Vetting a Supplier

Happy New Year all!

Well, I spent the end of last year looking at Dabblers and Bad Actors on the importing side, and issues and impacts of Origin both in the U.S. and overseas. Those are at one end of the supply chain. What should the downstream buyer do to protect themselves? After all the government places responsibility on you to ask questions and to help the vetting of your supply chain. You are the “Demand” side of the market – it is your responsibility to Demand good product. So how do you do that?

Obviously by asking questions. And just as obviously, a small retailer can’t dig all the way back through the supply chain; at least not dig deeply and still run their stores! What you want to do is figure out which companies are doing it right and work with them. Pick and choose your suppliers based not just on price or colors, but on their commitment to ethical behavior.

You don’t want to ask for PPQs and harvest documents. Not only are they often considered confidential, they are not going to be particularly helpful for you. More importantly, if you get them, you now have the responsibility to vet those documents. Are you prepared to translate a Brazilian forest management plan or a Chinese harvest permit?

You want to look at things you understand. Think about reviewing actions taken rather documentation review. What you really want to know is that your supplier is taking actions to protect you. Here are some questions you might ask of your supplier, both domestic manufacturers and importers:

  • Do you have a compliance program?
    • How is it staffed?
    • What are some of the things you do?
    • What steps would you take before starting business with a new supplier?
    • What do you look for when you visit your suppliers?
  • What are you doing to ensure the floor you sell me is TSCA compliant?
  • What do you do to avoid origin fraud and circumvention of duties?
  • What sort of training has your team taken to learn about these rules and regulations?
  • What sort of training do you offer your supply chain?
  • Do you have an anti-corruption policy?

That’s just a sampling. Broad questions are good to start a discussion. Be creative to get a sense of how seriously they really take compliance. For example, ask about the frequency of testing. Not “do you test?” but “how often” and “what” and “when” and “where?”

You might run into resistance about giving you details of work. That can be understandable, but there are options without the supplier opening up all their secrets. Here’s one of my favorites: ask about their SOPs, their Standard Operating Procedures for compliance activities. Get a copy of their Table of Contents (TOC).

First, if they don’t have any SOPs, that’s a red flag. Second, a TOC will give you a sense of the breadth of the program and the issues they cover. You might spot something to ask about or you might feel they are missing a detail, but even if you don’t, if you look at their SOP TOC, you’ll get a sense of what actions they take and their commitment to compliance. From their side, it shouldn’t be giving away their “secret sauce.” You aren’t asking for their supplier list or production details. Your getting a list of issues and actions that they consider important.

For those of you in the downstream market, do, please, ask questions. You have a responsibility to create demand for good behavior.

Elizabeth Baldwin is Environmental Compliance Officer for Metropolitan Hardwood Floors. In her 25 plus year career in the wood industry has visited over 70 countries and hundreds of facilities of all sizes and types. She describes herself as a “jack of all wood trades.” Familiar with jungles of all sorts–having camped out along the Amazon and walked the halls of Congress–she blogs for the NWFA on both environmental and regulatory issues for educational and informational purposes only. Her blog is not intended and should not be construed as legal advice. Persons seeking legal advice on compliance with CARB, TSCA, the U.S. Lacey Act or any other law, regulation, or compliance requirement/claim should consult with the regulatory agency directly and/or a qualified legal professional.

Leave a Reply

Your email address will not be published. Required fields are marked *