Ethical procurement awareness and guidance
Policy development and implementation

On this page

• Business responsibilities
• Key measures for businesses
• Honest policies and processes
• Prioritization and proportionality
• Base cost
• Child labour
• Written policy
  • Getting started
  • Implementation
  • Engaging with suppliers and other businesses
  • Summary of recommendations

Business responsibilities

Businesses have a responsibility to respect human rights in principle and through taking action. This means you have a duty to:

• avoid causing or contributing to adverse human rights impacts through your own activities
• address impacts when they occur
• prevent or mitigate adverse impacts linked to:
  • your operations, products, or services
  • the activities of your subcontractors
  • the actions of others in your supply chain

An effective due diligence method can fulfill these responsibilities.

Key measures for businesses

You should implement 3 key measures:

• A policy commitment to meet your responsibility to respect human rights
  • this should be specific, measurable, and reflective of the duties listed in Business responsibilities
• Identification and mitigation processes to identify, prevent, mitigate and account for how you address adverse impacts on human rights
  • these processes should be honest, and relevant authorities should support and inform them
• Remediation processes to remediate any adverse human rights impacts you cause or to which you contribute
  • these should honestly reflect impacts caused by your own activities or those linked to your operations, products, or services by your business relationships

Honest policies and processes

An honest policy represents the real and full risks present within a business, without hiding challenges.

• It communicates how you are addressing or planning to address these risks
• The actions should reflect your commitments and your capacity within available resources
• The policy should include methods for tracking progress

An honest due diligence process reflects the true actions required by the business to address risks.

• You should identity areas where you are not able to take action.
  • Explain why these areas are not being addressed, such as:
    • local context pressures
    • limited suitable resources
  • Indicate other methods being considered to manage these issues

Prioritization and proportionality

You should seek to understand your legal minimum obligations and the recommended standards.

Not all legally required or recommended standards are possible to implement immediately and fully. The resources and capacity of each business determine what they can do to meet requirements immediately, and reasonably plan for the future.

Another element to consider is the severity of your adverse impact on human rights. A high-risk small business will need to dedicate more resources than a low-risk one. 

PSPC recommends the following:

• United Nations Guiding Principles on Business and Human Rights (UN Guiding Principles)as a key reference document
• Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct, or OECD guidance, as a detailed and clear supporting document for business enterprises 

You should use these principles to support effective planning, implementation and communication of due diligence activities.

The OECD guidance provides additional support for meeting the recommendations listed under the OECD Guidelines for Multinational Enterprises.

• The OECD guidelines help businesses adopt Responsible Business Conduct (RBC)
• They support efforts to combat human trafficking, forced labour, and child labour
• They also address related areas, including:
  • environmental impacts
  • navigating business conduct across different markets

Base cost

• Every product or resource has a base cost
• Reducing costs can lead producers to lower labour standards, which may result in:
  • human trafficking
  • forced labour
  • child labour
• You should not cut costs at the expense of human and labour rights
• Respecting the base cost helps eliminate exploitation in the market
• Determining the exact base cost can take time, especially when:
  • poor labour conditions exist in supply chains
  • supply chains are complex

Positive and decent work standards are defined in the International Labour Organization Decent Work Agenda. 

Child labour

• Child labour is amongst the worst forms of forced labour
• It remains deeply ingrained in many markets
• It must be considered independently with a nuanced approach, in addition to general forced labour and human trafficking interventions

Children’s Rights and Business Principles (developed by UNICEF, Save the Children, and the UN Global Compact):

• is the first comprehensive set of principles to guide businesses
• helps respect and support children’s rights in the workplace, marketplace, and community

Some initiatives, which could help eliminate child labour in supply chains and improve labour standards, include the following:

• respect children’s rights and commit to supporting them
• provide decent work for young workers, parents, and caregivers
• ensure the protection and safety of children in all business activities and facilities
• use marketing and advertising that respect children’s rights
• respect children’s rights regarding the environment, land acquisition, and use
• reinforce community and government efforts to fulfil children’s rights

You should always, at minimum, meet requirements for providing wages.

• When gaps exist in wage legislation, you should:
  • exceed minimum standards to reduce the need for children to enter the workforce
• Taking proactive action can benefit you by:
  • increasing support for proactive action against human trafficking, forced labour and child labour

Preventing Child Labour in Supply Chains (2023) is a guide produced by the Fair Labour Association. It advises businesses to employ the following strategies:

• acknowledge the presence of child labour, without blame
• understand the realities of human trafficking, forced labour and child labour to take action against them
• use independent third-party certifications and programs for your suppliers
• create transparency across your entire supply chain
• find alternative sources of supply when possible and appropriate

A key to ending child labour is access to education. Costs such as school fees, books, school uniforms and transport can be obstacles to attendance.

Written policy

A written policy is the first stage in the due diligence process. It also mitigates internal and external risks.

According to United Nations Guiding Principle (UNGP) 16, a policy statement should:

• be approved at the most senior level of your business
• be informed by relevant internal and/or external expertise
• stipulate your business’s human rights expectations of personnel, business partners and other parties linked to the business
• be publicly available and communicated to all personnel, business partners and other relevant parties
• be reflected in operational policies and procedures necessary to embed it throughout your business

You should devise, adopt, and disseminate policies relating to human trafficking, forced labour, and child labour.

This applies to relevant operations, supply chains, and other business relationships.

Getting started

The following recommendations/practical actions are based on the OECD Due Diligence Guidance for Responsible Business Conduct.

Review existing policies

Review and update existing policies on human trafficking, forced labour and child labour issues. This includes policies on labour, human rights, disclosure, anti-trafficking governance, anti-bribery, and corruption.

Develop specific policies

Develop specific policies on your most significant risk areas, to guide a specific approach to addressing those risks.

Policy topics may include:

• whistle-blowing protections
• limits on overtime or commitments to wage compensation for overtime
• commitments to paying wages on time
• recruitment policies, especially with outsourced recruitment

Make policies publicly available

Publicize your policies on human trafficking, forced labour and child labour. For example, your policies should be visible on your website, at your premises, and in local languages when necessary.

Communicate risks and policies

Communicate the risks and relevant policies to your own employees and other workers. For example, during staff orientation or training, and as needed to maintain awareness.

Update policies

Update your policies as risks in your operations, supply chains, and other business relationships emerge and evolve.

Implementation

Once you adopt policies, you should embed them into oversight bodies, management systems and regular business processes. Consider the potential independence, autonomy, legal structure, and lack of external accountability to integrate policies into the core organizational culture.

Recommendations/practical actions for implementing your policy commitment(s) in your activities and internal actions:

Assign oversight

Assign oversight and responsibility for due diligence to relevant senior management. Meanwhile, assign board-level responsibilities for human trafficking, forced labour and child labour on a broader scale.

Assign responsibility

Assign responsibility for implementing policies across relevant departments. Focus on workers whose actions are more likely to affect risks, and workers most vulnerable to human trafficking and forced labour.

Collect information

Develop or adapt existing information and record-keeping systems to collect information on due diligence processes, related decision-making, and responses.

Establish communication channels 

Establish channels of communication between relevant senior management and departments to share and document information on risk and decision-making.

Align and integrate

Encourage alignment across teams and business units on relevant aspects of your human trafficking, forced labour and child labour policies.

Provide training

Provide training to workers on the associated risks and their policy responsibilities for themselves and their colleagues. Provide adequate resources to meet due diligence needs.

Incentivize

Develop incentives for business units to uphold policy commitments on human trafficking, forced labour and child labour.

Report

Develop, reuse or adapt complaint procedures for workers to raise issues or concerns related to poor working environment. The responsibility of reporting cases should not solely rely on workers reporting violations. Assess worker conditions where resources allow.

Develop response processes

Develop processes to respond to policy violations or identified cases of human trafficking, forced labour or child labour

• Include key actions in processes such as additional fact-finding, capacity building, or disciplinary actions or sanctions.
• Provide remedies where indications of exploitation arise
• Proactively seek out seek out potential cases and ensure support for victims

Engaging with suppliers and other businesses

Practical actions to engage suppliers and other business relationships include the following.

Key aspects of policies

Communicate key aspects of your human trafficking, forced labour and child labour policies to suppliers and relevant business relationships.

Conditions and expectations

Include conditions and expectations on human trafficking, forced labour and child labour in written agreements with suppliers and partners.

Pre-qualification processes

Develop and implement pre-qualification processes on due diligence for suppliers and other business relationships. Where feasible, adapt such processes to the specific context to focus on relevant human trafficking, forced labour and child labour issues.

Resources and training for suppliers

Provide suppliers and partners with the resources and training needed to understand human trafficking, forced labour and child labour policies. This will allow suppliers to apply the relevant policies and carry out due diligence.

Barriers

Seek to understand and address business practices that prevent suppliers from implementing human trafficking, forced labour and child labour policies. For example, examine purchasing practices and commercial incentives.

More information

Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct: Refer to pages 32 to 33 of this guide for more practical actions on tracking the implementation and communication of policies. 

Summary of recommendations

Use the following recommendations to develop policies on human trafficking, forced labour and child labour:

Start

A policy will evolve as you learn more about human trafficking, forced labour and child labour and change your activities and resources.

Be honest

Commit only to actions that your business can undertake.

Be clear

Explain your policy and what you are doing in simple terms. Avoid jargon and vague aspirational statements.

Reach out

Don’t reinvent the wheel. Get in touch with your peers, sector groups, and industry bodies.

Reach up

The most senior management level should approve the policy.

Use a risk-based approach

This will set priorities for your work against human trafficking, forced labour and child labour.

Let the policy drive action

Policy commitments direct targeted outputs for program planning, in an area that is broad and full of nuance. Allow policies to become guiding tools.

Be complete and revisit

Review and update the policy, don’t just re-date it—make it clear that you care, and apply what you learn.

About the recommendations

These practical actions do not represent an exhaustive checklist for due diligence. Not every practical action is appropriate for every situation. Additional practical actions or implementation measures not described here may be useful in some situations.