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1 Jan 2023

Implementation of the German Supply Chain Act

Bundestag in Berlin, Germany

The “Act on Corporate Due Diligence in Supply Chains” came into force on 1 January 2023 initially covering companies with 3,000 or more employees. From 1 January 2024 it has covered companies with 1,000 or more employees. According to the Federal Office of Economics and Export Control (BAFA), approximately 5,200 companies are currently covered. These companies must identify risks of human rights violations and environmental destruction at direct suppliers and, if they gain "substantiated knowledge" of a potential abuse, also at indirect suppliers. They must take countermeasures and document them to the Federal Office for Economic Affairs and Export Control (BAFA), which can issue fines if companies violate their due diligence obligations. Affected parties can submit complaints to the BAFA. See here for a guidance note on the Supply Chain Act by NGOs for communities and rightsholders.

In April 2023, FEMNET, ECCHR and the National Garment Workers Federation (NGWF) filed a complaint against IKEA and Amazon with the Federal Office of Economics and Export Control under the Supply Chain Act. The complaint alleges the companies failed to meet their due diligence obligations by not signing the Bangladesh Accord.

In June 2024, ECCHR filed a complaint against Volkswagen, BMW and Mercedes over forced labour risks in Xinjiang.

The Business & Human Rights Resource Centre collects publicly submitted complaints here. Additional information on the implementation of the Supply Chain Act is also available in German here.

For further background leading up to the entry into force on 1 January 2023, please refer to this story.