In February 2020, Ethical Consumer AS Watson's 2017 CSR report (the most recent available) for details of the company's supply chain management policies. The company was a member of the Business Social Compliance Initiative (BSCI). It stated that the company followed the BSCI code of conduct in regard to its supply chain management. The BSCI Code of Conduct, available on the BSCI website was therefore viewed.
Supply chain policy (reasonable)
There were adequate statements on: freedom of association, child labour, discrimination, working hours, and forced labour.
Regarding wages, the document stated: "Business partners shall comply, as a minimum, with wages mandated by governments’ minimum wage legislation, or industry standards approved on the basis of collective bargaining, whichever is higher." This was not considered an adequate statement guaranteeing the living wage.
A strong policy would include the following commitments: no use of forced labour, permission of freedom of association, payment of a living wage, the restriction of working hours to 48 hours plus 12 overtime (without exception), no use of a child labour (under 15 or 14 if ILO exempt), no discrimination by race, sex or for any other reason.
Overall the company was considered to have a reasonable supply chain policy.
Stakeholder engagement (poor)
Ethical Consumer deemed it necessary for companies to demonstrate stakeholder engagement, such as through membership of the Ethical Trade Initiative, Fair Labour Association or Social Accountability International. Companies were also expected to engage with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's supply chain audits. The company was a member of the BSCI, but this was not considered to be a multi-stakeholder initiative. On the BSCI website the organisation stated: "We are neither an auditing company nor an accreditation system...We provide companies with a social auditing methodology and report. We do not organise audits ourselves but provide a network of external accredited, experienced and independent auditing companies."
Ethical Consumer also expected workers to have access to an anonymous complaints system, free of charge and in their own language.
Overall, the company was deemed to have poor stakeholder engagement.
Auditing and Reporting (poor)
Ethical Consumer deemed it necessary for companies to have an auditing and reporting system. Results of audits should be publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to their whole supply chain, including some second tier suppliers. The company should also have a staged policy for non-compliance. The costs of the audit should be borne by the company.
On the AS Watson CSR Report 2017, the company stated that in 2016, 350 BSCI audits were carried out on suppliers. However, no other information was given.
Overall the company was considered to have poor auditing and reporting.
Difficult issues (poor)
Ethical Consumer also deemed it necessary for companies to address other difficult issues in their supply chains. This would include ongoing training for agents, or rewards for suppliers, or preference for long term suppliers. It would also include acknowledgement of audit fraud and unannounced audits, and measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.
No information was found on the above. Overall the company was considered to have a poor approach to difficult issues.
Overall the company received Ethical Consumer's worst rating for Supply Chain Management.