Supply Chain Due Diligence Requirements

1. Identification of Risks: Companies are required to identify the risks of human rights violations, forced labor, child labor, and environmental damage in their supply chains.
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2. Mitigation Measures: Companies are expected to implement measures to mitigate or prevent these risks, such as conducting audits of suppliers, improving transparency, providing training and support to suppliers, and implementing grievance mechanisms.
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3. Monitoring and Reporting: Companies must monitor and report on their efforts to identify and mitigate risks in their supply chains. This can include regular reporting on human rights impacts, supplier compliance, and other key performance indicators.
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4. Remediation: Companies must have systems in place to address any human rights abuses or environmental damage that is identified in their supply chains. This can involve remediation measures such as providing compensation to affected workers or communities, implementing corrective actions, and engaging with stakeholders to address root causes.
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5. Due Diligence Plan: Companies must develop a due diligence plan that outlines their approach to identifying, mitigating, and addressing risks in their supply chains. The plan should be comprehensive and regularly reviewed and updated.
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6. Disclosure Requirements: Companies must publicly disclose information about their due diligence efforts and the results of their monitoring and reporting.
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7. Penalties and Enforcement: Companies may face penalties for non-compliance with the Lieferkettengesetz, including fines of up to €2 million. The law also allows for civil liability claims by affected individuals or organizations.

Overall, the Lieferkettengesetz is designed to ensure that companies take responsibility for the impacts of their supply chains and take steps to address any negative effects on human rights and the environment.