This new white paper from EcoVadis explores this cautionary tale, and renewed focus on due diligence in Chinese supply chains in the wake of the Tianjin disaster.
The Tianjin disaster was a wake-up call for companies with Chinese supply chains. Despite general progress in environmental laws, decrease in workplace accidents, this devastating incident is a reminder to companies that they cannot rely only on government actions, and they must continue to invest in their own due-diligence and monitoring programs, with a culturally adapted approach, to avoid similar calamities.
In the months since the accident, investigations have revealed more about who was to blame, and over 100 officials have been named as responsible. It has left many companies wondering “What if these were my suppliers?” and perhaps “Am I doing enough due diligence in my Chinese supply chain?” This incident occurred amid overall strengthening of environmental laws and enforcement in recent years, which many companies with Chinese supply chains were watching closely. Also, there had been a positive long-term trend in Chinese labor accident reports (another indicator of Chinese supply chain risk) over the past decade, and lastly there is an ongoing anti-corruption campaign spearheaded by Xi Jinping. This incident in Tianjin has overshadowed this progress like a dark cloud, causing many procurement and supply chain leaders to worry about how they can discover and avoid such risks in their Chinese supply chains.