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5 steps to take if your supply chain is morally corrupt

Jessica Reid, Strategic Risk Magazine

On the eve of the 2016 Asia Strategic Risk Forum it is reassuring to see that ethics and reputation risks in our supply chains are on the top of the minds of our global Chief Risk Officers. 

"If your supply chain is morally suspect, this is how you should react" is an excerpt from Strategic Risk Magazine on 16 May 2016 |By Jessica Reid. It features USQ Alumnus and Vice Chair of USQ Singapore Alumni Chapter, Leesa Soulodre, Mim (Marketing) Class of 2014.

No major corporate condones unethical labour practices. So why are firms still getting caught up in scandals at the more opaque ends of their supply chain?

In January, Apple, Sony and Samsung made headlines for all the wrong reasons. Human rights organisation Amnesty accused them and others of failing to ensure minerals in their products are not mined by children. Though all three have stated zero tolerance for child labour, the incident highlights the potential financial and reputational impact of unethical activities in a supply chain.

In a special StrategicRISK survey about people risk, Asia-Pacific risk and insurance managers were asked how confident they were that their supply chain was acting ethically, on a scale of one (where unethical behaviour is non-existent) to five (where it is rife). The overall score was 3.44, indicating an above-average confidence in the supply chain, but with clear room for improvement.

... The scale of unethical labour is huge, with 168 million children – almost 13% of youngsters globally – engaged in child labour, according to Unicef. In addition, modern slavery affects 36 million people, the Global Slavery Index estimates.

... RL Expert managing partner Leesa Soulodre says multinationals have long profited from lax labour standards: “Even after tragedies like the Foxconn suicides or the collapse of the textile factory in Bangladesh, the tolerance for systemic child labour violations or the lack of a living wage suggests that the price being paid is not high enough, despite the reputation risks.”

How can companies stamp out the problem?

Read the full article here in the latest issue of Strategic Risk Magazine and learn what 5 steps you can take to stamp out the problem:

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