Where risk is identified in our first tier food, non-food, and produce raw material supply chains, we require our suppliers to demonstrate compliance to our Ethical Trading Code through the provision of third party social audits. In addition, where our country risk tracker flags a produce sourcing region as high risk, we will request supplementary information from potential new suppliers and engage with external parties for further insight. This can include third party audits, conducting detailed sanction checks or requiring suppliers to submit evidence of land ownership.
Third party audits provide independent verification of the labour standards at our supplying sites. Where issues are raised we require suppliers to provide a corrective action plan and will support them to address the root causes. New suppliers will not be approved for supply until they can demonstrate that any significant issues (as defined by our grading process) have been effectively mitigated and corrective actions have been verified by an independent third party (typically the original audit body).
Audits can provide the additional benefit of engaging suppliers in the conversation around human rights and modern slavery. This can lead to dialogue on how these challenging issues can be addressed, especially in countries where this may be contrary to historical employment practices. As our programme has developed however, we have come to recognise the limitations of audits and their efficacy in identifying and mitigating some of the more challenging issues in our supply chains. It is clear that to deliver meaningful change we need to engage and collaborate with a wider range of stakeholders.
Our risk assessment process enables us to prioritise activity beyond our audit programme. It supports identification of relevant collaborative initiatives that are focused on sourcing regions where we have leverage to effectively drive change. For example, we source fresh produce from a significant number of farms in the Andalusia region of southern Spain. Our country risk tracker flags this area as medium risk and examples of inadequate working conditions including poor accommodation standards and minimum wage non-compliance are well documented.
Building on our support for ETI human rights due diligence research in the region, in 2019, we became a sponsor of the Spain Ethical Trade Forums. This enables us to fund regular meetings throughout the year for suppliers, growers and retailers to work in collaboration to address the root causes of these issues. We are currently reviewing how we can support suppliers to deliver compliance with recent minimum wage legislation in an environment of rising raw operational costs, and the Spain Ethical Trade Forums provide an ideal channel for suppliers and workers to directly engage on the issue.
In addition, we maintain a supplier engagement programme with our primary first tier food and non-food suppliers. We conduct biannual review meetings with key suppliers to understand their approach to managing human rights risk in their own operations and supply chains. Together we assess progress made against corrective action plans and project activity, as well as sharing learning and best practice. These sessions are incredibly valuable for improving our understanding of the end to end supply chain and identifying opportunities where we can collaborate to improve standards.
We also recognise that external certification standards such as Fairtrade and Rainforest Alliance can play a role in improving the ability of small-scale farmers in our supply chains to become more resilient and prosperous. These schemes can protect farmers from fluctuations in the market price of commodities and enable them to access social improvements projects funded by premiums and sustainability differential payments. At present all our bananas and “The Best” Coffee and Chocolate ranges are either Fairtrade or Rainforest Alliance certified, and we increased participation of Tea in 2021 by moving all our “The Best” range to Rainforest Alliance certification.
We are committed to increasing our participation in these schemes both as an additional element of mitigation, and a route to improving outcomes for small-scale farmers. We are working to deliver a significant increase in coverage across the remainder of our own-brand Tea, Coffee, Chocolate and Cocoa supply chains by the end of 2022.
Click on the boxes below for more detail of our mitigation and improvement work in our key thematic areas: