The German Market Ticket: Why Your Supplier Must Understand the "LkSG" (Supply Chain Act)
Share
If you are a fashion brand selling in Germany, the rules of the game have changed.
It used to be enough to deliver good quality at a good price. Now, you must also deliver proof of responsibility.
The Fact: The German Supply Chain Due Diligence Act (known in German as LkSG - Lieferkettensorgfaltspflichtengesetz) is now in full effect. It forces companies to take responsibility for human rights and environmental standards in their supply chains.
I talk to German sourcing managers every week. Their biggest stress isn't the product; it's the paperwork. They are terrified of an audit finding a violation in their supply chain.
If your supplier does not understand this law, they are a liability to your business.
At CCA, we have aligned our operations with LkSG standards. Here is what that means for you, and why compliance is your ticket to the German market.
What is the LkSG? (Simple Explanation)
The LkSG is a German law that requires companies to identify and fix risks in their supply chain.
It focuses on two main areas:
-
Human Rights: No child labor, no forced labor, no discrimination, and safe working conditions.
-
Environment: No poisoning of water, no mishandling of chemicals (Mercury/POPs), and proper waste disposal.
If a German brand ignores these risks, they can be fined up to 2% of their global annual turnover. This is why your buyers are sending you 50-page questionnaires.
The 3 Pillars of CCA Compliance
We make it easy for you to answer those questionnaires. We provide the documentation you need to satisfy the German authorities (BAFA).
Pillar 1: The "Code of Conduct" (CoC)
The Requirement: You must prove that your supplier has agreed to ethical standards. Our Solution: We sign your Supplier Code of Conduct without hesitation. More importantly, we have our own internal Code of Conduct that mirrors international standards (like the ILO conventions). We train our workers on their rights, ensuring that the signature on the paper matches the reality on the factory floor.
Pillar 2: Transparency and Audits
The Requirement: You cannot just "trust" your supplier; you must verify them. Our Solution: We operate with an "Open Door" policy for compliance.
-
Third-Party Audits: We are familiar with and support standard social audits like BSCI (Business Social Compliance Initiative) or SMETA (Sedex).
-
Documentation: We keep clear records of working hours, wages, and safety drills. When your auditor arrives, we don't hide files; we show them.
Pillar 3: Environmental Safety
The Requirement: The LkSG specifically mentions the Minamata Convention (Mercury) and Stockholm Convention (POPs). Our Solution:
-
Material Safety: We use OEKO-TEX® certified materials, which proves our products are free from banned hazardous chemicals.
-
Waste Management: We have strict protocols for disposing of chemical waste from our dyeing and molding processes. We do not dump untreated water.
Why Smaller Brands Must Care Too
You might think: "My brand is small. The law only applies to big companies with 1,000+ employees."
This is a dangerous misunderstanding.
The "Trickle-Down" Effect: Big German retailers (like Zalando, Otto, or Adidas) are regulated. If you want to sell your products on their platforms or in their stores, they will demand LkSG compliance from you.
You may not be directly regulated by the government, but you are regulated by your customers. Being compliant now prepares you for growth.
Your Questions Answered: LkSG FAQs
1. What is the difference between BSCI and LkSG? LkSG is the law (the requirement). BSCI (Amfori) is a tool (an audit system) to prove you are following the law. We use audits like BSCI to demonstrate that we meet the standards required by the LkSG.
2. Does CCA use subcontractors? Transparency is key under LkSG. We perform the core manufacturing (Molding, Injection, QC) in-house. If we use a sub-supplier (e.g., for specialized raw materials), we vet them against the same ethical standards. We can provide a map of our immediate supply chain upon request.
3. What happens if a violation is found? Under the law, you must have a "Remedial Action Plan." If an audit finds an issue (e.g., a blocked fire exit), we fix it immediately and send photo evidence. We believe in continuous improvement, not hiding mistakes.
The Final Word
Entering the German market requires more than just a good product. It requires a clean conscience and clear documentation.
Don't let a non-compliant supplier block your entry.
Work with a partner who understands the rules and helps you play by them.
About the Author
August Lin is the VP of Sales and Co-founder of CCA.
He specializes in helping international brands navigate the complex landscape of compliance and manufacturing. He believes that ethical business is good business.