May 31, 2006

Environmental Risk and the China Supply Chain

Including Subcontractors in Risk Mitigation

International standards have been launched to promote environmental compliance in China. Global companies have realized that they cannot limit accountability to their first-tier suppliers. In order to mitigate risk to the company subcontractors must be included in your risk sampling, otherwise you may end up failing to protect your brand.

The SA8000 standard specifically addresses subcontractors and requires suppliers to be responsible for ensuring compliance. In addition to including subcontractors in your code of conduct, it is also crucial to monitor the implementation of the SA8000 standard at the subcontractor level.

Currently, the impact of SA8000 in China on the direct improvement in working conditions in individual factories is slight. The main impact may lie in the longer term. Although the number of SA8000 certified factories is increasing, there has been no breakthrough, either in China or elsewhere. However, there are examples of specific cases where the implementation of the standard have made a difference.

See: The Costly SA8000 in China(2)


	Social Accountability International
	Human Rights and Ethical Supply Chain
	http://www.sa-intl.org/index.cfm?fuseaction=Page.viewPage&pageId=472

	Environmental Risk in China's Supply Chain - China Series Part 6
	Importance of Incorporating Subctractors in Environmental Compliance Efforts
	http://scm.ncsu.edu/public/hot/hot050822.html

	SA8000 requires positive attitude
	Chinese Firms Increasingly Presssured to Meet Criteria
	http://english.people.com.cn/200407/06/eng20040706_148628.html