It is imperative to continually assess and reduce all potential risks associated with your suppliers, distributors and partners, and consistently keep track of any changes to their status.
The extractives industry – which includes oil, gas and mining companies – operates through a complex global supply chain and distribution network that involves domestic and international transport, trading, shipping, ordering, and inventory visibility and control.
Due to its large third-party networks that span regions with varying laws, oil and gas companies are highly regulated and need to have a robust due diligence program to manage and mitigate risks.
A poor third-party risk management program can expose companies in the extractives industry to a number of operational, integrity and ESG risks. This can potentially lead to enforcement actions and reputational damage.
The oil, gas and mining companies in the extractives industry operate in a global supply chain and a complex web of international relationships. Suppliers such as domestic and international transport and service providers are often located in jurisdictions affected by political instability, high levels of corruption and environmental risk. Oil and gas companies must always remain vigilant of heightened risk when entering specific markets and establishing relationships in new territories.
From exploration and production, to refining and marketing in the extractives industry, a thorough knowledge of risk in business relationships is essential. To mitigate reputational damage, loss of export licenses and potential litigation under anti-corruption legislation, supply chain and distribution networks must be aware of their third parties and how their products are being used.