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Promoting better labour practices in our global supply chains

At Woolworths Group, one of our core values is: I care deeply.  This is at the heart of our sustainability programs and is particularly relevant in our approach to responsible sourcing and how we manage the rights of workers across our global supply chain.

In 2009, Woolworths Group (the Group) launched its first Ethical Sourcing Policy. Since then, global retailers have made huge progress towards mature best practice programs; regulation and legislation such as the forthcoming Australian Modern Slavery Act require companies to report on their due diligence steps, and sustainability issues are top of mind for our customers and other stakeholders.

The Group’s new Responsible Sourcing Program, launched in July 2018, responds to this changing situation and sets out our business expectation for social compliance.  Aligned with our 2020 sustainability commitments to do the right thing for vulnerable workers and communities in our global upstream supply chains, it is our vision to be Australia’s leading retailer of Responsible Sourcing.

Our Responsible Sourcing Program

While our operations and supply chains are complex, our aim is to ensure that human rights issues are understood, respected and upheld.  We expect our business partners to adhere to ethical business conduct consistent with our own, and are committed to working with them to fulfil this common goal, and proactively address human rights.

Our approach to doing this is anchored by two main documents: 

The Policy 

The Responsible Sourcing Policy outlines our commitment to upholding the human rights of the workers in our supply chain. The Policy applies to all of our suppliers globally and is a part of doing business with the Group. 

Our Responsible Sourcing Policy replaces our Ethical Sourcing Policy. 

The Standards

The Responsible Sourcing Standards are a key way that we implement the Policy commitments. They include comprehensive criteria on business integrity, labour rights, fair and safe working conditions and environmental compliance:

  • Compliance with Local Laws: Suppliers must comply with all relevant local laws, rules and regulations in the countries in which they operate, including those relating to business integrity, transparency, bribery and corruption.
  • Management Systems: We believe that robust management systems, including hiring, disciplinary and termination practices, are important for suppliers to build and develop in order to support compliance requirements and sustainability goals. Suppliers are responsible for establishing these management systems to support their operations.
  • Social and Labour Standards: All workers must be treated with respect and dignity. Suppliers are to provide workers with a safe place to work, and respect workers’ rights to freedom of association. Workers’ grievances are to be heard, appropriately investigated, and any required remedial action taken, in addition to building capacity and awareness around social and labour practices. 
  • Environmental Standards: Suppliers must comply with all applicable environmental laws and regulations, and maintain an environmental management system that identifies and manages environmental impacts. 
  • Additional Standards: Where applicable, suppliers must comply with standards relating to overseas foreign migrant workers, authorised subcontracting and homeworkers, and responsible sourcing of minerals. 

As part of the rollout and ongoing due diligence, we are committed to supporting suppliers with relevant information sessions, guidance documents, training materials and, in higher-risk categories, establishing communities of practice.

The Addendum
Requirements for Labour Providers in our Australian Horticulture Supply Chain 

In February 2019, we released an Addendum to our Responsible Sourcing Standards, Requirements for Labour Providers in our Australian Horticulture Supply Chain. These are supported by our Statement of Principles.

The Addendum outlines specific requirements relating to the engagement of labour providers by participants in our horticulture supply chain. Safeguarding responsible employment practices by labour providers involved in our supply chain is a key component of Woolworths’ responsible sourcing commitments.  Our approach to responsible recruitment is aligned with industry standards and underpinned by three core principles known as the Priority Industry Principles:

  • every worker should have freedom of movement; 
  • no worker should pay for a job; and
  • no worker should be indebted or coerced to work.

For more information please read these FAQs.

Our Approach 

  • A risk-based approach to better understand our risks and prioritise supplier categories for relevant due diligence measures.  
  • To minimise duplication we are taking a ‘mutual recognition’ approach and will no longer be conducting Woolworths Ethical Audits. Rather, where required, we will accept third-party social compliance audits from approved third-party schemes. 
  • A focus on effective grievance mechanisms to ensure a common framework to identify and remediate concerns raised. 
  • Ongoing training and capacity building of our internal teams that manage the implementation of our responsible sourcing program; and fostering partnerships with our strategic suppliers, to develop their capability to identify and respond to responsible sourcing challenges. 

Risk-based supplier segmentation  

While our operations and supply chains are complex, our aim is to ensure that human rights are respected and understood.  At Woolworths Group, responsible sourcing is not about auditing all suppliers in scope of the Standards; it is about taking a targeted and informed approach in sectors where there are known risks and where we have limited visibility.  

To this end, we will conduct an annual supplier risk assessment. This assessment is based on a number of factors including country risk, third-party social compliance data and the nature of the supplier arrangement. You can read more about our approach here.

Based on this assessment, suppliers will be categorised into four risk segments and this segmentation will determine the activities suppliers are required to complete in order to verify compliance with the Standards. These include, but are not limited to: 

  • Attending training and education sessions 
  • Completing a supplier self -assessment questionnaire (SAQ) 
  • Submitting an audit under our third-party social compliance ‘Mutual Recognition’ scheme 
  • Agreeing to and implementing a corrective action plan 
  • Demonstrating  continuous improvement 
  • Announced and unannounced factory or site visits. 

Minimising duplication through ‘mutual recognition’ 

Recognising many of our suppliers are already a part of a social compliance audit program, we will now accept compliance information from six different third-party schemes. These schemes were selected based on their coverage, governance, relevance to our at-risk supply chain and alignment to our Standards. The schemes are: 

  • amfori BSCI
  • Supplier Ethical Data Exchange (Sedex) and SMETA 
  • Social Accountability (SA) 8000
  • International Councils of Toy Industries (ICTI) Ethical Toy Program 
  • Worldwide Responsible Accredited Production (WRAP)    
  • GLOBALG.A.P. Risk Assessment on Social Practice (GRASP)

Effective grievance mechanisms and access to remedy

The Group is committed to ensuring channels are provided through which adversely affected people or communities can raise complaints or concerns without fear of retaliation, intimidation, harassment, discrimination or victimisation. This commitment extends to the work of human rights defenders, and the expectation they can operate in a safe and respectful environment across our operations.  The Group provides a Speak Up service for our team members and direct suppliers (and their team members) as a mechanism by which responsible sourcing concerns can be raised anonymously, and we are committed to working with our suppliers to ensure appropriate mechanisms are made available within their own supply chains.  Information on how to contact Speak Up is available here

With suppliers in some 50 countries, we acknowledge there are different socio-cultural barriers that may prevent vulnerable workers from raising concerns, either directly with their employer (our supplier) or the Group. We know there is work to do to strengthen our grievance response and will prioritise this in FY19. At the same time, we will work to raise supplier awareness of the eight characteristics of an effective grievance process outlined by the United Nations Guiding Principles on Business and Human Rights (known as the UNGPs). 

It is important to us that effective remedies are available for affected people and communities where it is identified that our operations have caused or contributed to adverse impacts. These remedies may be provided through direct engagement with affected people and communities, or in collaboration with our suppliers or other third parties. 

As a signatory of the 2015 Australian Business Pledge against Forced Labour, we have coordinated the development of a report The business response to remedying human rights infringements. The research, commissioned by Pledge signatories, aims to contribute to the discourse on what constitutes an appropriate and effective remedy in instances of forced labour. 

Training and capacity building 

We will be rolling out training over the coming year to increase the awareness of all team members on the topic of human rights and our commitment in this area.  For our buying and sourcing teams, we will implement more targeted training on how to better incorporate respect for human rights into business decisions. 

The Group will support suppliers to understand and embed our Responsible Sourcing Standards. We will do this through information sessions, guidance documents, training materials and, in higher-risk categories, establishing communities of practice.

Governance 

We have developed an organisational structure and accountability to embed human rights management into our business.  Governance oversight of human rights management is provided by the Board’s Sustainability Committee. Responsible sourcing and related human rights issues are raised at the Board through papers compiled by our Group Sustainability team, who have oversight of the Group approach to human rights. 

Our Responsible Sourcing Steering Committee comprises of Executive and Senior leaders from across each of the Group’s business units. This Committee oversees our Group-wide framework for identifying human rights risks and impacts in the supply chain, as well as setting and now monitoring our policy and minimum standards. The Steering Committee is supported by a Working Group that has the day-to-day responsibility for embedding human rights in the supply chain. The Working Group meets regularly and is coordinated by Woolworths Groups’ Responsible Sourcing Manager. Senior management in each business is then responsible for managing human rights issues with their suppliers.

Tracking Progress 
Increasing transparency

Woolworths Group is an Australian company with a long-standing commitment to a large number of domestic suppliers.  100 percent of the fresh meat sold at Woolworths supermarkets is produced in Australia and 96 percent of fresh fruit and vegetables sold at our supermarkets are grown on farms in Australia.  

We also have a complex global supply chain and source products from many countries, including China, India and Bangladesh. 

The apparel industry carries a higher risk of child labour, forced labour and freedom of association.  Our BIG W business is committed to the ongoing transparency of its supply chain by publishing the details of factories that directly produce their own brand apparel and general merchandise quarterly on our website.  The latest list can be found here (as at 13 February 2019).

Similarly, Woolworths Food Group publishes the list of factories that directly produce our apparel and textile products here (as at 13 February 2019).

We are working to map our suppliers beyond tier one (supplier producing the final product) to include, where possible, tier two and three suppliers (suppliers producing components of a final product e.g. cotton suppliers). 

How we did in FY17-18 

Prior to the launch of our updated Responsible Sourcing Program in July 2018, we have had a social compliance audit program in place for factories making our own brand products.  We engage experienced third-party certification bodies to conduct the audits and to rate factories as approved, conditionally approved or at risk.  Factories at risk or that need critical corrective actions cannot start production until these issues are resolved.

More information on the outcome of this program will be available in our 2018 Group Sustainability Report due for release in August 2018. 

Partnerships to drive a multi-stakeholder response  

Human rights and responsible sourcing challenges do not occur in isolation. They are embedded in complex socio-economic systems of migration, gender, under-employment, weak rule of law and low wages. Where possible, the Group seeks to work in multi-stakeholder partnerships that both scale impact and promote a coordinated approach to tackling complex issues. 

Woolworths Group Retail Roundtable series
There are well known human rights challenges facing the retail industry in Australia. To promote knowledge sharing and collaboration in a pre-competitive space, we have initiated a set of Retail Roundtables. These multi-stakeholder events include representatives from retail, industry bodies, civil society, and suppliers. The first of these sessions was held in Sydney in March 2018 and covered the topics of the forthcoming Australian Modern Slavery Act and labour-hire in Australian fresh food supply chains.  The next session is planned for late July in Hong Kong. 

Bangladesh Accord
Last year, our BIG W business, along with other brands, signed an agreement to extend the Bangladesh Accord on Building and Fire Safety to 2021.  Woolworths Group strongly supports ongoing efforts to ensure a robust, transparent and industry-wide mechanism delivers safe working conditions for all factory workers. We support the Accord's continued operation in Bangladesh while the national inspection body readies for a full transition. 

Our suppliers have made significant progress under the Accord and we remain committed to suppliers in their remediation activities. BIG W has 27 active sites under the Accord and is the lead brand for four sites (as at March 2019). The remediation progress rate for the four sites is 92%. 

Bali Process Business Forum 
The Bali Process Government and Business Forum is a joint business and government initiative to combat modern slavery and human trafficking in the Indo-Pacific region. The Group is a participant in the Bali Process Business Forum and attended the Sydney Working Group in May 2018. We are in ongoing dialogue with the Bali Process Business Forum Secretariat, providing insights particularly into labour hire and overseas migrant workers in Australia. 

UN Global Compact Network Australia (GCNA) Modern Slavery Community of Practice 
Woolworths Group is an active member of the UN Global Compact Network Australia, with our team participating in numerous events throughout the year and contributing to the Human Rights Leadership Group. Building on our contribution, the Group is now represented on the GCNA Modern Slavery Community of Practice. The purpose of this group is to share emerging best practices to build common capability in addressing modern slavery and human rights risk management among Australian businesses. 

Other stakeholder engagements 

We regularly engage with key external stakeholders to understand their expectations in relation to human rights and responsible sourcing. This includes: 

  • Civil Society: Over the years, the Group has established a dialogue with key non-government organisations (NGOs) in Australia and overseas, largely as they relate to external benchmarking programs. This year, we plan to build and strengthen these engagements and develop new partners with broader civil society actors.  
  • Government: Woolworths Group supports the introduction of a Modern Slavery Act in Australia and has participated in a number of the Government’s consultations. Our inquiry submission is available here
  • Workers: Our teams regularly engage with workers in our supply chain through factory and farm visits, both announced and unannounced. As we roll out our new Responsible Sourcing Program, we will identify opportunities for enhanced worker engagement and consultation. 
  • Unions: Woolworths supermarkets is in dialogue with the National Union of Workers (NuW) as we work collaboratively towards the implementation of an agreed pre-qualification programme for labour-hire providers who operate in Woolworths’ direct fresh food supply chains. For more information read the press release here. 
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