THE EASY WAY TO COMPLY with the Act on Corporate Due Diligence Obligations in Supply Chains (LKSG)
On January 1, 2023, the Act on Corporate Due Diligence Obligations in Supply Chains (LKSG) came into force. It obligates all German companies, regardless of industry, that employ more than 3,000 workers in Germany to prevent human rights and environmental rights violations in their supply chains. From 2024, the LkSG will also apply to companies with at least 1,000 employees in Germany.
The foundation stone for the law was laid back in 2016. At that time, the German government adopted the National Action Plan for the Economy and Human Rights of the Federal Government of Germany (NAP) to work with companies to contribute to a more socially just globalization. The NAP is based on the United Nations Guiding Principles on Business and Human Rights. In addition to the state’s duty to protect and judicial as well as extrajudicial remedies, the focus is on corporate responsibility.
THE REQUIREMENTS OF THE LKSG
The term supply chain, within which companies must implement measures to prevent human rights and environmental law violations, covers all steps required to manufacture products and provide services at home and abroad – from the extraction of raw materials to delivery to the end customer. Relevant here are not only the actions in the company’s own business area, but also the actions of direct and indirect suppliers. The LkSG imposes a repeating cycle of various procedural steps on the companies concerned. With the entry into force of the LkSG, companies must be able to provide evidence of the implementation of these measures in order to avoid sanctions against the company as well as liability risks for the management.
According to § 8, companies must also set up a complaints procedure so that human rights and environmental risks as well as violations of human rights-related or environmental obligations can be pointed out. The company must provide clear and comprehensible information in an appropriate manner to the public on how to reach the company, who is responsible, and how to conduct the complaints procedure. The complaints procedure must also be accessible to potential stakeholders, maintain confidentiality of identity, and ensure effective protection against disadvantage or punishment as a result of a complaint.
For this reason RATISBONA COMPLIANCE
Ratisbona Compliance supports companies in fulfilling this responsibility and efficiently implementing the associated regulatory requirements for a complaints procedure. It combines the advantages of a digital whistleblower system with the special position of trust and competence of lawyers. This is because the secure implementation of legal requirements requires sound legal knowledge, from which sensible organizational deductions can be made in the event of rule violations.
Our lawyers are experienced compliance specialists. They analyze the legal relevance of reports received and confirm receipt of a notice to the whistleblower in a timely manner and discuss the facts of the case accordingly. This creates a trusting dialog and an optimal outcome for all parties.
UNDERSTANDABLE FOR EVERYONE
The reporting system of Ratisbona Compliance meets the requirement of linguistic accessibility. The procedures are formulated in an easy-to-understand manner – and in 60 different languages. This enables employees to point out possible legal violations across the entire supply chain in accordance with legal requirements.
ACCESSIBLE WITH CERTAINTY
The Ratisbona Compliance system is a cloud-based software-as-a-service operating on our own web servers. No IT implementation is required at the user’s site, and you have access anytime, anywhere. With Ratisbona Compliance’s software, you offer whistleblowers a secure and permanently available communication channel. Our lawyers are also available by phone and in person.
ADDITIONAL SHIELD OF PROTECTION
If companies fail to comply with their legal obligations under the LkSG, fines can be imposed. These can amount to up to eight million euros or up to two percent of global annual sales. In addition, companies that violate the Act may be excluded from the award of public contracts. The whistleblower system of Ratisbona Compliance provides a confidential and legally compliant reporting channel to point out breaches of the rules. This gives you the opportunity to react appropriately and early as well as protects you and your company from penalties.
MORE TIME FOR YOUR CORE BUSINESS
We preserve your resources. With Ratisbona Compliance at your side, you do not need to assign internal resources for the implementation of §8 LkSG. All reporting and notification obligations are handled by our experts. We cover your back.
ANONYMOUS AND CONFIDENTIAL
The LkSG requires the protection of the identity of the informant – both with regard to possible reprisals and from a data protection perspective. The digital reporting channel of Ratisbona Compliance treats both the identity of the whistleblower and the transmitted information anonymously and confidentially. A mandate relationship exists between the company and the legal experts of Ratisbona Compliance.