In April 2021 Ethical Consumer viewed the Reckitt Benckiser Group PLC website for information on how the company managed workers' rights in its supply chain.

1. Supply chain policy (poor)

Ethical Consumer looked for 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.

The policy on forced labour was adequate.

The policy required suppliers to respect employees' rights to freedom of association.

The policy on wages was considered to be inadequate, as it required suppliers to pay only the national minimum wages set by law rather than a living wage.

Regarding working hours, the company stated that working hours were key area of risk. This was considered to be inadequate because it did not specify that weekly hours were limited to 48 hours on a regular basis, plus 12 hours overtime without exception.

The policy on child labour was considered to be inadequate as it did not define the age of a child. (The company appeared to have specified the age in 2016 but this was in a document that was considered outdated).

The policy prohibited suppliers from all discrimination by race, sex etc

The code was stated to apply to the entire breadth of the supply chain in a 2020 document titled 'Reckitt: A responsible approach across our global value chain': "Our responsibilities start right at the origins of the raw materials in our products, and end only with a product’s use by consumers. [...] we lay out our global value chain and how we aim to manage it sustainably".

Overall, the company was considered to have a poor supply chain policy.

2. 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.

The company provided an anonymous whistleblowing hotline, available in multiple languages and run by a third party known as 'Speak up' which appeared to be free to use.

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 appeared to have only industry members.

No evidence was found of systematic input from NGOs and/or labour and/or not-for-profit in the country of supply into the verification of labour standard audits.

Overall, the company was considered to have a rudimentary approach to stakeholder engagement.

3. Auditing and Reporting (reasonable)

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.

The company provided significant detail on its audit results and some quantitative analysis "We audited 170 suppliers in 2020, with 69% (117) achieving a pass rating – an improvement of 19% on 2019. Also, we’re seeing tangible improvements in standards at suppliers we’ve supported for a number of years, with the pass rate increasing from 31% to 70%† since their first audit. [...] In 2020, we received 439 cases through Speak Up!, our formal whistleblowing channel. [...] We initially earmarked 173 cases that could raise issues that breach our policy on human rights and responsible business. As of 4 January 2021, 96 of these cases had been closed following internal investigations, with 38 cases being partially or fully substantiated. Of the 38 cases*: 5% relate to disciplinary practices. 76% relate to discrimination, including sexual, moral or verbal harassment, favouritism, or gender and race discrimination. 11% relate to working hours, pay and pay disputes. 8% relate to health and safety (mostly working conditions). [...] Of the remaining 77 cases, 26 have been referred elsewhere for informal review (e.g. employee relations matters) and 51 cases are still pending closure."

This was considered an adequate level of disclosure.

The company was considered to have adequately published a schedule for supply chain audits, stating: "all Reckitt facilities are assessed on the inherent risk associated with their country of operation, product area, sector profile and site function as well as their management controls risk [...] critical and high-risk sites are audited at least once every three years".

Regarding the proportion of suppliers covered by its audit program, the company did not appear to mention second tier suppliers. It stated "In 2020, we also started to review and risk-assess our indirect supply chain to better understand and define how we can increase human rights engagement in 2021."

The company had an adequate policy for handling instances of non-compliance with its code of conduct, which included a staged approach to dealing with violations, stating for example: "Corrective actions – 85% of suppliers and 100% of RB sites audited have an approved corrective action plan in place, with 67.5% of RB site non-conformities addressed."

Ethical Consumer searched the company website for information on who paid the costs of audit. No clear statement was found on a dated policy document, however the document 'Responsible Sourcing and Production - A guide for suppliers' was available on the company website and indicated that the company did not always pay audit costs as a policy. It stated to suppliers "You will need to pay the audit costs."

Overall it was considered ot have a reasonable approach to auditing and reporting.

4. 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 meeting labour standards, 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 following statement indicated that the company provided ongoing, scheduled training for buying agents on labour standards in the supply chain: "Each year, all employees and contractors must undergo training on our Code of Conduct and most relevant corporate policies".

A November 2019 document document titled 'Audit Committee' stated under the heading "Whistleblowing, fraud and compliance" that it would "annually review the Company’s procedures for detecting fraud". However, this was considered to be inadequate because no up to date information about how this would be systematically approached, for example through unannounced audits, was identified.

No other significant measures were found addressing difficult issues. In relation to freedom of association, the company stated: "consistent with the law and with Company policy, employees shall have the right to assemble, communicate and join associations of their choice, or not."

No evidence was found that the company was taking steps to address the issue of living wages.

The company was considered to have a rudimentary approach to difficult issues.

Overall, Reckitt Benckiser Group PLC received a middle Ethical Consumer rating for Supply Chain Management and lost half a mark in this category.

Reference:

Questionnaire response March 2020 (30 March 2020)

In April 2021 Ethical Consumer searched for an update on the scandal involving the toxic humidifiers produced by Oxy Reckitt Benckiser. An article titled 'More than 14,000 people may have been killed in South Korea's toxic humidifiers scandal, ten times more than previously thought' dated 28 July 2020 on the Telegraph website was viewed.

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 Ethical Consumer's Irresponsible Marketing, Human Rights and Pollution & Toxics categories.

Reference:

More than 14,000 people may have been killed in South Korea's toxic humidifiers scandal, ten times m

In April 2021 Ethical Consumer viewed an entry on the Federal Trade Commission website dated 12 July 2019.

This stated that Reckitt Benckiser had agreed to pay $50 million to the Federal Trade Commission, due to violating antitrust laws through a "deceptive scheme to thwart lower-priced generic competition to its branded drug Suboxone."

It stated "Worried that doctors and patients would not want to switch to Suboxone Film, Reckitt allegedly [...] misrepresented that the film version of Suboxone was safer than Suboxone tablets because children are less likely to be accidentally exposed to the film product."

An article on The Guardian website was also viewed, titled 'Reckitt Benckiser to pay $1.4bn fine over opioid treatment sales', dated 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 for Irresponsible Marketing.

Reference:

https://www.ftc.gov/enforcement/cases-proceedings/131-0036/reckitt-benckiser-group-plc (29 April 202

In April 2021 Ethical Consumer viewed an article on the Financial Times website dated 28 April 2021, titled 'Covid has only delayed the day of reckoning for Reckitt '.

This stated that Reckitt had agreed to pay $53m to buyers of its Schiff Move Free Advanced dietary top-up. This followed a class-action lawsuit challenged marketing claims that it could help ease joint pain and stiffness.

The article stated "Reckitt Benckiser’s success owes much to the placebo. From medicines to food supplements, Britain’s 10th-biggest listed company has been expert at selling products that seem to deliver less than they promise.
"

An article on the 'International Comparative Legal Guides' titled 'Rise in False and Misleading advertisements amidst Coronavirus Outbreak' sated 11 June 2020 also stated that "soap manufacturer Reckitt Benckiser (India) Pvt Ltd [...] amidst the Coronavirus outbreak broadcasted an advertisement which indicated that washing hands with soap cakes was an inefficient means to fight disease causing germs while their handwash offered better protection." It was contested before the High Court of Bombay and consequently Reckitt Benckiser removed the advertisement.

The company lost half a mark for Irresponsible Marketing.

Reference:

Covid has only delayed the day of reckoning for Reckitt (28 April 2021)

In April 2021 Ethical Consumer viewed the Reckitt Benckiser group family tree on the D&B Hoovers corporate database, which stated that the company had operations in the following countries: Mexico, Russia, China, Nigeria, Bangladesh, Pakistan, Philippines and Turkey,

At the time of writing Ethical Consumer considered each country listed to be governed by an oppressive regime. The company therefore lost a whole mark in the Human Rights category.

Reference:

Generic Hoovers ref (5 January 2021)

In April 2021 Ethical Consumer viewed an article on the Business & Human Rights website titled 'Malaysia: Condom supplier to NHS and British retailers accused of 'shameful' working conditions & labour abuses', dated 24 January 2019.

This discussed how the Telegraph had spoken to 22 Nepali and Bangladeshi employees of Karex condom factories in Malaysia. Workers were said to be living in cramped, undignified conditions, in damp and unhygienic dormitories.

It continued: "Karex produces five billion condoms a year, accounting for roughly 15 per cent of the world market [...] Globally Karex boasts a “clientele of... retailers in over 130 countries” [including] Reckitt Benkiser, the owner of Durex".

The article included a response from Reckitt Benckiser: "Reckitt Benkiser, owner of Durex, said [...] it had a “zero tolerance” policy on human rights abuses. “We audited this Karex facility in 2018 and have been in active dialogue with the company to implement necessary corrective actions”".

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

Reference:

Malaysia: Condom supplier to NHS and British retailers accused of 'shameful' working conditions & la

In April 2021 Ethical Consumer viewed an article on The Business Desk website dated 9 December 2020, titled 'Health and hygiene firm fined more than £200,000 after worker’s arm crushed'.

This stated that Reckitt Benckiser Healthcare (UK) Ltd, had been fined £200,000 for safety breaches after a worker had his left arm crushed in a bottle filing machine in September 2017.

As a result the company lost half a mark under Ethical Consumer's Workers' Rights category.

Reference:

Health and hygiene firm fined more than £200,000 after worker’s arm crushed (9 December 2020)

In April 2021 Ethical Consumer viewed an article on the Unite the Union website titled 'Heavy-handed bosses at Derby plant to make staff work 'up to an extra four weeks a year', says Unite', dated 24 June 2019.

This stated that bosses at Derby's Reckitt Benckiser plant made plans to increase workers hours by either 107 or 157 hours per year, depending on their contract. It stated that the copmany was “trying to bulldoze through a harsh increase in working hours which could mean up to an extra four weeks a year [...] even Christmas, Boxing and New Year’s Day will be treated as normal working days. Under these plans [...] many employees could lose up to £1,600 a year as the hours they get paid overtime rates for currently will now be part of the normal working week. At a time when most progressive companies are looking to reduce the working week to improve work/life balance, here is a management hell-bent on trying to force many workers to increase their working time by an extra 157 hours to 2,190 hours per year."

Unite said that this triggered a strike ballot. According to an article on The Business Desk, "The workers voted by 74% for strike action and by 83% for industrial action short of a strike." Workers opted for an overtime ban and "work to rule".

No updates appeared to have been published related to the outcome of the industrial action.

The company lost half a mark under Workers' Rights for secondary criticism.

Reference:

Heavy-handed bosses at Derby plant to make staff work 'up to an extra four weeks a year', says Unite