Transparency, Compliance and Ethics are Needed in the Global Supply Chain


With the Dodd-Frank Act’s conflict minerals legislation coming into effect, many companies are working hard to create ethical frameworks in their supply chains. Supply Chain Brain recently highlighted the work of HP in this regard. HP is an example of a company who has been diligently working on sustainability and ethics for at least a decade. Clearly ethical practices and transparency across the chain are needed. Companies and individuals can make the difference in how safe and fair our supply chains can be. This report looks at why this has become so important and how to proceed.


Too Global
When the outsourcing movement began in the 1990s, terms like collaboration and trust were bantered about quite a bit. But of late, concerns have taken center stage about whether trust will be ultimately possible to achieve with globalization.

Intellectual property theft between manufacturers is growing. Examples include an auto manufacturer’s workers being arrested for allegedly selling crucial car technology on various models to another manufacturer. Korea’s National Intelligence Service identified 101 such cases of industrial espionage between 2003 and May 20071 with billions of dollars in losses due to corporate espionage in automotive, high tech, etc.

Nor do we invest much time in the review of our supplier sites to determine unsafe/hazardous working conditions.

Most emerging nations—the upstream of our supply chains—have daily occurrences of major illicit activity and ongoing bribery activities. Even countries such as China now provide bribery statistics with 17,084 bribery cases announced last year. Each year the World Economic Forum puts out reports on the best trade-attractive countries, free from bribery, strong protection of property and consumer rights, and transparency of the legal system. Many of the strongest manufacturing nations do poorly on this independent rating.

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