A European perspective
The Supply Chain Act is not only important for emerging markets. It is a great opportunity for Europe, its companies and its citizens, if it is implemented sensibly.
Fair economic cooperation with emerging countries does not mean foregoing corporate profits and individual consumption. Rather, it means initiating the shift from short-term action to sustainable action.
For companies in the European Union, the Supply Chain Act means that they must ensure that their suppliers comply with human rights and global environmental standards along the entire supply chain. Refraining from child labor, forced labor, abuse and environmental destruction in distant countries indisputably increases procurement costs. But the additional costs are marginal relative to the entire production and trade cycle in most industries. However, the leadership of European countries in implementing the 2011 UNHCR guidelines automatically leads to a stronger customer-supplier relationship between European companies and those emerging market companies that implement human rights on the ground. This strengthens medium- and long-term supply security in such a way that Europe can also continue to generate steady growth. For each individual, this means job and prosperity security.
However, the Supply Chain Act means much more for Europe and its economy: the observance of human rights and thus of adequate payment leads to a decrease of economic flight. The history of Europe and many countries has shown that prosperity also leads to better education, which in turn leads to fewer wars. It is undisputed that these are desirable goals from an ethical point of view, but from an economic point of view, the effect that, in addition to economic flight reduction, the flight from war and the associated misery is reduced, will have a positive influence on the economic development in Europe. But the benefits for Europe do not stop there. The Supply Chain Act prevents and even repairs environmental damage in many ways. Cleaner water, less deforestation while rebuilding, and avoiding dead land degradation allows us all to support global climate goals and reduce climate disasters like floods and storms.
So the costs of adequate payment arising for the european economy are at the same time compensated by security of supply, health, less expense for refugees, reduced environmental damage, and reduced need for military intervention.
Just as China is investing in roads for Africa to increase its ties to the continent, Europe should use the Supply Chain Act to invest sustainably in relations with emerging economies and to share with them the global economic and wealth growth.
An emerging countries perspective
No investments through debt and dependency, but through fair and sustainable cooperation. For the governments of emerging countries, it has started to become an important factor for national peace that people are granted the human right to grow up and live healthy and secure including an environment making that possible. Local governments have realized that there is no need to accept environmental damages in order to export natural resources. Going one step further, it will even be a monetary advantage to increase the activities against environmental damages and human rights abuse. Human rights compliance is more expensive than non-compliance. Mining (or other businesses) with environmental damages is less expensive than without. To prevent environmental damages during mining, production or even agriculture, means taking measurements against pollution, reducing consumption of water, using filters for emissions a.s.o. This increases the cost of production (agriculture is an exception, as in some cases of misuse of fertilizers or herbicide the costs can be reduced while increasing the harvest at the same time).
That is an easy truth, at least from a commercial perspective. Expenses are reduced, if a business does not have to pay minimum wages and lets children work for even less than adults. Expenses are also reduced, if a mining company does not have to care about the environmental damages or protective equipment for their employees.