In response to the current coronavirus (COVID-19) outbreak, urgent procurements with new suppliers and supply chains are taking place to meet unprecedented demand. Current suppliers to the Welsh Government are also being asked to respond quickly to significantly increased demand. As we respond to the pandemic, the Welsh Government remains committed to tackling modern slavery domestically and internationally.
Buyers are reminded that they cannot abdicate their responsibilities in this area and assume that the risk and liability lies entirely with the supply side - buyers have a responsibility to conduct due diligence on modern slavery and ethical supply chains even in these difficult times.
There are some great examples of innovation and new industries in manufacturing being established in Wales in response to the Covid-19 crisis including but not limited to Personal Protective Equipment (PPE), ventilators and uniforms. Steps must be taken to ensure the necessary due diligence is undertaken so that modern slavery does not establish itself in these new industries and their supply chains.
This guidance note outlines the action that should be taken in urgent procurements related to the impact of COVID-19 when the risk of modern slavery may be higher.
For further advice and guidance, please refer to the Welsh Government’s Code of Practice: Ethical Employment in Supply Chains (hereafter referred to as “The Code of Practice”) and supporting code toolkit guides, Code of Practice: Ethical employment in public sector supply chains: guidance and specifically Code of Practice: Slavery and human rights abuses guide and Code of Practice: Example questions, conditions and policies guide.
1. Understanding the risks
There are a number of characteristics which can help determine the risk of modern slavery. They include:
Are the goods/services to be delivered known to have high modern slavery risks because the supply chain relies on low/unskilled manual labour? Examples include: Personal Protective Equipment (PPE), uniforms, food, construction and electronic hardware.
Consider where the goods are being manufactured/services being delivered. Is it from a place where there are inadequate labour laws and regulations with little or no-enforcement?
The sustainable risk assessment (SRA) should be completed where possible at the planning stage of procurement to identify opportunities in the supply chain to address environmental, social and economic impacts. Supplier selection is also a key stage to set minimum requirements and ask crucial questions to ensure you only do business with responsible suppliers – please see the Supplier Selection Guidance for more information and potential questions you can include.
More information can also be found on pages 4 to 6 of the Code of Practice: Slavery and human rights abuses guide.
2. Other factors for consideration
Once you have undertaken the work outlined in section 1 ‘Understanding the risks’ and have deemed that the contract has a high risk of modern slavery occurring in light of the sector/category and location of where the goods/services are coming from, you should consider the following factors to address this risk in proportion to the contract:
- value of the contract.
- length of contract - is it a one-off purchase or part of a longer term contract?
- new or existing supplier? New suppliers may present a greater risk.
- is the market saturated or is the item/service scarce due to increased demand? Is there a limited number of suppliers.
3. Potential questions for suppliers
Where the risk of modern slavery occurring is high, consider asking suppliers the following questions to help you understand what they are doing to mitigate the risk. These should be relevant and proportionate to the contract and shouldn’t create unnecessary barriers for SMEs:
- Does the supplier have a modern slavery or labour standards policy?
- Can the supplier monitor the current conditions in the manufacturing facilities/transportation used to produce and deliver the goods?
- What measures are being taken to ensure the health and safety of the staff involved in the supply of the contract in relation to COVID-19? Are they following relevant COVID-19 guidelines to avoid the spread of the virus?
- Where subcontractors are used, how are suppliers managing and monitoring modern slavery risks in the supply chain? What are their action plans for tackling cases as they arise?
- Can the supplier provide assurances that they will continue to pay suppliers on time?
- Is there evidence of compliance with all applicable labour/employment laws in delivering the contract?
- Is there evidence of the recruitment policy used (or will be used) to recruit the workers who will deliver the contract? Does it prohibit the practice of worker-paid recruitment fees?
- Will the supplier sign up to The Code of Practice?
Further example questions can be found in Part A – Example Procurement Questions pages 3 and 4 of the Code of Practice: Example questions, conditions and policies guide.
4. Use contractual clauses
Where the risk is high and it is relevant and proportionate to the subject matter of the contract, buyers should consider adding contract clauses that:
- allows an audit of the manufacturing facility to be carried out and requires the supplier to remediate if issues are found.
- gives you the right to require your supplier to submit, agree and deliver an action plan to remedy any modern slavery issues
- ensures you can approve all subcontractors, and any changes to subcontractors, who are to carry out services as part of your contract in the supply chain.
- explicitly prohibits the main indicators of forced labour, such as worker-paid recruitment fees.
- states that suppliers must adhere to international labour standards.
See Part B – Example Contract Conditions - page 6 of the Code of Practice: Example questions, conditions and policies guide for example contract clauses and further details.
5. Guidance for suppliers in mitigating modern slavery risks
The UK government has recently published guidance for business on key issues that suppliers should consider addressing during the COVID-19 pandemic to mitigate modern slavery risks. The guidance should be shared with suppliers in high risk areas.
If you have any queries relating to this guidance note or to procurement during Covid-19 please contact COVID-19.Procurement@gov.wales
Welsh Government acknowledges that it has utilised the following publication in the production of this procurement advice note and duly gives credit to the UK government:
‘Modern Slavery Guidance Note: Mitigating the risk of labour exploitation in procurements associated with COVID-19’ May 2020.