Loading ...Supplier Diversity and the Exclusion of Arabs
By: Mariam Alyakoob / Arab America Contributing Writer
Have you ever heard of “Supplier Diversity”? The way supplier diversity is used typically depends on the context. In terms of businesses, supplier diversity is usually a program that falls within Supply Chain and Procurement functions. The goal of a supplier diversity program is to procure from suppliers that are identified by the company as being diverse, as the name suggests.
What is a Diverse Supplier?
Now you may be wondering how you label someone as being “diverse?” In terms of supplier diversity programs, businesses that have been typically underrepresented are considered as being diverse. Diverse suppliers are identified as businesses that are 51% owned and operated by minorities, women, LGBT individuals, veterans, service-disabled veterans, or people who have a disability. Small businesses are considered to be diverse as well and are categorized as such depending on the revenue they receive. These programs are beneficial as they can help disadvantaged businesses grow and succeed.
Why do Companies Value Supplier Diversity?
Many large companies operate a supplier diversity program. Examples of companies that have these programs include Accenture, EY, AT&T, CVS, Toyota, and many more. According to Supplier.io, many companies find that incorporating a supplier diversity program is beneficial to them as they believe that these programs sustain economic growth by promoting innovation, providing opportunities to procure from various sources, and driving competition between existing and potential suppliers.
Because many companies believe in the benefit of procuring from diverse suppliers, they do invest time and money to do so. In fact, Fortune 200 companies have committed a diverse spend of $50 billion by 2030 for minority and women-owned businesses.
How Diversity is Certified
Because many large-scale companies have committed to sourcing from diverse suppliers, many of these diverse-owned businesses do benefit from becoming part of a supplier diversity program. For these large companies to avoid fraudulent behavior within their diversity programs, a diverse-owned business must be verified as a diverse supplier by being certified as such by third-party agencies. These third-party agencies include the Women’s Business Enterprise National Council (WBENC), the National Minority Supplier Diversity Council (NMSDC), the National LGBT Chamber of Commerce (NGLCC), and the U.S. Department of Veterans Affairs Vets First Verification Program.
These certifying bodies will ask diverse businesses for certain legal paperwork verifying their ownership of the business. Such documentation could include two to three years worth of federal tax returns, their current financial statements, and more. In addition to requesting business documentation, representatives of the certifying bodies may also conduct a site visit to the diverse supplier.
Arabs and Supplier Diversity
Now you may be wondering what these explanations have to do with being Arab, or even Middle Eastern. It’s important to understand supplier diversity and its benefits because it is another example of how Arab categorization as being “White” within U.S. race and ethnicity forms prevents them from accessing different resources that other minorities have access to. According to the U.S. Federal Reserve System, “minority” means an individual who falls within one or more of the following race and ethnic categories: Hispanic or Latino, Black or African American, Native Hawaiian or Other Pacific Islander, Asian, and American Indian or Alaska Native.”
As you can tell, neither Middle Eastern North African (MENA) nor Arab are included in this definition of minority. This legal classification means that Arabs are not only mislabeled as being “White,” but are not even considered to be minorities. This means that Arab or Middle Eastern-owned businesses would not be certified as minority-owned businesses by a certifying body such as the National Minority Supplier Diversity Council (NMSDC). Within the NMSDC’s website, they specify minorities as having at least one-quarter origin from a specific region or area. For example, they include the category of Asian-Pacific and list specific countries associated.
Within each of the countries of origin listed, not one Arab country was included.
It is surprising to hear that Arab Americans are not considered minorities. Given that the Census does not accurately collect data regarding Arab Americans and MENA individuals, the Arab American Institute estimates that there are around 3.7 million Americans who have Arab ancestry. Given that the U.S. population exceeds 300 million, that would mean that Arabs would make up less than 1 percent of the U.S. population when considering the Arab American population estimate. Despite these numbers, Arab owned businesses would still not be labeled as minority owned businesses given their classification as “White” within the U.S. Census.
Supplier Diversity programs are meant to help underrepresented businesses, and it is hard to believe that Arab Americans are not considered underrepresented within the U.S. and thus do not garner the same economic opportunities to help their businesses succeed that other populations have.
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