The mission to lift supplier working standards

5 August 2019

NZ company engages directly with Chinese supplier to improve the poor working conditions of its employees.

Companies can avoid becoming embroiled in unethical procurement practices by collaborating directly with their suppliers. That’s according to the buying boss at New Zealand’s Department of Corrections.

Julie Robertson, the department’s national chief procurement officer, was speaking at CIPS Australasia Conference in Melbourne. She and her colleagues worked closely with a China-based manufacturing subcontractor to address a surge in demand for its services. She explained how sending department representatives to engage with the contractor directly produced much more positive results than simply outsourcing to third parties.

The department expected some health and safety breaches but, right from the first visit to the plant, Robertson had her doubts about the situation. Workers were found to be sleeping under plant equipment, without adequate safety gear and working in floodwater left over by monsoon rains. The department also found that a key sub-contractor hadn’t been paid.

“It was very challenging for our executive team,” Robertson said. “They were confronted and thought very hard about whether we [should] continue.”

Pulling out of the contract was always a possibility, she said, but instead the department had a plan to lift its vendors’ standards. Representatives conducted a series of visits to the contractor’s manufacturer to ensure its expectations were met.

Robertson said their approach proved effective and the supplier responded by implementing working standards that gradually reached a level on par with New Zealand’s.

Rather than treating the expectations as excessive interference, the supplier said it had gained useful insights from them. As Robertson explained: “They told us: ‘We appreciate what you are doing because you’re now making us more able to deal with our Western world clients’.”

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