SL exporters will need to comply with German’s new SCA requirements
Sri Lankan exporters to Germany will need to comply with latest requirements of the German government’s newly introduced Supply Chain Act(SCA) to assure supply chain due diligence, through traceability, site-level audits and company reporting mechanisms.
The new act titled Corporate Due Diligence Obligations in Supply Chains (GSCDDA) is an effort on the part of the German Federal Government to work with enterprises towards improving the human rights situation around the world and giving globalisation a social dimension while taking the 2030 Agenda for Sustainable Development into account.
“Sri Lankan exporters to Germany will need to comply with these requirements requested by the importers in Germany,” said Marie Antonia von Schönburg, Chief Delegate of AHK Sri Lanka at an awareness programme on the new GSCDDA hosted by United Nations Industrial Development Organization (UNIDO) AHK Sri Lanka together Lanka Export Development Board (EDB) outlining the Challenges and Opportunities for Sri Lankan Export Industries.
“The act obliges all companies operating in Germany in 2023 with 3,000 or more employees to implement a supplier risk management system. In 2024, the act will apply to companies operating with 1,000 or more employees. The risk management system will help assess, mitigate, and monitor human rights and environmental risks in the company’s supply chain. The implications of the new act are to ensure free and fair trade. In short, it is to guarantee economic standards across value chains when doing business with Germany.”
The European Union (EU) too is preparing similar legislation that goes even further than the German Act.
“For example, while indirect suppliers will not be affected by the GSCDDA Act, the European Supply Chain Act will monitor the entire value chain. Considering that the EU is Sri Lanka’s second-largest export region and Germany is the fourth-largest export destination for Sri Lankan exports, it is pivotal for Sri Lankan companies to be prepared to adhere to the conditions imposed by the German and the upcoming EU Supply Chain Act.”
German Ambassador to Sri Lanka & Maldives Hoger Seubert said “The GSCDDA is yet another example to showcase Germany’s commitment towards social and environmental standards. I believe this will be a great opportunity for Sri Lankan exporters to stand out from their competitors by demonstrating their integrity and resilience”.
Dr. Jairo Andres Villamil- Diaz said UNIDO with the financial support of the EU has carried out several projects in Sri Lanka and is presently implementing another EU-funded project titled ‘BESPA FOOD’. More than75 guests including exporters representing apparel, coconut products, spices, value-added fruits, Sri Lankan agencies, professional associations and relevant stakeholders attended this event held at the Mövenpick Hotel.