The Lieferkettensorgfaltspflichtengesetz obliges companies above an employee threshold with a presence in Germany to conduct human rights and environmental due diligence in their own operations and at their direct suppliers, maintain a complaints procedure, and file an annual report with the federal regulator.
German Supply Chain Due Diligence Act
Statute Germany
The Lieferkettensorgfaltspflichtengesetz (LkSG) came into force in January 2023 and was the first national statute in Europe to put supply chain due diligence on a legal footing rather than a voluntary one. It obliges in-scope companies to run a risk analysis, take preventive and remedial action, operate a complaints channel, and file an annual report with BAFA, the federal office that supervises it.
- Direct suppliers by default - The standing obligation covers own operations and tier one, extending to indirect suppliers when the company has substantiated knowledge of a violation.
- Annual filing to a regulator - BAFA receives and reviews reports and can impose fines.
- Risk management as the unit - The law asks for a functioning process, not a guaranteed outcome.
LkSG is the statute that created the European supplier-risk software category — the platforms that monitor, score and document supplier risk exist in the shape they do because this law needed evidence. The State of Supply Chain APIs scored several of them and found the same pattern the regulation implies: strong data collection, strong reporting, and no requirement anywhere in the chain for one company’s system to be callable by another’s. The obligation lands on the report, so the investment lands on reporting.
Referenced in API Evangelist papers
This regulation shows up in my published research. These reports read the machine-readable evidence provider by provider — and put this regulation in the context of a real sector.
The State of Supply Chain APIs
The first national supply chain due diligence statute, and the one that created the European supplier-risk software category — reporting obligations, not interface obligations.
