LkSG Remedial Measures
Remedial measures under the German Supply Chain Due Diligence Act (LkSG) are the legally mandated steps a company must take to end, prevent or at least minimise identified breaches of human rights or environmental obligations.
Remedial measures are the central response instrument of the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG). If a company determines that a human rights or environmental obligation has already been breached, or that a breach is imminent, within its own business operations or at a direct supplier, it must take appropriate remedial measures without delay. The objective is to bring the breach to an end; where immediate cessation is not possible, the company must at least minimise the extent of the breach. Remedial measures are therefore distinct from preventive measures, which take effect before a violation has occurred.
The scope of the duty depends on where the breach occurs. Within the company's own domestic business operations, the remedial measure must necessarily result in the cessation of the breach. With direct suppliers, the company must draw up a concrete concept for ending or minimising the breach, including a timetable, if it cannot be stopped in the foreseeable future. The Act sets out a graduated catalogue of measures for this purpose: jointly developing and implementing a remediation plan with the supplier, joining forces with other companies within industry initiatives, and, as a last resort, the temporary suspension or termination of the business relationship.
Terminating the business relationship is expressly designed as a measure of last resort: it is only required where the breach is assessed as very serious, where the implementation of the remediation concept brings no relief after the agreed period has elapsed, where no other, milder means are available to the company, and where increasing its leverage offers no prospect of success. For indirect suppliers, remedial duties arise only once the company gains substantiated knowledge of a possible breach (event-driven due diligence). All remedial measures taken must be documented, their effectiveness must be reviewed regularly and on an ad hoc basis, and they must be disclosed in the annual report to the Federal Office for Economic Affairs and Export Control (BAFA).
Legal Basis
Section 7 LkSG (remedial measures), Section 3(1) no. 7 and Section 4(2) LkSG; supported by Section 6 LkSG (preventive measures) and Section 10 LkSG (documentation and reporting)
Practical Example
A German textile retailer receives reports through its complaints procedure that systematic unpaid overtime is occurring at a direct supplier in Southeast Asia. The compliance officer documents the suspicion, verifies it through an on-site audit and, together with the supplier, draws up a remediation plan with a concrete timetable: introducing electronic time tracking, paying outstanding wages and training management within six months. Since immediate cessation is not possible, minimisation is defined as an interim target, progress is reviewed quarterly, and the entire process is recorded in an audit-proof manner for the BAFA report.