry dialogue, practical guidelines for implementing due diligence obligations in operational management systems have been developed. The guidelines take into account both the requirements of the NAP and the LkSG and are available here. In the energy industry dialogue, potential human rights risks for selected parts of the German energy industry have been developed and documented. The document is available https://www.csr-in-deutschland.de/EN/Business-Human-Rights/Implementation-support/Sector-dialogues/Energy-sector-dialogue/publication-potential-human-rights-risks-along-supply-and-value-chains.html.
In order to administer the Supply Chain Due Diligence Act, BAFA develops and operates a risk database based on publicly available data. The database is available exclusively to BAFA and is not publicly accessible. The risk database contains information on human rights and environmental risks for specific sectors, countries and raw materials.
The following document provides companies and other interested parties with an overview and orientation of the indices and sources whose information is currently used in the risk database. The publication of the source overview shall inform the public about BAFA’s official activities.
The overview does not claim to be complete and is regularly updated by BAFA.
BAFA risk database – source overview (in German)
Below you will find a collection of links with information on the ratification status of the states for the conventions listed in the annex (to Section 2 Paragraph 1, Section 7 Paragraph 3 Sentence 2) of the LkSG. Please note that the website of the International Labour Organisation (ILO) does not display any declarations and reservations that may result in restrictions on the validity of the conventions, nor information on the status of implementation by the respective states.
Ratification of ILO Conventions
Ratification of the International Covenant on Civil and Political Rights
Ratification of the International Covenant on Economic, Social and Cultural Rights
By publishing the questions of the electronic reporting questionnaire in PDF format (in German), BAFA is responding to the request of companies and those interested in the LkSG to provide an analog version in addition to the digital version.
In this way, BAFA supports companies in their preparations for fulfilling their reporting obligations and enables the questionnaire to be easily distributed within companies.
For companies subject to the LkSG, the digital version of the reporting questionnaire is essential for fulfilling the reporting obligation.
