Memorandum submitted by Tesco
1. INTRODUCTION
1.1 This submission seeks to provide an
overview of our approach to human rights across our business.
Not being international human rights experts, it does not seek
to comment more widely on what is a complex debate. We do however
hope that by sharing our own experience we can help inform the
Committee's considerations.
2. OVERVIEW
2.1 We share the view that businesses have
a responsibility to respect human rights in the way in which they
operate. This means having regard for human rights in both their
direct and indirect impacts on individuals and communities.
2.2 For us this means: managing all aspects
of our business responsibly and in accordance with our core values;
looking after our people; and being fair and responsible and in
the way we work with others.
2.3 In this submission we focus on what
we are doing as a business to ensure human rights are respected,
in particular:
— our approach to ensuring human rights
are respected in the way we run our business through our values
and our management of corporate responsibility;
— how we treat our people and respect and
promote their rights and interests; and
— how we manage and uphold human rights
in our supply chain.
3. OUR VALUES
AND CORPORATE
RESPONSIBILITY
3.1 At the heart of our business and underpinning
everything we do are our values. These are a clear expression
of what we stand for and our core purpose as a business. They
embody our commitment to our people, our customers and the communities
in which we operate. Refreshed this year and being rolled out
worldwide they are:
No one tries harder for customers
— Be first to meet their needs.
— Act responsibly for our communities.
Treat people how we like to be treated
— Trust and respect each other.
— Listen, support and say thank you.
— Share knowledge and experience …So
we can enjoy our work.
3.2 These values are reflected in the way
we manage the business, which we do using our Steering Wheel.
This is our balanced scorecard approach which brings together
the key elements of our business—Customers, Operations,
People, Finance and Community—and ensures corporate responsibility
is not a specialist function but a core part of our business.
3.3 The Community segment of the Steering
Wheel reflects our new Community Promises, which were launched
in the UK in 2008 and are being launched internationally
this year. These are: actively supporting local communities; buying
and selling our products responsibly; caring for the environment;
giving customers healthy choices; and creating good jobs and careers.
4. OUR PEOPLE
4.1 We are the largest private sector employer
in the UK and provide diverse career opportunities for 470,000 people
worldwide. Alongside the UK we have businesses in Thailand; Poland;
South Korea; Hungary; Japan; the Republic of Ireland; the USA;
the Czech Republic; Turkey; China; Slovakia; Malaysia and India.
4.2 Our success depends on our people and
our commitment to them has a number of elements. It includes employing
people who reflect the diverse nature of society; supporting flexible
working; and giving our people "an opportunity to get on"
through investing in their training and development. Proper consultation
and communication is also important. We do this through staff
question times, face-to-face briefings, store and distribution
centre forums, staff publications, our intranet and our annual
staff survey, Viewpoint.
4.3 It also means respecting our people's
right to freedom of association. Our employees across our business
are free to join unions. In particular, we have an industry leading
partnership agreement with Usdaw in the UK and similar agreements
with Solidarity in Poland and Katz in Hungary.
4.4 We have a whistle-blowing policy and
helpline in place in all countries in which we operate. "Protector
Line" is a 24-hour confidential telephone line and email
address for employees to report grievances and ethical concerns.
We ensure concerns raised are properly investigated.
4.5 We also offer higher than minimum wage
salaries across our businesses internationally, and benefits in
each market that reflect employees' priorities. In many developing
markets, staff place most value on good basic pay and being paid
fairly for overtime, and these are our priorities. For example,
in Malaysia where there is no legal minimum wage, the minimum
wage a Tesco employee will receive is 30% more than the Poverty
Line Index for a household. We also offer a wide range of competitive
benefits in line with local labour laws and regulations and reflecting
local circumstances and priorities. So in the US we pay at least
75% of the cost of medical, prescription drug, dental and vision
coverage after 90 days' employment, whereas in South Korea
we provide tuition subsidy.
5. OUR SUPPLY
CHAIN
5.1 Providing excellent value for our customers
means sourcing the best products from around the world—at
the best prices. This helps families stretch their budgets further,
brings more products within the reach of ordinary people, and
helps to drive economic growth.
5.2 To deliver this, we source from many
countries around the world. We believe that international trade
helps people in developed and developing countries improve their
quality of life, creating jobs and raising standards. The record
of export-led growth and poverty reduction in China and other
parts of Asia bears testimony to this.
5.3 At the same time we recognise that regulation
and levels of enforcement of labour standards vary in different
countries. Our ethical trading policy and programme applies to
every country from which we source, including the UK, identifying
risks and helping our suppliers to address them.
5.4 Our approach to ethical trading has
five stages:
5.4.1 Setting and communicating standards
— We only work with suppliers who share
our values and demonstrate commitment to the ETI Base Code, of
which we are a founder member. This sets out that employment is
freely chosen; freedom of association and the right to collective
bargaining are respected; working conditions are safe and hygienic;
child labour shall not be used; living wages are paid; working
hours are not excessive; no discrimination is practised; regular
employment is provided; and no harsh or inhumane treatment is
allowed.
— We evaluate potential new suppliers to
ensure they understand these standards and can meet them. We will
not work with a supplier if we identify major problems at this
stage and cannot resolve them.
— In 2008 we issued a new, accessible
Code of Practice so suppliers can be absolutely clear on our programme
and expectations.
5.4.2 Monitoring supplier performance
— With a large and diverse supply chain,
we know that some suppliers will not always maintain the high
labour standards we expect. In order to help suppliers address
problems and to support them in improving labour standards, our
first step is to ensure we know what is going on, by gathering
detailed feedback on conditions in the farms and factories our
suppliers run around the world.
— As we are not able to monitor all our
suppliers' sites all the time, we take a risk assessment approach
to information gathering. We assess all direct supply sites to
all our businesses around the world.
—For suppliers to the UK business we, along
with other retailers, use risk assessment tools including the
Supplier Ethical Data Exchange (SEDEX)—an independent, online,
not-for-profit database through which ethical data about suppliers
can be shared. It significantly improves the transparency of retailers'
supply chains, and stores detailed information on gender, ethnicity,
languages spoken and permanent and temporary workers.
— We aim to undertake independent audits
of those supplier sites identified as high risk every year, and
medium risk every two years. Low-risk sites are required to complete
an annual self-assessment, which we monitor.
— In January last year we launched our
Auditor Recognition Programme to improve the quality of audits
across our supply chain and ensure the information they provide
is consistent and reliable.
5.4.3 Addressing problems
— We always ensure action is taken when
audits identify major breaches of the ETI Base Code. Following
an audit report, suppliers must address every non-compliance identified
and develop improvement plans. We follow up these plans and have
them independently verified or request further improvements as
required.
— In addition to reports by auditors, breaches
of the Code can also be reported by suppliers themselves, workers,
non-governmental organisations and trade unions. We investigate
any such reports immediately.
— Our priority is to ensure there is no
child labour, forced or bonded labour, or any form of abuse in
our supply chain.
— We develop the skills and capabilities
of our buyers, technical teams and suppliers so they can improve
labour standards in our supply chain.
— Last year we revised our core training
programmes for buyers and for technical managers, which are mandatory
for all new starters. We also tailored our core supplier training
following feedback that our workshops could be more specific to
local conditions, enabling greater sharing of experience and best
practice.
5.4.5 Working with others
— Partnership has an important part to
play, particularly in tackling challenges that go wider than our
own supply chain.
— For example, we took part in the ETI
Supervisor Training project, which culminated in a successful
pilot to tackle sexual harassment on farms in Kenya. We were also
involved in other ETI working groups on China, homeworkers, wages
and purchasing practices. We continue to sit on the board of SEDEX
and contributed to its working groups on audit methodology, risk
assessment and system development. We chair the Global Social
Compliance Programme, a business driven programme where leading
companies work together to build consensus on best practice in
supply chain labour standards.
June 2009
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