In a new survey by procurement and supply chain consultancy Proxima, 70.3% of CEOs in the United States and the U.K. say they are concerned about the potential for human or labor rights issues in their supply chain. As a result, more than half in the U.S. said they are spending more time reviewing supply chain issues.
More than 1,000 CEOs of U.S.-based companies took part in the survey, which was released Thursday morning. An additional 1,000 CEOs in the U.K. were polled.
The mitigation of a supply chain’s exposure to such risks is essential. We know that many of the smaller, lower-tier suppliers are not digital. Recent data supplied by U.S. Customs and Border Protection show the increase in denied shipments as a result of forced labor.
The Uyghur Forced Labor Prevention Act signed into law on Dec. 23, 2021, was in direct response to the systemic use of forced labor of ethnic minorities and the Uyghurs in the Xinjiang Uyghur Autonomous Region in the People’s Republic of China. According to the International Labor Organization, almost 28 million people are currently victims of forced labor.
The exposure to forced labor is real, and the contagion among the different categories shows forced labor does not discriminate between sectors.
In addition to investing into more real-time analysis of a supply chain, the report asked CEOs about building resiliency with onshoring or nearshoring. This year, 44.6% of respondents said they are already onshoring or are at least considering it as an option. Thirty-nine percent said they are seriously looking at nearshoring. Last year, only 26% of respondents said they were actively considering such a plan.
According to recent U.S. Customs data, Malaysia topped the list of enforcement.
“Addressing human rights issues across the supply chain is a huge challenge for businesses and it is clearly high up on the agenda for CEOs,” said Simon Geale, executive vice president and chief procurement officer at Proxima. “We’ve seen a number of businesses fall victim to human rights issues and as we see increased scrutiny from customers and regulators supply chain transparency is going to become increasingly critical. This is the emerging priority for CEOs at a time when business leaders are spending more time than ever tackling supply chain issues.”