From the Financial Times--
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July 20, 2014 5:26 pm
Britain risks a ‘supply chain crisis’
British businesses have poor knowledge of where their products were sourced from and how they were made, making it likely that some imported goods have involved the use of slaves, a purchasing managers’ organisation has said.
The research polled 3,406 consumers, business leaders and supply chain professionals. It revealed a disconnect – company leaders were twice as likely as purchasing managers to say their chains were transparent.
It has been 18 months since supermarkets were found to be selling “beef” that included horse meat. Although the government’s Elliot Review into the scandal is expected in the coming weeks, half of supply-chain professionals say the scandal has not led to risks being taken more seriously.
Mr Noble said that if the slavery bill passing through parliament is “to have a chance of eliminating slavery from the British supply chain and we are to avoid repetition of the horse meat scandal, then we must empower procurement professionals”.
Cips says there has been rapid growth in corruption, and human rights abuses since the financial crisis.
John Manners-Bell of the consultancy Transport Intelligence said that “many manufacturers and retailers believe that when they outsource the production of their goods to remote suppliers, often based in emerging markets where there are fewer regulations, they outsource the moral responsibility for the conditions in which these goods are manufactured.”
Incidents like last year’s Rana Plaza disaster in Bangladesh, in which 1,200 people were killed when the clothes factory they were working in collapsed, highlighted the reputational risks to business, he said.
Nearly three-quarters of supply chain professionals surveyed by the Chartered Institute of Purchasing and Supply admitted that they had “zero visibility” on the earlier stages of their supply chains. Eleven per cent acknowledged that this meant it was “likely” that slave labour was used at some point in the process of making goods and transporting them to the UK.
“Consumers and business leaders have entered into a ‘don’t ask, don’t tell’ pact,” said David Noble, the institute’s chief executive.
They “are content to remain ignorant of the malpractice that could be operating throughout their supply chains,” he said.The research polled 3,406 consumers, business leaders and supply chain professionals. It revealed a disconnect – company leaders were twice as likely as purchasing managers to say their chains were transparent.
It has been 18 months since supermarkets were found to be selling “beef” that included horse meat. Although the government’s Elliot Review into the scandal is expected in the coming weeks, half of supply-chain professionals say the scandal has not led to risks being taken more seriously.
Mr Noble said that if the slavery bill passing through parliament is “to have a chance of eliminating slavery from the British supply chain and we are to avoid repetition of the horse meat scandal, then we must empower procurement professionals”.
Cips says there has been rapid growth in corruption, and human rights abuses since the financial crisis.
John Manners-Bell of the consultancy Transport Intelligence said that “many manufacturers and retailers believe that when they outsource the production of their goods to remote suppliers, often based in emerging markets where there are fewer regulations, they outsource the moral responsibility for the conditions in which these goods are manufactured.”
Incidents like last year’s Rana Plaza disaster in Bangladesh, in which 1,200 people were killed when the clothes factory they were working in collapsed, highlighted the reputational risks to business, he said.
Primark, the retailer, paid $9m in compensation in an attempt to salvage its reputation. Last week Samsung Electronics said it had halted business with a supplier in China over suspected use of child workers.
According to the International Labour Organisation, about 21m men, women and children are slaves. This includes involuntary domestic servitude, bonded labour where employers exploit an initial debt to make people work for free, forced child labour, and adults coerced, forced or deceived into prostitution.
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