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Sedex supply chain risk briefing's spotlight on Latin America

The key supply chain risks in Latin America include the impact of industry and agriculture on the environment, health and safety risks, and working hou...

Freddie Pierce
|Jan 31|magazine7 min read

The key supply chain risks in Latin America include the impact of industry and agriculture on the environment, health and safety risks, and working hours, according to Sedex’s latest Responsible Sourcing Insights briefing.

Latin America offers many opportunities perhaps most critically as a major provider of natural resources – it holds 17 percent of the world’s known oil reserves – but also as an up-and-coming manufacturing location. With a rapidly expanding middle class and increasingly stable democracies, growth in intra-regional trade and also boosted consumer markets are being seen in the region.

Drawing on unique insights informed by data from Sedex and global risk analytics company, Maplecroft, the briefing explores finds that supply chain risks are particularly high in the major economies of Mexico, Brazil, Colombia and Peru. Other briefing insights include: 

A lack of proper health and safety management, as well as environmental issues relating to a lack of compliance to local and international laws and inadequate environmental management systems;

With major countries enjoying democratic political systems, limits on freedom of association are less of a challenge than in the past. Instead, inadequate working conditions, discrimination, and prevalence of forced and child labour are the key risks;

Institutions for labour rights enforcement and monitoring have failed to keep pace with economic growth, and are particularly weak outside capital cities;

A lack of, or improper implementation of, management codes or systems to meet local law, ETI Base Code and customer requirements is recorded as the highest occurring issues by external site audits, at 7.8 percent of all single issues recorded.

“With upcoming major events – the 2014 World Cup and 2016 Olympics - taking place in Latin America, there is increasing scrutiny on the region. There is greater need than ever for better understanding and transparency of supply chain challenges and opportunities such as this briefing provides” said Emily Pearce, report author and Stakeholder Manager at Sedex.

“The briefing outlines many of the reasons why the region is set to become more and more important in terms of global supply chains” said James Lockhart-Smith, Head of Latin America at Maplecroft.

Sedex risk briefings focus on different regions, issues or business topics relating to supply chain sustainability and features insights and viewpoints alongside case studies of best practice. The briefings include companies’ achievements and examples of good practice, their impact, collaboration and convergence in responsible business.

Sedex briefings are available from the Sedex Publications webpage.