Why is this a risk?
Like you, your suppliers will rely on their employees to provide the products and services that you are purchasing. These employees are protected by law and by their local rights and best practices to receive certain working conditions for a reasonable payment. It is expected that large companies will ensure that their suppliers' workers are protected, receive a fair working environment, work according to local and best practices, and are paid appropriately.
Example of where this risk could affect you
In many Asian countries, notably China, working conditions are often poor, with hours worked above the local maximum, certain legally-required benefits being withheld, and poor housing.
What sort of suppliers could be engaged in this risk area?
The types of suppliers that engage in poor employee rights are typically:
- suppliers that are manufacturing electronics, garments or food products in a low-margin environment where labour is predominantly cheap
- in the construction industry
- in fishing and food production.
How are these risks managed?
The risk of employee rights violations is normally managed through detailed reviews of policies and procedures. Onsite inspections are often completed as part of this process to verify the validity of claims made through surveys and data-collection efforts.
Which systems and tools do we provide as part of the Supplier Ecosystem™ Initiative to manage these risks?
- Onsite audits and verification
- Research on local sites and media on employee relations
- Reviews of NGOs and other companies working in the industry and region