FOR IMMEDIATE RELEASE
Managing Compliance: The New Business Challenge in a Global Economy
Apple’s stock plunges after one of its Chinese suppliers are accused of human rights violations; Nintendo’s world headquarters is protested by hundreds for lack of action to curb concerns of forced labor in their supply chain; Siemens AG paid a $450 million fine for violating the US Foreign Corrupt Practices Act (FCPA); a fire in a Bangladesh factory killing 112 workers has Sears calling for a press conference. Corporate social responsibility includes labor, human rights, workplace safety, trade compliance, environmental guidelines, and other supply chain compliance regulations have become a growing concern of multinational companies and their suppliers, who are also grappling with the crucial and wider issue of global sustainable business development.
Consumers, stockholders, and politicians are asking, “What in the world is going on?” APB & Associates asked a similar question years ago which became the catalyst for the development of its supply chain compliance division. Directed by James Morrow, an ISO Lead Auditor, this division of the business management consulting firm is devoted to supply chain risk management of regulatory compliance issues. APB’s compliance team has created processes, systems, and patented proprietary software that simplifies compliance reporting and makes it more cost-effective. Morrow oversees the development and monitoring of strategies to manage the ever- a growing body of international laws and regulations that increasingly affect global companies’ supply chains.
Established in 2004, APB’s mission was to help small and large enterprises increase profits and reduce risks through its consulting and training services. “Over the past five years”, observes APB founder and President Andre Bryan, a decorated Marine Corps captain, “we have seen that compliance with international regulations has become a serious issue, and enterprises are being held accountable for the products they sell.”
Today both regional and multinational firms face a vast, complex global regulatory landscape that is a potential nightmare for firms that conduct business on a global scale. Two of the newest and potentially the most challenging are The California Transparency in Supply Chains Act and The Dodd-Frank Conflict Mineral Act.
The California Transparency in Supply Chains Act was a response to growing public concern around forced labor. It became effective in January 2012 and requires companies to provide details on its website and other materials, identifying steps taken to remove slavery and human trafficking from their supply chains. APB’s clients have addressed these requirements using customized solutions while mitigating risks of non-compliance while also using compliance as a competitive advantage. The firms’ solutions oftentimes include comprehensive supply chain assessments, supplier audits, supplier certifications, risk assessments, internal compliance programs, and employee training. These services are invaluable since non-compliant companies risk civil actions by the California attorney general, possible additional actions brought by shareholders, and damage to their reputations.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, contains a small, but very important section (Section 1502), which addresses “conflict minerals” which are tin, tantalum, tungsten, and gold (3TGs); and are mined from the Democratic Republic of Congo (DRC). These minerals are used in everything from computers to automobiles to household appliances.
According to Dodd-Frank, this issue requires manufacturers and service companies to have an aggressive supply chain reporting mandate. A final ruling by the U.S. Securities and Exchange Commission (SEC) in August 2012, compelled any publicly-traded company and their suppliers “include a description of the measures it took to exercise due diligence on the conflict minerals source and chain of custody”; and report the findings to the SEC. Morrow believes, “The effects of Dodd-Frank are extensive and will affect many more than the 6,000 enterprises estimated by the SEC. As the requirements surge throughout supply chains, it does not matter whether you are publicly traded, assisting your customers in their efforts to report and remain compliant will be a business necessity.”
While it is a difficult task for a company to trace the flow of raw materials back to each component supplier; Dodd-Frank requires, in some instances, a company to peer even deeper into their supply chain, determining the actual location of the mine. APB takes the guesswork away.
Publicly-traded companies are required to file their annual report and disclose on their websites an independently audited Conflict Minerals Report describing the due diligence process used in determining the chain of custody and country of origin for all conflict minerals. Failure to comply may result in SEC enforcement proceedings, and/or shareholder litigation, risk-to- reputation due to negative publicity from humanitarian groups.
The APB compliance team uses professional environmental management systems, supply chain tools, professional project management, Lean Six Sigma principles, ISO, and other quality standards to help enterprises develop strategic plans for supply chain risk management and global compliance. APB specializes in solutions for compliance around REACH, RoHS, WEEE, conflict minerals, carbon management, and ISO auditing, designed to help global enterprises answer the elusive question, “What in the world is going on within my supply chain?”