Nye krav til openheit og rapportering Litteraturhuset, 19. januar 2011 Per N. Bondevik

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1 Nye krav til openheit og rapportering Litteraturhuset, 19. januar 2011 Per N. Bondevik

2 Initiativ for etisk handel (IEH) Eit fleirpartsinitiativ etablert i år med etisk handel! Ein pådrivar og eit ressurssenter for etisk handel samfunnsansvar i leverandørkjeda Bistår medlemmene i arbeidet med etisk handel

3 Dagligvare/Faghandel Sport Sko Infrastruktur /Eiendom Organisasjoner Offentlig sektor Coop Norge Handel AS Active Brands AS Alfa Skofabrik AS Expresspakk Amnesty International Norge Akershus fylkeskommune ICA Norge Bergans Eurosko Gruppen Hafslund Delta Bærum kommune Norgesgruppen Scan Trade (Umbro) Viking Fottøy Mesta Fair Trade Max Havelaar GKI innkjøpssamarbeid Rema 1000 Gresvig ASA Telenor Fellesforbundet Helse Sør Øst RHF Helly Hansen Tekstil/Annet Entra Eiendom Handel og Kontor i Norge Hjelmeland kommune Dagligvareleverandør Helsport HSH Kristiansand kommune Bama Norrøna Sport Markom Uniformer AS Stein Kirkens Nødhjelp Moss kommune Chiquita Stadion AS Nettbørsen AS Beer Sten AS KS Rogaland Fylkeskommune Fjordkjøkken AS Sport 1 Nor Tekstil AS Heimdal Granitt & Betong LHL Sauda kommune Kaffehuset Friele Stormberg Orient Import AS LO Landsorganisasjonen Norge Stavanger kommune Kjeldsberg Kaffe Swix Sport PM International Gaver/Leker/Div. forbr. NFF Norges Fotballforbund Suldal kommune Joh. Johansson Missing Link Group Prampack Allsidige Nord AS NIF og Olympiske Komité Universitetet i Stavanger Lilleborg Redress/Russedress Arts & Crafts Norsk Folkehjelp HINAS Noramix Dilmah Te Mote Russeservice Artisti AS Oikos Nidar Sjokolade Alpaca Society Sverre W. Monsen AS AS Pelion Priv. Barnehagers Landsforbund Tine Anouska University CSR Norge Sportsbransjen AS KappAhl Workmaster Scandinavia AS Edda Design AS YS Yrkesorg. Sentralforbund Møbler og Interiør LilleBa Baby Fair Play Design Ungdom & Fritid IKEA Nepal Productions Friends Fair Trade Elektronikkransjen Interia AS Pierre Robert Group Blomster Hokus Pokus Leker Kid Interiør Tova LTD Mester Grønn Klubben LaidBack Varner Gruppen Lekolar AB Mascot Høie AS Voice Reiseliv/Turisme Mokki Collection Norske Kontormøbler AS Choice Hotels Scandinavia Norsk Dekor Princess Gruppen AS Kristiansand Dyrepark NorEngros Scandi. Business Seating Sandvik Forlag Stokke AS Storhusholdning The Body Shop Vestre AS Enor/Culina Validus AS Viking Cimex Januar medlemmer IEHs medlemsutvikling

4 Kvifor debatt om openheit og rapportering? Ti år med etisk handel Betyr openheit og innsyn eigentleg noko for arbeidarane i leverandørkjeda? Har opne leverandørlister noko føre seg? Kan og bør lovverket brukast?

5 Nye krav til openheit og rapportering «Human rights due diligence can be a game changer for companies: from naming and shaming to knowing and showing Prof. John Ruggie, FN sin spesialrepresentant for næringsliv og menneskerettar, 2010 Styresmakter hovudansvar for å verna individ mot brot på menneskerettane Bedrifter ansvar for å respektera; opptre i samsvar med gjeldande lover og møta samfunnet sine forventingar om ikkje å krenke rettane til andre I praksis betyr dette at bedrifter må integrera menneskerettane i «due diligence» identifisera risiko for og handtera faktiske brot på desse, ogso i leverandørkjeda etablera system for kartlegging og oppfylging 5

6 Noko skjer når det gjeld openheit og rapportering Internasjonalt: Danmark (Lov 2009): Dei største skal rapportera på om dei har retningsliner, oppfylging og resultat av desse. Storbritannia (Companies Act 2006): Informasjon om policy og effektar av denne på miljø, tilsette og samfunn Svenske statseigde selskap skal rapporter i samsvar med Global Reporting Initiative GRI (f.o.m. 2008) Frankrike (Lov 2001): Krav til rapportering om utanlandske dotterselskap og kjernekonvensjonane til ILO Noreg (2011): Utkast til nye krav i rekneskapslova inspirert av danskane: Dei største (ca 700) må rapportera om retningsliner, oppfylging og resultat Men: Kva med konkretisering av god praksis, risikokartlegging og krav til handtering av brot? Hendelser i leveransekjeden knyttet til dårlig sikkerhet på arbeidsplassen, forurensning, barnearbeid og korrupsjon kan utgjøre en betydelig omdømmerisiko for selskapene og for staten. Eierdepartementene har fortsatt ikke god nok kunnskap om selskapenes ivaretakelse av samfunnsansvar Riksrevisor Jørgen Kosmo, 11.nov 2010 Leverandørkjederapportering lite utvikla og høg risiko IEH sin rapporteringsmal er basert på investorkriterier og GRI IEH er med i GRI arbeidsgruppe på leverandørkjeder 6

7 Open rapportering i IEH IEH har hatt open rapportering sidan 2004 Rapportering er viktig for fordi systematisk informasjon trengs for å fatta dei rette avgjerslene prioritering må til utan informasjon vert prioritering tilfeldig konkret rapportering gjer det mogleg å dokumentera, handtera risiko og måla framdrift

8 Samfunnsansvar og åpenhet Ole Kristian Lunde, Tidl. dir. Kommunikasjon og Samfunnsansvar Litteraturhuset, januar 2011

9 Agenda Samfunnsansvar i Orkla Åpenhet som ideal - utfordringer ved å være åpen Kommunikasjon om samfunnsansvar Operasjonelle utfordringer case Orkla Brands-selskaper 2 2 Sosiale medier - BI ccc

10 Reguleringer blir strengere krav og forventinger til åpenhet øker parallelt Eksempler Norge: Anti-korrupsjonslov 2003 Utvidet erstatningsansvar for selskaper knyttet til korrupsjon, 2008 Aktivitets- og rapporteringsplikt for likestilling og ikkediskriminering, 2009 Forslag om rapporteringsplikt for samfunnsansvar, 2010 Orkla ASA

11 Rapportering ikke alltid like populært internt Ressursbruk? Tilstrekkelig forståelse for nytteverdi/hensikt? Må veie nytte mot kostnader 4 Orkla ASA

12 Orkla Brands Orkla Aluminium Solutions Orkla Materials Orkla Associates Orkla Financial Investments Foods Nordic Profiles Lignotech Share Portfolio Brands Nordic Heat Transfer ChemCell Real Estate Food Ingredients Building System Ingredients Brands International Synthesis Approx. 40 % of the shares in both co s

13 Orkla Brands: 70 selskaper i Norden IEH members Orkla Brands presence in Europe and Asia

14 Samfunnsansvar Orklas definisjon Oppnå forretningsmessig lønnsomhet på en måte som er i tråd med grunnleggende etiske verdier og med respekt for individer, samfunn, miljø og lokalsamfunn. 7 Orkla ASA

15 Samfunnsansvar: Identifisere, forstå og håndtere behovene til selskapets interessenter 8 Orkla ASA

16 Sosialt ansvar i leverandørkjeden: Håndteres reaktivt, og bare når det får oppmerksomhet?

17 Ansvarlige innkjøp: Ny tunnelmodell for risikovurdering av leverandører Supplier Supplier Supplier Supplier Supplier Supplier Low risk suppliers Supplier Objective: All suppliers comply with supplier code of conduct = Risk managed Supplier Supplier Supplier Supplier Supplier Supplier 1 st screening/ filter : 2 nd screening/ filter : 3 rd screening/ filter : On-site supplier Monitoring corrective audit action via Sedex + Orkla ASA

18 Orkla ASA Utfordringer i kakaosektoren

19 Orkla ASA

20 13 Orkla ASA

21 Orkla ASA

22 Ansvarlige innkjøp kan kreve løsninger utenfor boksen Orkla ASA

23 Endringer og CR-trender: Interaksjon mellom ulike drivkrefter Myndigheter Forbrukere INTERNETT & MEDIENE NGO er Konkurrenter 16 Orkla ASA CR situation analysis

24 Orkla ASA

25 No Transparency, No Improvements Level Works Justin Bettey

26 About Level Works We are a forward thinking supply chain assessment & continuous improvement organisation. Level Works challenges the idea that there exists a one size fits all monitoring and labour rights solution. What We Do Supporting Organisations Labour Programmes Supply Chain Labour Assessments Continuous Improvement Programmes Transparency Initiatives Brand & buyer Collaboration Projects Awareness & Training in Supply Chain Industries: Apparel Toys Electronics Agriculture / Food Rugs

27 Global Locations Office Location & Staff Geographic Coverage (8) Hangzhou, China Central and North China (22) Shenzhen, China South China, Hong Kong, Macau (2) Istanbul, Turkey Turkey, Middle East, Eastern Europe (6) Chennai, India India (staff in 4 cities) (2) Dhaka, Bangladesh Bangladesh, Pakistan Hong Kong Administration, Operations and Financial Base (2) Mexico City, Mexico Mexico (2) San Salvador, El Salvador Central America (2) HCMC, Vietnam Vietnam, Cambodia (3) USA USA -Los Angeles & Pennsylvania (audit staff) & San Francisco (Program Development and Management) (2) London, England European Auditing / European Program Development and Management Level Works 3

28 What Do We Do? 70% of our work is related to Labour Audits / Assessments. This 70% is a mixture of audits ranging from standard assessments to in-depth Transparency or Results driven assessments. 25% is factory Continuous Improvement programmes The remainder are collaboration projects & training Level Works services are executed with the unyielding goal of generating and tracking improvement at the factory level. Level Works seeks client partners that share this goal We like to experiment and innovate! Level Works 4

29 Wide Spread Deception! One study suggested that nine out of every ten Chinese factories were breaking the law and that seven out of eight were maintaining falsified records of their employment practices. Source: The late Neil Kearney, General Secretary of Textiles Global Union There is an multi million Euro business in consultants teaching factories how to falsify records and hide the truth from their customers. Level Works 5

30 Transparency & Record Falsification We believe that record falsification is a negative activity which undermines the effort and resources and results of any social compliance programme. For the last five years we have been working with our clients & industry to help restore transparency to their programmes Level Works 6

31 Impacts & Risks of Falsification Unapproved Sub contracting You don t know who is lying to you You don t know the real working conditions No trust! Unknown Risks to Brand Game of Cat and Mouse Wasted time & resources True remediation cannot start Providing your stakeholders with inaccurate data Level Works 7

32 Our Data & Findings We know that the majority of Chinese factories in low cost consumer products & food sector maintain false records for compliance reasons. Factories will only show true records to buyers they trust. Depending on programme type the falsification rate can be over 90% Level Works 8

33 Transparency in China in 2009 (Average over all programme types) 1.11% 31.19% 21.42% 46.27% Access denied Inconsistent records Transparent records Inconclusive Note: transparency levels fluctuate greatly by client, depending on client s programme philosophy & design. Level Works 9

34 Why Do Factories Falsify? Fear of termination Easier to falsify than comply Cheaper than remediating issues..it can cost an average factory an extra 6000usd to comply with OT payments per month in China A consultant costs a lot less than that and to bribe an auditor even less Level Works 10

35 What Are The Drivers of Falsification? Different approach to remediation by customers e.g Immediate, 30 days / 180 days Unrealistic Expectations Non-Compliance Finding Minimum wage not being to all workers Work hours in excess of legal limits Necessary Corrective Action Pay all workers minimum Meet legal work hours Expected Time Frame Immediately 30 days OT Premiums not paid Pay OT rates 30 days Different approach by customers on termination / penalisation Level Works 11

36 My Factories Don t Have a Problem What does a Transparent factory in China looks like? Falsifying factory saying it works 17 hours less than what it really is. Inconsistent: Transparent: Inconclusive: Factory that is falsifying its records Factory that is telling the truth Factory that is falsifying but cannot find objective evidence Level Works 12

37 Root Causes! If factories in China did not work excessive OT and paid legal compensation then falsification / bribery would not exist. So why do they work OT and not pay legal wages? Level Works 13

38 Up Stream Root Causes Late design changes, Short lead times, Poor critical path design, price pressure, order consistency Down Stream Root Causes Full production/manufacture costs not calculated into unit price - Greed. Over commitment, - Don t want to turn away a global brand, - Poor production planning by factory leading to excessive overtime, - Poor management of raw material suppliers, - Poorly trained and inexperience managers & supervisors, - Poor QC/QA management which leads to rework and additional overtime, - OT cost not built into original price agreement - Non-existent legal enforcement, - Poor application of piece-rate wage systems (hours not tracked), - Labour pool willing to accept wages below the legal minimum Level Works 14

39 Rewards & Incentives for transparent factories Factory will not be terminated if it is transparent..regardless of wage/hours issues Factory commitment to Improve Brand / Customer collaboration on solutions Restoring Transparency Falsifying classed as a critical issue Rebuild trust and stop fear factor Realistic / Incremental corrective action plans Termination will occur if re-falsify Level Works 15

40 Re-designed purchasing & business practices Not chasing lowest price labour markets Quality & HR Systems Solving Root Causes Capacity matching / over committing Total manufacturing costs built into price Critical path designed to include social compliance expectations Level Works 16

41 What s The Benefit of Using Transparent Factories? Better trust / relationship with factories Less audits per year (cost saving) Reduced risk of termination due to using honest factories Reduced Brand Risk / Improved Reputation No more awkward meetings with Customers More orders for factories Level Works 17

42 Continuous Improvement & Engagement Monitoring (CIEM) Methodology developed specifically to combat the rampant use of record falsification and drive measurable improvement Methodology proven with over 300 factories Creates a comfort zone for factories to provide their actual records Allows vendor/factory to own their improvement schedule Supports factory managements attempts to improve Allows client partners to track real wage and work hour conditions Allows client partners to show actual improvement Eight days over month period Phase 1: Communication Phase 2: Assessment Phase 3: Improvement Plan Phase 4: Support Visits Phase 5: Progress Monitoring Level Works 18

43 Data Collection & Benchmarking Level Works 19

44 Thank You From the Level Works Team For more information please contact Justin Bettey European Director Level Works M: +44 (0) T: +44 (0) Marshall Street London, UK, W1F 7EZ Asia - Middle East - The Americas - Europe Level Works 20