Germany’s supply chain law is a gamechanger for blockchain

Dennis Hillemann
9 min readFeb 25, 2021

Germany seeks to protect human rights worldwide. Here’s why this could be an excellent use case fr blockchain.

The German government wants to introduce a supply chain law before the end of this legislative period. Under the proposed rule, large companies will have to monitor and promote human rights compliance in their supply chains from 2023. Blockchain technology can help companies meet the requirements of the law. However, the possibilities of blockchain go far beyond that. Implementing a blockchain in your supply chains now can simultaneously benefit from the efficiencies and technical capabilities that blockchain technology offers.

This article first describes the background and content of the proposed German Supply Chain Act (I.). It addresses the potential applications of blockchain to implement the Supply Chain Act requirements (II.).

I. Background and content of the German Supply Chain Act

After lengthy negotiations, the ministries involved have reached a compromise to be passed before the legislative period ends in September 2021. The “Act on Corporate Due Diligence in Supply Chains” is intended to help remedy existing grievances in global supply chains of transnational companies.

There are many examples of human rights violations by private companies in international supply chains: the use of child labor in the textile and raw materials industries, slave-like working conditions in infrastructure projects, unsafe production conditions that are harmful to health or even — as in the case of the collapse of the Rana Plaza building in Bangladesh in 2013 — cost the lives of a large number of people.

Since 2011, following the UN Guiding Principles on Business and Human Rights adoption, countries have increasingly taken action to ensure respect for human rights. In France, a corresponding law (Loi de vigilance) was passed in 2017. In the Netherlands (Wet Zorgpflicht Kinderarbeid) and the United Kingdom (UK Modern Slavery Act 2015), laws are in place that requires companies to monitor their supply chain for child labor or conditions of modern slavery. In January 2021, the European Parliament’s Legal Affairs Committee supported introducing a European supply chain law (Due Diligence Act). A draft…

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Dennis Hillemann

Lawyer and partner with a track record of successful litigation and a passion for innovation in the legal field