Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents

Memorandum submitted by Tesco


  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.


  2.1  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.


  3.1  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

    — Understand customers.

    — Be first to meet their needs.

    — Act responsibly for our communities.

  Treat people how we like to be treated

    — Work as a team.

    — 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.


  4.1  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.


  5.1  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.

    5.4.4 Building capacity

    — 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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Prepared 16 December 2009