{"id":17390,"date":"2022-03-27T15:16:24","date_gmt":"2022-03-27T15:16:24","guid":{"rendered":"https:\/\/crigroup.com\/?p=17390"},"modified":"2022-05-30T08:11:25","modified_gmt":"2022-05-30T08:11:25","slug":"supply-chain-due-diligence-act","status":"publish","type":"post","link":"https:\/\/crigroup.com\/ar\/supply-chain-due-diligence-act\/","title":{"rendered":"Supply chain due diligence act will enter into force on 1 January 2023, are you ready?"},"content":{"rendered":"<p><span data-preserver-spaces=\"true\">The German Parliament (&#8220;Bundestag&#8221;) adopted the &#8220;Act on Corporate Due Diligence in Supply Chains&#8221; (Supply Chain Due Diligence Act \u2013 &#8220;Act&#8221; or &#8220;LkSG&#8221;), and the act will enter into force on 1 January 2023. Originally adopted on 11 June last year, 2021, the act aims to improve the protection of the environment and international human rights by setting binding standards for large companies and their value chains.\u00a0<\/span><\/p>\r\n<h2><span data-preserver-spaces=\"true\">Background<\/span><\/h2>\r\n<p><span data-preserver-spaces=\"true\">Following the 2011 UN Guiding Principles on Business and Human Rights (UNGPs), Germany adopted a National Action Plan on Business and Human Rights, which recalled (but without setting legal standards) that companies should respect human rights in their operations, their value chains, and it is a well-known fact that most human rights violations occur at the beginning of the supply chain. But, and unsurprisingly, ten years after the adoption of the UNGPs, according to a\u00a0<\/span><a class=\"editor-rtfLink broken_link\" href=\"https:\/\/www.auswaertiges-amt.de\/blob\/2405080\/23e76da338f1a1c06b1306c8f5f74615\/201013-nap-monitoring-abschlussbericht-data.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">study commissioned by the government<\/span><\/a><span data-preserver-spaces=\"true\">:<\/span><\/p>\r\n<ul class=\"wp-block-list\">\r\n<li><span data-preserver-spaces=\"true\">only 13-17% of German companies were considered to be &#8220;in compliance&#8221; with their obligations<\/span><\/li>\r\n<li><span data-preserver-spaces=\"true\">while 83-87% were not, and<\/span><\/li>\r\n<li><span data-preserver-spaces=\"true\">less than 1% were classified as &#8220;companies with an implementation plan&#8221; concerning these obligations.<\/span><\/li>\r\n<\/ul>\r\n<p><span data-preserver-spaces=\"true\">As part of the fight against human rights violations and environmental degradation, the LkSG act notably aims to protect people from modern slavery, forced labour, human trafficking, hazardous work and exploitation under the standards of the International Labour Organisation (ILO) and the relevant articles of the International Covenant on Economic, Social and Cultural Rights (UN Social Covenant).\u00a0<\/span><\/p>\r\n<p><span data-preserver-spaces=\"true\">The LkSG act is the first in Germany to establish binding standards for companies concerning human rights and the environment. This is a huge milestone as it marks a shift away from the voluntary standards and self-regulation principles.\u00a0<\/span><\/p>\r\n<h3><span data-preserver-spaces=\"true\">Who is affected?<\/span><\/h3>\r\n<ul>\r\n<li><strong><span data-preserver-spaces=\"true\">From 1 January 2023 onwards:\u00a0<\/span><\/strong><span data-preserver-spaces=\"true\">All companies with at least 3,000 employees that have their head office, administrative seat or statutory seat in Germany OR companies that have a branch in Germany and usually employ at least 3,000 employees in this branch;<\/span><\/li>\r\n<li><strong><span data-preserver-spaces=\"true\">From 1 January 2024 onwards:\u00a0<\/span><\/strong><span data-preserver-spaces=\"true\">All companies with at least 1,000 employees that have their head office, administrative seat or statutory seat in Germany OR companies that have a branch in Germany and usually employ at least 1,000 employees in this branch.<\/span><\/li>\r\n<\/ul>\r\n<p><span data-preserver-spaces=\"true\">Even if companies with fewer employees are not addressees of the LkSG Act, they may still be indirectly affected; therefore, due diligence obligations could still apply. This is because the companies directly affected would be obliged to enforce compliance to the best of their ability with human rights in their supply chain. The measures necessary for this can have a direct impact on their suppliers, for example, through the implementation of a code of conduct. In addition, the directly affected companies will often be dependent on the active support of their suppliers and thus have this support be contractually assured, e.g. in the form of reporting obligations as part of their risk analysis.<\/span><\/p>\r\n<h2><span data-preserver-spaces=\"true\">New risk management and reporting duties for businesses<\/span><\/h2>\r\n<p><span data-preserver-spaces=\"true\">With newly imposed due diligence obligations on environmental protection and on human rights, businesses must introduce iterative and ongoing, or in certain circumstances ad hoc, due diligence processes specified by the LkSG.<\/span><\/p>\r\n<p><span data-preserver-spaces=\"true\">Identification and management of an organisation&#8217;s supply chain and the risks that come with it require the implementation of due diligence processes. The term &#8220;supply chain&#8221; refers to all products\/services of a business, including all manufacturing and services, in Germany and\/or abroad, from the extraction of raw materials to their delivery to the end customer. Furthermore, due diligence processes should implement the following criteria:\u00a0<\/span><\/p>\r\n<ul>\r\n<li><span data-preserver-spaces=\"true\">type and scope of the business activities of the company subject to the due diligence obligations,<\/span><\/li>\r\n<li><span data-preserver-spaces=\"true\">the ability of the company subject to the due diligence obligations to exert influence (so-called leverage),<\/span><\/li>\r\n<li><span data-preserver-spaces=\"true\">typically expected severity of the violation, and<\/span><\/li>\r\n<li><span data-preserver-spaces=\"true\">type of contribution by the company subject to the due diligence obligations to cause a violation.\u00a0<\/span><\/li>\r\n<\/ul>\r\n<p><strong><span data-preserver-spaces=\"true\">Who is CRI<\/span><\/strong><span data-preserver-spaces=\"true\">\u00ae<\/span><strong><span data-preserver-spaces=\"true\">\u00a0Group?<\/span><\/strong><\/p>\r\n<p><span data-preserver-spaces=\"true\">Based in London, CRI\u00ae Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international\u00a0<\/span><a class=\"editor-rtfLink broken_link\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=b733ad82-0e55-4917-bb02-011bb79f838d&amp;placement_guid=250fb2a7-fa34-4014-a23e-a19ec41aee8a&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Four-solutions%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Risk Management<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink broken_link\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=4ec58284-73b3-46f5-a11f-d9dcc6b8e17e&amp;placement_guid=f957ed6c-edc3-4286-ac30-f33caa6f81f9&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Femployee-background-checks%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Employee Background Screening<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/crigroup.com\/ar\/business-intelligence\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"><div id=\"h1-9\">\u0630\u0643\u0627\u0621 \u0627\u0644\u0623\u0639\u0645\u0627\u0644<\/div><\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink broken_link\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=13966f36-e2fa-4f6b-afeb-5a9004f47f91&amp;placement_guid=67fe51fd-e7a3-4fe3-814a-c8c713aa06e5&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Fthird-party-risk-management%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">TPRM<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink broken_link\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=b8a8c479-0172-4651-bdd7-06d3a3e1b42b&amp;placement_guid=26b207ed-54ef-48d8-a2eb-d0931ca99b39&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Fdue-diligence%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"><div id=\"h1-2\">\u0627\u0644\u0639\u0646\u0627\u064a\u0629 \u0627\u0644\u0648\u0627\u062c\u0628\u0629 <span class=\"rtl-1\">360\u00b0<\/span><\/div><\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink broken_link\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=e0e860b5-1822-40b5-a34c-d0a8782d97c8&amp;placement_guid=46f09df8-0452-4582-a178-75554e2c10bc&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Fcompliance-solutions%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"><div id=\"h1-1\">\u062d\u0644\u0648\u0644 \u0627\u0644\u0627\u0645\u062a\u062b\u0627\u0644<\/div><\/span><\/a><span data-preserver-spaces=\"true\">\u00a0and other professional\u00a0<\/span><a class=\"editor-rtfLink broken_link\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=186c5f76-08e9-452a-b6c7-53c143e3a42e&amp;placement_guid=da1251cb-798d-4e81-a03a-6484600d1cf1&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Finvestigative-solutions%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Investigative Research<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI\u00ae Group also holds\u00a0<\/span><strong><span data-preserver-spaces=\"true\">B.S. 102000:2013<\/span><\/strong><span data-preserver-spaces=\"true\">\u00a0and\u00a0<\/span><strong><span data-preserver-spaces=\"true\">B.S. 7858:2012 Certifications<\/span><\/strong><span data-preserver-spaces=\"true\">\u00a0and is an HRO certified provider and partners with Oracle.<\/span><\/p>\r\n<p><span data-preserver-spaces=\"true\">In 2016, CRI\u00ae Group launched\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the Anti-Bribery Anti-Corruption (ABAC\u00ae) Center of Excellence<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0\u2013 an independent certification body that provides education and certification services for individuals and organisations on a wide range of disciplines and ISO standards, including\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-31000-risk-management\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 31000:2018 Risk Management- Guidelines<\/span><\/a><span data-preserver-spaces=\"true\">;\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-37000-governance-of-organisations\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 37000:2021 Governance of Organisations<\/span><\/a><span data-preserver-spaces=\"true\">;\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-37002-whistleblowing-certification\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 37002:2021 Whistleblowing Management System<\/span><\/a><span data-preserver-spaces=\"true\">;\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-37301-certification\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 37301:2021 (formerly ISO 19600) Compliance Management system (CMS)<\/span><\/a><span data-preserver-spaces=\"true\">;\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/aml-training\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Anti-Money Laundering (AML)<\/span><\/a><span data-preserver-spaces=\"true\">; and\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-37001-anti-bribery-certification\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 37001:2016 Anti-Bribery Management Systems ABMS<\/span><\/a><span data-preserver-spaces=\"true\">. ABAC\u00ae offers a complete suite of solutions designed to help organisations mitigate the internal and external risks associated with operating in multi-jurisdiction and multi-cultural environments while assisting in developing frameworks for strategic compliance programs.\u00a0<\/span><a class=\"editor-rtfLink broken_link\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=2636d9bd-18de-499a-87a0-d62c4dd9c096&amp;placement_guid=c423f6be-c336-4a5b-834b-d1bccfd03ad6&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fabacgroup.com%2Fcontact%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Contact ABAC\u00ae for more<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0on ISO Certification and training.<\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>The German Parliament (&#8220;Bundestag&#8221;) adopted the &#8220;Act on Corporate Due Diligence in Supply Chains&#8221; (Supply Chain Due Diligence Act \u2013 &#8220;Act&#8221; or &#8220;LkSG&#8221;), and the act will enter into force on 1 January 2023. Originally adopted on 11 June last year, 2021, the act aims to improve the protection of the environment and international human [&hellip;]<\/p>","protected":false},"author":1,"featured_media":17394,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15,19],"tags":[],"class_list":["post-17390","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-industries","category-london"],"gutentor_comment":0,"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v16.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<meta name=\"description\" content=\"The German Parliament (&quot;Bundestag&quot;) adopted the &quot;Act on Corporate Due Diligence in Supply Chains&quot; (Supply Chain Due Diligence Act \u2013 &quot;Act&quot; or &quot;LkSG&quot;), and\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/crigroup.com\/ar\/supply-chain-due-diligence-act\/\" \/>\n<meta property=\"og:locale\" content=\"ar_AR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Supply chain due diligence act will enter into force on 1 January 2023, are you ready? 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