Companies know the origins and compliance status of materials in their supply chains. This Principle applies to companies that source material from producers or suppliers.
5.1 The company conducts sufficient supply chain mapping or traceability to assess compliance with company commitments and other obligations at the supply base level. For supplies that are not compliant, assessments identify the extent and nature of non-compliances that must be resolved.
- Primary processors and first intermediary traders know the origin of raw materials to the level of the production unit.
- Buyers downstream of the first intermediary (eg, manufacturers and retailers) trace supplies upstream until they are able to ascertain compliance status at the supply base level. This requirement is met in accordance with the traceability options presented in Section 2 of the Operational Guidance on Supply Chain Management.
- If traceability to these levels is not initially available, then it is progressively improved to these levels over a predefined timeline. These efforts prioritise the riskiest settings and provide support for traceability improvements for smallholders and others who may require assistance to avoid their exclusion from supply chains.
5.2 If the company uses risk assessments – for instance to prioritise efforts towards improving traceability, monitoring, and compliance – then these assessments follow good practices for credibility, transparency, and accurate risk characterisations as detailed in Section 3 of the Operational Guidance on Supply Chain Management.
Additional detail related to Core Principle 5 is available in the following Operational Guidance: