Human rights in the supply chain
Coles is committed to the fair treatment of all workers in our supply chains.
We engage with more than 750 Coles Own Brand, fresh produce and meat suppliers, operating at over 2,200 sites and located in more than 40 countries.
We acknowledge the importance of safeguarding human rights through ethical business practices within these supply chains.
Coles
Ethical Sourcing PolicyOpens in new window
and
Ethical Sourcing Supplier RequirementsOpens in new window
apply to all suppliers providing Coles Own Brand products, fresh produce and meat sold in Coles supermarkets. Other suppliers agree to meet the Policy as part of their contract terms and conditions.
The Ethical Sourcing Policy and Supplier Requirements are based primarily on Ethical Trade Initiative (ETI) and International Labour Organisation (ILO) Conventions and establish the minimum standards when supplying Coles. The Policy covers a range of key labour indicators including wages and benefits, working hours, freedom of association, safe working conditions, discrimination, forced or bonded labour, gender, marital status, child labour and illegal labour.
It is the supplier’s responsibility to achieve and maintain these standards and to enforce them within those parts of their supply chains involved in producing or supplying Coles (e.g. raw materials suppliers, processing facilities, factories, warehouses and third-party labour providers). As our business relationship develops we expect suppliers to raise their standards and continually improve working conditions.
Coles takes a risk-based approach to ethical sourcing and human rights due diligence, with a focus on direct suppliers in our Own Brand, fresh produce and meat supply chains. It is our expectation all suppliers engaged to supply Coles Own Brand, fresh produce and meat must take all reasonable steps to comply with our minimum standards.
In 2015, Coles signed the
Australian Business Pledge against Forced LabourOpens in new window, an industry-led initiative to end forced labour. The Pledge aligns with our Ethical Sourcing Policy.
Supply chain transparencyCollapsed
Coles was the first major Australian supermarket to adopt the Supplier Ethical Data Exchange (Sedex), a global ethical supply chain management platform, in 2016. Sedex facilitates risk assessments, and information and social compliance audit sharing across its platform. This maintains visibility and drives consistency across supply chains.
To monitor compliance with the Ethical Sourcing Policy, we require all Coles Own Brand, fresh produce and meat direct supplier sites to register on Sedex and complete a comprehensive risk assessment. We determine direct suppliers to mean any site which substantially contributes to the final form of the product and provide examples in section 11 of the Ethical Sourcing Supplier Requirements.
As of February 2019, 97 per cent of all direct suppliers are registered on Sedex and monitored under our ethical sourcing program. Due to the seasonal nature of our supply chain we are continually working with new suppliers and on-boarding them onto our ethical sourcing program. As our supply base is dynamic, we are unlikely to achieve 100 per cent registration at any one time.
On completion of the Sedex risk assessment, suppliers are rated as low, medium or high risk. The medium and high risk sites are required to be audited by an independent external provider.
Audit timeframes are specified by Coles and vary depending on peak times for each industry. For example, fresh produce audits would take place during harvest season when workers are on site.
These requirements provide Coles with increased visibility of our suppliers employment practices and enable us to proactively monitor human rights risks and compliance with the Coles Ethical Sourcing Policy.
Coles also undertakes direct audits to confirm risk assessments, randomly verify independent audit outcomes and respond to specific issues.
Coles supermarkets has an Australian-first Sourcing Policy to provide Australian-grown fresh produce as a first priority. In FY2018, more than 88 per cent of Coles branded food and drink was sourced from Australian suppliers, including 96 per cent of fresh produce and 100 per cent of fresh lamb, pork, chicken, beef, milk and eggs.
Our Ethical Sourcing Policy also states that suppliers must comply with local and national environmental laws and regulations and use reasonable endeavours to comply with international standards on environmental protection. Australian environmental law covers resources such as land rights and water use.
In selected Coles supermarkets we sell our own brand apparel range – Mix. We work with apparel suppliers to build strong relationships throughout the supply chain. The names and locations of the factories producing the Mix clothing range are available here.
RemediationCollapsed
To mitigate the risk of unethical practices occurring in our supply chains, we require medium and high risk sites to undergo an independent audit. In FY18 more than 420 direct supplier sites were independently audited.
Coles may accept audit formats that align with our Ethical Sourcing Policy. The audits must be carried out by third party auditors that are certified to ISO 9001:2015 by an independent accreditation body or are approved by the relevant audit format owner to undertake these audit formats.
Where non-compliance with our Ethical Sourcing Policy is identified through the independent audits, the supplier is required to remediate the issue within an appropriate period depending on the nature and severity of the non-compliance.
We classify non-conformances based on risk of harm to workers in the supply chain.
Critical non-conformances include:
- Policy requirements
- Legal requirements
- Forced/ bonded labour
- Child labour
- Illegal labour
- Harsh or inhumane treatment
- Business integrity
Major non-conformances include:
- Wages and Benefits
- Working Hours
- Freedom of Association
- Sub-Contracting and Indirect Suppliers
- Safe Working Conditions
Suppliers are ‘conditionally approved’ if non-critical non-conformances have been identified and notice has been given that they must be remedied via auditor verified corrective action plans. If a supplier then addresses non-conformance, it is deemed to be an ‘approved’ supplier site.
To support suppliers to remedy non-conformances, we have designed specific remediation processes for critical non-conformances such as child labour, forced and/or bonded labour, and major supplier issues such as workers’ wages and benefits.
Our audit process is contributing to remediating supplier non-conformance and improving conditions for workers by working with suppliers to address the root cause of the issue. If a supplier site is not willing to address a critical non-conformance, Coles will suspend supply and reserve the right to terminate the trading agreement.
In FY2018, Coles did not identify any critical non-conformances of our Ethical Sourcing Policy.
Third-party labour providersCollapsed
Coles understands that third-party labour hire organisations provide an essential service to Coles’ suppliers, however they can also introduce human rights and workplace compliance risks into these supply chains.
To help suppliers and the recruitment and staffing industry to reduce risk, Coles has supported the development of the StaffSure labour hire certification program.
StaffSure is an independent industry-led certification program that assesses labour hire providers against six key risk elements:
- Fit and proper persons own and run the labour hire business;
- Fair remuneration to ensure workers receive legal employment entitlements;
- Financial assurance to operate the labour hire business sustainably;
- Safe work for all workers;
- Immigration and visa laws are complied with; and
- Accommodation supplied by employers or clients is suitable and rent is fair.
Suppliers can find StaffSure certified labour providers via an online registry.
In addition to supporting the development of the StaffSure program, Coles has developed a Third-party Labour Provider Guidance for our suppliers. This tool is available for all Coles’ suppliers and outlines practical advice for managing labour hire, including detailing what good and best practice looks like to support suppliers on their continuous improvement journey.
Grievance channels and mechanismsCollapsed
In 2015, we established the confidential Coles' Wages and Conditions Hotline for workers in our supply chain including farms, factories and service providers.
In Australia, workers of Coles suppliers can call 1300 532 515 between 8am-8pm , seven days a week to understand more about their conditions of employment or to report unfair labour practices.
Posters promoting the Coles Wages and Conditions Hotline service are available in three different languages. They have been sent to all Coles Own Brand fresh produce and meat processing sites for display in tea rooms and communal areas.
Workers, for whom English is not a first language, can email
wageline@coles.com.au
with their telephone number, preferred language and a brief description of their concern.
Coles has a Whistleblower Policy that encourages the reporting of any suspected unethical, illegal, fraudulent or undesirable conduct, or any breach of the Coles Code of Conduct.
Coles commits to investigating all reported matters. Part of this process involves a risk assessment to determine the risk of harm to people. If the risk of harm is determined to be high, the matter is immediately passed on to the relevant authorities.
The Whistleblower Policy provides details of reporting options including StopLine (1300 304 550), an independent and confidential reporting line that Coles' team members, suppliers and others may use to report theft, fraud or other serious trading breaches.
Coles seeks to encourage an environment in which any team member, contractor, supplier or third party who makes a report shall do so without fear of intimidation, disadvantage or reprisal. If appropriate, the whistle-blower will be informed as to the progress and resolution of an investigation via their preferred communication channel.
GovernanceCollapsed
The policies and framework which support the Coles Group’s human rights due diligence program are designed to make sure all relevant universally recognised human rights are safeguarded throughout our Own Brand, fresh produce and fresh meat supply chains.
We acknowledge that Coles Group has a role and responsibility in seeking to safeguard human rights through ethical business practices consistent with the principles detailed in our Ethical Sourcing Policy.
The implementation and governance of the Coles Ethical Sourcing Policy is overseen by a Human Rights Steering Committee which is chaired by our Chief Legal Officer and includes representatives from across the Coles Group. The Committee meets monthly to support management of human rights issues and impacts and is accountable for strategy development and execution in this area.
Day to day management of human rights in the supply chain is overseen by the Ethical Sourcing team which is responsible for identifying human rights risks, conducting and reviewing supplier audits, remediation of non-conformances through corrective action plans and tailored processes, as well as building capacity throughout the supply base and training suppliers on human rights risks and practical mitigation strategies.
Stakeholder engagement and capacity building Collapsed
We aim to build strong, collaborative and long-term partnerships with our suppliers. This can have multiple benefits including providing the opportunity to work with them to safeguard human rights.
To drive continuous improvement across our supply chains we have a multi-stakeholder engagement approach to human rights due diligence that includes supplier capacity building and investment in supplier training.
During 2018, we held training sessions in Australian rural and regional areas to help our suppliers understand their ethical sourcing obligations and have plans for more sessions in 2019 including an ethical sourcing webinar for all suppliers.
Coles formed the Coles Agronomy Group with approximately 20 growers volunteering their time to work together with Coles to address industry challenges around labour practices in the fresh produce industry, varietal development, sustainable farm practices and water use.
In addition to the guidance provided through
Ethical Sourcing Policy
and
Ethical Sourcing Supplier Requirements, suppliers can access a range of Coles’ supplier on-line tools and guidance to build their capacity to manage human rights risks including:
- Continuous Improvement supplier guidance;
- Safety instructions and training checklist;
- Worker accommodation supplier guidelines;
- Safety instructions and training checklist templates;
- Cherry pickers hazard checklist; and
- Packing shed Hazard checklist.
We keep our buying and sourcing teams up-to-date on our ethical sourcing and human rights commitments and how their actions may impact workers’ rights. We aggregate the findings from our audit program and feed these into our internal training to ensure that our teams have a understanding of ethical sourcing and human rights relevant to their category.
