In a world where there is significant social, political and economic uncertainty and change, businesses play an increasingly crucial role in ensuring that the most vulnerable in society are not exploited. We are all entitled to live with dignity, freedom, equality, justice and peace. Organisations such as RB must do their utmost to ensure these fundamental principles are respected across their value chain.
Our vision is to positively enhance Human Rights and Responsible Business practices across our value chain.
We believe that policies alone are not sufficient in ensuring compliance. Consequently, we have established a proactive compliance monitoring programme focused on continuous improvement to enable us to identify and remediate any deviations from our policy within our business and supply chain.
In 2017, we issued our first Modern Slavery Act statement and significantly enhanced the robustness and capabilities of our Human Rights compliance programme by establishing a dedicated team with regionally based resources.
We established a partnership with Intertek, who provide four regional Human Rights leads who partner and engage with suppliers and internal teams to manage the programme within their respective regions. Within our highest risk regions – South Asia, Middle East and Africa - we have directly employed human rights experts who proactively engage with suppliers and local Procurement teams at a level previously not possible, resulting in a more collaborative approach to delivering sustained improvements in labour, health & safety, environment and business integrity standards within a challenging supply chain.
Currently we have 54 RB manufacturing facilities, 7 RB distribution centres and 770 suppliers, 3rd party distribution centres and embellishers amounting to 905 individual sites included in the programme. The steps of the programme and the associated performance are as follows:
We actively communicate our requirements and expectation to all RB facilities. At the start of any commercial relationship, we communicate our requirements to suppliers and integrate the need to comply within the commercial contract. In 2017, the scope of our compliance programme further increased to include all our embellishers located within developing markets.
We believe the self-assessment is a useful educational engagement tool in helping suppliers understand the policies and procedures they should implement within their own facilities and supply chain to best manage labour, H&S, environment and business integrity. In order to reduce the burden on suppliers we request them to complete the self-assessment on the ethical data sharing platform, Sedex.
As of the end of 2017, 82% of those suppliers requested to complete a self-assessment had done so and we continue to engage proactively with those suppliers still outstanding.
RB facilities are required to complete an annual self-assessment of compliance with RB’s Human Rights and Responsible Business requirements on Enablon. As of the end of 2017, all of RB’s manufacturing facilities had completed this apart from the recently acquired Mead Johnson Nutrition (MJN) sites. We have a planned programme role out for MJN sites and will ensure all complete the self-assessment in H1 2018.
RB follows a risk-based approach to compliance monitoring; therefore, of those included in our compliance programme we conduct a specific site level risk-assessment to determine which sites are high risk and in need of further due-diligence through a physical on-site audit.
All RB facilities are risk-assessed using the site’s inherent labour risk, associated with the site’s country of operation, product area, sector profile and site function, and management controls risk, which considers previous audit ratings as a reflection of the site’s ability to manage compliance on site.
All suppliers undergo a site level risk-assessment through our programme management platform, Inlight, which is hosted by Intertek. Through Inlight, each site is assigned an overall risk rating of either Critical, High, Medium or Low. The overall risk consists of inherent risk and if applicable, the audit rating of the latest audit. Currently, the site’s inherent risk score is country specific and based on the country performance against the indicators listed below; however, in 2018 we shall explore developing a commodity specific risk-assessment for packaging and raw material suppliers to complement this:
Critical and high-risk sites undergo a physical on-site audit to assess compliance. Additionally, all 3rd party manufactures located within an emerging economy require an audit as part of their onboarding. For our own operations, we conduct announced bespoke Human Rights and Responsible Business compliance audits. For our supply chain partners we conduct bespoke Human Rights and Responsible Business compliance audits for any supplier audited by our internal team and 4-pillar SMETA audits for any supplier audited by an external 3rd party audit firm. SMETA is our preferred auditing procedure as it is one of the most widely used ethical formats in the world that is widely accepted thereby reducing the audit burden on suppliers. We are also committed to recognising ethical audits carried out for other customers, provided they meet our mutual recognition criteria.
In 2017, we conducted audits of 11 RB factories and 7 RB distribution centres in high-risk geographies, in addition to 3 pilot audits of our commercial offices within the Middle East and North Africa. Through these 21 audits, 172 non-conformances with our requirements were identified, with the five most common issues concerning remuneration (24%), excessive working hours (17%), inadequate management systems (16%), disciplinary measures / procedures (9%) and forced labour (9%). We promptly remediate any areas of non-conformances and have internal processes to monitor progress towards this. In 2017, 59% of the issues raised were satisfactorily resolved with action plans in place for the remaining issues.
In terms of our supply chain partners, we conducted 118 supply chain audits across 22 countries within Latin America, Middle East, Africa, South and North Asia. We identified 1,545 non-conformances with the majority of issues concerning H&S (49%), working hours & remuneration (20%), environment (15%) and management systems (5%). We are always committed to supporting our suppliers in implementing robust corrective and preventative actions to ensure sustained improvements in working conditions. Our Procurement and Sustainability teams directly engage with suppliers to support and will continue to do so until all issues are satisfactorily.
Proactive engagement and establishing collaborative partnerships with key internal and external stakeholders is crucial in raising awareness and understanding of, preventing, identifying and remediating human rights issues. Currently much of our activity is focused on our own employees, our suppliers and our peers; however, we do recognise the importance and value of increasing the scope of our engagement and plan to do so moving forward. Below are some of the key areas of activity in 2017:
Employee training – We developed and launched an interactive human rights eLearning course to provide our employees with an understanding of Human Rights, RB’s minimum requirements, common supply chain issues they may come across and how to report issues for further investigation and remediation. This course was mandatory for all management employees globally and to date the training has been taken by 11,873 employees representing 76% of all management level employees. We will continue to follow up with those outstanding in 2018 to ensure they complete the training. In order to assess the effectiveness of the training there was an optional survey at the end of the course. We had 6,124 responses and achieved an effectiveness rating of 4.59 out of 5.
Peer and supplier collaboration – We are members of AIM-Progress, which is a forum of leading Fast Moving Consumer Goods (FMCG) manufacturers and common suppliers, assembled to enable and promote responsible sourcing practices and sustainable supply chains. It is a global initiative supported and sponsored by AIM in Europe and GMA in North America. RB has a leadership position within AIM-Progress, being a member of the leadership team and co-chair of the Capability Building work stream which seeks to promote responsible sourcing practices throughout the supply chain. In partnership with AIM-Progress member companies, we co-sponsored and attended two supplier capability building events over the course of 2017 - New Delhi, India and Dubai, UAE.
Going forward, we plan to take a more holistic view of human rights by focusing on stakeholders within our value chain: from suppliers and partners to employees and end-consumers of products.
In 2018, we are planning a range of initiatives to further develop our programme. These include identifying an independent global partner to provide expertise and guidance on our approach to enhancing human rights, enhancing supplier grievance mechanisms, auditing high-risk raw and packaging material suppliers and conducting an impact measurement pilot to measure the impact of our programme. We are also looking at how we can expand the scope of our internal human rights programme beyond our manufacturing sites.