A new model developed with Loughborough University gives companies eight pathways to achieving best practice in addressing slavery in their complex supply chains, says Dr Shamir Ghumra of BRE
I welcome Prime Minister Theresa May’s comments on the abhorrent and unacceptable continuation of modern slavery in the UN General Assembly last week. BRE supports her call for the UN to work together to put an end to these illegal and immoral practices.There are an estimated 45.8 million people in modern slavery, in 167 countries worldwide, and another 21 million victims of forced labour. The construction industry has been tackling sourcing issues associated with environmental responsibility for some time – having, for instance, managed stewardship impacts in terms of pollution and biodiversity, or chain of custody validation with materials such as timber.
It is the ethical dimension, which has only recently emerged as an important issue, that is presenting fresh challenges to the industry. This “dark side” of construction is rife with human rights abuses; bonded labour, delayed wages, awful working and living conditions and limitations of movement.
Business models are largely to blame. An industry with constantly fluctuating demand, organisations lean more towards outsourcing and cut-price contracting, making it easier for businesses to neglect their ethical responsibilities and leaving a huge lack of transparency in supply chains.
Often gaps in the construction market are filled by migrants from low wage economies travelling to richer countries
Construction work itself can be hard, and often gaps in the market are filled by migrants from low wage economies travelling to richer countries, with the hope of bring their families out of poverty. In terms of raw materials themselves, traceability issues resulting from fragmented supply chains, means materials are often used from locations where forced and child labour is prevalent.
Addressing these issues call for updated cultural approaches and demands different working practices. Integrating this rethinking into its everyday beliefs and behaviours represents a significant step forward for construction as an industry, bringing together the good and the green of sustainable business.
At present, there is a clear disconnect between the aspiration and the actuality. While public and professional demand for positive brand values and corporate purpose might be strong and rising, the reality can prove different and troubling, even tragic.
As a result, a modern-day business operating in the construction sector, dealing with supply chains that are not only long and global, but also complex in nature, can find itself exposed to reputational risk and commercial threat, with labour rights only one of the responsible and ethical sourcing concerns it faces. UK public scrutiny of employment standards and labour rights also intensified significantly in 2015 with the introduction of the Living Wage and the Modern Slavery Act.
It seemed inevitable that tough questions would start getting asked about organisations’ and companies’ ethical policies and practices. In construction, these questions do not simply stop at the entrance to the building site, or even the UK border.
Some organisations have already implemented changes to address these issues. Marshall’s ten-year initiative to protect vulnerable children and migrant workers in stone quarrying communities and Hewlett-Packard’s move to direct employment of foreign migrant workers are two influential examples.
The APRES (Action Programme on Responsible and Ethical Sourcing) Eight Pathways Model is another important contribution to the industry. Produced with academic partner Loughborough University, it builds on academic research, market intelligence, co-created insights, plus sound management systems and practices from some of the leaders in the field. It also holds the keys to progress and success; helping organisations achieve supply-chain excellence and sustainable procurement in the 21st century.
The model presents eight pathways to best practice that takes organisations and individuals from the level of "baseline" to "best in class" performance. The pathways are based on the critical areas of operation in a business: from initial policy-making, right through to PR and continuous improvement. These pathways are designed to be implemented over time, via four stages – preparation (Plan), action (Do), review (Check) and refinement (Improve) – and along eight Pathways.
The model presents eight pathways that takes organisations from the level of "baseline" to "best in class"
This first pathway, organisation strategy and policies refers to board-level decisions; the building blocks for any organisation. A Best in Class organisation would look to incorporate ethical sourcing into its business values and operationalise at every level. The second pathway, “Management Systems” relates to a continuous improvement of systems (typically related to quality, environment and Health & Safety), and in particular how the organisation recognises the role of top management and context of its operations.
Compliance and auditing focuses on the actions taken as a result of both internal and third party audits. Improvements could include making longer term goals for high-risk supply chain partners. Under the Reporting pathway, organisations would also be expected to report on their activities under the ethical sourcing agenda. In doing this, companies get a better understanding of the risk and opportunities associated with responsible ethical sourcing.
Pathway four, procurement, highlights how the standards and procedures employed for procurement are critical to ensure policies and training are fed into the supply chain, with clear expectations on all parties. Procurement is fast becoming a conduit to improve sustainability mechanisms and has the ability to create direct change. Longer term strategic partners should be formed with suppliers to ensure a more transparent supply chain.
Financial management concentrates on the capital and operational cost of conducting business and the need to the supply chain to be considered as “within the area of influence” of the business. Social and environmental impact should be accounted for and used to drive improvements along the supply chain.
Pathway six is concerned with HR and development. This area covers a wide range of issues, and ensures that policies are in place for managing people and other items such as grievance. Highly linked to the culture and values of a business, this pathway helps organisations create a vision, identify risks and ultimately embed behaviour into its everyday operations.
The seventh pathway relates to communications, both internally and externally. The availability of information, right up to board level is essential for open and transparent governance and reporting. The final and eight pathway covers innovation, best practice and continuous improvement. Innovation and best practice can cover all elements of business governance, operation and management, and continuous improvement should be built into all aspects of these systems. By demonstrating visible leadership, engaging and training from the top, businesses can improve responsible and ethical sourcing in all areas of their organisation.
The APRES Eight Pathways Model holds the keys to progress and success in implementing a strategic plan of action for organisations throughout the world. Accountability should remain an absolute must for supply-chain excellence and sustainable procurement in this day and age and also presents two advantages. First, it helps the victims and reduces the scope for there to be further victims in the industry. Second, if a business can demonstrate that its supply chain is slavery free, it can go a long way to improving the image of the industry. Taking action and positively helping the victims of modern slavery is the best way to show that construction is a modern people-centred industry that values all its stakeholders.
Dr Shamir Ghumra is director of sustainable products at BRE.