Corporate ignorance will not diminish the challenges of „NAP“ & Supply Chain Act. On the contrary.

Already in December 2016 the Federal Government adopted the National Action Plan for Business and Human Rights (NAP). In it, the government describes the explicit responsibility of German companies to respect human rights, both nationally and internationally.

The Supply Chain Act, which is being mentioned more and more frequently in the press, is a logical consequence if the values enshrined in the NAP are to be implemented in business operations. The reservations expressed by business associations against it are understandable. The effort and the demand for transparency of the entire value chain, i.e. starting with the extraction of raw materials and ending with delivery to the customer, is quite a challenge.

What is astonishing, however, is the almost stoic ignorance of many companies to actively address this issue. It reminds a little bit of the situation before the new dacha protection regulation, which was known for years and in the end led to almost chaotic and very expensive changes. One could have prepared oneself in a structured way.

A supply chain act – of whatever kind – will come. Now is the time for entrepreneurs to tackle the issue. Transparency in their own supply chain, including that of their main suppliers, is the prerequisite. At the same time, however, this also creates the freedom to establish a structured and efficient supplier and cost management. It also creates the prerequisite for promptly digitizing processes that are currently still being operated at great expense.

The methods, processes and also tools for this (in order) already exist today. Nothing stands in the way of implementation and, as experience has shown, finances itself within the first 12 months. Perhaps the demand for a national supply chain law, urgently presented by Development Minister Gerd Müller and Labour Minister Hubertus Heil on 14 July 2020, is the annoying but necessary wake-up call to the German economy to finally wake up here. Some well-known companies are already making progress. Those who are still hesitating are now giving away money and medium-term competitive advantages. And who can really afford this kind of ignorance?

 

Gregor van Ackeren

Managing Director, ADCONIA GmbH