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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q66-Q71):

NEW QUESTION # 66
A multinational engineering firm operates across multiple countries and has publicly committed to diversity and inclusion. However, an independent audit uncovers systemic issues:
1. Women with equal qualifications as men are consistently paid less for similar roles across all branches.
2. In the firm's regional office in Country X, minority ethnic applicants are frequently rejected for managerial roles without valid justification.
3. Employees with disabilities in Country Y are disproportionately placed in lower-growth roles, despite having skills for higher positions.
When questioned, leadership attributes these disparities to "cultural differences" and "regional norms." Which key labor rights issue does this scenario illustrate, and what actions should the company prioritize?

A. Abolition of child labor; the company should ensure that all employees meet the legal working age
B. Elimination of forced labor; the company should focus on ensuring no workers are coerced into taking undesirable roles
C. Elimination of discrimination in respect of employment and occupation; the company should implement a comprehensive diversity policy and actively monitor pay equity and equal opportunities
D. Freedom of association and collective bargaining; the company should allow workers to unionize and address these disparities through collective agreements

Answer: C

Explanation:
Option B- The scenario highlights discriminatory practices in pay disparities based on gender, hiring biases against minority ethnic groups, exclusionary treatment of employees with disabilities. The ILO's principle of eliminating discrimination in respect of employment and occupation requires companies to ensure equal treatment in hiring, pay, and opportunities, regardless of gender, ethnicity, or disability. The company's justification of "cultural differences" and "regional norms" does not absolve it of its responsibility to adhere to international labor standards.
Incorrect answer:
Option A- There is no evidence of coercion or lack of consent in employment.
Option C- The scenario does not mention issues related to unionization or collective bargaining.
Option D- No mention of underage workers is made in the scenario.
Reference:
LO-3.1; Page 253-254; Standards set by the United Nations (UN) and the International Labor Organization (ILO)

NEW QUESTION # 67
The Rampal Power Station, a 1320 MW coal-fired power plant, has recently faced accusations of poor health and safety standards in the workplace. Workers have reported being forced to work without safety masks, exposing them to air pollution. If Rampal Power Station fails to improve its health and safety standards, which of the following is the most likely primary consequence?

A. Acquisition of poor quality materials from suppliers
B. Loss of reputation
C. Destruction of the environment
D. Complexity in calculating insurance coverage

Answer: B

Explanation:
Choice B - Loss of reputation and damage to brand is a primary consequence of poor safety standards in the workplace for the power plant.
Incorrect answer:
Choice A - This option suggests that poor health and safety standards might lead to a decrease in the quality of materials sourced. While safety issues can affect worker performance and productivity, they do not directly relate to the quality of materials acquired from suppliers. Poor health and safety standards are more likely to impact employee morale and retention rather than the procurement process.
Choice C -Environmental effect is an indirect consequence for Rampal power plant but more so to the locals living there and natural habitat. If health and safety standards are not improved, it could lead to environmental issues, but this would be a broader consequence rather than a primary one related to workplace conditions.
Choice D-Although in cases of workers injury or death, calculating insurance would be complex, as not all injury and health related costs are covered by insurance, like sick pay, lost time, fines etc. But this is more of a secondary internal challenge and not a primary consequence of the power plant.
Reference:
LO-1.3; Page 99-100; Health and safety standards

NEW QUESTION # 68
Mr. Jerry, a procurement professional at a multinational company, notices unusually low labor rates within the supply chain. Which of the following should be his primary concern?

A. Fraudulent activity
B. Corruption
C. Modern Slavery
D. Bribe

Answer: C

Explanation:
Choice A- A procurement professional can evaluate the risk of slavery in their supply chain by considering whether buyers negotiate excessively low prices. If suppliers are pressured to reduce costs, it can negatively impact the finances of businesses involved in raw material production, increasing the likelihood of forced labor. Therefore, Choice A is the correct answer.
Choice B- Corruption is the dishonest or fraudulent behavior of people in power. This could be in the form of a producer bribing an official to get access to more farmland. It does not relate to low labor rates.
Choice C- Bribery is the act of offering money or something valuable to another person to persuade them to do something for you. Therefore is not concerned with labor rates.
Choice D- Fraud is the criminal deception that is designed to give a person or business a financial or personal benefit, ranging from bribes offered during supplier selection to forged checks during financing to fraudulent payments or payment guarantees. This option is not associated with low labor raters thus is not the answer.
Reference:
LO-1.1; Page 45; Issues impacting ethical and sustainable procurement and supply: modern slavery, bribery, corruption, fraud and human rights infringements

NEW QUESTION # 69
Which organisation is responsible for the creation of the 2030 Sustainable Development Agenda?

A. UN
B. ILO
C. NATO
D. ISO

Answer: A

Explanation:
This is the UN. There are 17 sustainability goals and these are listed on p.3. For the exam it's a good idea to familiarise yourself with them, but there's no need to learn them all off-by-heart.

NEW QUESTION # 70
Mahfuz, a Procurement Officer at GreenLine Industries, manages a contract with a supplier of key raw materials. He recently noticed the supplier's non-compliance with the company's CSR (Corporate Social Responsibility) policy. Despite addressing the issue in a meeting, no significant improvements have been made. What should Mahfuz do next?

A. Make a financial claim
B. Issue an ultimatum
C. Escalate the issue to a senior manager
D. Terminate the contract

Answer: C

Explanation:
Choice C - This is the correct answer. Escalating the issue allows for higher-level intervention, which may lead to more significant pressure on the supplier to comply with the CSR policy. Senior managers can also provide strategic direction on how to handle the situation.
Incorrect answer:
Choice A - This is a drastic step and should typically be a last resort. Terminating the contract without giving the supplier an adequate opportunity to improve or exhausting internal escalation processes may damage the business relationship and disrupt the supply chain.
Choice B - While this might push the supplier to act, it can come across as confrontational and may not lead to a constructive resolution. A more collaborative approach, such as involving senior management, is usually preferable.
Choice D- This option is not suitable unless the supplier's non-conformance has directly resulted in financial damages that can be substantiated. The scenario does not indicate such damages, so this is not an appropriate action at this stage.
Reference:
LO-2.4; Page 233-234; Escalating non-compliance and making exit arrangements

NEW QUESTION # 71
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Zack Reed Zack Reed

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