Are Global Supply Chains Making Progress in Ensuring Safe and Decent Work?

QIMA Supply Chain Conference 2019 - Session 2: Ethical and Sustainable Sourcing: Progress and Challenges

Gabriel Amouyal, Audit Services Manager, QIMA
Louis Vanegas, Director, Asia Ethical Sourcing, Hasbro
Stefan Karlsson, Director, S-WAY
Ines Kaempfer, Executive Director, CCR CSR
Bonnic Chung, Head of Operations, WRAP

Moderator: Courtney Terrey, Marketing Communications Director, QIMA

“Before you put in any purchase order, you have to ensure the factory owners care about their workers and are willing to put decency and respect of their rights above profit”
Bangladesh remained a hot topic when discussing ensuring worker safety. Many of the panelists had direct experience working in or with factories in Bangladesh (WRAP, Hasbro and QIMA), providing a first-hand look at where improvements have been made since Rana Plaza. While Bangladesh has seen improvements, QIMA’s Gabriel Amouyal noted that building safety still remains an issue in many regions. In the last 6 months, only 40% of factories that were audited were considered low risk. In South East Asia, 80% of factories audited were found to be at medium to high risk for workers in terms of building safety. The panel also touched on human rights and the changing shape of child labor issues. According to CCR CSR, there has been an increase of child labor among 17- and 18-year-olds. While of legal age to work, these workers are often put into hazardous positions so it’s important for them to understand their rights and for businesses to consider this when working to combat child labor issues.

Key takeaways:

  • Worker safety in Bangladesh since the Rana Plaza disaster:
    • The initiatives Bangladesh Accord for Fire and Building Safety and the Alliance for Bangladesh Worker Safety, formed in the wake of the deadly 2013 Rana Plaza collapse, made significant progress in improving worker safety in Bangladesh
    • Safety measures included not only inspections and remediation for structural, fire and electrical safety, but training on safety issues provided to over 1.6 million of line workers, security personnel and factory management
    • Work has been done to increase awareness of safety issues among workers, and provide them reporting channels, such as 24/7 hotlines
  • Other countries have yet to implement the lessons learned in Bangladesh, as factory safety remains a global challenge:
    • Only 40% of factories audited globally could be considered low-risk for worker safety
    • When diversifying their supply chains, businesses should be aware that less mature manufacturing regions tend to have higher safety risks
    • In Southeast Asia, over 80% of factories were found in need of remediation in the short and medium term
  • Child labor and other child right issues in global supply chains:
    • The good news and the bad news: while worldwide, the incidence of child labor is going down, this downward trend is slowing in the face of certain emerging risks
    • In some countries, the legal working age is as young as 15 or 16, and many of these young laborers are tasked with hazardous jobs, have to work with heavy machinery or during night shifts – which amounts to child labor according to the definition of the International Labour Organization
    • The diversification of sourcing, driven by the trade war, creates a lot of uncertainty and price pressure on suppliers, which can result in unauthorized subcontracting to non-compliant facilities
    • Hundreds of thousands of children are left unattended when their parents migrate for work, which has very strong negative impact on their well-being, education and development
  • Strategies businesses should consider to build an ethical supply chain:
    • Take a close look at your purchasing practices and supplier relations from the ethical procurement point of view
    • When moving into new markets and working with new suppliers, focus on ensuring human rights compliance and supply chain transparency
    • Get supplier buy-in by making a business case for transparent and ethical sourcing
    • Social compliance is not a one-off measure: take a systematic approach to managing it and follow up regularly
    • Put in the effort to know all parts of your supply chain, and make sure to get the initial data right by combining “boots on the ground” and technology