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.
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 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 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:
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.
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:
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:
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 titled, Human Rights Remedy. 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. The report is scheduled to launch in August 2018.
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.
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.
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 23 November 2018).
Similarly, Woolworths Food Group publishes the list of factories that directly produce our apparel and textile products here (as at 23 November 2018).
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).
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.
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.
Our BIG W businesses, along with other brands, signed an agreement with IndustriALL Global Union and Union Network International Global Union to extend the Bangladesh Accord on Building and Fire Safety to 2021. BIG W has 29 active sites under the Accord and is the lead brand for five sites (as of 30 May 2018). The remediation progress rate for the five sites where BIG W is the lead brand is 93%.
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.
We regularly engage with key external stakeholders to understand their expectations in relation to human rights and responsible sourcing. This includes: