The pandemic's opportunity for food retaliers to recognize farmers' values and lead transformative change

In its recent briefing paper From Risk to Resilience: A Good Practice Guide for Food Retailers Addressing Human Rights in Their Supply Chains, nonprofit advocacy organization Oxfam shares practices that companies in the food sector can take to address the risks and impacts of worker exploitation in their supply chains. As food systems are increasingly stressed by the COVID-19 pandemic, retailers have the “opportunity to not just gradually adopt good practices but to fundamentally shift the core business model” in order to better protect human rights.

To reach these insights, Oxfam held interviews with 26 key stakeholders and analyzed the results of its latest Supermarket Scorecard, which rates the effectiveness of grocery companies’ policies and practices to protect human rights in their value chains.

Below are some of the top-line findings and recommendations of the report:

Human rights practices of companies are improving: Many food retailers globally are increasingly taking steps to protect human rights in their operations and supply chains. Oxfam highlights the below practices that companies, their suppliers, and their investors are taking:

• “Human rights policies are becoming stronger;
• Several retailers have committed to undertake and publish Human Rights Impact Assessments;
• Initiatives to address recruitment fees are gathering momentum;
• Some suppliers recognizing the value of trade unions and collective bargaining;
• Investors are paying more attention to the Social pillar in Environmental, Social and Governance issues (ESG);
• Increased transparency of supply chains is fast becoming the new normal; and
• It is becoming more common for companies to make public commitments to living wages, living incomes and gender strategies.”

However, “transformative change” is still needed to meaningfully protect the human rights of workers and small-scale food producers in food supply chains. Companies must address structural challenges in the food sector by “embrac[ing] changes to their core business model.” Oxfam highlights four changes that companies should undertake:

1. “Embedding human rights responsibilities in corporate governance and the company’s purpose, and ensure respect for human rights is measured, managed and reported”:

• Human rights issues should be regularly discussed at meetings of senior management and the board of directors
• Financial performance can be linked to performance on social issues by “including human rights metrics in the targets and KPIs on which executive compensation is based”

2. “[E]nsuring that suppliers win business based on their own good practices, prices reflect the cost of sustainable production and a fair share of value demonstrably reaches the women and men producing food products”:

• Employees directly responsible for purchasing and supply chain management should “not only be trained on labour and human rights good practices but become champions of human rights due diligence”
• Suppliers should be prioritized based on their policies, practices and performance on human rights issues
• Suppliers and their workers should have feedback channels to detail human rights concerns to the retailer and to their employer (in the case of supply chain workers)
• Food retailers should take steps to ensure that market stressors like the COVID-19 pandemic do not adversely impact human rights in their supply chains
• Product certifications should evolve to better indicate performance on human rights topics, in order to help consumers choose products that are better for workers

3. “Engaging investors on what it takes to address the ‘social’ in ESG issues effectively and the implications for the role of investors”:

• Companies should increase their public disclosures on human rights issues in the supply chain
• Companies can also engage with their investors to “make the case for replacing the current focus on short-term shareholder value with a long-term, stakeholder value approach that will ultimately reduce investor risk and assure sustainable returns”

4. “Advocacy to governments to ensure that all companies are obliged to meet the same regulatory requirements to protect human and labour rights in their food supply chains and no-one gets a competitive advantage from workforce exploitation”:

• Companies should use their leverage to influence government policies in the places where they operate and source, in order to bring about legislation that will improve human rights and labour conditions
• They should also work with other companies and associations in the food retail industry to collectively support this type of change, for example by supporting mandatory human rights due diligence legislation

Source: Oxfam, From Risk to Resilience: A Good Practice Guide for Food Retailers Addressing Human Rights in Their Supply Chains (July 2020)

“For too long, vital food workers have been treated as though they were almost expendable, a kind of human commodity for the efficient delivery of ‘just in time’ food units. The global pandemic brings an opportunity for industry to recognize workers’ and farmers’ true value, and to understand that failure to ensure their wellbeing could result in food supply chain disruptions and, in turn, affect their business continuity.”                      

Source: Oxfam, From Risk to Resilience: A Good Practice Guide for Food Retailers Addressing Human Rights in Their Supply Chains (July 2020)