@Risk

Human rights and labor standards risks for companies and investors are increasing on a global scale, according to a new study from the risk analysis and mapping company Maplecroft.

The fifth annual Human Rights Risk Atlas (HRRA) found that nearly half (48 percent) of the 197 countries studied now pose ‘extreme’ or ‘high’ risks of corporate complicity in rights violations. All told, citizens in 95 countries are now exposed to human rights violations by states –that’s a 6 percent increase in countries posing ‘extreme’ or ‘high’ risks to business and investors since 2010.

What’s the reason behind the increase in human rights and labor standards risk? Maplecroft cites three main factors:

• the violent crackdown on protesters by security forces during the Arab Spring uprisings,
• an emerging set of resource scarcity challenges for business, linked to large scale ‘land grabs’ in developing countries by foreign investors, aimed at increasing food, water and energy security at home, and
• the global economic recession continued to challenge the rights of workers and has resulted in a trend for the trafficking of migrant workers for forced labor in countries such as Malaysia, Russia, South Africa and UAE.

Here is Maplecroft’s ranking of the ten countries where there’s the most extreme risk for human rights violations: (more…)

Analysts are forecasting continued global economic volatility in 2012, so it makes sense for forward-thinking companies to bolster their focus on improved efficiencies and the mitigation of supply chain risks.

Recent research from IDC Manufacturing Insights confirmed that many Asia/Pacific manufacturers are doing just that. Drilling down even further, the IDC Manufacturing Insights report, Asia/Pacific Manufacturing 2012 Top 10 Predictions, concludes that in 2012 there will be greater use of predictive analytics tools among the region’s manufacturers.

Why? Because countering supply chain risks now requires better decisions at strategic and tactical levels –the kind of decisions made possible by predictive analytics, automation and enhanced supplier collaboration.

Noting that countries in the West are battling sluggish economies and high unemployment rates, IDC Manufacturing Insights also predicts that Asia/Pacific manufacturers will focus on producing goods where there is demand and growth – domestically, in the Asia/Pacific region. (more…)

In today’s economic environment, it’s no surprise that manufacturers are focused on cutting costs and improving productivity whenever possible. However, these priorities must be balanced with effective safety strategies that both ensure compliance and mitigate risks.

A new report from Aberdeen Group explores the challenge. Between September and October 2011, Aberdeen used on an online survey to examine the use, experiences and intentions of more than 120 enterprises that have implemented safety systems. The research showed that:

• Best-in-Class companies are 81 percent more likely than Laggard organizations to leverage outsource services to maintain their safety systems.
• Best-in-Class companies achieve a 0.2 percent injury frequency rate as compared to Laggard organizations who achieve 3.9 percent injury frequency rate.
• Best-in-Class companies achieve a 0.09 percent repeat accident rate.
• Best-in-Class companies are twice as likely as Laggards to leverage diagnostic tools to gain visibility into manufacturing operations.

But, even so, it’s clear that much work needs to be done. (more…)

Scientists at the Joint Research Centre (JRC), the European Commission’s in-house science service, have identified five metals that are both essential for manufacturing low-carbon technologies and at high risk of shortage.

These five metals are: neodymium, dysprosium, indium, tellurium and gallium.

According to the report, titled Critical Metals in Strategic Energy Technologies, the risk of shortage stems from:

• Europe’s dependency on imports (as in the US, virtually the entire European supply of these metals comes from China),
• increasing global demand,
• supply concentration and
• geopolitical issues.

Furthermore, these metals are not easily recyclable or substitutable. (more…)

Most companies have tightened up their internal due diligence procedures over the past few years, but many remain unclear about how to test and evaluate the due diligence of potential suppliers.

That’s a big concern because, as research from the international legal practice Norton Rose Group shows, suppliers and their customers can often have very different perceptions of risk.

For example, the Norton Rose Group’s new survey found that customers rate reputational damage as a primary risk, but suppliers rank it only a secondary risk. On the other hand, suppliers see service performance failure as a primary risk, while their customers view it as a secondary risk.

In addition, nearly half (49 percent) of the customers polled felt suppliers should manage political/jurisdiction risk. But, only 8 percent of suppliers consider it their responsibility.

This disconnect leaves customers exposed to risk. And yet, the majority (65 percent) of companies in the study admitted that they do not conduct detailed due diligence on the incoming key personnel provided by their supplier.

“As many organizations have found to their cost, there is no ‘one-size-fits-all’ solution for risk management and it should never be seen as a box-ticking exercise – customers need to visit a potential supplier, test their technology and speak to other customers of that supplier,” Mike Rebeiro, group head of technology and innovation at Norton Rose Group, explained. “The majority of customers assume that their suppliers will have done the necessary due diligence on their own staff and do not see the need to repeat the exercise. This is surprising given the impact a single rogue employee can have on the reputation of a business and all associated organizations, as underlined by the scope of the Bribery Act 2010.”

The survey, which analyzed a wide range of current outsourcing practices and trends, also revealed that: (more…)