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BERLIN - The German parliament has approved a new supply chain law which will make larger companies legally responsible for human rights and environmental abuses within their global supply chains.

Under the act, companies in Germany above a certain size must establish due diligence procedures that prevent abuses within their supply chains and take action if they find violations.

Those that fail to meet the requirements of the new legislation could be forced to pay fines equivalent to up to two per cent of their annual global turnover in the worst cases.

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