By Claire Methven O’Brien, Strategic Adviser, Danish Institute for Human Rights
The views stated are the author’s and should not be attributed to the Danish Institute for Human Rights.
The terminology of the ‘smart mix’, coined by the UN Guiding Principles on Business and Human Rights (Commentary to UNGP 3), is now a common feature of responsible business policy discussions.
It refers to an idealised regulatory ecosystem that combines traditional forms of business regulation via legislation and judicially-enforced remedies, on one hand, with incentives, information-based and new governance approaches, such as sector-specific multi-stakeholder initiatives, as well as measures to enhance the role of financial actors in encouraging more sustainable business practices.
The supposed strength of the “smart mix” is that it harnesses corporations’ individual self-steering capacities, the creativity, dynamism, and distributive wisdom of markets, while also correcting for their tendencies to generate externalities antithetical to human rights and environmental sustainability, through the application of democratically-driven mandatory measures.
Famously, the UNGPs, though based on international human rights law, are not in themselves legally enforceable. Making the ‘smart-mix’ vision a reality thus crucially depends on the enactment of binding measures by national – and in the EU’s case, also regional – legislatures, as well as strengthening of scope for remedial action through courts and other adjudicatory bodies.
By Aline De Cokere Public buyer, Department of Facility Management, City of Ghent, Belgium
In September 2019 the City of Ghent won the Procura+ award for Sustainable Procurement of the Year. This award acknowledged the work the City of Ghent has done in adopting social responsibility requirements in its procurement policy, launching a pilot procurement project to test the implementation of the policy, and publishing a guide for public purchasers on socially responsible workwear based on this experience.
What approach is the City of Ghent taking to public procurement?
In 2014 the City of Ghent updated its procurement policy and set a strategic priority on sustainable purchasing practices aligned with the seven sustainable public procurement pillars for the City of Ghent:
Minimising the ecological footprint through the entire life cycle of goods and services it procures;
Encouraging sustainable employment of disadvantaged groups;
Promoting sustainable innovations;
Fostering local economic growth with a focus on start-ups and innovative companies;
Integrating and assuring international labour standards and fair-trade principles within the states supply;
Encouraging sustainable entrepreneurship;
Increasing the maturity of the public procurement function.
By Nikki Archer, Deputy Director, Head of Procurement and Commercial Policy & Strategy, shares the progress made across Scotland
In Scotland, public procurement of goods, works and services accounts for more than £11 billion a year, which constitutes a significant part of the Scottish economy. Consequently, the Scottish Government recognises that public procurement can be used as a lever to achieve inclusive and sustainable economic growth. They are seeking to ensure that public money is not only spent in a more efficient way, but also helps to deliver wider social, economic and environmental outcomes aligned with their wider aims and ambitions.
A holistic approach: Scotland’s National Performance Framework
At the heart of Scotland’s legislation is the National Performance Framework, a holistic framework for all of Scotland. It is composed of three central elements. Firstly, the overall purpose to create a more successful country by promoting sustainable and inclusive growth. Secondly, the national values that guide the Scottish approach. And thirdly, the envisaged national outcomes describing more specifically the kind of Scotland the framework aims to achieve. In addition, national indicators help to track and measure the progress against each of the eleven national outcomes.
The national outcomes are aligned with the United Nations Sustainable Development Goals, and make explicit reference to human rights: “We respect, protect and fulfil human rights and live free from discrimination”.
The World Bank (the Bank) is a development finance institution established by the 1944 Bretton Woods agreement to provide reconstruction aid to the countries devastated by World War II. The Bank has had a fractious relation with human rights. Whilst the Bank long ago recognised that it had some role to play in protecting and promoting human rights, this role was conceived as ensuring that “human rights are fully respected in connection with the projects it supports”. The Bank has however been less forthcoming about articulating its role in promoting human rights in countries in which it operates, and there has been reluctance by the Bank to use human rights to advance “an agenda that could present an obstacle for disbursement or increase the cost of doing business.” In other words, the Bank would not take human rights into account if this had adverse financial implications.
In terms of the way it operates, when the Bank loans money to fund projects in developing countries, the project is implemented through a procurement process conducted by public agencies in the borrower country. This process is regulated by the Bank’s procurement rules, as it is a condition of the loan agreement with the borrower that the procurement process is conducted in accordance with the Bank’s procurement regulations. Thus, the Bank provides the agreed funds to the borrower, and the borrower spends these funds in accordance with the Bank’s procurement rules, whilst the Bank supervises, but does not conduct the procurement process. In 2011, the Bank revised its procurement policies, practices and procedures. This led to the adoption of a new procurement framework, effective from 1 July 2016. The procurement framework includes new Procurement Regulations, containing instructions to borrowers implementing funded procurements.
In late 2018, the Guardian published an investigation revealing forced labour from high recruitment fees and debt bondage at Top Glove, the world’s largest glove manufacturer in Malaysia supplying Britain’s National Health Service.
Despite some minimal improvements, it’s clear that modern day slavery in factories in Asia supplying basic hygiene and medical products to the EU remains systemic.
In 2018, an estimated 268 billion gloves were used globally, with an annual increase of 15% predicted. Ensuring a continuous supply of gloves, mostly manufactured in migrant labour-intensive factories in Thailand and Malaysia, is vital for maintaining public health and ensuring food safety.
Yet does our dependence on gloves and other hygiene, safety and medical products tainted by exploitation, and procured often cheaply so as to reduce taxation burdens, mean manufacturers or suppliers are exempt from combatting this abuse?
By Albert Sánchez-Graells Professor of Economic Law, University of Bristol Law School, UK
In this post, Albert Sánchez-Graells maps how the 2014 EU public procurement rules create regulatory space for human rights considerations in every phase of the procurement cycle. Despite this possibility, there are questions as to the effectiveness of any of the foreseen mechanisms due to policy fuzziness and significant resource constraints. The desirability of human rights-oriented procurement can also be queried due to the implicit trade-offs it creates against the general effectiveness of the procurement function.
Despite the fact that the term ‘human rights’ does not appear even once in the European Union’s 2014 Public Procurement Package, there is an emerging consensus that this new set of rules provides increased scope for contracting authorities to include human rights considerations in the design and execution of public tenders. However, with one limited exception concerning the mandatory exclusion of tenderers convicted by final judgment of child labour and other forms of trafficking in human beings, the 2014 rules do not mandate the use of procurement for the enforcement or promotion of human rights norms. All relevant decisions are left to either the implementing legislation of the Member States or, where the latter does not prescribe a specific approach, to general policies or case-by-case decisions by contracting authorities.
This means that, to a large extent, the pursuit of human rights goals is left to the discretion of contracting authorities and, consequently, it is subjected to the relevant checks and balances—and, in particular, the constraints derived from the general principles of EU procurement law. Equally, constraints derived from limited human and technical resources, as well as the difficult trade-off between competing procurement goals will determine the extent to which contracting authorities are willing to or capable of taking into consideration human rights issues at different phases of the procurement cycle, while still achieving the desired general effectiveness and efficiency of the procurement function.
By Shekinah Apedo Intern, Danish Institute for Human Rights
European health services are saving lives at home but destroying lives abroad by purchasing rubber gloves and condoms produced through forced labour in Malaysia. Malaysia and the European states purchasing these goods should take immediate action to address such human rights abuses through laws, policies, and guidance, and use their leverage as buyers to demand with a unified voice that businesses respect the human rights of their workers.
In November 2018, Temos International Healthcare Accreditation revoked Malaysian glovemaker Top Glove’s certification for undisclosed reasons. A month later, The Guardian published a story investigating the UK’s National Health Service (NHS) procurement of medical gloves from Malaysian factories accused of exploiting migrant workers, including factories in Top Glove’s supply chain. Interviewed workers highlighted practices of debt bondage, passport seizures, forced overtime and withheld wages, which are all forms of forced labour. In January 2019, the Telegraph revealed that Karex, a supplier of condoms to the NHS, perpetrated human rights abuses against its workers at rubber factories through unethical and expensive recruitment schemes. In contrast to its initial defence of Top Glove, the Malaysian Human Resources Ministry announced that it would take action against WRP, a rubber glove manufacturer, for withholding salaries from its workers.
By Caroline Emberson Research Fellow, Rights Lab, University of Nottingham, UK
In this post Caroline Emberson discusses the results of a research study which examines the risks of modern slavery to care-workers in the labour supply chains of adult social care, created through contracting-out by English local authorities. While there are signs that the problems may now be receiving recognition, the findings presented raise questions about the adequacy and efficacy of current human rights accountabilities in our public authorities which may be of relevance to those in other EU member states.
This post discusses the risks related to modern slavery that may arise from the contracting-out and personalisation of adult social care in the UK.
Adult social care services support adults with physical or learning disabilities and physical or mental illnesses. According to the Institute of Fiscal Studies total annual expenditure on adult social care in England reached nearly £35 billion of which £19 billion was state spending.
Over the past three decades there has been a shift in the medium of public provision of adult social care in England from homes owned and operated by local government to public procurement of care services by local government from private providers.
So when, in September 2018, the Governments of Australia, Canada, New Zealand, the United States and the United Kingdom jointly published a set of principles to guide Government action to combat human trafficking in global supply chains hopes were raised that Governments might take action to exclude from public tenders companies that have not committed to action to eradicate modern slavery.
However, while the first of these four principles requires Governments to take steps to prevent and address human trafficking in their procurement practices, its focus on global supply chains means it falls short of providing sanctions of relevance to the networks of small, domestic, private-sector organisations and individuals who provide services in their home countries’ adult social care markets.
Yet, as Claire Methven O’Brien identifies, the public procurement of such essential services may remain within the scope of the state’s duty to protect human rights which arises from international human rights instruments such as the European Convention on Human Rights: a premise that is reinforced by the recent publication of a Procurement Guidance Note related to Human Rights in Public Procurement from the Northern Ireland Public Procurement Policy Board.
However, as Anna Gorma and Patrycja Krupinska noted in this blog last year, Section 54 of the UK Modern Slavery Act (MSA), which might be expected to provide specific legal protection related to modern slavery, currently precludes public bodies such as local authorities from the duty to provide an annual statement of the steps that they have taken to eliminate modern slavery from their organisation and those of their suppliers or to state that they have taken no such steps. This may change. A number of local authorities have already opted to publish voluntary statements related to their activities and, in the second interim review report of the MSA published by the UK Government at the end of January, the reviewers recommend that Section 54 be extended to the public sector.
This is important since there is, at present, limited oversight of the fragmented adult social care sector in which the majority of private care providers fail to meet the £36 million threshold in place for commercial organisations’ annual reporting.
To better understand the risks of modern slavery in this sector, it is necessary to consider the context in which procurement decisions are made.
The session on 28 November 2018 at the UN Business and Human Rights Forum was organised by the Danish Institute for Human Rights (DIHR), the International Corporate Accountability Roundtable (ICAR), the Ethical Trading Initiative Norway (ETI Norway), and the Harrison Institute for Public Law of Georgetown University Law Center.
This session looked at how public procurement at the sub-national level can be used, per the UNGPs and SDG 12.7, as a lever for extending the practice of corporate human rights due diligence in local economies and global supply chains. It focused on identifying transferable good practice examples and lessons learnt from those working with this topic including local and municipal governments, cities, universities, and hospitals. It addressed the unique challenges and opportunities faced at this level including building leverage, ensuring policy coherence between the national and sub-national institutions, and developing institutional capacity.
Executive Director and Board member, CSO Network Japan
Sustainable public procurement has become an important issue in Japan. We have witnessed that the Japanese government has committed to contributing to the Sustainable Development Goals (SDGs) that includes “Promoting public procurement practice that are sustainable” in the target 7 of Goal 12. The Tokyo Organizing Committee for Olympic and Paralympic Games (TOCOG) has announced its respect for the UN Guiding Principles on Business and Human Rights (UNGPs) and developed a sustainable sourcing code for goods and services to be procured for the 2020 games based on the UNGPs. The TOCOG has established a Grievance Mechanism, which will receive reports of non-compliance with the sourcing code and respond with a view to resolving reported cases promptly in a fair and transparent manner. In addition, the Government of Japan has launched the development of a National Action Plan on the UNGPs and public procurement is one of the core issues in the Plan. With all mentioned above in mind, public procurement is expected to be a strategic policy instrument toward achieving a sustainable society by integrated approaches of social, environmental and economic aspects in Japan (Figure 1)
Figure 1 Impact of Sustainable Procurement (Procura+ Manual)