tag:theconversation.com,2011:/nz/topics/supply-chains-13234/articlesSupply chains – The Conversation2024-03-28T18:54:32Ztag:theconversation.com,2011:article/2268342024-03-28T18:54:32Z2024-03-28T18:54:32ZAfter the Baltimore bridge collapse, we need clear-eyed assessments of the risks to key infrastructure<p>Catastrophic collapses of major bridges are thankfully rare. Notable examples in the last couple of decades include the failure of the <a href="https://www.dot.state.mn.us/i35wbridge/collapse.html">I35-W in Minneapolis in August 2007</a>, and the collapse of the <a href="https://theconversation.com/genoa-bridge-collapse-maintaining-these-%20structures-is-a-constant-battle-against-traffic-and-decay-101627">Morandi bridge in Genoa 11 years later</a>. When such events do occur, public attention is understandably focused on the nature of the collapse, which can extend over hundreds of metres in seconds, and its underlying causes. </p>
<p>Whether because of an extreme loading event or an accident, these supposedly rare events in the life of a bridge still need to be assessed before they happen, and mitigation measures taken in accordance with all the potential consequences. This type of analysis is known as a “risk-based consequence assessment”. The cost of taking additional measures in the near term can prevent major adverse consequences further down the road.</p>
<p>With many of these structures being over 50 years old, we often hear that a bridge’s condition may have been compromised by deterioration and increased traffic loads – both in the size and frequency of vehicles. Also, older bridges were designed to standards that have been superseded by new knowledge and technology.</p>
<p>While these factors have helped convince some politicians to increase their infrastructure budgets, including through the <a href="https://www.whitehouse.gov/briefing-room/statements-%20releases/2021/11/06/fact-sheet-the-bipartisan-infrastructure-deal/">Bipartisan Infrastructure Deal</a> in the US, the tendency has been to focus on stronger, more resilient new structures and on higher maintenance for existing structures. The latter makes it easy for politicians to show the money spent has had a positive impact, because it results in an overall reduction in the number of bridges classified as obsolete or deficient.</p>
<p>Given the enormous scale of the bridge maintenance problem – the American Road Transportation Builders Association has estimated that <a href="https://theconversation.com/disasters-like-bridge-collapses-put-%20transportation-agencies-emergency-plans-to-the-test-207779">one in three US bridges needs repair</a> – it makes sense to spread available funding widely. However, this approach can have serious shortcomings if it does not set clear priorities based on the scale of potential consequences from accidents and failures.</p>
<p>One of the two central pylons of the <a href="https://en.wikipedia.org/wiki/Francis_Scott_Key_Bridge_(Baltimore)">Francis Scott Key bridge</a> in Baltimore was rammed by a 300m-long container ship at around 1.30am on March 24, leading to progressive collapse of the bridge’s entire <a href="https://en.wikipedia.org/wiki/Truss_bridge">truss</a> within four seconds. </p>
<p>Although the 47-year-old bridge had been <a href="https://www.cbsnews.com/news/francis-scott-key-bridge-baltimore-condition-container-ship-what-we-know-how-collapse-happened/">found to be in a “fair” condition</a> during its most recent inspection in 2008, and was “fully up to code” according to Maryland’s governor after the collision, experts agreed that a catastrophic collapse <a href="https://www.cbsnews.com/news/francis-scott-key-%20bridge-baltimore-condition-container-ship-what-we-know-how-collapse-happened/">was to be expected</a> given the magnitude of the ship’s impact. Maintenance workers were on the bridge at the time filling potholes, including the <a href="https://www.bbc.co.uk/news/world-us-canada-68673146">six people who died</a>.</p>
<h2>Direct and indirect consequences</h2>
<p>Bridge collapses due to vessel collisions have happened before and unfortunately will happen again. In a similar incident in 1980, <a href="https://www.structuremag.org/?p=20417">the Sunshine Skyway bridge in Tampa Bay</a>, also a steel truss structure, was hit by a barge, resulting in 35 casualties due to the collapse of over 400m (1,300ft) of its span. </p>
<p>Around the world, the American Association of State Highway and Transportation Officials has reported 31 major bridge collapses <a href="https://doi.org/10.1016/j.marstruc.2020.102840">due to vessel collisions</a> between 1960 and 2002, resulting in 342 deaths.</p>
<p>The latest, the destruction of the Francis Scott Key Bridge, has cut off one of three transport links across the Patapsco river in the busy Baltimore port area. Given its importance as a transport hub, this will have major economic implications that could have been anticipated. </p>
<p>More than 30,000 vehicles that were using the Key Bridge daily now have to seek alternative routes. Significantly, the other two local crossings are via tunnels, which imposes limits on the type of traffic that can cross the river because the transporting of hazardous materials through tunnels is prohibited.</p>
<p>Shipping traffic into and out of the Baltimore port has been suspended until further notice. Removal of the debris will be a complex operation, and work to ensure all vessel types can navigate the river safely will take time. Further restrictions will then need to be in place when the new bridge is constructed.</p>
<p>There are already signs that supply chains around the world are being affected by the bridge collapse, especially in the car and light truck sector, and in farm and construction machinery. </p>
<p>The economic consequences of this catastrophic event will be substantial at both city and state level. Early estimates on liability insurance payouts suggest the total cost may <a href="https://www.ft.com/content/17cf3f2e-e64d-4666-b1c2-2723347c2ada">exceed US$1.5 billion (£1.2 billion)</a>. </p>
<p>Judging by what has happened after past bridge collapses, there could be negative impacts on jobs and the local economy: about 14,000 people work in the port itself, and another 140,000 are employed in related services. </p>
<p>Above all, six people lost their lives. But the human cost could have been much worse if the incident had taken place during rush hour. Had the impact occurred with a vessel carrying hazardous materials, the environmental costs could have been dramatic as well.</p>
<p>Given what we know from previous incidents about the severity of ship-bridge collisions and major bridge collapses, it was clear this bridge was of critical importance.</p>
<p>A number of mitigation options are available to bridges, including the installation of protection devices around the bridge supports (pylons) in the form of fenders or artificial islands, to deflect a ship or lessen the energy of a collision. </p>
<p>For bridges in general, there are measures that can help on the ship side too, such as requiring the use of tugboats or introducing stricter limits on speeds, depending on the type of cargo and vessel size. It is not clear, however, whether these would have made any difference in the case of the Baltimore bridge collapse.</p>
<p>Above all, by undertaking a risk-based consequence assessment every decade or so, authorities that are responsible for vital infrastructure can help visualise changing risks and prioritise their responses appropriately. In the case of river bridges, ever-increasing ship sizes, speedier turnaround times and higher cargo volumes have all increased the risks – and the costs of a catastrophic collision or collapse.</p><img src="https://counter.theconversation.com/content/226834/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marios Chryssanthopoulos has received funding from UKRI, Network Rail, Highways Agency and the European Commission.</span></em></p>The collapse of the Francis Scott Key bridge is already affecting global supply chains.Marios Chryssanthopoulos, Professor of Structural Systems, University of SurreyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2267052024-03-27T13:16:56Z2024-03-27T13:16:56ZPort of Baltimore bridge collapse rattles supply chains already rocked by troubles in Panama and the Red Sea<p><em>The collapse of the Francis Scott Key Bridge on March 26, 2024, has put a spotlight on the Port of Baltimore, <a href="https://www.axios.com/2024/03/26/baltimore-bridge-collapse-port-close-ripple-effects">one of the busiest harbors in the U.S.</a>, which paused shipping and immediately halted all vessel traffic in and out.</em></p>
<p><em>The port remained open to trucks following the incident, but the loss of maritime traffic <a href="https://www.newsweek.com/baltimore-bridge-collapse-could-cost-9-million-day-1883756#:%7E:text=The%20collapse%20of%20the%20Francis,supply%20chain%20expert%20told%20Newsweek.">is expected to cost US$9 million a day</a>. The overall <a href="https://www.nbcnews.com/business/economy/baltimore-maryland-bridge-collapse-impact-ports-shipments-deliveries-rcna145114">economic toll is likely to be higher</a> as billions of dollars of goods are rerouted amid the prospect of <a href="https://www.wsj.com/business/logistics/baltimore-bridge-economic-impact-0514d05a">supply chains being snarled for months</a>. It will also mean a loss of tax revenue for the city and state.</em></p>
<p><em>The Conversation asked Simona Stan, <a href="https://www.umt.edu/business-faculty-staff/directory/management-marketing.php?ID=3728">a supply chain and logistics expert</a> at the University of Montana, to explain the short- and long-term impacts of the crash on supply chains.</em></p>
<h2>How important is the Port of Baltimore?</h2>
<p>The Port of Baltimore <a href="https://www.wsj.com/livecoverage/stock-market-today-dow-jones-03-26-2024/card/here-s-how-baltimore-ranks-among-u-s-ports-GhJBis2HpJALb28ZjzQF">is the ninth largest U.S. port</a> by overall trade volume. In 2023 alone, it moved around 50 million tons of goods between the U.S. and other countries, much of it in large shipping containers, like those stacked on the ship that rammed into the bridge. </p>
<p>Although it’s smaller than other ports on the East Coast and in the Gulf of Mexico, it still plays a critical role in processing U.S. international trade traffic. That’s especially true for some products, <a href="https://oec.world/en/profile/subnational_usa_port/baltimore-md-1303">such as automobiles, heavy machinery and coal</a>. It also handles <a href="https://www.bakingbusiness.com/articles/61163-collapsed-bridge-shuts-down-port-of-baltimore">a large share of U.S. sugar imports</a>.</p>
<h2>What’s the short-term impact of its closure on supply chains?</h2>
<p>The immediate <a href="https://www.axios.com/2024/03/26/baltimore-bridge-collapse-port-close-ripple-effects">impact will be felt by the 15,000 or so workers</a> in the port and about 140,000 others who depend on it. It doesn’t mean they’ll be laid off, but drastically less traffic would mean less work to go around. </p>
<p>Companies and consumers should expect some delays for packages that would have otherwise been processed by the port. How long depends on how much time it takes for ships to be rerouted to other terminals, but it should only add a matter of days or up to a week or two. </p>
<p>Baltimore accounts for <a href="https://www.usatoday.com/story/money/2024/03/26/key-bridge-collapse-baltimore-deliveries-effect/73105545007">only 4% of overall East Coast trade</a>, so it shouldn’t have a major impact. Dealers will probably experience some delays receiving imported cars and light trucks, but things should be resolved within days or weeks.</p>
<h2>What’s the long-term impact?</h2>
<p>The problem is that supply chains have been under stress from multiple directions lately. </p>
<p><a href="https://www.theguardian.com/global-development/2024/feb/16/houthi-attacks-in-red-sea-having-a-catastrophic-effect-on-aid-to-sudan">Houthi attacks on ships in the Red Sea</a> and <a href="https://www.wsj.com/business/logistics/shipping-panama-red-sea-suez-canal-edc91172">Panama Canal bottlenecks</a> have lengthened delivery times and increased costs for companies that rely on East Coast ports. </p>
<p>The pause in maritime traffic at the Port of Baltimore adds one more point of pressure for trade in the region. This may lead more shippers that have a choice to send more freight through West Coast ports, which have not suffered much from the Red Sea attacks and Panama problems.</p>
<p>This could also mean <a href="https://www.cnbc.com/2024/03/25/a-trucking-strategy-that-boomed-during-pandemic-shocks-is-hot-again.html">more business for trucking and rail companies</a> if it means they have to transport more goods from the West to East Coast.</p>
<h2>How does this supply chain shock compare with other recent ones?</h2>
<p>From a supply chain perspective, this was a freak accident. It’s dramatic, it’s graphic, and it forces people to pay attention to the issue. </p>
<p>But unlike the Red Sea attacks or the impact from the COVID-19 pandemic, which have led to lingering supply chain problems, fallout from the bridge collapse will be temporary. </p>
<p>That said, we’ll likely see public pressure on companies to try to prevent such a thing from happening again – even though the risk of ships striking bridges is very low.</p><img src="https://counter.theconversation.com/content/226705/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simona Stan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A supply chain expert looks at the short- and long-term impacts of the bridge collapse.Simona Stan, Professor of Marketing, University of MontanaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2252392024-03-25T18:23:49Z2024-03-25T18:23:49ZBuying affordable ethical chocolate is almost impossible – but some firms are offering the next best thing<figure><img src="https://images.theconversation.com/files/581436/original/file-20240312-24-tojl7x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Transparency throughout the supply chains for cacao, the raw ingredient for chocolate, is required to ensure ethical sourcing and manufacture of products. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cacao-pods-cocoa-organic-chocolate-farm-1121861738">andysartworks/Shutterstock</a></span></figcaption></figure><p>With supermarket aisles piled high with assortments of chocolate treats, the choice can seem overwhelming. The array of ethical options – some with certifications, others with marketing claims about sustainability – can just add to the confusion.</p>
<p>Shoppers are becoming <a href="https://www.ethicalconsumer.org/sites/default/files/media-file/2023-12/EC-Markets-report-2023-web-final2.pdf">more eco-conscious</a>, with consumer spending on ethical products increasing from £17 billion in 1999 to more than £141 billion in 2023, according to Ethical Consumer magazine. In terms of chocolate, that usually means avoiding issues such as cocoa’s endemic reliance on <a href="https://www.dol.gov/agencies/ilab/our-work/child-forced-labor-trafficking/child-labor-cocoa">child labour</a>, <a href="https://unearthed.greenpeace.org/2020/11/25/cargill-deforestation-agriculture-history-pollution/">child trafficking</a> and <a href="https://doi.org/10.1038/s43016-023-00751-8">widespread deforestation</a>. </p>
<p>Lack of transparency along the whole supply chain is a major barrier to sourcing ethical cocoa and buying ethical chocolate. This makes it almost impossible to guarantee that any chocolate you buy is ethically sourced, even from companies that do their utmost to avoid buying from suppliers with harmful practices.</p>
<p>However, some new brands, such as the Netherlands’ Tony’s Chocolonely and Scotland’s UP-UP Chocolate, are trying to demonstrate their commitment to child labour-free products by doing more than claiming responsible sourcing of cocoa. </p>
<p>Tony’s <a href="https://online.flippingbook.com/view/287207390/8/">publishes the number of cases</a> of labour abuses it finds every year, and its packaging explains the issues of modern slavery in cocoa farming. UP-UP <a href="https://upupchocolate.com/pages/slavefreecocoa">surveys every worker</a> in its supply chains and states which single-estate plantation its cocoa comes from on its packaging.</p>
<h2>Why it’s so hard to guarantee ethical practices</h2>
<p>Without transparency, the origin of the cocoa – and therefore its impact on people and planet – cannot be known. Most of the world’s cocoa is grown <a href="https://www.icco.org/wp-content/uploads/Production_QBCS-XLIX-No.-4.pdf">in west Africa</a>, where more than 2 million farmers work on <a href="https://www.sciencedirect.com/science/article/pii/S1573521415000160">around 800,000 farms</a>. </p>
<p>Many of these <a href="https://doi.org/10.1108/SCM-11-2020-0583">farms are remote</a> and served only by motorcycle due to poor infrastructure. This contributes to the <a href="https://doi.org/10.1108/SCM-11-2020-0583">long and fragmented</a> nature of cocoa supply chains. </p>
<p>Tracing actual shipments of cocoa is rare because it’s sold as a commodity on a mass balance basis. So, while the volume of ethical cocoa farmed is equal to that sold, most cocoa is mixed with cocoa of unknown origin from multiple sources.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/581438/original/file-20240312-28-y9ka7h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Wooden table background, cut open cocao pod with nibs, fragments of brown chocolate and green leaves laid out on surface" src="https://images.theconversation.com/files/581438/original/file-20240312-28-y9ka7h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/581438/original/file-20240312-28-y9ka7h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/581438/original/file-20240312-28-y9ka7h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/581438/original/file-20240312-28-y9ka7h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/581438/original/file-20240312-28-y9ka7h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/581438/original/file-20240312-28-y9ka7h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/581438/original/file-20240312-28-y9ka7h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Chocolate brands going to extreme lengths to ensure traceability of their raw raw ingredients pay the price - and shoppers often pay a premium for the most ethical chocolate.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/composition-cocoa-pod-products-on-wooden-793125286">Africa Studio/Shutterstock</a></span>
</figcaption>
</figure>
<p>At various stages within the supply chain, from transport to processing, a company’s ability to track cocoa from known sources at specific farms is compromised. </p>
<p>While such complexity makes addressing child labour more difficult, it could be seen as convenient for large chocolate producers. Some have had <a href="https://www.reuters.com/business/hershey-nestle-cargill-win-dismissal-us-child-slavery-lawsuit-2022-06-28/">legal claims against them dismissed</a> because of the lack of traceability between child labour on cocoa farms and their products. </p>
<p>Tony’s and UP-UP try to overcome transparency issues by buying from specific plantations or cooperatives. UP-UP sources its cocoa from a specific plantation in Colombia. Tony’s sources from a known cooperative in west Africa which makes monitoring labour conditions easier. </p>
<p>But this approach is not flawless. Tony’s doesn’t own the plantations it buys from, so while it can influence conditions, it cannot dictate to farmers. Tony’s removed 1,752 children from child labour in its last year of reporting, but identified another 1,072 cases on plantations from which it sources its cocoa. </p>
<p>Tony’s also works with cocoa processor Barry Callebaut, despite its <a href="https://www.slavefreechocolate.org/dark-side-of-chocolate">alleged links</a> to <a href="https://www.barry-callebaut.com/system/files/2023-09/Barry%20Callebaut%20Global%20Child%20Labor%20Position%20Statement%202023.pdf">child labour</a>. <a href="https://www.callebaut.com/en-GB/zero-child-labour-2025">Barry Callebaut states that</a> it has “a responsibility and a plan of action – built on full traceability and transparency – to stop any form of child labour by 2025 and make it something of the past”. Tony’s wants to act <a href="https://tonyschocolonely.com/uk/en/our-mission/news/why-we-are-not-on-all-lists-of-ethical-chocolate-brands">as a lever to change</a> from within the industry and scale up efforts to improve transparency in chocolate supply chains. </p>
<h2>Hollow chocolate claims</h2>
<p>The difficulties of building more transparent cocoa supply chains is only half the story. Big firms have routinely been criticised by charities such as Oxfam for <a href="https://www.oxfam.org/en/press-releases/chocolate-giants-reap-huge-profits-promises-improve-farmers-incomes-ring-hollow">“hollow”</a> claims made about efforts to protect workers. </p>
<p>Environmental charity Mighty Earth has called Cargill, a major cocoa processor and chocolate producer, <a href="https://stories.mightyearth.org/cargill-worst-company-in-the-world/">“the worst company in the world”</a> for <a href="https://www.reuters.com/world/americas/brazil-court-fines-cargill-case-involving-child-labor-cocoa-farms-2023-09-26/">alleged links to</a> <a href="https://www.slavefreechocolate.org/dark-side-of-chocolate">child labour</a> and <a href="https://www.cargill.com/doc/1432239539226/cocoa-and-forests-initiative-progress-report-2022.pdf">deforestation</a>. <a href="https://www.cargill.co.uk/en/doc/1432103154643/slavery-and-human-trafficking-statement-pdf.pdf">Cargill states that</a> it does not tolerate the use of any form of forced labour and is “actively working towards eradicating child labour in the cocoa supply chain”.</p>
<p>Child and forced labour have long been a problem within cocoa supply chains and <a href="https://www.gutenberg.org/ebooks/67530">Cadbury was aware of the problem over a century ago</a>. In 2001, eight of the industry’s major multinationals <a href="https://www.cocoainitiative.org/sites/default/files/resources/Harkin_Engel_Protocol.pdf">pledged to end</a> child labour in cocoa production by 2005. Signatories have repeatedly pushed that deadline back. </p>
<p>Many companies rely on third-party certification by organisations such as <a href="https://www.fairtrade.org.uk/">Fairtrade</a> and <a href="https://www.rainforest-alliance.org/">Rainforest Alliance</a>. But <a href="https://www.greenpeace.org/static/planet4-international-stateless/2021/04/b1e486be-greenpeace-international-report-destruction-certified_finaloptimised.pdf">Greenpeace found</a> that a lack of consistency between standards means that claims can be misleading. </p>
<p>The most recent report from <a href="https://cocoabarometer.org/wp-content/uploads/2022/12/Cocoa-Barometer-2022.pdf">Cocoa Barometer</a>, a consortium of ethically minded and sustainability-focused organisations including Oxfam and WWF, claims that certification does not imply sustainability, because it doesn’t require much actual operational change. </p>
<p>While cocoa certification <a href="https://publications.jrc.ec.europa.eu/repository/bitstream/JRC135044/JRC135044_01.pdf">helps restore biodiversity</a>, it doesn’t necessarily increase the money <a href="https://www.theguardian.com/sustainable-business/2016/mar/10/fairtrade-labels-certification-rainforest-alliance">farmers receive</a> for their crop. Large chocolate producers <a href="https://doi.org/10.1007/s10551-021-04808-1">prioritise short-term profit</a> over meaningful structural change and this can result in a benefit from poor cocoa farmer pay and <a href="https://cocoabarometer.org/wp-content/uploads/2022/12/Cocoa-Barometer-2022.pdf">low transparency</a> in their own self-certified reporting. </p>
<p>Consumers pay a premium for ethical chocolate. Both the separation of harvests that enables Tony’s Chocolonely to know the origin of its cocoa origin and the meticulous survey approach taken by UP-UP Chocolate incur additional costs. Buying at huge scale and without such rigour does not. </p>
<p>Evidence of single origin cocoa published on product packaging does not guarantee ethical sourcing, but it’s a sign of good practice. Sourcing single-origin cocoa enables checks of working conditions at known sites. It’s better for the environment and leads to <a href="https://doi.org/10.1007/s43546-021-00051-y">substantially higher pay for farmers</a>. </p>
<p>Without genuine transparency about the source of cocoa, ethical chocolate claims are hard to take seriously. Smaller producers such as UP-UP, Divine and vegan chocolatier Pacari, source their cocoa from individual plantations and have that transparency. And by identifying child labour abuses, Tony’s is as much an activist brand highlighting cocoa’s ills as it is a chocolatier.</p><img src="https://counter.theconversation.com/content/225239/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Rogerson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>What makes a good egg? The ethics of chocolate is complicated and often hard to decipher with confusing marketing claims on some product packaging.Michael Rogerson, Lecturer in Operations Management, University of Sussex Business School, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2249232024-03-06T21:23:18Z2024-03-06T21:23:18ZSEC approves first US climate disclosure rules: Why the requirements are much weaker than planned and what they mean for companies<figure><img src="https://images.theconversation.com/files/580240/original/file-20240306-25-rfxv2z.jpg?ixlib=rb-1.1.0&rect=1958%2C11%2C5185%2C3482&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Companies face new rules for disclosing their climate-related risks.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/panoramic-aerial-shot-of-steaming-oil-refinery-royalty-free-image/908141180">halbergman/E+ via Getty Images</a></span></figcaption></figure><p>After two years of intense public debate, the U.S. Securities and Exchange Commission approved the nation’s <a href="https://www.sec.gov/files/33-11275-fact-sheet.pdf">first national climate disclosure rules</a> on March 6, 2024, setting out requirements for publicly listed companies to report their climate-related risks and in some cases their greenhouse gas emissions.</p>
<p>The new rules are much weaker than <a href="https://theconversation.com/sec-proposes-far-reaching-climate-disclosure-rules-for-companies-heres-where-the-rules-may-be-vulnerable-to-legal-challenges-179534">those originally proposed</a>. Significantly, the SEC dropped a controversial plan to require companies to report Scope 3 emissions – emissions generated throughout the company’s supply chain and customers’ use of its products.</p>
<p>The rules do require larger companies to disclose Scope 1 and 2 emissions, which are emissions from their operations and energy use. But those disclosures are required only to the extent that the company believes the information would be financially “<a href="https://www.law.cornell.edu/cfr/text/17/240.12b-2#:%7E:text=The%20term%20%E2%80%9Cmaterial%2C%E2%80%9D%20when,or%20sell%20the%20securities%20registered.">material</a>” to a reasonable investor’s decision making.</p>
<p>More broadly, the new rules require publicly listed companies to disclose climate-related risks that are likely to have a material impact on their business, as well as disclose how they are managing those risks and any related corporate targets.</p>
<p><iframe id="0j9Uw" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/0j9Uw/5/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>After announcing its initial proposal in 2022, the SEC received a <a href="https://www.sec.gov/comments/climate-disclosure/cll12.htm">staggering number of comments</a> from experts, companies and the public – about 24,000 of them, the most ever received for an SEC rule. The comments reflected both strong public interest in being informed about corporate climate-risk exposures and greenhouse gas emissions and also significant pushback, particularly over how much the rules would cost companies. Several Republican state attorneys general <a href="https://ago.wv.gov/Documents/Q0658792.pdf">threatened to sue</a>. </p>
<p>In response to the comments, the commissioners took their time to adjust the disclosure requirements, but the <a href="https://thehill.com/business/4513407-nine-states-file-legal-challenge-to-sec-climate-disclosure-rule/">legal challenges may not be over</a>.</p>
<p>I <a href="https://warrington.ufl.edu/directory/person/7627/">specialize in sustainable finance and corporate governance</a> and have been following the SEC’s climate disclosure plans. Here are some of the major issues that led to this change and the implications of the new disclosure rules as they phase in starting in 2025.</p>
<h2>The rule’s unequal cost to companies</h2>
<p>The most important reason for adding climate disclosure rules, <a href="https://www.sec.gov/news/speech/gensler-remarks-ceres-investor-briefing-041222">as SEC Chairman Gary Gensler has noted</a>, is that climate-related risks and greenhouse gas emissions appear to be financially material information demanded by investors. </p>
<p>Indeed, for the past several years, large institutional investors have been vocal about the need for more transparency and consistency in corporate climate-risk disclosures.</p>
<p>As the SEC has often emphasized, most large companies already disclose some of this information voluntarily in their sustainability <a href="https://www.pwc.com/sk/en/environmental-social-and-corporate-governance-esg/esg-reporting.html">or ESG reports</a>, which often are published alongside their annual reports.</p>
<p><iframe id="RrVke" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/RrVke/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Since investors seem to demand this information, and many companies are voluntarily providing it, the SEC and proponents argued that it would be <a href="https://www.sec.gov/news/speech/gensler-remarks-ceres-investor-briefing-041222">sensible to mandate some consistency</a> in disclosures.</p>
<p>However, much of the debate around the new disclosure rule has focused on whether it passes the cost-benefit smell test. In other words, would the compliance cost borne by firms potentially outweigh the financial benefits of mandated disclosures of climate risks and emissions that investors might value?</p>
<p>The compliance costs of federal disclosure requirements have been estimated to be substantial. When the SEC first proposed the rule in 2022, the commission’s own estimates implied that disclosure-related <a href="https://www.wsj.com/articles/fight-brews-over-cost-of-sec-climate-change-rules-11652779802">compliance costs would nearly double</a> for the average publicly listed company.</p>
<p>Comments on the rule have since pointed out that <a href="https://www.sec.gov/comments/s7-10-22/s71022-20132304-302836.pdf">there are also likely to be even greater indirect costs</a> related to adjustments that companies might have to make in how they conduct their operations. These costs might also have broader implications for employment in certain jobs and sectors.</p>
<p>Given that many smaller listed companies do not have voluntary disclosure practices in place, the burden is also expected to hit companies unequally, disproportionately affecting smaller companies while large corporations see little impact.</p>
<h2>Measuring greenhouse emissions isn’t simple</h2>
<p>Another practical problem lies in enforcing consistent measurement of emissions and climate-risk exposure.</p>
<p>International groups such as the <a href="https://www.fsb-tcfd.org/">Task Force on Climate-Related Financial Disclosures</a> and the <a href="https://www.ifrs.org/groups/international-sustainability-standards-board/">International Sustainability Standards Board</a> have provided reporting standards and guidelines. But the measurements themselves are still subject to estimation and collection problems that might vary across industries and activities.</p>
<p>Moreover, estimating Scope 1, 2 and 3 emissions separately presents significant challenges.</p>
<figure class="align-center ">
<img alt="Lists of examples of Scope 1, 2, 3 emissions sources with an illustration of a factory in the center" src="https://images.theconversation.com/files/450130/original/file-20220304-13-727hza.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/450130/original/file-20220304-13-727hza.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=509&fit=crop&dpr=1 600w, https://images.theconversation.com/files/450130/original/file-20220304-13-727hza.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=509&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/450130/original/file-20220304-13-727hza.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=509&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/450130/original/file-20220304-13-727hza.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=640&fit=crop&dpr=1 754w, https://images.theconversation.com/files/450130/original/file-20220304-13-727hza.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=640&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/450130/original/file-20220304-13-727hza.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=640&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">What Scope 1, 2 and 3 emissions involve.</span>
<span class="attribution"><a class="source" href="https://www.americanprogress.org/article/why-companies-should-be-required-to-disclose-their-scope-3-emissions/">Chester Hawkins/Center for American Progress</a></span>
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<p>In particular, the difficulty of measuring a company’s indirect emissions from its supply chain – Scope 3 emissions – exponentially compounds the estimation problem. Reporting Scope 3 emissions also opens a floodgate of legal issues, as many smaller organizations in a large company’s value chain might have no legal obligation to disclose their own emissions.</p>
<p>The backlash over the challenges inherent in measuring Scope 3 emissions led to the commission’s decision to pare back that part of its proposed rules.</p>
<p>Many companies will also likely have to outsource the estimation and quantification of emissions and climate risks to third-party companies, where there have been concerns about higher costs, conflicts of interest and greenwashing.</p>
<h2>How SEC stacks up to California, EU rules</h2>
<p>The SEC is not the first to adopt climate disclosure rules.</p>
<p>A <a href="https://blogs.law.columbia.edu/climatechange/2023/12/15/a-comparative-analysis-of-the-secs-climate-disclosure-proposal/">similar rule went into effect in the European Union</a> in January 2024. </p>
<p>California has <a href="https://theconversation.com/exxon-apple-and-other-corporate-giants-will-have-to-disclose-all-their-emissions-under-californias-new-climate-laws-that-will-have-a-global-impact-214630">an even more stringent rule</a>, signed into law in October 2023. It will require both publicly listed and privately held firms to fully and unconditionally disclose all of Scope 1, 2 and 3 emissions when it goes into effect in 2026 and 2027. Since California is among the world’s largest economies, its regulations are already expected to have wide effects on corporations around the world.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/xjSk7wWJG6o?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">SEC Chairman Gary Gensler discusses what the SEC has to do with climate change.</span></figcaption>
</figure>
<p>Hardcore <a href="https://news.bloomberglaw.com/esg/sec-climate-rules-risk-legal-battle-with-environmental-groups">proponents of the SEC rule</a> who wanted California-level disclosures across the board argue that Scope 3 emissions need to be disclosed given that they compose the largest fraction of all carbon emissions.</p>
<p>Skeptics of the rule, including two of the five SEC commissioners, question whether there needs to be any rule at all if things are inevitably watered down anyway. </p>
<p>Given the recent conservative <a href="https://www.wsj.com/business/the-latest-dirty-word-in-corporate-america-esg-9c776003">backlash against companies focusing on ESG</a> issues and the ensuing <a href="https://www.ft.com/content/3ce06a6f-f0e3-4f70-a078-82a6c265ddc2">retrenchment by several institutional investors</a> from their previous climate commitments, it will be interesting to see how the new corporate climate disclosures will actually affect investors’ and corporations’ decisions.</p><img src="https://counter.theconversation.com/content/224923/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sehoon Kim does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Climate disclosure rules are meant to help investors understand their risks, but they come with costs for companies, as a finance scholar explains.Sehoon Kim, Assistant Professor of Finance, University of FloridaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2244382024-03-04T13:41:42Z2024-03-04T13:41:42ZDemand for computer chips fuelled by AI could reshape global politics and security<figure><img src="https://images.theconversation.com/files/578585/original/file-20240228-18-rudxyy.jpg?ixlib=rb-1.1.0&rect=28%2C0%2C6361%2C3592&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/close-silicon-die-being-extracted-semiconductor-2262331365">IM Imagery / Shutterstock</a></span></figcaption></figure><p>A global race to build powerful computer chips that are essential for the next generation of artificial intelligence (AI) tools could have a major impact on global politics and security. </p>
<p>The US is currently leading the race in the design of these chips, also known as semiconductors. But most of the manufacturing is carried out in Taiwan. The debate has been fuelled by the call by Sam Altman, CEO of ChatGPT’s developer OpenAI, for <a href="https://www.wsj.com/tech/ai/sam-altman-seeks-trillions-of-dollars-to-reshape-business-of-chips-and-ai-89ab3db0">a US$5 trillion to US$7 trillion</a> (£3.9 trillion to £5.5 trillion) global investment to <a href="https://venturebeat.com/ai/sam-altman-wants-up-to-7-trillion-for-ai-chips-the-natural-resources-required-would-be-mind-boggling/">produce more powerful chips</a> for the next generation of AI platforms. </p>
<p>The amount of money Altman called for is more than the chip industry has spent in total since it began. Whatever the facts about those numbers, overall projections for the AI market are mind blowing. The data analytics company GlobalData <a href="https://www.globaldata.com/media/technology/generative-ai-will-go-mainstream-2024-driven-adoption-specialized-custom-models-multimodal-tool-experimentation-says-globaldata/">forecasts that the market will be worth US$909 billion</a> by 2030.</p>
<p>Unsurprisingly, over the past two years, the US, China, Japan and several European countries have increased their budget allocations and put in place measures to secure or maintain a share of the chip industry for themselves. China is catching up fast and is <a href="https://thediplomat.com/2023/09/china-boosts-semiconductor-subsidies-as-us-tightens-restrictions/">subsidising chips, including next-generation ones for AI</a>, by hundreds of billions over the next decade to build a manufacturing supply chain. </p>
<p>Subsidies seem to be the <a href="https://www.reuters.com/technology/germany-earmarks-20-bln-eur-chip-industry-coming-years-2023-07-25/">preferred strategy for Germany too</a>. The UK government has announced its <a href="https://www.ukri.org/news/100m-boost-in-ai-research-will-propel-transformative-innovations/#:%7E:text=%C2%A3100m%20boost%20in%20AI%20research%20will%20propel%20transformative%20innovations,-6%20February%202024&text=Nine%20new%20research%20hubs%20located,help%20to%20define%20responsible%20AI.">plans to invest £100 million</a> to support regulators and universities in addressing challenges around artificial intelligence. </p>
<p>The economic historian Chris Miller, the author of the book Chip War, <a href="https://www.dw.com/en/ai-chip-race-fears-grow-of-huge-financial-bubble/a-68272265">has talked about how powerful chips have become a “strategic commodity”</a> on the global geopolitical stage.</p>
<p>Despite the efforts by several countries to invest in the future of chips, there is currently a shortage of the types currently needed for AI systems. Miller recently explained that 90% of the chips used to train, or improve, AI systems are <a href="https://www.siliconrepublic.com/future-human/chip-war-semiconductors-supply-tech-geopolitics-chris-miller">produced by just one company</a>.</p>
<p>That company is the <a href="https://www.tsmc.com/english">Taiwan Semiconductor Manufacturing Company (TSMC)</a>. Taiwan’s dominance in the chip manufacturing industry is notable because the island is also the focus for tensions between China and the US. </p>
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<strong>
Read more:
<a href="https://theconversation.com/the-microchip-industry-would-implode-if-china-invaded-taiwan-and-it-would-affect-everyone-206335">The microchip industry would implode if China invaded Taiwan, and it would affect everyone</a>
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<p>Taiwan has, for the most part, <a href="https://www.taiwan.gov.tw/content_3.php#:%7E:text=The%20ROC%20government%20relocated%20to,rule%20of%20a%20different%20government.">been independent since the middle of the 20th century</a>. However, Beijing believes it should be <a href="https://www.reuters.com/world/asia-pacific/china-calls-taiwan-president-frontrunner-destroyer-peace-2023-12-31/">reunited with the rest of China</a> and US legislation requires Washington to <a href="https://www.congress.gov/bill/96th-congress/house-bill/2479#:%7E:text=Declares%20that%20in%20furtherance%20of,defense%20capacity%20as%20determined%20by">help defend Taiwan if it is invaded</a>. What would happen to the chip industry under such a scenario is unclear, but it is obviously a focus for global concern.</p>
<p>The disruption of supply chains in chip manufacturing have the potential to bring entire industries to a halt. Access to the raw materials, such as rare earth metals, used in computer chips has also proven to be an important bottleneck. For example, China <a href="https://securityconference.org/en/publications/munich-security-report-2024/technology/">controls 60% of the production of gallium metal</a> and 80% of the global production of germanium. These are both critical raw products used in chip manufacturing.</p>
<figure class="align-center ">
<img alt="Sam Altman" src="https://images.theconversation.com/files/578592/original/file-20240228-30-178em0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578592/original/file-20240228-30-178em0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578592/original/file-20240228-30-178em0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578592/original/file-20240228-30-178em0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578592/original/file-20240228-30-178em0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578592/original/file-20240228-30-178em0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578592/original/file-20240228-30-178em0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">OpenAI CEO Sam Altman has called for a US$5 trillion to $7 trillion investment in chips to support the growth in AI.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/openai-ceo-sam-altman-attends-artificial-2412159621">Photosince / Shutterstock</a></span>
</figcaption>
</figure>
<p>And there are other, lesser known bottlenecks. A process called <a href="https://research.ibm.com/blog/what-is-euv-lithography">extreme ultraviolet (EUV) lithography</a> is vital for the ability to continue making computer chips smaller and smaller – and therefore more powerful. <a href="https://www.asml.com/en">A single company in the Netherlands, ASML</a>, is the only manufacturer of EUV systems for chip production.</p>
<p>However, chip factories are increasingly being built outside Asia again – something that has the potential to reduce over-reliance on a few supply chains. Plants in the US are being subsidised to the tune of <a href="https://securityconference.org/en/publications/munich-security-report-2024/technology/">US$43 billion and in Europe, US$53 billion</a>. </p>
<p>For example, the Taiwanese semiconductor manufacturer TSMC is planning to build a multibillion dollar facility in Arizona. When it opens, that factory <a href="https://theconversation.com/the-microchip-industry-would-implode-if-china-invaded-taiwan-and-it-would-affect-everyone-206335">will not be producing the most advanced chips</a> that it’s possible to currently make, many of which are still produced by Taiwan.</p>
<p>Moving chip production outside Taiwan could reduce the risk to global supplies in the event that manufacturing were somehow disrupted. But this process could take years to have a meaningful impact. It’s perhaps not surprising that, for the first time, this year’s Munich Security Conference <a href="https://securityconference.org/en/publications/munich-security-report-2024/technology/">created a chapter devoted to technology</a> as a global security issue, with discussion of the role of computer chips. </p>
<h2>Wider issues</h2>
<p>Of course, the demand for chips to fuel AI’s growth is not the only way that artificial intelligence will make major impact on geopolitics and global security. The growth of disinformation and misinformation online has transformed politics in recent years by inflating prejudices on both sides of debates. </p>
<p>We have seen it <a href="https://www.jstor.org/stable/26675075">during the Brexit campaign</a>, during <a href="https://journals.sagepub.com/doi/10.1177/20563051231177943">US presidential elections</a> and, more recently, during the <a href="https://apnews.com/article/israel-hamas-gaza-misinformation-fact-check-e58f9ab8696309305c3ea2bfb269258e">conflict in Gaza</a>. AI could be the ultimate amplifier of disinformation. Take, for example, deepfakes – AI-manipulated videos, audio or images of public figures. These could easily fool people into thinking a major <a href="https://www.theguardian.com/us-news/2024/feb/26/ai-deepfakes-disinformation-election">political candidate had said something they didn’t</a>.</p>
<p>As a sign of this technology’s growing importance, at the 2024 Munich Security Conference, 20 of the world’s largest tech companies <a href="https://news.microsoft.com/2024/02/16/technology-industry-to-combat-deceptive-use-of-ai-in-2024-elections/">launched something called the “Tech Accord”</a>. In it, they pledged to cooperate to create tools to spot, label and debunk deepfakes. </p>
<p>But should such important issues be left to tech companies to police? Mechanisms such as the EU’s Digital Service Act, the UK’s Online Safety Bill as well as frameworks to regulate AI itself should help. But it remains to be seen what impact they can have on the issue.</p>
<p>The issues raised by the chip industry and the growing demand driven by AI’s growth are just one way that AI is driving change on the global stage. But it remains a vitally important one. National leaders and authorities must not underestimate the influence of AI. Its potential to redefine geopolitics and global security could exceed our ability to both predict and plan for the changes.</p><img src="https://counter.theconversation.com/content/224438/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alina Vaduva is affiliated with the Labour Party, as a member and elected councillor in Dartford, Kent. </span></em></p><p class="fine-print"><em><span>Kirk Chang does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The effects of AI’s growth on global security could be difficult to predict.Kirk Chang, Professor of Management and Technology, University of East LondonAlina Vaduva, Director of the Business Advice Centre for Post Graduate Students at UEL, Ambassador of the Centre for Innovation, Management and Enterprise, University of East LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2237582024-02-26T17:19:23Z2024-02-26T17:19:23ZRed Sea crisis: with fears of a UK tea shortage, worries are brewing over other crucial commodities<figure><img src="https://images.theconversation.com/files/577598/original/file-20240223-22-io12k4.jpg?ixlib=rb-1.1.0&rect=0%2C5%2C3408%2C2149&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/close-big-cup-tea-brewing-using-1854472879">Stockah/Shutterstock</a></span></figcaption></figure><p>British people are known around the world for their love of tea. This is borne out by the statistics: a staggering <a href="https://www.ibisworld.com/united-kingdom/market-research-reports/tea-processing-industry/">50 billion cups of tea</a> are consumed on average in the UK every year.</p>
<p>Most of this tea is made using black tea leaves, most of which are not produced in the UK. Thus, shipping disruption caused by attacks on merchant vessels in the Red Sea, through which an estimated <a href="https://www.bbc.com/future/article/20240119-red-sea-crisis-how-global-shipping-is-being-rerouted-out-of-danger">12% of global trade</a> passes each year, has <a href="https://www.thetimes.co.uk/article/black-tea-shortage-2024-britain-supply-issues-w2rzxt9tv">sparked fears</a> of a national tea shortage.</p>
<p>The attacks, which are being carried out by the Yemeni Houthi rebel militant group in support of Hamas, have forced shipping companies to redirect around the southern tip of Africa – a journey that can take up to three weeks longer.</p>
<p>Two of the UK’s biggest suppliers of tea, Tetley and Yorkshire Tea, have announced that they are <a href="https://www.bbc.co.uk/news/business-68284391">monitoring</a> their supply chains closely for any potential disruptions. And customers have <a href="https://www.standard.co.uk/business/business-news/tea-drinkers-warned-over-supply-issues-facing-supermarkets-b1138702.html">reported</a> reduced stocks of tea in supermarkets across the UK.</p>
<p>It is no surprise that tea is vulnerable to supply chain disruption. The <a href="https://www.steepedcontent.com/blogs/blog/tea-supply-chain">tea supply chain</a> is a complex global network, involving producers, processors, auctions and wholesalers, packers, distributors and retailers.</p>
<p>The UK imports primarily unprocessed tea from countries in <a href="https://www.foodingredientsfirst.com/news/tea-trouble-red-sea-attacks-impede-tetley-supplies-amid-shipping-disruptions.html">south Asia and east Africa</a>. This tea is then packaged and blended <a href="https://www.cbi.eu/sites/default/files/market-information/cbi_2016_-_tea_-_pfs_uk_-_final_draft_-_adjusted.pdf">within the UK</a> for both domestic and export markets. Only around 10% of the packaged tea sold in the UK is supplied by companies from overseas.</p>
<p>But tea is <a href="https://www.reuters.com/world/uk/britains-tea-supply-facing-disruption-red-sea-crisis-2024-02-13/">one of many items</a> to be caught up in the supply chain crisis. The disruption is affecting supplies across various other sectors too, including <a href="https://theconversation.com/what-the-red-sea-crisis-could-mean-for-the-electric-vehicle-industry-and-the-planet-221074">electric cars</a> and liquified natural gas – and it could prove costly.</p>
<p>The UK is particularly reliant on <a href="https://theconversation.com/the-uk-carbon-dioxide-shortage-still-hasnt-been-resolved-here-are-some-long-term-answers-176910">natural gas</a> for the production of carbon dioxide, a gas that is essential for everything from NHS operations to keeping food fresh while it is transported. </p>
<h2>Not so unpredictable</h2>
<p>The disruption caused by the Red Sea attacks is considered by some to have been an entirely unpredictable occurrence of what is known as a <a href="https://www.logupdateafrica.com/shipping/another-black-swan-event-red-sea-blues-for-supply-chains-1350712">“black swan”</a> event. But this crisis is the latest in a long line of shocks to global supply networks that have occurred over the past decade. </p>
<p>Whether it was the 2011 tsunami off the coast of Japan, Brexit, COVID, US trade sanctions on China, or the war in Ukraine, the fact of the matter is that supply chains are now experiencing disruption more often than they used to. </p>
<p>There are two reasons for this. First, organisations have become increasingly reliant on distant countries for the manufacturing and supply of routine and critical components. </p>
<p>Sometimes this decision is made because of the natural advantage these countries hold. For example, China currently <a href="https://www.nytimes.com/2009/09/01/business/global/01minerals.html">accounts for 93%</a> of the global production of so-called rare earth elements, which are used in the components of many of the devices we use every day. But most of the time these decisions are driven by an organisation’s pursuit of lowering its cost of operation. </p>
<p>Second, a focus on just-in-time production, where businesses focus on producing precisely the amount they need and delivering it as close as possible to the time their customers need it, has reduced the buffer against supply chain shocks.</p>
<h2>Building resilient supply networks</h2>
<p>Organisations need to diversify their supply chains by developing alternate sources of supply. Many businesses already spread their source of materials over multiple suppliers across different regions to ensure quality, the continuity of supply, and to minimise costs.</p>
<p>For less complex components, such as packaging (cardboard, plastic bags and bubble wrap) or raw materials (metals and plastic), multiple sourcing is often practised through competitive tendering and reverse auctions; where the sellers bid for the prices at which they are willing to sell their goods and services. </p>
<p>However, for more complex products, the development of alternate sources of supply needs to be done strategically. One of the most important steps to improve supply chain resilience is to reduce reliance on global suppliers through processes called “onshoring”, “nearshoring” and “friendshoring”. </p>
<p>Onshoring is where components are sourced from suppliers located within domestic national borders. Nearshoring is a similar strategy where a company moves its supply to neighbouring countries. And <a href="https://www.weforum.org/agenda/2023/02/friendshoring-global-trade-buzzwords/">friendshoring</a> is where organisations transfer their production away from geopolitical rivals to friendlier countries. </p>
<p>The US, for example, has traditionally relied on Taiwan and South Korea for its <a href="https://www.cnbc.com/2021/04/12/us-semiconductor-policy-looks-to-cut-out-china-secure-supply-chain.html">supply of semiconductors</a> (computer chips). But geopolitical tensions with China, coupled with a global shortage of semiconductors, have forced the US to look for suppliers in countries closer to home, while also exploring the potential of <a href="https://www.theguardian.com/business/2023/aug/28/phoenix-microchip-plant-biden-union-tsmc">moving chip manufacturing</a> to the US.</p>
<p>Geographical and climate factors restrict the onshoring of tea cultivation to the UK. But these supply strategies could help businesses manage the risk of supply chain disruption to other, potentially more critical, commodities.</p>
<figure class="align-center ">
<img alt="A large glass building under construction in a desert." src="https://images.theconversation.com/files/577617/original/file-20240223-22-675qmd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/577617/original/file-20240223-22-675qmd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/577617/original/file-20240223-22-675qmd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/577617/original/file-20240223-22-675qmd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/577617/original/file-20240223-22-675qmd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=505&fit=crop&dpr=1 754w, https://images.theconversation.com/files/577617/original/file-20240223-22-675qmd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=505&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/577617/original/file-20240223-22-675qmd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=505&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Taiwanese microchip manufacturer TSMC are building a plant in Phoenix, Arizona.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/phoenix-arizona-march-08-2023-ongoing-2272666939">Around the World Photos/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Making supply chains more agile</h2>
<p>The frequency with which global supply chains are now becoming disrupted means that organisations must rethink their supply chain strategies, evolving from being efficient and lean to flexible and agile. </p>
<p>An agile supply chain strategy will require businesses to maintain adequate inventory levels to guard against a situation where stock runs out. These inventory levels must be informed by real-time – or as close to real-time as possible – data on customer demand.</p>
<p>The disruption to the UK’s tea supply highlights the vulnerability of supplies of everyday essentials to unexpected events. But businesses can make sure they are better prepared for the occurrence of an unexpected event by enhancing the resilience of their supply chain through diversification and agility.</p><img src="https://counter.theconversation.com/content/223758/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jas Kalra does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Tea supplies are under threat as a shipping crisis continues in the Red Sea.Jas Kalra, Associate Professor of Operations & Project Management, Manchester Metropolitan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2225622024-02-07T12:03:07Z2024-02-07T12:03:07ZUK peatlands are being destroyed to grow mushrooms, lettuce and houseplants – here’s how to stop it<figure><img src="https://images.theconversation.com/files/573477/original/file-20240205-17-9w5rwe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Peat is a natural carbon sink but is often found in house plants and other retail products, particularly within the food and farming industry. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/woman-transplanting-houseplant-into-new-pot-2321168311">New Africa/Shutterstock</a></span></figcaption></figure><p>During the long, solitary days of lockdown, I found solace in raising houseplants. Suddenly stuck at home, I had more time to perfect the watering routine of a fussy Swiss cheese plant, and lovingly train our devil’s ivy to delicately frame the bookcases. </p>
<p>But I started noticing that these plants, sourced online, often arrived in the post with a passport. Most had travelled from all over Europe, with one common tagline: contains peat.</p>
<p>As a peatland scientist, these labels instantly filled me with horror. <a href="https://www.wildlifetrusts.org/ban-sale-peat">Hidden Peat</a>, a new campaign launched by The Wildlife Trusts, is now highlighting the presence of peat in all sorts of consumer products, including house plants. </p>
<p>Peatlands, such as bogs and fens, store more carbon than all of the <a href="https://www.iucn.org/resources/issues-brief/peatlands-and-climate-change">world’s forests combined</a>. They trap this carbon in the ground for centuries, preventing it from being released into the atmosphere as greenhouse gases that would further warm the climate. </p>
<p>Peatlands have <a href="https://www.ons.gov.uk/economy/environmentalaccounts/bulletins/uknaturalcapitalforpeatlands/naturalcapitalaccounts">multiple environmental benefits</a>. They are havens for wildlife, providing habitat for wetland birds, insects and reptiles. They supply more than 70% of our drinking water and help protect our homes from flooding. </p>
<p>So why on earth is peat being ripped from these vital ecosystems and stuffed inside plant pots?</p>
<h2>From sink to source</h2>
<p>Despite their importance, peatlands have been systematically drained, farmed, dug up and sold over the last century. In the UK, only <a href="https://assets.publishing.service.gov.uk/media/649d6fe1bb13dc0012b2e349/lowland-agricultural-peat-task-force-chairs-report.pdf">1% of lowland peat</a> remains in its natural state. </p>
<p>Instead of acting as a carbon sink, it has become one of the <a href="https://oro.open.ac.uk/50635/">largest sources</a> of greenhouse gas emissions in the UK’s land use sector. When waterlogged peat soils are drained, microbes decompose the plant material within it and that results in the <a href="https://www.ceh.ac.uk/sites/default/files/Peatland%20factsheet.pdf">release of greenhouse gases</a> such as methane into the air. </p>
<p>Most of the peat excavated, bagged up and sold in the UK is used as a growing medium for plants. Gardeners have become increasingly aware of this problem. Peat-free alternatives have been gaining popularity and major retailers have been phasing out peat-based bagged compost in recent years. </p>
<p>Indeed, the UK government announced they would ban sales of all peat-based compost <a href="https://www.gov.uk/government/news/sale-of-horticultural-peat-to-be-banned-in-move-to-protect-englands-precious-peatlands">by 2024</a>. But this legislation has not yet been written and it seems unlikely it will be enacted before the end of the current parliament. </p>
<p>Even if brought in to law, this ban would only stop the sales of peat-based bagged compost of the type you might pick up in the garden centre. Legislation for commercial growers is not expected until 2030 at the earliest. So the continued decimation of the UK’s peatlands could remain hidden in supply chains long after we stop spreading peat on our gardens. </p>
<h2>Hide and seek peat</h2>
<p>For consumers, it’s almost impossible to <a href="https://www.wildlifetrusts.org/news/devastating-using-peat-uk-horticulture#:%7E:text=In%202020%20alone%2C%20nearly%20900%2C000%20cubic%20metres%20of%20peat%20were%20extracted%20from%20UK%20soils%2C%20with%20a%20further%201.4%20million%20cubic%20metres%20of%20peat%20imported%20from%20Ireland%20and%20the%20rest%20of%20Europe">identify products</a> that contain peat or use peat in their production. All large-scale commercial mushroom farming involves peat and it is used for growing most leafy salads. It gives that characteristic peaty aroma to whisky, and, as I found out, is a popular growing medium for potted plants. </p>
<p>But you’d struggle to find a peat-free lettuce in the supermarket. The Hidden Peat campaign asks consumers to call for clear labelling that would enable shoppers to more easily identify peat-containing products. Shoppers are also encouraged to demand transparency from retailers on their commitment to removing peat from their supply chains. </p>
<p>You can ask your local supermarket about how they plan to phase out peat from their produce. Some supermarkets are actively investing in new technologies for <a href="https://www.newscientist.com/article/2326773-uk-mushroom-growing-uses-100000-m%25c2%25b3-of-peat-a-year-can-we-do-better/">peat-free mushroom farming</a>. </p>
<p>Make informed purchases by checking the labels on garden centre potted plants or source plants from peat-free nurseries. The Royal Horticultural Society lists more than 70 UK nurseries dedicated to <a href="https://www.rhs.org.uk/advice/peat/peat-free-nurseries">peat-free growing</a>. </p>
<p>You can write to your MP to support a ban on peat extraction and, crucially, the sale of peat and peat-containing products in the UK. That ensures that peat wouldn’t just get imported from other European countries. </p>
<h2>Pilots and progress</h2>
<p>The UK government recently announced <a href="https://www.gov.uk/government/publications/lowland-agricultural-peat-water-for-peat-pilots/lowland-agricultural-peat-water-for-peat-pilots">£3.1m funding</a> for pilot projects to rewet and preserve lowland peat, with peat restoration seen as a cornerstone of net zero ambitions. This campaign calls for further acceleration of peatland restoration across the UK. </p>
<p>As a research of the science behind <a href="https://www.linkedin.com/pulse/fin-ring-hrubesh-peatland-restoration">peatland restoration</a>, I see firsthand the enormous effort involved in this: the installation of dams to block old agricultural drainage ditches, the delicate management of water levels and painstaking monitoring of the peat wetness.</p>
<p>I spend a lot of time taking samples, monitoring the progress, feeding results back to the land managers. Like many other conservationists, I work hard to find ways to preserve these critical habitats. </p>
<p>But sometimes, there may be a digger in the adjacent field doing more damage in a day than we could undo in a lifetime. That’s the reality, and the insanity, of the UK’s current peatland policies. </p>
<p>We heavily invest in restoring peatlands, yet fail to ban its extraction – the one action that would have the most dramatic impact. By demanding that peat is not only eradicated from garden compost, but weeded out of our supply chains, we can keep peat in the ground, not in pots.</p>
<hr>
<figure class="align-right ">
<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
<br><em><a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeTop">Get a weekly roundup in your inbox instead.</a> Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. <a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeBottom">Join the 30,000+ readers who’ve subscribed so far.</a></em></p>
<hr><img src="https://counter.theconversation.com/content/222562/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Casey Bryce works with the Somerset Wildlife Trust to monitor peat restoration, funded by the University of Bristol department for alumni relations. </span></em></p>Hidden Peat, a new campaign from The Wildlife Trusts, encourages people to look out for peat-free alternatives and support their wider use.Casey Bryce, Senior Lecturer, School of Earth Sciences, University of BristolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2216072024-02-06T06:03:26Z2024-02-06T06:03:26ZFinding a reasonably priced new car is almost impossible. And the second hand market is not much better<figure><img src="https://images.theconversation.com/files/573679/original/file-20240206-17-h0yyn4.jpg?ixlib=rb-1.1.0&rect=246%2C202%2C5060%2C3470&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/couple-dealer-selling-cars-look-car-1579747456">Studio Romantic/Shutterstock</a></span></figcaption></figure><p>Despite most businesses around the world returning to some form of normal after the pandemic, supply chain problems continue to disrupt the manufacturing and availability of new and second hand cars.</p>
<p>This disruption has caused vehicle prices to sky-rocket, adding to cost-of-living pressures already being experienced by most Australians.</p>
<p>Car prices in Australia rose throughout 2023 with an <a href="https://premium.goauto.com.au/car-prices-exceed-inflation/">average increase of almost 20%</a> since April 2020, even faster than the consumer price index.</p>
<p>The increase has varied depending on the model, but the biggest increases – of about 25% – have been in the small car sector.</p>
<p><iframe id="ILUD0" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/ILUD0/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>This resembles the situation in Europe where the prices of the cheapest models produced by the five biggest carmakers have increased by <a href="https://www.transportenvironment.org/discover/carmakers-are-hiking-the-prices-of-small-cars-far-above-inflation/">an average of 41% since 2019</a>.</p>
<h2>The impact of supply not matching demand</h2>
<p>The availability and cost of buying new cars in Australia have been impacted by both demand and supply issues.</p>
<p>On the demand side, many new orders have been delayed by time lost during the lockdowns followed by strict social distancing requirements holding up work at all stages of the manufacturing process.</p>
<p>This has been worsened by new car demand increasing across all markets. In Europe, new vehicle registrations rose <a href="https://www.bloomberg.com/news/articles/2023-10-20/europe-car-sales-extend-winning-streak-on-large-order-backlogs">11% in October 2023 for 14th consecutive month</a>. The Federal Chamber of Automotive Industries in Australia also recorded <a href="https://www.fcai.com.au/news/index/view/news/806">breaking new vehicles sales</a> in August 2023 with 15.4% increase compared to the same period in 2022.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/what-the-red-sea-crisis-could-mean-for-the-electric-vehicle-industry-and-the-planet-221074">What the Red Sea crisis could mean for the electric vehicle industry and the planet</a>
</strong>
</em>
</p>
<hr>
<p>There has also been an ongoing global shortage of semiconductors to make
<a href="https://www.techrepublic.com/article/global-chip-shortage-cheat-sheet/">computer chips</a>. Not only are these chips commonly used in household devices, they are essential as cars are increasingly automated and electric vehicles become popular.</p>
<h2>Geopolitical tensions</h2>
<p>The shortage and associated hold ups, has been exacerbated by conflict in the Middle East, particularly the Israel-Hamas war as <a href="https://techinformed.com/israel-hamas-war-could-endanger-advanced-chip-supply/">Israel</a> is a major supplier of chips to the world.</p>
<p>Shipping delays caused by the need to re-route <a href="https://www.ft.com/content/97dd4654-995f-4bfa-aa45-2f6f4736cdef">car carriers</a> due to attacks by Houthi rebels on ships operated by supporters of Israel in the conflict have also held up supply.</p>
<p>A shortage of the special RORO (roll on, roll off) shipping carriers used to transport cars has added to delays. While demand for car carriers has <a href="https://www.tradewindsnews.com/opinion/car-carrier-shortage-bodes-well-for-pctc-sector-as-demand-for-vehicles-drives-upwards/2-1-1525444">grown 37%</a> since 2019, the fleet has barely grown.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/573652/original/file-20240206-25-u47b93.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Thousands of new cars parked on a wharf waiting to be loaded onto a cargo ship" src="https://images.theconversation.com/files/573652/original/file-20240206-25-u47b93.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/573652/original/file-20240206-25-u47b93.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/573652/original/file-20240206-25-u47b93.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/573652/original/file-20240206-25-u47b93.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/573652/original/file-20240206-25-u47b93.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/573652/original/file-20240206-25-u47b93.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/573652/original/file-20240206-25-u47b93.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A shortage of RORO (roll on, roll off) carriers is contributing to delays in new car supplies.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/aerial-view-vehicle-carrier-vessel-loading-2104257590">Avigator/Fortuna/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Problems at the Australian end</h2>
<p>When shipments do finally arrive at the Australian ports, they face port congestion. This is caused by several factors: </p>
<ul>
<li><p>large amounts of cargo arriving at Australian ports and terminals at the same time as previously delayed exports are being sent offshore</p></li>
<li><p>higher demand for <a href="https://www.drive.com.au/news/quarantine-crisis-deepens-thousands-cars-stranded/">quarantine checks</a> after pests and seeds were found in 1000s of vehicles being brought in from Asia and Europe last year</p></li>
<li><p>insufficient labour to conduct biosecurity checks and handle cargo</p></li>
<li><p>industrial action, such as the ongoing dispute at <a href="https://www.afr.com/work-and-careers/workplace/dp-world-calls-for-circuit-breaker-to-ports-disputes-20240122-p5ez4p">DP World-operated ports</a>, affecting productivity.</p></li>
</ul>
<h2>A second hand solution?</h2>
<p>Understandably, when there is a shortage of new cars and prices are high, consumers have turned to second-hand cars which are already in the country. However, this has led to a supply-demand imbalance, reducing the availability and increasing the cost of this once cheaper option.</p>
<p>The longer the wait for new cars and the higher the costs, the greater the pressure on the second-hand car market.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/attacks-on-cargo-ships-in-the-red-sea-threaten-australias-trade-we-need-a-plan-b-220541">Attacks on cargo ships in the Red Sea threaten Australia's trade – we need a Plan B</a>
</strong>
</em>
</p>
<hr>
<p>Some strategic customers may worsen the problem by registering to buy several different cars and then only buying the first one that arrives, therefore jacking up the demand and slowing down the process. They may also demand a high price for their used car, putting a vehicle out of reach for some would-be buyers.</p>
<h2>It will take time to resolve</h2>
<p>Supply will gradually catch up with demand, therefore easing the problem. But the current global geopolitical tensions and industrial action on the wharves, makes it difficult to predict when this will happen.</p>
<p>In the short term, the Albanese government may need to intervene to deter unhealthy trading practices. This could be achieved in the short term by imposing higher taxes on people who register to buy more cars than they need for personal use.</p><img src="https://counter.theconversation.com/content/221607/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Vinh Thai does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Several years on from the pandemic, the demand for new cars still outstrips supply. But turning to the second hand market is not the solution.Vinh Thai, Professor, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2209862024-01-30T12:31:12Z2024-01-30T12:31:12Z‘We miners die a lot.’ Appalling conditions and poverty wages: the lives of cobalt miners in the DRC<figure><img src="https://images.theconversation.com/files/569013/original/file-20240112-27-c98vr0.jpg?ixlib=rb-1.1.0&rect=620%2C178%2C3127%2C1977&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Labourers load sacks of cobalt onto bicycles at Mutoshi mine in July 2021.
</span> <span class="attribution"><span class="source">Roy Maconachie</span></span></figcaption></figure><p>It was a cool, dusty morning in July 2021, when I first visited the Kamilombe cobalt mine in Lualaba Province in south-eastern Democratic Republic of Congo. Situated just outside Kapata on the south-west outskirts of Kolwezi, a mining town that has historically served as an important centre for copper and cobalt, Kamilombe is now one of hundreds of spontaneously emerging cobalt mining sites in the region, where an enormous workforce of artisanal miners, called “creuseurs”, extract and process cobalt ore using rudimentary hand tools.</p>
<p>Estimates suggest that as many as <a href="https://www.faircobaltalliance.org/blog/the-fatal-toll-of-artisanal-cobalt-mining-continues-is-responsible-asm-even-possible/">11,000 men and women</a> work on the site, the majority of whom have no other means of deriving a livelihood.</p>
<p>Risking their lives, they tunnel deep into the red earth, excavating cobalt in shafts that descend as deep as 100 metres, and yet they receive almost none of the profits. Instead, they endure <a href="https://humantraffickingsearch.org/resource/modern-slavery-the-true-cost-of-cobalt-mining/#:%7E:text=Thousands%20of%20artisanal%20miners%20dig,shield%20toxic%20dust%20or%20shoes.">perilous working conditions</a>, <a href="https://www.amnesty.org/en/wp-content/uploads/2021/05/AFR6231832016ENGLISH.pdf">human rights abuses</a>, and are paid <a href="https://www.theguardian.com/global-development/2021/nov/08/cobalt-drc-miners-toil-for-30p-an-hour-to-fuel-electric-cars">poverty wages</a> by agents and buyers who source small amounts from each miner at so called “buying houses”. </p>
<p>This story of labour exploitation and unequal exchange in Africa has become an all-too-familiar one to me. For the last 20 years, I’ve dedicated my <a href="https://researchportal.bath.ac.uk/en/persons/roy-maconachie">academic career</a> to researching the social, political and economic aspects of natural resources extracted or grown in sub-Saharan Africa. </p>
<figure class="align-center ">
<img alt="Close up of hands washing ore." src="https://images.theconversation.com/files/569049/original/file-20240112-25-va5dfq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569049/original/file-20240112-25-va5dfq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569049/original/file-20240112-25-va5dfq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569049/original/file-20240112-25-va5dfq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569049/original/file-20240112-25-va5dfq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569049/original/file-20240112-25-va5dfq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569049/original/file-20240112-25-va5dfq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Women washers handling raw cobalt ore display dangerously high levels of heavy metals in their bloodstreams, increasing the risk of having still born babies or children with birth defects.</span>
<span class="attribution"><span class="source">Roy Maconachie</span></span>
</figcaption>
</figure>
<p>My first visit to the Kamilombe cobalt mine had a dramatic impact on me. I was eager to visit the site because I had heard many encouraging things about it. Since 2004, Kamilombe has been run by a mining cooperative called la <a href="https://www.cmds.network/">Coopérative Minière pour le Développement Social</a> (CMDS), which has partnered with the <a href="https://www.faircobaltalliance.org/">Fair Cobalt Alliance</a> to try and improve artisanal <a href="https://www.faircobaltalliance.org/blog/the-fatal-toll-of-artisanal-cobalt-mining-continues-is-responsible-asm-even-possible/">miners’ safety and wellbeing</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/from-cobalt-to-tungsten-how-electric-cars-and-smartphones-are-sparking-a-new-kind-of-gold-rush-100838">From cobalt to tungsten: how electric cars and smartphones are sparking a new kind of gold rush</a>
</strong>
</em>
</p>
<hr>
<p>Although it is well known that artisanal mining is now a vital rural livelihood in developing countries around the world, with World Bank estimates suggesting that there may now be as many as <a href="https://www.internationaltin.org/artisanal-small-scale-mining/">100 million artisanal miners globally</a>, a major concern has focused on its informal nature. Most artisanal mining sites are found in remote locations, remain unplanned and unregulated, and are subject to a host of social and environmental problems.</p>
<p>But at the same time, there has been much fanfare around the idea of organising artisanal miners into cooperatives, as a potential solution to this problem. By organising miners into groups and giving them a stronger collective voice, many argue that this could provide the necessary space for them to challenge their exploitation, including low pay, poor and unsafe working conditions, and human rights abuses. I was eager to find out if the situation at Kamilombe was any different, or if it would just be business as usual.</p>
<hr>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/288776/original/file-20190820-170910-8bv1s7.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/288776/original/file-20190820-170910-8bv1s7.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/288776/original/file-20190820-170910-8bv1s7.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/288776/original/file-20190820-170910-8bv1s7.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/288776/original/file-20190820-170910-8bv1s7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/288776/original/file-20190820-170910-8bv1s7.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/288776/original/file-20190820-170910-8bv1s7.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><strong><em>This article is part of Conversation Insights</em></strong>
<br><em>The Insights team generates <a href="https://theconversation.com/uk/topics/insights-series-71218">long-form journalism</a> derived from interdisciplinary research. The team is working with academics from different backgrounds who have been engaged in projects aimed at tackling societal and scientific challenges.</em></p>
<hr>
<p>As we sat on a pile of sacks of cobalt ore in the early morning sun, Ghlislain Mujinga Kaungu, a 28-year cobalt miner and father of five, told me how the rising global demand for cobalt had transformed both the landscape and communities in the region. As we peered into the depths of Ghlislain’s mining pit he explained:</p>
<blockquote>
<p>There are people who come from Kasai, the Chinese who leave China to come here, Canadians who leave their country to come here. All these people come to get the minerals. The ore is very good. It is very good.</p>
</blockquote>
<h2>‘The work we do is hard’</h2>
<p>Five months after my first visit, during the rainy season in December 2021, I returned to the Kamilombe mine to spend more time with the creuseurs, understand more about their difficult predicament, and this time, to produce a short documentary film on their lives.</p>
<p>The creuseurs that I met on site at Kamilombe, and the stories they shared, haunted me. They told me about the severe environmental damage and social harm caused by the rapidly growing extraction of cobalt, and the unequal terms of trade that cut them off completely from the wealth being generated.</p>
<p>Most of the miners I spoke to were well aware that they were being exploited. Many told me they only started mining because they wanted to create a better life for their kids. It is easy to understand why a parent would tolerate hardship, injustice and risk, if it could help their children.</p>
<figure>
<iframe src="https://player.vimeo.com/video/776698318" width="500" height="281" frameborder="0" webkitallowfullscreen="" mozallowfullscreen="" allowfullscreen=""></iframe>
</figure>
<p>Listening to their stories, it became immediately apparent that most miners endured such horrific working conditions because there were no other options in an employment-constrained economy. Mama Kalonda Alphonsine, a mother of eight and an ore washer at the Kamilombe mine, explained:</p>
<blockquote>
<p>The work we do is hard because it’s a job you do all day long. And you have to bend all the time. We only do this work because we don’t have the means to survive.</p>
</blockquote>
<p>Likewise, according to Ghlislain: “I have to go down the pit to feed my family. I don’t even have 100 Congolese francs in my house. There is no flour or vegetables.” </p>
<p>Ghislain went on: “I don’t wish my children to be miners. Not even for a single day. Normally, if I get 100 francs from the Chinese, I’ll put it towards their schooling, so that they become respectable people. So I can be proud when people say, ‘this is Ghislain’s son or daughter’.”</p>
<p>Such sentiments were confirmed by Pitchou, a 40-year-old ore transporter and father of four who had dropped out of university to haul bags of cobalt from the mining pit to the washing site on his bicycle. Pitchou said:</p>
<blockquote>
<p>My bike is important because it is what feeds us, me my wife and my children. But the wish I have for my children when they grow up is that they must go to school. Because the education they are going to get will help them in future … My children should never go to the mine, they should focus on school because school is the future …</p>
</blockquote>
<p>Even with our much greater awareness of global supply chains and volumes written about fair trade and sustainability, neocolonial exploitation is as much a part of the fabric of mineral extraction in the DRC as it ever was. But economic exploitation is only part of the story.</p>
<figure class="align-center ">
<img alt="Two men hauling sacks of cobalt on a bike surrounded by three women." src="https://images.theconversation.com/files/569054/original/file-20240112-15-575fwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569054/original/file-20240112-15-575fwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569054/original/file-20240112-15-575fwr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569054/original/file-20240112-15-575fwr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569054/original/file-20240112-15-575fwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569054/original/file-20240112-15-575fwr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569054/original/file-20240112-15-575fwr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Washers intercept an ore hauler to secure his cobalt for washing at Kamilombe.</span>
<span class="attribution"><span class="source">Roy Maconachie</span></span>
</figcaption>
</figure>
<h2>‘We miners die a lot’</h2>
<p>While I was filming with cobalt miners during the rainy season, one of the mining pits collapsed. Six miners were killed and the depth and design of the tunnels meant that the bodies could not be recovered. Ghislain told me:</p>
<blockquote>
<p>We have many cases of accidents during the rainy season. When it rains, a tarpaulin is put over the pit but if it rains heavily, the tarpaulin can tear. Water enters the pit, and anyone inside can drown.</p>
</blockquote>
<p>And to be sure, all the miners I spoke to feared such a disaster could happen to them at any time. Such incidents occur on a regular basis and in January 2023, a similar cave-in at Kamilombe was <a href="https://www.faircobaltalliance.org/blog/the-fatal-toll-of-artisanal-cobalt-mining-continues-is-responsible-asm-even-possible/">reported by David Sturmes</a>, the strategic partnerships director for the Fair Cobalt Alliance. He said: “A lack of mine planning and the resulting inability to manage water flooding into the mine after days of heavy rains caused individual tunnels to be blocked off, leaving no route to escape. The resulting pressure affected the structural integrity of the tunnel walls, causing cave-ins. Sadly, these kinds of incidents are not uncommon at most informal mines.”</p>
<p>For many creuseurs, part of the attraction of artisanal cobalt mining is the sector’s low “barriers to entry”. You don’t need advanced skills, a university degree, or large amounts of capital to invest. Anyone can become an artisanal miner. </p>
<p>However, there is also a downside to this. Compared to large-scale industrial mines, where there are significant capital investments in site preparation and development, artisanal mine sites are usually financed through their erratic cash flow.</p>
<p>More often than not, this leaves cooperatives unable to make much-needed investments in mine infrastructure. Death and injury is common among artisanal miners, due to both tunnel collapses and working without personal protective equipment. In the words of Ghislain:</p>
<blockquote>
<p>Sometimes we are afraid because if you look at the ceiling (of the tunnel), you will see that it is already very fragile. The ceiling is already damaged. So, if we don’t make repairs, at some point when you’re down there, things are going to fall on you. And this can result in either a broken leg or a broken hand, or your skull will be fractured. Collapses are very frequent. We miners die a lot.</p>
</blockquote>
<h2>Toxic dust and birth defects</h2>
<p>Further compounding the hazardous working conditions, cobalt dust is toxic, affecting all those working in mines, but also those <a href="https://www.amazon.co.uk/Cobalt-Red-Blood-Congo-Powers/dp/1250284309">in the wider community</a>. People living near the mines display raised levels of cobalt in their urine and blood, and oxidative damage to DNA in children related to cobalt toxicity <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6166862/">has been demonstrated</a>.</p>
<p>That research also found high concentrations of uranium in the urine of exposed children and miners. Correlations have been found between levels of uranium in urine and drinking water.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/569047/original/file-20240112-15-c98vr0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Close up of a sack of cobalt being shipped to China." src="https://images.theconversation.com/files/569047/original/file-20240112-15-c98vr0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569047/original/file-20240112-15-c98vr0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569047/original/file-20240112-15-c98vr0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569047/original/file-20240112-15-c98vr0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569047/original/file-20240112-15-c98vr0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569047/original/file-20240112-15-c98vr0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569047/original/file-20240112-15-c98vr0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Crude cobalt hydroxide is loaded onto trucks destined for South African ports, before being shipped to China for refining and use.</span>
<span class="attribution"><span class="source">Roy Maconachie</span></span>
</figcaption>
</figure>
<p>It is often the case that women wash the raw ore after it has been extracted, and pregnant women handling radioactive cobalt report stillbirths. A Lancet study found that pregnant women living in cobalt-mining communities have the highest levels ever reported of <a href="https://www.thelancet.com/journals/lanplh/article/PIIS2542-5196(20)30059-0/fulltext">heavy metals in their blood</a>. The same study demonstrated a five-fold increase in risk of birth defects in babies born to fathers working in cobalt mines.</p>
<p>Alphonsine, eloquently described the horrific conditions that washers must endure: </p>
<blockquote>
<p>There are several problems in doing this work. First is the dirty water in which we are forced to work. Typhoid fever is common. We also often suffer from stomach pains and get infections, and as soon as we have a small fever, we get tested and find out it’s malaria. Women should not be washing these types of minerals, because they contain uranium. If uranium enters the body of a pregnant woman, it can cause a miscarriage or the baby to be malformed.</p>
</blockquote>
<p>Another danger to the community are the sites themselves. Disused mining pits are often left abandoned like open sores on the landscape. Instead of being filled in and rehabilitated they fill with water, becoming breeding grounds for malaria-carrying mosquitos and a drowning hazard for local children. </p>
<p>No-one is held accountable. Recent comparisons of time-lapse satellite imagery over the past five years demonstrates the dramatic growth of cobalt mines in and around Kolwezi.</p>
<p>A recent story <a href="https://abcnews.go.com/International/cobalt-mining-transforms-city-democratic-republic-congo-satellite/story?id=96795773">by ABC News noted:</a> “The mines aren’t only growing around the city, they are often creeping into people’s neighbourhoods … satellite images of the west of the city reveal entire streets have disappeared over the last few years.”</p>
<h2>The invisible face of the cobalt rush</h2>
<p>Hunting for the buried blue treasure – a key ingredient in the lithium-ion batteries used in consumer electronics and electric vehicles that are vital to global efforts to combat climate change – artisanal miners like Ghislain have long been the invisible face of the cobalt rush. Until recently, their stories have been largely overlooked or ignored.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/victims-of-the-green-energy-boom-the-indonesians-facing-eviction-over-a-china-backed-plan-to-turn-their-island-into-a-solar-panel-ecocity-214755">Victims of the green energy boom? The Indonesians facing eviction over a China-backed plan to turn their island into a solar panel 'ecocity'</a>
</strong>
</em>
</p>
<hr>
<p>However, all this seemed to change in recent years. A number of <a href="https://www.ft.com/cobalt1">high-profile</a> stories have shone a light on how skyrocketing demand for so-called “critical” minerals, such as cobalt, can wreak havoc on people and the environment at the bottom of the supply chain. </p>
<p>In his portrayal of the “dark side” of Congo’s cobalt rush <a href="https://www.newyorker.com/magazine/2021/05/31/the-dark-side-of-congos-cobalt-rush">in The New Yorker</a>, journalist Nicolas Niarchos goes as far as to describe how, upon discovering that his house sat upon a rich seam of cobalt, one resident on the outskirts of Kolwezi tunnelled down 30ft through the floor of his kitchen to haul out ore at night.</p>
<p>The Congolese cobalt rush fuels a <a href="https://www.forbes.com/sites/jenniferwang/2021/05/03/this-chinese-battery-company-has-produced-more-billionaires-than-google-or-facebook/">multi-billion-dollar industry</a> for international mining companies and buying agents – often from China – that have moved into the country. Southern Congo sits upon <a href="https://spheresofinfluence.ca/coblat-mining-drc-green-technology/">3.4 million tons of cobalt</a>, an estimated two thirds of the world’s known supply.</p>
<p>Yet despite the frenzy of activity from foreign agents desperate to secure supplies of cobalt, many miners admitted that they were not entirely sure why there was so much interest in the mineral.</p>
<p>Alphonsine told me that she didn’t know what happened to the cobalt she washed, after it left the site. She said:</p>
<blockquote>
<p>The cobalt will be sold abroad. We heard they sell it to China. How the product will be used in China is not known. We are only told that this product has several uses. But we don’t know what they are.</p>
</blockquote>
<p>In 2021, Chinese companies produced <a href="https://www.statista.com/statistics/1249871/share-of-the-global-lithium-ion-battery-manufacturing-capacity-by-country/#:%7E:text=China%20dominated%20the%20world%27s%20electric,that%20entered%20the%20global%20market.">79%</a> of the world’s electric vehicle lithium-ion batteries and have established a major presence in the DRC, creating new forms of corporate “colonialism”.</p>
<figure class="align-center ">
<img alt="Woman washed what looks like rocks in water." src="https://images.theconversation.com/files/569046/original/file-20240112-25-i1yag7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569046/original/file-20240112-25-i1yag7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569046/original/file-20240112-25-i1yag7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569046/original/file-20240112-25-i1yag7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569046/original/file-20240112-25-i1yag7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569046/original/file-20240112-25-i1yag7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569046/original/file-20240112-25-i1yag7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Mama Kalonda Alphonsine washes cobalt ore. Women are paid the equivalent of US$3.75 for cleaning one full sack.</span>
<span class="attribution"><span class="source">Roy Maconachie</span></span>
</figcaption>
</figure>
<p>Ghislain told me that artisanal miners have very little bargaining power when it comes to negotiating with buying agents or securing a fair price for their cobalt. He explained:</p>
<blockquote>
<p>You will see that to buy the ore, everyone has their price. Instead of buying well so that we too can win, they buy the products maliciously. When you bring the product to a buying house, they will force the price on you. And if you don’t agree, they will ask you to leave.</p>
</blockquote>
<p>As the world transitions to electric vehicles, competition over supplies of cobalt continues to intensify, with global demand set to increase up to <a href="https://www.sciencedirect.com/science/article/pii/S0921344923000575">eight-fold by 2040</a>. This, in turn, has ratcheted up geopolitical tensions and <a href="https://theconversation.com/china-us-tensions-how-global-trade-began-splitting-into-two-blocs-188380">a new rivalry between the US and China</a>, both of which seek to dominate the green energy revolution.</p>
<p>Against this backdrop, the OECD estimates that there are more than <a href="https://mneguidelines.oecd.org/Interconnected-supply-chains-a-comprehensive-look-at-due-diligence-challenges-and-opportunities-sourcing-cobalt-and-copper-from-the-DRC.pdf">200,000 creuseurs</a>, often labouring alongside large-scale industrial operations, who extract <a href="https://www3.weforum.org/docs/WEF_Making_Mining_Safe_2020.pdf">up to 30%</a> of Congo’s cobalt.</p>
<h2>Child labour</h2>
<p>Evidence <a href="https://www.childrights-business.org/resources/study-opportunities-for-businesses-to-promote-child-rights-in-cobalt-artisanal-and-small-scale-mining.html#:%7E:text=The%20study%20examines%20the%20current,labour%20and%20improving%20child%20rights.">from the charity Save the Children</a> suggests that the majority of Congolese artisanal miners earn less than the DRC national minimum wage of $USD5 per day, and there is a significant gender pay gap, with women earning considerably less than men.</p>
<p>Moreover, some estimates indicate that there may be as many as 40,000 children engaged in artisanal cobalt mining in the country. Such claims have provided fertile ground for <a href="https://www.theguardian.com/global-development/2019/dec/16/apple-and-google-named-in-us-lawsuit-over-congolese-child-cobalt-mining-deaths">a high-profile legal case</a> against the world’s largest tech companies, launched in December 2019 by Congolese families, over deaths and serious injuries sustained by child labourers in cobalt mines.</p>
<p>In October 2022, the US Department of Labour added lithium-ion batteries to its list of goods <a href="https://abcnews.go.com/International/cobalt-mining-transforms-city-democratic-republic-congo-satellite/story?id=96795773">produced by child labour</a>.</p>
<p>While it can certainly be argued that powerful multinational companies such as Apple, Google or Tesla should have the resources and technical capability to effectively monitor their supply chains and source their cobalt responsibly, traceability remains difficult. Numerous well-meaning transnational initiatives now exist to improve supply chain transparency, most of which align with <a href="https://www.oecd.org/investment/due-diligence-guidance-for-responsible-business-conduct.htm">OECD due diligence guidance</a>.</p>
<h2>No such thing as ‘clean cobalt’</h2>
<p>At the same time, a significant challenge remains: there are a multitude of intermediaries in the mid and upper-tiers of the cobalt supply chain <a href="https://assets.ctfassets.net/y0dk4vkszqeh/1r5ZlwmS51Zy010gCdUzqs/03b6fd20c2d79c68c4407e439fa2991f/Study_Tracing_Cobalt_in_Fragmented_Supply_Chains.pdf">whose business strategies benefit</a> from opaque practices. Profit margins are much higher when it’s possible to purchase cobalt that is extracted under slave-like conditions.</p>
<p>And the reality is that cobalt unearthed by creuseurs is bought by agents and processed alongside cobalt from large-scale mines, with <a href="https://www.cecc.gov/events/hearings/from-cobalt-to-cars-how-china-exploits-child-and-forced-labor-in-the-congo">over 80%</a> of it then being refined in China. Under such circumstances, the supply chain cannot be fully regulated or monitored: it becomes cross-contaminated, and both sources of cobalt end up in electric vehicles and devices purchased around the world. As things stand, there is no such thing as “clean cobalt”.</p>
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Read more:
<a href="https://theconversation.com/eco-friendly-tech-comes-with-its-own-environmental-costs-thats-why-its-vital-to-cut-energy-demand-now-183567">Eco-friendly tech comes with its own environmental costs: that's why it's vital to cut energy demand now</a>
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<p>While many African countries are rich with highly sought-after resources, the wealth generated does not stay in Africa, or benefit its people. And there is, of course, a long history of this that extends back to colonial times. The current cobalt rush in and around Kolwezi appears to be no different.</p>
<p>During the colonial era, European imperial interests were channelled indirectly through small groups of local elites, who helped to govern territories and expedite the exploitation of resources for colonial agents. As African countries gained independence in the 1960s, one legacy of “<a href="https://eprints.lse.ac.uk/27879/1/WP131.pdf">indirect rule</a>” was that it cultivated a ruling class of commercially-minded local elites who were <a href="https://scholar.harvard.edu/files/jrobinson/files/indirect_rule_nber_4_0.pdf">unaccountable to their citizens</a>.</p>
<p>This set the stage for the current second scramble for Africa, where the rampant expropriation of resources characteristic of colonial times has largely remained unaltered, apart from the arrival of new corporate agents of foreign exploitation that are extracting resources on an industrial scale.</p>
<p>The introduction of China and its <a href="https://eng.yidaiyilu.gov.cn/">Belt and Road Initiative</a> as a major new player on the scene, has sparked considerable debate as to whether this offers a new opportunity for Africa, or a new form of colonialism.</p>
<h2>Plausible deniability</h2>
<p>While the negative impacts of the cobalt boom may be increasingly visible and have now become impossible to ignore, industry is not held accountable, partially because it has found new ways to hide its exploitative business practices.</p>
<figure class="align-center ">
<img alt="A large group of 'washers' clean ore are a washing pit." src="https://images.theconversation.com/files/569051/original/file-20240112-21-y8h866.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569051/original/file-20240112-21-y8h866.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569051/original/file-20240112-21-y8h866.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569051/original/file-20240112-21-y8h866.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569051/original/file-20240112-21-y8h866.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569051/original/file-20240112-21-y8h866.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569051/original/file-20240112-21-y8h866.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The washing pit at Kamilombe.</span>
<span class="attribution"><span class="source">Roy Maconachie</span></span>
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</figure>
<p>In the mining sector, intermediaries – buyers, agents, dealers and brokers – exist to shield multinational corporations from being directly implicated in labour exploitation. Complexity in the supply chain helps big corporations to demand profit-boosting efficiencies at arms’ length, giving them plausible deniability for the consequences of their actions.</p>
<p>These companies also have become adept at spinning their purported efforts to improve conditions. Look at their websites and you’ll probably see a massive section devoted to sustainability and community-building. On the surface, this may provide reassurance to a consumer or policymaker. But all those efforts don’t seem to be making a difference to those at the bottom of the chain, like Ghislain or Alphonsine or Pitchou.</p>
<p>We are all potentially complicit. I often tell my students that anyone with a mobile phone in their pocket probably has a little bit of the DRC in there as well. But multinational tech companies, or the mining giants have a lot more power and resources to make real change.</p>
<p>They should be made to pay for their role in creating and perpetuating unequitable systems that harm people and the planet. The people in the DRC’s cobalt belt that I have had the privilege of spending time with, and the many millions like them, deserve much better.</p>
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<img alt="" src="https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=112&fit=crop&dpr=1 600w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=112&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=112&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=140&fit=crop&dpr=1 754w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=140&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=140&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p class="fine-print"><em><span>For this research, Roy Maconachie received funding from the Global Challenge Research Fund (GCRF), the Bath Research in Development (BRID) Fund, and the Bath Impact Fund.</span></em></p>Cobalt is a critical component in the production of batteries, smartphones, jet engines and electric vehicles. Yet miners who risk their lives digging it up receive almost none of the profits.Roy Maconachie, Professor of Natural Resources and Development, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2200222024-01-24T20:58:25Z2024-01-24T20:58:25ZCanada lags behind on efforts to address human rights abuses in seafood supply chains<iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/canada-lags-behind-on-efforts-to-address-human-rights-abuses-in-seafood-supply-chains" width="100%" height="400"></iframe>
<p>Seafood has become a source of concern for consumers who pay attention to the environmental and social impacts of what they buy. Climate change is <a href="https://theconversation.com/climate-change-challenges-marine-conservation-efforts-in-atlantic-canada-211580">adversely affecting ocean ecosystems</a>, and a series of <a href="https://doi.org/10.1016/j.marpol.2016.02.009">widely publicized scandals</a> have exposed <a href="https://www.nature.com/articles/s41467-022-28916-2">widespread illegal fishing</a> and awful working conditions in both fishing and seafood processing.</p>
<p><a href="https://doi.org/10.1016/j.marpol.2021.104796">Seafarers in fishing</a> often work 18 hours a day in <a href="https://www.the-human-cost-of-fishing.org/">what is widely considered to be the world’s most dangerous profession</a>. Many are at sea for months or even years at a time, and most have <a href="https://globallaborjustice.org/wifinowforfishersrights/">no access to Wi-Fi</a>. <a href="https://www.law.georgetown.edu/human-rights-institute/wp-content/uploads/sites/7/2019/05/Georgetown-THE-PRICE-OF-PARADISE-5-4-19-WEB-2.pdf">They are often excluded from labour laws</a> and <a href="https://bristoluniversitypressdigital.com/gsc/view/journals/gscj/2/2/article-p146.xml">all are paid very low wages</a>, despite producing food for high-income consumers. </p>
<p>Similarly, those working in seafood processing are also poorly paid, and <a href="https://www.dal.ca/news/2023/03/01/migrant-workers-new-brunswick-conditions.html">many are migrant workers</a> who lack basic labour rights.</p>
<p>In response to these concerns, governments in many seafood importing countries have taken action. The <a href="https://oceans-and-fisheries.ec.europa.eu/fisheries/rules/illegal-fishing_en">European Union</a> and <a href="https://www.seafoodsource.com/news/supply-trade/japanese-legislature-passes-law-to-curb-iuu-fishing">Japanese government</a> have banned imports of seafood produced by illegal fishing, while the <a href="https://www.dol.gov/agencies/ilab/comply-chain/steps-to-a-social-compliance-system/step-6-remediate-violations/key-topic-information-and-resources-on-withhold-release-orders-wros">United States’ program to ban imports produced by forced labour</a> includes seafood. </p>
<p>The EU is also instituting a <a href="https://www.europarl.europa.eu/news/en/press-room/20231205IPR15689/corporate-due-diligence-rules-agreed-to-safeguard-human-rights-and-environment">corporate due diligence</a> approach that holds corporations accountable for human rights abuses and environmental impacts in their supply chains.</p>
<p>The Canadian government has yet to implement similar policies for seafood sold in Canada and is an outlier in its failure to hold buyers and retailers accountable for labour abuse in seafood supply chains. In the meantime, many Canadian seafood buyers and retailers have turned to private schemes that certify for sustainability, and less commonly for worker rights.</p>
<p><a href="https://www.loblaw.ca/en/loblaws-journey-to-a-sustainable-seafood-future/">Loblaws</a>, for example, is prioritizing wild-caught seafood that is sourced from fisheries that are certified by the <a href="https://www.msc.org/en-us?gad_source=1&gclid=CjwKCAiA44OtBhAOEiwAj4gpObPhf7KMXOD6_yH6enKQvw-0LvkGx1BqbUbvBTHwBi6VpXEH0k0RSRoCUnUQAvD_BwE">Marine Stewardship Council (MSC)</a>, as well as organic standards or fisheries making progress toward these or other private standards.</p>
<p>The MSC is the world’s premier sustainability certification for fishing, <a href="https://www.seachoice.org/certification-verification-or-fabrication-a-seachoice-report/">praised by ocean conservation groups</a>. What Canadian seafood consumers do not know is that evidence is mounting that even gold standard certifications like MSC fail to address terrible working conditions in seafood supply chains.</p>
<h2>Seafood supply chains</h2>
<p>To start, we need to recognize seafood supply chain complexity. The freezer sections in Canadian supermarkets are full of frozen seafood labelled “product of China,” while in the canned seafood section, most tuna is labelled as a “product of Thailand.” </p>
<p>In reality, most of this seafood is caught by fisheries around the world and shipped to China, Thailand or other seafood processing hubs, where it is transformed into seafood products and exported — mostly to higher income countries.</p>
<p>China is the world’s <a href="https://www.fao.org/3/cc0461en/online/sofia/2022/trade-of-aquatic-products.html">largest seafood processing hub</a>, importing, transforming and exporting <a href="https://doi.org/10.1126/science.abl4756">pollack, cod, shrimp, salmon, herring</a> and other species, as well as processing raw material caught by Chinese fishing vessels. </p>
<p><a href="https://www.theoutlawocean.com/investigations/china-the-superpower-of-seafood/reach/#the-globe-and-mail">Investigative journalism</a> by the non-profit <a href="https://www.theoutlawocean.com">Outlaw Ocean Project</a> has revealed the use of <a href="https://www.seafoodsource.com/news/supply-trade/bombshell-outlaw-ocean-report-finds-evidence-of-seafood-processed-by-forced-labor-in-us-supply-chain">forced Uyghur labour in many of China’s seafood processing facilities</a>, as well as human rights violations and illegal fishing in <a href="https://www.theoutlawocean.com/investigations/china-the-superpower-of-seafood/findings/">China’s global squid fishery</a>. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1729893072530534477"}"></div></p>
<p>Many of the seafarers who work in this fishery are from Indonesia and the Philippines. They are paid a few hundred dollars a month to work under conditions that would be considered unacceptable on land.</p>
<p>Outlaw Ocean investigators found that many Chinese seafood factories had been audited for labour standards, and that importers were relying on these audits to assure consumers that the seafood was ethical.</p>
<p>But these audits — including the independent audits <a href="https://www.theoutlawocean.com/investigations/china-the-superpower-of-seafood/discussion/#marine-stewardship-council">required by MSC for its sustainability certified seafood</a> — failed to detect the use of forced labour found by the Outlaw Ocean Project.</p>
<p>The Outlaw Ocean’s <a href="https://www.theoutlawocean.com/investigations/china-the-superpower-of-seafood/bait-to-plate/#!">Bait-to-Plate tracing tool</a> has identified many <a href="https://www.theglobeandmail.com/canada/article-canadian-seafood-company-high-liner-cuts-ties-with-supplier-following/">Canadian seafood importers</a> and supermarkets that source from processing plants accused by the Outlaw Ocean of using forced labour.</p>
<h2>Poor working conditions worldwide</h2>
<p>These findings are not unique to China. Our <a href="https://workatsea.info.yorku.ca/">Work at Sea</a> project has found that unacceptable working conditions are ubiquitous in transnational seafood supply chains. This includes Thailand’s tuna canning industry, which is the world’s <a href="https://www.fao.org/3/cc7781en/cc7781en.pdf">largest</a>. </p>
<p>Thailand’s seafood processing industry relies on <a href="https://thailand.iom.int/news/new-report-highlights-opportunities-protect-migrant-workers-thailands-fishing-and-seafood-processing-sector">over 160,000 migrant workers</a> from Myanmar and Cambodia. Workers are not guaranteed a minimum number of working days per month, meaning they are more likely to work excessive overtime hours and/or fall into debt. </p>
<p>This situation is made worse by <a href="https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/documents/publication/wcms_848445.pdf">inadequate labour inspections</a> and <a href="https://www.hrw.org/news/2019/06/10/mscs-revised-chain-custody-certification-fails-adequately-address-forced-labor-and">audits</a>, <a href="https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/documents/publication/wcms_848445.pdf">ineffective grievance mechanisms</a> and the lack of unions. It is <a href="https://mekongmigration.org/wp-content/uploads/2023/05/Book_Agents-of-Change.pdf">illegal in Thailand</a> for migrant workers to participate in organizing unions, although they can be members of unions.</p>
<p>The raw materials for Thailand’s canned tuna industry are imported as frozen whole fish from fisheries across the Pacific and Indian Ocean. The vessels are owned and operated from Taiwan and other East Asian countries, and are mostly crewed by workers from the Philippines and Indonesia. </p>
<p>These seafarers have told our research team that work on Taiwanese vessels is preferable to Chinese vessels, partly because their pay, at a minimum of US$550 per month minus agency fees, is better.</p>
<p>But <a href="https://doi.org/10.1016/j.marpol.2021.104685">working conditions still fall short of standards</a> set out in private certifications schemes, government fishing labour regulations or the <a href="https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C188">Work in Fishing Convention</a>, which is meant to ensure fishers have decent working conditions. The reality of this transnational supply chain is not visible on canned tuna labels.</p>
<h2>Canada is lagging behind</h2>
<p>Canada is falling behind in addressing labour abuse and sustainability in seafood supply chains. Although the <a href="https://www.publicsafety.gc.ca/cnt/cntrng-crm/frcd-lbr-cndn-spply-chns/index-en.aspx">Forced Labour and Supply Chain Reporting Law</a> came into effect in January 2024, this law has been <a href="https://cnca-rcrce.ca/2023/05/03/canadas-new-law-on-forced-and-child-labour-in-supply-chains-wont-work/">criticized for serving as a mere checkbox exercise</a> for companies and lacking effectiveness in <a href="https://www.theglobeandmail.com/politics/article-why-canada-will-continue-to-be-a-dumping-ground-of-products-made-with/">curbing forced labour in Canadian supply chains</a>. </p>
<p>To address these shortcomings, Canada needs human rights and environmental <a href="https://cnca-rcrce.ca/campaigns/mhredd/">due diligence legislation</a> — policy that mandates Canadian companies to substantially address human rights abuses and environmental harm in their supply chains.</p>
<p>It is also critical that Canada go beyond private audits and government inspections to work with international institutions to help create a robust system that monitors and enforces standards for work in global fishing, one that meaningfully involves workers. </p>
<p>Canada has not even ratified the International Labour Organization’s <a href="https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C188">Work in Fishing Convention </a> — that would be a good start. For inspection and monitoring, the <a href="https://www.itfseafarers.org/en/focs/about-the-inspectorate">ITF inspectorate</a>, working in some 140 ports around the world to monitor working conditions in the shipping sector, is a potential model.</p>
<p>By taking these steps, Canada can play a pivotal role in fostering ethical and sustainable practices in its seafood supply chains, ensuring the well-being of workers and the environment.</p><img src="https://counter.theconversation.com/content/220022/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Vandergeest receives funding from the Social Sciences and Humanities Research Council of Canada. </span></em></p><p class="fine-print"><em><span>Carli Melo receives funding from the Social Sciences and Humanities Research Council of Canada and the York Centre for Asian Research.</span></em></p><p class="fine-print"><em><span>Melissa Marschke receives funding from the Social Sciences and Humanities Research Council of Canada.</span></em></p>Canada is an outlier in its failure to hold buyers and retailers accountable for labour abuse in seafood supply chains.Peter Vandergeest, Emeritus Professor, Geography, York University, CanadaCarli Melo, PhD Candidate in Geography, York University, CanadaMelissa Marschke, Professor, School of International Development and Global Studies, L’Université d’Ottawa/University of OttawaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2210742024-01-17T14:15:57Z2024-01-17T14:15:57ZWhat the Red Sea crisis could mean for the electric vehicle industry and the planet<p>Automotive giants <a href="https://www.wsj.com/business/tesla-to-halt-production-at-german-car-factory-as-red-sea-conflict-hits-supply-chains-3735e991#">Tesla</a> and <a href="https://www.reuters.com/business/autos-transportation/tesla-berlin-suspend-most-production-two-weeks-over-red-sea-supply-gap-2024-01-11/">Volvo</a> have announced pauses to the production of their electric vehicles (EVs) in Europe. Electric vehicles are seeing <a href="https://finance.yahoo.com/news/tesla-model-y-was-the-best-selling-car-worldwide-in-the-first-quarter-154909234.html">record sales and demand worldwide</a>, but a lack of parts means that factories cannot sustain their production.</p>
<p>The reasons for this are complex. Parts are taking longer to deliver as attacks by Houthi rebels force ships to <a href="https://www.reuters.com/business/retail-consumer/electrolux-readies-alternative-routes-after-red-sea-attacks-2023-12-19/">avoid the Red Sea</a>. And there are also issues around the monopoly that <a href="https://www.theguardian.com/global-development/2021/nov/25/battery-arms-race-how-china-has-monopolised-the-electric-vehicle-industry">Chinese factories</a> hold on many EV components, including crucial lithium batteries.</p>
<p>These factors have made it harder (and more expensive) to move parts across the globe to support EV production in Europe.</p>
<p>Modern global supply chains are tightly orchestrated. Moving goods to factories (and away from them to customers) is heavily demand driven. Forecasting this demand has become a huge industry, valued at <a href="https://www.prnewswire.com/news-releases/supply-chain-management-market-size-to-grow-usd-75-6-billion-by-2032-at-a-cagr-of-10-9--valuates-reports-301806938.html">over US$27 billion</a> (£21.3 billion).</p>
<p>But even with all this intelligence, political tensions, pandemics and even <a href="https://www.reuters.com/world/ever-given-container-ship-set-leave-suez-canal-2021-07-07/">stuck ships</a> can turn this industry on its head overnight. This is particularly the case where the supply side is constrained, as it is with EV batteries from China. </p>
<p>In 2021, a container ship called the Ever Given <a href="https://www.reuters.com/world/ever-given-container-ship-set-leave-suez-canal-2021-07-07/">ran aground</a> in the Suez Canal, blocking this vital shipping route from the far east to Europe for the best part of a week. The blockage prevented goods from passing through the canal, so had the knock-on effect of raising container shipping prices. </p>
<p>Even though the Suez canal has been open for two years, the recent attacks on commercial ships in the Red Sea have caused shipping companies to divert their ships to less direct routes – adding significant costs and time. </p>
<p>What does this mean for consumers and the planet? And are there ways for EV manufacturers to circumvent these risks?</p>
<figure class="align-center ">
<img alt="A container ship heading up the Red sea towards the Suez Canal." src="https://images.theconversation.com/files/569785/original/file-20240117-29-509uce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569785/original/file-20240117-29-509uce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569785/original/file-20240117-29-509uce.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569785/original/file-20240117-29-509uce.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569785/original/file-20240117-29-509uce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569785/original/file-20240117-29-509uce.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569785/original/file-20240117-29-509uce.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Houthis have carried out multiple attacks on merchant vessels in the Red Sea.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/egypt-red-sea-oct-3-2023-2374214059">David G40/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Supply chains are fickle things</h2>
<p>If manufacturers cannot produce due to shortages, then factories that make a single product such as Tesla’s gigafactory near Berlin (which produces the best-selling Model Y SUV) have one option – to idle the lines. Hourly-paid workers are sent home and where possible, salaried staff will continue in other roles such as safety checking and testing. </p>
<p>Tesla and Volvo <a href="https://www.tesla.com/en_gb/manufacturing">have other factories</a> and other product lines that can keep running. But even finished vehicles travelling from plants in China for sale in Europe are affected by the need to avoid the Red Sea. Vehicle manufacturer, Geely, who also produce <a href="https://www.wsp.com/en-gb/projects/geely-and-volvo-cars-manufacturing-plant">Volvo vehicles in China</a>, has <a href="https://www.reuters.com/business/autos-transportation/chinas-geely-warns-red-sea-attacks-delay-europe-bound-ev-shipments-2023-12-22/">warned of delays</a> to European consumers expecting their new cars in early 2024. </p>
<p>Delays are not the only issue associated with shipping parts and vehicles around Africa to avoid the Red Sea. The 3,000 extra miles travelled by ships means they burn more fuel – a lot more fuel. </p>
<p>Peter Sand, a shipping analyst at ocean and air freight analytics platform, Xeneta, has estimated conservatively that each ship taking this route <a href="https://theloadstar.com/emissions-expected-to-increase-as-box-ships-re-route-and-burn-more-fuel/#:%7E:text=The%20route%20will%20add%20some,each%20tonne%20of%20fuel%20burned.">produces 2,700 extra tons of CO₂</a>. If the international shipping industry were a country, it would already be among the world’s top carbon-emitting nations. And <a href="https://www.shipmap.org/">greenhouse gas emissions from ships</a> are projected to increase by <a href="https://www.edfeurope.org/shipping">up to 50% by 2050</a>.</p>
<p>EVs are undoubtedly better for the environment than their combustion engine counterparts. However, when supply is constrained, buyers often have little choice but to delay making the switch. Sales <a href="https://www.bbc.co.uk/news/business-67017972">figures</a> from 2023 show that private buyers still did not purchase as many EVs in the historically buoyant month of September as they did in the year before due to uncertainty in the market. </p>
<p>Fleet demand remains strong. But the market can only grow as fast as manufacturers can make cars. And pausing production is not going to help the transition. </p>
<h2>Can manufacturers square this circle?</h2>
<p>Clearly, these pinch points in the global supply chain have huge repercussions for manufacturers and consumers. Tesla’s factory in Germany is tight-lipped about actual production figures, but <a href="https://electrek.co/2023/08/23/tesla-gigafactory-berlin-production-has-been-dipping-report/">reports</a> claim it makes around 4,000 units per week. Each car makes around US$8,000 profit, so this shut down could, in raw terms, lead to a loss of US$64 million in profit. </p>
<p>How do they prevent this? Supply chains do have some element of elasticity, but supply chain managers are always keen to reduce the potential of something known as the “<a href="https://www.sciencedirect.com/science/article/abs/pii/S0925527304003524">bullwhip effect</a>”. This is where marked differences in order quantities lead to even more shortages down the line. Managing expectations and reassuring buyers will thus help to smooth any issues with supply. </p>
<p>Making supply chains more resilient is also a huge <a href="https://www.researchgate.net/profile/Mohamad-Heidari-6/publication/374145196_Applying_Resiliency_in_Predicting_Demand_for_the_Automotive_Supply_Chain/links/6510142ad5293c106cdf0876/Applying-Resiliency-in-Predicting-Demand-for-the-Automotive-Supply-Chain.pdf">area of research</a>. Rerouting ships to prevent lost components is an example of <a href="https://www.gov.uk/government/publications/supply-chain-resilience">this concept</a> being put into practice. </p>
<p>If the parts were lost to rebel forces or pirates by taking the Red Sea route, then the revenue loss would be even larger. So although diverting routes is worse for the planet and arguably bad press, it would seem to be the lesser of two evils.</p>
<p>Multinational automotive manufacturer Stellantis has announced that it is instead bypassing the Red Sea by <a href="https://www.reuters.com/business/autos-transportation/stellantis-turning-airfreight-compensate-temporary-red-sea-disruptions-2024-01-12/">air-freighting parts</a> to its EU factories. But, while this is faster than shipping parts around Africa, it’s not good for either CO₂ emissions or cost.</p>
<figure class="align-center ">
<img alt="A freight airplane flying above shipping containers." src="https://images.theconversation.com/files/569789/original/file-20240117-23-46klno.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569789/original/file-20240117-23-46klno.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569789/original/file-20240117-23-46klno.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569789/original/file-20240117-23-46klno.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569789/original/file-20240117-23-46klno.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569789/original/file-20240117-23-46klno.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569789/original/file-20240117-23-46klno.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Stellantis is relying on airfreight to cope with temporary supply disruptions.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/freight-airplane-flying-above-overseas-shipping-2041371503">Summit Art Creations/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Keeping the global economy running</h2>
<p>To reduce the disruptive potential of geopolitical tensions, Tesla and other automakers are attempting to produce their product closer to the consumer. The strategy is to put factories on each continent or geographical area where their products are sold. </p>
<p>However, as China still produces many of the core EV parts, manufacturers will have to invest heavily in their suppliers and put them closer to their factories.</p>
<p>Ultimately, this will require investment in skills and more factories. But with dropping profit margins, Chinese manufacturing dominance and inflationary pressures, it will continue to be a headache to implement.</p>
<hr>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p class="fine-print"><em><span>Tom Stacey receives funding from the European Union for the ENE and SENE projects. </span></em></p>EV manufacturers pause production in Europe as the Red Sea shipping crisis deepens.Tom Stacey, Senior Lecturer in Operations and Supply Chain Management, Anglia Ruskin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2210232024-01-12T17:38:54Z2024-01-12T17:38:54ZBoeing needs to get real: the 737 Max should probably be scrapped<p>The Boeing 737 Max is in the <a href="https://www.reuters.com/business/aerospace-defense/boeings-ongoing-737-max-crisis-2024-01-06/">news again</a>, this time because the <a href="https://www.youtube.com/watch?v=ek_KjQCoVV4">door plug</a> on a brand-new plane <a href="https://news.sky.com/story/alaska-airlines-grounds-all-boeing-737-9-max-planes-after-mid-flight-window-blowout-13042962">came off</a> soon after take-off. The pilots of the Alaska Airlines flight from Portland, Oregon, managed to return the Max 9 safely to Portland International Airport, but the consequences would have been far more serious had the incident occurred at cruising height a few minutes later. </p>
<p>Alaska Airlines and fellow US carrier United Airlines have also <a href="https://www.bbc.co.uk/news/world-us-canada-67919436">discovered</a> loose hardware and connections on their fleets of 737 Max planes. The US Federal Aviation Administration (FAA) <a href="https://news.sky.com/story/boeing-737-9-max-alaska-airlines-blowout-cannot-happen-again-official-investigation-into-jet-under-way-13046391">has now grounded</a> 171 Boeing aircraft, mostly operated by Alaska Airlines and United Airlines, pending inspections.</p>
<p>The 737 Max is a series of narrow-body commercial aircraft developed as an upgrade to the highly successful <a href="https://en.wikipedia.org/wiki/Boeing_737_Next_Generation">Boeing 737 Next Generation</a> (NG) series. First delivered in 2017, it <a href="https://www.icelandair.com/about/our-fleet/boeing-737-max/">was designed</a> to be even more fuel efficient and with more power supplied by bigger engines. </p>
<p>It has attracted more demand than Boeing can supply, but has faced significant challenges. Most notable were crashes in <a href="https://www.nbcnews.com/news/world/indonesia-report-finds-fatal-lion-air-jet-crash-due-boeing-n1071796#:%7E:text=Plane%20plunged%20into%20the%20Java,%2C%202018%2C%20killing%20189%20people.&text=JAKARTA%2C%20Indonesia%20%E2%80%94%20An%20Indonesian%20investigation,inadequate%20training%20and%20maintenance%20problems.">Indonesia (2018)</a> and <a href="https://www.barrons.com/news/inquiry-into-2019-ethiopian-air-crash-confirms-software-failure-01671821708">Ethiopia (2019)</a>, which were partly caused by technical problems and killed 346 people. </p>
<p>So why have there been <a href="https://www.reuters.com/business/aerospace-defense/boeings-ongoing-737-max-crisis-2024-01-06/">all these problems</a> and what can be done? </p>
<h2>Design and manufacturing</h2>
<p><a href="https://www.aviationtoday.com/2019/10/28/lion-air-737-max-final-accident-report-cites-aoa-sensor-mcas-as-contributing-factors/">An investigation</a> following the Indonesia crash revealed issues with an automated flight control system called the Maneuvering Characteristics Augmentation System (MCAS). This was designed to prevent the 737 Max <a href="https://simpleflying.com/airplane-stalls/">from stalling</a>, which had been made more likely by its larger engines. Yet the system’s complexity and reliance on a single sensor made it vulnerable to failure. </p>
<p>The MCAS was also involved in the Ethiopian crash, albeit the <a href="https://www.seattletimes.com/business/boeing-aerospace/final-report-on-boeing-737-max-crash-disputed-agencies-note-pilot-error-as-a-factor/">US safety agency</a> argued pilot errors were the main cause. Boeing <a href="https://www.boeing.com/commercial/737max/737-max-software-updates.page">subsequently issued</a> a <a href="https://www.seattletimes.com/business/boeing-aerospace/boeings-fix-tames-the-tiger-in-the-737-max-flight-controls/">software fix</a> for the MCAS problem. So far as we are aware, it has now been resolved. </p>
<p>Besides the most recent issues with Alaska and United, quality and safety problems have included <a href="https://www.cnbc.com/2019/06/02/boeing-notifies-faa-of-737-max-parts-that-may-be-susceptible-to-failure.html">unsatisfactory wing components</a> in 2019. In 2023, suppliers were poorly attaching <a href="https://www.reuters.com/business/aerospace-defense/boeing-pauses-deliveries-some-737-maxs-amid-new-supplier-problem-2023-04-13/">aircraft fittings</a> and <a href="https://www.flyingmag.com/extra-holes-drilled-in-737-max-pressure-bulkheads-boeing/">drilling unnecessary holes</a>. </p>
<p>While these defects could be blamed on manufacturing, unwieldy designs make it difficult to manufacture products at scale while meeting quality requirements. So, you have to question whether poor design and unrealistically high volume expectations are ultimately what has happened to the 737 Max. </p>
<p>The fact that door plug problem and loose bolts are cropping up at a time when <a href="https://www.reuters.com/business/aerospace-defense/boeing-boosts-monthly-737-production-38-defense-unit-struggles-2023-07-26/">Boeing is trying</a> to ramp up 737 Max production to about double the pre-pandemic level – and the pressure to achieve the pre-pandemic stock price – makes design all the more suspect. </p>
<p><strong>Boeing share price:</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Boeing share price chart" src="https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=363&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=363&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=363&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=457&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=457&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569070/original/file-20240112-23-v1l2za.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=457&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="https://www.tradingview.com/">Trading View</a></span>
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<p>Moreover, <a href="https://www.theguardian.com/business/2020/jan/09/boeing-737-max-internal-messages">leaked internal documents</a> from 2015-18 have revealed that employees who worked on the Max planes believed the design was unsound. Hundreds of internal messages showed them referring to the “piss-poor design” and one “designed by clowns” who were “supervised by monkeys”. </p>
<p>A <a href="https://www.bbc.co.uk/news/business-54174223">US Congressional report</a> in 2020 into the 737 Max crashes said: “Boeing failed in its design and development of the 737 Max, and the FAA failed in its oversight of Boeing and its certification of the aircraft.” It also pointed to too close a relationship with the FAA. </p>
<p>Boeing’s approach to manufacturing costs may also be a factor. Former employees <a href="https://www.cbc.ca/news/business/boeing-fifth-estate-costs-safety-1.5426571">previously suggested</a> it had imported a culture that was very focused on cost-cutting when it bought rival US aerospace manufacturer <a href="https://simpleflying.com/mcdonnel-douglas-boeing-merger/">McDonnell Douglas</a> back in 1997. Boeing <a href="https://www.aljazeera.com/economy/2014/9/10/interview-the-former-boeing-union-president">has denied</a> that it has compromised on product safety or quality for any reason whatsoever. </p>
<p>Assembly line workers on the 737 Max have <a href="https://www.ft.com/content/04f6f45e-1c2c-11ea-97df-cc63de1d73f4">reportedly faced</a> intense pressure to meet production deadlines, while a former senior manager claimed in 2019 he had sent urgent emails and letters to <a href="https://www.ft.com/content/04f6f45e-1c2c-11ea-97df-cc63de1d73f4">the company’s leadership</a> to shut down production. Boeing <a href="https://www.ft.com/content/04f6f45e-1c2c-11ea-97df-cc63de1d73f4">has denied</a> that assembly-line pressure had any bearing on the crashes, and pointed out that company’s commitment to safety was reflected in the fact that the whistleblower was able to brief its general counsel over his concerns. </p>
<p>Despite these alleged assembly-line issues, Boeing has not faced anything like the same problems with the other 737 variants or indeed with other planes like the 787 Dreamliner. Again, it indicates that the problem may ultimately be more to do with design of the 737 Max. </p>
<h2>What next</h2>
<p>So what happens now? Going by the previous debacles, the playbook is clear. The FAA will lift the grounding order in the coming weeks as politicians start complaining about orders being lost to Airbus. Boeing will swear all the planes are safe and that the production processes of the parts vendor in question, Kansas-based <a href="https://www.spiritaero.com/">Spirit AeroSystems</a>, have been reviewed (<a href="https://www.boeing.com/737-9-updates/index.page">Spirit has said</a> it is committed to ensuring every Boeing plane meets the highest safety and quality standards). </p>
<p>Then the White House will push developing countries to buy the Boeing 737 Max, as <a href="https://www.reuters.com/business/aerospace-defense/vietnam-air-signs-78-bln-deal-50-boeing-737-max-planes-white-house-says-2023-09-11/">President Biden did</a> in his visit with business leaders to Vietnam last September. All will be well – until it isn’t. </p>
<p>Instead, Boeing should suppress its political muscle and take a different approach. The 737 Max brand is so tarnished that it may be better to let go. More importantly, if the design is also ultimately unworkable at scale, it would be better to scrap it too rather than trying to push production even harder. </p>
<p>The good news for the company is that the 737 has been highly successful commercially going back to 1968, with a solid history of safety, not including the 737 Max. The 737 variants’ <a href="https://www.independent.co.uk/travel/news-and-advice/boeing-737-max-crash-plane-door-future-b2476106.html">safety record</a> until the end of 2019 was the same as the narrow-body offering from Airbus, including the A320, but it has now become much worse with the 737 Max. </p>
<p>Boeing should arguably design a new narrow-body plane again based on the 737 Next Generation with higher efficiency and larger engines. The supply chain won’t need to be changed dramatically. It worked for previous 737s, so there is no reason it can’t work again. If cost-cutting has resulted in suppliers cutting too many corners, that needs to be revisited of course. </p>
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<p>Boeing President and CEO Dave Calhoun <a href="https://www.boeing.com/737-9-updates/index.page">said at</a> an all-employee safety meeting on January 9: “We’re going to have to demonstrate trust by our actions, by our willingness to work directly and transparently with them (customers).”</p>
<p>This is true, but the company’s first priority has to be to <a href="https://www.nytimes.com/2020/01/10/business/boeing-737-employees-messages.html">make sure</a> it has the trust of its workers by listening to their safety concerns and taking them onboard. </p>
<p>Only by addressing its culture can Boeing really end this crisis. There has been such a catalogue of sequential errors that anything short of a complete overhaul is only likely to compound the problem and put more lives at risk.</p><img src="https://counter.theconversation.com/content/221023/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>ManMohan S Sodhi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There have been so many problems with the 737 Max that the nuclear option may be the best way forward.ManMohan S Sodhi, Professor of Operations and Supply Chain Management, City, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2191382023-12-27T15:48:36Z2023-12-27T15:48:36ZWhere do all of James Bond’s gadgets come from? A geologist tells the raw truth<figure><img src="https://images.theconversation.com/files/563295/original/file-20230713-15-u5em9p.png?ixlib=rb-1.1.0&rect=17%2C8%2C1880%2C804&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">In Spectre (2015), Daniel Craig and Ben Whishaw respectively play the world's most famous secret agent and his gadget supplier.</span> <span class="attribution"><a class="source" href="https://www.youtube.com/watch?v=SzvxegcZzPU">Spectre</a></span></figcaption></figure><p>Laser watches, fingerprint guns, explosives and, of course, over-equipped cars: the list of gadgets flaunted by James Bond is as bewildering as the mind of their inventor, Q. While some of these gadgets actually exist (laser, fingerprint recognition, back reactor), others, as we shall see, are more fanciful. </p>
<p>But they all have one thing in common: the raw materials needed to make them, and in particular the <a href="https://mineralinfo.fr/fr">mineral resources</a> that geologists are helping to extract from the earth’s crust. Below are some that jumped out of the screen for me. </p>
<h2>The fast, inconspicuous cars of the world’s most famous secret agent</h2>
<p>In 1964’s Goldfinger, James Bond (Sean Connery) has to give up his Bentley for an Aston Martin DB5 modified by Q (the unforgettable Desmond Llewelyn). This is the first of eight appearances of a car that will go on to become inseparable from 007.</p>
<figure class="align-center ">
<img alt="The Aston Martin DB5, James Bond's historic car" src="https://images.theconversation.com/files/537729/original/file-20230717-138681-wy16lv.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/537729/original/file-20230717-138681-wy16lv.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=371&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537729/original/file-20230717-138681-wy16lv.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=371&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537729/original/file-20230717-138681-wy16lv.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=371&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537729/original/file-20230717-138681-wy16lv.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=466&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537729/original/file-20230717-138681-wy16lv.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=466&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537729/original/file-20230717-138681-wy16lv.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=466&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Aston Martin DB5, which first appeared in Goldfinger in 1964. This car is made from aluminium extracted from bauxite ore.</span>
<span class="attribution"><span class="source">N. Charles</span>, <span class="license">Fourni par l'auteur</span></span>
</figcaption>
</figure>
<p>The auto is a good example of how products have become more complex and incorporated a greater diversity of raw materials over time. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/537731/original/file-20230717-248129-ixx1gi.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="zoom on a pink mineral with pinkish and whitish spots" src="https://images.theconversation.com/files/537731/original/file-20230717-248129-ixx1gi.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/537731/original/file-20230717-248129-ixx1gi.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537731/original/file-20230717-248129-ixx1gi.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537731/original/file-20230717-248129-ixx1gi.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537731/original/file-20230717-248129-ixx1gi.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537731/original/file-20230717-248129-ixx1gi.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537731/original/file-20230717-248129-ixx1gi.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Bauxite : the main ore of aluminium, the metal used in 007’s DB5, which takes its name from Baux-de-Provence, France.</span>
<span class="attribution"><span class="source">N. Charles</span>, <span class="license">Fourni par l'auteur</span></span>
</figcaption>
</figure>
<p>The DB5 contains an array of minerals, starting with aluminium, a metal known to make cars lighter. The latter is derived from bauxite, an ore mined in Jamaica near Ocho Rios, which, incidentally, served as the setting for Crab Key Island, Dr No’s hideout, in 1962.</p>
<p>The body of the DB5 is made of aluminium and magnesium alloy plates resting on a tubular steel structure. The engine block is aluminium, as are the pistons and cylinder head. The connecting rods and crankshaft are made of steel doped with chromium and molybdenum for greater strength. The aluminium rims are mounted on chromed steel hubs, as are the spokes.</p>
<p>Of course, we mustn’t forget the <a href="https://mineralinfo.fr/sites/default/files/documents/2021-03/silice_industrielle_rp-66167-fr_2016revise2020.pdf">silica in the windows</a>, the <a href="http://infoterre.brgm.fr/rapports/RP-69037-FR.pdf">copper in the electrical wiring</a>, the lead in the battery or the carbonates and <a href="https://mineralinfo.fr/sites/default/files/documents/2021-03/kaolin_argiles_kaoliniques_rp-67334-fr_2018.pdf">kaolin in the paint</a>, and the petrol to make the whole thing run at top speed.</p>
<p>The automotive industry has come a long way since 1964, and one innovation follows another, each bringing its new share of unique materials. Several dozen are needed today for a standard vehicle - and what can we say about the latest racing cars driven by 007 since 2000, such as the BMW Z3 or the Aston Martin Valhalla? </p>
<p>This goes on with electric vehicles, whose batteries rely on <a href="https://theconversation.com/relocaliser-lextraction-des-ressources-minerales-en-europe-les-defis-du-lithium-138581">lithium</a>, cobalt, graphite, <a href="https://mineralinfo.fr/fr/ecomine/sulfate-de-nickel-un-ingredient-cle-des-batteries-li-ion">nickel</a> and <a href="https://mineralinfo.fr/fr/ecomine/marche-des-terres-rares-2022-filieres-dapprovisionnement-aimants-permanents">rare earths</a>. In 1971 <em>Diamonds Are Forever</em>, James Bond can be seen flying and driving around in no less than an electric lunar module. More recently, in <em>Dying Can Wait</em> (2021), the Aston Martin Valhalla is a plug-in hybrid, but James Bond has not yet gone all-electric.</p>
<h2>Golden guns that would melt in real life</h2>
<p>Another cult item is the Walther PPK, the German pistol used by 007 in many of the Bond films. It’s a weapon made from a stainless steel alloy. Although the steel is mainly iron, it also contains other elements depending on its use and the properties required: chromium, molybdenum, nickel, manganese, carbon, silicon, copper, sulphur, nitrogen, phosphorus, boron, titanium, niobium, tungsten, vanadium, and cerium.</p>
<p>Much more precious, Francisco Scaramanga’s (Christopher Lee) pistol is made of solid gold and assembles everyday objects to go unnoticed during checks: lighter, cufflinks, fountain pen as well as a cigar case. Limited to one shot, the pistol fires bullets of 4.2 mm calibre, weighs 30 g and is made of 23-carat gold with traces of nickel. So much for fiction.</p>
<figure class="align-center ">
<img alt="gold pistol at the museum" src="https://images.theconversation.com/files/537734/original/file-20230717-129345-k99hdj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/537734/original/file-20230717-129345-k99hdj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537734/original/file-20230717-129345-k99hdj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537734/original/file-20230717-129345-k99hdj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537734/original/file-20230717-129345-k99hdj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537734/original/file-20230717-129345-k99hdj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537734/original/file-20230717-129345-k99hdj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Francisco Scaramanga’s gold pistol, solid gold here being unrealistic for dedicated use… The bullet, also in gold, is engraved</span>
<span class="attribution"><a class="source" href="https://flickr.com/photos/66857806@N02/14592496766">Gareth Milner, Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>In reality, it’s hard to imagine a gun made entirely of gold, a very dense and, above all, very soft metal, which wouldn’t withstand the repeated power of a gunshot for very long. In jewellery, gold is often combined with silver, copper or zinc to make it wearable. On 4 December 2023, one kilogram of gold was trading at around €66,000, an all-time record (<a href="https://www.gold.org/">World Gold Council</a>). It’s hardly surprising, given that gold has been a precious, unalterable, shiny metal with a deep yellow colour since Antiquity, arousing covetousness and serving as a safe haven.</p>
<p>In <em>Love from Russia</em> (1963), James Bond receives 50 gold British sovereigns in a briefcase brimming with gadgets. Attracted to the gold coins, the enemy Grant opens the booby-trapped case while holding 007 at gunpoint. Tear gas escapes, saving Bond’s life.</p>
<h2>James Bond and his high-tech enemies</h2>
<p>The saga has also always been about surprising the general public with cutting-edge technology, which may be little known at the time of the film’s release.</p>
<p>What better example than the <a href="https://www.sfpnet.fr/le-laser-principe-de-fonctionnement">laser</a>, which, should we be reminded, stands short for <em>Light Amplification by Stimulated Emission of Radiation.</em> The saga likes to beam it as often as possible, alternatively adding it to pistols, watches, cars, and satellites.</p>
<figure class="align-center ">
<img alt="plastic laser gun" src="https://images.theconversation.com/files/537736/original/file-20230717-243941-ymm8xc.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/537736/original/file-20230717-243941-ymm8xc.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=259&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537736/original/file-20230717-243941-ymm8xc.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=259&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537736/original/file-20230717-243941-ymm8xc.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=259&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537736/original/file-20230717-243941-ymm8xc.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=326&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537736/original/file-20230717-243941-ymm8xc.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=326&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537736/original/file-20230717-243941-ymm8xc.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=326&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Laser guns (plastic !) from the space base in Moonraker, 1979.</span>
<span class="attribution"><span class="source">Nicolas Charles</span>, <span class="license">Fourni par l'auteur</span></span>
</figcaption>
</figure>
<p>In <em>Goldfinger</em> (1964), film director Guy Hamilton chooses to bypass Ian Fleming’s novel of the same name by threatening James Bond not with a chainsaw, but a laser.
The latter were also used in other Bond films: satellites in Diamonds Are Forever (1971) and Murder Another Day (2002); laser pistols in Moonraker (1979); laser watches in Never Again (1983) and Goldeneye (1995); laser-equipped cars in Killing Is No Game (1987), etc.</p>
<p>Lasers can be used to a variety of ends. For one, telemetry: from the Greek “tel” (“remote”) and “metros” (“to measure”), this practice consists in remotely measuring physical and electrical data. Other uses include cutting objects and projecting light.</p>
<p>Physicist Théodore Maiman introduced the first operational laser in the real world in May 1960 (<a href="https://www.aps.org/publications/apsnews/201005/physicshistory.cfm">American Physical Society</a>), right before James Bond. </p>
<p>This first laser used a ruby, a mineral in the corundum (aluminium oxide) family, like sapphire. But this is a <a href="https://www.gemsociety.org/article/understanding-gem-synthetics-treatments-imitations-part-4-synthetic-gemstone-guide/">synthetic ruby</a> created from aluminium oxide (<a href="https://www.rsc.org/periodic-table/element/13/aluminium">from bauxite</a>) mixed with a tiny amount of <a href="https://www.rsc.org/periodic-table/element/24/chromium">chromium</a> (mainly produced from chromite). There are different types of laser, depending on the application:</p>
<ul>
<li><p>Crystalline lasers: made of silica glass (from very pure quartz) or synthetic ruby or sapphire crystals (aluminium oxide doped with <a href="https://mineralinfo.fr/sites/default/files/documents/2020-12/fichecriticitetitane171017.pdf">titanium</a>, <a href="https://mineralinfo.fr/sites/default/files/documents/2020-12/fichecriticitechrome171003.pdf">chromium</a> or rare earths : neodymium, ytterbium, praseodymium, erbium or thulium) ;</p></li>
<li><p>Fibre lasers : composed of optical fibres based on silica (derived from ultra-pure quartz) and doped with <a href="http://infoterre.brgm.fr/rapports/RP-65330-FR.pdf">rare earths</a> (metals extracted mainly from minerals such as bastnaesite, monazite or xenotime) ;</p></li>
<li><p>Gas lasers: using helium (extracted from natural gas deposits) and neon (extracted from atmospheric air gases) or CO<sub>2</sub> ;</p></li>
<li><p>Organic dye lasers.</p></li>
</ul>
<p>The red light beam in <em>Goldfinger</em> was emitted from a laser (probably ruby) whose brightness was amplified by special effects.</p>
<p>However, the destructive nature of the laser is pure fiction. During filming, an operator used an acetylene torch under the pre-cut table even though Sean Connery was lying on it !</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/537735/original/file-20230717-210016-ygo2ez.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/537735/original/file-20230717-210016-ygo2ez.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537735/original/file-20230717-210016-ygo2ez.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537735/original/file-20230717-210016-ygo2ez.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537735/original/file-20230717-210016-ygo2ez.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537735/original/file-20230717-210016-ygo2ez.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537735/original/file-20230717-210016-ygo2ez.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Shark’s teeth (</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/111748974@N02/26039238632/">Shaun Versey, Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Finally, since we all know the bad guys like to bare their teeth, let’s mention the surgical steel jaw of the impressive Shark (Richard Kiel) in <em>The Spy Who Loved Me</em> (1977) and <em>Moonraker</em> (1979). It’s a stainless and corrosion-resistant steel that limits the risk of allergic reactions when it comes into contact with the skin. Its composition includes iron, nickel, chromium, manganese and molybdenum.</p>
<p>James Bond is like many other citizens, he consumes mineral raw materials on a daily basis. At a time of energy, ecological and digital transition, mineral resources are essential elements in the decarbonisation of our activities.</p><img src="https://counter.theconversation.com/content/219138/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nicolas Charles ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>At Q’s of course! But he doesn’t pull them out of his sleeve. In Spectre (2015), Daniel Craig and Ben Whishaw play the famous spy and his gadget supplier.Nicolas Charles, Géologue, PhD, BRGMLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2193162023-12-19T00:02:42Z2023-12-19T00:02:42ZAmid allegations of price gouging, it’s time for big supermarkets to come clean on how they price their products<figure><img src="https://images.theconversation.com/files/565402/original/file-20231213-23-483trl.jpg?ixlib=rb-1.1.0&rect=0%2C14%2C4992%2C3308&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/minded-man-viewing-receipts-supermarket-tracking-1980000383">Denys Kurbatov/Shutterstock</a></span></figcaption></figure><p>With inflation driving up the cost of living, many are dreading not just the hassle of a big grocery shop, but also the bruising cost.</p>
<p>But while Australians struggle with their budget and spending, several major supermarkets made large profits in 2022–23. Coles and Woolworths, for example, made net profits of <a href="https://www.theguardian.com/business/2023/aug/23/woolworths-posts-162bn-profit-with-dramatic-lift-in-margins-despite-cost-of-living-crisis">A$1.1 billion and A$1.62 billion</a>, respectively. </p>
<p><a href="https://www.news.com.au/finance/money/costs/coles-and-woolworths-chief-executives-to-face-senate-inquiry-into-supermarket-price-hikes/news-story/0f74b6d4cac20ee65b818642f4f554ba">Allegations of price gouging</a> by Australian supermarkets have even led to a <a href="https://www.abc.net.au/news/2023-12-03/greens-move-to-establish-senate-inquiry-into-supermarkets/103179656">Senate inquiry</a> into supermarket pricing.</p>
<p>Coles chief executive Leah Weckert has <a href="https://www.colesgroup.com.au/media-releases/?page=coles-group-statement-on-senate-inquiry-into-supermarket-prices">promised</a> to appear at the inquiry, saying the company “works hard to keep prices affordable for Australian households […]” and is ready to “engage in an informed discussion on the factors that influence supermarket pricing.”</p>
<p>Woolworths Group chief executive Brad Banducci, meanwhile, <a href="https://www.woolworthsgroup.com.au/au/en/media/latest-news/2023/woolworths-group-confirms-ceo-will-appear-at-senate-inquiry-on-s.html">said</a> he welcomes the chance to explain to the Senate “how we are working to balance the needs of our customers, our team and our suppliers in the context of economy-wide inflationary pressure”.</p>
<p>But why wait until a Senate inquiry to explain all that? There’s an opportunity <em>now</em> for the big supermarkets to be more transparent about how they decide what prices to put on products.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1731170927889490272"}"></div></p>
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Read more:
<a href="https://theconversation.com/feeling-lonely-too-many-of-us-are-heres-what-our-supermarkets-can-do-to-help-211126">Feeling lonely? Too many of us are. Here's what our supermarkets can do to help</a>
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<h2>Allegations of price gouging</h2>
<p>It’s not just <a href="https://www.abc.net.au/news/2023-12-03/greens-move-to-establish-senate-inquiry-into-supermarkets/103179656">politicians</a> and <a href="https://au.finance.yahoo.com/news/woolworths-photo-exposes-everything-wrong-with-supermarkets-002726485.html">customers</a> complaining about supermarket prices.</p>
<p>Australian farmers have also accused Coles and Woolworths of price gouging for <a href="https://www.news.com.au/finance/business/retail/aussie-farmer-shipping-beautiful-melons-to-japan-rather-than-deal-with-coles-and-woolworths/news-story/bd685cd91f934f31c02c764097f496ae">fruits and vegetables</a>, claiming supermarkets profit too much from their crops. </p>
<p>The National Farmers’ Federation has <a href="https://www.freshplaza.com/oceania/article/9583132/farmers-call-for-price-transparency-beyond-supermarket-inquiry/">called</a> for greater transparency from the supermarkets on how they decide prices. </p>
<p>A recent <a href="https://www.freshplaza.com/oceania/article/9583132/farmers-call-for-price-transparency-beyond-supermarket-inquiry/">survey</a> by AUSVEG (the peak industry body for the Australian vegetable and potato industries) found 34% of vegetable growers are considering leaving the industry in the next 12 months as they <a href="https://www.news.com.au/finance/business/retail/aussie-farmer-shipping-beautiful-melons-to-japan-rather-than-deal-with-coles-and-woolworths/news-story/bd685cd91f934f31c02c764097f496ae">struggle</a> to turn a profit.</p>
<p>When asked about calls for more transparent pricing, a Woolworths spokesperson told The Conversation:</p>
<blockquote>
<p>We publish both our average gross margin and EBIT (earnings before interest and taxes) margin transparently in our public financial reports.</p>
<p>Supply chain costs are different for every product and they are constantly fluctuating, as are our buying costs in the case of fresh food like fruit and vegetables.</p>
<p>Shoppers are very savvy. We operate in a highly competitive industry and we know our customers will – and do – shop around to find the best value.</p>
<p>As we start to see the rate of inflation ease, we will continue to focus on delivering savings to our customers.</p>
</blockquote>
<p>Coles was also contacted for comment but did not reply before publication deadline.</p>
<h2>Factoring in many costs</h2>
<p>When a retailer buys products from their suppliers, it involves a supply chain that includes supply, manufacturing, transportation and distribution, warehouse and storage. </p>
<p>There are several costs – such as product costs, transportation fees, labour, rent, inventory and more – involved at every step of the process. </p>
<p>The supermarket must factor in all costs, as well as its profit margin, when it sets the selling price for a product.</p>
<p>Organisations usually have these cost breakdowns as part of their internal decision-making – but they don’t typically disclose these calculations to their customers.</p>
<h2>Not disclosing the cost breakdowns</h2>
<p>The problem for supermarkets is that when they don’t disclose details such as their buying price or supply chain costs, it can contribute to anger among customers and suppliers.</p>
<p>Apple and Pear Australia Limited – the national peak industry body for apple and pear growers – has <a href="https://apal.org.au/retailers-need-to-demonstrate-greater-price-transparency/">called for</a> retailers to demonstrate greater price transparency, saying, “frustration at the behaviour of the major retailers has again angered many growers”.</p>
<p>Of course, supermarkets use several pricing strategies to win customer support – such as locking in prices for a certain period of time, everyday low prices on key products, specials, price-matching and discounts. </p>
<p>Supermarkets spend millions of dollars on these price-related advertisements, but perhaps they would get more community support by simply disclosing cost breakdowns on their websites and in-store to show their commitment to transparent and fair pricing. </p>
<h2>Transparent and fair pricing</h2>
<p>Research shows price transparency helps businesses build trust with their <a href="https://fastercapital.com/content/The-Importance-of-Price-Transparency-in-Pricing-Psychology.html">customers</a>.</p>
<p>Many major retailers already have this information for internal decision-making, so could display this online and in stores. </p>
<p>Yes, prices change constantly due to factors outside their control – such as fuel prices, shipping problems or even supply chain issues linked to global conflict. But being more open with customers about these issues could help repair relationships and their public image.</p>
<p>Perhaps there may even be a role for government, which could collaborate with supermarkets and retailers to develop policies for transparent and fair pricing. </p>
<p>Everyday Australians deserve to be treated fairly and given the information they need about how major supermarkets price their products, so they can make informed decisions at the checkout.</p>
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Read more:
<a href="https://theconversation.com/a-weird-dinging-sound-that-everyone-dreads-what-rapid-deliveries-mean-for-supermarket-workers-185960">'A weird dinging sound that everyone dreads': what rapid deliveries mean for supermarket workers</a>
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<img src="https://counter.theconversation.com/content/219316/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sanjoy Paul does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Why wait until a Senate inquiry to explain how supermarkets come up with the prices in their stores? There’s an opportunity now for the big supermarkets to be more transparent on pricing.Sanjoy Paul, Associate Professor, UTS Business School, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2175332023-11-13T06:16:44Z2023-11-13T06:16:44ZHas the cyberattack on DP World put Australia’s trade at risk? Probably not … this time<p>Australians getting ready for Christmas this week had reason to believe even the best of preparations were not enough after a cyberattack hit all its major ports.</p>
<p>DP World, which operates container ports in Australia and the region, first detected problems last Friday so unplugged its systems to minimise the impact while it examined what had happened.</p>
<p>While operations <a href="https://www.abc.net.au/news/2023-11-13/dp-world-deals-with-impact-of-cyber-attack/103097658">resumed at the ports Monday</a>, the cause is still unclear and the incident continues to be investigated.</p>
<p>With responsibility for about 40% of freight movement at Australian ports, and a significant 10% of global trade through its international operations, the attack disrupted the flow of goods coming from ports DP World operates.</p>
<p>Deliveries of <a href="https://www.dfat.gov.au/trade/resources/trade-at-a-glance/Documents/top-goods-services.html">import items</a> such as videogames, air-conditioners, furniture and pharmaceuticals were held up.</p>
<p>As well, Australian exports of goods including processed meat, dairy products and fruits, all with limited shelf life, were delayed.</p>
<h2>Why this cyber attack is significant</h2>
<p>While DP World seems to be recovering, the incident highlights the potential vulnerability of global networks. </p>
<p>Supply chains rely on fully integrated solutions, from sellers overseas to buyers in Australia, to work efficiently. Information technology is embedded into them through equipment automation and data processing. Product visibility, customs clearance and checks for <a href="https://www.agriculture.gov.au/biosecurity-trade/import/arrival">biosecurity risks</a> rely on cargo information detailing where goods come from, who is responsible for them and their trading value. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1723541050328023478"}"></div></p>
<p>With sensitive data linked to the movement of containers, it is no wonder logistics professionals recognise cybersecurity as a major threat to operations – not to mention their obligations under the <a href="https://www.legislation.gov.au/Details/C2022C00160">Security of Critical Infrastructure Act</a>.</p>
<p>If there is still no certainty of the specific nature of the incident with DP World, there are few likely causes.</p>
<p>Ransomware has been on the rise, with incidents aligned to prolific cyber-criminal gangs including REVil and more recently LockBit.</p>
<p>In an attack, data is usually extracted from an organisation and then rendered inaccessible to users – typically using encryption. The organisation will usually receive a ransom demand to “unlock” the data, often payable using a crypto-currency.</p>
<p>In recent years the trend of double-extortion has become common, where the criminals incentivise their victims to pay by threatening to release the data publicly if they refuse.</p>
<p>While refusal is a possibility, the nature of the disruption could mean a loss of access to critical systems and information. If data is inaccessible, operations would need to be halted, leading to even greater losses.</p>
<p>Recovering systems would require restoration from backups and a thorough inspection for any traces of the original infection or compromise. Finally, checks would be needed to ensure no data had been lost and to identify any missing consignment data after the previous backup had taken place.</p>
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Read more:
<a href="https://theconversation.com/major-cyberattack-on-australian-ports-suggests-sabotage-by-a-foreign-state-actor-217530">Major cyberattack on Australian ports suggests sabotage by a 'foreign state actor'</a>
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<p>If the incident is a direct cyber-attack that infiltrated systems and stole or modified data, this would also require a complete system shutdown. Without the integrity of systems, consignment data cannot be trusted and the Australian Border Force would be unable to verify the content of shipments. There would also be issues with the collection of duties, taxes and fees.</p>
<p>Disconnecting DP World from networks allowed the investigating team to inspect systems to look for impacted systems and to evaluate the depth of any infection. This process also needs to consider the original infection mechanism – you don’t want the systems re-infected.</p>
<h2>The timing could have been worse</h2>
<p>The cyberattack caused the ports operated by DP World to start filling up with containers, but it had not yet become critical.</p>
<p>While Black Friday, Cyber Monday and Christmas are an extra busy time for retailers, there is usually a marginal increase in movement compared to other times of the year, typically less than 10%. With around <a href="https://www.bitre.gov.au/sites/default/files/documents/water_069_0.pdf">1.4 million containers</a> to be moved in the last three months of the year, the impact of losing a few days should be minimal.</p>
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Read more:
<a href="https://theconversation.com/is-australia-a-sitting-duck-for-ransomware-attacks-yes-and-the-danger-has-been-growing-for-30-years-161818">Is Australia a sitting duck for ransomware attacks? Yes, and the danger has been growing for 30 years</a>
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<p>Big retailers typically start making orders for Christmas in August, with deliveries starting as early as October. While they keep inventory in check, it is unlikely that operations work in just-in-time mode.</p>
<p>Especially in Australia, where the distance from major global flows, the lack of alternatives such as railroad imports and lessons learned from COVID has bred risk averse businesses that are extra cautious to avoid empty shelves.</p>
<p>Also, ports can quickly recover. When container volumes go up, extra labour and equipment can be organised to increase the output of a terminal. In the last three years the number of time slots used by trucks has seldom reached 90% of total availability.</p>
<p>DP World should quickly be able to resolve any backlogs arising from this incident. </p>
<h2>The hidden problem behind this attack</h2>
<p>A problem for Australia is the potential effect of the cyberattack on its reputation as a shipping destination. When port facilities fill up with containers to the point where ships are delayed, costs quickly escalate to millions of dollars.</p>
<p>And numbers haven’t been shiny lately.</p>
<p>The <a href="https://www.bitre.gov.au/sites/default/files/documents/water_069_0.pdf">Maritime Waterline 69 report</a> shows ship turnaround time increased from 35 hours early in 2020 to more than 50 hours in 2022. Port congestion went from a little over 10% of ships waiting for more than two hours to over 22%. And average waiting time at anchorage went up from 17.3 hours before COVID to 126.5 hours in mid-2022.</p>
<p>Add the risk of cyberattacks to this and Australian ports may lose their competitiveness, with fewer companies interested in sending their ships down here - or requiring a premium price to do so.</p>
<p>While the DP World cyberattack is unlikely to upset Christmas, the aggregated impact such attacks could have on Australia’s reputation as an important shipping hub, must be taken seriously.</p><img src="https://counter.theconversation.com/content/217533/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Flavio Macau receives funding from the Planning and Transport Research Centre - PATREC. He is currently involved in the Last Mile Delivery (LMD) project which looks at parcel distribution to the end consumer. This article, and the ports impacted in this incident, are not connected with the LMD project or the funding provided by PATREC.</span></em></p><p class="fine-print"><em><span>Paul Haskell-Dowland receives funding from the Cyber Security Cooperative Research Centre. He is currently involved in the Augmenting Cyber Defence Capability (ACDC) project which looks at cyber security in Maritime Ports. This article, and the ports impacted in this incident, are not connected with the ACDC project or the funding provided by the Cyber Security Cooperative Research Centre.</span></em></p>A cyberattack on one of Australia’s biggest port operators has highlighted the potential vulnerability of the global economy.Flavio Macau, Associate Dean - School of Business and Law, Edith Cowan UniversityPaul Haskell-Dowland, Professor of Cyber Security Practice, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2163222023-11-02T22:15:48Z2023-11-02T22:15:48ZHow Canadian companies can use tech to identify forced labour in their supply chains<figure><img src="https://images.theconversation.com/files/557005/original/file-20231101-19-pz1lh7.jpg?ixlib=rb-1.1.0&rect=29%2C37%2C4962%2C3293&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Canadian companies will soon be legally obligated to annually report on efforts to prevent and remediate forced and child labour in their supply chains. Technology could help them do this.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/how-canadian-companies-can-use-tech-to-identify-forced-labour-in-their-supply-chains" width="100%" height="400"></iframe>
<p>Levi Strauss Canada is yet another company facing <a href="https://core-ombuds.canada.ca/core_ombuds-ocre_ombuds/press-release-levi-strauss-communique.aspx?lang=eng">allegations of forced labour in its supply chain</a>. The allegations, <a href="https://www.ctvnews.ca/canada/corporate-ethics-czar-investigating-levi-strauss-over-alleged-links-to-forced-labour-1.6570081">which Levi Strauss denies</a>, centre on whether the company is working with suppliers using Uyghur forced labour. With over <a href="https://www.ilo.org/global/topics/forced-labour/publications/WCMS_854733/lang--en/index.htm">27 million people worldwide</a> in forced labour, we can expect to witness similar allegations elsewhere in the coming years. </p>
<p>While Canada enjoys strong protections against labour exploitation, the issue of involuntary work may hit closer to home than expected. The reality is that forced labour <a href="https://www.businessinsider.com/companies-brands-china-supply-chains-illegal-forced-labor-2022-12">could have been used to produce many of our everyday items</a>, including clothing, electronics and vehicles. </p>
<p>Canada has taken a significant step in addressing this problem through the <a href="https://laws.justice.gc.ca/eng/acts/F-10.6">Fighting Against Forced Labour and Child Labour in Supply Chains Act</a>. As of Jan. 1, 2024, companies with significant operations in Canada will be legally obligated to pay closer attention to the working conditions in their supply chains. </p>
<p>This act brings Canada’s efforts to address forced labour in alignment with other regions such as the <a href="https://www.cbp.gov/trade/forced-labor/UFLPA">United States</a>, the <a href="https://www.legislation.gov.uk/ukpga/2015/30/contents/enacted">United Kingdom</a> and <a href="https://www.legislation.gov.au/Details/C2018A00153">Australia</a>.</p>
<p>Under this act, any entity with significant operations in Canada will be obligated to annually report on its efforts to prevent and remediate forced and child labour in its supply chains. </p>
<p>This includes disclosing information about relevant policies, due diligence processes, supply chain hotspots, employee training and remediation measures. The act also includes provisions for corrective measures and punishment. </p>
<h2>Identifying forced labour with technology</h2>
<p>The complex nature of supply chains makes identifying when and where forced or child labour occurs a significant challenge. Supply chains can contain thousands of suppliers that span continents. Even major international companies like Levi Strauss, which has a strong <a href="https://www.levistrauss.com/wp-content/uploads/2022/09/LSCo_Code-of-Conduct.pdf">supplier code of conduct</a>, can end up facing allegations of violations in their supply chains.</p>
<p>To explore how forced and child labour can be identified in supply chains, we <a href="https://cmr.berkeley.edu/2022/03/modern-slavery-in-global-supply-chains-the-impact-of-covid-19/">conducted over 30 interviews with experts from around the world</a>. These experts included representatives from non-governmental organizations, companies and auditing bodies, providing insight into how emerging technologies can be used to support identifying such practices.</p>
<p>The difficulty of identifying far-flung suppliers, for instance, could be simplified by using DNA to identify a product’s origin, as is done with <a href="https://www.nytimes.com/2023/04/07/business/economy/ai-tech-dna-supply-chain.html">cotton</a>, <a href="https://www.msc.org/media-centre/news-opinion/news/2020/02/21/how-dna-testing-works">seafood</a> and <a href="https://theconversation.com/chocolate-a-new-way-to-make-sure-your-favourite-bar-is-an-ethical-treat-163687">chocolate</a>.</p>
<p>Drones and satellite imaging can be used to identify potential forced labour hotspots, such as remote <a href="https://www.insider.com/pakistan-brick-kilns-debt-bondage-modern-day-slavery-2023-4">brick kilns</a>, <a href="https://us.macmillan.com/books/9781250284297/cobaltred">mines</a> or <a href="https://hai.stanford.edu/news/detecting-modern-day-slavery-sky">areas of illegal deforestation</a>. AI can also <a href="https://www.weforum.org/agenda/2020/01/how-ai-and-satellite-imaging-tech-can-put-an-end-to-modern-slavery/">predict areas at high risk of forced and child labor</a> and direct attention to these regions.</p>
<p>Additionally, emerging technologies can help identify some forms of deception. Blockchain technology, for example, can provide an <a href="https://widgets.weforum.org/blockchain-toolkit/data-integrity/index.html">unalterable ledger of transactions in real time</a>, preventing later manipulation. Artificial intelligence can quickly process immense quantities of data, which aids in <a href="https://www.nytimes.com/2023/04/07/business/economy/ai-tech-dna-supply-chain.html">detecting unusual patterns indicating potential fraud</a>.</p>
<h2>Addressing the risk of deceptive practices</h2>
<p>In some cases, there are incentives for businesses to conceal illegal and immoral practices. Transparentem, a non-profit group focused on eradicating labour abuse, found <a href="https://transparentem.org/project/hidden-harm/">evidence of deception during supply chain audits in garment factories in India, Malaysia and Myanmar</a>. These deceptive practices include falsifying documents, coaching workers to lie and hiding workers who appeared to be unlawfully employed.</p>
<p>Based on in-depth interviews with auditors, suppliers, brand representatives and workers in the apparel industry, Human Rights Watch has found these risks are <a href="https://www.hrw.org/report/2022/11/15/obsessed-audit-tools-missing-goal/why-social-audits-cant-fix-labor-rights-abuses">elevated when companies have advance notice of an upcoming audit</a>. </p>
<p>Integrating sensors, cameras and other cloud technology can enable real-time monitoring of working conditions, mitigating the risks of <a href="https://doi.org/10.1016/j.jclepro.2020.120773">advance notice of audits</a>. Sensors and cameras, for example, have been used on <a href="https://teem.fish/vessels/">fishing vessels</a> to remotely transmit data in near real-time. </p>
<p>Worker voice platforms, such as those used in the <a href="https://www.responsiblebusiness.org/tools/voices/">electronics industry</a>, allow workers to provide feedback directly through smartphone apps. This can serve as a real-time whistleblower mechanism for workers trapped in forced labour.</p>
<h2>Technology is only part of the solution</h2>
<p>Despite its potential benefits, technology still has weaknesses, like high costs, susceptibility to manipulation and weak data security, that need to be addressed. Blockchain technology, for instance, <a href="https://widgets.weforum.org/blockchain-toolkit/data-integrity/index.html">can codify manipulated or incorrect data</a> unless the necessary precautions are taken.</p>
<p>Meeting the requirements of the Fighting Against Forced Labour and Child Labour in Supply Chains Act will require grounding technology in a broader risk-based approach consisting of supplier screening, monitoring and auditing. </p>
<p>In addition, even when technology does indicate the presence of forced or child labour, on-the-ground verification and follow-up is often required. Identification is just the first step. The act requires reporting on remediation, which is typically based on long-term collaborative relationships with local parties.</p>
<p>Addressing the issue of forced and child labour in supply chains is difficult and complex. While technology can help companies fulfil their reporting obligations under the act, identifying and remediating these crucial issues will require <a href="https://cmr.berkeley.edu/2022/11/65-1-transformational-transparency-in-supply-chains-leveraging-technology-to-drive-radical-change/">ongoing and concerted efforts</a>. </p>
<p>The first report is due on May 31, 2024, so companies have no time to spare in working to comply with the act.</p><img src="https://counter.theconversation.com/content/216322/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cory Searcy receives funding from the Natural Sciences and Engineering Research Council of Canada. </span></em></p><p class="fine-print"><em><span>Grant Michelson and Pavel Castka do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Supply chains can contain thousands of suppliers spanning continents. DNA testing, drones, satellite imaging and other technologies can help identify forced and child labour.Cory Searcy, Professor, Mechanical and Industrial Engineering, & Vice-Provost and Dean of Graduate Studies, Toronto Metropolitan UniversityGrant Michelson, Professor of Management, Macquarie Business School, Macquarie UniversityPavel Castka, Professor in Operations Management and Sustainability; Associate Dean Research at UC Business School, University of CanterburyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2146302023-10-10T12:38:20Z2023-10-10T12:38:20ZExxon, Apple and other corporate giants will have to disclose all their emissions under California’s new climate laws – that will have a global impact<figure><img src="https://images.theconversation.com/files/552856/original/file-20231009-27-tfp69u.jpg?ixlib=rb-1.1.0&rect=5%2C15%2C3489%2C2310&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Marathon Petroleum Corporation's Los Angeles refinery, California's largest producer of gasoline.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/an-aerial-view-shows-marathon-petroleum-corps-los-angeles-news-photo/1210662767"> David McNew/Getty Images</a></span></figcaption></figure><p><em><a href="https://theconversation.com/novas-leis-climaticas-da-california-obrigarao-exxon-apple-e-outras-gigantes-a-declararem-suas-emissoes-de-gases-de-efeito-estufa-impacto-pode-ser-global-216712">Leia em português</a>.</em></p>
<p>Many of the world’s largest public and private companies will soon be required to track and report almost all of their greenhouse gas emissions if they do business in California – including emissions from their supply chains, business travel, employees’ commutes and the way customers use their products.</p>
<p>That means oil and gas companies like Chevron will likely have to account for emissions from vehicles that use their gasoline, and Apple will have to account for materials that go into iPhones.</p>
<p>It’s a huge leap from <a href="https://www.epa.gov/ghgreporting">current federal</a> and <a href="https://ww2.arb.ca.gov/our-work/programs/mandatory-greenhouse-gas-emissions-reporting">state reporting requirements</a>, which require reporting of only certain emissions from companies’ direct operations. And it will have global ramifications. </p>
<p>California Gov. Gavin Newsom <a href="https://www.gov.ca.gov/2023/10/07/governor-newsom-issues-legislative-update-10-7-23/">signed two new rules</a> into law on Oct. 7, 2023. Under the new <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB253">Climate Corporate Data Accountability Act</a>, U.S. companies with annual revenues of US$1 billion or more will have to report both their direct and indirect <a href="https://ghgprotocol.org/corporate-standard">greenhouse gas emissions</a> starting in 2026 and 2027. The California Chamber of Commerce <a href="https://advocacy.calchamber.com/2023/08/01/calchamber-opposed-climate-reporting-bills-create-challenges-for-businesses/">opposed the regulation</a>, arguing it would increase companies’ costs. But more than a dozen major corporations <a href="https://www.ceres.org/news-center/press-releases/companies-call-climate-disclosure-legislation-california-lawmakers">endorsed the rule</a>, including Microsoft, <a href="https://twitter.com/Scott_Wiener/status/1699891993105833985">Apple</a>, Salesforce and Patagonia. </p>
<p>The second law, the <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB261">Climate-Related Financial Risk Act</a>, requires companies generating $500 million or more to report their financial risks related to climate change and their plans for risk mitigation.</p>
<p>As a <a href="https://www.lilyhsueh.com/home">professor of economics and public policy</a>, I study corporate environmental behavior and public policy, including whether disclosure laws like these work to reduce emissions. I believe California’s new rules represent a significant step toward mainstreaming corporate climate disclosures and potentially meaningful corporate climate actions.</p>
<h2>Many big corporations are already reporting</h2>
<p>Most of the companies covered by California’s climate disclosure rules are multinational corporations. They include technology companies such as Apple, Google and Microsoft; giant retailers like Walmart and Costco; and oil and gas companies such as ExxonMobil and Chevron.</p>
<p>Many of these large corporations have been preparing for mandatory disclosure rules for several years.</p>
<p>Close to two-thirds of the companies listed in the S&P 500 index voluntarily <a href="https://www.cdp.net/en/companies">report to CDP</a>, formerly called the Carbon Disclosure Project. CDP is a nonprofit that surveys companies on behalf of institutional investors about their carbon management and plans to reduce carbon emissions.</p>
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<img alt="Apple CEO Tim Cook stands under a giant glittery Apple logo on a black background." src="https://images.theconversation.com/files/552870/original/file-20231009-21-gljmp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/552870/original/file-20231009-21-gljmp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=421&fit=crop&dpr=1 600w, https://images.theconversation.com/files/552870/original/file-20231009-21-gljmp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=421&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/552870/original/file-20231009-21-gljmp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=421&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/552870/original/file-20231009-21-gljmp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=529&fit=crop&dpr=1 754w, https://images.theconversation.com/files/552870/original/file-20231009-21-gljmp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=529&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/552870/original/file-20231009-21-gljmp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=529&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Apple has been working with its suppliers for several years to reduce their emissions.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/apple-ceo-tim-cook-delivers-a-keynote-address-during-an-news-photo/1421648761">Justin Sullivan/Getty Images</a></span>
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<p>Many of them also face reporting requirements elsewhere, including in the <a href="https://corpgov.law.harvard.edu/2023/01/30/eu-finalizes-esg-reporting-rules-with-international-impacts/">European Union</a>, the <a href="https://www.gov.uk/government/news/uk-to-enshrine-mandatory-climate-disclosures-for-largest-companies-in-law">United Kingdom</a>, <a href="https://environment.govt.nz/what-government-is-doing/areas-of-work/climate-change/mandatory-climate-related-financial-disclosures/">New Zealand</a>, <a href="https://www.sgx.com/sustainable-finance/sustainability-reporting">Singapore</a> and cities like <a href="https://www.sfc.hk/en/Rules-and-standards/Securities-and-Futures-Ordinance-Part-XV---Disclosure-of-Interests">Hong Kong</a>. </p>
<p>Moreover, some of the same U.S. companies, notably <a href="https://www.morganstanley.com/im/en-be/intermediary-investor/about-us/newsroom/press-release/sustainable-finance-disclosure-regulation.html">banks and asset managers</a> that operate or sell products in Europe, have already started to comply with the EU’s <a href="https://finance.ec.europa.eu/regulation-and-supervision/financial-services-legislation/implementing-and-delegated-acts/sustainable-finance-disclosures-regulation_en">Sustainable Finance Disclosure Regulation</a>. Those regulations require companies to report how sustainability risks are integrated into investment decision-making.</p>
<p>While California isn’t the first place to mandate climate disclosures, it is the <a href="https://www.bloomberg.com/opinion/articles/2022-10-24/california-poised-to-overtake-germany-as-world-s-no-4-economy">fifth-largest economy</a> in the world. So, the state’s new laws are poised to have substantial influence worldwide. Subsidiaries of companies that didn’t have to report their emissions before will now be subject to disclosure requirements. California is in effect exercising its immense market leverage to establish climate disclosures as standard practice in the U.S. and beyond.</p>
<p>California also has a history of being a <a href="https://press.princeton.edu/books/hardcover/9780691179551/california-greenin">test bed</a> for future federal U.S. policies. The U.S. government is considering broader emissions reporting requirements. But California’s new rules go further than either the U.S. Securities and Exchange Commission’s <a href="https://www.sec.gov/files/rules/proposed/2022/33-11042.pdf">proposed corporate climate disclosure rules</a> or President Joe Biden’s <a href="https://www.sustainability.gov/federalsustainabilityplan/fed-supplier-rule.html">proposed disclosure rules for federal contractors</a>.</p>
<figure class="align-center ">
<img alt="A chart shows the differences between California's new climate disclosure laws and carbon disclosure and reporting proposals by the SEC and Biden Administration." src="https://images.theconversation.com/files/552885/original/file-20231010-23-5u8syd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/552885/original/file-20231010-23-5u8syd.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=846&fit=crop&dpr=1 600w, https://images.theconversation.com/files/552885/original/file-20231010-23-5u8syd.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=846&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/552885/original/file-20231010-23-5u8syd.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=846&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/552885/original/file-20231010-23-5u8syd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1063&fit=crop&dpr=1 754w, https://images.theconversation.com/files/552885/original/file-20231010-23-5u8syd.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1063&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/552885/original/file-20231010-23-5u8syd.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1063&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p>The most controversial part of the new disclosure rules involves scope 3 emissions. These are emissions from a company’s suppliers and its consumers’ use of its products, and they are notoriously difficult to track accurately. </p>
<p>California’s new emissions reporting law directs the <a href="https://ww2.arb.ca.gov/">California Air Resources Board</a>, which will develop the regulations and administer them, <a href="https://legiscan.com/CA/text/SB253/id/2841248/California-2023-SB253-Enrolled.html">to allow some leeway</a> in scope 3 reporting as long as the reports are made with a reasonable basis and disclosed in good faith. It’s also important to note that at this point the disclosure laws don’t require companies to cut these emissions, only to report them. But tracking scope 3 emissions does highlight where companies could pressure suppliers to make changes.</p>
<h2>What can disclosures achieve?</h2>
<p>The plethora of climate disclosure mandates globally suggest that policymakers and investors around the world perceive climate disclosures as driving actions that protect the environment. The big question is: Do disclosure rules actually work to reduce emissions?</p>
<p><a href="https://doi.org/10.1142/S2010007822500038">My research</a> shows that voluntary carbon disclosure systems like CDP’s that focus on reporting corporate sustainability outputs, such as having science-based emissions targets, tend not to be as effective as those that focus on outcomes, such as a company’s actual carbon emissions.</p>
<p>For example, a company could earn an A or B grade from CDP and still <a href="https://theconversation.com/secs-climate-disclosure-plan-could-be-in-trouble-after-a-recent-supreme-court-ruling-but-a-bigger-question-looms-does-disclosure-work-185371">increase its entitywide carbon emissions</a>, notably when it does not face regulatory pressure.</p>
<p>In contrast, a recent study of the U.K.’s 2013 disclosure mandate for U.K.-incorporated listed firms found that companies <a href="https://doi.org/10.1007/s11142-021-09611-x">reduced their operational emissions by about 8%</a> relative to a control group, with no significant changes to their profitability. When companies report their emissions, they can <a href="https://theconversation.com/legos-esg-dilemma-why-an-abandoned-plan-to-use-recycled-plastic-bottles-is-a-wake-up-call-for-supply-chain-sustainability-214573">gain important knowledge</a> about inefficiencies in their operations and supply chains that weren’t evident before.</p>
<p>Ultimately, a well-designed disclosure program, whether voluntary or mandatory, needs to focus on consistency, comparability and accountability. Those traits allow companies to demonstrate that their climate pledges and actions are real and not just a front for greenwashing.</p><img src="https://counter.theconversation.com/content/214630/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lily Hsueh does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>California is the world’s fifth-largest economy. Laws tested there often spread across the U.S. and around the world.Lily Hsueh, Associate Professor of Economics and Public Policy, Arizona State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2132042023-10-09T17:19:23Z2023-10-09T17:19:23ZFarmers are bearing the brunt of big food companies’ decarbonisation efforts – here’s why<figure><img src="https://images.theconversation.com/files/552056/original/file-20231004-28-dqil99.jpg?ixlib=rb-1.1.0&rect=12%2C6%2C4077%2C2121&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The corporate rush to reduce the environmental footprint of their food supply chains poses several challenges for farmers.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/silhouette-farmer-stands-near-cow-milk-1898830387">StockMediaSeller/Shutterstock</a></span></figcaption></figure><p><a href="https://news.un.org/en/story/2021/03/1086822">More than a third</a> of the global greenhouse gas emissions resulting from human activity can be attributed to the way we produce, process and package food. So it comes as no surprise that many large companies involved in food production and retailing are <a href="https://www.fairr.org/news-events/press-releases/fast-food-giants-ramp-up-climate-commitments-under-investor-pressure-in-breakthrough-year">under pressure</a> from investors, politicians and environmental groups to clean up their operations.</p>
<p>Having a carbon-neutral supply chain isn’t just good for the environment, it’s a smart business move too, especially at a time when the public is <a href="https://www.pewresearch.org/global/2022/08/31/climate-change-remains-top-global-threat-across-19-country-survey/">growing more concerned</a> about the negative effects of climate change. </p>
<p>Several leading fast-food chains are starting to take note. McDonald’s, for example, has <a href="https://www.mcdonalds.com/gb/en-gb/our-plan-for-change/our-plan/defining-net-zero.html">announced plans</a> to achieve net zero emissions from its entire business operation by 2040.</p>
<p>Yet the corporate rush to reduce the environmental footprint of their food supply chains poses several challenges for farmers. These supply chains – from providing ingredients, to processing and retailing – are mainly controlled by a handful of large companies. In the US, Walmart <a href="https://www.axios.com/2023/04/20/most-popular-grocery-stores">holds a quarter</a> of the grocery market share, while Tesco <a href="https://www.kantarworldpanel.com/grocery-market-share/great-britain">commands 27%</a> of the UK’s food retail sector. </p>
<p>This level of concentration means that initiatives for decarbonising the food supply system are spearheaded by large companies. This is a problem because the proposed measures are often impractical for smaller farms, expensive or lack buy-in from farmers. </p>
<figure class="align-center ">
<img alt="Tesco supermarket sign outside of a store." src="https://images.theconversation.com/files/552040/original/file-20231004-25-v6i8ko.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/552040/original/file-20231004-25-v6i8ko.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/552040/original/file-20231004-25-v6i8ko.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/552040/original/file-20231004-25-v6i8ko.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/552040/original/file-20231004-25-v6i8ko.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/552040/original/file-20231004-25-v6i8ko.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/552040/original/file-20231004-25-v6i8ko.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Large corporations dominate food supply chains.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bathgate-scotland-uk-october-11-2017-738923662">Loch Earn/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Voluntary or compulsory?</h2>
<p>Many large companies have sought to offset emissions that are hard to reduce by <a href="https://www.aldi.co.uk/corporate/corporate-responsibility/greener/carbon-neutrality">buying carbon credits</a>. These are permits that allow the owner to emit a certain amount of carbon dioxide. </p>
<p>However, there is a growing issue with the credibility of carbon offset programmes. So firms risk being accused of “<a href="https://www.abatable.com/blog/eu-vote-product-sustainability-greenwashing">greenwashing</a>” or facing <a href="https://apnews.com/article/delta-airlines-lawsuit-carbon-credits-carbon-neutral-469f2671010ba7f40c934cc23d62149a">potential legal challenges</a> for spurious carbon offsets. Many of these firms are now <a href="https://www.carrefour.com/en/csr/commitment/reducing-ghg-emissions">shifting their focus</a> towards decarbonising their own operations, by tackling emissions directly throughout their <a href="https://hbr.org/2021/11/accounting-for-climate-change">entire supply chain</a>. </p>
<p>This shift directly affects farmers. For instance, a cattle farm in Brazil that supplies beef to a transnational retailer overseas would now be obliged to comply with emission-reduction measures imposed by that retailer. </p>
<p>These measures may include changes to grazing land or the installation of <a href="https://clear.ucdavis.edu/explainers/what-dairy-digester-and-how-does-it-affect-methane-emissions">digesters</a> (closed tanks where microorganisms break down organic material such as cow manure). But they can be very costly to implement for small farms and can expose them to the risk of exclusion from global markets. </p>
<p>Research by the British bank Barclays indicates that, in 2021, UK retailers <a href="https://www.barclayscorporate.com/insights/industry-expertise/reshaping-retail/">cancelled contracts</a> worth over £7 billion with suppliers as a result of failure to meet sustainability standards. </p>
<p>Constrained by the influence of these companies, farmers also lose their ability to use practices that result in substantial, although challenging to measure, reductions in emissions. One such practice involves the <a href="https://pubmed.ncbi.nlm.nih.gov/23739472/">selective breeding of cattle</a> for greater feed efficiency. </p>
<p>By doing so, farmers can raise cattle herds that consume less feed and produce fewer greenhouse gases, all while maintaining milk and meat production. According to a <a href="https://projectblue.blob.core.windows.net/media/Default/Research%20Papers/Beef%20&%20Lamb/61100002%20Defra%20IF0207%20Evidence%20Project%20Final%20Report.pdf">UK government report</a>, this breeding strategy has the potential to reduce beef-related greenhouse gas emissions by 27% across the whole industry over a 20-year period.</p>
<p>Still, a <a href="https://doi.org/10.1108/BFJ-10-2015-0411">modelling study</a> my colleagues and I conducted in 2016, found that farmers are unlikely to adopt this practice if beef processors – primarily large companies downstream in the supply chain – do not pay for feed-efficient cows. Even though our results were published a few years ago, the situation remains largely unchanged.</p>
<figure class="align-center ">
<img alt="Black and white cows eating hay in the farm stable." src="https://images.theconversation.com/files/552041/original/file-20231004-17-deen3k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/552041/original/file-20231004-17-deen3k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/552041/original/file-20231004-17-deen3k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/552041/original/file-20231004-17-deen3k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/552041/original/file-20231004-17-deen3k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/552041/original/file-20231004-17-deen3k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/552041/original/file-20231004-17-deen3k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Feed-efficient cows consume less feed and produce fewer greenhouse gases.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/black-white-cows-eating-hay-farm-673807834">Tanya May/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Getting off the fence</h2>
<p>Achieving a transition to net zero that is fair will require that farmers have a say over how to go about it. With an in-depth knowledge of their land, crops and animals, farmers can help to implement measures and set targets that are practical, effective and attainable. </p>
<p>There are encouraging signs that this is starting to happen in several countries. The UK’s National Farmers Union, which represents over 55,000 farmers in England and Wales, has set an ambitious target of <a href="https://www.nfuonline.com/media/jq1b2nx5/achieving-net-zero-farming-s-2040-goal.pdf">reaching net zero by 2040</a>. Similarly, the Dairy Farmers of Canada plan to achieve <a href="https://dairyfarmersofcanada.ca/en/farmer-resources/net-zero-2050">net zero by 2050</a>.</p>
<p>But these initiatives must extend beyond mere rhetoric and vague net zero targets, towards tangible actions. The capacity of farmers to measure, report and verify on-farm emissions must be improved through better training and innovation. </p>
<p>Currently, measuring a farm’s carbon emissions is difficult. There are as many as <a href="https://pure.sruc.ac.uk/en/publications/comparative-analysis-of-farm-based-carbon-audits">64 different carbon farm accounting tools</a> in use, each differing in terms of their scope and data requirements. This lack of standardisation can <a href="https://www.climatexchange.org.uk/research/projects/comparative-analysis-of-farm-based-carbon-audits/">diminish the credibility</a> of decarbonisation schemes and potentially discourage farmers from participating. </p>
<p>Providing farmers with the right incentives is critical. The multinational dairy cooperative <a href="https://www.arla.com/company/news-and-press/2022/pressrelease/arla-earmarks-up-to-500-meur-annually-for-rewarding-climate-activities-on-farm/">Arla Foods</a> provides farmers with €0.03 per kg for engaging in sustainability activities, such as using renewable energy, and €0.01 per kg for submitting emissions data using the firm’s carbon accounting tool. More initiatives like this are needed across the industry to gather emission data from farms and incentivise change.</p>
<p>Decarbonising our food system hinges on major food companies, farmers, policymakers and environmental advocacy groups taking action together. This action must be practical and measurable and offer the right incentives, not only to companies, but also to farmers.</p>
<hr>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p class="fine-print"><em><span>Albert Boaitey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Big name food brands are pursuing decarbonisation – but they are squeezing farmers in the process.Albert Boaitey, Lecturer in Global Agri-food Supply Chains, Newcastle UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2054712023-09-20T04:12:14Z2023-09-20T04:12:14ZGovernments are pouring money into housing but materials, land and labour are still in short supply<p>As Australia’s housing affordability crisis worsens, governments are spending more on housing.</p>
<p>Victoria’s Andrews government has <a href="https://www.vic.gov.au/housing-statement">announced</a> a suite of <a href="https://www.theage.com.au/politics/victoria/kingswood-golf-course-rezoning-among-five-projects-suddenly-approved-by-government-20230920-p5e64c.html">reforms</a> (such as boosting social housing and making planning processes faster) in an effort to get 800,000 extra homes in Victoria over the next decade.</p>
<p>Federally, the Albanese government’s A$10 billion Housing Australia Future Fund, or HAFF, has <a href="https://theconversation.com/the-greens-were-right-to-pass-australias-housing-future-fund-bill-the-case-for-further-delay-was-weak-213255">passed the Senate</a> with the help of the Greens, who supported the bill in exchange for another A$1 billion for social housing.</p>
<p>And this year’s federal budget has expanded eligibility for the <a href="https://ministers.dss.gov.au/media-releases/11161#:%7E:text=Helping%20Australians%20with%20the%20cost,%242.7%20billion%20over%20five%20years">Home Guarantee Scheme</a> so more people can buy a home with a smaller deposit. </p>
<p>But is Australia ready for a house construction boom? </p>
<p>Supply chain constraints say no. Ballooning construction costs and labour shortages have already claimed well-known building firms across the country. Delivering thousands of extra new homes in the coming years will not be easy.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/549027/original/file-20230919-25-o18tcl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Houses like half-constructed in the lanscape." src="https://images.theconversation.com/files/549027/original/file-20230919-25-o18tcl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/549027/original/file-20230919-25-o18tcl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=443&fit=crop&dpr=1 600w, https://images.theconversation.com/files/549027/original/file-20230919-25-o18tcl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=443&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/549027/original/file-20230919-25-o18tcl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=443&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/549027/original/file-20230919-25-o18tcl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=557&fit=crop&dpr=1 754w, https://images.theconversation.com/files/549027/original/file-20230919-25-o18tcl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=557&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/549027/original/file-20230919-25-o18tcl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=557&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Is Australia ready for a house construction boom?</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-greens-were-right-to-pass-australias-housing-future-fund-bill-the-case-for-further-delay-was-weak-213255">The Greens were right to pass Australia's Housing Future Fund bill – the case for further delay was weak</a>
</strong>
</em>
</p>
<hr>
<h2>Materials are hard to get</h2>
<p>Building a home requires the right materials at the right time. But many building materials are in short supply.</p>
<p>Timber is a good example. The Master Builders Association <a href="https://www.theaustralian.com.au/business/timber-shortages-ease-but-reliance-on-overseas-suppliers-leaves-industry-exposed/news-story/50f6012ebbd48d2749a9309b7f9c6f1b">highlights</a> there are still pressures on timber and wood supplies.</p>
<p>This imbalance between supply and demand for construction materials can be traced back to the <a href="https://www.smh.com.au/politics/federal/new-homebuilder-package-aims-to-safeguard-jobs-of-a-million-tradies-20200603-p54z7w.html">HomeBuilder</a> program, which saw over 138,000 Australians applying for a <a href="https://treasury.gov.au/coronavirus/homebuilder">grant</a> to build or renovate. </p>
<p>The number of new dwellings commenced went from 41,855 in September 2020 to a <a href="https://www.abs.gov.au/statistics/industry/building-and-construction/building-activity-australia/mar-2023">peak</a> of 67,306 in July 2021 – an increase of 60% in less than a year. </p>
<p>Typically, a spike in demand is met by imports. But soaring <a href="https://www.imf.org/en/Blogs/Articles/2022/03/28/how-soaring-shipping-costs-raise-prices-around-the-world">shipping costs</a> during the pandemic conspired with <a href="https://www.timberbiz.com.au/conflict-timber-comes-into-australia-with-false-origin-labels/#:%7E:text=Australia%20has%20not%20banned%20timber,conflict%20timber%20and%20its%20sustainability">restrictions</a> to timber imports from Russia to send global markets into disarray. </p>
<p>Tim Reardon, Chief Economist for the Housing Industry Association <a href="https://hia.com.au/our-industry/newsroom/economic-research-and-forecasting/2023/04/housing-supply-worsens-as-demand-increases">reckons</a> housing supply issues will not get any better soon. The federal government’s National Housing Finance and Investment Corporation <a href="https://www.nhfic.gov.au/research/state-nations-housing-report-2022-23">expects</a> housing supply will only recover by 2025-26.</p>
<p>Demand pressures will continue. As it is, there are lots of <a href="https://www.abs.gov.au/statistics/industry/building-and-construction/building-activity-australia/mar-2023">unfinished homes</a> around the country.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/549029/original/file-20230919-17-d1u576.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Building frames of houses are seen against an urban background." src="https://images.theconversation.com/files/549029/original/file-20230919-17-d1u576.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/549029/original/file-20230919-17-d1u576.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=327&fit=crop&dpr=1 600w, https://images.theconversation.com/files/549029/original/file-20230919-17-d1u576.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=327&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/549029/original/file-20230919-17-d1u576.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=327&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/549029/original/file-20230919-17-d1u576.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=411&fit=crop&dpr=1 754w, https://images.theconversation.com/files/549029/original/file-20230919-17-d1u576.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=411&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/549029/original/file-20230919-17-d1u576.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=411&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">You need materials and energy to build a house.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Labour and land are also in short supply</h2>
<p>Building a home is labour intensive. Finding roofers, bricklayers, carpenters, tilers, landscapers and other construction workers has <a href="https://www.jobsandskills.gov.au/download/2289/skills-shortage-quarterly-march-2023/1448/skills-shortage-quarterly-report-march-2023/docx">not been easy</a>. </p>
<p>Australia’s record low unemployment <a href="https://www.abs.gov.au/media-centre/media-releases/unemployment-rate-falls-34">rates</a> and a global rise in <a href="https://www.oecd.org/publications/the-post-covid-19-rise-in-labour-shortages-e60c2d1c-en.htm">labour shortages</a> have made it hard for builders to find the workers they need to finish jobs. <a href="https://www.9news.com.au/national/construction-delays-perth-customers-waiting-up-to-four-years-for-new-homes-to-be-built-by-states-largest-builder/fa6334f3-64f9-47c1-9d5a-e0898e9a4a4e">Delays</a> are common.</p>
<p>Some skill sets are in even higher demand, as workers flock to oil and gas, mining, and infrastructure projects. In Western Australia, for example, <a href="https://bcec.edu.au/publications/housing-affordability-in-western-australia-2023-building-for-the-future/">research</a> has shown a shortage of construction managers, handy persons, and civil engineering professionals.</p>
<p>Then, there is the question of land. Greenfield projects (new developments on the city fringes) typically see fast approvals, fast sales, and good profit.</p>
<p>But suburbs alone cannot deliver the demand that is coming, thanks to the Housing Australia Future Fund and the other government initiatives.</p>
<p>There is a growing consensus more has to be done to increase <a href="https://www.abc.net.au/news/2023-09-01/four-unique-ways-tokyo-approaches-housing/102784020">urban density</a> (in other words, apartments) next to <a href="https://theconversation.com/to-make-housing-more-affordable-this-is-what-state-governments-need-to-do-105050">mass transit hubs</a>.</p>
<p>But this isn’t easy either. Not-in-my-backyard (NIMBY) critics abound and demand for standalone houses remains strong as people pursue the “great Australian dream” of a <a href="https://immi.homeaffairs.gov.au/amep-subsite/Files/intermediate-housing-housing-worksheet-1-the-great-australian-dream.pdf">large house</a> on a large block of land.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/549030/original/file-20230919-20-iklfa4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Construction workers look on as a crane moves a heavy object for a building project." src="https://images.theconversation.com/files/549030/original/file-20230919-20-iklfa4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/549030/original/file-20230919-20-iklfa4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/549030/original/file-20230919-20-iklfa4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/549030/original/file-20230919-20-iklfa4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/549030/original/file-20230919-20-iklfa4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/549030/original/file-20230919-20-iklfa4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/549030/original/file-20230919-20-iklfa4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Labour is in short supply.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>So how can we strengthen supply?</h2>
<p>These issues in materials, labour, and land will not solve themselves. Pouring more money into the housing market without addressing supply shortages will only increase prices. </p>
<p>So, what initiatives can really address the housing supply crisis? Options include:</p>
<ul>
<li><p>reducing import taxes on materials like construction timber and steel frames to boost short-term supply (while adhering to long-term strategies to address future demand) </p></li>
<li><p>supporting new technologies in the construction industry (the federal government’s <a href="https://www.agriculture.gov.au/about/news/grants-open-for-wood-processing-facilities">Accelerate Adoption of Wood Processing Innovation</a> program, which enables the use of innovative technology for timber production, is one example)</p></li>
<li><p>increasing skilled migration to boost labour supply (Western Australia’s <a href="https://migration.wa.gov.au/news/boosting-was-building-construction-industry-through-skilled-migration">Construction Visa Subsidy Program</a>, which targets skilled migrants to the construction sector, shows what’s possible)</p></li>
<li><p>embracing manufactured homes (<a href="https://www.sbt-durabi.org/articles/article/M9R2/#Information">modular construction</a>, for example, can increase labour productivity, reduce costs and mitigate the effects of weather delays)</p></li>
<li><p>making it easier to release land for development, especially in urban areas (for example, the Victoria government is investing <a href="https://www.budget.vic.gov.au/homes-for-victorians">$40 million in red-tape busting measures</a>).</p></li>
</ul>
<p>The housing crisis in Australia is far from over. Without coordinated action to increase supply, government grants will have little practical effect on house affordability anytime soon.</p><img src="https://counter.theconversation.com/content/205471/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Is Australia ready for a house construction boom? Supply chain constraints say no.Flavio Macau, Associate Dean - School of Business and Law, Edith Cowan UniversityDeepa Bannigidadmath, Lecturer, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2136692023-09-15T14:04:38Z2023-09-15T14:04:38ZLibya floods: why cash is the best way to help get humanitarian aid to people affected by disasters<figure><img src="https://images.theconversation.com/files/548542/original/file-20230915-27-9t1f7u.jpg?ixlib=rb-1.1.0&rect=314%2C134%2C5308%2C3826&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/mature-man-working-volunteer-community-center-2147202215">Drazen Zigic/Shutterstock</a></span></figcaption></figure><p>The heavy rainfall that hit <a href="https://www.bbc.co.uk/news/av/world-africa-66787997">Libya during Storm Daniel</a> caused two dams and four bridges to collapse in the coastal city of Derna, submerging most of the city in floodwater and claiming thousands of lives. </p>
<p>As you watch the disturbing scenes of this disaster on the news, you might wonder about the best way to help. Sending that blanket in the closet you have never used or those painkillers in the cabinet you overbought last time you had a headache might seem helpful. </p>
<p>But <a href="https://jhumanitarianaction.springeropen.com/articles/10.1186/s41018-016-0015-7">research suggests otherwise</a>. Such “in-kind donations” (physical items such as food, clothing, household items and medicine) can actually place a heavy burden on the humanitarian aid network.</p>
<p>If items are delivered to disaster areas in bulk, humanitarian organisations can struggle to receive, sort and send them to people in need quickly. Any accumulation can clog critical airports and warehouses. </p>
<p>This is known as “<a href="https://www.sciencedirect.com/science/article/abs/pii/S1366554522001272?via%3Dihub">material convergence</a>”. Humanitarian organisations can become overwhelmed with unsolicited donations. </p>
<p>This can <a href="https://www.magonlinelibrary.com/doi/abs/10.12968/bjhc.2022.0091">range from</a> medicine and food (sometimes at or near expiry), to equipment that’s just not compatible with the country’s systems – whether that’s because of voltage differences or product labels written in a different language.</p>
<p>To avoid such backlogs, <a href="https://link.springer.com/article/10.1007/s10479-014-1623-5">research shows</a> donating money in cash or via bank transfer to <a href="https://www.icrc.org/en">verified</a> international <a href="https://crisisrelief.un.org/donate">humanitarian</a> organisations is the most helpful and efficient response to humanitarian crises. Within the past decade, some organisations have even launched <a href="https://www.wfp.org/cash-transfers">successful cash and voucher assistance programmes</a> to pass this money on to people in dire need. </p>
<p>Giving cash rather than in-kind donations also respects the dignity of beneficiaries, and prevents duplication and delivery of unneeded aid. Also, perhaps most importantly, it helps to support a local economy that might be crippled by crisis. </p>
<p>Cash-based interventions safeguard people’s purchasing power and help them cover urgent needs during crises, according to <a href="https://docs.wfp.org/api/documents/WFP-0000150584/download/">the Word Food Programme (WFP)</a>. This isn’t as simple with in-kind donations.</p>
<h2>Delivering humanitarian aid to Derna</h2>
<p>The recent flooding in Libya has left <a href="https://www.bbc.co.uk/news/world-africa-66807956">the city of Derna</a> in dire need of such support for its people and its local economy. But even before the floods, the area has been crippled by civil conflict for more than a decade. </p>
<p>Libya is divided into zones ruled by different militias and two governments on the east and west of the country. There is constant fighting between the various factions. </p>
<p>The country already suffers from weak economic growth. Its GDP per capita <a href="https://www.worldbank.org/en/country/libya/overview">dropped by 50%</a> between 2011 and 2020 due to this conflict, despite Libya being among the top 10 global sources of proven oil and natural gas reserves.</p>
<p>Storm Daniel had <a href="https://apnews.com/article/turkey-greece-bulgaria-extreme-weather-d2aaa1701dbc7a3722a85aee04a977ac">already hit</a> Greece, Bulgaria and Turkey before it was <a href="https://www.climatecentre.org/11608/the-storm-daniel-medicane-turns-on-libya/#:%7E:text=The%20danger%20Storm%20Daniel%20posed,forecaster%20Matt%20Taylor%20said%20then.">forecast</a> to cause heavy rainfalls in Libya. But the country’s fragile economic and political environment and lack of <a href="https://www.afdb.org/en/countries/north-africa/libya/libya-economic-outlook">national climate change strategy</a> left it far from prepared for this disaster. </p>
<p>Worse, Derna is a neglected city in eastern Libya controlled by a rival administration to the western government. The region’s government does not allow free access of humanitarian organisations to Derna so <a href="https://edition.cnn.com/2023/09/13/middleeast/libya-flood-political-rift-mime-intl/index.html">it’s unclear</a> if much-needed aid is reaching the right people and being distributed equally. But this political status has also created other complications for the current situation.</p>
<p>The city’s two now-collapsed dams <a href="https://www.aljazeera.com/news/2023/9/12/infrastructure-in-libyas-derna-not-built-to-withstand-storm-deputy-mayor?traffic_source=KeepReading">have not been maintained</a> for more than two decades, despite erosion concerns. Also, a functional meteorological service could have saved thousands of lives by issuing an early evacuation warning, according to <a href="https://www.independent.co.uk/tv/news/libya-floods-weather-deaths-warning-b2411558.html">the head of World Meteorological Organization (WMO)</a>.</p>
<p>After years of conflict, reports say <a href="https://www.aljazeera.com/news/2023/9/12/infrastructure-in-libyas-derna-not-built-to-withstand-storm-deputy-mayor">the only hospital</a> serving Derna’s 100,000 residents was a five-bedroom villa. Road and telecommunication infrastructure has also been weakened, while new road renovation and construction projects <a href="https://dlca.logcluster.org/libya-23-libya-road-network">have been suspended</a> due to security concerns. The port of Derna <a href="https://dlca.logcluster.org/213-libya-port-derna">was also closed due to security issues</a> for about three years until 2021, affected the local economy.</p>
<h2>The compounding effect of concurrent disasters</h2>
<p>When disasters happen in a setting already hit by other crises, there is a compounding effect. This means a disaster can have a higher detrimental impact on the livelihood of the people and the local economy. Responding to concurrent disasters is more challenging and can require more resources from humanitarian organisations.</p>
<p>The likes of the International Committee of Red Cross (ICRC) are no strangers to delivering humanitarian aid to remote or troubled areas, of course. Their supply chains are designed in a fundamentally different way from <a href="https://www.emerald.com/insight/content/doi/10.1108/IJOPM-04-2016-0202">commercial supply chains</a>. They are typically decentralised to allow swift decision making and the mobilisation of resources as required. </p>
<p>The Red Cross and other humanitarian organisations such as WFP, which runs the <a href="https://unhrd.org/">UN Humanitarian Response Depot</a> also keep essential items “prepositioned” in strategic locations so they can be dispatched to disaster areas <a href="https://www.sciencedirect.com/science/article/abs/pii/S0038012119303489">as a first emergency response</a>. </p>
<p>The compounding effect of prolonged civil conflict makes delivering humanitarian aid challenging, but climate change <a href="https://www.icrcnewsroom.org/story/en/1921/icrc-report-climate-change-and-conflict-are-a-cruel-combo-that-stalk-the-world-s-most-vulnerable?utm_source=twitter&utm_medium=social&linkId=100000013447880">is adding another layer of complexity to such situations</a>. Of the 20 countries most vulnerable to climate change, most are dealing with armed conflict. </p>
<p>By 2050, humanitarian organisations will need to deliver aid to <a href="https://www.icrcnewsroom.org/story/en/1921/icrc-report-climate-change-and-conflict-are-a-cruel-combo-that-stalk-the-world-s-most-vulnerable?utm_source=twitter&utm_medium=social&linkId=100000013447880">200 million people</a> – almost double current needs. Much of this aid will go to people hit by concurrent disasters, making delivery challenging, slow and arduous. </p>
<p>So, when donating in the wake of a disaster, consider giving cash to a reputable aid organisation. Research shows it has the best chance of getting to the heart of the crisis.</p><img src="https://counter.theconversation.com/content/213669/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hossein Zarei does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Even before Storm Daniel hit, Derna in Libya was in dire need of help. But it’s not always clear how best to help humanitarian organisations to deliver aid most effectively.Hossein Zarei, Lecturer in Business Strategy, Coventry UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2094922023-09-05T12:32:22Z2023-09-05T12:32:22ZWhat is geospatial intelligence? A geographer explains the powerful melding of maps and data<figure><img src="https://images.theconversation.com/files/545837/original/file-20230831-29-uaz7h6.jpg?ixlib=rb-1.1.0&rect=0%2C8%2C6000%2C3979&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Where + what = geospatial intelligence.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/august-2020-hanover-geospatial-information-provides-an-news-photo/1556978824">Peter Steffen/picture alliance via Getty Images</a></span></figcaption></figure><p>With <a href="https://theconversation.com/july-was-earths-hottest-month-on-record-4-factors-driving-2023s-extreme-heat-and-climate-disasters-209975">record-breaking temperatures</a> across the South, <a href="https://theconversation.com/wildfire-smoke-and-dirty-air-are-also-climate-change-problems-solutions-for-a-world-on-fire-207676">smoke from Canadian wildfires</a> across the North, <a href="https://theconversation.com/how-climate-change-intensifies-the-water-cycle-fueling-extreme-rainfall-and-flooding-the-northeast-deluge-was-just-the-latest-209476">historic flooding</a> in the Northeast and a <a href="https://theconversation.com/hurricane-idalia-intensifies-over-extremely-warm-gulf-waters-on-track-for-florida-landfall-as-a-dangerous-major-hurricane-212410">powerful hurricane in the Southeast</a>, the <a href="https://www.usatoday.com/story/news/nation/2023/07/01/smoke-heat-wave-forecast-for-summer-2023-is-looking-bad-experts-say/70364826007/">summer of 2023</a> has presented a range of threats to the safety of the majority of Americans. The good news, through all of this: <a href="https://www.nga.mil/resources/GEOINT_Basic_Doctrine_Publication_10_.html">Geospatial intelligence</a> has offered valuable insights to help governments and organizations protect communities.</p>
<p>Geospatial intelligence is the collection and integration of data from a network of technologies, including satellites, mobile sensors, ground-control stations and aerial images. The data is used to produce <a href="https://trajectorymagazine.com/no-matter-their-scale-nga-maps-have-huge-impact/">real-time maps</a> and simulations to help identify when, where and to what extent a threat is likely to emerge. Government officials, individuals or both can use this information to <a href="https://www.nga.mil/about/Mission.html">make informed decisions</a>.</p>
<h2>Disasters sudden and slow</h2>
<p>One long-standing contribution of geospatial intelligence is in emergency preparedness and response. For example, the <a href="https://www.nhc.noaa.gov/">National Hurricane Center</a> actively monitors the location, formation and trajectory of tropical cyclones. Detailed information on the timing, location and strength of a given hurricane helps officials distribute resources and personnel, as well as issue storm warnings and evacuation orders. </p>
<p>Geospatial intelligence also provides valuable guidance for search-and-rescue and recovery efforts following a disaster. For example, in the immediate aftermath of the February 2023 7.8 magnitude <a href="https://www.unicef.org/emergencies/Syria-Turkiye-earthquake">earthquake that struck Turkey and Syria</a>, maps and aerial images quickly identified the extent of damage and the populations affected. In addition, they helped first responders locate access points in the transportation network to rescue survivors, set up aid stations and provide emergency supplies.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/542416/original/file-20230811-15-lh0j6x.jpeg?ixlib=rb-1.1.0&rect=0%2C0%2C1868%2C972&q=45&auto=format&w=1000&fit=clip"><img alt="A map of the United States overlaid by colored blobs" src="https://images.theconversation.com/files/542416/original/file-20230811-15-lh0j6x.jpeg?ixlib=rb-1.1.0&rect=0%2C0%2C1868%2C972&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/542416/original/file-20230811-15-lh0j6x.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=312&fit=crop&dpr=1 600w, https://images.theconversation.com/files/542416/original/file-20230811-15-lh0j6x.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=312&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/542416/original/file-20230811-15-lh0j6x.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=312&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/542416/original/file-20230811-15-lh0j6x.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=392&fit=crop&dpr=1 754w, https://images.theconversation.com/files/542416/original/file-20230811-15-lh0j6x.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=392&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/542416/original/file-20230811-15-lh0j6x.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=392&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Environmental Protection Agency publishes air quality maps that are particularly useful when smoke from wildfires spreads across large parts of the U.S.</span>
<span class="attribution"><a class="source" href="https://gispub.epa.gov/airnow/?tab=archive&archivedates=06%2F01%2F2023&xmin=-19900762.26273924&xmax=-1614579.1120248176&ymin=546395.5542774848&ymax=8725769.07701545">EPA</a></span>
</figcaption>
</figure>
<p>Another use of geospatial intelligence is environmental monitoring. A stable environment is essential for human health and security. Monitoring temperature, precipitation, <a href="https://nsidc.org/home">snowpack and polar ice</a> helps scientists and government officials anticipate and prepare for potential disturbances.</p>
<p>For instance, understanding <a href="https://www.severe-weather.eu/long-range-2/summer-2023-weather-forecast-update-el-nino-rising-atmosphere-pattern-shift-united-states-europe-fa/">temperature profiles</a> – past, current and forecasted temperatures over an area – provides information on when, where and to what extent that area is likely to be affected by events such as heat waves. Heat waves often result in <a href="https://theconversation.com/if-you-thought-this-summers-heat-waves-were-bad-a-new-study-has-some-disturbing-news-about-dangerous-heat-in-the-future-189370">human suffering</a>, <a href="https://theconversation.com/4-ways-extreme-heat-hurts-the-economy-164382">increased energy demands and crop damage</a>. With climate change intensifying extreme weather events, there is likely to be a corresponding increase in threats to human safety and security.</p>
<h2>Military and civilian logistics</h2>
<p>The Russian-Ukraine war is another area where geospatial intelligence has made contributions. Maxar Technologies, a commercial satellite imagery company, was the first to report the 40-mile-long <a href="https://blog.maxar.com/earth-intelligence/2023/new-documentary-on-ukraine-underscores-the-importance-of-maxars-commercial-satellite-imagery-and-capabilities">convoy of Russian ground forces</a> heading toward Kyiv in February 2022.</p>
<p>While governments historically could choose whether to release intelligence-related information, commercial satellite companies now play a vital role in providing this type of information to the public. In this way, geospatial intelligence represents an extension of the free press.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/Ce3rDcCophY?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Geospatial intelligence is a key component of open-source intelligence, which in turn has played a key role in monitoring the war in Ukraine.</span></figcaption>
</figure>
<p>Another use of geospatial intelligence is in <a href="https://doi.org/10.1007/978-981-15-5720-0_6">transportation, logistics and global supply chains</a>. The global economy runs on GPS, which generates spatial data. GPS provides governments, businesses and people with detailed information on the time, location and destination of ships and cargo. This leads to greater efficiency and more consistent and reliable operations.</p>
<p>Geospatial intelligence is also helping with the <a href="https://doi.org/10.22381/CRLSJ13220217">rollout of autonomous vehicles</a>. Using high-resolution imagery of about a foot (30 cm) per pixel, city planners and engineers are able to detect markings and features on the ground such as bicycle lanes and traffic direction. These advances help planners build safer, smarter, more efficient and better connected communities.</p>
<p>Yet another use of geospatial intelligence is contributing to the development, implementation and evaluation of <a href="https://theconversation.com/what-are-digital-twins-a-pair-of-computer-modeling-experts-explain-181829">digital twins</a>. Digital twins are virtual representations of real systems – buildings or cities, for example – that mimic the systems’ characteristics and can be updated in real time to reflect changing conditions in the systems.</p>
<p>Digital twins are being used in many civilian and military settings to improve decision making. They are useful for modeling changes and predicting outcomes. Digital twins have been highly effective in conflict settings by <a href="https://trajectorymagazine.com/rapid-terrain-generation/">simulating weather and terrain</a> to help militaries and peacekeepers develop and enact strategies.</p>
<h2>Growing need</h2>
<p>The need for geospatial intelligence is more important than ever. Average temperature is projected to <a href="https://www.climate.gov/news-features/understanding-climate/climate-change-global-temperature-projections">increase between 2 to 9.7 degrees Fahrenheit (1.1 to 5.4 degrees Celsius)</a> by the end of the century. The global population is expected to reach <a href="https://www.un.org/en/global-issues/population">11 billion by 2100</a>, and urban areas are becoming denser and more prone to disasters. Whether reconstructing the past, describing the present or anticipating the future, geospatial intelligence provides valuable information to help keep people and communities safe.</p>
<p>Not surprisingly, the geospatial intelligence industry is projected to grow from a US$61 billion enterprise in 2020 <a href="https://usgif.org/geoint-symposium-2023/">to more than $209 billion in 2030</a>. The world is rapidly transforming, and geospatial intelligence is positioned to play an increasingly important role in <a href="https://trajectorymagazine.com/geospatial-intelligence-revolution-in-insurance-and-risk-management/">working toward a safe, stable and informed future</a>.</p><img src="https://counter.theconversation.com/content/209492/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Darren Ruddell does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The combination of data and maps is useful for a lot more than just helping you get from point A to point B. Think natural disasters, global supply chains and climate change.Darren Ruddell, Associate Professor of Spatial Sciences, University of Southern CaliforniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2027062023-08-03T12:25:29Z2023-08-03T12:25:29ZMany global corporations will soon have to police up and down their supply chains as EU human rights ‘due diligence’ law nears enactment<figure><img src="https://images.theconversation.com/files/538609/original/file-20230720-27-c0f2jp.jpg?ixlib=rb-1.1.0&rect=130%2C142%2C7809%2C5154&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Forced and child labor has been reported in mines in the Congo, which produces over 70% of the world's cobalt. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/artisanal-miners-carry-sacks-of-ore-at-the-shabara-news-photo/1244417469">Junior Kannah/AFP via Getty Images</a></span></figcaption></figure><p>The European Union <a href="https://www.reuters.com/business/environment/eu-lawmakers-back-human-rights-environmental-checks-big-companies-2023-04-25/">will soon require thousands of large companies</a> to actively look for and reduce human rights abuses and environmental damage in their supply chains. And although it’s an EU law, it will also cover foreign businesses – including American ones – that have operations in the region.</p>
<p>The European Parliament <a href="https://www.europarl.europa.eu/doceo/document/TA-9-2023-0209_EN.html">approved a draft of the new rules in June 2023</a>, and now EU member states and the European Commission will negotiate to finalize the law, which is expected to begin rolling out in phases a few years from now. </p>
<p><a href="https://www.business.uconn.edu/person/rachel-chambers/">We study</a> the <a href="https://peoplefinder.lsbu.ac.uk/researcher/8xxx0/dr-david-birchall">impacts of human rights</a> disclosure and due diligence laws on businesses. In the past, governments have generally asked only that companies voluntarily comply with efforts to advance human rights. The EU law would be the biggest attempt yet to legally mandate compliance – with major implications for human rights and businesses around the world. </p>
<h2>Human rights and big business</h2>
<p><a href="https://www.ohchr.org/en/what-are-human-rights">Human rights are those fundamental rights</a> that all individuals hold simply by virtue of being human, such as rights to life and freedom of thought.</p>
<p>Human rights usually inform laws that limit what governments can do – for example, by obliging them to refrain from torturing people. Increasingly, however, <a href="https://www.lawfareblog.com/business-and-human-rights-requirements-are-rise-2023">they are also informing business regulations</a>, because powerful companies can have serious impacts on individuals’ human rights. </p>
<p>Businesses have a <a href="https://www.routledge.com/Business-and-Human-Rights-History-Law-and-Policy---Bridging-the-Accountability/Bernaz/p/book/9781138683006">long history of human rights abuses</a>, from the British East India Co.’s pivotal role in the <a href="https://theconversation.com/taboo-the-east-india-company-and-the-true-horrors-of-empire-73616">slave trade</a> and IBM’s complicity in <a href="https://www.theguardian.com/world/2002/mar/29/humanities.highereducation">the Holocaust</a> to more recent deadly environmental disasters involving <a href="https://www.leighday.co.uk/latest-updates/news/2021-news/legal-claim-by-more-than-2-500-zambian-villagers-in-a-case-against-vedanta-resources-limited/">oil and mining companies</a>.</p>
<p>More contemporary examples of this are <a href="https://www.npr.org/sections/goatsandsoda/2023/02/01/1152893248/red-cobalt-congo-drc-mining-siddharth-kara">children in the Democratic Republic of Congo mining cobalt</a> destined for cellphones or <a href="https://www.nytimes.com/2022/05/27/business/cotton-xinjiang-forced-labor-retailers.html">forced labor being used in the production of cotton</a> in China’s heavily Muslim Xinjiang region.</p>
<p>In 2011, the United Nations Human Rights Council took a step toward policing these abuses by unanimously adopting “guiding principles” on business and human rights. These principles <a href="https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf">urge governments to compel</a> companies in their jurisdictions to respect human rights wherever they operate. Such an approach stands in contrast to more common voluntary standards, such as <a href="https://ecovadis.com/glossary/supplier-code-conduct/#:%7E:text=What%20is%20a%20Supplier%20code,of%20employees%2C%20and%20ethical%20practices.">supplier codes of conduct</a>, which <a href="https://theconversation.com/why-apparel-brands-efforts-to-police-their-supply-chains-arent-working-136821">some observers have suggested have been ineffective</a>. </p>
<p>In 2017, France <a href="https://www.dlapiper.com/en/insights/publications/2021/03/human-rights-due-diligence-legislation-in-europe#">became the first country</a> to actually mandate that companies police their supply chains for human rights abuses. </p>
<p>The EU’s human rights due diligence law, <a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1145">first drafted in 2022</a>, builds on the French version – but goes a few steps further. </p>
<figure class="align-center ">
<img alt="protesters march in streets holding signs in front of apple logo on a building" src="https://images.theconversation.com/files/539098/original/file-20230724-21-tniwth.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/539098/original/file-20230724-21-tniwth.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/539098/original/file-20230724-21-tniwth.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/539098/original/file-20230724-21-tniwth.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/539098/original/file-20230724-21-tniwth.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/539098/original/file-20230724-21-tniwth.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/539098/original/file-20230724-21-tniwth.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Apple is among the U.S.-based companies that would likely have to comply with the EU rules.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/hongkongers-tibetans-uyghur-muslims-and-their-supporters-news-photo/1245513825">Wiktor Szymanowicz/Anadolu Agency via Getty Images</a></span>
</figcaption>
</figure>
<h2>Doing your due diligence</h2>
<p><a href="https://www.ohchr.org/en/special-procedures/wg-business/corporate-human-rights-due-diligence-identifying-and-leveraging-emerging-practices">Human rights due diligence</a> is a process by which companies are meant to map out, understand and address all potential human rights abuses that occur throughout their operations. </p>
<p>The term “<a href="https://www.investopedia.com/terms/d/duediligence.asp">due diligence</a>” is borrowed from the common business practice of financial due diligence, wherein financial risks are investigated before any large investment. So just as businesses evaluate financial risks, <a href="https://www.ohchr.org/sites/default/files/Documents/Issues/Business/ExecutiveSummaryA73163.pdf">human rights advocates argue</a> companies should put similar effort into investigating the risk that an activity might violate someone’s human rights.</p>
<p>The EU law would mandate that all large companies that operate in the bloc conduct human rights due diligence among their suppliers – by, for example, making sure child or forced labor wasn’t involved – but also on how their products are used by consumers – such as when a piece of technology is used to surveil citizens. </p>
<p>The law would cover most human rights, including labor rights and environmental rights, past or present. In practice, that would mean companies would have to map any harmful impacts that have occurred or could occur and take action to remedy or prevent them.</p>
<p>The rules would also include provisions for enforcement and penalties for noncompliance through fines and other sanctions. And victims of abuse would be able to seek damages.</p>
<p>In its current form, the law would cover EU companies with at least 500 workers and 150 million euros US$162 million) in net revenue, but those thresholds fall to 250 workers and 40 million euros ($44.5 million) in sectors with a higher risk of abuse, such as clothing, footwear and agriculture. Non-European companies must comply if they have EU revenues that meet those thresholds. An estimated 13,000 EU companies and 4,000 based outside of Europe – including household names like Apple, Amazon and Nike – <a href="https://www.csis.org/analysis/european-union-releases-draft-mandatory-human-rights-and-environmental-due-diligence">would be subject to the law</a>. </p>
<p>If it works as intended, the EU law <a href="http://corporatejustice.org/wp-content/uploads/2021/03/asi_eccj_report_final.pdf">could be transformative</a> in protecting human rights, including worker health and safety and workers’ free speech, around the world. According to a recent report by human rights scholars, it could be “<a href="https://media.business-humanrights.org/media/documents/TraffLabReport_March23.pdf">particularly valuable</a> in the context of transnational supply chains, where the fragmented nature of production has long presented formidable legal and practical barriers to efforts to secure greater corporate accountability for labor rights violations and poor working conditions.”</p>
<h2>Bad for business?</h2>
<p>While <a href="https://www.ioe-emp.org/fileadmin/ioe_documents/publications/Policy%20Areas/business_and_human_rights/EN/_2015-03-16__Economist_Intelligence_Unit_Report_-_Today_s_Challenges_for_Business_in_Respecting_Human_Rights.pdf">many companies</a> <a href="https://www.business-humanrights.org/en/big-issues/mandatory-due-diligence/companies-investors-in-support-of-mhrdd/">have already endorsed mandatory due diligence</a> rules, others worry this kind of government mandate <a href="http://corporatejustice.org/wp-content/uploads/2021/03/debating-mhrdd-legislation-a-reality-check.pdf">would be too onerous</a>.</p>
<p>A full map of risks in a company’s value chain – from raw materials to consumers – is difficult to establish when suppliers are separate companies operating on the other side of the world and global supply chains are frequently large and complex. </p>
<p>Some companies also <a href="https://www.supremecourt.gov/opinions/20pdf/19-416_i4dj.pdf">strongly resist</a> the idea of being held responsible for human rights violations that take place in their supply chains overseas. </p>
<h2>Ripe for US rules</h2>
<p>For this reason, the U.S. <a href="https://heinonline.org/HOL/LandingPage?handle=hein.journals/nyujolbu18&div=17&id=&page=">has so far preferred voluntary rules</a> when it comes to pushing companies to respect human rights. </p>
<p>But that’s slowly beginning to change.</p>
<p>In 2012, California implemented the <a href="https://oag.ca.gov/SB657">Supply Chain Transparency Act</a>, which requires companies operating in the state to disclose their “efforts to eradicate human trafficking and slavery” in their global supply chains. And in 2021, Congress passed the <a href="https://www.cbp.gov/trade/forced-labor/UFLPA">Uyghur Forced Labor Prevention Act</a>, which bans the importation of goods mined, produced or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of China – home of the Uyghur people, who have been <a href="https://news.sky.com/story/whats-happened-to-chinas-uyghur-camps-12881984">subjected to an intense program of state suppression since 2017</a>. </p>
<p>Between these rules there is a clear trend developing of an increasing number of U.S. companies being obligated to implement some form of human rights due diligence. But these rules, unlike the developing European approach, are very narrowly tailored and don’t require companies to routinely undertake due diligence.</p>
<p>As a result, the U.S. companies that would be subject to the EU rules would be at a competitive disadvantage to many of their domestic rivals. </p>
<p>That’s why we believe the time may be ripe for Congress to consider its own more comprehensive human rights due diligence law, which would let the U.S. take the lead on the issue and have more of a say in these global standards. We believe that such a move would also be a major boon to protecting the human rights of marginalized groups across the world.</p><img src="https://counter.theconversation.com/content/202706/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rachel Chambers and David Birchall received a small grant from Universitas 21 for the research project that this article forms part of.</span></em></p>A new EU law would require thousands of multinational companies, including many based in the US, to look for signs of human rights abuses in their supply chains.Rachel Chambers, Assistant Professor of Business Law, University of ConnecticutDavid Birchall, Senior Lecturer in Law, London South Bank UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2069232023-08-01T21:00:35Z2023-08-01T21:00:35ZLearning from Lululemon: If Canada wants to get serious about forced labour, disclosure laws won’t do<figure><img src="https://images.theconversation.com/files/531197/original/file-20230609-15-z5uk83.jpg?ixlib=rb-1.1.0&rect=51%2C0%2C5711%2C3274&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A recent investigation into Lululemon casts doubt on the ability of Canada's new Modern Slavery Act to tackle labour abuse.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/learning-from-lululemon-if-canada-wants-to-get-serious-about-forced-labour-disclosure-laws-wont-do" width="100%" height="400"></iframe>
<p>The Canadian government recently passed <a href="https://www.parl.ca/DocumentViewer/en/44-1/bill/S-211/third-reading">the Fighting Against Forced Labour and Child Labour in Supply Chains Act</a>. The new law is designed to address forced labour and child labour in supply chains by requiring companies to disclose their efforts in eliminating labour abuse from their supply chains. </p>
<p>The legislation, known colloquially as Canada’s Modern Slavery Act, does not require large Canadian companies to actually take actions to prevent or reduce the risk of forced labour and child labour in their supply chains.</p>
<p>The act also doesn’t hold companies accountable when forced labour is found. Similar weak disclosure laws in <a href="https://oag.ca.gov/SB657">California</a>, <a href="https://www.legislation.gov.uk/ukpga/2015/30/contents/enacted">the United Kingdom</a> and <a href="https://www.legislation.gov.au/Details/C2018A00153">Australia</a> <a href="https://doi.org/10.1111/1758-5899.12512">have already been found to be ineffective</a> by academic researchers.</p>
<p>Our recent investigation at the <a href="https://gflc.ca/">Governing Forced Labour in Supply Chains Project</a> into the Canadian apparel company Lululemon Athletica casts doubt on the ability of this new law to tackle labour abuse.</p>
<p>The new law falls short of what is required to make large corporations exercise due diligence to prevent labour abuse from occurring within their supply chains. </p>
<h2>Remembering Rana Plaza</h2>
<p>This new Canadian law comes a decade after the tragic collapse of the nine-storey Rana Plaza building in Bangladesh that killed nearly 1,130 garment workers and injured over 2,500. The disaster <a href="https://theconversation.com/years-after-the-rana-plaza-tragedy-bangladeshs-garment-workers-are-still-bottom-of-the-pile-159224">raised concerns about the ability of voluntary corporate initiatives</a> to address labour rights violations and protect workers.</p>
<p>In response to the tragedy, an agreement between brands, retailers and trade unions called <a href="https://wsr-network.org/success-stories/accord-on-fire-and-building-safety-in-bangladesh">the Accord on Fire and Building Safety in Bangladesh</a> was established. The accord was designed to improve workplace safety and prevent future accidents in the garment sector. </p>
<figure class="align-center ">
<img alt="A group of people march down a street with protest signs and a large banner written in Bengali." src="https://images.theconversation.com/files/531194/original/file-20230609-22144-k2hwj4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/531194/original/file-20230609-22144-k2hwj4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=389&fit=crop&dpr=1 600w, https://images.theconversation.com/files/531194/original/file-20230609-22144-k2hwj4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=389&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/531194/original/file-20230609-22144-k2hwj4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=389&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/531194/original/file-20230609-22144-k2hwj4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=489&fit=crop&dpr=1 754w, https://images.theconversation.com/files/531194/original/file-20230609-22144-k2hwj4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=489&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/531194/original/file-20230609-22144-k2hwj4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=489&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Bangladeshi garment workers, activists and relatives of workers participate in a protest marking the four-month anniversary of the Rana Plaza building collapse in Dhaka, Bangladesh in August 2013.</span>
<span class="attribution"><span class="source">(AP Photo/A.M. Ahad)</span></span>
</figcaption>
</figure>
<p>Building on this initiative, <a href="https://internationalaccord.org/about-us">the International Accord for Health and Safety in the Textile and Garment Industry</a> — with 198 brand and retailer signatories — was introduced in 2021.</p>
<p>Remarkably, only one Canadian garment company — <a href="https://www.thestar.com/business/opinion/2023/04/29/10-years-after-the-rana-plaza-disaster-canada-needs-to-do-more-to-protect-worker-rights.html">Loblaw Companies Ltd., the parent company of the Joe Fresh brand</a> — has signed the accord. Other Canadian companies prefer their own voluntary initiatives. </p>
<p>Legislation aimed at addressing forced labour in supply chains has the potential to address these weak corporate initiatives — but only if the law is strong enough.</p>
<h2>Lululemon report</h2>
<p>Our report, <a href="https://gflc.ca/wp-content/uploads/2022/09/Lululemons-Conundrum_GFLC_final.pdf"><em>Lululemon’s Conundrum: Good Corporate Social Responsibility Initiatives and the Persistence of Forced Labour</em></a>, examines Lululemon’s efforts to address potential labour abuse in its supply chain.</p>
<p>In 2021, <a href="https://knowthechain.org/about-us/">KnowTheChain</a> — which evaluates companies’ efforts to address forced labour risks in their supply chains based on international labour standards — <a href="https://knowthechain.org/wp-content/uploads/2021-KTC-AF-Benchmark-Report.pdf">ranked Lululemon first among 129 apparel and footwear companies</a> for its measures to address forced labour risks. </p>
<p>Despite being recognized as an industry leader in this area, an investigation by researchers at Sheffield Hallam University in England found that <a href="https://www.shu.ac.uk/helena-kennedy-centre-international-justice/research-and-projects/all-projects/laundered-cotton">Lululemon was at a high risk of sourcing from the Xinjiang region</a> in China — <a href="https://www.reuters.com/world/china/un-expert-concludes-forced-labour-has-taken-place-xinjiang-2022-08-18/">which has been associated with forced labour and human rights abuses</a> — that same year.</p>
<p>In <a href="https://www.business-humanrights.org/en/latest-news/responses-to-uflpa-outreach/">response to this accusation</a>, Lululemon stated it had zero tolerance for forced labour, was committed to all the workers in its global supply chain and regularly monitored vendors globally through a due diligence process.</p>
<h2>Lululemon supplier concerns</h2>
<p>Lululemon does not own or operate any of the manufacturing or raw materials facilities used to make its apparel. <a href="https://corporate.lululemon.com/%7E/media/Files/L/Lululemon/lululemonSupplierListFinal050923.pdf">Its April 2023 supplier list</a> revealed the company sourced from suppliers located in four out of the 10 <a href="https://files.mutualcdn.com/ituc/files/ITUC_GlobalRightsIndex_2021_EN_Final.pdf">worst countries for workers’ rights violations</a> according to the 2021 Global Rights Index created by International Trade Union Confederation: Bangladesh, Colombia, the Philippines and Turkey.</p>
<p>According to the supplier list, one of Lululemon’s largest manufacturing facilities is in Bangladesh, with over 13,000 workers — 70 per cent of whom are women. Despite this, Lululemon has not signed the 2021 International Accord for Health and Safety in the Textile and Garment Industry.</p>
<figure class="align-center ">
<img alt="A person wearing a face mask and work uniform picks a large spook of yarn up from a pile" src="https://images.theconversation.com/files/540249/original/file-20230731-271165-grpb0x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/540249/original/file-20230731-271165-grpb0x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/540249/original/file-20230731-271165-grpb0x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/540249/original/file-20230731-271165-grpb0x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/540249/original/file-20230731-271165-grpb0x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/540249/original/file-20230731-271165-grpb0x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/540249/original/file-20230731-271165-grpb0x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A worker packages spools of cotton yarn at a Huafu Fashion plant, as seen during a government organized trip for foreign journalists, in Aksu in western China’s Xinjiang Uyghur Autonomous Region, in April 2021.</span>
<span class="attribution"><span class="source">(AP Photo/Mark Schiefelbein)</span></span>
</figcaption>
</figure>
<p><a href="https://www.fairlabor.org/reports/charter-link-clark-inc">Two reports found that from 2018 to 2019</a>, workers at a Lululemon supplier factory had to work two to three nights without being allowed to go home or take necessary breaks. </p>
<p>While a <a href="https://www.fairlabor.org/wp-content/uploads/2021/04/Charter-Link-Verification-Report-MO-Final-4-27-22.pdf">2022 follow-up investigation</a> determined this situation had been rectified by Lululemon and the supplier, some workers reported they still felt unable to refuse overtime requests.</p>
<p>According to the follow-up report, the supplier at the same factory also engaged in serious union-busting tactics, including firing the union’s elected leaders and reports from workers that some managers had threatened to close the factory if the workers unionized.</p>
<p>The follow-up report found that while many of the anti-union issues had been addressed, some supervisors reportedly made comments that could be construed as still discouraging workers from joining the union.</p>
<h2>Corporate transparency issues</h2>
<p><a href="https://corporate.lululemon.com/our-impact/reporting-and-governance/reporting-and-disclosure/policies-and-guidelines">Lululemon has several codes and policies in place to address forced labour</a>. One is the Lululemon Global Code of Business Conduct and Ethics, which states that employees and vendors are to adhere to labour and employment standards in the countries they operate in, unless the code sets a higher standard.</p>
<p>Employees are encouraged to report any violations to this code internally through Lululemon or externally using third-party tools such as the international Integrity Line. This phone line allows employees to anonymously report complaints at any time. </p>
<p>However, third-party complaint avenues pose challenges, including requiring tech access, trusting unfamiliar third parties and filing a complaint that protects one’s anonymity while still providing enough detail about worker issues.</p>
<p>Another code Lululemon has in place is the <a href="https://corporate.lululemon.com/%7E/media/Files/L/Lululemon/our-impact/vendor-code-of-ethics/vcoe-supporting-benchmarks.pdf">Vendor Code of Ethics</a> and its accompanying Benchmarks policy.
Vendors are responsible for enforcing key aspects of the code of ethics, including creating grievance and disciplinary systems for violations and training workers on the policy’s content. When vendors use subcontractors, they are the ones responsible for ensuring subcontractors adhere to the policy.</p>
<p>While Lululemon can conduct unannounced visits to monitor their compliance with the Vendor Code of Ethics, this is rarely done. Only <a href="https://pnimages.lululemon.com/content/dam/lululemon/www-images/Footer/Sustainability/lululemonKnowTheChainDisclosure_20210302.pdf">one per cent of assessments in 2019 were unannounced</a>. Lululemon also works with third-party auditors sometimes, which can be problematic since these auditors rely on their clients to stay in business, <a href="https://www.cornellpress.cornell.edu/book/9781501754524/private-regulation-of-labor-standards-in-global-supply-chains/">raising questions about the authenticity of auditing reports</a>.</p>
<h2>Reliance on local labour laws</h2>
<p>Lululemon’s measures to address forced labour largely rely on the labour laws in the countries in which the suppliers are located. <a href="https://doi.org/10.1080/20414005.2021.2008763">Relying on local labour laws is a major shortcoming of many corporate initiatives</a>, since they often fall short of international legal norms and are not well enforced.</p>
<p>In California, the United Kingdom and Australia, Lululemon is required by law to report on its efforts to detect, remedy and eradicate forced labour in its supply chains. However, the information necessary for evaluating the effectiveness of these initiatives is not available to researchers, the public or workers.</p>
<p>Crucial information about all the participants and purchasing practices in a supply chain, such as the amount of lead time suppliers are given for orders and whether suppliers get paid on time, are not provided. Additionally, information on how workers navigate Lululemon’s policies and grievance mechanisms is not publicly available.</p>
<h2>Due diligence legislation needed</h2>
<p>Our study raises concerns about the effectiveness of current transparency and disclosure laws as an effective tool for combating forced labour in supply chains. </p>
<p>Disclosure laws, like those in Canada’s new act, will not require Lululemon to reveal the type of information needed to ensure its suppliers are not abusing workers. Nor does the new law require large multinational corporations to take any steps to eradicate labour abuses in the supply chains.</p>
<p>Our study suggests disclosure laws are a form of window dressing that can be used by companies to project an image of social responsibility to consumers, rather than genuinely improving the working conditions for supply chain workers.</p>
<p>It’s time to require companies to take real steps to rid their supply chains of labour abuse. If Canada is to truly eradicate force labour in global supply chains, it needs mandatory due diligence legislation that involves supply chain workers at every stage of the process — before another disaster like Rana Plaza occurs.</p>
<p><em>Editor’s note: Prior to publishing this story, The Conversation sought comment from Lululemon about how the company is complying with the new Fighting Against Forced Labour and Child Labour in Supply Chains Act, as well as some other issues raised in this article. Lululemon did not respond.</em></p><img src="https://counter.theconversation.com/content/206923/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Judy Fudge receives funding from the Social Sciences and Humanities Research Council.</span></em></p><p class="fine-print"><em><span>Gayathri Krishna and Kaitlyn Matulewicz do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A new study suggests disclosure laws to prevent forced labour in the clothing industry are a form of window dressing designed to ease the conscience of consumers rather than protecting workers.Gayathri Krishna, PhD Candidate, School of Labour Studies, McMaster UniversityJudy Fudge, LIUNA Enrico Henry Mancinelli Chair of Global Labour Issues, School of Labour Studies, McMaster UniversityKaitlyn Matulewicz, Researcher, Governing Forced Labour in Supply Chains ProjectLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2104312023-07-25T21:12:18Z2023-07-25T21:12:18ZUPS and Teamsters agree on new contract, averting costly strike that could have delayed deliveries for consumers and retailers<figure><img src="https://images.theconversation.com/files/539360/original/file-20230725-15-oa13ub.jpg?ixlib=rb-1.1.0&rect=80%2C359%2C2892%2C1612&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Teamsters employed by UPS practiced holding rallies ahead of the strike that wasn't.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UPSLabor/9040f6dc60c648d4b1690781df068879/photo?Query=UPS&mediaType=photo,video,graphic,audio&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=25001&currentItemNo=4">AP Photo/Damian Dovarganes</a></span></figcaption></figure><p><em>The International Brotherhood of Teamsters union and UPS have <a href="https://apnews.com/article/ups-teamsters-strike-labor-logistics-delivery-a94482dbff7bfb67ad82f607ab127672">agreed on a new five-year contract</a> that boosts wages and guarantees more air conditioning in drivers’ trucks. The deal, struck on July 25, 2023, came <a href="https://apnews.com/article/ups-strike-teamsters-biden-delivery-cb586d2f6160a92cda9318d6290ac8ea">one week before an Aug. 1 deadline</a> that the Teamsters had set for the threatened strike – which <a href="https://doi.org/10.1177/0160449X9902400106">would have been the first by UPS workers since 1997</a>. The union announced on Aug. 22 that <a href="https://teamster.org/2023/08/teamsters-ratify-historic-ups-contract/">86.3% of its members had voted to approve</a> the contract, <a href="https://apnews.com/article/ups-teamsters-contract-union-voting-b104ca459ddb810f2018c68046d063ed">ratifying it</a>.</em></p>
<p><em>The Conversation asked <a href="https://scholar.google.com/citations?user=g_BdG-cAAAAJ&hl=en&oi=ao">Jason Miller</a>, a supply chain scholar at Michigan State University, to explain what happened and to sum up the significance of this deal, which is keeping 300,000 workers on the job.</em></p>
<figure class="align-center ">
<img alt="A uniformed employee sits in the driver's seat of a truck with UPS written on the side." src="https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Millions of Americans depend on UPS drivers to deliver their packages.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UPSLaborTalks/8d7eac1a06f94afc932a2cecab27a173/photo?Query=UPS%20teamsters&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=67&currentItemNo=28">AP Photo/Michael Dwyer</a></span>
</figcaption>
</figure>
<h2>What’s in this contract?</h2>
<p>UPS has agreed to:</p>
<ol>
<li><p>Increase <a href="https://apnews.com/article/ups-teamsters-strike-labor-logistics-delivery-a94482dbff7bfb67ad82f607ab127672">starting hourly pay for part-time workers to US$21</a>, up from $16.20.</p></li>
<li><p>Raise the hourly pay of existing part-time and full-time workers by <a href="https://www.freightwaves.com/news/breaking-ups-teamsters-reach-tentative-contract">$2.75 in 2023 and $7.50 more</a> over the next five years.</p></li>
<li><p>Make <a href="https://nmaahc.si.edu/explore/stories/15-year-battle-martin-luther-king-jr-day">Martin Luther King Jr. Day</a>, the third Monday of January, a paid holiday.</p></li>
<li><p>Stop requiring UPS employees to work <a href="https://apnews.com/article/ups-strike-labor-contract-teamsters-3438edf86cb006a1685e29822399a4d9">overtime hours on their days off</a>.</p></li>
<li><p>Add fans and install <a href="https://teamster.org/2023/06/teamsters-secure-air-conditioning-for-ups-fleet-in-major-tentative-deal/">air conditioning in many trucks</a> to improve cooling.</p></li>
<li><p>Create another <a href="https://www.freightwaves.com/news/breaking-ups-teamsters-reach-tentative-contract">7,500 full-time Teamster jobs</a> and <a href="https://teamster.org/2023/07/weve-changed-the-game-teamsters-win-historic-ups-contract/">fill 22,500 open positions</a>.</p></li>
</ol>
<p>Teamsters General President <a href="https://www.wsj.com/articles/ups-teamsters-reach-agreement-on-new-contract-a134c910">Sean O'Brien hailed the agreement as a victory</a>. “This contract sets a new standard in the labor movement and raises the bar for all workers,” he said.</p>
<h2>What does this deal say about the supply chain and labor?</h2>
<p>This deal further reinforces the strong bargaining position of unions representing workers in the logistics sector – not just in the U.S. but also in <a href="https://www.joc.com/article/western-canada-port-strike-ends-after-deal-reached-tentative-four-year-contract_20230713.html">Canada</a>, <a href="https://www.freightwaves.com/news/breaking-ups-teamsters-reach-tentative-contract">Europe</a> and elsewhere.</p>
<p>U.S. shipping could still be disrupted amid one of the <a href="https://fred.stlouisfed.org/series/U6RATE">tightest labor markets in decades</a>, since UPS rival <a href="https://www.cnn.com/2023/07/24/business/fedex-pilots-union-vote/index.html">FedEx recently had its 5,200</a> <a href="https://www.freightwaves.com/news/fedex-pilots-reject-new-labor-deal">pilots reject a new labor agreement</a>.</p>
<p>That said, TForce Freight – formerly UPS Freight – reached its own new five-year contract with the Teamsters <a href="https://www.freightwaves.com/news/tforce-teamsters-reach-tentative-5-year-contract">earlier in July</a>, as did competitor <a href="https://www.freightwaves.com/news/teamsters-at-abf-freight-ratify-new-labor-deal">ABF Freight</a>. Unionized pilots at <a href="https://www.cnbc.com/2023/03/01/delta-pilots-new-contract-big-raises.html">Delta Airlines</a> and <a href="https://www.cnbc.com/2023/05/19/american-airlines-pilots-reach-preliminary-labor-agreement-.html">American Airlines</a> also recently agreed to new contracts with large raises – a 34% boost, in Delta’s case. </p>
<p>My view is that UPS was more willing to accept the Teamsters’ demands because current economic conditions favor labor. In addition, the company realized that a strike could have cost it substantial market share, up to <a href="https://www.freightwaves.com/news/consultant-strike-could-cost-ups-30-of-diverted-volume">30% of volume by one estimate</a>. Combined with the company’s <a href="https://investors.ups.com/sec-filings/annual-filings/content/0001090727-23-000006/0001090727-23-000006.pdf">recent high profits</a>, it was not in UPS management’s interests to let a strike proceed. </p>
<h2>What would have happened had there been a strike?</h2>
<p>Roughly 57.3% of the packages UPS delivers <a href="https://www.freightwaves.com/news/tough-quarter-starts-the-year-for-ups">are shipped straight to consumers</a>. The rest go to retailers and other businesses.</p>
<p>Based on <a href="https://scholar.google.com/citations?hl=en&user=g_BdG-cAAAAJ">my years of researching</a> transportation operations and supply chain disruptions, the impact of a UPS strike would have stretched far beyond delayed delivery of everything from pet food to tennis rackets that U.S. consumers buy online.</p>
<p>A UPS strike could have disrupted the availability of <a href="https://www.usatoday.com/story/money/2023/07/11/ups-strike-2023-impact/70400086007/">spare parts for cars</a> and <a href="https://www.npr.org/2023/07/12/1187354600/ups-workers-could-be-on-course-for-a-historic-strike-within-weeks">wholesale medical supplies</a>, just to name a few essentials. Consumers would also have found it harder to get clothing and shoes in stores, as retail locations are typically replenished by parcel carriers. </p>
<p>Even a 10-day strike could have <a href="https://www.cnn.com/2023/07/14/economy/ups-strike-economic-impact/index.html">cost the U.S. economy an estimated $7.1 billion</a>, according to research firm <a href="https://www.andersoneconomicgroup.com/potential-ups-strike-could-be-costliest-in-a-century/">Anderson Economic Group</a>. That would have made it potentially the costliest strike in U.S. history. These costs stem from the 340,000 striking workers losing an estimated $1.1 billion in wages and UPS losing $816 million in earnings. The balance of this estimate would result from the disruptions incurred by UPS customers. </p>
<p><em>This article was updated on Aug. 22, 2023. Portions of it appeared in a prior article published on <a href="https://theconversation.com/ups-impasse-with-union-could-deliver-a-costly-strike-disrupting-brick-and-mortar-businesses-as-well-as-e-commerce-209819">July 20, 2023</a>.</em></p><img src="https://counter.theconversation.com/content/210431/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jason Miller does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The strike would have been the first for the parcel delivery giant since 1997.Jason Miller, Associate Professor of Supply Chain Management, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2098192023-07-20T12:31:46Z2023-07-20T12:31:46ZUPS impasse with union could deliver a costly strike, disrupting brick-and-mortar businesses as well as e-commerce<figure><img src="https://images.theconversation.com/files/538363/original/file-20230719-19-vsufa7.jpg?ixlib=rb-1.1.0&rect=16%2C0%2C5514%2C3689&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Placards are part and parcel of a protest.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UPSLaborTalks/80443caf79fb48a894d4acfd6de53333/photo?Query=UPS%20teamsters&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=67&currentItemNo=7">AP Photo/Brittainy Newman</a></span></figcaption></figure><p><em>Talks between the International Brotherhood of Teamsters and UPS over a new contract <a href="https://www.cnn.com/2023/07/05/business/ups-teamsters-negotiations/index.html">fell apart on July 5, 2023</a>. The union and the shipping and logistics company are <a href="https://www.freightwaves.com/news/ups-teamsters-talks-collapse">blaming each other for the collapse</a>, which occurred a few weeks after <a href="https://teamster.org/2023/06/teamsters-authorize-strike-at-ups/">97% of UPS’s Teamsters voted to strike</a> if the Teamsters and UPS don’t reach an agreement by midnight on July 31.</em></p>
<p><em>Without a deal in place, <a href="https://apnews.com/article/ups-strike-teamsters-biden-delivery-cb586d2f6160a92cda9318d6290ac8ea">more than 300,000 Teamsters will stop working</a> on Aug. 1. It would mark the delivery service’s <a href="https://doi.org/10.1177/0160449X9902400106">first strike since 1997</a>.</em></p>
<p><em>The Conversation asked <a href="https://scholar.google.com/citations?user=g_BdG-cAAAAJ&hl=en&oi=ao">Jason Miller</a>, a supply chain scholar at Michigan State University, to explain how likely it is that this will happen and what to expect if it does.</em></p>
<figure class="align-center ">
<img alt="A uniformed employee sits in the driver's seat of a truck with UPS written on the side." src="https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Upward of 300,000 employees could take part in a strike.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UPSLaborTalks/8d7eac1a06f94afc932a2cecab27a173/photo?Query=UPS%20teamsters&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=67&currentItemNo=28">AP Photo/Michael Dwyer</a></span>
</figcaption>
</figure>
<h2>What are the reasons for this impending strike?</h2>
<p>Before the talks collapsed, both sides had been negotiating extensively on a new five-year agreement that <a href="https://www.usatoday.com/story/money/2023/07/11/ups-strike-2023-impact/70400086007/">would cover about 340,000 unionized UPS workers</a>.</p>
<p><a href="https://www.fleetowner.com/operations/article/21269359/freightmarket-ripples-ahead-of-possible-ups-strike">The delivery company has agreed to some of the Teamsters’ demands</a>, pledging to:</p>
<ol>
<li><p>End a two-tiered wage system in which part-time workers earn an average of about US$5 per hour less than full-time workers;</p></li>
<li><p>Make <a href="https://nmaahc.si.edu/explore/stories/15-year-battle-martin-luther-king-jr-day">Martin Luther King Jr. Day</a>, the third Monday of January, a paid holiday;</p></li>
<li><p>Stop requiring UPS employees to work <a href="https://apnews.com/article/ups-strike-labor-contract-teamsters-3438edf86cb006a1685e29822399a4d9">overtime hours on their days off</a>;</p></li>
<li><p>Add fans and install <a href="https://teamster.org/2023/06/teamsters-secure-air-conditioning-for-ups-fleet-in-major-tentative-deal/">air conditioning in many trucks</a> to improve cooling.</p></li>
</ol>
<p>The primary remaining sticking points concern <a href="https://twitter.com/CNBCOvertime/status/1678505073641390080?">part-time workers</a>. The Teamsters dispute UPS’s claim that part-time workers earn an average of $20 per hour. Teamsters President Sean O’Brien instead says they’re paid “<a href="https://twitter.com/Teamsters/status/1678799645336543233">poverty wages</a>.”</p>
<p>The Teamsters further want part-time workers to have earlier access to health insurance coverage and pension plans and a clearer pathway to full-time employment. The union also seeks to resolve safety and health concerns and “better pay for all workers,” as well as obtaining “<a href="https://teamster.org/2023/06/ups-pleads-to-keep-bargaining-with-more-money-teamsters-demand-more-progress/">stronger protections against managerial harassment</a>.”</p>
<p>The impasse comes after two years in which UPS posted record profits. The company cleared <a href="https://investors.ups.com/sec-filings/annual-filings/content/0001090727-23-000006/0001090727-23-000006.pdf">$12.9 billion and $11.5 billion</a>, respectively, in 2021 and 2022. The company <a href="https://investors.ups.com/sec-filings/annual-filings/content/0001090727-20-000005/0001090727-20-000005.pdf">nearly tripled its net income</a> from the levels seen in 2018 and 2019 of $4.8 billion and $4.4 billion.</p>
<p>The Teamsters argue that these record profits mean <a href="https://teamster.org/2023/07/after-marathon-sessions-ups-negotiations-collapse/">UPS can afford to pay higher wages</a>.</p>
<h2>What should consumers expect?</h2>
<p>If unionized UPS workers do go on strike, many U.S. consumers will surely fear delays in the delivery of their online purchases. In my view, that’s a reasonable concern, given that <a href="https://www.nytimes.com/2023/07/07/business/ups-strike-retail-shippers.html">UPS handles roughly 25%</a> of all U.S. package deliveries. </p>
<p>The <a href="http://www.cnn.com/US/9708/20/ups.update.early/">1997 strike, which lasted 16 days</a>, took place when e-commerce was in its infancy. The Census Bureau only began to track that slice of the economy in 1999, when <a href="https://fred.stlouisfed.org/series/ECOMPCTSA">online shopping amounted to about 0.6% of all retail sales</a>. Today, consumers spend about 15% of their shopping dollars on e-commerce purchases.</p>
<p>If a strike were to happen, UPS competitors, including FexEx Ground and the United States Postal Service, <a href="https://www.linkedin.com/posts/jason-miller-32110325_supplychain-supplychainmanagement-ecommerce-activity-7084504099454390272-3iwR?utm_source=share&utm_medium=member_desktop">would likely be able to handle about 20%</a> of UPS’s deliveries because the industry currently has some excess capacity. </p>
<p>That’s due to delivery <a href="https://data.bls.gov/timeseries/CES4349200007?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true">workers clocking fewer hours per week</a> today compared to the height of the COVID-19 pandemic. <a href="https://data.bls.gov/timeseries/CES4349200034?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true">Parcel delivery demand peaked in 2021</a>, when millions of Americans were still social distancing. </p>
<p>If a prolonged strike happens, UPS could lose up to <a href="https://www.freightwaves.com/news/consultant-strike-could-cost-ups-30-of-diverted-volume">30% of its business</a>, experts warn, as <a href="https://www.freightwaves.com/news/fedex-advises-ups-shippers-to-get-on-board-now">customers switch to rival services</a>.</p>
<p>The risk of losing market share is leading many industry experts to believe that if a strike were to occur, <a href="https://www.fleetowner.com/operations/article/21269359/freightmarket-ripples-ahead-of-possible-ups-strike">it wouldn’t last long</a>.</p>
<h2>What about businesses?</h2>
<p>Roughly 57.3% of the packages UPS delivers <a href="https://www.freightwaves.com/news/tough-quarter-starts-the-year-for-ups">are shipped straight to consumers</a>. The rest go to retailers and other businesses.</p>
<p>Based on <a href="https://scholar.google.com/citations?hl=en&user=g_BdG-cAAAAJ">my years of researching</a> transportation operations and supply chain disruptions, I believe Americans should recognize that the impact of a UPS strike would stretch far beyond delayed delivery of everything from pet food to tennis rackets that they buy online.</p>
<p>A UPS strike could disrupt the availability of <a href="https://www.usatoday.com/story/money/2023/07/11/ups-strike-2023-impact/70400086007/">spare parts for cars</a> and <a href="https://www.npr.org/2023/07/12/1187354600/ups-workers-could-be-on-course-for-a-historic-strike-within-weeks">wholesale medical supplies</a>, just to name a few essentials. Consumers will also find it harder to get clothing and shoes in stores, as retail locations are typically replenished by parcel carriers. </p>
<p>The supply chain for manufacturing computer and electronics products would probably be disrupted too, according to <a href="https://www.census.gov/data/datasets/2017/econ/cfs/historical-datasets.html">my analysis of data</a> from the Census Bureau and the Bureau of Transportation Statistics that <a href="https://www2.census.gov/programs-surveys/cfs/technical-documentation/methodology/2017cfsmethodology.pdf">tracks how different industries transport products to their customers</a>. Farmers and construction companies trying to get spare parts for heavy equipment would see delays in those shipments, which might result in downtime that costs tens if not hundreds of thousands of dollars.</p>
<p>Consequently, a strike would leave many businesses scrambling to fulfill customers’ orders, which may force them to spend more money on higher-priced air freight shipping. </p>
<p>Even a 10-day strike could <a href="https://www.cnn.com/2023/07/14/economy/ups-strike-economic-impact/index.html">cost the U.S. economy an estimated $7.1 billion</a> , according to <a href="https://www.andersoneconomicgroup.com/potential-ups-strike-could-be-costliest-in-a-century/">Anderson Economic Group</a> – a research firm – making it potentially the costliest strike in U.S. history. These costs stem from the 340,000 striking workers losing an estimated $1.1 billion in wages and UPS losing $816 million in earnings. The balance of this estimate would result from the disruptions incurred by UPS customers. </p>
<h2>What do you think will happen?</h2>
<p>Unlike the threatened <a href="https://theconversation.com/railroads-and-unions-reach-deal-to-avert-devastating-strike-keeping-americas-trains-and-the-economy-on-track-for-now-190600">railroad strikes of 2022</a>, there is no system in place for the federal government to prevent a UPS strike. On that occasion, Congress had the option of intervening, but a deal was reached before the government had to step in.</p>
<p>However, it seems likely that there <a href="https://apnews.com/article/ups-strike-teamsters-biden-delivery-cb586d2f6160a92cda9318d6290ac8ea">will be calls for the White House</a> to get both parties back to the negotiating table.</p>
<p>Given that both the Teamsters and UPS have an incentive to not see the company lose customers to rival shipping operations, I believe that they may reach a deal soon enough to avoid a costly and disruptive strike. Consistent with this, UPS announced on July 19, 2023, that it and the Teamsters will <a href="https://www.freightwaves.com/news/ups-teamsters-to-return-to-table">return to the negotiating table</a> before their July 31 deadline.</p><img src="https://counter.theconversation.com/content/209819/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jason Miller does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Talks between the the International Brotherhood of Teamsters and company bosses have broken down. A supply chain expert explores what could happen next.Jason Miller, Associate Professor of Supply Chain Management, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.