In March 2020 Ethical Consumer sent Reckitt Benckiser a questionnaire, asking for details of the company's supply chain management policy. The company replied with details and with links to several other documents, including its Sustainability Insights Report 2018 and RB’s Policy on Human Rights and Responsible Business - Detailed Requirements dated April 2016.

Supply chain policy (rudimentary)
Ethical Consumer considered Reckitt Benckiser to have a rudimentary approach to its supply chain policy due to the fact it had adequate clauses on child labour, forced labour, freedom of association and discrimination. The clause on working hours was not considered adequate as it stated "shall not exceed 60 hours on a regular basis." While the company had used the wording as described by the Ethical Trading Initiative it was not considered adequate due to the fact the company itself was not a member. The clause on remuneration did not provide a living wage.

Stakeholder engagement (rudimentary)
Reckitt Benckiser was considered to have a rudimentary approach to stakeholder engagement due to the fact it had a "speak up" freephone confidential hotline which was available in different languages and run by a third party. The company also said that it had been working with the Danish Institute for Human Rights. The company stated that it was a member of AIM-Progress and the Consumer Goods Forum, however these were not considered multi-stakeholder initiatives as they had only industry members. It also stated that it was a member of the Indirect Procurement Human Rights Forum. Very little information could be found about this, but it did not appear to be a proper multi-stakeholder initative.

Auditing and reporting (reasonable)
Reckitt Benckister provided details of its auditing system, including where breaches had been found and the remediation stategy used. It committed to auditing its entire supply chain. All companies were initially required to complete a self-declaration form and then had site visits at a frequency depending on the risk level determined. The company described its audit schedule. The company stated "As active members in Aim Progress we accept Mutual Recognition Audits conducted by our approved audit houses. As a result, we ask our suppliers to pay for the audit so they can own the report and share with other customers who require a SMETA Audit. Failing this RB will pay for the audit."

Ethical Consumer considered Reckitt Benckiser to have a reasonable approach to auditing and reporting due to the fact it was auditing or assessing its whole supply chain, provided quite a lot of information about results, and had a remediation strategy. However, as not all audit costs were paid by the company it was not able to get a "good" rating.

Difficult issues (rudimentary)
Reckitt Benckiser described its work with internal human rights training and capacity building with its suppliers. It stated "We are accredited in the UK for living wage payments are now considering how that may be extended to other key origin markets....Through membership of organisations such as SEDEX and AIM Progress, we are able to cross-check audit approaches and findings to mitigate the risk of audit fraud". Overall it was considered to have a rudimentary approach to difficult issues.

Overall Reckitt Benckiser received a middle Ethical Consumer rating for its supply chain management.

Reference:

Questionnaire response March 2020 (30 March 2020)

In May 2016 Time Inc reported in an article entitled "Hundreds of South Korean Victims of Toxic Disinfectant File Lawsuit" that a lawsuit had been filed in South Korea for the victims of a toxic disinfectant for humidifiers sold by Oxy, a subsidiary of Reckitt Benckiser.

The Korea Times reports that the plaintiffs included 235 people who suffered lung damage and relatives of 51 people who died after coming into contact with the product. The lawsuit was seeking $9 million in compensation from the manufacturer of the product, distributors and the government.

It was believed more people were killed or suffered ill effects from the popular product, which was targeted at families with children using humidifiers in South Korea’s dry climate. It was taken off the market after South Korea’s Center for Disease Control identified a link with lung damage in 2011. Prosecutors charged four executives at Oxy with skipping necessary toxicity tests before the product was launched in 2001.

The suit demands compensation — including $45,000 for each of the deceased, and smaller sums for those suffering continuing effects — from a total of 22 companies involved in making and selling the disinfectant, and the authorities.

“Without any grounds, the manufacturers and sellers of the humidifier disinfectants indicated on the labels of their products that the ingredients were safe,” a lawyer told the Korea Times. “The government, which failed to properly conduct safety tests and approve the products through tightly enforced safety regulations, must also take responsibility.”

Reckitt Benckiser announced in 2016 the establishment of a compensation fund for those affected in South Korea. The company says it accepts “full responsibility for the role that this product played in these health issues, including deaths,” and that it has improved its product-safety processes.

Subsequent news reports added that in 2017 the former head of Reckitt Benckister’s Korean subsidiary, Oxy Reckit Benickster, was found guilty of accidental homicide and received the maximum sentence of seven years of imprisonment.

The company lost a whole mark under Irresponsible Marketing, and Pollution & Toxics.

Reference:

Hundreds of South Korean Victims of Toxic Disinfectant File Lawsuit (17 May 2016)

In October 2019 Ethical Consumer viewed on The Guardian website an article titeld 'Reckitt Benckiser to pay $1.4bn fine over opioid treatment sales' and dated to 11 July 2019.

Reckitt Benckiser agreed to pay a fine of $1.4 billion (£1.1 billion) fine to the US Department of Justice and Federal Trade Commission to resolve an inquiry into sales and marketing of Suboxone Film, an opioid-based drug. The drug had been sold as a treatment for addiction to opioids by Individior, a subscription drugs producer that was a subsidiary of Reckitt Benckiser until 2014. Although Reckitt had not been charged, investors worried the company could face a major fine or an indictment as well. By paying the fine, Reckitt retained its right to participate in US government programmes.

In April 2019, the Department of Justice charged Indivior with fraudulently claiming that Suboxone Film was better and safer than similar drugs. It also stated that the company referred patients to doctors it knew were prescribing opioids "in a careless manner".

Reckitt responded that it had acted lawfully at all times but had agreed to settle to avoid further costs and uncertainty for the company. The fine was at the time of the settlement the highest penalty imposed on a company involved in the US opioids crisis.

The company lost half a mark under Irresponsible Marketing.

Reference:

www.insightpartners.com (26 September 2019)

In October 2019 Ethical Consumer searched for RB UK Commercial Ltd on the website of the Advertising Standards Agency (ASA). In June 2019 ASA upheld complaints about an ad that claimed “there's nothing faster or stronger” than its Lemsip Max All-In-One, a treatment of colds, flu and coughs. ASA found that the ad breached rules on comparisons with identifiable competitors.

RB UK Commercial Ltd lost half a mark under Irresponsible Marketing.

Reference:

ASA Ruling on RB UK Commercial Ltd (5 June 2019)

In March 2020 Ethical Consumer viewed Reckitt Benckiser's family tree on the corporate information website hoovers.com. It stated that the company had subsidiaries in the following countries: Russia, the Philippines, China, Israel, Nigeria, Pakistan, and Bangladesh. At the time of writing Ethical Consumer considered each country to be governed by an oppressive regime. Reckitt Benckiser lost a whole mark under Human Rights.

Reference:

Generic Hoovers ref (2020)

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.”

Reckitt Benckiser confirmed that it received palm oil or palm-related derivatives from one or more of the refineries identifed by Amnesty International as being linked to plantations where labour abuses occur. The company referred to how it supported or relied on the Aggregator Refinery Transformation Plan (ART). It stated that it had made efforts, along with Wilmar and The Forest Trust (TFT), to trace
palm oil back to mills to identify those that are high priority (known as its Mill Prioritisation Process). While the ART approach may be useful for engaging suppliers, Amnesty stated that it was extremely limited in scope. "The criteria used for selection of mills are not based on an adequate pre-assessment of the risk of labour rights abuses." Therefore, engaging in the ART plan alone was consider insufficient by Amnesty to identify labour risks and abuses linked to palm oil plantations. A review of the mill prioritisation document also showed that the assessment was heavily based on environmental rather than labour criteria.

Reference:

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

The Business and Human Rights Resource Centre’s published a report in 2017, First Year of FTSE 100 Reports under the UK Modern Slavery Act: Towards Elimination? The report assessed how well FTSE 100 companies demonstrated their understanding and commitment to preventing modern slavery from taking place anywhere in their operations or along their supply chains. These companies, the report argued, had the resources and capacity to provide leadership for the 9,000-11,000 companies who are required to report under the Act according to Home Office estimates. It highlighted the importance of regular assessment to ensure companies were held to account on their shared responsibilities to improve standards to help improve the lives of the victims of modern slavery (estimated to be 16 million in 2016) and ultimately eradicate the practice altogether.

The report placed company statements in 10 scoring tiers with 10 being the highest tier and one the lowest. Companies with no statement were placed in tier zero. 98 companies in the FTSE 100 had produced a statement by September 2017. No company scored in tier ten. Some improvements were found, however nearly half of the companies did not meet the minimum requirements set out by the Act.

Reckitt Benckiser Group plc (an international financial services group) scored in tier 6, although at the time of publication the company had not met the minimum requirements of the Act, which includes evidence of a modern slavery statement signed by the director, explicitly approved by the Board and available on the company's homepage. More than half the companies (52) were in the bottom four tiers.

As a result the company lost half a mark in the Workers Rights category.

The methodology used to place the statements in the ten scoring tiers used six reporting areas of the UK government designed to benchmark company action (structure, business and supply chains; policies in relation to slavery and human trafficking; due diligence processes; risk assessment and management; effectiveness; and training). Each company could score up to a total of 30 points. Companies that did not have polices or processes in place but stated an intention to develop and implement them were credited for stating intention. Companies were divided into 10 tiers with tier 10 representing a high reporting standard and tier one indicating no, or cursory, effort. Companies with no statement were placed in tier zero.

Under risk assessment and management, Reckitt Benckiser Group received a positive reference for considering factors including country of operation, commodity supplied, and sector profile, and identified certain supplier groups as high risk: third-party manufacturers, distribution centres and selected raw and packaging material suppliers, predominantly located in Latin America, Middle East, Africa, North and South Asia. The average score for risk assessment and management was 1.9 out of 5.

Under effectiveness, Reckitt Benckiser Group was recognised as an example of good practice for its identification of two non-compliances with its ‘No forced labour’ clause at its manufacturing facility in Bahrain through an internal review of its operations. The issues concerned the withholding of passports without the consent of sub-contracted labour provided by a third party. The company immediately remediated the case, though did not provide information on how this was accomplished. As this is a common issue faced by companies operating within the Middle East, the company planned to conduct further due diligence of its manufacturing facilities as well as offices located within this region. The average score for effectiveness was 0.8 out of 5, making it the lowest scoring category.

Most companies provided an overview of their business (including whether they have operations outside the UK), providing general descriptions of their services and products, and overall figures on the number of employees, customers and suppliers. However, detailed reporting on supply chains was weak, including on the structure of supply chains and/or what goods or services are sourced and from where (by region or country). Company performance was very weak on development and oversight of policies, particularly in terms of seeking input and guidance from relevant internal and external stakeholders. On risk management, companies often failed to provide information on next steps taken to address the risks they disclose. 50 companies did not provide any information at all on effectiveness.

Statements and data were gathered from Modern Slavery Registry; a free, open and searchable registry of company statements under the UK Modern Slavery Act.

Reference:

FIRST YEAR OF FTSE 100 REPORTS (2017)

Know the Chain, a US supply chain accountability initiative, have developed a methodology framework, used to benchmark 20 companies in the Food & Beverage sector on their efforts to address forced labour in their supply chains.
The latest report was published in October 2016. Mead Johnson was one of the Food & Beverage companies audited by Know the Chain.

Mead Johnson scored 29%. The average score was 30%. Ten companies scored 30% or higher.

The company scored the following marks out of 100 in each sub-category:
Commitment and Governance - 42
Worker Voice - 0
Traceability and Risk Assessment - 25
Monitoring - 58
Purchasing Practices - 38
Remedy - 38
Recruitment - 0

Mead Johnson was not picked out for special mention, either good or bad in the report. Know the Chain made a general comment about companies that gained around the average score, it said that they “demonstrate a growing commitment to addressing forced labor and have taken initial steps such as starting to trace parts of their supply chain and putting in place audit and corrective action processes for their first-tier suppliers. In order to improve, the average company in the benchmark needs to strengthen existing processes and start taking steps in areas such as recruitment, worker voice, and remedy.”

The company lost half a mark under Workers' Rights.

Reference:

KnowTheChain 2016 Food & Beverage Ranking (October 2016)