Management

Is it time you faced up to ethical sourcing?

1 May 2013

Crossrail has taken the lead on ethical sourcing, but as Liane Hartley reports, more guidance is needed.

There is growing sophistication of ethical sourcing on the part of clients and commissioners of construction projects. Correspondingly, the industry and the various bodies and organisations that have been established to monitor, regulate and support the transition of ethical practices into mainstream construction processes have become more sophisticated. But it’s a complicated area, and there is still a long way to go.

Ethical sourcing places a responsibility on contractors to ensure materials they use are supplied by markets or companies that have minimum standards of labour practices. These include ensuring workers enjoy freedom of association and the right to collective bargaining, that child labour isn’t being used, and that workers receive a living wage. Ethical sourcing becomes more important with complex supply chains that extend beyond the UK and outside of the EU. By sourcing ethically and responsibly we are not only effectively acting as a driver for those rights, welfare and freedoms being in place, we can highlight where they are missing or being abused.

Following on from the Olympics, the Crossrail project is now demanding that suppliers adhere to requirements laid down by the Greater London Authority for ethical sourcing and has set up a working group to work out the best way of going about this, an initiative in which I am involved. That’s in addition to long-held requirements for environmental sustainability. In terms of ethical sourcing the main areas we are concentrating on at Crossrail are timber, stone, cement, steel, fixtures and fittings and PPE.

Responsible sourcing

In 2008, the UK government/industry Strategy for Sustainable Construction called for at least 25% of products to adhere to schemes recognised for responsible sourcing by 2012. Meanwhile, the reputational risks inherent in using products or suppliers that have unethical connections or provenance can have significant impacts on a business’s reputation, bottom line and level of consumer trust.

ETI Base Code

The ETI Base Code specifies nine main areas of ethical concern with requirements:

1. Employment is freely chosen

2. Freedom of association and the right to collective bargaining

3. Working conditions are safe and hygienic

4. Child labour shall not be used

5. Living wages are paid

6. Working hours are not excessive

7. No discrimination is practised

8. Regular employment is provided

9. No harsh or inhumane treatment is allowed

However, ethical sourcing is a challenging and emotive area for the construction industry. While there is a raft of guidance and standards, codes of practice and organisations dedicated to embedding ethical sourcing within supply chains, much is not product specific.

Ethical sourcing is defined most clearly by the Ethical Trading Initiative’s Ethical Sourcing Base Code (see box). The ETI is an alliance of companies, trade unions and voluntary organisations. For them ethical trade means that “retailers, brands and their suppliers take responsibility for improving the working conditions of the people who make the products they sell”.

However, ethical sourcing is a challenging and emotive area for the construction industry. While there is a raft of guidance and standards, codes of practice and organisations dedicated to embedding ethical sourcing within supply chains, much is not product specific.

Ethical sourcing is defined most clearly by the Ethical Trading Initiative’s Ethical Sourcing Base Code (see box). The ETI is an alliance of companies, trade unions and voluntary organisations. For them ethical trade means that “retailers, brands and their suppliers take responsibility for improving the working conditions of the people who make the products they sell”.

A number of standards and codes have been developed towards building in the necessary comfort and assurance that certain products comply with ETI. Certifications such as the Programme for the Endorsement of Forest Certification (PEFC) and the Forest Stewardship Council (FSC) provide assurance that timber and timber-related products have been ethically sourced. There is a growing convention for timber being used on construction projects to be sourced via these certification standards only. The UK Contractors Group issued an agreed statement requiring its members to ensure that all timber products purchased for either temporary or permanent inclusion in the works to be certified as legally and sustainably sourced, as defined by the UK government’s Central Point of Expertise on Timber (CPET).

There are two UK routes for responsible sourcing of construction products:

One such company has done just that. The CARES Sustainable Reinforcing Steel (SRS) scheme has been developed and accredited under BS8902 for steel products, including those used for the reinforcement of concrete. CARES is an independent, not-for-profit certification body that provides regulation, testing and inspection of steels at source. Specifying CARES SRS-approved companies and products enables procurers to effectively ensure that ethical issues have been addressed and that sufficient auditing mechanisms are in place to provide this assurance.

One manufacturer already ahead of the pack in ethical sourcing is InterfaceFlor. Barry Townsend, European purchasing director of InterfaceFlor, says the company works in partnership with its entire supply chain to address ethical and responsible sourcing, to ensure that the responsibility for making changes and addressing issues is shared.

InterfaceFlor’s approach is to analyse all of its raw materials at source and look for ways that its products can be improved. The company is now looking at developing Social Product Declarations that will work in a similar way to its Environmental Product Declarations in helping to verify and provide transparency on products’ environmental performance.

Technical definitions

The Construction Fixings Association, meanwhile, responded to calls from its own membership when it decided to look at ethical sourcing as a new area of activity. The CFA is qualified to award European Technical Approvals. Andrew Thomas, CFA chairman, argues that technical definitions used in these sort of instruments need to be broadened to cover non-technical aspects such as social responsibility and ethical requirements.

What is clear is that the real wins and leaps forward will be where the industry, clients and commissioners and these wider organisations work collaboratively – and we are already seeing this happen, for example on Crossrail.

This is a fascinating time for the industry taking on the challenge of working ethical sourcing into their business processes and a great example of how old charges of silo mentalities in this sector do not apply.

Liane Hartley is director of the social enterprise Mend and a member of Crossrail’s Ethical Supply Chains in Construction working group

UKCG drives ethical change

The UK Contractors Group is bringing ethical sourcing to the fore. Its members have agreed to support and give preference to procuring products “which are able to demonstrate compliance with a recognised responsible sourcing scheme, certified by a third party”. Steve Cook, principal sustainable development manager at Willmott Dixon Re-Thinking, chairs the UKCG Materials Group which is driving it.

UKCG members agreed last year that all timber products for either temporary or permanent inclusion in the works should be certified as legally and sustainably sourced and with the appropriate chain of custody documentation (PEFC or FSC).

For other non-timber construction products the dominant scheme is BES6001. Cook says that 168 individual products from 40 companies have been certified to this standard so far. Many UK construction materials ranging from radiators to PVC products, including 92% of concrete and 83% of steel reinforcement in 2011 sold through UK fabricators, are responsibly sourced to BES6001.

Cook acknowledges that main contractors and subcontractors must make responsible sourcing an inherent part of the procurement process to drive the market demand in the right direction and provide the benefit to suppliers who have invested in obtaining these standards.

To achieve responsible sourcing certification across the board is challenging largely due to the fact that 30-40% of materials come from overseas and there is currently no European or International standard for the responsible sourcing of construction products outside of the UK. Their provenance might not be easily traceable and laws are not always in place or enforced to protect against abuses such as child labour.

“Many construction materials such as steel, copper, aluminium and glass are part of a global market and require the full support of many international stakeholders,” says Cook. “Materials that are sourced from outside the EU should have an appropriate risk assessment to demonstrate due diligence in monitoring compliance with standards.

“With regard to natural stone, the group recognises the risks in sourcing from outside the UK, and we are finalising a policy that will look to give preference to suppliers demonstrating leadership in the ethical stewardship of their supply chain through active participation of the Ethical Trading Initiative (ETI Stone Group) or the TFT Responsible Stone Program.”

Comments

It would also be refreshingly ethical for companies to formulate a system of employing freelancers without the use of recruitment agencies. Speaking as an experienced site manager, the amount of add on short course certificates that we must attain and maintain costs a fortune. For example a refresher SMSTS course costs approx £600 there is likely to be hotel and petrol costs too, coupled together with the fact we do not earn anything whilst in attendance. Greedy percentage cream offs taken by recruitment agencies are making much harder for freelance site managers to earn a living. Then there is the recruitment agencies "finders fee" which is demanded, should a company like to offer full time work to a successful freelancer having completed a project. Which will actually result in the offer being withdrawn! In most cases these finders fees are demanded and the freelancer has never met anyone from the agency, we just respond to free advertisements, and if put forward for an interview the client ultimately decides. Where are the ethics in that? Then there is the advertising of bogus jobs, in order to attain a fresh batch of CVs. The fact that this raises the hopes of people seeking work and distorts the true state of the jobs market. Then there is the selling of information obtained from the CVs, to 3rd party data collection companies. "Write off your debt" and "CV Review services" to name but a few.
In short it is unskilled, unqualified people who have failed to earn a living, from their chosen career and ended up in recruitment. Earning a living by exploiting the skills, qualifications and experience of people that have worked in construction their whole lives. Where are the ethics in that?

Anthony Porter, 10 May 2013

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