5. Taking Preventive Measures

Preventive measures in the company’s own area of activity

The company is obliged to take appropriate preventive measures in its own area of activity, in particular the following:

1. Implementation of the human rights strategy set out in the policy statement in the relevant business processes,
2. Development and implementation of appropriate procurement strategies and purchasing practices by preventing or minimising the identified risks,
3. Carrying out training in the relevant areas of activity,
4. Implementation of risk-based control measures whereby compliance with the human rights strategy set out in the policy statement is monitored in the company’s own area of activity.

Under the Directive, too, it is stated that Member States require companies to take the necessary measures to prevent the risks defined in the Directive from arising.

Preventive measures towards direct suppliers

Companies are also obliged to take appropriate preventive measures towards the direct supplier, in particular the following:

1. Taking human rights-related and environmental expectations into account when selecting a direct supplier,
2. Contractual assurance that the direct supplier will comply with the human rights-related and environmental expectations required by the company management and will appropriately meet them throughout the supply chain,
3. Provision of the necessary basic and supplementary training to enforce the direct supplier’s contractual assurances,
4. Agreement of appropriate contract-based control mechanisms to verify compliance with the human rights strategy at the direct supplier, and their risk-oriented implementation.

Reviewing and updating the effectiveness of the measures

The effectiveness of the preventive measures must be reviewed once a year and on an ad hoc basis where a significantly changed or expanded risk situation in the company’s own area of activity or at its direct supplier must be taken into account, for example because new products, projects, or a new line of business are being taken on. In particular, the findings obtained from processing reports received under Section 8(1) must be taken into account. The measures must be updated without delay where necessary. The Law provides for an annual review (Section 6(5)); the Directive requires policies to be reviewed at least every 24 months (Article 7(3)) and the effectiveness of measures to be assessed at least every 5 years (Article 15).

Tying the measures to the purchasing process

Preventive measures work to the extent that they are built into the purchasing process. Adding human rights and environmental criteria to the pre-qualification stage of supplier selection, writing compliance undertakings and audit rights into the contracts, and documenting the training given all strengthen both the effectiveness of the measures and your ability to prove them to the supervisory authority. Given that the Act has been in force since 1 January 2023 and has covered companies with 1,000 or more employees since 1 January 2024, the catalogue of measures should by now be in place and under regular review.

What does this mean for Turkish suppliers?

The picture is the same for Turkish suppliers: German customers will push these measures down the chain by contract. A company that meets the expectations before they arrive, and keeps its code of conduct and training records ready, both protects the relationships it has and gains an advantage in winning new ones; a structured LkSG/CSDDD compliance programme is one way to organise that preparation.