Highlights - Dialogue Meeting

ETHICAL PUBLIC PROCUREMENT

3. March 2015

On March 3rd

Danish Ethical Trading Initiative and The Mediation and Complaints-Handling Institution for Responsible

Business Conduct invited stakeholders to a dialogue meeting about ethical public procurement and the respect for

human rights in the supply chains.

The focus of the meeting was ethical public procurement and the respect for human rights in the supply chain within

the framework of the UN Guiding Principles for Human Rights and OECDs guidelines for multinational companies.

The meeting was divided in two parts. The morning session focussed on the international guidelines for ethical public

procurement. The afternoon session was about the practical steps to take to implement ethical public procurement in

practice using the IT-sector as case.

70 participants representing public procurement organs, business organisations, unions and civil society organisations

from Denmark, Sweden and USA attended the meeting, which took place at Frederiksberg Town Hall, Denmark. The

participants shared their views and experiences on ethical trade and the expectations of the public authorities, what it

takes to establish a system for responsible public procurement, and how it can be implemented in practice? A follow

up meeting will be held in the Fall of 2015.

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Session 1: What are the expectations of the public sector?

Turning a blind eye – Human rights in public procurement

Robert Stumberg, Prof, Georgetown University Law

Center, US presented the main points in the report;

“Turning a blind Eye” emphasizing the high risk

sectors as intervention areas to reduce the risk of

human rights abuses: Electronics, Logistics,

Agriculatural/Seafood and Apparel, which in total

accounts for 11,6% of the total US Government

purchasing of between 300- 500 billion USD as focus

area. Stumberg acknowledged that the political will

and the government resources are limited. He

encouraged taking a practical political and step-by-

step approach to reduce the risk of abuses in the

supply chains. He warned against what he called “full

frontal”; an approach of insisting on compliance to all

48 human rights declarations at the same time. According to him a “full frontal” approach would inhibit a progress

making process. Amol Mehra, Dir. International Corporate Accountability Roundtable called for increased

cooperation and exchange of experience between European and American parties to respect human rights in the

supply chain.

Increase the level of awareness on human rights

Mads Øvlisen, The Mediation and Complaints-Handling Institution for Responsible Business Conduct explained that

the OECD guidelines are to be perceived as the Danish Governments expectations to the Danish Business sector’s

compliance to due diligence in relation to human rights, labor,

environment, anti-corruption and consumer rights. In order to live

up to the OECD's requirement companies must work with suppliers

to eliminate negative impacts. Øvlisen emphasized that it pays off

for companies to look into the supply chains to identify where the

risks are high in order to prevent them. He explained that the

Mediation and Complaints Handling Institution works to mediate

and is never partial while handling complaints. Christian

Christensen, Purchasing Manager Region Sjælland, commented

that the present agenda on public procurement enhancing

efficiency inhibits even tentative efforts on human rights. Øvlisen

regretted that political will on the issue of human rights and

responsible business is limited. He encouraged increasing the level

of information and awareness on human rights in all walks of life.

Being perfect shouldn’t become the enemy of doing good

A variety of perspectives emerged during the subsequent panel. The “full frontal” debate derived from Amol Mehra

and Robert Stumberg’s presentation re-emerged. Catrine Poulsen-Hansen, DIHR called for the panel’s view on how to

integrate human rights into the procurement processes. Sune Skadegaard Thorsen, Global CSR, was of the opinion

that the question was already answered by the UN Guiding Principles. The problem was rather that no-one is aware

of the 48 human rights declarations and that there is a general lack of knowledge about the UN guiding principles.

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“Human rights are unyielding and indivisible”, he said sparking Louise Koch, Danish Chamber of Commerce, to warn

against the “full frontal”. “Being perfect shouldn’t become the enemy of doing good!”, she said.

Towards increased transparency

Hanne Selsholt Britz, De Forenede Dampvaskerier,

pointed out that as long as human rights are not part of

the procurements contracts as anything other than a

small note on the last page, progress is bound to be

limited. Simon Aggesen said that in Frederiksberg

municipality human rights are included in the terms of the

procurement contracts. The issue is rather how to follow

up. Increased collaboration among regions and sectors

were mentioned to make the best use of the limited

resources for monitoring and evaluations. The inclusion

of human rights predicaments in the procurement

documents was briefly discussed, followed by a debate on

the issue of transparency. While some participants stressed that transparency in the supply chains are the only way

forward others thought it was a tremendously big task, which would rather block progress than move the area

forward.

Multistakeholder approach towards solutions

There were widespread agreement that dialogue among different stakeholders is necessary to find practical solutions.

The politicians, Charlotte Fisher (B) and Simon Aggesen (C), acknowledged that increased political pressure is an

important element to enhance government organs and institutions to include human rights as a parameter in the

procurement procedures. Øvlisen pointed out that the responsibility cannot be placed on companies alone. The raw

facts are, that a number of countries do not consider human rights as priority in the supply chains, he said. He also

regretted the limited level of engagement at EU level by a range of member states, and said OECD was more action

oriented than the EU. He encouraged a cross border, cross sector collaboration including with the human rights

organizations and NGOs.

Respect for Human rights: Shared responsibility of public and private sector

While summing up on the debate, Birgitte Qvist-Sørensen, Chair Woman, Danish Ethical Trading Initiative, extended

her gratitude for a lively debate which had highlighted the urgent

need for the public authorities to live up to their responsibility of

respecting human rights in the procurement processes. Through

the morning discussions a discussion on whether the public

sector is lagging behind the private sector in this area emerged.

Birgitte Qvist-Sørensen warned that it is counter-productive to

make Ethical Trading a political issue of public against private

rather than a matter of a shared responsibility. She encouraged

to putting both the private and public procurement muscles

behind improving the human rights situation in the various links

of the value chains.

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Session 2: Ethical Public Procurement – how? Case: IT industry

How do we make clear and effective requirements?

Anne Dorthe Baunehøj, National Procument Ltd. – Denmark, emphasized that the organization has made CSR

requirements part and parcel of all framework agreements. All suppliers

must comply with UN guiding principles formulated in the Global Compact,

the ILO conventions on human and labor rights and the OECD Guidelines.

The National Procument Ltd. follows up on cases if they become aware of

irregularities. The issue is what they are not aware of. Anne Dorthe

Baunehøj listed a number of challenges and dilemmas including clear

guidelines and resources to follow-up on the requirements. She also

touched on weak procurement rules in terms of compliance with human

rights and rounded off by asking: How do we change the bad stories? How

do we make clear and effective requirements? Are transparent supply

chains a solution? How to make risk assessment that we can vouch for it?

Creating synergies of knowledge and learning

Pauline Göthberg, Swedish County Councils and Regions, shared her experiences of responding to two concrete cases

raised by respectively DanWatch and FinnWach and the importance of risk assessments and practical field monitoring

versus desk monitoring. She acknowledged the issue of limited resources. She urged different stakeholders from

different regions and sectors to get together to stretch the available resources, including on a Nordic level creating

synergies of knowledge and learning.

Customers’ role in pushing the Ethical Trade agenda Annachiara Torciano, Samsung Electronics Nordic, stressed how pleased

Samsung was to be invited to the meeting and to be part of the dialogues.

She went through the steps on how Samsung work on social responsibility;

Reporting and stakeholder dialogue, supplier compliance and EICC. She

mentioned how Codes of Conduct are compatible with the way the IT-

industry works; “It’s an industry that likes standardization”. She emphasizes

customers 'responsibility to push the various companies towards enhanced

Ethical Trade, especially companies like Samsung, which is sensitive and

responsive to customers' requests.

Electronic Watch – a new supply chain monitor for the public sector in IT

Björg Claesson, representing Electronic Watch – a new supply chain monitor for the public sector in IT-procurement. A

core element in Electronic Watch is to create market demand for decent working conditions from the public buyers on

one side and upholding workers rights on the other side. The

model of Electronic Watch operates with a chain-system of

public sector affiliates, an Electronic Watch Head office, field

staff and Community Monitors. The latter consists of community-

based labour rights experts, maybe ex-workers. Björg Claesson

stressed that even though Electronic Watch operate within a

code of internationally recognized labour standards, non

compliance is not always within the contractors control; hence

Electronic Watch follow step-by-step approach to ensure

increased adherence to human rights in the IT supply chains.

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The following panel debate evolved on the issue of whether independent models like Electronic Watch were the way forward. Some participants found that it would be more conducive to increase the attention on the codes of conduct that the IT-industry already follows instead of creating parallel models. Others defended independent watchdogs to ensure that the voices of the workers are adequately raised. Sum up and conclusions Hanne Gürtler, moderator of the afternoon session and Director of Danish Ethical Trading Initiative stressed the importance of collaboration among key stakeholders to move Ethical Trading and the respect for human rights in the global supply chain forward. She emphasized that the causes of the violations of the international human rights guidelines are not to be found with one stakeholder but with a multitude of stakeholders from government and local authorities to factory owner, import companies etc. She encouraged to further dialogue and collaboration among all stakeholders for practical solution finding. In her final remarks she advised public purchasers to emphasize good working and environmental conditions in their procurement practices, engagement in dialogue with suppliers on labour and environmental conditions in the supply chain and to follow up on the improvement initiatives that they embark on.

Main Conclusions

Need for further dialogue and collaboration among all stakeholders for practical solution finding

Public purchasers ought to emphasize good working and environmental conditions in their procurement

practices, engagement in dialogue with suppliers on labour and environmental conditions in the supply chain and

to follow up on the improvement initiatives that they embark on.

VQ/12. marts 2015