Supply & Demand for Information
The EU’s Corporate Sustainability Due Diligence Directive (EU3D) is a mess. Much of the Brexit chat focused on how it would impact us (Brits), but there was too little on how it would affect the EU. Way back in 2000, we were studying supply chain resilience and security. Our lecturer pointed out that the UK took “forever” to debate and approve regulations, but when they did, they were (generally) workable and adhered to. Our French cousins passed things quickly and struggled to follow or enforce.
I don’t know if my lecturer’s jingoism is accurate, but after reading articles from Germany, I see that he may have had a point. The EU3D is a perfect example of something that needed more debate, rigour, and analysis before implementation without anything bordering on sensible guidance.
It’s no surprise that each week on my (admittedly weirdly curated) newsfeed, I’m reading about Xinjiang forced labour tomatoes (in supermarket tomato pastes) or Apple’s latest woes. (The Democratic Republic of the Congo has filed criminal complaints against Apple subsidiaries in France and Belgium, accusing the tech giant of using conflict minerals in its supply chain, more here).
When the regulation is bad, what do you do? Take a risk-based approach. Identify the critical inputs into your value chain first. Do the red team work on how they could bypass your security? Start with that much more triaged dataset. For example, if you’re sourcing tomatoes from China, it’s not hard to identify a potential exposure. The briefest Google would have identified a potential risk (it took me ~5 seconds to find Produce Blue Book’s quote, “About 70 per cent of China’s total tomato output comes from the remote Xinjiang Uygur region”).
Researching yourself can seem like more work, but it’s not. It’s much more work to ask suppliers to fill out tens of pages of forms scanned only for compliance (Y/N answers) and then be caught in the headlines with your pants down.
