Compliance
Supply Chain Due Diligence Act (LkSG) – Compliance for Vending Operators
Term from the vending glossary
The Supply Chain Due Diligence Act (LkSG) obliges companies with 1,000 or more employees (as of January 1, 2024) to systematically identify, assess and document human rights and environmental risks across their entire supply chains. For vending operators, this primarily affects procurement chains for coffee, cocoa, tea and fruit juices from high-risk regions.
Who is Affected?
The LkSG entered into force on January 1, 2023. In the first year, obligations applied to companies with at least 3,000 employees in Germany; as of January 1, 2024, the lowered threshold of 1,000 employees applies. Small and medium-sized vending operators thus fall outside the law initially. However, they are indirectly affected: coffee roasters, snack manufacturers and beverage wholesalers subject to the LkSG pass their documentation obligations downstream via supplier questionnaires.
Raw Material Risks in Vending
Coffee beans from Ethiopia and Colombia, cocoa from Côte d'Ivoire, tea from Sri Lanka: typical vending raw materials originate from regions where child labour, low wages and inadequate workplace safety standards pose elevated risk. Affected companies must conduct a risk assessment annually and document concrete remediation measures when violations are identified. The competent supervisory authority is the German Federal Office for Economic Affairs and Export Control (BAFA). The annual report must be published on the company's website no later than four months after the end of the fiscal year.
Fines and Public Procurement Exclusion
Violations incur fines of up to €8 million imposed by BAFA (§ 24 LkSG). For companies with annual revenue exceeding €400 million, fines may rise to up to 2% of global annual revenue. Additionally, exclusion from public procurement for up to three years is imposed (§ 22 LkSG).
Outlook: EU-CSDDD
Parallel to the German LkSG, the Corporate Sustainability Due Diligence Directive (CSDDD) is being developed at EU level. It provides for civil liability and is expected to set even lower thresholds. Operators who build structured supplier documentation now will significantly reduce the effort required for CSDDD compliance later.