The Sup­p­ly Chain Due Dili­gence Act takes effect on 1 Janu­ary 2023


Last week, Germany’s Fede­ral Par­lia­ment adopted the new Sup­p­ly Chain Due Dili­gence Act (PDF only in Ger­man). The new law will enter into force on 1 Janu­ary 2023 and will take effect imme­dia­te­ly for com­pa­nies with 3,000 or more employees, and on 1 Janu­ary 2024 for com­pa­nies with 1,000 or more employees. The law will only app­ly to com­pa­nies who­se head office, prin­ci­pal estab­lish­ment, cen­ter of admi­nis­tra­ti­on or regis­tered office is in Germany.


Com­pa­nies within the scope of the Act will be requi­red to ana­ly­ze their ope­ra­ti­ons and sup­p­ly chains (pro­cu­re­ment and dis­tri­bu­ti­on) in order to ensu­re adhe­rence to human rights and envi­ron­men­tal requi­re­ments, as well as taking pre­ven­ti­ve and reme­di­al actions.

As for the spe­ci­fic requi­re­ments which com­pa­nies will have to satis­fy with regard to human rights and the envi­ron­ment, the Act sta­tes that com­pa­nies will be requi­red to adhe­re to the inter­na­tio­nal trea­ties and con­ven­ti­ons which are lis­ted in an annex to the Act. The Act now includes addi­tio­nal envi­ron­men­tal requi­re­ments with regard to the import and export of was­te and was­te traf­fi­cking, and the “Basel Con­ven­ti­on” (only in Ger­man) has now been express­ly included, as well as the “Stock­holm Con­ven­ti­on” (PDF only in Ger­man) and the “Min­ama­ta Con­ven­ti­on.”

Lia­bi­li­ty Risks

The Sup­p­ly Chain Due Dili­gence Act its­elf does not estab­lish lia­bi­li­ty for vio­la­ti­ons of the­se requi­re­ments and their con­se­quen­ces. Howe­ver, the­re is still a risk of gene­ral tort law lia­bi­li­ty in accordance with §§ 823(1) and (2) of the Civil Code for vio­la­ti­ons of due dili­gence requi­re­ments and so-called “pro­tec­ti­ve legis­la­ti­on.” Whe­ther and how lia­bi­li­ty of this kind will deve­lop, par­ti­cu­lar­ly in inter­na­tio­nal cases whe­re the rules of inter­na­tio­nal pri­va­te law app­ly, will only beco­me clear in prac­ti­ce. But it will be inte­res­t­ing to see what the EU Com­mis­si­on ulti­m­ate­ly publishes and puts into effect in the coming months with regard to the pro­po­sed EU Sup­p­ly Chain Direc­ti­ve, as this will be decisi­ve in case of doubt.

It is also important to under­stand that, as sta­ted in its legis­la­ti­ve intent, the Act does not requi­re any com­pa­ny to do the impos­si­ble (eit­her legal­ly or fac­tual­ly). Accor­din­gly, any lia­bi­li­ty for com­pa­nies would be limi­t­ed and would have to be eva­lua­ted on a case-by-case basis. Moreo­ver, tho­se affec­ted would have to explain and fur­nish evi­dence that the due dili­gence requi­re­ments were violated.

Recom­men­ded Actions

Com­pa­nies affec­ted by the Act should take action as soon as pos­si­ble in order to ensu­re that they will com­ply with the Act as of 1 Janu­ary 2023. In addi­ti­on to lia­bi­li­ty risks in civil law, the­re may also be a risk of signi­fi­cant fines and pen­al­ties, as well as exclu­si­on from ten­der pro­ce­du­res for public con­tracts. But smal­ler com­pa­nies should also take heed: com­pa­nies which are direct­ly affec­ted by the Act will (have to) try to obli­ga­te their sup­pli­ers to com­ply with their own requi­re­ments, so that due dili­gence requi­re­ments might get in “through the back door.”

In addi­ti­on, deve­lo­p­ments at the EU level should be wat­ched closely.


Stay up-to-date

We use your email address exclusively for sending our newsletter. You have the right to revoke your consent at any time with effect for the future. For further information, please refer to our privacy policy.