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Supply Chain Act: Works councils recognize positive impact of the law

The Supply Chain Due Diligence Act (LkSG), which has been in force since the beginning of 2023 (or 2024 for companies with 1,000 or more employees), obliges large companies to analyze human rights risks in their supply chains and to take preventive measures. A representative survey of works councils shows the extent to which the law has changed practice in companies and how various company groups (management, economic committee, works council, employees) are dealing with the issue.

Important results of the study are:

  • Impact and differences between sectors: Around 36% of works councils state that their company is affected by the LkSG. The level of impact increases with the size of the company. Differences between sectors are also evident: Companies in trade, transport, hospitality, construction and business-related services are more likely to be affected than companies in the manufacturing industry.
  • Measures in supply chains: Around 43% of works councils report that measures have been implemented in the last two years to review or change supply chains in order to comply with human and employee rights and environmental standards. The most common measures relate to the analysis, monitoring and control of the supply chain, while profound structural changes are less common. It is noteworthy that not all changes were made directly in response to the LkSG.
  • Involvement of internal groups: Management is most intensively involved in the issue, followed by economic committees, works councils and the workforce. In companies affected by the LkSG, the issue of working conditions and human rights at suppliers is generally more intensive.
  • Information deficits: Two thirds of the works councils surveyed do not feel sufficiently informed about the topic, although the level of information is higher in larger companies. There is therefore a clear need for action, also with regard to training and information offers for the co-determination bodies.

Overall, the article shows that the LkSG and the associated public debate are having an impact, but that there are also gaps in implementation and information. In addition to adapting supply chains, measures are being taken primarily for analysis and monitoring. In order to ensure comprehensive implementation and the active involvement of all company stakeholders, further educational initiatives and sufficient resources for co-determination are necessary.

Please refer: Das Lieferkettengesetz in der Praxis: Einschätzungen durch Betriebsräte

2025-02-06T12:13:50+01:00February 6th, 2025|

France: Alleged government move to deregulate EU sustainability laws sparks protest

The French government’s alleged push for comprehensive deregulation of EU corporate sustainability laws, including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), is facing strong opposition from NGOs and civil society. Critics argue that it prioritizes business interests over pressing climate and social concerns. France’s proposal to postpone the CSDDD indefinitely and potentially exclude 70% of covered companies raises concerns about the EU’s broader sustainability agenda. Meanwhile, business and human rights experts, civil society organizations and 10 national human rights institutions have warned that such deregulation could lead to legal uncertainty. In contrast, 400 French companies have called on EU politicians to respect existing ESG reporting deadlines.

Siehe: France: CSOs criticise French government’s call for “massive regulatory pause” on EU legislation, incl. CSRD and CSDDD

2025-01-29T17:32:43+01:00January 29th, 2025|

Business association calls for retention of supply chain law

The Federal Association for Materials Management, Purchasing and Logistics (BME) is clearly in favor of maintaining the German Supply Chain Act (LkSG), as it shows progress in implementation in companies and offers planning security. A recent study by the association shows that large companies in particular are coping well with the requirements of the law, such as when conducting risk analyses. However, challenges still exist when it comes to controlling indirect suppliers. The law is seen as preparation for the EU Supply Chain Directive, which will come into force in 2027.

Companies such as Unilever, KiK and Hapag-Lloyd emphasize the importance of legal and planning stability – also with regard to the validity of the existing LkSG – as changes can cause high costs and competitive disadvantages. However, the high effort required for various sustainability reports, which ties up resources, is criticized. Companies such as s. Oliver and KiK are therefore calling for a standardization of reporting requirements.

Siehe: Wirtschaftsverband fordert Beibehaltung des Lieferkettengesetzes

2025-02-06T12:16:56+01:00January 27th, 2025|

On our own behalf: XertifiX elects new chairwoman

We are very pleased that Dr. Maria Flachsbarth was elected as the new chairwoman of XertifiX e.V. by the XertifiX general meeting on December 3, 2024. Mrs. Flachsbarth worked for many years as a politician, including as Parliamentary State Secretary in the Federal Ministry for Economic Cooperation and Development (BMZ). She wants to bring this wealth of experience to her work with XertifiX: “I am delighted to now be able to work with committed colleagues on the board of XertifiX e.V. and in cooperation with XertifiX Sozialprojekte e.V. to work specifically for fair working conditions in the natural stone sector, for education instead of child labor, health care and adequate nutrition for the people working in the quarries. Our goal is to work specifically towards achieving SDG 8 “Decent work and economic growth” of the UN Agenda 2030.”

We are very much looking forward to working with Maria Flachsbarth!

At the same time, we would like to thank our previous chairwoman, Ms. Ingrid Sehrbrock, for her many years of commitment to XertifiX. After more than 11 years as chairwoman of XertifiX, Ms. Sehrbrock decided not to run again and to vacate her position. During her term of office, the XertifiX standard was significantly expanded and the area of ​​​​activity expanded from India to China and Vietnam. During this time, Ingrid Sehrbrock visited India twice and China once to get a first-hand impression of the work in quarries and factories. She has made a significant contribution to the success of XertifiX in recent years, for which we are very grateful. We are therefore pleased that she will continue to support XertifiX. At the suggestion of the new chairwoman, Ingrid Sehrbrock was elected by the XertifiX Board of Directors as the new chairwoman of the XertifiX Board of Trustees, succeeding the previous chairwoman of the Board of Trustees, Mr. Heribert Scharrenbroich.

Heribert Scharrenbroich is resigning from his position as Chairman of the Board of Trustees at his own request and, together with Ms. Flachsbarth, is supporting the election of Ingrid Sehrbrock as his successor. We would like to thank Heribert Scharrenbroich very much for the many years of valuable support and advice he has given XertifiX. With his broad knowledge of development cooperation and his experience in this field, he has made a particularly significant contribution to the success of XertifiX. We are very pleased that he will remain a member of the XertifiX Board of Trustees.

2024-12-05T17:01:26+01:00December 5th, 2024|

Report of the XertifiX Managing Director’s India visit 2024

From October 19 to 26, 2024, XertifiX Managing Director Walter Schmidt will visit social projects in India and accompany the XertifiX auditors on quarry and processing plant audits. Within a week, the Managing Director visited over eight preschools and schools, four tutoring projects, as well as a quarry and four natural stone processors. The detailed report with numerous photos can be found .here.

2025-01-27T14:49:35+01:00November 8th, 2024|

International Day Against Child Labour: ILO warns of increasing child labour

On the occasion of the Day against Child Labour on June 12, the German section of the ILO warns of an increase in child labour due to climate change. “Climate change will become a driver for child labour due to poverty if the global community does not take countermeasures,” concluded Dr. Annette Niederfranke, ILO Director Germany.

In recent years, extreme weather events such as heat waves, droughts, cyclones and floods have hit people in sub-Saharan Africa and South Asia very hard – and have thereby increased child labour in particular.

The last survey on global child labor figures dates from 2021 and found 160 million child laborers, of which around 79 million were engaged in the worst forms of child labor. The child labour figures are updated every four years. It is assumed that the global community’s goal of eliminating child labor by 2025 will certainly be missed. Worse still, there are fears that child labour has even increased again.

For this reason, despite the numerous current crises, we must not lose sight of the goal of combating child labor. XertifiX Social Projects supports social projects in India to prevent child labor and to provide education in schools and bridge schools.

Here you have the opportunity to donate to our social projects!

Please check also: ILO: Klimawandel erhöht Risiko von Kinderarbeit

2024-06-14T11:26:34+02:00June 12th, 2024|

EU supply chain law finally passed

Today (24th May 2024) the EU Supply Chain Act (officially: Corporate Sustainability Due Diligence Directive, CSDDD) was finally passed by the Council of the EU. The EU states now have two years to implement the directive into national law.

The CSDDD gradually applies to companies of different sizes in the EU:

  • It starts in five years with companies with 5,000 or more employees and a turnover of over 1.5 billion euros.
  • After six years, the CSDDD applies to companies with 3,000 employees or more and a turnover of 900 million euros
  • After seven years for companies with 1,000 employees or more and a turnover of 450 million euros

The Supply Chain Act Initiative has put together a few points in which the CSDDD stands out – also compared to the existing LkSG.

In principle, it is very welcome that the CSDDD represents a paradigm shift from voluntary commitments by companies to binding requirements regarding compliance with human rights and environmental/climate protection. With the CSDDD, companies must now carry out a risk assessment of their supply chains and take remedial measures if there are negative impacts on human rights and the environment.

Unlike the LkSG, the CSDDD includes the entire supply chain from the outset, including suppliers such as quarries and mines. When companies identify risks in their supply chains, these must be weighted and addressed as a priority depending on their severity. If, in addition to the risks, it is determined that damage has already been primarily caused by the company and has occurred, then the company must make reparation.

Compared to the LkSG, the CSDDD also covers more human rights and environmental protection criteria: e.g. the right to life and freedom of thought, as well as the right to food, clothing and sanitary facilities. Conversely, the CSDDD puts small and medium-sized enterprises (SMEs) in a better position than under the LkSG, since it requires that access to training and financial support are provided if necessary. Accordingly, large companies are not allowed to pass on reporting obligations to SMEs. Unlike the LkSG, the CSDDD gives those affected the opportunity to sue companies that cause damage under civil law for damages.

What is negative about the CSDDD is that initially only companies with 5,000 or more employees are covered by the directive and that there is a long transition period until companies (of different sizes) have to comply with the directive. It is important here that the German federal government must not fall behind the German LkSG when implementing the directive, which already applies to 1,000 employees and without restriction to a minimum turnover. However, Article 1 Paragraph 2 of the CSDDD applies here, which stipulates that existing protection of human rights and the environment may not be weakened through the implementation of the CSDDD.

For a detailed assessment by the Supply Chain Act Initiative, see here:

“Was liefert das EU-Lieferkettengesetz? Kurzbewertung der EU-Lieferkettenrichtlinie (CSDDD)”

2024-05-30T12:21:30+02:00May 24th, 2024|

On our own behalf: XertifiX standard revision is pending

Every five years we revise our standard with the aim of adapting it to current requirements and the experience of recent years (see the process here).

Anyone interested is invited to take part in the revision process: To do this, please write a short email with the subject “Participation in the revision process” to info [at] xertifix.de. You will then receive the draft of the revised standard and can submit proposed changes to it by June 2024 (extended till end of July 2024!). In addition, XertifiX actively writes to representatives of various stakeholder groups and asks for feedback on the draft standard.

2024-06-14T08:29:20+02:00May 14th, 2024|

EU countries vote for EU supply chain law

On March 15, 2024, after a long struggle, the EU countries finally agreed to a compromise on the EU Supply Chain Act (Directive). The Belgian Council Presidency was able to reach the compromise despite Germany’s abstention. This is a major political success for the EU!

However, it must be noted that the agreement could only be reached in a massively slimmed-down form compared to the original draft from last December.

The directive does not apply to companies with 500 employees or more and a turnover of 150 million euros, but only to significantly larger companies – and only in a graduated form:

  • Initially, the law applies to companies with 5,000 employees or more and a turnover of 1.5 billion euros
  • After 4 years, it affects companies with 4,000 employees or more and a turnover of 900 million euros
  • after another year (i.e. a total of 5 years) for companies with 1,000 employees or more and a turnover of 450 million euros

Nevertheless, the current draft applies a liability rule according to which companies can be held liable in European courts if human rights are violated in their own supply chains.

It remains a big mystery why the FDP could not agree to this weak draft of the EU directive. The FDP’s argument was always a warning against excessive bureaucracy for small and medium-sized companies. This claim was pure nonsense in relation to the original draft; But in relation to the current compromise proposal, the objection is completely absurd. With a view to Germany and the current federal government, the sober conclusion remains that the FDP has broken the agreement in the coalition agreement, which should actually have prompted the German Chancellor to act. Johanna Kusch from the “Initiative Supply Chain Act”, of which XertifiX is also a member, also comments:

“After the long wrangling, the law has unfortunately been significantly weakened and only applies to a few companies It is shameful that the federal government itself could not agree to this version. In doing so, the FDP not only duped the SPD and the Greens, but also acted against the broad majority of the population […] We are disappointed that the project has been so undermined. Chancellor Olaf Scholz could have prevented this if he had put the FDP in its place and stuck to the compromise that had already been made. Instead, he accepted with full eyes that established EU procedures were ignored and that Germany is no longer considered a reliable negotiating partner in the EU.

The EU Parliament still has to approve the directive in April, which is considered very likely.

Please see: EU states agree on supply chain law – Germany abstains

2024-03-15T13:55:54+01:00March 15th, 2024|

EU supply chain law still without majority

On Wednesday, February 28, 2024, a debate on the planned EU supply chain law was scheduled at relatively short notice. It became apparent that there was no majority in favor of passing the law. This is more than unfortunate! And indirectly a consequence of the policy of the German government. The FDP’s refusal to recognize and accept a negotiated legal compromise and instead to stir up sentiment among other governments against this compromise has led to German abstention and uncertainty in other EU countries.

As the Süddeutsche Zeitung reports, there would not have been a majority for the law even with the approval of the federal government. This means that what many predicted has come true: that the blockade by the FDP and the resulting abstention by the German federal government ultimately led to the failure of the law!

See also: EU states bury supply chain law

2024-03-12T12:32:52+01:00February 28th, 2024|
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