On 3rd May 2021 Ethical Consumer viewed Unilever's website for the company's policy on supply chain management.
Supply chain policy (rudimentary)
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.
A document called 'Unilever Responsible Sourcing Policy' (dated 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. The section on wages required adherence to local laws or industry standards only and was not considered to constitute a requirement for a living wage to be paid. 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 rudimentary 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 or trade union partners. The document ‘Unilever Human Rights Report 2020’ stated that the company also worked with AIM-Progress, The Consumer Goods Forum, The Business for Inclusive Growth (B4IG), Leadership Group for Responsible Recruitment (LGRR), World Economic Forum (WEF) Global Future Council: The Future of Human Rights (SSC) and the Responsible Labour Initiative, which was part of the Responsible Business Alliance. 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. Fair Labor Association was considered a multi-stakeholder initiative but as Unilever was not a member and this action did not cover its whole supply chain this was not considered adequate. In May 2019, Unilever, the IUF and IndusriALL signed a joint Commitment on Sustainable Employment in Unilever manufacturing. Both of these organisations were considered multi-stakeholder initiatives.
No evidence of systematic engagement of NGOs or trade unions in the verification of Unilever’s supply chain audits was found.
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)’. Overall it 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.
Unilever had an audit programme and stated: “We use a risk-based approach, where all suppliers are assessed for both the risk of what they supply and the inherent risks of the country where they operate. Suppliers that are deemed to represent a high risk are required to have a third-party audit conducted.” Its audit programme appeared to apply to its direct suppliers and also to its ‘extended supply chain’.
It provided an analysis of suppler audit results in its ‘Human Rights Report 2020: Supplier audit update’ (linked to from its Human Rights Report 2020).
Unilever also had a staged approach to instances of non-compliance. It stated: “If remediation is required, the supplier will devise and inform Unilever of their corrective action and implementation plans and timeline to effectively and promptly resolve the breach.”
However, a clear and transparent audit schedule could not be found nor information on who bore the cost of audits.
Unilever was considered to have reasonable approach to auditing and reporting.
Difficult issues (reasonable)
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 with Purpose', which stated that the company had an approach to building long-term relationships with selected key strategic supplier partners.
The Unilever Human Rights Report 2020 stated: “One of our key commitments is that everyone who directly provides goods and services to Unilever will earn a living wage or a living income by 2030 […] we will focus on the most vulnerable workers in manufacturing and agriculture, working with stakeholders to create systemic solutions to raising living standards through purchasing practices, collaboration and advocacy wherever we operate. Our approach to extending our ambition on living wages beyond our direct employees builds on our requirement, enshrined in our RSP, that our suppliers must pay their workers the legal minimum wage or prevailing industry standard, whichever is higher”.
The report also contained a section on Freedom of Association which was said to be one of the company’s ‘salient issues’. It stated: “The Middle East and North Africa were described as the worst regions for working people and 10countries ranked as the worst countries for working people. Like many other businesses, we work in all of these countries and must remain diligent. One of the challenges continues to be working in those countries where, due to legal frameworks, unions are neither free nor fair, there are no effective collective bargaining mechanisms and/or workers are not free to join a union of their choice. In such cases, we recognise that we need to ensure that other credible means of worker engagement are available, while always supporting independent unions and respecting the right to freedom of association.”
Unilever was considered to have a reasonable approach to difficult issues found within supply chains.
Overall, Unilever received a best rating for Supply Chain Management and was not marked down in this category.
Responsible Sourcing 2017 (2017)