In March 2020, Ethical Consumer viewed Colgate-Palmolive’s ‘Third Party Code of Conduct’ document and its ‘Sustainability’ webpages. Ethical Consumer were looking to understand how the company approached managing workers’ rights in its supply chain.

Supply Chain Policy (poor)
The company’s Third Party Code of Conduct contained adequate clauses on forced labour, discrimination and freedom of association. It did not: define the age below which a person is considered a child for purposes of employment; make reference to paying a living wage to suppliers' employees; or limit a working week to 48 hours and 12 hours overtime. The company was considered to have a poor supply chain policy.

Stakeholder Engagement (poor)
The company’s Third Party Code of Conduct did not include any evidence that: a) the company was a member of the Ethical Trading Initiative, the Fair Labor Association, or Social Accountability International; b) there was systematic input from NGOs or labour organisations or not-for-profit organisations in the verification of audits on labour standards; c) supplier employees could provide anonymous feedback on working conditions to Colgate at no cost to them and in their first language, although there was an EthicsLine for direct employees including an email which could be used for questions regarding the Third Party Code of Conduct. Colgate-Palmolive was considered to have a poor approach to stakeholder engagement.

Auditing and Reporting (poor)
The company’s Sustainability webpages stated, "Through the use of a supplier risk assessment scorecard, selected suppliers and business partners are scored against critical risk factors to determine the need to conduct a social compliance audit. When a supplier is assessed as high risk, a third-party audit of its facility is required. To date, there are currently 550 suppliers and service providers in the program and 46% have conducted a social compliance audit."
It did not disclose audit results or a detailed schedule. It was not clear if all of Colgate’s suppliers would be included in this process, or whether the costs of the audit would be borne by Colgate. Consequently, Colgate was considered to have a poor approach Auditing and Reporting.

Difficult Issues (poor)
Ethical Consumer did not consider that the company addressed difficult issues in supply chain management such as ongoing, scheduled training for buyers on labour standards, a systematic approach to audit fraud, the question of workers receiving living wages or to problems stemming from the employment of homeworkers or sub-contactors in the supply chain. Consequently, Colgate was awarded the lowest rating in Difficult Issues.

Overall, Colgate received Ethical Consumer's worst rating for Supply Chain Management and lost a whole mark in this category.

Reference:

https://www.colgatepalmolive.com/en-us/core-values/sustainability (9 March 2020)

In March 2020, Ethical Consumer searched the Colgate-Palmolive SEC filing Exhibit 21 which listed the company's subsidiaries and their registered country. A number of these companies were listed in countries which were listed on Ethical Consumer's list of oppressive regimes at the time of writing, namely: Myanmar, China, Egypt, Israel, Mexico, Philippines, Russia, Saudi Arabia and Turkey.

As Colgate-Palmolive had more than 6 subsidiaries in oppressive regimes the company lost a whole mark under Human Rights.

Reference:

SEC filing Exhibit 21 (31 December 2019)

On 30th November 2016 Amnesty International released a report called “The Great Palm Oil Scandal: Labour Abuses Behind Big Brands Names.” The report investigated labour exploitation on plantations in Indonesia that provide palm oil to Wilmar, one of the world’s largest processor and merchandiser of palm and lauric (palm kernel) oils and controls over 43% of the global palm oil trade. The report also traced the palm oil produced in Indonesia for Wilmar to a range of consumer goods companies that use palm oil in their products.

Amnesty International found serious human rights abuses on the plantations of Wilmar and its suppliers. These included forced labour and child labour, gender discrimination, as well as exploitative and dangerous working practices that put the health of workers at risk. The abuses identified were not isolated incidents but due to systemic business practices by Wilmar’s subsidiaries and suppliers, in particular the low level of wages, the use of targets and ‘piece rates’ (where workers are paid based on tasks completed rather than hours worked), and the use of a complex system of financial and other penalties. Workers, especially women, are employed under casual work arrangements, which make them vulnerable to abuses.

Amnesty stated “All of these are obvious and predictable areas of concern and risk. However, none of the companies that buy palm oil from Wilmar could demonstrate to Amnesty International that they had identified and addressed the actual abuses documented by Amnesty International.”

Colgate-Palmolive was said to have be sourcing palm oil from refineries where the palm oil has been directly supplied or, at the very least, been mixed with palm oil produced on plantations where there are severe labour rights abuses.

Colgate-Palmolive said none of the products Amnesty International listed contained palm oil from Wilmar’s Indonesia operations. They did not say which of their products do, although it acknowledged that they received palm oil from Wilmar refineries that Amnesty International linked to the plantations investigated for the report.

Colgate-Palmolive lost half a mark under Palm Oil and a whole mark under Workers' Rights.

None of the companies Amnesty International contacted denied that the abuses were taking place, but neither did they provide any examples of action taken to deal with labour rights abuses in Wilmar’s operations.

Reference:

The Great Palm Oil Scandal: Labour Abuses Behind Big Brands Names (30 November 2016)