Minimum standards in the supply chain

With the “Supply Chain Act”, German companies will face increased requirements with regard to compliance with human rights and environmental standards in international supply chains. The Federal Government’s draft of the “Act on Corporate Due Diligence in Supply Chains” of 3 March 2021 now offers the first details of these requirements. The new Supply Chain Act aims in particular to prevent child and forced labour as well as discrimination among foreign suppliers of German companies. According to the government draft, the Supply Chain Act will apply to larger companies with a workforce of at least 3,000 employees from 2023, and this threshold will be lowered to 1,000 employees from 2024.