Is it possible to combine the requirements of the LkSG and HinSchG?

What is the LkSG and who does it apply to?
The Supply Chain Due Diligence Act (LkSG) came into force on January 1, 2023 and initially applies to companies with at least 3,000 employees in Germany, and from 2024, also to companies with at least 1,000 employees domestically.
The LkSG strengthens human rights and environmental protection in global supply chains. It obliges companies to respect human rights and environmental concerns by implementing defined due diligence obligations. These obligations apply to their own business area, the actions of a contractual partner, and the actions of further (indirect) suppliers. Thus, companies’ responsibility no longer ends at their own factory gate but extends along the entire supply chain.

The LkSG defines the following due diligence obligations:

– Establishment of risk management
– Definition of internal responsibilities (Human Rights Officer)
– Regular risk analysis
– Issuance of a policy statement
– Anchoring of preventive measures
– Taking remedial action
– Establishment of a complaint procedure
– Documentation and reporting

Requirements for the complaint office according to the LkSG
Companies that fall under the LkSG are required to set up a complaints office so that people can point out human rights and environmental risks and violations that have arisen due to a company’s economic activities in its own business area or that of an immediate supplier. The complaint procedure establishes an early warning system and at the same time creates access to appropriate remediation of human rights or environmental violations. Furthermore, provisions must be made to ensure the confidentiality of the identity of the reporting persons and the protection of their personal data.

Companies also need to make a procedural order, i.e. understandable information on accessibility, responsibility, scope and course of the complaint procedure, publicly accessible. The company is not given any concrete specifications, so the final design can be done by the company itself.
Companies may also use a third party to implement and operate the complaints office.

Once a complaint is received, the so-called complaint procedure is initiated

The complaint procedure is as follows:

– Confirmation of receipt and permanent contact with the reporting person
– Examination of the complaint
– Clarification of the facts
– Development of a solution
– Initiate remedial action
– Review and conclusion
– Effectiveness review

Companies are obligated to keep documentation on the due diligence obligations for seven years. This also includes the indications that come in at the respective complaint office.

Requirements for the reporting office according to the HinSchG
With the introduction of the Whistleblower Protection Act (HinSchG), employers are obligated to set up internal reporting offices or commission a third party to do so, starting from a permanent number of 50 employees.
The reporting office must enable all employees and those who learn of violations in a professional context to give a hint in oral, written, or personal form. Confidentiality regarding the identity of the reporting person and the person in question must be guaranteed.
After receiving a hint, a reporting procedure must be initiated. This means that the reporting person must receive a confirmation of receipt about the receipt of the hint no later than seven days later. After a maximum of three months, the reporting person must be informed about the progress of the hint and possible follow-up measures that have been initiated. Meanwhile, contact with the reporting person can be maintained to clarify the exact facts.
The retention periods for reported hints under the HinSchG are three years.

Operation of a joint reporting office
It is possible to combine the reporting office according to the HinSchG and the complaint office according to the LkSG. With such a solution, personnel resources can be bundled and financial resources can be saved.

We at eagle lsp offer a solution that meets all requirements. We fundamentally support the submission of anonymous hints, send confirmations of receipt on time, and properly inform the reporting person about the course of the respective complaint and reporting procedure.

Do you want to learn about the reporting channels according to the HinSchG and LkSG? Then we should talk!

As of: 06.07.2023