Germany Adopts New Environment Due Diligence Law

On the 11^th of June 2021, the German Parliament adopted a potentially revolutionary Supply Chain Act (‘the Act'), which establishes that the biggest German-based companies will be required to establish comprehensive due diligence procedures to prevent human rights and environmental abuses within the course of their business, as well as within their global supply chains.

The proposed Act, which is sometimes referred to as the ‘Due Diligence Act', establishes a definition of a “supply chain”, which encompasses all the products and services of a company. Its scope extends from the extraction of raw materials to the delivery of the final product or service to the customer. This may sound rather abstract but in fact, the main aim of the law is to force companies to take responsibility for any labour or environmental abuses in their global supply chains. It focuses on combatting issues such as modern slavery, child labour, and workers' health abuses among others.