Our concern as Manuyoo regarding the proposed Supply Chain Act is regarding its unintended consequences. Instead of increasing the number of global suppliers to allow more smaller companies to participate fairly in global trade, there could be a move toward more integration as German companies optimize to meet their due diligence obligations.
There may also be greater demand for sophisticated suppliers that can provide certificates and own compliance reports in an acceptable format. The Law may thus have the unintended consequence of creating new trade barriers for smaller businesses further making it impossible for them to join existing supply chains. We are already aware of the unintended consequences of the ubiquity of "Fair Trade", "Organic", and other certification on small businesses based in Africa. The requirements for attaining these certifications are often too onerous for them with the consequence that their products are not competitive enough without certification and therefore less likely to gain access to the European market.
That's why we founded Manuyoo, to give manufacturers, small startups a stage on the European market and to support them with certification and market conformity.
Therefore, as much as the law is targeted at bigger actors in the market (with at least 1000 employees) it has a potential to create knock-on effects to smaller producers in the lower end of the supply chain. It may therefore serve to entrench the existing inequalities in African and European trade relation instead of removing them.
(Preceding Photo by NeONBRAND on Unsplash)