CIPS & Walk Free Foundation's ethical procurement guide
A guide on ethical and sustainable procurement designed to help companies avoid sourcing from firms that operate unethically or illegally has been released, courtesy of the Chartered Institute of Procurement and Supply and a charity partner whose aim it is to end modern slavery.
The guide, called Ethical and Sustainable Procurement, is designed to help buyers who may unknowingly be sourcing from companies operating outside the law or subjecting workers to poor wages and inhumane conditions or in forced labour environments. The guide forms part of the initiative between CIPS and Walk Free Foundation to eradicate modern slavery in supply chains.
The Walk Free Foundation is a global organisation with a mission to end modern slavery by mobilising a global activist movement, generating the highest quality research, enlisting business and raising levels of capital to drive change in those countries and industries bearing the greatest responsibility for modern slavery today.
The document that the foundation, in partnership with CIPS, has released offers guidance on the procurement cycle including identifying vulnerability and risk, evaluating and shortlisting suppliers, creation of contract performance and updating ethical procurement programmes. It contains useful practical information on how to communicate with suppliers from other regions in the world and highlights potential social and cultural differences.
Walk Free Foundation’s Global Slavery Index estimates there are 29.8 million people who are trapped in modern day slavery and the International Labour Organisation believes that business and governments are largely responsible for this.
CIPS Group CEO David Noble said: “The increase in global sourcing has led to an increase in serious issues being discovered in procurement practices, in particular the occurrence in the supply chain, unwittingly or otherwise, of modern slavery. We have to make a step change as a profession to make a real difference in business and society.”
Andrew Forrest, Chairman of Fortescue Metals and Founder of Walk Free Foundation, said: “The slavery industry generates over $32 billion in profits globally. Businesses around the world have their part to play in ensuring slavery is eradicated from their supply chain. The first step is asking the question – that is – doing a supply chain audit, and that is where procurement officers can show true leadership on the issue.”
Anyone with responsibility for procurement and supply chain management is urged to read the guide available on the Traidcraft and CIPS websites.
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”