Laws Will Push Human Rights Due Diligence

On 3 March, the German Federal Cabinet passed a draft law outlin - ing the obligations of companies to conduct human rights due diligence through their supply chain. Known as the "Due Diligence Act" or the "Supply Chain Act', the proposed law is expected to become law in 2022.

Initially, the Act would apply to companies with more than 3,000 employees and require human rights due diligence across international supply chains. In the draft legislation, the due diligence obligations are described as "best efforts obligations", but companies should be able to demonstrate that they have implemented the due diligence obligations in a way that is "appropriate and practicable" based on the industry and company profile. Guidelines for penalties will be forthcoming.