Human Rights in the supply chain: enforcement at risk – German government weakens control, EU directive still hanging in the balance
The Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettengesetz (LkSG)) has promoted corporate action and offered new opportunities to investigate and detect human rights violations along the supply chain. However, current developments in Germany and on the EU-level threaten to undermine central elements of the law: transparency, sanctions, regulatory oversight and a broad scope of application are all under scrutiny.
Since it came into force in January 2023, the Supply Chain Act obliges the German economy to identify, prevent and address human rights and environmental risks within their supply chains. In particular, the complaint procedures have proved to be a key tool: they enable affected individuals, workers, and trade unions to report violations and demand improvements. A complaint by the Ecuadorian alliance ASTAC and NGOs including the European Center for Constitutional and Human Rights (ECCHR) and Oxfam led the Federal Office for Economic Affairs and Export Control (BAFA) to initiate preliminary proceedings against Rewe and Edeka for human rights violations on banana plantations in Ecuador. The allegations dealt with human health risks caused by the use of pesticides, violations of the right to freedom of association, and inadequate wages and health and safety standards. A complaint was also lodged against Heidelberg Materials in May 2026, alleging human rights violations in cement production.
However, the practical enforcement of the law reveals serious shortcomings: complain procedures are difficult to access for affected individuals, the anonymity of whistleblowers is not sufficiently guaranteed, and procedures take a very long time. In addition, no fines have been imposed to date, and hardly any orders for specific remedial measures have been issued. Likewise, the responsible regulatory department BAFA shows severe deficits – deliberately vacant leadership positions and unfilled posts at the supervisory level, combined with policy guidelines on “business-friendliness”, undermine enforcement.
In September 2025, the federal government presented a draft legislation to amend the LkSG (Drucksache 21/2474), which has been debated in the Bundestag since January 16, 2026. Die proposed amendments are drastic: From 1 October 2025, the BAFA will fully suspend the review of company reports – in anticipation of the legislative amendment to come into force in early 2026. Furthermore, fines will only be imposed in cases of serious breaches. The government argues in favour of reducing bureaucracy and easing the burden on businesses, but non-governmental organisations and trade unions warn that the abolition of reporting obligations and the restriction of sanctions will undermine the binding nature and enforceability of the law.
There are severe setbacks on the EU-level: The Corporate Sustainability Due Diligence Directive (CSDDD), which was supposed to establish a European framework for due diligence obligations, is being further weakened. The implementation deadline has been postponed to 26 July 2028 under the ‘Stop-the-Clock’ Directive and the ‘Omnibus I’ package. Furthermore, the scope of application has been significantly tightened: Instead of the original threshold of 500 employees, only companies with over 5,000 employees and a revenue of 1.5 billion euros are now covered. Applying it to Germany, only 150 companies would fall under this obligation, compared to the 3.000 companies prior under the Supply Chain Act. Additionally, the standardised civil liability provision was struck down, meaning that companies can no longer be directly sued for damages by affected parties.
The Supply Chain Act demonstrated that binding rules have the power to promote corporate action. The ongoing plans of the federal government and of the EU step into the wrong direction. Less bureaucracy cannot lead to less responsibility. From a humanitarian perspective, one case asks: What remains of binding accountability when reporting requirements are scrapped, sanctions are reduced and oversight is weakened? Transparent reporting obligations are not an end themselves. They ensure transparency, enable public scrutiny and reveal whether companies are actually taking risks seriously. If these instruments are removed, the law risks losing its binding force. To maintain the law’s effectiveness, enforcement mechanisms must be strengthened, complaint procedures expanded, and oversight made independent and competent. Otherwise, the Supply Chain Act risks becoming an empty shell – a dramatic step backwards for human rights.
Companies that take human rights due diligence seriously rely on professional support. corsus supports them in the implementation of requirements stemming from the Supply Chain Act and the CSDD – not merely as a formality, but with genuine commitment to human rights and people in the supply chain. corsus has signed the petition launched by the Supply Chain Act initiative to save the Supply Chain Act. The petition calls on Federal Chancellor Friedrich Merz to defend an effective supply chain law in Germany and Europe, demonstrating that economic profit and responsibility go hand in hand.
