Beyond the looking glass

From the December 2021 print edition

Organizations often choose not to peer through the looking glass and into the depths of their supply chains. Why? Perhaps fear of what they might find; or not understanding the potential issues. Or they are paralyzed by what they see as the enormity of the task. Yet as they turn a blind eye to the conditions downstream of their products and services, they reinforce the culture of abuse in their vendor base.

They don’t do this with malintent. No one starts the day expecting to support human rights abuses or environmental devastation. Yet, with every day that corporations, governments and others do not move to identify and rout out these transgressions, they inadvertently become pawns, enabling bad actors to continue their nefarious practices.

Many organizations focus primarily on sustainability’s obvious aspects, for example GHG emissions, supplier diversity, health and safety, which are extremely important. However, sustainability’s hidden elements, in the arena of supply chain risk, can have the most devastating consequences, but also the most positive impact when acknowledged and acted upon.

According to the International Labour Organization (ILO) there are over 40 million victims of modern slavery. One in four are children, and over 70 per cent are female, predominantly in Asia and Africa, but human rights abuses exist on every continent.

Global and national corporations, NGOs, NFPs and governments have, to their chagrin,
discovered the impurity of their supply chains, often through the media. These reports on the poor conditions in the garment industry, child labour used to mine cobalt or PPE made by forced labour, represent the tip of the iceberg.

Down the chain
It’s not only the front end of supply chains that have issues, but also waste generated from that consumption. Developed countries export massive amounts of waste to developing countries. In 2019, Canada was criticized after sending a container of contaminated plastic waste to Indonesia. How many
of these containers have and are continuing to leave our shores?

It is not just regular waste that is exported to developing countries. According to the United Nations Environment Programme (UNEP) under 20 per cent of e-waste is formally recycled, with 80 per cent ending up in landfill or informally recycled – much of it by hand – in developing countries. This exposes workers (including children) to hazardous and carcinogenic substances like mercury, lead and cadmium. E-waste in landfills contaminates soil and groundwater, putting food supply systems and water at risk.

COVID-19 exasperates these issues. The United Nations Secretary General, Antonio Gutteres said “the world faces a pandemic of human rights abuses in the wake of COVID-19, and equally, our disregard for the environment is, according to David Attenborough, the ‘biggest threat that modern humans have ever faced.’”

Many enterprises hide behind an invisibility cloak. They believe that it is sufficient to outline their sustainability requirements in a contract.

At best, this is done naively, believing it will ensure vendors refrain from nefarious activities. A skeptic may believe it is to provide plausible deniability. Yet it is conceivable that organizations will eventually be outed with reputational damage, regardless of contract conditions negotiated with vendors.

This is an urgent situation that must be addressed now. It can’t be solved overnight, but sustained and constant progress will ensure that through a “clean” supply chain, bad actors will be neutralized.

How can organizations start moving towards sustainable development goals (SDGs)? Here are some tips:
Organizations must be educated on the issues and risks. The UN Global Compact; the Social Accountability Standard (SA8000); and ISO26000 and Transparency International are great resources.
Communicate with stakeholders, particularly suppliers. They may be struggling with the same issues and welcome collaboration.

Chose 20-to-25 products and services, then fully map their supply chain. What raw materials
go into the product? How/where is it manufactured and by whom? How is it transported? How are services delivered? Through (sub)contractors? Where are those entities obtaining materials?

Take a cross-sectional sample of high/medium/small value and size of suppliers, as the lowest value or small suppliers might prove to be the highest risk. The intent is to perform this mapping on at least 80 per cent of your vendors.

Create a strategy outlining intent, short-, mid- and long-term objectives, process and outcomes. Some elements to include are:

  • Identify key stakeholders and how to engage them;
  • What policy drivers to develop;
  • Develop and incorporate questions into solicitations that address high-risk areas like management systems, human rights, labour/health and safety standards, along with environmental management and questions about (sub)contractors.
  • Database creation of information gleaned and creation of a protocol for in-person assessments.
    It is important to trust but verify.
  • Remedies if issues are uncovered. Can the supplier be educated, informed and rehabilitated?

Just get started. Move forward and make a difference. Ensure the looking glass reflects the reality you want to see.

Patricia J. Moser is principal at i3advantage.com and was CPO for a large UN agency for several years.