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.