In October 2020 Ethical Consumer viewed Unilever's website for the company's policy on supply chain management.

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.

Supply chain policy (rudimentary)
A document called 'Unilever Responsible Sourcing policy June 2017' was downloaded. A section called 'Mandatory Requirements for doing Business with Unilever' was viewed. This included workers' rights provisions which adequately addressed discrimination, forced labour, child labour and freedom of association. A page on the company website titled 'Fair compensation' stated that Unilever had been working with Fair Wage Network (FWN) to assure that all full-time direct employees were receiving a living wage. No statement was identified stating that it was the company policy for all employees, including those in the supply chain, to receive a living wage. In the company's Responsible Sourcing Policy, a living wage was said to be Good Practice but it was not a policy or requirement. The company also stated working hours per week should not exceed 48 hours, but stated that in exceptional circumstances the sum of regular and overtime hours might exceed 60 hours. Unilever was therefore considered to have a reasonable 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.

Unilever stated that it was a member of industry groups such as the Global Social Compliance Programme and the Leadership Group for Global Recruitment. However, Ethical Consumer did not consider these groups to be multi-stakeholder initiatives, as they were industry only groups with no civil society partners.

The document ‘Unilever Human Rights Report 2019’ stated that the company also worked with the Consumer Goods Forum, Humanity United and the Responsible Labour Initiative, which was part of the Responsible Business Alliance and which they joined in 2019. However these were also not considered multi-stakeholder initiatives.

In 2019, Unilever also signed a Memorandum of Understanding with the Fair Labor Association (FLA) to participate in the “Harvesting the Future” project,in Turkey. The project brought together the Sustainable Agriculture Initiative Platform (“SAI”), agricultural suppliers, and buyers to improve working conditions for migrants in seasonal agriculture work in Turkey. This was considered a multi-stakeholder initiative.

In May 2019, Unilever, the IUF and IndusriALL signed a joint Commitment on Sustainable Employment in Unilever manufacturing. Both of these organisations were considered multistakeholder initiatives.

Ethical Consumer viewed Unilever’s ‘Raise a Concern’ page on their website. It had numbers for toll-free confidential complaints lines in its different countries of operation. However, it did not state whether the complaints service would be in the employees’ own language. Ethical Consumer viewed the ‘Reporting on Breaches’ page in Unilever’s ‘Responsible Sourcing Policy 2017’. This stated that the lines were ‘anonymous (where permitted by law)’. This was not considered to meet Ethical Consumer's requirements.

Unilever was considered to have rudimentary stakeholder engagement overall.

Auditing and Reporting (reasonable)
Ethical Consumer deemed it necessary for companies to have an auditing and reporting system. Results of audits should 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.

In its document called 'Unilever Human Rights Report 2017' Unilever stated "Alongside our own URSA (Understanding Responsible Sourcing Audit) standard, we now recognise SMETA (Sedex Members Ethical Trade Audit) audits, thus eliminating duplications for suppliers and reducing audit fatigue and cost. This is possible as we have worked with partners to strengthen standards and in June 2017 Sedex (an online platform for sharing responsible sourcing data on supply chains) updated and extended the scope of its compliance process and auditing tool (SMETA) incorporating critical elements of our RSP (URSA) audit." It was not specified whether the Unilever Responsible Sourcing Policy and associated auditing system appeared included any Tier 2 suppliers.

The results of audits were published and quantitatively analysed in the Unilever Human Rights Update Report 2019.

Any suppliers who had non-conformances were expected to create a remediation strategy with a corrective action plan. It stated “A supplier must provide a time-bound corrective action plan to address and remediate non-conformances, and the auditor must confirm the remediation has effectively addressed the non-conformance in a follow-up audit within a 90-day period for the supplier to be RSP compliant.”

No information could be found regarding the schedule of audits or who bore the costs of these audits.

Unilever was considered to have reasonable 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.

The Unilever website featured a page titled 'Partner to Win', which stated that the company had an approach to building long-term relationships with selected key strategic supplier partners.

The 'Unilever Human Rights Report 2017' contained information on Unilever’s Framework for Fairer Compensation. But this mainly focused on Unilever's direct employees, all of whom Unilever aimed to pay a living wage to by end 2018. The company also stated, "We compile annual status progress reports against the standards of our Framework in each country, and where any employees are identified as below the living wage benchmark, put remediation plans in place to bring the fixed earnings above the benchmark by the end of 2018. One of our focus areas is the need for more data relating to rural/agricultural living wage levels, and we are discussing this with the Fair Wage Network and certification organisations."

In terms of the wider supply chain the company was focused on "fair wages" rather than a living wage, as the company's Responsible Sourcing Policy 2017 stated: “All workers are provided with a total compensation package that includes wages, overtime pay, benefits and paid leave which meets or exceeds the legal minimum standards or appropriate prevailing industry standards, whichever is higher, and compensation terms established by legally binding collective bargaining agreements are implemented and adhered to.”

Unilever was considered to have a rudimentary approach to difficult issues found within supply chains.

Overall, Unilever received a middle rating for Supply Chain Management adn lost half a mark under this category.

Reference:

Responsible Sourcing 2017 (2017)

In March 2020, Ethical Consumer contacted the Fung Group for information on its supply chain management. Its website was also searched, and its Supplier Code of Conduct and 2018 Annual Report for its Li & Fung brand was viewed.

SUPPLY CHAIN POLICY - rudimentary
The code contained acceptable clauses on child and forced labour, discrimination and freedom of association. Its policies on wages and working hours did not meet Ethical Consumer’s minimum standards as they did not mention limiting overtime to 60 hours, nor did they define a fair wage. The company was considered to have a very rudimentary supply chain policy.

STAKEHOLDER ENGAGEMENT - poor
No evidence was found that the company was a member of a multi-stakeholder initiative, or that it had systematic input from NGO's or trade unions into verifications of labour audits, or that it had a complaints process for workers in its supply chain. The company was considered to have poor stakeholder engagement.

AUDITING AND REPORTING - reasonable
The company appeared to be conducting some level of auditing and reporting. Li & Fung’s 2018 Annual Report stated that, “suppliers are periodically subject to compliance auditing to ensure their compliance with our Supplier Code of Conduct.” It also stated that: "Compliance against the Code is assessed by one of our designated third-party audit firms. All of our direct suppliers (tier 1) are audited on a schedule, which varies according to their level of risk...We audit beyond tier 1 when requested by a customer or in high risk instances such as child or forced labor.”
The results of these audits were reported in the same report. Alongside a statement detailing the company’s staged approach to non-compliances.
However, there was no mention of who paid the costs of audits. Thus the company were rated as reasonable in this category.

DIFFICULT ISSUES - reasonable
The company also appeared to be aware of auditing fraud, saying, “We also rotate audit firms who conduct our onsite audits to maximize the various strengths of each firm and to reduce the risk of corruption.” This was considered to be addressing a difficult supply chain issue.
The company had also trained over 2,000 staff on modern slavery and child labour. The company did not mention a systematic approach to difficult issues such as homeworkers, or living wages. It was considered to have a reasonable approach to difficult issues.

Overall Li & Fung received Ethical Consumer's middle rating for Supply Chain Management and lost half a mark in this category.

Reference:

Li & Fung AR 2018 (11 March 2020)

In October 2020 Ethical Consumer viewed the Advertising Standards (ASA) website which stated that ruling against Unilever UK Ltd, in relation to advertising of its subsidiary Ben & Jerry's, had been upheld.

As the product was high in fat, salt or sugar (HFSS) it should not be directed at children according to the CAP Code.

The ads were located within 100 metres of schools. It stated that the proximity of the posters to the schools was likely to mean that the audience of the ads were significantly skewed towards under-16s and because of that they were directed at children through the context in which they appeared. It was concluded that the placement of ads breached the Code.

It was ruled that Unilever UK Ltd must ensure to take measures in future to ensure that HFSS product ads were not displayed in close proximity to a school.

The company lost half a mark for Irresponsible Marketing.

Reference:

ASA Ruling on Unilever UK Ltd (9 October 2020)

In March 2019, Ethical Consumer viewed an article on the Organic Consumers Association website, titled “Ben & Jerry's Loses the Legal Battle for Misinforming Consumers” and dated to 22 January 2019.

In July 2018 the Organic Consumers Association took Ben & Jerry to court for deceptive labelling, marketing and sale of its ice cream products. It stated that Ben & Jerry's promoted its ice cream as “made from milk from ‘happy cows’ supported by its ‘Caring Dairy’ program, a set of standards for cow care, planet stewardship and farmworkers that are supposed to go beyond the CAFO [concentrated animal feeding operations] status quo”.

In the lawsuit, OCA claimed that Ben & Jerry's marketing could lead consumers to assume all its dairy meets the standards of the Caring Dairy programme, while it had found that the company sourced its dairy from a Vermont cooperative where fewer than 25 percent of the participating farms met the Caring Dairy standards. The cooperative supplied Ben & Jerry’s with milk mixed together from all its farms. OCA also claimed that Ben & Jerry's' marketing could lead consumers to assume that its ice cream contained no harmful chemicals, such as the herbicide glyphosate.

In January 2019 the District of Columbia Superior Court allowed the lawsuit to move forward, after a motion by Ben & Jerry’s to dismiss it. The judge stated that a “reasonable consumer” could interpret Ben & Jerry's' labelling and marketing as “affirmatively (and inaccurately) communicating” that the company's dairy was all sourced from Caring Dairies and/or other sources guaranteeing animal welfare. The court also concluded that OCA had made a plausible claim that consumers could be misled into believing the company's ice cream products contained no traces of chemicals like glyphosate.

There was no outcome to the lawsuit at the time of writing. The company lost half a mark in the Irresponsible Marketing category.

Reference:

Ben & Jerry's Loses the Legal Battle for Misinforming Consumers (22 January 2019)

In October 2020 Ethical Consumer viewed the Vermonters for a Just Peace in Palestine/Israel (VTJP) website, www.vtjp.org. The group was calling for a boycott of Ben & Jerry's over its selling of ice cream within illegal Israeli settlements. VTJP stated 'in violation of their social mission, their Israeli franchise sells ice cream in illegal, Jewish-only settlements in the occupied West Bank and East Jerusalem, transported on Jewish-only roads, on trucks with Jewish-only license plates, passing easily through military checkpoints that bedevil others.'

The company therefore lost half a mark under Human Rights.

Reference:

https://icecream.vtjp.org/ (9 October 2020)

In October 2020 Ethical Consumer viewed an article titled 'Kenyan tea workers file UN complaint against Unilever over 2007 ethnic violence', dated 1 August 2020 on the Unilever website.

A group of 218 Kenyan tea plantation workers had filed a complaint with the UN against Unilever, alleging that the multinational violated international human rights standards by not adequately assisting its employees, who were attacked when ethnic violence broke out following a disputed election in 2007.

The workers said that Unilever breached its obligation to remediate any human rights abuses to which it had contributed, which was central to the UN’s guiding principles on business and human rights.

Unilever “strongly reject[ed] any allegation” that it violated the principles in the case of the tea workers, a spokesperson said, and “provided significant support to those employees impacted”.

A Guardian article titled 'Kenyan tea workers file UN complaint against Unilever over 2007 ethnic violence' dated 1 August 2020 stated:

"Following the violence, Unilever closed the plantation temporarily and sent workers home. The victims say they were not paid for six months [...] They brought a court case in the UK, but in 2019 the supreme court declined jurisdiction, saying Unilever’s Kenyan subsidiary was responsible for risk management of any crises and as such any case should be heard in Kenya. The court’s decision confirmed that Unilever 'can’t be held responsible for what happened', the company’s spokesperson said."

The article continued: "Daniel Leader, a lawyer with Leigh Day, the firm that filed Thursday’s complaint on the victims’ behalf, says that Unilever 'relentlessly hid behind its corporate structure” to prevent the case proceeding in the UK. The complaint requests a UN statement on “litigation strategies used by parent companies to distance themselves from subsidiaries and shield themselves from liability for human rights abuses occurring in their corporate group'."

The company lost half a mark under Ethical Consumer's Human Rights category.

Reference:

Kenyan tea workers file UN complaint against Unilever over 2007 ethnic violence (1 August 2020)

In October 2020 Ethical Consumer viewed an article dated 10 March 2018 on The Times website, titled '‘Tatler Tory’ Mark Clarke quits City job after harassment claim'.

It stated that Clarke quit his job at Unilever during an internal investigation into a claim that he sexually harassed a female colleague.

Clarke was understood to have been suspended, but resigned before the investigation was completed. The inquiry followed an allegation from a female contractor who had been working for Unilever.

Ethical Consumer could not identify a statement by Unilever, including justification of their original hiring of Clarke, who was expelled from the Tory party for life in 2015 after claims he bullied a young activist who later took his own life.

The company lost half a mark under Human Rights.

Reference:

‘Tatler Tory’ Mark Clarke quits City job after harassment claim (10 March 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 , which 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.”

Unilever confirmed to Amnesty that “Wilmar is both a direct and indirect supplier to Unilever of conventional and RSPO certified palm oil – the traded palm oil from Wilmar also enters our supply chain via other referineries and processors.”

Unilever was one of the largest buyers of palm oil and was the largest end user of “physically certified” palm oil in the consumer goods industry. In its response to Amnesty International, Unilever confirmed that Wilmar was one of its “key palm oil suppliers,” and that Wilmar supplied it directly and indirectly. It also confirmed that most of the palm oil it received came from Indonesia. Unilever had policies in place with respect to a range of human rights issues, including gender discrimination, forced labour, and the use of chemicals. However, based on the evidence gathered by Amnesty International, the company had failed to put its policies into practice. Unilever said it was developing a roadmap for supplier compliance with its Palm Oil Sourcing Policy and provided some details relating to verification efforts.
The company advised that: “…we are also working towards independent verification of our palm oil supply chain, especially on high risk mills where we have identified issues including those relating to wages, working hours, environment and health and safety issues. We have developed a programme for risk verification and have piloted this through three independent assessments.”
Unilever did not provide any explanation for why it had taken so long for the company to put in place a process to identify significant risks for labour rights issues and to check its suppliers, particularly since it had been sourcing from Wilmar for more than 10 years. Its efforts were still at the piloting stage and the future potential for addressing these issues was uncertain.
Summing up, Unilever agreed that the industry was “in need of structural and sustainable change”
and stated that: “We will continue to support the drive across the industry for greater visibility and
transparency of the palm oil sector’s supply chain. We are committed to the continuous improvement in the processes for the identification and remediation of social issues.”

Unilever lost half a mark under Palm Oil and a full mark under Workers’ Rights.

Reference:

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

In March 2020, Ethical Consumer searched Fung Group's website. A number of the companies owned subsidiaries were apparel companies which manufactured products for other brands, including Calvin Klein Jeans. These websites showed many images of jeans which were distressed.

The company's website was searched for a policy on sandblasting but no information could be found.
In order to achieve a distressed look companies often used sandblasting techniques which had been heavily criticised due to the risks to workers' health. Due to the fact the company had no policy it lost half a mark in the Workers’ Rights category.

A report by IHLO, SACOM, Clean Clothes Campaign and War on Want in June 2013 called 'Breathless for Blue Jeans: Health Hazards in China's denim factories' found that despite promises by brands to end the practice of sandblasting, workers in the factories revealed that the practice continued behind closed doors. In addition, many factories had introduced other methods of distressing denim which brought their own health risks, and workers were rarely given the necessary training in how to use the new techniques safely
.
Sandblasting involved firing abrasive sand onto denim under high pressure, whether in a machine booth or simply via an air gun attached to a hose. Often performed without proper ventilation, safety equipment or training, the practice exposed workers to serious risk of silicosis, the deadly lung disease caused by inhalation of silica dust.

Reference:

https://www.funggroup.com (11 March 2020)

In March 2020, Ethical Consumer searched the Fung Group's website for a cotton sourcing policy. Although the company's subsidiaries sold a range of products which included cotton, no policy could be found.
According to Anti-Slavery International (ASI) website viewed by Ethical Consumer in August 2018, Uzbekistan and Turkmenistan were two of the world’s largest exporters of cotton, and every year their governments forcibly mobilised over one million citizens to grow and harvest cotton. Due to the high proportion of cotton likely to have come from Uzbekistan and Turkmenistan and the prevalence of forced labour in its production, the company lost half a mark in the Workers Rights category.

The Organic Trade Association website, www.ota.com, stated in July 2018 that cotton covered roughly 2.78% of global arable land, but accounted for 12.34% of all insecticide sales and 3.94% of herbicide sales. Due to the impacts of the widespread use of pesticides in cotton production worldwide the company lost half a mark in the Pollution & Toxics category.

According to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA), a non-profit pro biotech organisation, genetically modified cotton accounted for 80% of cotton grown in 2017. Due to the prevalence of GM cotton in cotton supply chains and the lack of any evidence that the company avoided it, it was assumed that some of the company's cotton products contained some GM material. As a result it lost half a mark under the Controversial Technology category.
Overall the company received Ethical Consumer's worst rating for its cotton sourcing policy.

Reference:

https://www.funggroup.com (11 March 2020)