Oxfam urges companies to review labour standards

19 February 2013
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19 February 2013 | Anna Reynolds

Oxfam has called on businesses to address labour standards in their supply chains, following a two-year study with Unilever into conditions at factories in Vietnam.

The report assessed a range of issues affecting around 1,500 workers in Vietnam, including working hours, wage levels, stability of employment and relationships between management and workers.

Barbara Stocking, Oxfam chief executive, said in a statement: “Working conditions remain poor for many workers in the value chains of multinational companies around the world, despite the often good intentions of senior management.

“We hope this study will help Unilever strengthen this aspect of its business model and encourage other companies to revisit their reliance on compliance with national law rather than international principles, and to be open about the challenges in this complex area.”

Oxfam carried out phone interviews with 48 of Unilever’s Vietnamese suppliers, selected as being in a high-risk environment for labour standards. They also interviewed managers and workers at Unilever’s operations in Cu Chi, where the company directly employs 700 people to produce home care, personal care and food products for brands such as Lipton, Dove and Persil.

The charity found 28 of the 48 suppliers confirmed they were asked by Unilever to commit to complying with national laws and regulations outlined in the company’s Supplier Code, while the rest said it was never mentioned.

Interviews with supply chain staff at Unilever revealed that integration of labour standards into the business was fairly low, with labour rights not discussed with suppliers or proactively addressed. Reasons given included the absence of specialists in the in-house auditing team and the staff’s belief that if poor treatment was taking place, factory workers would leave for new jobs. The subject was also seen as too sensitive to discuss with suppliers.

Instances of low wages and excessive working hours were also found including at one supplier where workers said they had worked four hours overtime a day, six days a week for ten months. This is in excess of legal limit of 200 hours a year.

As a result of the report’s findings, Unilever has made a series of commitments, such as conducting a sustainable living review in the 180 countries it operates by the end of 2015, a review of worker grievance mechanisms and collaborating with NGOs and trade unions to integrate human and labour rights into its business.

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