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German Supply Chain Due Diligence Act - Lieferkettensorgfaltspflichtengesetz (LkSG)

Minimize Supplier Risks and Ensure Compliance with the German Supply Chain Due Diligence Act Requirements

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What is the German Supply Chain Act or German Supply Chain Due Diligence Act (in German Lieferkettensorgfaltspflichtengesetz or Lieferkettengesetz or LkSG)?

The German Supply Chain Due Diligence Act was passed by the German Federal Government to regulate human and labor rights violations in supply chains. As per the German Supply Chain Law, beginning on January 1, 2023, companies in Germany with 3000 or more workers will have to perform substantial supply chain due diligence by incorporating supplier risk management and compliance mechanisms within their supply chains. From January 1, 2024, businesses with over 1000 employees will also come under the scope of the Supply Chain Act, Germany.

The companies under the scope of the German Supply Chain Due Diligence Act (LkSG) should take the below steps to ensure compliance.

  • Establishing a Risk Management system
  • Designating a responsible person or persons within the enterprise for monitoring compliance
  • Performing regular risk analysis
  • Issuing human rights policy statements for the protection of human rights in business
  • Establish preventive measures in its area of business and vis-à-vis direct suppliers
  • Taking remedial action in the event of human rights violation
  • Establishing a complaints procedure including whistle-blower enablement for human rights violations
  • Implementation of due diligence measures with regard to risks connected to indirect suppliers
  • Documenting and reporting of due diligence obligations annually
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How can MeRLIN help to comply with The German Supply Chain Due Diligence Act (LkSG)?

MeRLIN's LkSG solution enables you to implement sustainable sourcing practices across the supplier ecosystem and perform the due diligence required to comply with the German Supply Chain Act. Its comprehensive features allow businesses to meet the obligations of the Act easily.

Download MeRLIN LkSG Solution Factsheet
Contract-Management

Risk Management

Maintain risk register to consolidate risks associated with suppliers, track and monitor them

Compliance

Policy Statement

Issue policy statements with supplier invites or publish them in supplier portal and mandate its acceptance for onboarding

Supply-Management

Supplier Surveys & Questionnaires

Request information from supplier regarding compliance to the law using configurable surveys or questionnaires that can be associated with sourcing

Sourcing-Events

In-Person Audits

Facilitate audits to supplier sites by a designated person/compliance officer who can answer to audit questions and add observations in the system

Supplier

Whistleblower Functionality

Any internal or external party can report human rights violations by anyone in the ecosystem

Analytics-and-Reports

Dashboards & Reporting

Analyse and track noncompliance and risk exposure using intuitive dashboards and generate reports on due diligence activities

Are you LkSG ready?

If not, Act Now!

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Webinars and Blogs

German Supply Chain Act (Lieferkettensorgfaltspflichtengesetz) – What it Means to SCM & Procurement Professionals

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How COVID-19 will change the design planning & operation of global supply chains

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Panel Discussion : Agile Procurement Practices in Dynamic Business Scenarios

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Factsheet

To know more about how MeRLIN LkSG Solution can help you ensure compliance with the German Supply Chain Act, download factsheet.

Download Factsheet