The law regulates requirements for responsible management of global supply chains for certain companies. Companies are provided with a legal framework for fulfilling human rights due diligence requirements. For monitoring and enforcing compliance with the due diligence obligations and is given powers to intervene. The law establishes a duty of effort. It establishes neither a duty to succeed nor a guarantee liability for the companies.
in its own business unit : implementation in relevant business processes, development and implementation of appropriate procurement strategies and purchasing practices, conducting training in relevant business units, implementing risk-based control measures.
against direct suppliers: Contractual assurances from immediate suppliers, conducting training and education to enforce the contractual assurances of the immediate supplier, agreeing on appropriate contractual control mechanisms, and implementing them on a risk-based basis.
Efficacy of preventive measures The effectiveness of the preventive measures must be reviewed once a year as well as on an ad hoc basis if the company is confronted with a significantly changed or significantly extended risk situation in its own business area or at the direct supplier.
Implement the grievance procedure in such a way that it also allows individuals to human rights or environmental risks, as well as violations of human rights-related or environmental related or environmental obligations that are affected by the economic actions of an indirect supplier.
Extending the risk management, corrective action and policy statement in the event of factual indications that a violation of a human rights-related or an environmental obligation at indirect suppliers appears possible (substantiated knowledge).
Continuous internal company documentation with a minimum seven-year retention period.
Publishing a report on the company's performance of its due diligence obligations in the previous fiscal year on the company's website no later than 4 months after the end of the fiscal year and for at least 7 years
Disclaimer: This is a summary of the law. We do not guarantee its completeness or accuracy. For details, see the text of the law.
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The risks mentioned in the law are summarized in the following table. Further details are provided in the text of the law.
|1||Child labor or employment|
|4||Disregard for the freedom of coalition|
|6||Withholding a reasonable wage|
|7||Harmful soil degradation, water or air pollution, harmful noise emission, excessive water consumption.|
|9||Assignment of security forces for the protection of the entrepreneurial project, from which risks (torture, life and limb, freedom of association) emanate|
|10||Serious impairment of protected legal positions|
|11||Production of products containing mercury|
|12||Use of mercury during production|
|13||Behandlung von Quecksilberabfällen entgegen den Bestimmungen des Artikels 11 Absatz 3 des Minamata-Übereinkommens|
|14||Production and use of chemicals pursuant to Article 3(1)(a) and Annex A of the Stockholm Convention of May 23, 2001 on Persistent Organic Pollutants (BGBl. 2002 II p. 803, 804) (POPs Convention).en)|
|15||Non-environmentally sound handling, collection, storage and disposal of waste in accordance with the regulations in force in the applicable jurisdiction under the terms of Article 6(1)(d)(i) and (ii) of the POPs Convention|
|16||Non-environmentally sound handling, collection, storage and disposal of waste in accordance with the regulations in force in the applicable jurisdiction under the terms of Article 6(1)(d)(i) and (ii) of the POPs Convention|
|16||Export of hazardous waste as defined in Article 1(1) and other waste as defined in of Article 1, paragraph 2, of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal of 22 March 1989 (Federal Law Gazette 1994 II pp. 2703, 2704) (Basel Convention)|
|17||Export of hazardous waste from countries listed in Annex VII to the Basel Convention. States to States not listed in Annex VII (Article 4A of the Basel Convention, Article 36 of Regulation (EC) No 1013/2006)|
|18||Import of hazardous waste and other waste from a non-Party to the Basel Convention (Article 4(5) of the Basel Convention)|
For the risk analysis, the risks are to be recorded, weighted and prioritized. There are no further explanations in the law.
To capture the risks, use different sources. Interested parties (internal and external employees, Customers, employees of suppliers and subcontractors, and people from the communities at their sites), NGOs, representatives of the public administration are a good point of for direct contact. In addition, you can use publicly available databases, media reports or reports from the Internet. Even if not all reports and information have to be correct, you could be shaping public opinion and damaging your supply chains as a result.
You can use the list of risks as a basis for discussion and research. Also look for data to help you evaluate and prioritize (see next section).
Three aspects play a role in weighting and prioritizing risks: the severity of impact, your ability to influence it, and the likelihood.
Severity of impact To evaluate the severity of impact use three dimensions related to your economic activity.
If your identified risks in one of the three dimensions falls into the higher class, the violation is classified as serious. The initiation of measures is independent of the classification. It is only used for prioritization purposes.
Influence name possibility. The law recognizes different constellations in the supplier relationship. You do not always have the economic power to enforce something with the supplier. Therefore, it is necessary to categorize the possibility of influence. Here it is helpful to make a gradation. One possibility is in:
own group company - dependent company (§§ 16, 17 AktG) / controlled company (§ 17 AktG) / dependent group company (§ 18 para. 1 AktG) - independent company
The ability to influence determines whether to what extent you can agree measures (such as contracts, training, controls) with the company. If you cannot do this, you still need to monitor and assess risks. In extreme cases, changing suppliers or making your own will help.
Probability of occurrence. The probability of occurrence has an impact on prioritization. You can try to derive it from historical data. However, you should also consider regional conditions
Prioritization In a classical risk analysis, probability and impact are plotted. You can do this in the case of supply chain law in terms of probability and severity of impact. A graph might look like this, depending on your choice of gradations.
With the help of this representation, you visualize the risks and can derive an appropriate order and the scope of the measures.
However, take the opportunity to log information that led to the assessment. This will help you determine if changes have occurred over time. The next time you go through for risk analysis, ask for new information and changes to existing information.
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