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Ethical Sourcing Standards

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Training participants will gain a basic understanding of Ethical Sourcing Standards and their applications within food safety and quality systems. Basic knowledge competency will be verified through successful completion of the accompanying Ethical Sourcing Standards assessment activity. Basic skill competency can be verified through the Ethical Sourcing Standards competency checklist available as a resource for this training activity.

Key Definitions for Ethical Sourcing Standards
- Corporate Social Responsibility: Corporate social responsibility, also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business or corporate social performance, is a form of corporate self-regulation integrated into a business model. The Corporate Social Responsibility process is implemented to guide all company activities in the protection and promotion of international human rights, labour and environmental standards and compliance with legal requirements within its scope of operations.
- Ethical Sourcing Standards: Ethical sourcing is the intentional purchase of products and services that the customer considers to be sourced ethically. This may mean with minimal harm to or exploitation of humans, animals or the natural environment.
- International Labour Organisation: The International Labour Organization or ILO is the tripartite United Nations agency that brings together governments, employers and workers of its member states in common action to promote decent work throughout the world.

Ethical Sourcing Standards Development
When considering the development, documentation and implementation of Ethical Sourcing Standards within food safety and quality management systems, the following information should be considered to ensure effective outcomes:

About Ethical Sourcing Standards
Ethical Sourcing Standards are applied across international food industries to ensure sourcing is facilitated in a responsible manner, to ensure suppliers continually improve their social and environmental practices and shield retailer and brand confidence.

Ethical Sourcing Standards are a general expectation of consumers who, over time, have become increasingly aware of purchasing goods and services that have been sourced in a manner that does not include exploitation of humans, wildlife or the environment, or in a manner that does not represent a danger to the health or safety or humans, wildlife or the environment.

In an effort to provide food items and general merchandise at competitive prices, retailers are continually forced to source items from a variety of international locations, including developing countries. Instances of exposed poor working conditions and environmental degradation within developing countries over time have seen retail businesses develop and implement targeted social responsibility requirements for their suppliers.

Common elements of Ethical Sourcing Standards implemented by progressive retail businesses include:
- Using suppliers that source, manufacture and package their products in a responsible manner;
- Working with suppliers to improve their social and environmental practices;
- Development, implementation and maintenance of policies and procedures applicable to ethical sourcing issues that it can control or influence; and
- Demonstrating to interested parties that it has implemented policies, procedures and practices that conform to the requirements of these standards.

The basis of Ethical Sourcing Standards is commonly linked to recognized Ethical Trading and Labour Initiatives. These are often used to define the guidelines for the Ethical Sourcing Standards mandated by retail companies.

Corporate Social Responsibility
Corporate social responsibility is a term commonly used to define the objective commitment to accountability for any business operation in relation to their supply chains, business outputs and social impacts.

An example may be that: A senior company representative should be responsible for maintaining procedures for the selection of suppliers and subcontractors and determining their ability to meet the company’s ethical sourcing policies and the requirements of the Ethical Standard.

Elements of Ethical Sourcing Standards commonly addressed as part of any food business’ corporate social responsibility may include:
- Child labour;
- Illegal labour and labour rights;
- Wages and benefits for employees;
- Working hours;
- Discrimination;
- Discipline;
- Freedom of association;
- Health and safety;
- Accommodation, facilities and amenities;
- Equipment;
- Compliance with local and international laws;
- Environment;
- Ethical sourcing standards.

Child labour
No child labour is utilized. Minimum age of employment is in line with International Labour Organization recommendations.

Workers should be of an appropriate age, and must not be deprived of their childhood, their dignity or their potential. Child labour must not be facilitated where such labour would be harmful to their mental and physical development.

Illegal Labour and Labour Rights
No forced labour is utilised. Bonded labour is prohibited. Identity papers are not required or bonded from employees to supplier.

Employment should be freely chosen, not bonded or involuntary. Workers should not be required to lodge money or possessions with their employer, and can leave employment with a reasonable period of notice.

Wages and Benefits for Employees
Wages and benefits for workers for a standard working week should meet industry benchmarks or legal standards. Wages should be enough to meet basic needs and to provide some additional income. Workers should have access to the documented and understandable particulars of their income and terms for a standard working week. Deductions from wages should not be facilitated unless they are legal and acknowledged by the relevant employee.

A Wage Compliance Supplier will have a wage compliance program in place which ensures that employee wages, payment cycles, overtime policies all adhere to local regulation or ILO conventions.

The Supplier should have a provision for the following benefits: 
- Workers leave;
- Sick and maternity / paternity leave as required by local regulations.

Regarding terms of employment, the company should provide employees with documented terms of employment. The document should address at a minimum:
- Pay rates, including overtime pay rates, dates and means of payment; usual working hours;
- Rights and obligations of both parties as appropriate;
- Conditions for termination; and
- Provisions for holidays and sick leave if applicable.

Working Hours
The company should not utilize excessive working hours more than 72 hours per week.

Working hours for a standard working week should meet industry benchmarks or legal standards. Under standard conditions and circumstances, workers should not be required to work more than an acceptable number of hours per week, and should be granted at least one day off, on average, per calendar week. Overtime should not be mandatory, and should be paid at an applicable suitable rate of pay.

Discrimination
Discrimination should not be facilitated in any manner, including through hiring, compensation, access to training, positional promotion, employment termination based on race or caste, nationality, religion, age, disability, gender, marital status, sexual orientation, union membership or political affiliation.

The company should facilitate Equal Opportunity in Hiring. They should not discriminate in their hiring of potential employees on the basis of age, race, gender, religion, ethnic origin, disability or other arbitrary or personal basis. 

The company should facilitate Equal Opportunity in Employment: They should not discriminate against employees on the basis of age, race, gender, religion, ethnic origin, disability or other arbitrary or personal basis in regards to compensation, training, promotion, termination or retirement.

Discipline
Disciplinary measures should not be facilitated in a manner that causes physical or mental harm. Records of all disciplinary actions must be recorded. Physical abuse, sexual abuse, harassment, verbal abuse and other forms of intimidation are not acceptable under any circumstances.

Freedom of Association
Workers should have the right to initiate or maintain union memberships of their own choice, and to participate in collective bargaining as required. Employers should facilitate open attitudes towards trade unions and their organizational activities. They should not interfere with, obstruct or prevent such legitimate and lawful activities. Employee representatives are supported by the business within their required duties within the workplace.

Workplace Health and Safety
Accidents should be prevented through conscious applications of workplace health and safety requirements throughout the workplace environment. Relevant health and safety training should be conducted and recorded to ensure all employees are aware of applicable risks. Personal protective equipment should be provided and must be available as required. Responsibility for health and safety should be delegated to a member of Senior Management.

In terms of Occupational Health and Safety, the company should appoint a senior management representative responsible for employee occupational health and safety. The company should provide a safe working environment for employees by documenting an Occupational Health and Safety Plan which: 
- Outlines the results of a risk assessment identifying all hazards to employee health and safety in the work environment;
- Identifies control points to manage those hazards identified;
- Establishes policies and procedures that are appropriate to the industry sector and that as far as reasonably practicable eliminate isolate and / or minimize the hazards;
- Employees should not be subjected to any sort of abuse, verbal, physical or sexual for any reason.

Accommodation, Facilities and Amenities
Suitably constructed, maintained, cleaned and sanitised working facilities, amenities and accommodation should be provided for all employees. Access to clean and sanitary toilet facilities and potable drinking water of suitable temperature should be provided. Where appropriate, suitably constructed and maintained facilities for eating and drinking, including food storage amenities should be provided. Where applicable, accommodation facilities should be suitably constructed and maintained to ensure the safety and basic needs of worker.

Compliance with Local and International Laws
Only employees with a legal privilege to be employed should be used. Evidence of the legal status of all employees should be verified through relevant original documentation by the employer. Relationships with regulatory agencies should be nurtured by the employer to ensure ongoing positive outcomes. The supplier should ensure that all local and applicable regulations are in compliance, including that all monitoring is completed per regulatory requirements and; business licenses and permits are maintained and current.

Environment
Applicable local environmental regulations must be met on an ongoing basis. Waste and by-product disposals should be conducted in a manner which meets local environmental regulations and does not negatively impact upon the environment, wildlife or humans according to benchmark industry or international standards. Risk assessments should be conducted, documented, validated and verified to ensure environmental impacts are limited to acceptable levels. Requirements for the control of solid waste, liquid waste, air contaminants and chemical storage, usage and waste should be developed and implemented to ensure adequate control.

Environmental Management Plan
The supplier should develop Environmental Management Plans for priority impacts identified through the risk assessment. Environmental Management Plans must specify: management objectives and targets for priority impacts, local regulatory requirements for environmental management and tasks, time frames and responsibilities required to meet the nominated objectives and targets.

The Environmental Management Plan includes specific details on the following:
- Energy use and air emissions;
- An inventory of ozone depleting substances is maintained;
- Water consumption;
- Wastewater treatment and effluent management;
- Waste management;
- All waste containers are properly identified;
- No on-site burning is maintained;
- Recycling program / waste reduction program in place;
- Pollution prevention;
-  Hazardous chemicals inventory;
- Noise prevention;
- Groundwater contamination prevention;
- Land / soil loss prevention;
- Land use and biodiversity;
- Environmental impact studies.

Equipment
Equipment must be constructed and maintained in a manner that facilitates safe and hygienic working conditions for all employees. Equipment must be safeguarded in a manner that meets or exceeds local regulations.

Equipment Maintenance
All equipment used in the treatment, handling, monitoring and storage of air, waste, waste water, water, or other elements as identified within the Environmental Management Plan should be properly maintained, be included on a maintenance schedule, and have records maintained to verify maintenance activities.

General Ethical Sourcing Standards
Bribery and corruption should not be knowingly facilitated. The falsification of documents should not be knowingly facilitated. Food business Ethical Sourcing Standards requirements are most often linked to suppliers of retail stores, for which the sub-contractors or suppliers are also required to meet the nominated Ethical Sourcing Standards. No sub-contracted suppliers or service providers should be utilised without the written permission of the customer where an Ethical Sourcing Standard has been implemented.

Additional Relevant Information
The following information is provided from other foodindustrycompliance.com Training Activities as the content is relevant to Ethical Sourcing Standards:

About Customer Focus and Customer Complaint Management
Without customers, food businesses do not survive. It is important that food businesses understand the sometimes rapidly changing and evolving requirements of customers, and anticipate customer requirements before they change. This process is aimed at meeting customer requirements through a strategic approach to identifying and managing customer needs.

The benefits of customer focus include:
- Developing and maintaining an understanding of customer needs;
- Meeting customer requirements;
- Exceeding customer expectations;
- Ensuring Food Safety, Food Quality and Ethical Sourcing requirements are maintained in accordance with customer specifications;
- Ability to obtain increased revenue and market share through efficient and flexible responses to market opportunities;
- Effective use of the business' resources including plant, equipment, staff and processes to enhance customer satisfaction;
- Ongoing business through continued customer loyalty.

It is important that the Senior Management of any food business play a leading role within the management and review of the Customer Focus and Customer Complaints processes. This will ensure general awareness of product or service issues as they occur, rather that after a significant incident has occurred.

Understanding Customer Requirements and Expectations
It is important within any Customer Review activity to ensure the requirements and expectations of any prospective or existing customer are fully understood. This element of the Contract Review process requires clear and open communication channels between the food business and their customer.

Customer requirements and expectations commonly include provisions for:
- Quality;
- Safety;
- Timeframes;
- Cost;
- Delivery;
- Volumes;
- Identity preservation;
- Use of Trademarks and Claims;
- Verification and Validation;
- Emergency Provisions;
- Sub-contracting of Products or Services;
- Regulatory compliance;
- Ethical Sourcing standards;
- Industry acceptance.

About Approved Supplier Management
Approved supplier management programs are implemented to ensure a food business has control of materials and services supplied. An effectively implemented approved supplier management program provides confidence that the supplied materials or services will not negatively impact upon the safety or quality of finished products.

In a modern age where information is readily available and bad news travels at speed, Customers of food businesses also play a leading role in ensuring the raw materials or services used to manufacture their products meet certain expectations. Ethical Sourcing Standards often play a large role in the continued use of food businesses as elements of the established food supply chains.

If your food business supplies foodstuffs manufactured to a customer’s specifications, it is important to consider any specific Ethical Sourcing Standards Development requirements in relation to their items.


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