how to address labour issues in your supply chain
DESCRIPTION
Presentation given by Oxfam at Food Ingredients Europe 2009, Frankfurt, Germany.TRANSCRIPT
How to Address Labour Issues in Your Supply Chain
Rachel Wilshaw and Alex Cole-Hamilton
Outline
• Why do we need to address labour issues in supply chains.
• What are the effective ways to address labour issues.
• How buying strategies can directly impact your ethical trade programme.
• What are the business benefits.
Why do we need to address labour issues in supply chains? 1. Workers
After 10 years of ethical trade programmes, labour conditions continue to be poor - especially further down the supply chain.
12.3 million people work as slaves or in other forms of forced labour
That’s more than were transported during 400 years of the transatlantic slave tradeSource ETI
126 million children work in dirty dangerous and demanding conditions
That’s twice the number of children of that age living in the EU27Source WFCL
Labour issues are found in the majority of factories and farms
Worker’s key concerns
Worldwide% of sites where issue found
China % of sites where issue found
Child Labour was found at 24% of the sites they visited.
visited 98 sites in 2008 and found the following:
Accommodation, Health & Safety
100% of sites
100% of sites
Employment terms 29% held deposits
45% held deposits
Pay 49% fail to pay the minimum wage
73%fail to pay the minimum wage
Working Hours 30%over 350 hours a month
58%over 350 hours a month
Source Impactt Ltd
Why do we need to address labour issues in supply chains? 2. Brand
“Wristbands sold to raise money for a campaign against world poverty are made in Chinese sweatshops in "slave labour"
conditions”
Oxfam accused of ‘Rank Hypocrisy’60% of the value of
a brand is linked to its reputationSource ETI
What are the effective methods for addressing labour issues
1. Adopt a company policy with labour standards based on the International Labour Organisation (ILO).
2. Put a clause in your standard contract stating the supplier will work toward the policy standards.
3. Develop a system for risk assessing suppliers so you can identify where in-depth assessments are needed.
What are the effective methods for addressing labour issues
4. Be aware that traditional audit methodologies often miss significant labour issues
Source Impactt Ltd
Coaching Materials foundExample:Q20: Does the factory provide wage slips? Could you show it to us? Standard Answer – Yes we have wage slips, but we throw it away after we look at them.
What are the effective methods for addressing labour issues
5. Use ‘forensic’ ethical assessment methodologies where appropriate.
6. Work with NGOs, not for profit assessment organisations, unions, and local resources.
7. Support a culture of openness, honesty and a genuine commitment to continuous improvement
Positive Buying Strategies: 1. Ensure staff are aware of their impact
Pressure on time and
speedFines for late
delivery
Shorter lead times
Last minute changes
Excessive overtime
High pressure shifts
Short term contracts
No toilet breaks
Subcontracting
Poor internal communicatio
n, late decisions
Frequent changes in
product specifications
IMPACT ON SUPPLIERS
IMPACT ON WORKERS
BUYER PRACTICES
Source - Impactt Ltd
A. Incentivise staff to address labour issues.
B. Assess attitude and ability to address labour standards when selecting your suppliers.
C. Encourage honesty about labour issues.
– It’s about working toward your policy and stated standards
– This message needs to cascade to factories and farms
Positive Buying Strategies: 2. Integrate ethics in to your business
Positive Buying Strategies: 3. Develop longer term relationships with fewer suppliers
A. Work with suppliers to understand their capacity and develop their product range.
B. Reward suppliers which are actively working toward your ethical purchasing policy standards.
Positive Buying Strategies: 4. When leverage is low or the relationship is short term…
A. Find out who else they supply.
B. Ask for copies of ethical audits and support the corrective action process.
C. Encourage the supplier to join a database such as SEDEX.
Benefits for your business
• Better relationship with supplier.
• Improved product quality and delivery.
• Reduced risk to the brand.
• Feels right.
Benefits for the supplier
• Happier and more productive workers.
• More and more buyers are asking for ethical assessments.
• Ethical databases reduce audit fatigue
Be part of the solution
