German Supply Chain Due Diligence Act (LkSG)

Companies with at least 1,000 employees in Germany (3,000 during 2023) must set up risk management, run annual risk analyses, adopt a policy statement, take preventive and remedial measures with direct suppliers and operate a complaints procedure. A pending government bill would abolish the annual reporting duty retroactively and limit fines to serious breaches. Fines currently reach EUR 8 million or 2 percent of average annual global turnover for large companies, plus exclusion from public contracts.

LkSG applies to many German retailers and manufacturers, who pass its requirements to logistics suppliers through codes of conduct, audits and contract clauses. A 3PL or carrier serving a German brand may need to answer questionnaires on working hours, subcontracted drivers and safety, and accept audit rights. Road freight subcontracting chains, where drivers work for small subcontracted carriers, are a recognized risk area, so documented subcontractor controls help retain German customers.

• Corporate Sustainability Due Diligence Directive (CSDDD)2024, applies from 2029 · EU directive on corporate human rights due diligence
• UK Modern Slavery Act 20152015 · UK law requiring slavery statements from large firms
• EU Forced Labour Regulation2024, applies from December 2027 · EU ban on products made with forced labour

1. BAFA: Supply Chain Act bafa.de
2. Jones Day: German Government Follows Up on Promise to Change German Supply Chain Act jonesday.com