In April 2020 Ethical Consumer searched the GlaxoSmithKline website and Annual Report 2019 for information on the company's supply chain management. The website directed readers to several documents, including: "GSK Public policy positions: Working with Third Parties” dated May 2016. On the basis of this, GSK was rated as follows:
Supply Chain Policy (poor)
The “GSK Public policy positions, Working with Third Parties” document included reasonable provision on freedom of association and prohibited forced labour and discrimination. The clauses on wages and working hours were insufficient however, as they granted these only in accordance with local laws. The clause on child labour was also insufficient, as it did not clearly state that it was aligned with the ILO Convention on child labour and again just stated it would comply with local law. As a company working in over a hundred countries around the world, and in places where there is a high prevalence of child labour, low wages, long working hours, and restrictions concerning freedom of association, Ethical Consumer would expect GSK to have a more rigorous supply chain policy that ensured workers rights were protected.
Stakeholder Engagement (poor)
A search of GSK website found no evidence that it was a member of a multi-stakeholder process nor was it involved in discussions with trade unions, Not For Profits or NGOs in helping to improve workers' rights. GSK did offer a Confidential Reporting Line to employees and 3rd party suppliers to report violations of the Code of Conduct. Calls could provide anonymous feedback as the company had taken steps to remove ID caller information. It was not clear if it was independently investigated or whether employees could speak in their own language. Overall GSK received was considered to have a poor approach to stakeholder engagement.
Auditing & reporting (poor)
The company stated in its Modern Slavery Statement 2019 that "In 2019, over 13,500 third parties underwent a risk assessment, of which 608 were deemed to be at high risk of potential non-compliance from a labour rights perspective based on their country of operation and the type of product or service they provide. High risk third parties have their policies and processes to manage labour rights risks independently assessed by EcoVadis. During 2019, 193 third parties that completed an EcoVadis assessment failed to meet the minimum score we expect on labour rights and were required to make improvements. A further 203 third parties who were reassessed by EcoVadis in 2019 following poor performance on labour rights in previous years, increased their score to meet our required threshold.In 2019, we conducted over 40 on-site audits of our third-party suppliers covering environment, health and safety, and labour rights."
It also stated: "No incidences of modern slavery were identified through these audits. Major labour rights non-compliances were found at five third-party suppliers of active pharmaceutical ingredients, intermediates and agro-commodities in China, India, Mexico, Pakistan and Indonesia. The issues related to wages, working hours, regular employment, and policies/risk management systems. Following these audits, each third-party supplier is required to develop and agree a corrective action plan to address the findings, which are tracked and followed up through engagement activities. "
While the company was conducting audits and did have a staged approach to issues of non-compliance it did not appear to have a clear schedule and committment to audit its whole supply chain, including some second tier suppliers. It also did not state who paid for audits nor did it provide adequate analysis of audit results. Overall GSK was considered to have a poor approach to auditing and reporting.
Difficult Issues (poor)
A search of GSK's website found no evidence that it was addressing any difficult issues within its supply chain such as payment of living wages and what it did in countries where freedom of association was curtailed by law or audit fraud.
Overall GSK received Ethical Consumer’s worst rating for Supply Chain Management and lost a whole mark in this category.
www.gsk.com (16 April 2020)