Insights: International Supply Chains

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Mandatory Due Diligence for international Supply Chains

With the introduction of the new Supply Chain Law in 2021, Germany embarked on uncharted legal territory. Although the due diligence requirements of the Law are basically known and internationally connectable, as they are based on the due diligence standard of the UN Guiding Principles on Human Rights, just like the German National Action Plan for Business and Human Rights of 2016. However, for the first time in German law, the Law provides a catalogue of binding due diligence obligations whose objects lie outside the obliged companies’ own sphere of business, thus, also outside their primary sphere of influence. Consequently, the new Supply Chain Law will pose very special challenges for the highly globalised German economy, which is networked with the entire world through complex supply chains.
Parallel to the German Supply Chain Law, numerous other countries within and outside the EU have already enacted comparable regulations. The EU legislator is also working on a European framework legislation to regulate global supply chains. The corresponding draft legislation already indicates a further tightening of the German legal framework in the future.
To ensure legally compliant conduct within their supply chains in the future, German companies must now pay particular attention to an effective risk management in their international business relationships. In this respect, the present “The present Insights shall provide an overview of the status of supply chain legislation worldwide.

 Supply Chain Law around the world

 Europe

International supply chains 

The new Supply Chain Act - German economy in practice

Since 2021, also Germany has its own supply chain law, following the international trend toward greater transparency and responsibility in its international supply chains. However, the requirements of the new law will present German industry with quite significant challenges in the coming years. Read more »

 

The German Supply Chain Act – a high risk of liability

Compliance with the obligations of the German Supply Chain Act is important. Violations of the act must be carefully prevented, because the power of third parties to conduct lawsuits raises many questions in legal practice. Read more »

 

Consideration of voluntary initiatives in the context of Supply Chain Regulation

Dealing with human and environmental rights in global supply chains has increasingly become the focus of government regulation in recent years. Read more » 

 

The Supply Chain Due Diligence Act and the still underestimated issue of liability

The Supply Chain Due Diligence Act (Gesetz über die unternehmerischen Sorgfaltspflichten zur Vermeidung von Menschenrechtsverletzungen in Lieferketten, abbreviated LkSG), was passed by the Bundestag on 11.6. 2021 and is scheduled to come into force on 1.1.2023. Read more »

 

Human Rights Due Diligence – Regulation through Reporting

With increasing globalisation and the growing influence of markets and internationally active companies, the issue of human rights in supply chains is becoming increasingly relevant. In the area of business and human rights, the regulatory developments have failed to keep up with the rapid changes in markets over the past few decades. Read more »


The European Supply Chain Act - the important topics

With the obligation to track entire value chains, the EU Supply Chain Act represents a significant tightening compared to the German Supply Chain Act. German SMEs in particular will have to prepare themselves for increased control and bureaucracy. Read more »

International supply chains Due Diligence in Supply Chains – a look at the Czech Republic

In summer 2021, the Federal Republic of Germany passed a law on corporate due diligence in supply chains (the Supply Chain Act), joining other European and non-European countries (e.g. the Netherlands, the UK and the USA) that have already enacted legislation addressing this area. Read more »

International supply chains Supply Chain Compliance and Due Diligence in Estonia

Supplying and distributing a specific product or service from the beginning to end is what is known as the supply chain process (involving sourcing of materials, R&D, manufacture, finance, customer service, distribution & marketing). Read more »

International supply chains The French law on Duty of Care (“Devoir de vigilance”) dated 27. March 2017 – lessons learned and recommendations

The scope of the French law on Duty of Care (“Devoir de vigilance”) is deliberately broad to allow for several types of situations. It establishes the need for a vigilance plan in five parts to be implemented within companies meeting certain thresholds. Read more »

International supply chains Supply Chain Risk Management for German Companies in Greece

As a German company, you are required by the German Supply Chain Act to carry out due diligence on contracted businesses throughout your supply chain, identify risks to human rights and take measures to mitigate such risks. Read more »

International supply chains Corporate Governance: Supply Chain Sustainability Risk Analysis in Latvia

Latvia has adopted no country specific rules regarding the sustainability impact analysis and related reporting requirements. However, despite this voluntary principle, the intangible qualities of a business partner, such as reputation, are of increasing importance. Read more »

International supply chains Sustainability in the Netherlands: What you need to know

With the announcement of the CSRD obligation for large companies, the list of European applicable laws and regulations is further extended. Also in the Netherlands, there are various directives and laws that contribute to achieving the climate objectives of 2030 and 2050. Read more »

International supply chainsTransparency Act in Norway: Requirements for transparency on enterprises' business contacts and suppliers

In Norway on 1 July 2022, the “Act relating to enterprises’ transparency and work on fundamental human rights and decent working conditions” – the Transparency Act – entered into force. As a consequence, more than 9,000 Norwegian enterprises are required to carry out a due diligence. Read more »

International supply chains The legal status of Due Diligence Regulations in Supply Chains in Poland

As opposed to Germany, Poland has not taken any measures aimed at introducing an obligation for enterprises to exercise due diligence into the system to safeguard human rights and environmental standards in supply chains. Read more »

International supply chains Prohibition of discrimination in Slovakia

The Labour Code as well as the special Act on Equal Treatment in Certain Fields and on Protection against Discrimination and on Amendments to Certain Acts (the Anti-Discrimination Act) introduce the principle of equal treatment provided for in the field of employment relations. Read more »

International supply chains Spanish companies within the Supply Chain of German manufacturers – Focus on automotive suppliers and agricultural producers

The entry into force on 1 January 2023 of the German Supply Chain Act (LkSG) is expected to coincide in the other EU countries – and therefore also in Spain – with the revival of the public debate on the European Commission's proposal for a directive “on corporate due diligence with regard to sustainability”, which was published on 23 February 2022. Read more »

International supply chains Human Rights Issues to take i̇nto Consideration while doing Business in Turkey

Export of mechanical products is one of the largest industries in Turkey. 60 percent of the products is exported to EU countries including Germany, England, France, Italy, and the USA. Particularly, the machinery sector adds value to Turkey's economy by encoring the use of high technology, creating a large scale of subindustry and supply chains. Read more »

International supply chains UK Supply Chain Guidance

Organisations across all sectors are becoming subject to more compliance requirements. These can arise from specific legislative requirements or the increasing drive for businesses to operate ethically and with regard for their impact on the environment and wider society. Read more »

 Worldwide

International supply chains Modern Slavery Act and human rights in Supply Chains: What businesses in Australia need to know

The website of the Australian Department of Home Affairs contains the following statement “There is no place for modern slavery in the Australian community or in the global supply chains of Australian goods and services.” Read more »

International supply chainsThe Supply Chain Act and its implications in Brazil

Despite not having specific legislation regarding the Supply Chain, Brazil has, in its several legislations, legal provisions for the protection of human, environmental, and children's rights, among others. Read more »

International supply chainsThe German Supply Chain Due Diligence Act and Costa Rica – a risk analysis

For companies in Costa Rica, the introduction of the German Supply Chain Due Diligence Act (LkSG) in January 2023 poses some potential risks. This is especially true with regard to the role of national economic activities within the production chains of companies based in Germany. Read more »

International supply chainsImportant Aspects of Ecuadorian Regulations in the Supply Chain

The German Supply Chain Due Diligence Act establishes an obligation of care for companies located in Germany that meet the conditions to be subject to control by the competent authority in this country. Read more »

International supply chainsThe German Supply Chain Law: Control of labour standards and environmental protection in Egypt

The human rights standards and the companies’ obligations in a developing country like Egypt can certainly not be compared with those applicable in Germany or other European countries. The practical application of the German supply chain law may therefore require a higher level of risk analysis and risk management. Read more »

International supply chainsLegal Support in Supply Chains, the Kenyan Experience

The legal office in Kenya prides itself with lawyers in its team who specialise in corporate and commercial law with a focus on good corporate governance through effective compliance management strategies. Read more »

International supply chainsImpact of the German Supply Chain Act on South African Business

South Africa is an important supplier of German companies, especially for the automotive and raw materials sectors. Thus, it is important for German companies to address the due diligence requirements of the Supply Chain Act in relation to the country-specific risks of South Africa. Read more »

International supply chainsGerman Supply Chain Law in Asia-Pacific

The German Supply Chain Law („Gesetz über die unternehmerischen Sorgfaltspflichten in Lieferketten”; short: Lieferkettengesetz) has been passed by parliament on 11 June 2021. Read more »

 

German Supply Chain Law Panel discussion: German Supply Chain Act and its impact in Asia

​Watch our experts discussing the German Supply Chain Act and its impact and implementation in Asia, providing hands-on advice on what you should particularly focus on in the future, as well as the measures you can take to ensure compliance with the Law, avoid penalties and minimize risks. More »

published on 15 September 2022
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