The new supply chain law has potentially unintended effects: the requirement to provide complete evidence of compliance with the regulations overwhelms many small and medium-sized entrepreneurs. As a result, they lose important customers to larger (intermediate) dealers who are better organized for this.
A law with light and shadow
The Supply Chain Act is intended to improve the protection of human rights along global supply chains and, for example, prevent child and forced labor and ban substances that are harmful to people and the environment. This is to be welcomed, because the German economy and our consumption are particularly dependent on inputs and raw materials that are produced in developing countries. We cannot ignore the fact that some of the products we consume are sourced from intolerable environmental and labor conditions, very low wages or even exploitative child labour. Most of us agree that due diligence is necessary to ensure a fair and transparent supply chain on the part of German companies.
We as Manuyoo are concerned about the unintended consequences of the proposed Supply Chain Law. Instead of increasing the number of global suppliers to allow more smaller companies to participate fairly in global trade, there could be greater integration as German companies streamline their due diligence requirements.
There could also be a greater demand for sophisticated suppliers who can provide certification and their own reports of compliance in an acceptable format. The law may therefore have the unintended consequence of creating new trade barriers for smaller companies, making it impossible for them to enter existing supply chains. We are already aware of the unintended consequences that the ubiquity of fair trade, organic and other certifications is having on small businesses in Africa. The requirements for obtaining these certifications are often too high for them, with the result that their products are not competitive enough without certification and therefore have less chance of accessing the European market.
This is also why we founded Manuyoo to give start-ups and small manufacturers a stage on the European market and to support them with certification and market conformity.
Because the law targets larger market players (with at least 1000 employees), it has the potential to hit smaller producers down the supply chain. It could therefore serve to perpetuate existing inequalities in trade relations between Africa and Europe, rather than eliminate them.
Here's our idea: Perhaps we should push for a diversity provision to be included in the law that encourages importers to expand their supply chains to include small suppliers in developing countries.
However, the supply chain law for decent standards (which Manuyoo agrees with) will only make sense if German and European customers are educated and rethink to a greater extent.
Negative effects on the African economy cannot be avoided if this way of thinking is not worked on, trained, promoted or discussed in Europe.
Through our purchasing decisions, WE ourselves can help determine the working and living conditions of people in developing countries.
Manuyoo Supply Chain Law Statement
Manuyoo changes the picture in D/EU: Every citizen can contribute to buying fair products. Manuyoo creates transparency here. Living fairly and sustainably means being aware of the consequences of your own lifestyle and consumer behavior and acting responsibly. Manuyoo particularly supports smaller companies and start-ups.
Manuyoo works with partners who create sustainable jobs, support social projects, create space for education and further development and promote local structures.
For Manuyoo, sustainability is not only limited to ecological aspects, but also extends to economic, social and political standards, regardless of supply chain law.
Manuyoo works exclusively with partners throughout the supply chain who set an example and represent humane conditions: fair wages with good working conditions.
Manuyoo and our partners do not accept child labor.
Manuyoo works with partners who are committed to creating many highly skilled and competitive jobs in Africa.
Manuyoo works with partners who integrate the supply and value chains more than before, treat them fairly and reduce dependencies on other continents.
Manuyoo has to ensure a lot of transparency and educational work in Europe so that in the next few years more products "Made-in-Africa" will be bought that have been produced sustainably and fairly.