Supply Chain Due Diligence Act.

The Act obliges enterprises with their head office, principal place of business, administrative headquarters, registered office or branches in Germany with at least 3,000 employees within Germany (decreasing to 1,000 employees as of January 1st 2024) to respect human rights by implementing certain due diligence obligations relating to their whole supply chain, including contractual partners and other (indirect) suppliers. Enterprises need to introduce and effectively implement an appropriate risk management system in the whole supply chain and across all key internal business processes. In particular, they must carry out a risk analysis and take preventive and remedial action. In addition, enterprises must set up a complaints procedure that allows those who are directly affected, as well as those who are aware of possible violations, to report human rights risks and violations. Enterprises must submit an annual report to the competent public authority on how they are meeting their due diligence obligations.
The Supply Chain Act lists and refers to the international agreements that define human rights. These include, inter alia, the prohibition of child labour, protection against slavery and forced labour, health and safety at work and related health risks, the payment of an adequate wage, the right to form trade unions and employee representation bodies, and access to food and water.
The competent public authority has extensive control powers. This includes, for example, official instructions to enterprises to carry out specific actions to fulfil their obligations or requests for the provision of information. Large fines, intended to act as a deterrent, may be imposed to enforce compliance with the law, including fines of up to 8 million euros or up to 2% of annual turnover.