Corporate responsibility among medium-sized businesses.
3 steps to implementing a supply chain complaints procedure according to the Supply Chain Act
The German Supply Chain Due Diligence Act (LkSG) came into force on 1 January 2023. Long called for by interest groups, it is intended to make companies responsible for their entire supply chains. Neglect of due diligence regarding human rights and the environment should thus be identified early and avoided in the future.
In Germany, the LkSG has been in effect for companies with 3,000 or more employees, and since 2024, it has also been mandatory for companies with 1,000 or more employees. However, it affects not only companies directly falling within the scope of the LkSG but also, for example, smaller suppliers. Consequently, there is a need for action among medium-sized businesses too.
In practical application, the complaints procedure is the most important measure in implementation, alongside risk analysis.
But what does this look like in practice? What are the LkSG's requirements regarding a complaints procedure, and how can you ensure compliance?
3 steps to introduce a legally compliant complaint procedure
Step 1: Definition: Target audience of a complaint procedure
Under the LkSG, unlike the Whistleblower Protection Act and the EU Whistleblowing Directive, companies must not only offer their own employees but also external parties the opportunity to report. This means: all persons working in the supply chain, or persons who have become aware of violations. This can also include representatives of affected persons. Important: the procedure should also be designed according to the target group. In the case of a risk of child labour, a channel for the complaints procedure must be child-friendly, for example.
Step 2: Implementation – Carefully put the complaints procedure into practice
A sensible complaints procedure should not be a „compulsory event“. It serves as an early warning system and should identify problems or risks in good time, ideally before people or the environment are harmed. Employees often learn about violations first – if this happens in good time, remedial measures may not be necessary at all. Financial and human resources should be planned accordingly for the establishment of a complaints procedure. The findings of the procedure should be incorporated into the review and improvement of the fundamental and human rights declaration.
The complaints procedure should be clearly communicated to the target audience (employees, external parties) and be easily accessible.
Step 3: Reporting system – It must be simple
The be-all and end-all of the reporting system is its intuitive usability. It should be easy to understand and accessible 24/7, multilingual, and usable from any device. Reports should be possible both in writing and verbally.
Incidentally, at LegalTegrity, we already fully implement the requirements profile for a reporting system in accordance with the LkSG and will be there to assist you with the implementation.
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