Supply chain duty law ahead: CWS Supply GmbH makes workwear ready for 2023
On January 1, 2023, the so-called Supply Chain Sourcing Obligations Act (LkSG) will come into force. It makes many exemplary processes that CWS has already introduced voluntarily now mandatory for many companies.
2023 is when the law with the unwieldy name Supply Chain Sourcing Obligations Act will take effect. It is intended to help improve human rights and working conditions in the textile industry worldwide and prevent child labor, for example. In addition, it also regulates environmental aspects when work on products could harm people - for example, when dealing with toxic water or unhealthy dyes. 1
2023: Companies with 3,000 or more employees affected
Initially, the LkSG will apply to all companies in Germany with more than 3,000 employees - including CWS with around 10,000 employees. In 2024, the threshold will drop to companies with more than 1,000 employees. The law applies both to the company's own business operations and to direct and indirect suppliers.
In order to comply with the new requirements in the best possible way and to meet them in an exemplary manner, CWS Supply GmbH convened a team of experts at the beginning of 2021. This team consists of Heike Fischer, Judith Knuffke and Dirk Baykal. The three belong to CWS Supply GmbH, the purchasing company under the CWS Workwear umbrella. "We also maintain close contact with the procurement team of Claus Bamm, Director Strategic Procurement Workwear. We are well connected and work hand in hand for more sustainability in our supply chain and in dealing with the supply law," explains Heike Fischer, Project&Process Manager Supply Chain Workwear.
Dirk Baykal, Coordinator Sustainability Supply Chain, sees a lot of good in the LkSG. Until now, too few companies fulfilled their human rights due diligence obligations of their own accord. The law now prescribes standards so that manufacturers are forced to act. "It is a powerful tool to advance better conditions in the textile industry and sustainability on a global scale. We at CWS are happy to accept this responsibility!"
Well positioned: CWS already meets legal requirements today
For CWS, the LkSG is by no means unexpected. Long before the legal requirements, the company had already clearly positioned itself for fair working conditions in the textile market and, among other things, had been relying on certifications such as Ökotex Standard 100, recycled polyester and Fairtrade for several years, as Project & Process Manager Supply Chain Workwear Judith Knuffke knows. She has worked in supply chain management since joining CWS 15 years ago. "We joined the Textile Alliance early on as a member, which has been working for higher social and environmental standards for many years. We were happy to voluntarily support this project," says Judith Knuffke. Her colleague Dirk Baykal emphasizes: "Striving for sustainability is not new to us. One example: our suppliers and subcontractors have been regularly audited for many years, so we can be sure that employees there are employed under fair conditions." Such audits will soon be mandatory under the LkSG. "So we don't have to reinvent anything here and are very well prepared."
Risk analyses also fall under the law - and have long been part of supply chain management at CWS. "In doing so, we look at the countries of our sources of supply. What conditions prevail locally, what is the political situation, does the country meet our Code of Conduct? This is not about pulling orders from countries with risk, but improving conditions for local workers."
The LkSG also calls for a so-called complaints mechanism. This allows supplier employees, for example, to complain anonymously about grievances and get help without worrying about their jobs. Like audits and risk analyses, this tool has long been part of the daily routine at CWS Workwear. In addition, CWS has expanded its internal compliance hotline: Producers and employees can now also anonymously seek help from a contact person.
Annual company report for maximum transparency
In the future, the German Federal Office of Economics and Export Control (BAFA) will check whether companies are implementing the law correctly. Once a year, companies must submit a report containing details of their supply chain. If the regulations are not observed, BAFA can impose sanctions and fines.
The LkSG only affects companies based in the Federal Republic of Germany and their direct and indirect suppliers. However, it could also serve as a blueprint for a regulation at European level.
CWS Supply GmbH has set all the necessary course and optimally prepared its workwear division for the LkSG. And as before the law, the team is continuously working to further improve working conditions at suppliers and partners - even beyond the minimum legal requirements.