Political Instability in Turkey Drives Array of Supply Chain Risks
Political instability in Turkey increasingly poses an array of risks to supply chain security, business continuity, and corporate social responsibility with domestic and international impact. An ongoing government crackdown and consolidation of political power following a military coup attempt against President Recep Tayyip Erdogan directly threatens Turkish supply chains, particularly in the areas of unmanifested cargo introduction, tense relations with the European Union, and labor violations in major export sectors.
The mass arrests and firings of state personnel critical to supply chain security contribute to the High BSI threat rating for the introduction of unmanifested cargo, including drugs, weapons, and stowaways, into legitimate Turkish shipments. Turkish authorities have suspended or detained more than 140,000 people, including thousands of police and customs personnel, on charges of collaborating with the coup plotters. Criminal groups are likely attempting to exploit these well-publicized gaps in security capacity, driving larger flows of contraband into the country. For example, in the first quarter of 2017, BSI recorded more seizures of heroin and heroin precursors from cargo in Turkey than all of last year.
In addition to these widespread purges, President Erdogan continues to successfully centralize his control over the Turkish government, posing serious business continuity concerns for Turkey and the European Union. A divisive constitutional referendum process, which will transform Turkey into an executive presidency and potentially enable the current incumbent to rule until 2029, has largely diminished prospects for greater EU-Turkey integration. Turkey has repeatedly threatened to reevaluate critical agreements that slowed disruptive migrant flows into Europe if progress is not made soon on visa liberalization. However, EU-Turkey negotiations on various accession requirements have effectively stalled since late last year due to EU condemnation of Turkey’s current political direction. The downturn in relations also halts momentum on other issues essential to supply chain continuity, such as modernizing an EU-Turkey customs union dating back to 1995.
With government priorities focused on internal security and weakening incentives from the European Union, Turkish supply chains suffer from heightened risks of labor violations, including in key export sectors. BSI recently increased the threat rating for child labor in Turkey to High, as upwards of 400,000 of the 1.3 million Syrian refugee children in the country are employed. Most Syrian minors work in the agricultural industries of southern free trade zones such as Mersin, Adana, Gaziantep, and Mardin. A local media investigation also recently discovered child laborers in Istanbul textile workshops linked to the supply chains of major Western retail brands. The presence of these corporate social responsibility violations in the agricultural and textile industries, both leading export sectors of the Turkish economy, contributes to the significant risk of goods produced by child labor entering the international supply chain. These findings underscore the broad range of supply chain risks stemming from ongoing political instability in Turkey.
Recent Spate of Hijackings in North India Reflects Increasing Use of Violence by Cargo Theft Gangs, Severe Deficiencies in Law Enforcement Capacity and Infrastructure
BSI has recorded a spate of at least ten violent hijackings across the north Indian states of Uttar Pradesh and Bihar over the last month, including at least three incidents in which criminals killed truck drivers in the course of the theft. In one notable incident in Uttar Pradesh, a gang of at least six criminals intercepted a truck carrying a shipment of flour on State Highway 29 between the cities of Shahjahanpur and Madura. The criminals overtook the truck, blocked the road, climbed onto the truck’s cab, and assaulted the driver and his assistant, forcing them out of the vehicle. The hijackers then bound, gagged, and blindfolded both men, and left them by the side of the road.
Some general trends underpin this recent stretch of hijackings. In most of these incidents, hijackers did not utilize firearms, instead physically beating drivers and their assistants with blunt instruments. Nearly every hijacking involved a large group of criminals, in several cases using multiple vehicles to intercept targeted trucks. The most commonly targeted commodity in the recent spate of thefts was agricultural products, especially flour and wheat. In at least one case, the driver’s assistants colluded in the theft, with police arresting an assistant and searching for a truck cleaner in the theft of a truck and murder of a driver. Two areas within Uttar Pradesh that saw a higher concentration of cargo thefts over the past month included the Ghaziabad area, outside Delhi, and the area between and around Lucknow and Kanpur.
A number of factors contribute to the frequency and violence of these recent hijackings in Uttar Pradesh and Bihar. Despite their large economies, both states have among the highest percentages of people living below the poverty line in India, contributing to the proliferation of hijacking gangs and other organized criminal groups. Another major concern is the diminished capacity of the severely understaffed and poorly resourced police forces in both states, even relative to other overburdened states in India. The most recent nationwide survey by the national crime statistics body in India found that Uttar Pradesh and Bihar had the lowest ratios of police to population in India. Uttar Pradesh, for instance, has a police force of just 180,000 despite having a population of 200 million, for a ratio of just 86 police officers for every 100,000 residents. Another concern is transportation infrastructure, as Bihar and Uttar Pradesh are second in third in India for lowest density of National Highways relative to population, behind only West Bengal. The relative underdevelopment of National Highways in both states forces drivers to utilize more poorly maintained and less-policed state highways and roads. This recent spate of hijackings underscores the High threat of cargo theft and Severe threat of hijacking for businesses operating in India.