This was the topic of a closed webinar “The future of trade and business relations with German companies in the context of due diligence legislation “, which was held for EBA member companies by German colleagues from consulting firms \u2013 Marlow Strategies and Twenty Fifty.<\/p>\n
Such initiative was launched first in France in 2017, and regulations on due diligence in supply chains are already in force this year in Switzerland, the Netherlands, and Norway.<\/p>\n
All these initiatives ensure the implementation of the UN Guiding Principles on Business and Human Rights, as by 2020, 46.2% of the world’s largest companies have not yet provided any assessment of the human rights situation in their supply chains.<\/p>\n
The due diligence regulation will be introduced gradually for German and foreign companies with registered branches in Germany:<\/p>\n
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- from 2023 for companies with more than 3,000 employees;<\/li>\n
- from 2024 for companies with more than 1,000 employees.<\/li>\n<\/ul>\n
Thus, companies will be required to submit annual comprehensive due diligence reports. In doing so, they should describe the measures taken to identify the risks and any further action if such risks have been identified.<\/p>\n
Companies will assess human rights risks, such as forced and child labor, decent working conditions, and so on. The law also covers environmental risks, but only those that may harm human rights: depriving people of access to drinking water or sanitation, improper disposal of hazardous waste, and toxic chemicals, including mercury.<\/p>\n
Control should be exercised at all stages of the supply chain, including the main activities of the company, its direct and indirect suppliers, as well as the use of additional services such as logistics or temporary storage of products.<\/p>\n
Penalties for violating the law are considerable – up to 8 million euros or 2% of annual turnover, as well as deprivation of the right to participate in public procurement for up to 3 years.<\/p>\n\t
\n\n\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t![](\"https:\/\/eba.com.ua\/wp-content\/uploads\/2021\/12\/Svitlana_Mykhailovska_2021_av.jpg\")
\n\n\t\t\t\t\t\t\tSvitlana Mykhailovska<\/span>\n\t\t\t\n\t\t\t\t\t\t\tEBA Deputy Director for Advocacy<\/span>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\"The business as usual\u201d no longer works so effectively, only responsible companies will be able to survive in the new realities. Germany is one of our main trading partners and the trade turnover between our countries is constantly growing. There are 56 German companies in the Association, and we sincerely hope for further fruitful cooperation.\n\t\t\t<\/blockquote>\n\t\t\t\t\n\t<\/div>\n\n