Supply Chain and Product Investigations

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In Short: An introduction to supply chain investigations including an overview of the main tools, techniques, data resources and essential precautions to take. It focuses on the main actors, stages and processes of a supply chain and includes a hypothetical step-by-step investigation.

A supply chain is a set of steps that commodities (goods or raw materials) undergo on their way to becoming products used by consumers or industry. Stages of a supply chain can include places where products are transformed – for instance, an electronics company where circuit boards are made from transistors and copper lines – and where products change hands through transport, such as the loading of circuit boards onto a truck and their shipment to a computer manufacturing company.

Supply chain investigations focus on collecting evidence to link each stage of a product’s journey, from the origin of the commodity (for example, the conflict metal Cassiterite used in the solder of laptops) to the final product (the laptop itself), which can contain hundreds of different components.

Supply chain investigations can be particularly impactful because they have the potential to change the behaviours of entire industries when done effectively, with thorough and reliable evidence. A recent supply chain investigation, for example, alleged that a large palm oil supplier to major food companies such as Unilever, Nestle and Mars, was conducting massive deforestation and not complying with sustainable palm oil policies. As a direct result, Unilever stalled collaboration with the supplier pending further verification. In another case, in 2018, the British supermarket chain Iceland (Iceland Foods Ltd) committed to removing palm oil from the manufacturing process of its own-brand products by the end of 2018.

Such investigations and findings can have an impact not only on the reputation but also the financial status of the companies involved, in particular when they reveal illegal or controversial activities. Remember, something doesn’t have to be illegal for it to be considered controversial. Even the use of rabbit fur, while legal, can be problematic for a fashion brand these days.

In the most successful cases, this change impacts the supply chain all the way back to the origin of the product, where it may prevent social injustice, from poor working conditions and human rights abuses to land grabbing and environmental destruction. Most supply chain investigations are carried out by journalists or NGOs, but they can also be carried out by determined independent investigators or people and communities directly affected by an issue.

Shining a light on where our products really come from

Everything around us is part of a supply chain: from the food we eat to the clothes we wear and the devices we use. But the nature of supply chains means we rarely know how commodities are produced or even where they originate.

We might not always consider where our items come from, who harvested their source materials and under what conditions, whether there was exploitation or abuse at any point in the production process, or if illicit acts were carried out along the way. However, these questions might be brought to light when public controversies emerge about certain products or brands.

Perhaps you live in an area where important materials are extracted or produced. These materials may then enter the supply chain of a final product through countless contracts, companies and manufacturing processes, which are often opaque or not immediately visible or accessible. Or, you might live near a forest that is being cleared and want to know whether the companies carrying out the clearing are using legal and ethical practices. The impact of such findings can be crucial in saving the forest.

Of course, it is not always an investigator living in that area who will expose the truth, but having someone familiar or close by to observe or launch the quest for more information is a good start. Often a few initial questions and some raw evidence can lead to wider investigations by another group or organsation. Equipped with awareness of the risks and safety considerations, and a good assessment of what is at stake, you can also start this way.

Even if you are not physically present at a location where commodities are produced or extracted, many supply chain investigations can be carried out remotely. Indeed, in most cases, elements of a supply chain are located far from the source - for example, wood processing and furniture manufacturing can take place continents away from where the forest was originally cleared.


Tip: Helpful tools anyone can use to track products

Barcodes: Barcodes on consumer products can be used to identify the manufacturer, as well as additional information about them. Though barcodes are most familiar to us from a retail environment, they are also used in many other areas of business. In retail, the most commonly used barcodes are the European Article Numbers / EAN, which are usually 13 digits and used both within and outside of Europe; and the 12-digit Universal Product Code (UPC), which is very similar to the EAN, but contains a zero at the beginning to signify registration in the USA or Canada. The first three digits of an EAN indicates the name of the company that accepted the registration of the code (note that the location of the company may be, but not necessarily, the same as the location the product was manufactured). Companies that accept registration are members of the GS1 non-profit organisation, which maintains the global standard of barcodes. The GS1 website has a searchable database of many (but not all) barcodes. In some cases this is useful for obtaining information on who registered the product, and can also reveal details about a company’s ownership structure.

Food hygiene labels: EU rules regarding food hygiene cover all stages of the production, processing, distribution and sale of animal products intended for human consumption. This includes, for example, fish, meat and dairy products, but also non-food animal byproducts such as pet food. Every individual establishment or outlet (rather than the parent company) that puts such products on the market has to have a registration number that uniquely identifies it. The codes can be found on the product label and consist of a combination of letters and numbers within an oval. Have a look at a product at home to see how easy it is to spot the label. The EU has an online database of the codes, making it possible to identify the name of the company that put the product on the market. Since the regulation covers imports and any processes that take place in the EU, the database includes details of companies from over 80 countries. This comes in very useful if you’re investigating the chain of custody of a food product manufactured by a large consumer company on a contract, or a brand owned by a supermarket. In such cases, you can identify the actual producer rather than the brand owner.

What makes a supply chain investigation

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As you prepare for your investigation it’s important to have an informed idea of what is possible to achieve, what is relevant and what may be out of reach.

Supply chains are not always simple; they are often complicated networks or webs of actors, processes and movements. While it takes thousands of links in multiple supply chains to manufacture one laptop, investigations usually focus on very specific components of a supply chain, such as the source of one single element used in the manufacture of one part of the laptop, or a single factory where one stage of the production takes place. Maintaining such a focus makes the research more effective.

Supply chain research can be instrumental in linking a company to ethical issues that taint their products, even though the physical components of the product itself may not be controversial – for example, the violation of indigenous land rights that often occurs when producing rubber for car tires.

A key concept to remember about supply chains is traceability: the passing of information from one stage in the supply chain to the next.

This can relate to the initial source of the ingredients or raw material of a product, the alterations it incurred along the way, or other relevant details that may help trace an entire history of transportation and production. Some companies have systems for this but many supply chains are so long and complicated that it can be difficult even for the companies directly involved to achieve a fully traceable supply chain.

Sometimes, certification schemes are used to ensure that products are manufactured, produced and traded following specific standards. For instance, they can indicate that the human rights and traditional land rights of local and indigenous people are observed or that no tropical forests are cleared to make a specific product. Well known certification schemes include those for organic and fair trade produce or for sustainable timber, palm oil or coffee.

../_images/supply-chain-certificates_collage.pngFairtrade certificate logos. Image from Pinterest: https://www.pinterest.com/pin/110619734567839836/

In order to carry out supply chain research, it is necessary to get a good understanding not only of the product you are trying to track and its production prices, but also about company finances and trading and transport processes in different countries.

Re-evaluate your assumptions and verify your data at every step. As with any investigation, you should always question your initial assumptions and results in order to make sure that the information you collect is relevant to what you intended to prove. What at first appears likely may in fact have another explanation. For instance, you might have linked a company illegally clearing forests to a timber mill that sells to a furniture company, only to find out that the furniture company does not actually use the timber species harvested from the forest in question. You therefore cannot make a direct connection between the company and the illegal deforestation activity.

The flexible and unpredictable nature of supply chain research also means that it is not always possible to anticipate how long your research will take. Sometimes linking two processes can take a day of online database work; sometimes it can take months and dozens of research strategies and tools, including online and field research.

Due to the complexities of supply chain research and the legal, ethical and safety risks involved in accusing large corporations of wrongdoing, if you decide to conduct this kind of investigation, it’s best to take your time to slowly expand your skills and understanding of supply chains. Starting with basic searches and testing some of the tools and techniques we present here would be an easy way to introduce yourself to the field.

How and Where Do I Start?

You can start your investigation at any point along the supply chain where you suspect unethical or illegal behaviour might be taking place.

In most cases, investigators follow the trail downstream along the supply chain from this entry point. For instance, if an investigation starts at a mobile phone assembly plant suspected of using child labour, it will most likely continue downstream to the brand that sells the mobile phones, rather than upstream to the origin of the plastics and metals used in the phones’ manufacturing process. The focus here will be to expose illegal and unethical practices of exploiting children to produce that phone.

In some cases, however, research can occur upstream. An example might be the case of an ill-famed company establishing a manufacturing plant in a town whose residents want to find out if the products and commodities entering the plant are of controversial origin.

Once you identify an entry point, you can follow a sequential path along the supply chain to collect evidence connecting each step, be it along a production process or a product’s transport path.

That said, your research will most likely be nonlinear, and you will have to use multiple tools. Depending on what you are investigating, your work will involve extensive online research, and sometimes field research.

You might need to use anything from maps to identify the source locations of raw materials or interactive transport tracking services to follow commodity shipments, to online customs and product databases or corporate records and stock exchange websites to learn more about the products and companies you are focusing on. You might also sometimes undertake field research and collaborate with others to collect evidence and witness accounts about what happens on the ground.

Remember that companies tend to tightly guard information about their suppliers and customers to avoid exposing their internal mechanisms and advantages to their competitors. Companies also sometimes hire investigators to research the supply chains of competing products and of other companies.

Good supply chain investigators look for evidence that links the chain, and this often requires a lot of creativity since no two supply chains are the same and access to information can vary vastly depending on the data sources available or the geographies where research is being conducted. The ability to ‘look sideways’ by making previously unseen connections is a critical skill, as is being able to come up with innovative solutions to research problems.

Mapping and Profiling Actors

When thinking about supply chains, a useful first step is to understand the various actors – the participating companies or individuals – that operate along the way. While the actual chains are usually unique combinations, some of the actors can be categorised into groups, which are often connected by shipping or transport providers.

Most often, along a supply chain you will encounter the following:


Producer: company, person or group of persons that takes, grows, mines or otherwise produces the raw materials (such as the owner of a timber plantation).

Initial processor: company that carries out the first transformation of the product (for instance, a timber mill turning a log into planks).

Further processors: companies that carry out additional transformations of the product (wood can ultimately even turn into fiber for textiles). In many supply chains there are multiple further processors, while other supply chains may not have any.

Importers, exporters, distributors: companies responsible for getting the products into different countries, by operating or hiring shipping or trucking services to carry the products (for example, shipping the wood planks to a deposit in country X, from where it can be sold to furniture manufacturers and others).

Manufacturers: companies that carry out the last transformation before the product is sold to consumers or industrial users (such as the company making furniture or toothpicks).

Retailers: companies and individuals responsible for selling the products to consumers or industrial users (like a hardware shop or furniture store).

../_images/supply-chain-blocks.pngSimplified example of supply chain actors and their connections

Let’s assume you’ve chosen your entry point in the supply chain: for example, a local fabrics manufacturer where you suspect that workers are mistreated and underpaid, and you want to find out what fashion brands buy these fabrics and where they are sold. You’ve also mapped the actors you will focus on: the manufacturer and the retailer (plus, potentially, the final consumers), so you can raise public awareness about your investigation findings.

Now you know what and whom you are investigating. The next step is to establish a list of companies and people of interest – your actual actors. Before you move any further, begin by researching their company ownerships, business models, networks of collaborators, places where they are registered and/or operate, products they manufacture or sell, and possible controversies surrounding them already.

By doing this background research you create a profile of your main actors and their connections, build your foundation for further investigation, prepare yourself for interviews with relevant people (sources, witnesses, specialists etc.), establish connections and assess your potential risks.

Internet research is a good place to start looking for basic information about businesses and people associated with the companies in the supply chain you’re investigating. Try to find out as much as possible from companies’ websites and activity reports, supply chain due diligence reports (if available), stock exchanges (if the company is listed), media articles or social media profiles of the company, its board and staff. At the same time, look for official documents that include the companies’ registration data, shareholders, subsidiaries, members of the board, directors, annual financial reports and other relevant details. If you already know in which countries to look for official documents, you can start by checking available online corporate registries and other official databases, such as land records, court records, patent registries etc.

There are a number of platforms to help you start this research. Some corporate registry websites may seem intimidating at first, but don’t be daunted: there are more user-friendly, convenient and extremely helpful ways to get introduced to the company research field.

The Investigative Dashboard (ID) is a resource built by the Organized Crime and Corruption Reporting Project, providing a global index of public registries for companies, land and courts. From this platform you can go to the country and type of records you want, but note that while some corporate records provide free access to basic or more advanced information, many will require registration and fee payments in order to provide detailed company records. ID often marks the resources as free or paid for, so you know what to expect. In addition, the platform allows investigators to freely search and use its database of millions of documents and datasets from public sources, leaks and investigations it has conducted in the past. Chances are that you might find good leads in there too.

../_images/supply-chain-ID.pngInvestigative Dashboard database. Screenshot by Tactical Tech.

There are other similar resources where you can continue and expand your research. Open Corporates is a platform that lets you search freely for company records and related data it collects from all over the world. The International Consortium for Investigative Journalism (ICIJ) runs the Offshore Leaks Database a massive resource of company records and other useful documents that have been revealed by large leaks and projects the group has been working on, including the Paradise Papers, Panama Papers, Offshore Leaks and Bahamas Leaks.

Do not forget about the power of social media, and especially professional networks such as LinkedIn, where you can search for people and companies as well as identify possible connections among your subjects of interest.

Elsewhere in this kit, you can learn how to build a strong body of evidence, how to investigate companies and people, how to do online and offline research and how to use various tools and techniques such as maps, social media, interviews etc. You can combine resources and develop new skills with each issue you investigate, based on the demands of your particular context, while also making sure to remember the safety and ethical considerations that go hand in hand with your plans.

Inspiration and Guidance: a sample investigation

This section uses a fictitious example to show you the kinds of tools and approaches you might use to carry out a supply chain investigation. While the example is relatively realistic, the chain of custody has been simplified and shortened for the sake of illustration.

Unlike the product itself, chain of custody research cannot follow a simple research recipe, so the goal of this example is to demonstrate the need to think creatively and adjust to each specific case.


Note: all the names of the entities involved are fictional, and any relation to real companies or products is coincidental.

Sparked by a story of injustice

You read a news report that details how villagers in a South American country have been rounded up at gunpoint and forced to work in a bauxite mine run by a company named Brown Gold. You want to find out if the minerals from the mine are being used in well known consumer products.

You start your investigation by focusing on the supply chain at the point where the mineral leaves the mine or company warehouse. This is your entry point. Initially, you might begin with simple online research. Keep in mind that this case could be sensitive, so it’s useful to familiarise yourself with and start using some digital security tools, such as the Tor Browser, DuckDuckGo search engine or a VPN (Virtual Private Network), to avoid being tracked.

Your search does not yield much more than the name of the company itself, but in the process you gather additional information, such as the company’s registration number and the names of the founders and key people in the company.

You also carry out online research and ask some specialists you trust on related subjects such as:

  • The uses of bauxite (as a main source of aluminium).
  • Detailed information about the aluminium production process and its impacts.
  • The largest companies involved in global bauxite and aluminium production.
  • The main uses for aluminium in industry.

Example of online research entry points:

In many instances, Wikipedia provides useful entry-level information and links to external sources that you can check for more in-depth knowledge. Specialised websites that focus on the particular minerals are helpful for understanding the field and its main players. In this case, for example, a DuckDuckGo (or a Firefox, Google etc.) search for “aluminium and bauxite” leads you to pages like that of Geology.com, Aluminum.com (Aluminum Association in the US) – , Australia’s Aluminum Council and many others, where you read about the production process and uses of this resource.

Searching for “bauxite producers world 2019,” for instance, takes you to information on the current top bauxite producer countries and companies.

Searching for “aluminium producers world 2019” leads you to other resources such as a map and downloadable database of top aluminium producers from international institute World Aluminium and additional data from statistics aggregator Statista.

Investigating the Key Players

Your preliminary online research provided key information about the products and actors at the centre of your investigation; enough to build some background knowledge and basic details about your topic and main subjects (producers, buyers etc.).

You then continue by mapping your actors and the connections between them – who is the producer, who delivers the commodity to whom, by what means etc. – and following the supply chain downstream from your entry point.

The Producer: MINING COMPANY

Since the company – Brown Gold – is mining the resource, it is considered the producer of the commodity. By using the resources mentioned above, you can gather various types of information to get a better understanding of who Brown Gold is:

  • Physical company operations and locations – source: maps and satellite images (potential transport routes).
  • Type of company (private, public and, if so, shareholders, etc.) – source: company registries, stock exchange, website information.
  • Financial information – source: company filings, annual reports on company’s website, stock exchange (if the company is listed on any stock exchange).
  • Registered office addresses (used for formal purposes, e.g. where mail can be received) and trading or operational addresses (where actual activities occur) – source: online and offline corporate records, company’s website.
  • Board members and directors (and any other businesses they might be involved in) – source: company registries, company website, company and people databases (see above for Investigative Dashboard and other resources)
  • Bank connections, loans, mortgages – source: corporate records, court records, annual financial reports.

Note:

Carefully searching through company reports and other documents can lead to very useful findings. Annual reports, corporate sustainability reports, company presentations and shareholder filings can all be useful not only for basic information on a company and its finances, but also, in some cases, about its customers (photos within these reports can be especially useful for this).

In this case, you find the location of the company on satellite images and identify its board members and directors, but cannot find any further information about them. Nor have you found detailed financial data or names of any customers of the company. Searching through company records and annual reports, you do, however, manage to find a subsidiary (a company owned and controlled by another company) of Brown Gold, by the name of BG Shipping.

The Initial Processor: ALUMINIUM SMELTER

From your initial online research you found out that bauxite is used to manufacture aluminium, which in turn is produced in large smelters (facilities where the metal is extracted by heating and melting the ore). You also discovered that smelters are massive investments – to the extent that there are fewer than 150 of them globally.

This information will help you in your investigation, because it offers a relatively narrow field of inquiry. In order to find one of the smelters that is supplied by Brown Gold, you use a process of elimination to rule out certain routes, while looking for likely connections between the mining company and certain smelters.

Examples of investigation activities to do this include:

  • Finding out if there are any smelters located in the country the mine operates in – there are none.
  • Identifying other bauxite mines in the country – you find three more.
  • Analysing whether this country exports any bauxite overseas using the UN Trade database Comtrade: comtrade.un.org/ – you find that six countries received bauxite. So far you know of four mines in total; this means you can’t yet determine which country is supplied by Brown Gold.

../_images/supply-chain-comtrade.pngSample comtrade.org search. Screenshot by Tactical Tech.

In order to identify the smelter, you need to first determine the country that receives the bauxite.

With a relatively simple online search (e.g. ‘how is bauxite transported’) you learn that bauxite is most commonly transported by ships or trains.

You carry out further online research, and check transport routes and map locations (using Google Maps or Google Earth) to map out deepwater seaports. Then, by looking at the train lines between the four mines and the location of the mines to each other, you conclude that Brown Gold is most likely exporting its bauxite using ships.

Moreover, you previously identified the BG Shipping subsidiary and were able to locate its warehouses on the map at a port that is connected to Brown Gold via train track. You can therefore conclude with even higher certainty that the company exports its bauxite from this port.

The Trader: SHIPPING COMPANY

Today, the majority of commodity-carrying ships are fitted with live tracking devices, which employ what’s called an Automatic Identification System (AIS). All vessels over 300 tonnes (gross) are required by law to emit radio signals with their speed, direction and exact location. This data is also captured by receivers on other vessels and by stationary receivers in ports and on coastlines.

Services such as Marine Traffic, Vesseltracker, and others use AIS information to produce live maps showing the movement of ships across the globe. To search the map, you need to know the name or registration number of the vessel you are tracking. For additional resources and depending on your needs, other tracking services may be of further help, so reviews like this from Marine Insight - “Top Eight Websites to Track Your Ship” - may help when looking for alternatives.

Most of the ship tracking services either have a free version or offer a free trial, which can be used to track these vessels. They also tend to employ their own network of receiver stations and have maps on their websites that indicate the network coverage. MarineTraffic, for instance, provides near real-time information about vessels’ positions and voyage-related information. In addition to the AIS receivers, which are ground-based, Marine Traffic (and other such platforms) also collects vessel data from satellite receivers. Obtaining this data often requires paying a one-off fee or signing up for yearly subscription, which is usually cheaper if you plan to use it longer.

../_images/supply-chain-marinetraffic.pngSample MarineTraffic.org search. Screenshot by Tactical Tech.


Tip:

Always search more than one vessel-tracking website to trace the same ship, as some platforms may provide you with more free information than others, and some may have the data you need while others may not.

If there is an area of particular importance to your investigation that is not covered by these services, it’s even possible to buy your own receiver online, from places like Amazon or specialised websites such as Milltech Marine. If this is the case, do some serious research first: check what range you need to cover, what other users recommend, verify equipment reviews, consult forums like ShipSpotting and maybe even check with some vessel tracking enthusiasts for advice and recommendations.


Note:

Taking this route requires some financial cost, a stable Internet connection and power supply in the place where you are installing the receiver, knowledge of how to use the equipment and some extra effort to maintain it. However, if it helps to advance your investigation and you have no other options, it’s well worth the relatively short time it takes to learn and experiment. Marine Traffic provides useful advice for such situations in its FAQ section. The website also offers free receivers to those who want to contribute to its live map, but that requires you to share your receiver’s data with the platform, something you might or might not want to do, depending on how sensitive your investigation is. If you decide to go ahead and operate a receiver, you also get a free subscription plan, or an upgrade to your existing account.

After deciding which tracking site(s) to use, you spend several weeks mapping out the journeys of vessels that appear to have been loading materials at BG Shipping. Ships that spend several hours berthed right next to the BG Shipping facility in the port are more than likely loading or unloading.

You can track journeys of vessels by saving their movements on some of the above mentioned online platforms. In Marine Traffic, for example, you can create your own ‘fleet’ of vessels to monitor and get updates on, or set up notifications when a vessel reaches a port) and accessing past travel information in the database (sometimes free, other times for a fee).

Eventually, by tracking these ships, you identify three ports in three different countries across Asia that received exports from BG Shipping. This means that, at the very least, three separate smelters bought bauxite from the Brown Gold mine.

Using Marine Traffic you manage to show that a vessel that left BG Shipping went directly to the port facility of a company called Caliper Alumina. You conclude that Caliper Alumina is one of the smelters receiving bauxite from Brown Gold mine.

Think back to your earlier research, when you identified and mapped smelters, their transport routes, subsidiaries, key personnel, addresses and finances. You can now apply the same techniques and resources to find out more about Caliper Alumina and its activities.


Tip:

Vessels sometimes make multiple stopovers. It’s also not always clear from sites like Marine Traffic whether a vessel is loading or unloading. Look for additional information about the vessel’s draught (the depth its hull is submerged into the water), which provides another indicator of whether it has been loading or unloading (the higher the draught, the heavier the ship).

The Further Processor: CAN PRODUCER

In this example, you can use another resource, namely customs data, to try to identify one of the customers of Caliper Alumina.

Customs data consists of shipping manifests, which every shipment vessel is legally required to carry while it travels around the world. Governments collect this data in order to produce their trade data statistics. It’s possible to purchase this data, but doing so is expensive and only available for a limited number of countries. Generally it provides the name of the importer and exporter – so if one country in the trade does not make customs data available for purchase, you may be able to get the same information from the other country involved in the transaction.

The cost of purchasing customs data has decreased lately, in line with a growing number of companies offering it for sale. Examples of such services include Trade Atlas, Export Genius, Xportmine, ListThe, Panjiva etc.

The first step in this process is knowing which data to buy, and to do that, you need some context and background information.

Products are usually organised by HS (harmonised system) codes, a nomenclature developed and maintained by the World Customs Organization(WCO). The codes are organised into 21 sections, which are subdivided into 97 chapters, in turn further subdivided into several thousand headings and subheadings. The most recent HS codes edition, the 2017 one, is here.

Here is how it works.

Usually each subdivision comes in a two-digit increment. For instance, in our example:

Section XV “Base Metals and Articles of Base Metal” lists a series of chapters numbered from 72 to 83.

  • Chapter 76 is Aliminium and articles thereof. This is followed by 16 headings, for example:
    • Heading 7606: Aluminium plates, sheets and strips…
    • Heading 7612: Aluminium casks, drums, cans, boxes and similar containers (including rigid or collapsible tubular containers), for any material (other than compressed or liquefied gas), of a capacity not exceeding 300l, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment.
      • Subheading 7612.10: Collapsible Tubular containers

../_images/supply-chain-wcoomd.pngBase metals codes from World Customs Organization wcoomd.org. Screenshot by Tactical Tech.

When buying customs data, most of the time it is necessary to know the HS codes of the products in question. Often HS codes are defined down to eight or 10 digits, but at these levels the classification is usually set by the countries rather than the WCO. In addition, codes are reviewed and sometimes adjusted every few years, including those of the World Customs Organization above, so make sure you stay updated.


Note:

Each product and shipment that enters a country has an HS code attached to it, so both domestic and international trade statistics are usually based on those HS codes. For instance, the United Nations maintains the Comtrade database, which contains such statistics - comtrade.un.org/data - that can also prove useful for chain of custody investigations.

In many cases, customs data comes in spreadsheets and often contains false positives or multiple spellings for the same company name. Depending on the purpose of your investigation, you might need to clean the data, especially for statistical analysis. The details of the data vary depending on the country that supplies it, but it usually includes:

  • the names of the exporter and importer
  • the date of the shipment (at least the month)
  • the weight of the shipment
  • the HS codes
  • the port of loading
  • the port of discharge

Additional data fields can include addresses, phone numbers, detailed product descriptions, the value of the shipments, the name of the vessel and shipping company, as well as the names and addresses of notifying parties (the buyer or importer who receives notice of the shipment’s arrival).

In this case, the data shows that a US company by the name of Beverages Inc. purchased aluminium sheets from Caliper Alumina. You also find a number of older shipments made by that company, which you are able to verify with historical Marine Traffic data, by tracking the vessel’s past movement as detailed above. You also notice that the Beverages Inc. website features photos that show cans of soft drinks produced by prominent brands.

The Manufacturer: SOFT DRINK COMPANY

One of the companies whose cans are displayed on the website of Beverages Inc. is called Spark Drinks.

While you might be tempted to link this well known brand to the controversial bauxite producer, more research is necessary to ensure that this supply chain is indeed linked. There are various reasons why they may not be connected. There could, for instance, be different grades (strength, concentration) of aluminium in different lines of cans used for different brands. So, there is a chance that Sparks Drinks may not be using the aluminium made from the bauxite sourced from Brown Gold’s mine. This is where the problem of traceability emerges.


Note:

Supply chain traceability is a process and technique that ensures the integrity and transparency of a company’s supply chain, by tracking products from origin to consumer. This reduces the risk of mislabelling commodities that have been mixed from different suppliers and regions, allows products to be tracked back to their source and helps identify particular batches of the product if something goes wrong and products need to be tested or recalled, etc. Traceability is a key challenge in supply chains.

In certain cases, however, commodities and products are segregated (they have their identity preserved), which means that companies can trace the product and its components all the way back to the origin and the producer. This segregation is often required for certified products (e.g. those who must meet strict quality standards) and animal products (for instance, to identify farms in case food safety issues arise).

In most instances, though, raw materials or components from different sources (e.g. from different mines and suppliers) are mixed together at various points in the supply chain. The result is that, due to a lack of segregation and traceability, most companies do not know for sure whether they are connected to actors involved in illegal, unethical or controversial activity. From an investigator’s point of view, this means that all actors downstream of where the mixing occurs are part of the supply chain in question.

For companies, traceability is important for a number of reasons. These include compliance with policies of sustainable sourcing (for example, making sure they do not contribute to famine, drought or environmental damage) or with conflict minerals regulations implemented by various countries, which impose strict rules on the purchase and use of commodities obtained from areas controlled by armed groups or where abuses take place. Such aspects are important for a company’s accountability to regulatory authorities and to their consumers.

There are a number of research techniques you can use to find out if mixing occurs along the supply chain.

Sometimes the company information (websites, public filings) includes details about where the company purchases commodities from and if it keeps a detailed log of its own supply chain from the sourcing of materials until the point these reach its ‘hands’. In other situations, searching online for scientific articles or other investigations on your topic or commodity of interest, as well as more general magazines such as Supply Chain Quarterly, and available industry research might shed light on how the sector operates in general.

In addition, NGOs like Greenpeace, Rainforest Action Network, Rainforest Alliance, Mining Watch and many others already conduct research on various supply chains and their impact on human rights, the environment, and the wellbeing of communities living and working along the chain. Contact them for advice if you find their knowledge useful.


Tip: using NGO reports

The techniques and resources outlined here are often used by NGOs working to pressure companies into changing their ways of production or cleaning up their supply chains. NGO reports can offer insightful and inspiring examples of how such tools have been used in conjunction with other supply chain research techniques. When reading reports, keep in mind the mission of the NGO. Some of the language may not be appropriate for investigators or journalists and some texts are designed for advocacy and policy purposes. However, it’s an interesting exercise to try and figure out how the research was carried out and what investigation tools and strategies were applied.

Also look out for trade and industry magazines and websites that profile the way your company of interest operates (see supplychain247.com, for example). However, keep an eye out for articles and research that appear one-sided or solely focused on positive angles – this is a strong clue that they may be sponsored by the very companies you are investigating, and thus not always reliable or complete. Search multiple sources and read as much as possible to create a complete picture.

You might also consider talking to industry experts or even to the company itself.


Warning:

Before talking directly to the company of interest, you should conduct thorough background research on their operations, and be prepared to ask highly relevant questions rather than details you might already find elsewhere. If you plan on accusing the company of something, it makes sense to avoid telling them so, or even closely hinting at that, before you’ve gathered solid proof. Powerful companies will go a long way to make you stop your research, try to discredit you or sometimes even threaten you with legal action or other types of pressure.

Now, back to our scenario. You find out from industry magazines that mixing occurs at the aluminium smelter and that all products leaving the smelter contain bauxite from various sources. Since this question is crucial, you also confirm it by carrying out interviews with industry experts and eventually also with representatives of the smelter itself. This means that any product containing aluminium that originates from the smelter, including the products of Spark Drinks, is potentially contaminated with bauxite of controversial origin.

The Retailer: SUPERMARKET

In this supply chain, the last step of identifying retailers that sell the products to consumers is relatively simple, since most retailers in your country have online stores and stocked products can be found via the retailer websites – as well, of course, as in person by visiting the stores. This allows you to complete the supply chain and link the bauxite to a number of major supermarket chains.

Loose Ends and Further Questions

Even though the case study ends here, there are many potential questions still to be answered to increase your certainty in the information. These include:

  • Are the customers listed by Beverages Inc. still up to date?
  • Is it possible that the bauxite and aluminium are of grades that rule out the smelter you identified, and thus render the particular chain impossible (and therefore another smelter would have to be identified)?
  • Does Beverages Inc. export to other countries?
  • Are there ways to confirm the supply chain links using other research techniques or further verify the results you obtained so far?

You can employ numerous different research techniques to identify customers of the aluminium smelter and, depending on how many more transformations take place, there may still be more chains to uncover before you reach the final consumer product.

For electronic products, it is likely that the aluminium will change hands many times before it can be found (unrecognisable in shape and form) in a store. In some cases, due to the nature and complexity of supply chains, you’ll have to invent or significantly adapt the research techniques as you go.

Risks and Considerations

Supply chain research often comes with significant risks, many of which depend on both the research strategies employed and the geographies in which they take place.

Safety concerns

Successful supply chain research often requires field research in addition to online data collection and shipments tracking. Field research can be high-risk, especially in some areas where corruption is rife, where investigators and journalists have little protection, or where violence occurs frequently. This kind of work is usually carried out in teams and under detailed plans for physical and digital security. High-risk work should only be undertaken by experienced investigators.

Data access

Companies usually have multiple customers and suppliers, often hundreds. There are, therefore, many forks in the road when it comes to following the trail of the products you are investigating. Make such choices carefully and base them on knowledge, facts and information rather than on gut feelings. An assessment of the difficulty of research and operating in specific jurisdictions for instance is a rational way of making such decisions.

It is important to give special consideration to supply chain bottlenecks (for example, a blockage in the chain caused by shortage of a commodity or increased demand), where only a small number of companies may have overwhelming market shares. For instance, a handful of traders now dominates the global trade of agricultural commodities.

In most cases it is not possible to prove the supply chain for a specific product all the way to the end product. This diluting of the chain is common and is not necessarily a concern. For example, it would be very difficult to show that one harvest of coffee beans from a smallholder (a non-industrial farmer harvesting a small area) who has illegally cleared forested land, ends up in instant coffee products of a large consumer brand company.

However, it might be possible to prove that the smallholder sells to a specific agent, who sells the coffee to a company where the beans are collected and washed. This company in turn sells to a processing and packaging company that ships the coffee overseas to an importer, who passes it on to the coffee roasting and grinding company, which in turn sells it to a large consumer brand that packages the instant coffee products, which are sold in supermarkets around the world. In this scenario, the coffee coming from the illegal plants can never be traced directly and has been mixed with coffee from many other plantations, yet the consumer brand is still exposed to the problem because it is part of the supply chain.

Collaboration

In order to avoid or mitigate many of the risks above, investigators often collaborate with others doing similar work, including asking for advice and best practices on physical and digital security.

Collaboration is particularly advisable when investigating certain topics for the first time, and additional knowledge and expertise is required. Don’t shy away from asking questions to trustworthy organisations and people, and avoid the temptation of trying to take down a company with your very first investigation.

Collaboration also help share the workload, so you don’t have to follow the entire supply chain by yourself, but instead work with local communities, experts, NGOs and others to collect stronger evidence and reach a more impactful result.


Published April 2019

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Glossary

term-certified-product

Certified product – a product that receives approvals and certifications confirming it abides by a set of quality and performance standards and regulations. For instance, certified organic foods are expected to be produced without the use of chemicals but also abide by specific conditions in terms of storage, packaging and transport, among others.

term-chain-of-custody

Chain of custody – a process that seeks to demonstrate that physical and other sorts of evidence is protected from tampering during the course of an investigation, from the point of collection to the point of publication or use in other circumstances, such as in court.

term-commodities

Commodities – traded goods or raw material.

term-distributor

Distributor – company responsible for getting the products into different countries, by operating or hiring shipping or trucking companies to carry the products.

term-exporter

Exporter – an actor (company, organisation, person) sending goods and materials across the border to a foreign country for trade purposes.

term-further-processor

Further processor – company that carries out additional transformations of a product (such as wood turning into fiber for textiles). In many supply chains there are multiple further processors, while other supply chains may not have any.

term-hs-codes

HS (harmonised system) codes – a nomenclature established to organise and list products for easier classification and labelling across borders. It is developed and maintained by the World Customs Organisation (WCO).

term-importer

Importer – an actor (company, organisation, person) bringing in goods and materials across the border from a foreign country for trade purposes.

term-initial-processor

Initial processor – company that carries out the first transformation of the product (for instance, a timber mill turning a log into planks).

term-manufacturer

Manufacturer – company that carries out the last transformation before the product is sold to consumers or industrial users (such as the company making furniture or toothpicks).

term-producer

Producer – the actor, be it a company or person/group of persons, that takes, grows, mines or otherwise produces the raw materials (such as the owner of a timber plantation).

term-product-certification

Product certification – a process of verification and approvals confirming that certain standards and regulations are met by products and services.

term-retailer

Retailer – company or individual responsible for selling the products to consumers or industrial users (like a hardware shop or furniture store).

term-supply-chain

Supply chain – a set of steps that commodities undergo on their way to becoming products used by consumers or industry.

term-supply-chain-bottleneck

Supply chain bottleneck – an impediment or blockage along the supply chain caused by shortage of a commodity or increased demand, and where only a small number of companies may have overwhelming market shares.