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Activity HRa1.1
Objective
Ethical Materials Procurement
Concept
Human Rights
Activity Type
Impact
Rating System Application
Owner shall proactively specify ethical materials in design and planning documents
Scope
The Owner shall establish a governance framework for ethical procurement, including the adoption of a Socially Sustainable Procurement Policy, integration of Ethical Design Requirements, and procurement of slave-free materials to promote ethical sourcing. This activity encompasses continuous monitoring, training, and regular supplier evaluations. Direct management of Supplier internal operations are outside the scope of this Activity.
Requirements 114
Act to Avoid Harm
- 01.
A Socially Sustainable Procurement Policy that includes the following:
- a.
Commit to address and work to eliminate any forms of discrimination, harassment, abuse, and modern slavery, including forced labor and human trafficking, within the supply chain.
- b.
Prioritize decent work and safe working conditions, ensuring the right to collective bargaining and freedom of association for all workers (where legal).
- c.
Demonstrate a clear commitment to promoting diversity and inclusion throughout the procurement processes and organizational structures.
- d.
Commitment to promoting that all workers receive a living wage and establish clear guidelines for voluntary and fairly compensated overtime.
- e.
Implement clear channels for impacted parties, especially workers, to voice concerns or grievances without fear of retaliation.
- f.
Dedicate efforts to continuous improvement in social performance and transparently report on key social sustainability indicators.
- g.
Ensure regular training on this policy's principles and invest in capacity-building initiatives promoting sustainable practices for staff, particularly those in decision-making roles.
- h.
Extend these requirements to all suppliers and conduct regular risk assessments and due diligence to maintain a socially sustainable supply chain.
- a.
- 02.
Incorporate the Ethical Design Requirements from the Design for Freedom initiative in all project design documents. Position these requirements in either Division XX – Conditions of the Contract or Division XX-General Requirements to ensure contractual compliance by all Contractors and Suppliers. Additional details for slave-free materials shall be included in product specifications. For operating assets, Owner must include a Slave-free Materials Requirement in rules or other documents to ensure compliance by all Suppliers.
- 03.
Include a universal contract clause in agreements with Suppliers creating a standardized, self-propagating requirement that each party must include in their contracts, irrespective of their position in the supply chain (see Guidance below).
- 04.
Assessment of the ability of Suppliers (architects, engineers, designers, suppliers, vendors, and any other consultant that controls the choice of goods and materials supplied to the project) to comply with the requirement during the qualification and selection of new suppliers and vendors.
Benefit Impacted Parties
- 05.
Training on human rights and labor standards for relevant management and procurement staff.
- 06.
Contract clauses that require Suppliers to continuously monitor and report on their adherence to slave-free material standards.
Contribute to Solutions
- 07.
The project and procurement practices, such as prices, delivery times and internal incentive structures, encourage improved human rights standards in suppliers and business partners.
- 08.
Supplier monitoring as part of ongoing evaluation of suppliers and contractors through self-assessment, site visits, and/or audits.
Indicators
The performance indicator is the percentage of ethical procurement governance compliance rate according to the requirements. The first context indicator is the percentage of materials procured that meet all requirements. The second context indicator is the total number of hours of training on human rights and labor standards for relevant management and procurement staff.
To calculate the performance indicator:
To calculate the performance indicator:
- Determine compliance with each of the requirements (Complied or Not Complied).
- Determine ethical procurement governance compliance rate.
This is expressed mathematically as:
Ethical procurement governance rate = (# of requirements satisfied / # of requirements) x 100
Scoring
Outcome threshold
The minimum threshold is a 50% ethical procurement governance compliance rate for satisfying all Act to Avoid Harm requirements (4 out of 8 requirements satisfied), which is a requirement for SEAM Certification. No points are awarded for the minimum. However, additional points are assigned for achieving higher levels of progress in the Benefit Impacted Parties and Contribute to Solutions requirements.
Points assignment
| Points | Percentage of Ethical Procurement Governance Compliance |
|---|---|
| REQUIREMENT MET | 50% ethical procurement governance compliance rate |
| +1 point | 75% ethical procurement governance compliance rate |
| +2 points | 87.5% ethical procurement governance compliance rate |
| +3 points | 100% ethical procurement governance compliance rate |
Example:
After an internal audit of their operations and project contracts, XYZ Corporation finds the following:
- They've updated their Socially Sustainable Procurement Policy.
- They've recently revised their Supplier Code of Conduct.
- They haven't included Ethical Design Requirements Specifications or a Slave-free Materials Requirement in their project documents.
- They've integrated the universal contract clause.
- They've conducted a human rights assessment during supplier/vendor qualification.
- They haven't yet provided training on human rights and labor standards to their staff.
- Their procurement practices moderately support human rights.
- They've initiated, but haven't completed, monitoring of suppliers/contractors for compliance.
Based on this, XYZ Corporation complies with 5 out of the 8 requirements.
Percentage Compliance = (5/8) x100 = 62.5%
Given the scoring bands: 62.5% falls within the 62-74% Compliance, awarding them 4 points.
Result: XYZ Corporation scores 4 points on the Conditional Human Rights Compliance Scoring Rubric. They should focus on integrating Ethical Design Requirements, conducting staff training, and completing supplier/contractor monitoring to improve their score in the next assessment.
Documentation
- 01.
List of financial, human, and material resources utilized for this activity.
- 02.
Copy of the adopted or updated Socially Sustainable Procurement Policy according to requirements.
- 03.
Internal memos or circulars showcasing the policy's dissemination and implementation.
- 04.
Project design documents incorporating Ethical Design Requirements from the Design for Freedom initiative and detailed product specifications outlining the Slave-free Materials Requirement.
- 05.
Sample contracts demonstrating the inclusion of the universal contract clause with Suppliers.
- 06.
Training schedules, content and materials, and attendance sheets for human rights and labor standards training (if applicable).
- 07.
Sample contract clauses requiring Suppliers to monitor and report on slave-free material standards (if applicable).
- 08.
Supplier self-assessment forms or reports, documentation from site-visits, including observation reports and findings, and/or audit reports detailing supplier and contractor adherence to standards (if applicable).
Guidance
On the universal contract clause
Below is example language that meets Requirement 1 and ensures consistent adherence and minimizes the risk of misinterpretation or oversight.
Universal Socially Sustainable Procurement Clause
By entering this contract, the Contracting Party pledges adherence to the Socially Sustainable Procurement Policy (Appendix <X>). Furthermore, the Contracting Party agrees to embed this clause verbatim in all contracts established with direct suppliers or sub-suppliers for this project, ensuring these entities both uphold the stipulated policies and continuously propagate this exact clause in their subsequent agreements.
Should the Contracting Party not adhere to the policies, fail to propagate this clause, or breach other contract stipulations, a 60-day rectification period will be provided. If non-compliance persists beyond this period, business activities may be temporarily suspended. The non-compliant party shall be responsible for seeking and undergoing capacity-building or training programs relevant to the non-compliance, with evidence of completion to be provided. In instances of severe or repeated non-compliance, the contract may be terminated.
On awareness raising, training and capacity building 115
"The UN Guiding Principles on Business and Human Rights, or UNGPs, recognize the importance of strengthening awareness and know-how. Key guidance on awareness raising, training and capacity building includes:
A company's responsibility to respect extends across all internationally recognized human rights. Companies need to build the capacity to identify, address and communicate about issues related to any internationally recognized human right.
Employees need to be aware of the company's policy commitment and receive relevant training and operational guidance. A company's human rights policy statement – and related policies, processes and lines of accountability – need to be communicated clearly.
Companies should build the capacity of employees to identify and address human rights risks. To carry out effective human rights due diligence, employees in relevant functions will need specific knowledge and capacity. You may need to "translate" human rights-related concepts into operational language, and ensure employees know where to find more information.
Additional Resources
- Design for Freedom toolkit – a comprehensive resource for design and construction professionals to implement ethical, forced labor-free material sourcing strategies into their practices
- Sample Specification – Ethical Design Requirements can be downloaded at the designforfreedom.org website (link in footnote)
- Responsible Sourcing Tool – a collaboration between Verite, US Department of State, Made in a Free World, and the Aspen Institute.
- Mindful Materials mM portal – a common materials framework with searchable database.
Referenced Source
- UN Guiding Principles on Business and Human Rights (2011), Principle 16
- Universal Declaration of Human Rights (1948)
- ILO's Declaration on Fundamental Principles and Rights at Work
- International Covenant on Economic, Social, and Cultural Rights (1966)