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SUPPLY CHAIN

Avoid scandals
through
proper

monitoring of
your supply

chain

As supply chains become more complex and
legislators in many key countries demand greater
transparency, companies operating in emerging

markets need to ensure their operations are
squeaky clean. By Tielman Nieuwoudt.

H ARDLY A MONTH GOES BY on the food labels, among them water forced and child labour, which still remains PHOTOS: GETTY/GALLO IMAGES, SUPPLIED
without a multinational being buffalo and donkey. Researchers became prevalent in many emerging nations.
tied to a supply chain scandal interested only after the extent of the
somewhere in the world. Particularly in the United Kingdom’s horse meat scandal With such legislation comes the need
consumer goods industry, large corporates became apparent for auditing, and many organisations
have been making the news for all the outsource to private auditors to inspect
wrong reasons – for example, slave labour Beyond the brand implications, factories and identify supply chain
in Thailand’s seafood industry. legislation in Western countries is getting infringements. Apple, for example,
tougher with those companies that pay recently declared that it audits 100% of
For organisations working in Africa, no more than lip service to supply chain its supply chain for the use of conflict
poor transparency in the supply chain minerals tied to the eastern Congo.
can have serious implications for the Apple audits 100%
reputation of a company if misdeeds of its supply chain Nonetheless, a recent University of
come to light. These could include slave Sheffield study in the UK questioned the
labour on cocoa farms in Ivory Coast, infringements. The Dodd-Frank Act in effectiveness of audits for detecting,
textile companies struggling with child and the US came into effect in 2010 with reporting or correcting labour and
forced labour practices in Madagascar, the aim of ensuring that products aren’t environmental challenges in supply chains.
or technology companies making use of tied to conflict minerals. In February this Subcontractors are frequently overlooked
conflict minerals in eastern Congo. year, the US Trade Facilitation and Trade and auditors often serve their clients by
Enforcement Act, and more recently the turning the audit into a ‘business’ rather
Despite the relative sophistication of UK Modern Slavery Act, both became law. than a rigorous and independent oversight.
its economy, South African companies These pieces of legislation focus on ending
have also not been spared. In 2013, a Interest in labelling
Stellenbosch University study identified
that 60% of supermarket meat tested Accurate product labelling has also
included DNA of animal species not listed received renewed interest. South African
retail chains, for example, have been quick

50 strategicmarketingafrica Issue 4 2016