SARIA Global Newsletter February 2023

How we are prepared for the Supply Chain Due Diligence Act

The new law at a glance

On January 1, 2023, the German “Supply Chain Due Diligence Act” (SCDDA) came into effect. It aims to prevent, detect, and mitigate human rights violations and environmental hazards related to human rights risks. The new law obliges companies to install appropriate tools for risk analysis and risk management in their supply chains, covering both the companies’ own activities and entities as well as the actions of all immediate and indirect suppliers.

As affiliates of the RETHMANN Group, all SARIA activities (worldwide) fall within this scope!

Threat of heavy fines

Fines of up to 8 million Euros or up to 2% of annual turnover are possible for violations of the law. In the case of serious violations, companies can be excluded from public tenders for up to three years.

So far, we have taken the following actions

  • SARIA Policy Statement on Human Rights Strategy was issued to set out our overall risk management strategy
  • SARIA Supply Chain Integrity Committee with members of Group Compliance, Procurement, Sustainability and Risk Management was founded for coordination at Group level + the Compliance Organization was assigned to coordinate and implement SCDDA duties in each country/unit
  • Questionnaire for risk analysis in own business area was prepared and completed by Compliance Officers in coordination with local departments in Q4 2022
  • Update existing documents: SARIA Code of Conduct, Supplier Code of Conduct and Sustainable Procurement Policy to meet SCDDA requirements
  • E-learning „Fair Working Conditions – Preventing Modern Slavery in the Supply Chain” will be rolled out until Q3 2023
  • EcoVadis IQ-Tool was implemented to screen and determine overall risk score of suppliers based on sustainability related industry and country risks
  • Via a newly created landing page high risk suppliers are obliged to accept SARIA Supplier Code of Conduct and contractual assurance
  • Multilanguage FAQ for SARIA Integrity Line was prepared to increase transparency of anonymous complaints procedure

What happens next

In the next step, we will evaluate the results of the internal risk analysis, implement the defined preventive measures for suppliers, and provide a manual for our Compliance Officers to strengthen their ability to take action.

Would you like to learn more? Then contact your local Compliance Officer.