How to address labour issues in your supply chain


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Presentation given by Oxfam at Food Ingredients Europe 2009, Frankfurt, Germany.

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How to address labour issues in your supply chain

  1. 1. How to Address Labour Issues in Your Supply Chain <br />Rachel Wilshaw and Alex Cole-Hamilton<br />
  2. 2. Outline<br />Why do we need to address labour issues in supply chains.<br />What are the effective ways to address labour issues.<br />How buying strategies can directly impact your ethical trade programme.<br />What are the business benefits.<br />
  3. 3. Why do we need to address labour issues in supply chains? 1. Workers<br />After 10 years of ethical trade programmes, labour conditions continue to be poor - especially further down the supply chain.<br />
  4. 4. 12.3 million people work as slaves or in other forms of forced labour<br />That’s more than were transported during 400 years of the transatlantic slave trade<br />Source ETI<br />
  5. 5. 126 million children work in dirty dangerous and demanding conditions<br />That’s twice the number of children of that age living in the EU27<br />Source WFCL<br />
  6. 6. Labour issues are found in the majority of factories and farms<br />visited 98 sites in 2008 and found the following:<br />Child Labourwas foundat 24% of the sites they visited. <br />Source Impactt Ltd<br />
  7. 7. Why do we need to address labour issues in supply chains? 2. Brand<br />“Wristbands sold to raise money for a campaign against world poverty are made in Chinese sweatshops in "slave labour" conditions”<br />Oxfam accused of <br />‘Rank Hypocrisy’<br />60% of the value of a brand is linked to its reputation<br />Source ETI<br />
  8. 8. What are the effective methods for addressing labour issues<br />Adopt a company policy with labour standards based on the International Labour Organisation (ILO).<br />Put a clause in your standard contract stating the supplier will work toward the policy standards.<br />Develop a system for risk assessing suppliers so you can identify where in-depth assessments are needed.<br />
  9. 9. What are the effective methods for addressing labour issues<br />Be aware that traditional audit methodologies often miss significant labour issues<br />Source Impactt Ltd<br />Coaching Materials found<br />Example:<br />Q20: Does the factory provide wage slips? Could you show it to us? <br />Standard Answer – Yes we have wage slips, but we throw it away after we look at them.<br />
  10. 10. What are the effective methods for addressing labour issues<br />Use ‘forensic’ ethical assessment methodologies where appropriate. <br />Work with NGOs, not for profit assessment organisations, unions, and local resources.<br />Support a culture of openness, honesty and a genuine commitment to continuous improvement<br />
  11. 11. Positive Buying Strategies: 1. Ensure staff are aware of their impact <br />Pressure on time and speed<br />IMPACT ON SUPPLIERS<br />IMPACT ON WORKERS<br />BUYER PRACTICES<br />Fines for late delivery<br />Shorter lead times<br />Last minute changes<br />Excessive overtime<br />High pressure shifts<br />Short term contracts<br />No toilet breaks<br />Subcontracting<br />Poor internal communication, late decisions<br />Frequent changes in product specifications<br />Source - Impactt Ltd<br />
  12. 12. Incentivise staff to address labour issues.<br />Assess attitude and ability to address labour standards when selecting your suppliers.<br />Encourage honesty about labour issues.<br />It’s about working toward your policy and stated standards<br />This message needs to cascade to factories and farms<br />Positive Buying Strategies: 2. Integrate ethics in to your business<br />
  13. 13. Positive Buying Strategies: 3. Develop longer term relationships with fewer suppliers<br />Work with suppliers to understand their capacity and develop their product range.<br />Reward suppliers which are actively working toward your ethical purchasing policy standards.<br />
  14. 14. Positive Buying Strategies: 4. When leverage is low or the relationship is short term…<br />Find out who else they supply.<br />Ask for copies of ethical audits and support the corrective action process.<br />Encourage the supplier to join a database such as SEDEX. <br />
  15. 15. Benefits for your business<br />Better relationship with supplier.<br />Improved product quality and delivery.<br />Reduced risk to the brand.<br />Feels right.<br />
  16. 16. Benefits for the supplier<br />Happier and more productive workers.<br />More and more buyers are asking for ethical assessments.<br />Ethical databases reduce audit fatigue<br />
  17. 17. Be part of the <br />solution<br />
  18. 18. email<br /><br />Oxfam now provides an advice service on Ethical Trade.<br />