Human Rights Due Diligence: Tesco's Journey

Tesco is a proud member of The Consumer Goods Forum’s Human Rights Coalition — Working to End Forced Labour (HRC), which shares our ambition to eradicate forced labour from consumer goods supply chains and own operations globally. We are pleased that the Coalition has now released its first strategic document: the HRC Maturity Journey Framework for Forced Labour-focused Human Rights Due Diligence (HRDD) in Own Operations. Tesco has an existing HRDD approach — and we want to share how and why this has been an important tool in ensuring we respect human rights.

HRDD systems are a process for identifying, remedying, and preventing human rights risks and impacts. The HRDD approach enables us to identify and focus our resources in areas of highest risk, whether they are in our supply chains or our own operations. Many companies are already employing HRDD approaches voluntarily as they implement the UN Guiding Principles on Business and Human Rights. The HRC’s focus on HRDD is therefore in strong alignment with many companies’ existing actions, including ours.

However, while there is growing momentum in support of employing mandatory HRDD in consumer goods’ supply chains — such as the existing French “Duty of Vigilance” law and proposed European Union legislation, which we welcome — coverage in companies’ own operations has often been less of a priority due to a misconception that own operations pose less risk.

We believe that own operations can remain a high-risk area for human rights violations, which is one reason why the HRC’s commitment to achieve 100% HRDD coverage in members’ own operations is so important. If we are going to ask our suppliers to prioritise human rights in their business activities, we should be able to do the same in ours. For Tesco, we define ‘own operations’ as the labour, goods and services used within our own business and subsidiaries. It includes agency workers, security guards and cleaners, all the way to the sourcing of our shopping trolleys and reusable plastic bags – the HRC Framework offers a useful, more detailed definition.

The HRC has defined its HRDD strategy as a “Maturity Journey Framework,” inspired by AIM-Progress’s Responsible Sourcing Journey. It is designed to offer a starting point for all companies, regardless of experience, size or resources, and sets out ways to keep improving that approach. For Tesco, we have evolved our HRDD approach over several years. It now includes efforts to support meaningful action across our industry, particularly where we know collaborative action is required to drive lasting change. Evolving our approach has meant continuously reflecting on what works well and where we can improve by engaging with a range of stakeholders and learning from our peers.

Historically, we primarily sought to address human rights issues through ethical audits of our direct supplying sites. This approach did have its challenges firstly, audits do not always identify hidden or systemic drivers of issues such as modern slavery. Secondly, the most serious risks of human rights abuses often tend to occur in businesses further down the supply chain where we, as a retailer, do not have direct commercial relationships. As a result, our leverage to instigate change can be more limited.

In 2018, in consultation with over 50 key internal and external stakeholders and in line with the UNGPs, we developed a broader HRDD approach to cover both our supply chains and our own operations. This meant we could ensure our work on human rights is fully integrated across our business activities, forming a key part of our broader strategy for responsibility and sustainability. Our established programme is actively deployed in priority regions and supply chains, for forced labour this includes the UK and Southeast Asia and our Poultry and Seafood supply chains. The programme is implemented by our team of over 40 responsible sourcing specialists based across nine key sourcing countries, increasing our ability to find out about local concerns, through dialogue with a range of stakeholders, ensuring our approach continues to reflect changing risks.

Deploying an HRDD approach in our own operations has enabled us to successfully drive improvements for workers. It has also meant we have been able to better incorporate our commitment to the Employer Pays Principle (EPP) that “No worker should pay for a job – the costs of recruitment should be borne not by the worker but by the employer”. (This is also one of the CGF’s three Priority Industry Principles.) For example, in 2019 prior to their sale, we conducted a review of migrant worker welfare in our stores and distribution centres in Thailand and Malaysia. In response to the findings, we developed a comprehensive action plan including a commitment to reimburse recruitment fees. In 2020, we reimbursed £2.5 million to migrant workers employed by our service/labour providers in replenishment and cleaning roles in Tesco Malaysia. Closer to home, we have implemented new Human Rights requirements for suppliers identified as high risk within our UK operations, including a requirement to engage with the Responsible Recruitment Toolkit in order to drive alignment with the EPP. Further detail can be found in our Modern Slavery statement.

The complexity of global supply chains and the scale of our own operations means there will always be a lot to do. We welcome the HRC’s HRDD in Own Operations Maturity Journey Framework as a means both to ensure greater accountability and transparency, and continue to drive up standards across the industry. We believe the actions of the private sector would be further strengthened by the introduction of well-designed mandatory HRDD legislation, which we continue to advocate for. Another important step is aligning on best practices and transparency expectations, which the HRC Framework clearly lays out.

As a member of the HRC, we know we need to continue our work towards eradicating forced labour alongside our colleagues from the other HRC member companies, leveraging the power of scale of our Coalition. With all members of the HRC committed to implementing this Framework in our own operations, we are sending a strong collective message to the service providers, business partners and labour agencies we work with by saying we take the issue of human rights seriously — not just within our supply chains, but in all operations that contribute to our businesses.

This blog was written and contributed by:

Giles Bolton
Responsible Sourcing Director
Tesco