Tesco Christmas card shock increases pressure for tighter supply chain rules

Calls for stronger EU rules covering human rights in global supply chains will have got louder this week as UK supermarket group Tesco was forced to suspend production of charity Christmas cards at a factory in China, after a six-year-old girl found a plea for help from workers inside a card. Risk and insurance managers have become increasingly involved in supply chain risk management in recent times as major events such as the Thai floods of 2011 hit. The Rana Plaza building collapse in Pakistan in 2013 that killed up to 1,200 people, including many clothing workers working in terrible conditions, showed the more human side of supply chain risk. Efforts to ensure multinationals are not effectively funding modern slavery through their supply chains have, until now, been delivered through reporting guidelines. Responsible companies apply the United Nations Guiding Principles for Business and Human Rights, and the Organisation for Economic Co-operation and Development’s Due Diligence Guidance for Responsible Business Conduct, to help manage their supply chain risk. But this latest case involving Tesco will surely ramp up the pressure on legislators to beef up the current regime. In this case, six-year-old Florence Widdicombe found a message within a card bought from Tesco written by prisoners in Shanghai saying they were forced to work against their will. "Please help us and notify human rights organisation," the message said. Tesco responded quickly to the news and said it was "shocked" by the report. "We would never allow prison labour in our supply chain," stated the company. The supermarket said it would de-list the supplier of the cards, Zheijiang Yunguang Printing, if it was found to have used prison labour, reported BBC News. Tesco’s risk management team members will need to make sure that they do their homework properly, because pressure is mounting on UK-based supermarkets to up their game. Oxfam published a report in October that concluded workers on farms and plantations that supply big UK supermarkets are being subjected to poverty and human rights abuses. The charity said that a "relentless" drive for retailer profits is fuelling poverty, abuse and discrimination. The British Retail Consortium said retailers were "spearheading actions" intended to improve millions of lives. But this latest Tesco case will not help retailers’ PR efforts and will surely also embolden attempts by European pressure groups to persuade the EU to introduce stiffer rules to force multinationals to more effectively police and risk manage their supply chains. The coalition of human rights and environmental pressure groups that wrote to the EU ahead of a human rights event hosted by the Finnish Presidency at the start of December will surely pounce on this news and demand a response. The groups are calling on the European Commission to introduce legislation that establishes a corporate duty to respect human rights, the environment and provide access to justice for victims of potential abuses. “Such legislation could help companies and financial institutions prevent potential risks and ensure fair competition for European companies that act responsibly,” said the group. “A so-called mandatory due diligence law would make companies and financial institutions legally obliged to identify, prevent and mitigate, as well as hold them to account for potential abuses and harm in their domestic and global supply chains and operations,” it continued in its letter. The introduction of the Modern Slavery Act in the UK was a positive step, but the pressure groups believe a more coordinated effort at EU level is now needed. They claim there is an increasing number of leading companies in favour of EU-wide legislation to introduce mandatory corporate environmental and human rights due diligence. This would help create a level playing field across the bloc. “The absence of such a law systematically undermines individual responsible business efforts, leaving them at a competitive disadvantage while continuing to incentivise an unsustainable business race to the bottom,” the group stated.

Tesco Christmas card shock increases pressure for tighter supply chain rules

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