I interviewed Mark Katchen who discussed International Ethics in Supply Chain.
Mark Katchen, who is the managing principal of the Phylmar Group, and this is an International Environmental Health and Safety and Sustainability Consulting Firm. Mark is a certified Industrial Hygienist with 35 years in the business, and he has experience dealing with international environmental supply chain issues. Today the topic is International Ethics in Supply Chain. So, Mark, is there any more you want to provide about a background of yourself?
No, I think that's about it. We certainly have a broad base in some of these... broadly, from international. We do work in Asia and Europe, South America... So, we've got quite a broad base of experience.
What is a typical scenario that you deal with regarding international environmental supply chain issues?
Well, from the ethical standpoint, let's take an example of a company that's operating and producing, say, widgets in the US, United Kingdom, and Germany. And as part of that production process, they have to use, say, a fairly toxic chemical called methylene chloride. In each of those countries, there's different limits of exposure that are allowed for given employee populations. The question is, which limit or limits should the company adhere to in those varying facilities. That's a typical scenario.
Are there any frameworks that you can use to resolve these issues?
Yes.As a matter of fact, we try to use what's known as an eight-step framework to deal with some of these ethical conundrums. And they're really rooted in a couple of basic principles. One is what is called now, non-malfeasance, which is avoiding any kind of harmful acts. Second is beneficence, which really is maximizing potential benefits. Third is respect for individuals and communities. And the fourth of one of justice — treating equal equally, so to speak.
So, with respect to the framework, the first step is really gathering facts. In other words, what are those? In this case, what are those particular exposure limits in each of the locations? For example, here in the United States, the exposure limit is what we call 25 parts per million of exposure. In the UK, it's 100, and in Germany, it's 50. So, we know that. And the next step is we then review the standards for ethical practice that a professional who is acting in that way — in my case, being a certified industrial hygienist — I'm looking at what is called the American Board of Industrial Hygiene has an ethical practice. And so, I'm going to use that as a basis in terms of code of ethics that I'm going to apply.
And the third step is really to articulate those ethical concerns. For example, if the company really complies with the local law, it may be treating employees differently with respect to disease risks in these different localities. So, that presents the dilemma that we're having to deal with.
The fourth step is really determining the ethic, principles, involved. In other words, we'll get into issues of compliance as a baseline, but what about... How does that gel with the code of ethics that a professional will have, like myself, in trying to apply these standards as well as the code, and how do we mesh them together?
In the fifth step, we determine whether the principles are in tension with each other and to see if, for example, the dilemma provides some nuances to consider. For example, complying with the law is an ethical act. So, therefore, if we're requesting the UK factory to reduce its exposure limits by a factor of four, maybe we increase cost for them. If the local law is satisfied,should the cost be considered part of the cost-benefit equation? Maybe yes and maybe no, because while we take that into consideration, how does that play into the fact that we're still exposing a population at greater risk if we only look at those cost perspectives. So, we're always looking at not only cost-benefit analysis, but from an ethical standpoint, how do we work all that into this framework?
The sixth step is determining options, including analysis of the pros and cons. So, we just talked about that from a cost standpoint. What are the good parts and the bad parts?So that, while it may cost a little more to bring those exposure levels down to a common exposure level, it may be beneficial, in the long run, because if we have information that suggests that people would be at considerably good risk to be exposed at, say, the UK level of 100 parts per million, we may be saving us in the long run in terms of that employee's productivity. Because if they get sick, especially if it's something like cancer, we would lose that individual and therefore, that would have a much broader impact than maybe the cost of actually controlling the exposure.
The seventh step is soliciting feedback and that's including from local shareholders, stakeholders. Excuse me. So, we want to get input from, say, the UK and Germany folks to indicate how that's going to work. Is that lowest limit of 25 parts per million, for example, attainable? And what would that take and over what period of time can we do it? It may take a few years and work at certain budgeting requirements to make sure it works.
And finally, the eighth step is to finally decide on an approach. What approach are we finally going to take? How are we going to implement this? What makes the most sense in terms of our operations on this global scale?
So, those are the, Dustin, the eight steps that we would use in this process.
How do you apply these frameworks in practice?
So, at the end of the day, what we're really trying to do is look at what makes the most sense in terms of achieving, really, as low as reasonably achievable perspective in all of the scenarios. We want to make sure. Because we always find out new information as things evolve. Normally these limits never go up or increase. They always tend to go down. And as a result, again, we may reach a certain level today, but if we get more information tomorrow, it really makes sense to try to get as low as we possibly can. And so, even though we may hit a certain, or try to establish, a certain benchmark today, if we can get lower using the same technology or modification, even slightly more, then it makes sense to do it. So, we're always trying to get the lowest reasonable achievable limit that we can.
Thank you, Mark, for sharing today.
Okay. Thank you very much, Dustin. I appreciate the opportunity.
About Mark Katchen
Managing Principal at The Phylmar Group, Inc.