Supply chain legislation update: Australia, Germany and Norway
The past few months have seen more countries pass laws aimed at driving responsible business practices and greater supply chain transparency. Get up to speed with our short summary.
Please contact us if you would like to learn more about how Sedex can help your business comply with these and other similar laws.
Australian Senate passes Customs Act amendment to ban goods made using forced labour
In August 2021, a proposed amendment to Australia’s Customs Act passed the first stage in the process of becoming law.
The bill will amend the Customs Act to include an import ban on any goods produced or made using forced labour, during any stage of the production. This means that goods could be held at the Australian border if the government suspect that forced labour has been used in production.
The Australian Senate passed the bill, and it will now go to the House of Representatives for a final stage of approval. There isn’t yet a confirmed date for the House of Representatives to discuss the bill.
Germany passes new Supply Chain Due Diligence Act
In June 2021 the German parliament passed a new law that will require large companies to conduct supply chain due diligence. They must take steps to identify, prevent and address human rights and environmental issues in their own activities and in their direct suppliers’ operations.
From 2023, the requirements will apply to companies, or branches of companies, in Germany with more than 3,000 employees. This will be extended in 2024 to cover companies with more than 1,000 employees.
Norway passes Transparency Act
In June 2021 Norway passed a Transparency Act that will require companies to conduct human rights due diligence assessments on their own operations and their entire supply chain.
Companies meeting certain criteria must take steps to identify, prevent, limit and remedy human rights violations. They must report on these activities on their corporate websites, and must respond to information requests about the human rights risks in their operations.
The law will apply to companies registered or selling in Norway meeting two out of three criteria:
- 50 full-time employees
- An annual turnover of at least NOK 70 million (£5.8 million)
- A balance sheet sum of at least NOK 35 million (£2.9 million)
There’s no confirmed date yet for this law to take effect.
Read more about this law and others driving responsible business on our key legislation page.
Steps your business can take
- Look at the criteria for these laws to work out whether they will apply to your business, or your customers’ businesses. You may need to prepare for requests from large customers, even if the law doesn’t apply directly to your business.
If you would like support with this, Sedex Consulting offers a legislation diagnostic. Contact us for more information.
- For the laws that apply to your business, start learning about what information you will need to gather and what steps you will need to take. Work with teams across your company to create a full list of your direct suppliers – including the locations of their work sites, the nature of these businesses, and contact details for each supplier.
- Check that you are compliant with labour, health and safety, and environmental legislation, and that your paperwork is up-to-date. This will help both you and your customers comply with these types of laws.
Over the last six years there has been a surge in the number of national laws requiring business to act on environmental and human rights issues. These laws are growing both in scope – requiring organisations to look at their supply chains as well as their own activities – and in severity, with penalties for non-compliant businesses.
The laws are increasingly more technical, with the requirements for businesses becoming more intricate. The scale of their scope is also growing, with some recent laws looking beyond one country’s borders.
The increase in legislation makes it essential that all businesses take social and environmental sustainability seriously. In many countries, ethical business practices are no longer a “nice” to have – they are a legal requirement.