With labour costs comprising such a significant proportion of overall production costs across many businesses, the updated SMETA (SEDEX Members Ethical Trade Audit) scheme standards has caused a significant level of frustration and concern amongst our members 鈥� and rightly so.
Shortly after they were released, the NFU called for a halt to the new standards until a proper and thorough consultation with the supply base had been conducted.
Areas of concern
There are two main areas for concern.
The first is the expectation that audited employers verify that costs incurred by workers in relation to securing a job are 鈥榬eimbursed鈥� in a timely manner.
It is already unlawful to charge workers 鈥榝ees鈥� in order to secure a job, but according to SEDEX this standard also requires workers to be reimbursed for any other costs they may have incurred.
This might include the costs of getting a visa (if they are coming from another country), travel costs, insurance, medicals and so on. This applies to all workers, whether seasonal, permanent, from overseas or domestic, though the implications for employing seasonal workers from overseas is most acute.
鈥�皇家华人believes a halt to their implementation, therefore, is the only viable thing to do next.鈥�
NFU Chief crops and plant production adviser Lee Abbey聽
The second area of concern is the expectation that businesses have plans to move to the Real Living Wage, and no longer use the National Living Wage as the minimum.
It will not yet be a requirement to actually pay the Real Living Wage, but to show there is a realistic plan to do so in the future. On this, we are seeking further clarity.
Retailer response
Both of these standards have a new categorisation: a CAR, or Collaborative Action Required.
This is in recognition that it cannot solely be the supplier who is responsible for the administration or cost of delivering the standard. In theory, the supply chain could agree a mechanism to manage this collaboratively.
The reality, however, is likely to be very different and suppliers are concerned about how retailers will respond to any CAR and what consequences there may be.
Aside from the concerns that these standards appear to go much further than UK law, it is the power it potentially gives to buyers which is arguably its biggest concern.
It simply must not be allowed to be used as an easy route to delisting or penalising suppliers, or bypassing the protections afforded by the GSCOP code.
Next steps
Over the last few weeks, we have had a number of discussions with SEDEX about the implications of the new standards and reinforced our call for a halt in its implementation.
We have also reached out to major retailers asking for high-level meetings and have had dialogue with some of their Human Rights teams to understand if, or how, they intend to implement the standard.
Indeed, many retailers sit on a Seasonal Worker Taskforce group, alongside the NFU, which has regularly discussed worker costs but has never found a workable mechanism to deliver what SEDEX now appears to be adopting.
Through the creation of the CAR, SEDEX does appear to recognise that this needs proper collaboration across the entire supply chain. However, the implications and practicalities should have been properly considered before these new standards were published.
皇家华人believes a halt to their implementation, therefore, is the only viable thing to do next.
