17 July 2008
Buyers should alert the most senior people in their organisation if they discover an ethical issue in the supply chain.
Raees Lakhani, client services director at consultancy Resources Global Professionals, said consumers are increasingly aware of corporate ethics and buyers must help to stamp out poor practice in the supply chain.
In his view, if buyers don't have clear ethical procurement guidelines and they spot a problem with a supplier, such as a breach of labour laws, it is important they raise it at the "highest level".
His comments come after construction firm Skanska became the latest company to discover problems within its supply chain. The Union of Construction, Allied Trades and Technicians (UCATT) found that staff working for a subcontractor of one of Skanska's suppliers took home only £8.80 for a 40-hour week on a construction project in the UK.
The 12 Lithuanians were paid £7 an hour, but received no overtime and had "excessive" fees deducted for accommodation, tools and utility bills.
Skanska said it "takes such issues very seriously" and works to ensure staff are paid in accordance with the national Working Rule Agreement, which sets pay rates for the construction industry.
UCATT discovered the issue after the workers had their pay stopped all together and were owed five weeks' wages. The union met with Skanska and the two suppliers involved in an effort to resolve the issue last month.
Also in June, retailer Primark axed three suppliers for subcontracting work to companies that used child labour (Web news, 18 June).
Lakhani added it was essential companies take the initiative to form their own ethical guidelines.