Health and safety non-compliance top supply chain risk in China

Gurjit Degun
20 March 2014

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20 March 2014 | Gurjit Degun

Inadequate storage, management and training for hazardous chemicals or lapses in their use headed the top 10 supply chain issues in China.

Audits of 19,328 businesses in China by Sedex found chemicals accounted for 4 per cent of all single non-compliance issues recorded.

Health, safety and hygiene issues dominated the latest Sedex Responsible Sourcing Insights Briefing: China at 56 per cent of the issues raised.

This was followed by labour standards, which made up 32 per cent of all the non-compliance issues raised in China.

The survey added: “Political liberalisation is failing to occur on a notable scale, enforcement of labour standards is weak, and there is a lack of control over sub-contractor networks.”

The report noted that issues around “a lack of code and system implementation” are absent from the list. This issue, Sedex said, is significant in other regions such as Africa, South and South East Asia and South America.

“We believe this may be due to the focus, over the last decade or so, on addressing re-occurring social compliance issues found in China, and the drive by many retailers and brands to seek a more in-depth and sustainable solution to these, which in turn is showing itself in the management processes that Chinese companies are putting in place,” the study said.

“It is important that companies operating in the country understand the changing environment, with a growing middle class and changes in the availability of previously plentiful suppliers of cheap labour,” said Carmel Giblin, CEO at Sedex.

“China remains a key manufacturing and sourcing location and the international scrutiny on the region – along with efforts made by Sedex global community of buyers and supplies – are helping to improve in management processes and working conditions.”

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