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Exploration of the opportunities to include social and ethical aspects in University procurement activity - legal issues, risks, benefits, development/use of an ethical code of conduct for suppliers, implementation of an ethical supply chain

The Only Way is Ethics -Implementing an ethical approach to

procurement and supply

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Workshop

SPCE – Introduction and Legal Issues

APUC - Implementation of Code of Conduct

NUSSL – achieving an ethical supply chain

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EU Regulations

Subject Matter of the Contract

Fairness, Transparency, Equal Treatment

Non-Discriminatory

No Unrestricted Choice

General requirements re Supplier Behaviour

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Specific Topics

Living Wage

Fair Trade

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What You Can Do!

Stages of the Purchasing Cycle

Selection

Specification/Award

Contract Management

Updated interpretation of Subject Matter

New EU Directive

Defra-commissioned Guidance

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If you don’t do anything else…

Your ‘aha’ moment

Include ethical requirements about supply chain in contract performance conditions

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Emma Nicholson, Special Projects Manager APUC

Max Crema, Vice President (Services), Edinburgh University Students' Association

The Only Way is Ethics –Developing Sustainable Procurement Beyond Tendering

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Outline

APUC

Beyond tendering

A collaborative approach

Code of Conduct

Benefits

‘Aha’ moments

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APUC

Established in 2005 as one of 6 Centres of Procurement Expertise in Scotland

* Collaborative Contracting * Shared Services * College Procurement Services * eSolutions

* Guidance * Processes * Tools * Training

Represents the sector as sector ‘voice’ as required.

700+139 £350M

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Beyond Tendering

Risk Reputation

StakeholdersOpportunity

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A Collaborative Approach

Stakeholder working group

Policy

Code of Conduct

Strategy

Early involvement process support stakeholder buy-in successful implementation

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Code of Conduct

o Applies to APUC and its suppliers..... and their suppliers

o Can be used by institutions for their supply chains too

APUC Code of Conduct (http://www.apuc-scot.ac.uk/code.htm)

Social Compliance

Labour * Working conditions * Equality

Ethical Compliance & Economic Diversity

Laws, regulations, taxations * Contract Terms * Training * Community benefit * whistleblowing

Environmental Compliance

Regulations * Impact * Plans * Technologies

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Code of Conduct - Implementation

o Pre-tender

oStrategy Development

o Tender

oPre Qualification questions

oTender questions

o Post Tender

oContract Management

oSupply Chain Sustainability Compliance Assessment

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Benefits

Increased Sector Influence*

Supplier Development

Common / shared platform of supplier sustainability compliance

Earlier realisation/integration of improved technologies

Better communication with supplier

Improved understanding and scoping of future agreements

More effective risk mitigation

Increased risk awareness

Understanding of SC

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If you don’t do anything else…

Your ‘aha’ moment

• Push traditional boundaries

• Collaborate – use your interested parties

• Collaborate – for change

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Sophie Sharp

Ethical Supply Chain Coordinator

NUS Services Ltd.

Ethical Supply Chain Management in Practice

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Our objectives

What drives ‘sustainable procurement’ or ‘ethical trading’ for you?

Minimise risks

Maximise opportunities

Duty

Stakeholder concerns ?

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NUS Ethical Supply Chain

Sound Sourcing Guide

Ethical & Environmental Accreditation

Product Evaluation

Ethical Screening

Contract Clauses

Audits

Constructive Engagement

Sound Ethical Choice

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Key issues

Priority issues may vary from institution to institution. Key areas for the NUS include:Labour standards

Animal welfare

Corruption & bribery

Business ethics

Environmental management

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A question of responsibility…

Buyers? Contract Managers? Estates? Sustainability staff?

Collaboration is critical

Consistent messages are crucial

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Setting out the basics

Codes of conduct

Setting expectations

A framework against which to measure performance

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Being realistic

When is a document more than a document?We can’t see everything - how suppliers are managed is

where we succeed or fail

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The small matter of trust…

“The best way to find out if you can trust somebody is to trust them.”

Ernest Hemingway

“Anyone who doesn't take truth seriously in small matters cannot be trusted in large ones either.”

Albert Einstein

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Prioritising suppliers

Ensuring the best use of resources:

Everyone’s different

Risk vs opportunity

Priority issues

Inherent riskOpportunity1 5

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Determining a course of action

Considering the tools available

Audits

Product evaluation

Contract clauses

Supplier management

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Constructive engagement

“A meaningful two-way dialogue in which both parties listen to each others’ viewpoints and share a genuine commitment to resolving issues of contention”

A working example from NUS:

Engaged with Coca-Cola over four years

Consulted with stakeholders and developed a list of recommendations

A number of positive developments were made including:

Created new post of ‘Head of Labour Relations’

Launched pilot workplace standards assessment for bottlers

Join statement signed with IUF

Developed a Global Human Rights Policy

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Addressing the big challenges

There are often no ‘answers’ or ‘quick fixes’ for addressing some of the bigger, more common ethical procurement issues

On some issues, we are all learning together

Partnership working and shared learning is essential

Photograph: Christopher Pillitz/AlamyPhotograph: The Hindu Business Line

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Clothing – beyond audits

Objectives to improve the ethical sourcing of clothing and develop a living wage offering were set at NUS Conference

Problems are wide-spread, inherent and growing

Key issues include poor wages, forced labour, health & safety and toxic chemicals

Supply chain visibility is a real challenge

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The importance of partnerships

Impossible to go straight to market for a solution

We now ask more of our suppliers than ever before

The project proved more challenging than initially anticipated, with issues more complex than realised

Remaining part of on-going dialogue with a key supplier and potential new factories has been critical

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Conclusions

Some fundamentals…Gain internal buy-in

Build mutual trust

Ask more of your suppliers