Our approach to human rights in our supply chain
Last updated: 08/11/2017
Why it matters
One of our business values is that we treat people how they want to be treated. We also believe that every little help can make a big difference. We want everyone who works for or with Tesco to have their human rights upheld and we know our customers, colleagues and suppliers do too.
Overall we believe our trade is a force for good, creating jobs and opportunities for people and communities across the world. But we also want those jobs to be good jobs. It is important that clear standards are upheld around issues such as working hours, health and safety, no child or forced labour, freedom of association and ensuring that discrimination does not take place. It is also important that where evidence of human rights abuses does occur we ensure it is addressed and those affected receive redress.
We recognise that labour rights violations in global supply chains can be systemic. Addressing them requires understanding the root causes and collaborating with suppliers, other retailers, trade unions, NGOs, governments and other industry experts. For example, both governments and businesses play an important role to ensure that small-scale producers are resilient and prosperous, can earn a living income, and receive a fair share of the value accumulated in food supply chains. Similarly, the most serious abuses as set out in the UN Guiding Principles on Business and Human Rights, including forced and child labour, can occur when workers’ rights fail to be protected and when trade unions are absent or weak due to restrictions on their activities.
In some countries, workers can experience in-work poverty even where legal minimum standards are complied with. Furthermore, across many countries women face additional barriers to decent work, due to unequal gender norms and their greater share of unpaid care work. Migrant workers are also particularly vulnerable to some of the worst forms of abuse, especially where they are working in a country illegally and therefore unwilling or unable to turn to legal authorities if they are being abused. We will continue to advocate and work in partnership with governments and other stakeholders to help overcome such systemic challenges within our supply chains.
As founding members of the Ethical Trading Initiative (ETI), we have been taking action on these issues since 1998. We support our suppliers to comply with the ETI Base Code and seek to use our business for good, helping suppliers to improve, adding our weight to collaborative initiatives which improve conditions for workers across industries, and working with suppliers to provide support for communities linked to our supply chain facing human rights challenges.
Tesco’s human rights programme is a core element of our promise to buy and sell our products responsibly. Our customers want to know that everything they buy is produced under decent conditions, and everyone involved is treated fairly.
We are committed to upholding human rights and fully support the UN Universal Declaration of Human Rights, the International Labour Organization Core Conventions and the UN Guiding Principles on Business and Human Rights. We are also committed to reporting regularly on our work to uphold human rights in our supply chains.
Historically we sought to address human rights issues primarily through an ethical audit programme of our direct supply base. However, this approach was limited, both because audits do not always identify hidden or systemic issues such as modern slavery, and because the most serious risks of human rights abuses tend to occur further down the supply chain where we don’t have direct commercial relationships. Our leverage to instigate change further down the supply chain through audits and compliance approaches is more limited.
Our work on human rights is fully integrated within Tesco's operations, forming a key part of our broader strategy for responsibility and sustainability. Its objectives and activities are integrated within lead Technical Manager objectives and within the overall technical plan, as well as within individual commercial category plans. These are delivered by a wide range of commercial staff and overseen by a specialist responsible sourcing team, including dedicated local staff in 11 key supplying countries. Our human rights work is led by Giles Bolton, Group Responsible Sourcing Director who reports to Andrew Yaxley, Chief Product Officer who is responsible for product sourcing across all retail businesses. On a day-to-day basis, colleagues in our procurement teams manage supplier and site relationships, and ethical requirements with the support of Responsible Sourcing Managers. All UK Buying Managers, Technical Managers and Procurement Managers are required to attend internal Responsible Sourcing training.
Oversight of our human rights work sits with the Board’s Corporate Responsibility Committee for all markets and subsidiaries. Executive oversight sits with the Group Compliance Committee, led by the Group CEO.
While our work is most developed in the supply chain for our UK business, this update covers our approach to human rights issues across Tesco’s retail businesses.
Due diligence approach
Over the past two years we have put in place a due diligence processes to ensure that we are identifying and then focusing our resource in areas of highest risk, wherever this is in the supply chain. The process was developed in consultation with over fifty internal and external stakeholders, including suppliers, multi-stakeholder bodies such as the Ethical Trading Initiative, civil society groups such as Unseen, Oxfam and the Ethical Tea Partnership, and Government bodies.
Our due diligence framework has five stages:
- Establish a broadened perspective beyond our immediate business and the first tier of our supply chain
- Determine priorities based on areas of highest risk and through intelligence gathering
- Identify the process of avoiding, reducing and managing risk
- Define method for rectifying abuses and remediating any victims
- Developing learning strategy allowing us to consider new information
At its core of this framework is engagement and insight from NGOs, trade unions, multi-stakeholder groups and other organisations who can help us identify areas of greatest risk. This ongoing dialogue and feedback helps us to continuously review our approach and incorporate learnings. Our belief is that dialogue with a wide range of parties is the best way to understand the issues in our supply chain and to work together to address them. Although there is always more to learn, it means we can be confident that we are prioritising the greatest known risks in our supply chain.
Our performance against our plan, risks and trends is reported annually to the Ethical Trading Initiative. The report we prepare is scrutinised by Trade Union and NGO members of ETI (members include the Trades Union Congress, Oxfam and Anti-Slavery International) and feedback is provided to us to help us review and improve.
Our human rights supply chain programme extends to everything we source for our own label including Tesco-exclusive brands, services and goods not for re-sale to customers.
Our risk assessment framework is built around 5 metrics, which have the potential to increase the vulnerability of workers:
- Country of origin – assessing the enabling environment of the supply chain
- Type of work – assessing whether a role requires a skilled, semi-skilled or unskilled worker
- Type of labour – identifying whether a role is permanent, seasonal, or through an agency
- Known cultural or community issues – identifying any endemic challenges such as gender discrimination
- Supply chain capability – assessing the knowledge and capacity suppliers have to address supply chain risks
These risk metrics are then mapped end to end in our key supply chains, allowing us to identify the most salient supply chain risks, wherever they occur. To underpin this process, we use the country risk ratings from the Food Network of Ethical Trade (FNET) – a collaborative industry platform. The rating is based on a number of sources, including the ITUC (International Trade Union Confederation) risk ratings, Freedom House rankings, UNDP Human Development Report and Employment rankings, retailers’ own rankings where they have on the ground knowledge, and Maplecroft risk ratings.
We then seek to work collaboratively with our suppliers, wider industry, civil society and, where appropriate, policy makers to address these systemic challenges, rather than just relying on an audit model to drive compliance and good practice.
As part of our due diligence approach, over the last two years we have changed our approach to addressing and avoiding human risks in our supply chain. This approach is based on three pillars:
An example of our programme in action is in our banana supply chain, where we have committed to all of our bananas for the UK market being from sources certified by the Rainforest Alliance. This milestone is supported by our programme to improve conditions and low wages, and address gender inequality in the industry through the World Banana Forum and where we have worked with our banana suppliers to set up foundations to empower workers and local communities.
This approach is founded on long-term, stable relationships with suppliers. More than 80% of our bananas in the UK and Ireland, for example, come from growers we have worked with for more than 5 years. And at an industry level, Tesco is an active participant in, and funder of, work with the World Banana Forum and the Global Living Wage Coalition to define Living Wage benchmarks for the most relevant banana producing countries. There has been significant progress made in Costa Rica (where our suppliers already pay 20-25% above the minimum wage) and Ecuador, and draft benchmarks for these countries should be published by the end of 2017. Benchmarks for Colombia, Guatemala and the main banana producing countries in West Africa are scheduled to be developed in 2018.
Respecting the rights of people working for our suppliers
- International human rights standards are met at all our suppliers’ sites
- Zero tolerance of critical breaches (including forced labour, child labour, illegal wages, building safety)
- Move sourcing of high-risk products and raw materials to credible certification where available
For our supply base, adherence to our responsible sourcing requirements is set out in our Terms and Conditions (T&Cs) and within Tesco Supplier Requirements documentation. This documentation is provided to our suppliers at the first point of contact with our commercial teams, prior to any contract. Our technical teams then help administer these requirements. We require that our suppliers uphold the full range of labour standards set out in the Base Code of the Ethical Trading Initiative. Suppliers are required to resolve all corrective actions identified in the audit report, addressing non-compliances with the ETI Base Code and local law. As part of our core programme we require that suppliers display ETI posters and audit results on suppliers’ notice boards so that workers know what their rights are and that they are being met or re-mediated.
Our programme uses a combination of in-house visits by our expert responsible sourcing team, independent ethical audits by trusted partners, and independent certifications to assure working conditions in high risk sites. Importantly, these include interviews with workers, visits to associated facilities such as housing, and a review of relevant documents. All first tier supplying sites in high risk countries must have an audit before supply and then on an annual basis.
Ethical auditing is predominantly focused on the ‘first tier’ of the supply chain, i.e. sites producing the final product, such as a clothing factory or food manufacturing plant but we also audit beyond first-tier based on the risk of the products being produced. For example, we audit down to grower level for our produce products and do this in collaboration with our first tier suppliers who cascade our requirements upstream
Independent certification, such as by Rainforest Alliance, is used for high-risk supply chains in lower tiers. We use certifications to share meaningful information with customers on provenance and standards and will continue to do so. We also put country of origin labelling on a wide variety of our products, including in fresh produce, meat and fish.
Ethical audits are conducted in accordance with SMETA (SEDEX Members Ethical Trade Audit) guidelines. SMETA, a SEDEX initiative, helps consumer brands and their suppliers reduce duplication and ensure better quality auditing by setting out a robust methodology and a common format for the audit report and its corresponding corrective action plan.
Audits are conducted by specialists who, after internal review of auditor experience and competency, are recognised as competent to audit and interview workers in their own languages. The size and composition of the audit team and duration of the audit are tailored to the supplier/site, and reflect the gender profile of the workforce and the main languages spoken.
During the closing meeting all non-compliances are discussed and a Corrective Action Plan Report (CAPR) agreed between the Supplier and the auditor. If any critical non-compliances are found, the Audit Company will notify Tesco directly. They will also inform Tesco of any issues that the supplier refused to acknowledge or that could not be verified. Any attempt to pervert the course of the audit through fraud, coercion, deception or interference is treated as a critical non-compliance and reported to Tesco.
Following the audit suppliers are required to resolve all corrective actions identified in the audit report, addressing non-compliances with the ETI Base Code and local law. The supplier is responsible for completing all corrective actions on the CAPR within agreed timescales, and for obtaining verification of closure from the independent auditors — normally within six months. The whole process, from planning, through supplier completion to final auditor verification, is tracked through SEDEX, enabling our Commercial teams to have oversight of progress and take action where necessary.
Although we have a ‘zero tolerance’ approach to critical breaches of the ETI Base Code, it is important to note that we do not abandon suppliers facing such problems. Our first aim is to ensure the issues are remediated and practices put in place to avoid recurrence. If we then believe that there is both commitment from the suppliers to avoid recurrence, and capability to do so, we will usually continue to work with them until and unless there is any repetition. We believe this approach supports improvement and that a simple ‘cut and run’ approach, as well being bad news for workers when orders are cancelled at short notice, discourages transparency with suppliers about the challenges they face.
On the rare occasions that we do not believe the supplier is committed to remediation, we will then seek to exit in a responsible manner, often continuing orders for up to 3 months to allow workers to have good notice of any changed hours as a result of our business moving.
A good example of this in action is when we occasionally find that workers have not been paid for all hours worked, which is a critical issue. Rather than exiting the relationship with the supplier, we seek to agree that workers are back paid for at least 3 months for any missing salaries. If the supplier agrees and implements this approach, we will continue working with them. For more details, see page 14 of our Modern Slavery Statement.
We seek to work collaboratively with our suppliers, wider industry, civil society and, where appropriate, policy makers to address wider systemic challenges, rather than just relying on an audit model to drive compliance and good practice.
Announced and semi-announced audits
Announcing the date of audits to suppliers in advance helps ensure that all necessary records are present for inspection during the audit, and helps build ownership of ethical issues by the supplier’s management team. However, this practice can present an opportunity for some suppliers to prepare sites and coach workers prior to an audit in an attempt to manipulate findings.
To address this risk, we nearly always operate ‘semi-announced’ audits, a process where suppliers are given a one-month window during which the audit will take place as opposed to an exact date. This enables suppliers to ensure that the relevant records are present on site, but that there is less chance for manipulation.
In addition, we sometimes make entirely unannounced visits if we have particular concerns, including to validate audit findings.
Our primary certification partner for a number of key supply chains is the Rainforest Alliance, who use the SAN standard.
There is more detail about how these partners work across our ‘Top 20’ most important products and ingredients here
Listening to workers
Gathering information through workers about workplace concerns is a powerful addition to intelligence gathered through other routes including audits, participatory interviews and links with local stakeholders on the ground. It is also vital to the UN Business and Human Rights Framework, which we support, and that requires workers have access to grievance mechanisms to ensure any concerns they have can be raised and resolved. All workers in Tesco’s ‘first tier’ supply base have access to our independently managed Protector Line. Workers in lower tiers can also use the line and all concerns will be investigated, but it is not communicated directly to these workers. Protector Line is promoted in the relevant language.
We investigate any such reports immediately and provide confidentiality for complainants where requested. Insights from these services are reviewed at Compliance Committee meetings in each of our operating markets and, at a group level, by the Group Compliance Committee chaired by the Group Chief Executive.
We complement this with dialogue with global and local unions, and participation in collaborative initiatives in key sourcing locations to help improve working conditions and increase worker voice. Examples include the Accord on Building and Fire Safety in Bangladesh, a joint initiative between brands and the global union IndustriALL where we were the first UK retailer to sign up, the World Banana Forum, The Issara Institute’s Inclusive Labour Monitoring™ approach which is founded on strengthening worker voice, and our collaboration with the union Community in our UK garment supply chain. We are also in regular dialogue with union representatives at the Ethical Trading Initiative, which our Group Responsible Sourcing Director is a Board member for, alongside representatives from the International Trade Union Confederation (ITUC), International Union of Food (IUF) and Trades Union Congress (TUC).
Case study: Tesco is a leading member of the World Banana Forum where we engage with NGOs and Trade Unions such as Banana Link, COLSIBA (Confederation of Latin American Banana Trade Unions), FENACLE of Ecuador, SINTRAINAGRO of Colombia, SITRAP of Costa Rica among other workers’ organizations to ensure their voices are heard, agree progress on wages and decent working conditions. Tesco promotes dialogue and consensus building within the World Banana Forum to ensure sustainability and social responsibility of the international banana trade.
Case study: Tesco was one of four companies - and the only retailer - that volunteered to pilot the UN Guiding Principles on Business and Human Rights, using our South African supply base. The pilot culminated in the development of a toolkit for workplace communication with an emphasis on improving the reporting and management of grievances. It involved engagement and participation of trade unions, workers, exporters together to design and implement transparent and credible mechanisms. All the guides are visual in nature to allow for low literacy levels and case studies clearly demonstrate some of the challenges that women workers face in agriculture. The toolkit has been made available on the South African industry website and is in wide use.The report on the pilot, its learnings and outcomes can be found here, Annex D’.
In addition, our team of 45 responsible sourcing specialists based across 11 key sourcing countries increases our ability to find out about local concerns, through dialogue with a range of stakeholders. They will investigate any issues of concern and will take appropriate remedial action.
Internally we also provide a dedicated, confidential helpline for any staff concerned about ethical trade issues — whether about the actions of Tesco staff in their relationships with suppliers, or events at one of our supplier’s workplaces — and investigate any reports.
Case study: Protecting workers from indebtedness in non-food factories in Asia - see page 14 of our Modern Slavery Statement.
Addressing endemic labour issues throughout key supply chains
- Address endemic labour challenges throughout key supply chains
- Work in partnership with suppliers, other businesses, NGOs, unions and other stakeholders to drive improvement below first-tier
- Strive to eradicate forced labour from value chains
Service providers in our own operations
In our direct operations, our risk assessment process has identified that the greatest risks come from service providers such as temporary workers in distribution, office cleaners or carwashes. This is because of the significant proportion of migrant workers in this sector, in many of the countries we operate in, who may be less aware of their rights and more vulnerable to abuse. It is also because we have less direct visibility over these areas, relative to areas where we directly employ workers.
We have therefore mapped the UK service providers in our offices, retail operations, property, distribution, HR and in specialist services such as IT and car washing. We have then worked to identify the service providers that contain the highest risks based on their contract type, the level of skill involved in the work, wages and our visibility of the service provider. Professional and specialist service providers on permanent contracts, such as lawyers and IT consultants who operate in high wage sectors, we would consider to be at low risk. In contrast, workers in lower skilled roles on temporary contracts and within lower wage industries would be at higher risk.
Through this process we have identified priority sectors including:
- Workers in the construction industry who build our stores and carry out renovations
- Agency labour in our distribution and logistics operations
- Workers in security for our offices and stores, and cleaning staff
- Our car wash supplier in the UK who operates the business as a franchise model
Dedicated head office resource for our own business and procurement works closely with all service providers, as well as our internal People function, to help them address risks by training them to spot potential indicators of modern slavery such as workers with shared addresses and bank details. We have implemented a Recruitment Charter as part of our contracts with labour providers to our UK operations; this prohibits work finding fees being charged to workers as this increases the risk of debt bondage. The Charter also sets out our expectations with regards to other practices which can be problematic (e.g. provision of accommodation). We also support our suppliers in using the Stronger Together ethical recruitment toolkit.
Our UK labour providers are registered with the Gangmasters Labour and Abuse Authority and prohibited from actively recruiting from outside of the UK without the prior agreement of Tesco, as recruiting people who have moved to the UK autonomously, and have the legal right to work here, reduces the risk of trafficking. We work collaboratively with service providers to help ensure all temporary workers receive a reasonable number of paid hours each week, and have the opportunity to transfer to permanent employment when vacancies arise.
We are also assessing our labour providers in other Tesco markets, starting with Thailand and Malaysia where we know that the charging of fees to workers by recruitment agents can be commonplace. We are working to reduce the number of labour providers we use in Thailand and placing our business with those we trust most.
We acknowledge that awareness raising and capacity building is a necessary tool to ensure that relevant decision-makers within the company are aware of human rights risks such as modern slavery, effectively implementing our policies and standards and are subsequently able to drive improvement. Our training programme, which covers topics such as responsible sourcing, policy and modern slavery, is regularly reviewed to ensure its on-going relevance.
Our supply chains
We are committed to continuous stakeholder engagement. Working in partnership with others is vital to addressing risks, particularly further down the supply chain where our direct commercial leverage is diluted. We are committed to help lead the industry in addressing the human rights and environmental challenges in our key supply chains. We are prioritising the sustainability risks associated with 20 of our UK products and ingredients, chosen because they are either most regularly bought by customers – meaning we have leverage to help create change - or have the biggest sustainability impacts.
11 of these ‘Top 20’ have significant and systemic human rights risks associated with them, and are therefore focus areas for our work:
- Bananas: wages and worker representation
- Corned beef: forced labour
- Berries: gender discrimination (especially in Morocco), wages
- Citrus fruits: abuse issues, youth empowerment (especially South Africa)
- Coffee: forced labour
- Cocoa: forced and child labour
- Cotton: forced and child labour
- Palm oil: forced labour
- Prawns: forced labour
- Sugar: wages, gender discrimination
- Tea: wages, gender discrimination
Outside these 11 products, we also focus on the following regions and issues because of the high risks:
- All non-food factories across Asia: wages and working hours
- Peru agriculture: especially worker representation
- Turkey and Syrian refugees: illegal working, wages
- Spanish salads: forced labour
- Italian tomatoes: forced labour
- UK agriculture: accommodation standards
- Indian spinning mills: forced labour, gender discrimination
We have made significant progress in many of these areas, including time bound commitments to ensure our sourcing will have a positive impact on small scale producers. These commitments feed into discussions to start new business relationships and review them. For example, we have put in place a clear roadmap to reach 100% responsibly sourced cocoa by the end of 2018 for the UK business. This not only covers our own-label chocolate but also cocoa used in other Tesco UK products, such as biscuits, cakes, desserts and cereals. To reach this commitment we will source through a combination of responsible cocoa programmes including Cocoa Horizons, Fairtrade, Rainforest Alliance Certified and UTZ, and we are engaging the broader industry through our membership of the World Cocoa Forum.
Similarly, all our finest roast and ground coffee in the UK is already certified, and Rainforest Alliance certification was introduced to other own label coffee lines. We are now working to extend certification to all our green beans across the own-label business, as well as collaborating with the industry to work beyond certification requirements.
Another example, is that 100% of palm oil in our UK own label food products already comes from sources certified to the Roundtable on Sustainable Palm Oil standards. However, significant challenges remain for the palm oil industry including growing evidence of labour exploitation at plantation level. Developing the right conditions for a strong, sustainable palm oil market is not something that we can achieve alone, which is why we are working with the Consumer Goods Forum, with other retailers and the Roundtable on Sustainable Palm Oil (RSPO), first to map the nature and extent of the issues and then to build forced labour issues into the RSPO standard and process.
As demonstrated in the examples above, we often need to work with the wider industry to address specific entrenched issues. This is why we actively participate in a number of credible multi-stakeholder initiatives and programmes. For example, in our tea supply chains, we are working in Malawi with Oxfam, the Malawian tea industry and leading tea brands to improve wages and working conditions across the industry. Throughout this work, experienced development organisations are educating women on their rights in the workplace. In Assam, India, we are working with UNICEF to help prevent the trafficking of children into domestic slavery and sexual exploitation. Our partnership with the Ethical Tea Partnership and UNICEF addresses the roots of gender inequality in the Assam region in India, where girls and young women can be at risk of trafficking. Directly working with tea gardens, we funded capability building to train women and the community to prevent gender-based violence. As a result of this three-year collaboration, more than 33,000 women were reached out to. Another example of working through a collaborative initiative to understand the role and impact on women in food supply chains is the Better Strawberries Group which we participate with in collaboration with the Ethical Trading Initiative, Oxfam and other stakeholders. In South Africa we have worked with industry and other stakeholders to develop the following resources to support our citrus, grape, Topfruit and Stone fruit supply chains:
- Accommodation guidelines
- Transport guidelines
- Ethical Trade handbook
- Tesco Training Fund
- Induction training for workers on their rights and responsibilities in the workplace – Siza Visa
- Leadership and mentorship programmes including a strong focus on women
Through our partnership with Rainforest Alliance and our certification commitments, we have supported impact reports looking at coffee, cocoa, tea and bananas. These include impacts of sourcing on the livelihoods of small-scale producers and women workers who form an important part of our supply chain. Individual farmers and local partners were consulted in the process. Small-scale producers have gained access to training materials, These, together with our continued work collaborating through multi-stakeholder initiative stakeholders has informed our approach to sourcing to ensure we address issues for smallholders and workers.
- Addressing Sumangali. Some women in the Tamil Nadu garment industry are recruited through contracts under which they are paid a lump sum at the end of a three-year period, leaving them vulnerable to abuse in the interim. We monitor our direct suppliers closely to ensure no such practices exist in our supply chain, and are mapping our ‘second tier’ supply chain in India, including spinning mills, washing, printing and dyeing facilities and have begun visits to the spinners identified. We are also part of the ETI programme providing training to mills across the region.
- Better Cotton Initiative (BCI). Tesco is a member of BCI, a not-for-profit organisation which works to make the cotton industry more sustainable and to make life better for those who work in it, including avoiding slavery. As of summer 2017, more than 70% of cotton for our clothing was sourced through the BCI scheme, well on the way to our target of 100%.
- ETI Working Group for Italian Tomatoes. Tomatoes for tinned products are picked during a six-week period in the summer. The majority of labour for manual harvest is supplied by migrant workers who are at significant risk of exploitation through illegal recruitment practices, including indebtedness and coercion. Tesco is part of the ETI group working to pilot a programme to certify labour providers and improve recruitment practices more generally.
- Project Issara. A collaborative initiative to tackle slavery in the Thai prawn supply chain. See case study on page 15 of our Modern Slavery Statement. The Issara Institute also provides us specific site reports so we can identify issues and work with our suppliers to improve working conditions for migrant workers.
- Refugee labour. We have started to work with the United Nations High Commissioner for Refugees (UNHCR) in Turkey to train our suppliers to identify and support any refugee employees. We know that refugees, particularly from Syria, are at high risk of trafficking and exploitation and we aim to expand this work with Unseen and International Organization for Migration (IOM) in our berry supply chains in Jordan over the coming year.
- Seafood. Workers within the fishing sector are particularly vulnerable to exploitation. This is a result of work taking place offshore, long hours, challenging physical environments, many informal recruitment practices and the lack of international binding labour standards that cover fishing vessels. We have started a comprehensive and tailored human rights risk assessment of our entire seafood supply chain, working with our partners Sustainable Fisheries Partnership (SFP), Seafish and the Monterey Bay Aquarium. The Seafood Human Rights Risk Tool uses credible, publicly available and verifiable information from multiple sources to produce risk ratings of human rights abuses by a fishery and/or country. It is currently in the pilot phase. In parallel, we are undertaking more in depth research on known issues in specific fisheries, such as the British and Irish fisheries sectors and Thai prawn supply chains (see an
- Bananas: We sit on the WBF Gender Conference Organizing Committee (GCOC) to ensure the development of joint strategies and activities on key issues facing women working in global banana supply chains, and help fund this work. We are currently working with members of the World Banana Forum to ensure that gender is established firmly on the banana industry agenda.
More examples of our work within the supply chains of our top products can be found at www.tescoplc.com/top20. Work on these issues is led by the Group Responsible Sourcing team. While our primary commitments on certification for some supply chains are for UK products in the first instance (our UK business represents a significantly larger proportion of overall sales), wider efforts to drive industry improvement impact supply chains across the Group and certification initiatives will also be rolled out more widely over time.
Case study: Freedom of Association in Latin American countries
In Latin America we work actively to ensure strict assessment of labour conditions to promote continuous improvement of workplaces. We monitor all sites (both pack houses and farms) to ensure workers are able to democratically elect their representatives to worker committees and/ or Health and Safety committees. It is our belief that where workers organize independently and select their representatives without management interference, most labour conditions will tend to be considerably better than in sites where there is no worker representation. Management is also usually more respectful of organized workers.
The most significant impact has been in Peru where five years ago almost none of our suppliers had democratically elected worker representatives – as is common across the industry in that country. Now all Tesco suppliers have free and fair elections by workers to elect their representatives and management holds regular meetings with worker representatives. Written records are kept to ensure management commitment to address workers concerns and requests. Audits also assess if a majority of workers are aware of who their representatives are and if they are satisfied with their effectiveness.
Tesco have been helping lead work with the Ethical Trading Initiative to ensure similar practices are extended more widely. The pilot Project in Peru will help identify the main challenges for improving labour conditions (independent worker representation is one of the most recognized concerns for workers in Peru). This project will be developed with similar producers in Mexico and Colombia to allow for a comparative assessment of challenges and best practices to address those issues. The main objective is to ensure similar practices. This covers sites across a number of supply chains including blueberries, citrus, asparagus, grapes and avocadoes, and many other Peruvian products purchased from this South American nation.
In sites where there are trade unions, we work with suppliers to ensure trade union representatives are treated with respect and no discrimination takes place. When there have been complaints of discrimination Tesco actively participates to ensure bilateral negotiations take place to resolve the disagreements and promote management training to ensure better relations with trade union leaders.
An essential part of all audits, conducted through a trusted partner, is the worker´s interviews to ensure their concerns and suggestions are taken into consideration and passed on to management to ensure continuous improvement of labour conditions.
Collaboration with suppliers
Having established our due diligence process and sought to move our programme beyond primarily audit, we aligned commercial, technical and responsible sourcing strategies to recognise and encourage good supplier performance. As a result, human rights is an important component in evaluating current and future sources of supply – especially for high risk priority products. For example, we have ranked each of our tea gardens on 6 parameters including responsible sourcing. The rating has been used to inform our supplier sourcing strategy and to incentivise overall improvement. We were also keen to start working more closely with other retailers. This is to ensure that collectively we are aligned in our requests to suppliers and not over burden them. Together we will also be able to use our collective leverage, to address abuses.
This overall collaborative approach led to the development of three key initiatives:
- Joint Quality Plans (JQP) – Improving labour standards in our supply chains is a responsibility we share with our suppliers. We have developed joint responsible sourcing plans with each of our 25 ‘Product Partners’ – our biggest suppliers who supply the UK. These plans sit alongside and feed into our commercial 'buy and sell' plans and help ensure we are offering a commercial benefit for good practice. Supplier performance is assessed across responsible sourcing, technical and commercial KPIs. The plans also help drive improvement further upstream as our suppliers work with their own suppliers to implement responsible sourcing standards.
- ‘Blue’ factory ratings - Recognition for ethically highly capable factories in non-food who receive a reduced frequency of expert visits and audits, along with larger orders. The first 8 of these ‘blue’ factories were recognised in September 2017.
- Food Network for Ethical Trade (FNET) – In 2016, together with our joint suppliers (UK, CE and Asia) we worked to develop a platform which brings together other retailers and suppliers to look at what comes ‘after audits’. There are currently 3 work streams:
- Risk Assessment – sharing best practice in supply chain risk assessment and learning from suppliers who have already risk assessed their supply chain. The risk assessment tool has been designed to look at risks within composite products (using more than one ingredient) as this is an area where we have struggled to get full supply chain visibility of the raw materials.
- Collaboration on joint areas of risk – working with suppliers and retailers who have identified common risks in their supply chains and are keen to increase their impact and work more efficiently by working collaboratively to tackle those risks.
- Supply Chain Engagement – working with suppliers and retailers to understand the best ways of engaging workers, suppliers, growers, farmers and labour agencies further down the supply chain.
The effectiveness of this work of course depends on us treating suppliers fairly ourselves and building open and trusted relationships. For more information about how we are doing this, please read:
Case study: Structural Safety and Fire Safety in Bangladesh
The structural safety of buildings and the protection of workers in the event of a fire are major issues of concern following the recent tragedies in Bangladesh in which my workers lost their lives. While none of our suppliers were involved, we view it as our responsibility to ensure the high standards are maintained across our sites and we lend our weight and support to initiatives which improve standards for garment workers across all sites in Bangladesh.
We have 35 colleagues in Dhaka whose job is to support and help to improve standards at the 60 garment factories we work with. We try to build relationships with our supplier so that we can earn each other’s trust. We are also proud to have been signatories of the initial Bangladesh Fire and Building Safety Accord and what it has achieved. We have committed to supporting the new Transition Accord, with a view to supporting Bangladeshi regulatory counterparts take back control of these issues and provide long-term benefits to Bangladeshi workers.
For further details of the improvements we have made and our latest work, please click here.
Case study: Stronger Together
Stronger Together is a multi-retailer initiative which aims at reducing modern slavery in the UK agriculture supply chain by raising awareness amongst suppliers and brands. They also provide resources to help suppliers and auditors identify potential indicators of modern slavery, and manage any cases they find. We have enabled all suppliers to attend a Stronger Together session free of charge, and also provide training for all relevant sourcing colleagues.
Helping communities facing complex social & environmental challenges
- Work in stakeholder partnerships to build local community resilience against rights abuses
This is an emerging and increasingly important area of our work. Our aim is to identify the most urgent human rights issues in communities linked to key supply chains, in particular focusing on those facing entrenched challenges.
Our approach is to identify these challenges through suppliers, civil society and multi-stakeholders bodies, and fund responses jointly with suppliers and/or other retailers and donors to help create scale. We will also work to engage governments where better regulation and enforcement could support improvements.
Over the last two years we have developed with partners a number of strong projects especially in:
- Assam: supporting children in the tea sector Working with UNICEF and the Ethical Tea Partnership to address issues of child trafficking, particularly of girls, from communities in Assam linked to tea estates. See more here.
- South Africa: fruit – supporting the Pinotage Youth Development Asssociation.
- Ecuador: bananas – including awareness raising on the risks and impacts of domestic violence.
- And a wide range of small and impactful projects across Asian countries where we source clothing and other non-food items such as supporting disabled workers in Bangladesh into secure employment.
These projects have reached around 450,000 people over the last 2 years, with £1.5m spent by Tesco and our supplier partners.
Tesco is a founding member of Sedex and tracks the majority of its data through the Sedex platform. Tracking reports are generated periodically and shared with our technical colleagues to manage with the supply base (with oversight by the responsible sourcing team). The reports provide detail of site audit data of first tier sites, including non-compliances with the ETI base code.
As per our strategy we prioritise our high risk supply chains. In lower-tiers, the majority of this work is undertaken through collaborative programmes and initiatives such as Malawi 2020 and the Issara Institute who monitor and track numbers of worker impacted by the initiatives and progress over time. For example within the Malawi 2020 project a key KPI and focus is farmer training (the vast majority women) but the actual outcomes were also tracked (i.e. increase in yields was 15-20% higher than untrained groups). By training farmers we can increase their yield and quality ensuring greater returns for their work and increased incomes for families.