Compliance Briefing — June 11, 2021

Executive briefing: Germany’s Bundestag passed the Lieferkettensorgfaltspflichtengesetz (Supply Chain Due Diligence Act) on 11 June 2021. From 1 January 2023, companies with 3,000+ employees (and from 2024, 1,000+) must implement risk management systems, preventive measures, and remediation processes covering suppliers and indirect partners.

Key compliance checkpoints

• Risk management and analysis. Establish due diligence procedures to identify human rights and environmental risks across tiers, with annual risk analyses and ad-hoc reviews.
• Preventive measures. Implement supplier codes of conduct, training, and control mechanisms tailored to risk severity.
• Complaints procedure. Provide accessible grievance channels enabling affected parties to report violations with protections against retaliation.

Operational priorities

• Governance structure. Appoint responsible persons at management level and integrate due diligence reporting into supervisory board oversight.
• Documentation and reporting. Prepare annual public reports documenting identified risks, mitigation steps, and effectiveness for submission to the Federal Office for Economic Affairs and Export Control (BAFA).
• Contractual clauses. Update supplier agreements to include audit rights, remediation commitments, and termination triggers tied to due diligence breaches.

Enablement moves

• Deploy supply-chain mapping tools capturing geographic exposure, subcontractors, and risk ratings.
• Integrate due diligence requirements into procurement scorecards and onboarding questionnaires.
• Coordinate cross-functional remediation plans with sustainability, legal, and procurement teams to address severe findings swiftly.

Sources

• BGBl. 2021 I p. 2959 — Supply Chain Due Diligence Act
• German Federal Ministry of Labour press release on the Act

Zeph Tech operationalises Lieferkettengesetz controls with supply-chain mapping, grievance management, and BAFA-ready reporting.

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