lsas: what you need to know

© Assent Compliance 2016Confidential and Proprietary to Assent Compliance. © 2016 Assent Compliance Inc.

The Labour Standards Assurance System: What You Need To Know

© Assent Compliance 2016

Today’s Presenters

James CalderAssent ComplianceDirector, Compliance Programs

Kate DunbarAssent ComplianceSubject Matter Expert, Human Trafficking

[email protected] | www.assentcompliance.com | TEL: 1(866)964.6931

mailto:[email protected]














Assent ComplianceINTRODUCTION


Assent Product SuitesOur Market Leading Platform

Ethical Sourcing

Materials Management

Supplier Information Management

InspectionsConfigurable Surveys & Declarable Substance

Lists
















REGULATORYMaking sure specific regulations are being met

Some of the Companies We Work With
















The UK Labour Standards Assurance Requirements


Agenda

Understanding LSAS:

1. What is LSAS

2. Background

3. Requirements

Getting Started:

1. Building the Business Case

2. Policy Development

3. Management Representation

1

2
















Understanding LSAS


Labour Standards Assurance SystemWhat?

Assurance system placing a contractual obligation on suppliers to have effective systems in

place to monitor and address concerns raised over labor standards.

Who?

● Developed by NHS Supply Chain (NHS SC) and UK Dept of Health

● Affects Medical Goods Industry

Why?

Prevent labor standards abuses in the supply chain of the UK National Health Service (NHS).
















Labour Standards Assurance System

Huge purchasing power:

● NHS = publicly-funded UK health system

● 83% total healthcare expenses in UK

● NHS #1 customer for medical goods

industry in UK

● UK NHS spent £116 billion on healthcare in

2015/2016

● Fifth biggest employer in the world
















BackgroundLSAS response to serious labor abuses:

● Child labor, trafficking and worker’s rights abuses

in Pakistan, Malaysia and Thailand

● Pakistan = 100m surgical instruments produced

every year, 10m for NHS

● 150 billion pairs of gloves produced each year


‘Workers [..] pay extortionate fees [..]work long hours with limited rest, their passports are often confiscated, they are offered poor standards of accommodation.‘















The LSAS 15 Action Point Matrix


1. Policy 2. Management Representatives3. Labour Standard Status Review4. Legal & Other Requirements5. Objectives, Targets and

Programmes6. Roles & Responsibilities7. Competence, Training & Awareness8. Communication

9. Documentation & Records10. Operational Control11. Supply Chain Management12. Emergency & Critical Issue

Response13. Performance Monitoring &

Measurement14. Corrective Action15. Management Review

Policies - Processes - Practices














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13

Understanding the LSAS Performance Levels

LEVEL 1: FOUNDATION(6 months)

LEVEL 2: INITIAL IMPLEMENTATION

(18 months)

LEVEL 3: ESTABLISHED IMPLEMENTATION

(optional)

LEVEL 4: PROGRESSIVE(aspirational)

● Supplier has the building blocks for labor standards management in place.

● Supplier has considered how labor standards relate to its business.

● Initial documentation in place for auditor review.

● Supplier is demonstrating progression towards implementation processes & procedures to manage labor standards.

● Supplier has selected and assigned responsible individuals and departments

● Supply chain risk assessment processes have begun.

● Risk mitigation has begun.

● Supplier have a viable system in place for managing and monitoring labor standards risk.

● Supplier can evidence through records and examples that supply chain risk assessment has occurred.

● Supplier can evidence that they are taking actions to mitigate identified risks, including in the supply chain.

● Supplier demonstrates leadership is involved in LSAS implementation.

● Supplier goes beyond audit to address and change non-conforming labor practices.

● Evidence of key stakeholder engagement, partnerships and related projects are in place.

Phased approach with mandatory audits


Targeted Products

Phased approach to LSAS implementation within NHS SC contract portfolio:

● 2014 - gloves, procedure packs, disposable curtains, suction consumables and miscellaneous sundries.

● 2015 – polymer, urology, theatre clothing, bowel management & continence.● 2016 – general wound care, office furniture, podiatry, disposable continence

& washable continence.
















Implications for LSAS Implementation


Content:

What data to collect?

Risk assessment criteria?

Training content

Labor standards status review

Process / Systems:

How to collect and analyze data

Audit trail

Training dissemination and tracking

Progress tracking

Incident management














© Assent Compliance 2015 Confidential

Where To Start?


First Steps in Establishing a LSAS Program


1 2 3

Building the Business Case

Reviewing/ Developing

Policies

Identifying Management

Representative















The Business Case


● Remain competitive NHS SC supplier● Better supply chain understanding and visibility● Reduce risk ● Protect against reputational damage● Protect against loss of contract● Prepare for LSAS scope expansion ● Strategic competitive advantage ● And of course.. Protect your workers!














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LSAS Policy Requirements

Policy Requirements - Level 1

● Documented policy in relation to labor standards● Approved by top management● Appropriate to nature and scale of the organization● Commit to continual improvement● Set out defined set of minimum relevant legal and

other requirements (reference these)● Commit to making necessary resources available● Commit to compliance with relevant labor standards

(ILO & local law)



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LSAS Policy Discussion

Relations Between Policies

Current:● Supplier and employee code of conduct● EHS policy● CSR or human rights policy● HR policies ● Procurement policy● Global human rights policy

Additional policies relevant to LSAS: ● Ethical procurement policy (standalone or integrated)● Labor standards policy (standalone or integrated into

human rights?)



21

Discussion: Approaches to Ethical Procurement Policy Development

Two approaches:

1. Standalone2. Incorporate into existing procurement

policy(ex. commitment to risk assessment and supplier requirements)



22

Goals (building on business case)Scope Who is responsible for policy implementation? Board level supportRelationship to other policiesCommitment to a code of conduct Assurance and verification procedures (see LSAS action points)Statements on communication and training on policyCommitments to addressing significant issues (for example LSAS action points)Expectations on suppliersPolicy review process

+ Supplemented by supplier code of conduct.

Labor Standards and/or Ethical Procurement Policy Checklist



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Labor Standards Policy: Essential Clauses

ETI base code:1. Employment is freely chosen2. Freedom of association and collective bargaining3. Working conditions are safe and hygienic4. Child labor shall not be used5. Living wages are paid6. Working hours are not excessive7. No discrimination is practiced8. Regular employment is provided9. No harsh or inhumane treatment is allowed

+ Prohibit Modern Slavery enablers:● Recruitment fees● Untrained labor providers● Withholding identity documents● Failure to provide return transportation● Failure to provide housing that meets safety and housing standards

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Management Representation

Requirements Responsibilities Cross-functional working group

?


LSAS Manager: Responsibility, Authority & Reporting

Requirements - Level 1:

● Identification ● Defined responsibility and authority for:

○ Establishment○ Implementation○ Maintenance○ Reporting


LSAS Manager: Sample Responsibilities

Strategy and action plans Awareness-raising and training for procurement managers Risk assessmentDevelop supplier minimum standards Communicate expectations to suppliers Collate and review supplier self assessments/third party auditsSupplier engagementRemediation programsProgress reporting to board/senior managementBusiness case


Best Practices:● Make the links (national, regional, global,

inter-departmental)● Create cross-functional working group● Get senior leadership endorsement● Review responsibilities, resources and focus

regularly● Input from external stakeholders● Start with a pilot? Then roll-out

How Does this Fit in Your Organization?
















● ETI Ethical Procurement for Health: Workbook http://www.ethicaltrade.org/resources/ethical-procurement-health-workbook

● BMA ‘Is this Ethical Procurement’ feature: https://www.bma.org.uk/features/isthisethicaltrade/

Additional Resources


http://www.ethicaltrade.org/resources/ethical-procurement-health-workbook



https://www.bma.org.uk/features/isthisethicaltrade/

















[Webinar] Chapter 3: Looking ahead: Human Rights Reporting and AccountabilityTuesday, August 23rd | 1PM

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Q&A Discussion

Questions?













