In February 2020, Ethical Consumer viewed Johnson & Johnson's website for information on how the company managed workers' rights in its supply chain. Information on the company’s policies was obtained from its 2018 Health for Humanity Report and 2017 Responsibility Standards for Suppliers document.
Supply chain policy (rudimentary)
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.
Johnson & Johnson's Responsibility Standards for Suppliers included adequate clauses on child labour, forced labour, discrimination and freedom of association. The clause on wages was considered to be inadequate, as it only required the payment of minimum wages, not living wages. No clause was found covering working hours.
Overall, Johnson & Johnson was considered to have a rudimentary supply chain policy.
Stakeholder engagement (rudimentary)
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, and for workers to have access to an anonymous complaints system, free of charge and in their own language.
Johnson & Johnson was a member Pharmaceutical Supply Chain Initiative (PSCI), However, as an industry-only body (with no membership from NGOs or trade unions), this was not considered to be a multi-stakeholder initiative and therefore did not demonstrate adequate stakeholder engagement.
The company had a hotline, stating: “Our Credo Hotline is an integral component of the strong compliance culture at Johnson & Johnson. It is an anonymous whistle-blowing mechanism that provides a channel for all employees, contingent workers, customers, third-party agencies and other partners to report potential violations.”
Overall Johnson & Johnson was considered to have a rudimentary approach to 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.
Johnson & Johnson’s Health for Humanity Report reported on several different types of supplier audits; compliance with its workers’ rights exceptions was said to monitored via ‘Social audits’.
It stated: “in 2018, we rolled out our social audit program, with 11 audits completed by year end. We plan to expand the program in the coming years.” However, this was not deemed to constitute a scheduled and transparent audit plan and no further details were found.
The company published some limited data on completed audits, but this was not considered to be sufficient, as it only stated the number of audits completed in each region and the number of ‘critical findings’ (0). It did not publish the numbers of findings categorised as ‘major’ or ‘minor’, nor did it explain these categories. No quantitative analysis of audit results was found.
The report included some examples of steps it would take towards “audit supplier improvement” in relation to its EHS audit program, but did not specify a policy for dealing with non-compliance with regards to its Social audits.
No mention of the costs of audits was found.
Overall, Johnson & Johnson was considered to have a poor approach to auditing and reporting.
Difficult issues (rudimentary)
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.
Johnson & Johnson stated a preference for long-term suppliers in from its 2018 Health for Humanity Report: “We aim to maintain long-term relationships with suppliers, and prefer to work with them to resolve audit findings.” No information was found addressing other areas considered ‘difficult issues’ in this context.
The company was considered to have a rudimentary approach to difficult issues.
Overall Johnson and Johnson received a middle rating for supply chain management and lost half a mark in this category.
2018 Health for Humanity Report (2018)