Bundestag rejects the repeal of the LkSG

On October 17, the Bundestag voted on the repeal of the Supply Chain Due Diligence Act (LkSG). The proposal to abolish the law was rejected. In the roll-call vote, 401 members of parliament voted against the proposal, while 252 voted in favor. There was one abstention.

Background of the Discussion
On June 11, 2024, the CDU/CSU parliamentary group introduced a draft bill to repeal the Supply Chain Due Diligence Act, which has been in force since January 1, 2023. The group argued that the LkSG imposed a significant bureaucratic burden. Additionally, the requirements of the LkSG and the upcoming EU directive on corporate due diligence (CSDD) were structurally different, making it necessary to suspend the LkSG to give companies sufficient time to prepare for the CSDD.
The draft bill was debated in the Bundestag on June 13, 2024. The CDU/CSU requested a vote on the bill without a second reading, which was rejected. The bill was then referred to the committees. On September 26, 2024, the Committee on Labor and Social Affairs presented its report and recommended rejecting the draft. In the debate of October 17, a roll-call vote took place. The day before, the VDMA (German Engineering Federation) had called for the approval of the draft with its campaign "Stop Supply Chain Laws Now," arguing that the LkSG had so far had significant negative effects—not only on directly affected companies but also on medium-sized and smaller businesses that had been passed obligations from larger companies.

What does this mean for the future of the LkSG?
The result means that the draft bill will not be pursued further, and the requirements of the LkSG will remain in effect. Companies with more than 3,000 employees are required to report starting from the fiscal year 2023, while those with more than 1,000 employees must submit reports starting from the fiscal year 2024. These reports must be submitted annually to the Federal Office for Economic Affairs and Export Control (BAFA).
It is already known that a report under the Corporate Sustainability Reporting Directive (CSRD) will be accepted as a substitute for the LkSG report, and the deadline for submitting the report for fiscal year 2023 has been extended to 2025. However, companies with more than 3,000 employees must still report for fiscal year 2023, and companies with more than 1,000 employees must report for fiscal year 2024 before transitioning to CSRD.