Ethical and Responsible Sourcing Questions and Answers
Question 89
What course of action should be taken when an audit of a supplier identifies evidence of human rights malpractice?
Options:
A.
Remove all business and inform press organisations to escalate to government authorities
B.
Allow the supplier to complete current orders while pursuing alternatives
C.
Immediately raise the issue with the supplier and jointly develop a timely action plan before a repeat audit
D.
Immediately halt all orders and switch to an alternative source of supply
Answer:
C
Explanation:
CIPS promotes a constructive and corrective approach when suppliers fall short of ethical standards, especially on critical issues like human rights. Immediately cutting ties can harm workers further and disrupt supply without addressing root causes. A responsible sourcing approach requires buyers to engage suppliers, escalate the concern, and establish a corrective action plan with monitoring to ensure compliance. Only if the supplier refuses to act or breaches persist should termination occur. This supports continuous improvement, supplier development, and ethical due diligence, reflecting global standards such as the UN Guiding Principles on Business and Human Rights.
Which of the following incoterms has the lowest risk to the buyer?
Options:
A.
exworks
B.
delivered duty paid
C.
carriage and insurance paid to
D.
free on board
Answer:
B
Explanation:
Explanation
The lowest risk to the buyer is 'delivered duty paid'. This is because the supplier does all the work transporting the items to the buyer's premises. Incoterms_2020_chart | Intersped
