Supply Chain

Products should be delivered to customers efficiently and within a reasonable timeframe. Companies need reliable distribution and logistics to avoid product delays, production impacts and customer complaints, charges or losses. Companies are increasingly expected to monitor and disclose the performance of their supply chain, particularly with regards to labour practices, human rights and environmental impacts. The United Nations affirmed the expectation that organisations should respect human rights throughout their activities and relationships with others. Companies should avoid negative associations with distribution and logistics providers with poor ethical performance. Common issues for the distribution and logistics industry include poor safety standards, drug and human trafficking and money laundering initiatives. Companies should also be aware that poor practices cannot be outsourced to the supply chain. Directors of companies have a responsibility to ensure they are informed of matters relevant for their organisations, including the distribution and logistics component of their supply chain. Directors must satisfy themselves that appropriate policies, risk management and control systems, monitoring and review, and reporting systems are in place. When a new distribution and logistics supplier is considered for engagement, companies must undertake thorough due diligence inquiries in addition to financial and non-financial performance. The performance of the supplier should also be monitored throughout the period of engagement. Breaches of Australian environmental laws at Federal and State level can result in criminal offences, fines and imprisonment for Directors.