Human Rights in F&F & GM

Human Rights

One of our business values is that we treat people how they want to be treated. We want everyone who works for or with Tesco to have their human rights upheld and we know our customers, colleagues and suppliers do too. Across F&F and GM, we are committed to improving the lives of everyone involved in creating our products.

As founding members of the Ethical Trading Initiative, we support our suppliers to comply with the ETI Base Code. This ensures that human rights standards are upheld around issues such as wages, working hours, health and safety, no child or forced labour, freedom of association and ensuring that discrimination does not take place. If we find evidence of human rights abuses, we ensure they are addressed and those affected receive redress.

We monitor compliance with the ETI base code and improve standards for people working in our supply chains through our 3-pillar approach. Under this approach we not only implement continuous improvement programmes with suppliers, but also seek to drive transformative industry-wide efforts to address endemic labour and community issues and use our convening power to advocate for change.

Further detail on how we integrate human rights within our business, and our human rights due diligence approach, can be found here as well as in our Responsible Sourcing Manual. Suppliers are contractually obliged to adhere to all Tesco policies including our Responsible Sourcing manual and supporting policies. This made clear in our appointment (purchase) agreements.

We are committed to supply chain transparency and we have published a full list of our first tier garment supply base as well as information on our Tier 2 and Tier 4 supply base. This information is also available on the Open Apparel Registry (OAR), in order to further enable collaboration, as well as easy and efficient access for our stakeholders. The information can be downloaded as either a CSV or excel from the OAR.

Examples of our work under the Improve pillar of our Human Rights strategy include:

Ethical Audit Programme

We require all direct supplier sites (known as ‘Tier 1’ sites) in high-risk countries to have a human rights audit before they start supplying to Tesco, and then on an annual basis. Sites in medium-risk countries are required to have a human rights audit every two years. These audits are conducted against best practice international labour standards as set out in the Base Code of the ETI.

During the closing meeting for all audits, all non-conformances with the ETI base code are discussed and a Corrective Action Plan Report (CAPR) is agreed between the supplier and the auditor. We categorise non-conformances as critical, major or minor.  As part of their contracts with us, suppliers are required to ensure all non-conformances are fixed, with critical issues needing immediate action. Suppliers are supported to address these issues by expert Tesco teams and a follow-up audit is conducted by our in-house team or independent auditors to verify that issues have been closed. For example, we require 2-3 months of records to verify that findings of excessive working hours are closed. Suppliers who cannot correct their non-compliances within agreed timeframes will have their new orders suspended until they complete the correction. 

Further detail on the outputs of our ethical audit programme can be found in our Human Rights factsheet.

Ethical First

Our work on human rights is fully integrated within our operations. In 2020, across our non-food supply base, we launched our ‘Ethical First’ approach with internal colleagues and suppliers. Under this approach, Tesco commits to only buying and selling ethically with all internal functions committed to working together for an ethical supply base. To support this, all suppliers are assessed on their ethical performance, capability and transparency. Improvement plans are required for those with lower scores and performance linked to future growth in business volumes.

Tesco Supplier Ethical Change-Makers

We now have over 100 supplier representatives certified as ‘Ethical Change-Makers’ (TSEC’s) at supplying sites in Bangladesh, China, India, Pakistan, Sri Lanka and Turkey. All TSEC’s complete a comprehensive training programme which includes in-depth discussion regarding our values and standards as well as operational skills such as management systems. As well as driving compliance with our Responsible Sourcing standards, these forums also offer an opportunity for the TSEC’s to share their experiences and examples of best practice.

Health and Safety

For all the factories we source from, the principles of safety, partnership, transparency and improvement apply. We provide guidance to our supplier factories to ensure they share our values and understand our requirements as well as ensuring they are equipped with the practical knowledge to embed our requirements in their everyday operations. This includes important topics such as fire safety and the use of shared sites, topics on which we have stand-alone policies. In the first instance where factories struggle to meet our ethical standards we work with them to improve, however, if they fail to make satisfactory progress they are ultimately removed from our supply base.

We have worked proactively to improve the health and safety of factories in Bangladesh. Before the collapse of the Rana Plaza building in 2013, we had started independent structural surveys in all the suppliers’ factories we work with in Bangladesh and Pakistan. After the tragedy, we joined forces with global unions and other international garment companies in the multi-stakeholder organization, Bangladesh Accord, for bigger impact for all workers in the garment industry in Bangladesh. As part of the Accord requirement, all factories Tesco buy from have a health and safety committee with worker representation. The committee members are trained to understand health and safety risks and follow up with necessary remediation. We are also actively supporting the current RMG Sustainability Council in Bangladesh which was established with participation of Bangladeshi regulatory counterparts to take control of these issues and provide long-term benefits to Bangladeshi workers. Meanwhile, we are also an active member of the International Accord which aims to apply the successful experiences of the Bangladesh Accord to other countries.

Wages

One issue we monitor particularly closely in key sourcing countries is that salaries are paid on time and in full and in line with local law for all hours worked, including overtime premiums where relevant. Similar to our approach on working hours, Tesco representatives will review working hours, pay and production records to identify any anomalies. Through these checks, we occasionally find cases where salaries are not paid on time and/or in full, in which case we require suppliers to pay back any missed wages. We have an established procedure to do this that enables us to quick agree the payment amounts, timelines and verification process with any suppliers impacted. For all instances of underpayment, we verify repayment via worker interviews. In the rare occurrence that suppliers do not agree to make repayments, we exit our relationship with them in a responsible manner. We report annually the number of cases we have identified where payments (wages or overtime payments) have fallen short of what should have been paid, as well as the amount reimbursed to workers in our annual Modern Slavery Statement.

We believe collaboration is key to meaningful change in this area and we are an active member of Action Collaboration Transformation (ACT). The ambition of this initiative is to drive living wages for garment sector workers through collective bargaining at industry level.  Member brands and IndustriALL believe that collective bargaining, enabled by freedom of association and responsible purchasing practices, is the way together we can impact garment sector wages.

Working Hours Reduction Projects

In some of our sourcing regions there is a heightened risk of factory workers working excessive overtime hours. This could be for many reasons including that factories do not have proper production planning in place or systems to effectively monitor overtime. In instances when this does occur, it can drive absenteeism and worker turnover, which results in the need for further overtime for the remaining workforce.

We expect all suppliers to comply with the ETI Base Code, which includes clauses that working hours are not excessive and overtime is voluntary, as well as within national laws. As a result we expect all workers:

• Receive their annual leave and public holiday entitlement
• Receive an adequate number of paid rest breaks within normal working hours
• Are working normal, legal hours

We have introduced procedures to ensure the above requirements are met. In regions identified as being at higher risk of non-compliance, our Responsible Sourcing specialists conduct on-going due diligence of working hour records and systems established. Although it is the responsibility of our suppliers to establish their own monitoring systems and to improve their production planning and productivity, we support them in designing these and seek to verify their effectiveness. This includes manually cross-comparing working hours records with production records to identify any inconsistencies and tracking employees rest breaks. Through worker interviews we are further able to confirm working hours as well as that annual leave entitlements are being met. 

If we find evidence that suppliers are not meeting these requirements, we work with them to improve practices. For example, in 2020 we identified a supplier that did not fully utilize a monitoring system which resulted in workers working excessive hours. After identifying the root causes, the supplier was required to action vigorous improvement plans with support from Tesco. Within a few months of implementing the new measures, the factory was able to bring average monthly working hours back to acceptable limits. Moreover, factory management understands that the changes will help production efficiency and quality and keep their high-skill workers for longer.

COVID-19 Response

We worked extensively during the COVID-19 pandemic to protect workers across both our own operations and supply chains. This includes ensuring access to adequate protective equipment and paying for all existing orders.   We have organized webinars to support suppliers to put in place effective precautionary measures and we have continued to conduct assessments to verify the implementation, some of them were conducted virtually in times of travel restrictions.  We have also worked with suppliers to protect workers’ livelihoods by ensuring workers receive their wages during the pandemic and ensured that all missed wages including during the lockdown periods are paid to workers.   You can learn more about our efforts to protect workers in Non-Food supply chains here.

Under the Transform pillar of our human rights approach we seek to drive transformative industry-wide efforts to address endemic labour and community issues. Examples of these are:

Eliminating forced labour

We want to ensure that workers in our supply chain are never forced to work against their own will. Cotton has long been associated with the risk of forced labour in certain growing regions. Our aim is to ensure that 100% of the fabrics we choose to make our products with will be sourced responsibly and sustainably by 2025. In our Cotton Sourcing policy, we already outline the sustainability standards that, as a minimum, our suppliers must adhere to.

In parts of the garment industry in southern India, workers are recruited through contracts under which they are paid a lump sum at the end of a three-year period, and have restrictions placed on their movement, known as Sumangali. This leaves them vulnerable to abuse. We have continued to monitor our direct suppliers closely and work through the ETI to ensure this practice does not take place in our supply base. We continue to map our clothing and textile supply chain - including spinning mills, fabric mills and other processing sites - to ensure better visibility of any potential risks.

Migrant workers are known to be one of the vulnerable groups most prone to exploitation and forced to work. In 2021, we launched new Responsible Recruitment requirements for all Non-Food suppliers. This document outlines a requirement for all Non-Food suppliers to align with the Employer Pays Principle that ‘no worker should pay for a job, the cost of recruitment should be borne not by the worker but by the employer.’

In the very few cases where we have found workers’ passports or identity documents to have been withheld by factories, we make sure that the documents are returned to workers. We also ensure that the factories in question correct their employment practices to make sure that this will not be repeated in the future. In collaboration with our suppliers, we have also supported hundreds of migrant workers to renew their work permits to ensure they have access to social security and other legal entitlements.

For further detail on our approach to tackling Modern Slavery, please refer to our Modern Slavery Statement.

Worker Voice and Representation

We recognize the importance of effective worker voice and representation in both identifying and preventing human rights risks. We continue to work with suppliers to strengthen their internal grievance mechanisms and implement worker surveys in key supplying sites which provide unique insights into working conditions.  In Bangladesh and Turkey, we implemented worker satisfaction surveys in some of our key supplier factories to understand workers’ opinions on their working conditions and worked with our suppliers to put improvement plans in place. We have also engaged with the GIZ in Cambodia and the ETI in Bangladesh and Turkey on their social dialogue project which sought to ensure fair and transparent worker committee elections as well as building the capacity of elected worker representatives.

Where disputes between unions and factories appear in our supplier factories, we collaborate with local and global unions, as well as other brands and retailers to ensure that freedom of association is respected. In the majority of cases this has led to positive social dialogue between unions and factories to address the issues together, and in some cases has resulted in factories’ recognition of unions’ official status as their collective bargaining partner. Here is one example of our collaborative efforts leading to successful reinstatement of unionized workers.

In the 2021-22 FY we have had 5 instances of Union Disputes including violations of freedom of association. In all instances, we have worked in collaboration with other brands and retailers to ensure resolution.

Women Empowerment

We firmly believe women should be fairly represented in management in all workplaces, including our own business and throughout our supply chain. We have been supporting suppliers to create opportunities for women and prevent discrimination in our Non-Food business since 2017. Interventions include:

• Over 4500 women workers from 10 factories benefited in the financial inclusion programme for women workers in our supplier base in India. This supported women set-up their own bank accounts and provided them with basic financial awareness training so they can effectively plan how to make use of their wages and make informed decisions regarding money, especially in relation to local cultures e.g. dowry.
• Over 2000 women workers benefited in the HerHealth programme in our supplier base in India. The project increased the health awareness of women workers and empowered them as health ambassadors to deliver peer health awareness training. Outcomes of the program included a reduction in women skipping meals from 15% to 74%, a reduction in health-related absences from 10-12% to 5-6% and an improved awareness of government health schemes from 0% to 63%. 
• Joint CSR plans with 18 F&F suppliers in Bangladesh and Sri Lanka. Under this programme individual targets were set by suppliers to empower women workers and subsequently support their promotion to supervisors or management level. As a result, as of the end of 2021, 1,068 women workers had been promoted to supervisors.
• 100 women workers have been trained through the UN women leadership programme in Bangladesh. The training was on leadership skills for women workers to be ready for promoting to the supervisors/senior operator level in partnership with Care Bangladesh.

To build on this progress, in 2021, we launched a new ambition for at least 30% of supervisory and management roles in our supply chain to be occupied by women by the end of 2025. Through this ambition, we want to increase representation in leadership and ensure those previously disadvantaged have opportunities for development and progression. You can read more here.

Preventing discrimination and harsh treatment

One of our values is that we treat people how they want to be treated and we expect our suppliers to also uphold this principle. We continue to seek opportunities to prevent discrimination and ensure decent and fair work for all.

Through worker surveys at our supplying sites in Bangladesh we previously identified issues relating to mid management and supervisor behaviour towards workers in less senior roles such as abusive languages, threats of dismissal and unfair punishments. To address this, in 2018 we launched the ‘Create Workplace Culture of Respect’ programme in partnership with local NGO, SHEVA.

The ambition of the programme was to:

• Improve the working environment by ensuring a harassment and discrimination free workplace.
• Improve managerial capacity to prevent of workplace harassment.
• Establish sustainable practices to maintain a respectful and positive workplace.

Our training programme was implemented at all tier 1 supplying sites and sought to change both the mindset of those in supervisory roles and the practices and system aiding them in their role. Following our training programme:

• 97% of surveyed workers reported visible positive changes in supervisors’ behaviour.
• 100% of participating supervisors agreed they had successfully learnt new skills for both work and personal life.
• 100% of factory management confirmed that the workplace atmosphere became more friendly.

We have also sought to prevent the discrimination of differently abled individuals in Bangladesh. From 2014 to date, in partnership with the Center for the Rehabilitation of the Paralysed (CRP) we have provided vocational training to 308 individuals including job placements in our supplier production units. CRP also followed up to ensure these workers are effectively included in the workplace with support they need, and our supplier factories also arrange buddies from their fellow workers to help them, and ensure these workers’ work stations arranged close to evacuation routes with visual on top of audio alarms.

Subcontracting

Unauthorised subcontracting poses a risk to Tesco as we do not have visibility of the working conditions and therefore cannot ensure our Responsible Sourcing requirements are being implemented. Tesco therefore does not permit unauthorised subcontracting.

Where part of a production process needs to be subcontracted to another site due to availability of required skills or equipment, prior written approval must be obtained from Tesco. This enables us to have greater traceability of our supply chain.  In the first instance, where suppliers seek approval to outsource, Technical colleagues will seek to re-engineer processes to enable to all processes to occur at the existing approved site. Where outsourcing is deemed necessary, Responsible Sourcing specialists will work with Technical to first ensure all our requirements are met. Additional human rights due diligence is conducted for high risk products.

To further ensure unauthorised subcontracting does not occur we provide training to both our colleagues and our suppliers on the definition of subcontracting and the process they must follow if they do require the use of an additional site. This includes case studies or where unauthorised subcontracting has previously been identified and the consequences of this.

Worker Accommodation 

We are committed to ensuring the accommodation provided to workers is fit for purpose. In addition to auditing worker accommodation where workers are living on site, we have also engaged in several initiatives aimed at improving conditions in hostels/dormitories.

For example, in India we have collaborated with the Tirupur Stakeholders Forum (TSF), other brands and the ETI to develop dormitory guidelines. These were later adopted by the Tamil Nadu mills industry groups. The guidelines address the common issue found in dormitories in the region resulting in the upgrading of facilities whilst ensuring freedom of movement. We further collaborated with the ETI and Southern India Mills Association (SIMA) to create an additional Code of Conduct for hostels and dormitories to be adopted by all members of SIMA.

From 2019 onwards we conducted workshops for all mills and suppliers in India and oriented them on our expectation around hostel management, based on these guidelines and Code of Conduct.

We recoginse that our scale means we have the opportunity to use our convening power to Advocate for change where it is needed. Recent examples include:

• Signed a letter to the Sri Lankan government, alongside other brands and the ETI, seeking clarity on the payment of wages during the COVID-19 pandemic
• Signed a letter sent to the Commission’s Justice and Consumers Directorate-General (aka “DG Just”) supporting the EU moves towards Mandatory Human Rights Due Diligence
• Released a joint statement, via the ACT (Action, Collaboration, Transformation) initiative, expressing our "deep concern" for supply chain workers following the military coup in Myanmar
• Signed up to the ILO Call to Action in the garment industry in response to COVID-19