Ensuring Necessary Supply Chain Compliance with Supranational Regulations in a Multinational Manufacturing Company
Climate change is a worldwide problem and requires global commitment and solutions. For this purpose, the European Union introduces the carbon border adjustment mechanism (CBAM) which will prevent carbon leakage and level the playing field for carbon emissions by levying an additional import tax on products placed on the European market. International businesses need to comply with the CBAM regulation. CBAM is not the only upcoming novelty of EU regulation under the European Green Deal. There are other regulations proposed following a comparable approach and structure. Climate change is inevitably linked to companies’ corporate social responsibility efforts. The research revealed environmental responsibility is a main incentive for sustainability programs.
In companies there is always the question who will be responsible and accountable for compliance. This research is conducted to demonstrate compliance with a regulation enforced by customs cannot be the responsibility of one single department. It is shown that compliance cannot be ensured without internal collaboration and support.
This thesis follows a mixed-methods approach which combines several independent research methods in one empirical study. It is argued that thinking in necessary conditions helps ensure supply chain compliance with new regulations in a multinational company. The necessary condition analysis method has been proven to be a suitable methodology in different research domains. The CBAM regulation contains different necessary conditions. In addition, the customs-oriented value chain model is used to institutionalize and operationalize necessary conditions into business operations. The model underlines supply chain compliance is a cross functional team effort. It also helps to make comprehensible the various contributions by each involved function participating to ensure compliance with a regulation. CBAM follows the basic principles of the concept of government enforced self-regulation. Climate change is identified to be a driving force for business regulation by government regulators.
It is concluded that trade compliance management is still an underrated topic in academic research. Compliance management in companies and in academic research do not include trade. Ensuring compliance with regulations which involve customs is seen as a trade compliance task within companies. An operating model is developed to emphasize compliance with regulations cannot be the task of one department alone. For CBAM, it became apparent collaboration between many departments such as procurement, trade compliance, sustainability, and master data is required.
|A. Veenstra (Albert), A. Grainger (Andrew)
|Customs and Supply Chain Compliance
|Rotterdam School of Management
S. Klautke (Sina). (2023, March 27). Ensuring Necessary Supply Chain Compliance with Supranational Regulations in a Multinational Manufacturing Company. Customs and Supply Chain Compliance. Retrieved from http://hdl.handle.net/2105/66295