❗#EuropeInsight Series: Implementing the German Supply Chain Act❗
We explain the new, official guidance on #humanrights #duediligence in the #supplychain
❓ What is the German Supply Chain Act about?
1️⃣ Large companies in Germany are required to take measures to ensure that human rights are respected in their supply chains.
2️⃣ These measures include risk management, risk analysis, remedial measures, complaints procedures and reporting obligations.
3️⃣ All companies with more than 3,000 employees in Germany must comply (lowered to 1,000 employees from January 2024).
4️⃣ The impact has been felt in Japan: Japanese suppliers are being approached to support their German business partners' compliance efforts. But many struggle to understand why and how they should react.
📌Better safe than sorry?
The international sources of the Supply Chain Act (#un #globalcompact) and its good intentions (#sdgs #fairtrade) are clear. But its vague wording has left companies in the dark about the specific actions they need to take.
From what we have seen, many have taken a formalistic way: Transferring a maximum of legal obligations to suppliers through the use of a uniform, mandatory "supplier code of conduct" or assessment centers for all suppliers.
The more effective risk-based approach (i.e., targeting high-risk scenarios and developing meaningful improvements for each specific case) requires much more research and on-the-ground work, and is difficult to build from scratch in only a couple of years.
☝ Some guidance at last
The agency in charge of enforcing the Supply Chain Act (short: BAFA) has by now published several guidance papers, some of which are available in English. The aim: providing concrete input on how to implement the Supply Chain Act.
Can these guidance papers square the circle of maximizing impact and minimizing costs?
💡 In this 3-part Europe Insight series, we will outline the BAFA guidance papers on three main issues: risk analysis, appropriate & effective measures, and cooperation with suppliers.
Our focus: The impact on Japanese suppliers and Japan-based subsidiaries of German companies.
Coming up first: Part 1 – Risk Analysis
🤔 Questions?
Contact us via LinkedIn or at Europe_Insight@arqis.jp to receive all 3 parts of our @Europe Insight Supply Chain Act Series NOW!
For support in understanding the Supply Chain Act or negotiating supply agreements with German business partners, get in touch with us at ARQIS Foreign Law Office!
Ulrich Kirchhoff Tobias Schiebe Kenichi Takasugi Dr. Carmen Appenzeller Britta Sültz Keiko Ishikawa
#ARQISTokyo #EuropeInsight #supplychains #globalization #nearshoring #childlabor #modernslavery #hrlaw #labour #compliance #esg
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