Systematic audits and clear principles
In order to contribute to ensuring socially acceptable working conditions within our procurement channels and to prevent potential infringements, the application of social standard systems is a key part of the purchasing process as set out in our social compliance policy. We require our producers to be audited in accordance with the supply chain management standard set out by the amfori Business Social Compliance Initiative (amfori BSCI), the Sedex audit according to SMETA or an equivalent social standards system. This follows a clear risk assessment approach and therefore applies to all producers in amfori BSCI defined risk countries or producers which we consider risky with regards to potential Human Rights violations assessed e.g. by the Sedex Risk Assessment Radar in which METRO SOURCING International (MSI) and METRO Food Sourcing (MFS) have imported goods manufactured. Our social compliance process also applies to all other producers who manufacture own brands or own imports for our sales lines.
A list of risk countries is collected by amfori BSCI* and its classification as a risk country is based e.g. on the criteria:
- Experience of local purchasing companies
- United Nations’ human development index and
- Transparency International’s Corruption Perceptions Index
Assessing risks e.g. by the Sedex Risk Assessment Radar targets at the rights of the rights holders workers and local communities with a special view on vulnerable groups such as women, children and young workers, migrants or seasonal and temporary workers. Risk assessments typically cover fundamental labour rights like forced and child labour, discrimination and freedom of association as well as working conditions like living wages or health and safety topics.
For many years now, we have been working on this process with our non-food producers. Since 1 June 2019, the same process was established analogously for all food and near-food producers in the own-brand sector. Effective 1 January 2019, non-food producers who fail the audit can only be commissioned as METRO contracting parties if they achieve an acceptable audit result (A, B or C for the amfori BSCI assessment or an audit that is acknowledged as equivalent). Until further notice, all food/near-food suppliers with amfori BSCI D (and in exceptional cases also E) audit results (and corresponding equivalents of other standards recognised by METRO) can also be commissioned by METRO. This procedure realistically reflects the challenging way of re-integrating suppliers into the process and gradually working towards ensuring socially acceptable (working) conditions.
After conducting an audit, the assessed party – in collaboration with involved other parties – starts working on the areas of improvement from their audit reports and start mitigating the same. Follow up sessions, e.g. desk research or follow up audits (full or partially) track the development of the assessed party. Such corrective action (plans) are generally available for any audit report regardless of the audit result. Hence, from our FY 2020/21 reported audited producers all 675 non-food and 60 food-/near-food producers have recommendations at hand to mitigate their improvement areas.
Since 2013 METRO is also signatory of a multi-stakeholder initiative, the Accord on Fire and Building Safety in Bangladesh in order to contribute to the health and safety of particularly the textile industry workers in Bangladesh. Amongst other activities, the initiative runs independent safety inspections, remediation programs and offers safety training programs. Compared to the Accord producers average on closing the findings from Accord-audits during the year 2020, METROs producers average progress rate of 96% is slightly higher.