Procurement Intelligence Unit

 do not know the background to this topic. What I am sure of is that who ever is the cause of any blunder, direct or in-direct, they take responsibility of the blunder and are liable to ensure the blunders correction. Just the same way as the success is asscribed to someone so should blunders. therefore in terms of the ethical question, whan a supplier benifits from a supply chain process, they are by default also responsible for the ethical issues, otherwise who else is responsible. You win and/or loose in all aspects of a process, that is called ownership. 

A business cannot claim to be ethical firm if it ignores unethical practices by its suppliers – e.g.•Use of child labour and forced labour•Production in sweatshops•Violation of the basic rights of workers•Ignoring health, safety and environmental standards
An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain – i.e.•Suppliers•Contractors•Distributors•Sales agentsIf the supplier is strategic, efforts have to be made to improve sthical standards if this poses a problem. If ethics are part of the supplier selction process, of course this area can be analysed and discussed in the process. Ethics of tactical supplier might not be of great concern. 

If a company knows that their supplier has ethical issues and still hires them, then both are responsible. Many times what you find is the buyer had no knowledge of the acts, and many times they acts occur in a portion of the company that the buyer has no dealings with. If they are your supplier in any way, you get bad press, but theres a difference between bad press and acting un-ethically..The best most buyers can do is establish ethical requirements the supplier must meet in doing business with them and look for obvious problems when performing site visits. Most suppliers are large and disbursed with many businesses and customer and that makes playing ethical policeman impossible.

I think the key point is "Brand Value & Reputation" which Kayleigh pointed out in her article. I would love for governments to take responsibility for working conditions, human rights in their countries factories, but at the end of the day if there are egregious violations, the brand or retailer sourcing from that factory will be called out publicly, thus damaging their brand equity and reputation, costing them potentially hundreds of millions of dollars in damage. It does not matter who is at fault, the Brand or Retailer must take 100% responsibility for the actions of all suppliers, period!
This is not to say the brands/retailers need to do everything, but they need to collaborate and partner with their suppliers/vendors/factories as part of a team efforts to work on addressing these issues together. Through collaboration and partnership whereby they establish trust and honesty, true communication and change can be implemented. 
There are tremendous business (bottom line) benefits for brands and retailers to take responsibility including:• Avoiding downturn risk• Competitive advantage and industry leadership• Brand recognition and consumer loyalty• Higher employee satisfaction and lower employee turnover• Higher productivity• Higher employee satisfaction • Lower quality defects• Lower absenteeism and work accidents• Increased employee morale and lower employee turnover• Capable/skillful workforce• International competitiveness• Lower brand risk (for being caught in a supply chain scandal – sweatshops, child labor, human trafficking, etc.)
Those who take responsibility, invest money into having a socially responsible supply chain program (similar to having insurance), partner with their suppliers/vendors/agents/factories, have internal AND external (3rd party responsible sourcing / ethical supply chain partners) responsible sourcing management teams, will benefit the most. Feel free to email me directly to further discuss. 

Generally, the buyer is not responsible as the supplier's business model will dictate how they produce their goods and services. That said, buyers must satisfy themselves that 'in doing business' with a supplier, the supplier is operating in fashion, and behaving in a manner, which is compatible with the buying brand, that due diligence might be undertaken to satisfy this is the case and that there are safeguards in place which mean the risk of such revelations in the future are small. It is all in the selection and contracting process!

The supply chain personnel that handles the purcahse in one's company is and should be the ultimate responsible party.

Companies do have a responsibility to ensure that ethical standards are maintained across the entire supply chain. Saving money on costs by producing items in developing countries may not reap the rewards hoped for, if the company's partner is skipping ethics when practicing business. 
If a supplier is producing material but doing so unethically the company should discontinue future business with that producer until the situation becomes ethical. If the company chooses to continue to conduct business with unethical partners, it should expect for the brand image to be tarnished and possible sanctions placed against the company by the government.

 I think you are talking about "responsible supply chain management" and obligations associated with this management approach. The key word is "responsible" which has several distinct meanings. In this context, responsible usually refers to:
1. The obligation to carefully manage supply chains as part of the wider obligations to society.
1. Having to be answerable for one's actions
Responsible management requires an organization to manage things so that the associated risks to society and the environment are minimized. The accepted approach is adaptation of policies and procedures for identification and management of risks as part of the overall organizational management.
The extent of liability / responsibility is defined firstly in law, and secondly by internal organization policies.
Are companies 100% responsible for their supply chain mistakes? They are responsible for identifying the risks associated with their supply chains and managing those risks to an extent that is fair and reasonable. If a company fails to apply fair and reasonable management control, then yes they are 100% responsible when things go wrong.
Sometimes non-compliance happens because of things outside of an organization's control such natural disasters, malicious / illegal acts, or some completely unexpected or unusual event. In these cases, even the best systems sometimes cannot prevent a supply chain problem. The company is then responsible for identifying the problem, fixing the problem to the best of their ability, and putting in place procedures to stop the problem from occuring again.

Suppliers should assure that we are doing business with ethical , suppliers to honor our business values outlined in our Supplier Code of Conduct.

Ultimately it is the buyer who needs to make sure that the supplier is up to the ethical standards of the buyer (normally in the technical specifications) - problem is that depends on your ethics.....for worker ethics there is ETI certification for example but many other buyers in different markets have different ethics - depends a lot on their culture................other companies proactively develop and guide their suppliers on ethical issues under their CSR programs - but that is just glorified marketing serving their own sales purposes.....

I think as professional you have a role to play. However it can not be 100% responsibility on the part of the companies. 
Part of this has to be viewed from the levels of tiers a supply chain has got. The more tiers in a supply chain the more complex the ethical issue, although on the face value there should be a degree of comfort for the contractors you deal with.

 The scandals on lead tainted paint and other failures to perform to specification come to mind. My position is that if a company chooses to use offshore suppliers, then they own the risk of that relationship. In some economies, some of that risk is mitigated by the government oversight (and paid by taxes). In less developed economies, that oversight and enforcement may not be there for economical reasons, or may be inadequate, perhaps through corruption. In the rush to offshore to low cost manufacturing, many organizations chose to ignore these risks, and they have since come home to roost. Awareness of these risks is necessary. How you choose to manage or mitigate these risks is a decision that is best made from an informed perspective, because the reputational risk is not diminished by ignorance.

Organisations whom have terms relating to Ethics with suppliers cannot police all of their vendors - this has been reported in the media on a numerous occassions with major brands and the media commentary always stating on those countries from Asia who breach ethics. 
Should Procurement police this? or should a separate internal department be set up within organisations to police organisations ethical codes of practice is the question. 
I believe in ethical trading as much as developing sustainable procurement and growth.

I believe that it is up to the purchaser and the supplier to work together for the common goal of ethical responsibility. Many purchasers are making the effort to be environmentally responsible but without increasing their bottom line. Hopefully, government will step in and reward the them for their efforts through tax breaks or compensation in some way. Also, I believe that the consumer has the power to adjust their buying practices toward a more environmental view which in the end will influence both the retailer and manufacturer.

I believe companies are responsible for ethics, if you study books epecially on stratergic sourcing you will see that companies are suppose to create an inviroment that is ethical. This invoromet must start from the internal to external customer. Employees need to be trained about ethics. In my work eperience i was only trained once by Axiz on ethics

Interesting question. While each company is legally responsible for their own ethical issues, companies increasingly face backlash over the ethical misconduct of their subcontractors. And rightly so. The article points out outsourcing to developing countries as an issue, as e.g. environmental regulations can be laxer there, but why should it be OK to pollute in a developing country in order to save money for a company in a developed country?

@Katri :- "but why should it be OK to pollute in a developing country in order to save money for a company in a developed country? " 
So that the consumer in the developed countries have the latest bestest gadgets like Iphones , Nike shoes, Gucci Bags etc etc.. That's called as pure "capitalism".. The primary mission of the company is to make $$ and stay in business. The mission of a CEO is to increase shareholder's wealth. The Question is -- at what costs to the rest of the world ?? 
In most blue chip companies there is always a Ethics & corporate Governance group/department, which is supposed to ensure that social issues are taken into consideration when practicing business. 
So in short, I believe its the company is 100% responsible for its SC , down to the nTier. This is called as due diligence and strict compliance.

A company is absolutely responsible for the contractor or supplier they use in their supply chain. It has to start with a robust due diligence process for assessing not only the financial and technical strengths of a supplier but their ethics as well such as how they treat their workers, interact with regulatory agencies, and pay their bills. Once a supplier is chosen it is incumbent upon your company to periodically review the original criteria. If, after all this diligence a supplier fails to meet your standards then you have a responsibility to either hold them to your standards or find a new supplier.

@Kayleigh, thanks for your inputs.. 
Yes, I agree, that " there is a fine line "..However, withe Davos meetings et all. .. I think in general ALL Governement's should be doing a better job ! 

Good points Ken. It is not just new suppliers though. A new Account Rep. or Sales leadership at a long-standing supplier may have different thoughts on how to get business than their predecessors. With a multi-million dollar bid a month away, I was offered ALCS AND World Series tickets a few years ago. After the first time the supplier was told I could not accept gifts and I warned them that they would be taken off our approved list if this happened again. As accepting the tickets was grounds for termination, I told my Director, and we sent the tickets back together so there was a witness. At the second offer I conferred with my Director and we removed the supplier from the bidders list for their product. 
It not only needs to be a written policy in the department, but part of the culture.

Ed, I agree with your comments and especially the comment about being part of the culture. Management's come and go in all companies and regular reviews are essential to confirming the original decision to work with a particular supplier.

In the end, the buyer is responsible. If they buyer sources from a limited number of suppliers, then all of them can be visited and assessed. Large supply chains require a sustainability or ethical performance evaluation system and not just a series of assessments or audits. 
The best bet would be a risk-based system, with the buyer defining, hopefully through some type of in-house and external consultation, what are the risk criteria. Evaluations should be a combination of third-party audits, self-assessments and other evaluation and intelligence gathering tools. Again, the buyer needs to define its comfort level regarding risk. Completely risk adverse = full due diligence on each supplier. 
Certification helps, but it is not the magic bullet. (The Ethical Trading Initiative is not a certification. It's a membership organization that requires annual performance reporting, among other commitments, from its members.)