Marshalls launch New Ethical Risk Index

During recent years, improper practice in large organisation’s supply chains have been brought to light in the media, with brands such as ASOS, Mango and Marks and Spencer all being put in the spotlight, with issues including child workers and the exploitation of refugees being uncovered.

Ethical sourcing is an issue affecting many industries today, and is not going away any time soon. Issues including slave and child labour have traditionally marred the stone industry’s reputation, but a positive move towards transparent supply chains has been a sea change of late. However, sourcing in the stone industry is still a difficult area in which to clearly identify transparency in supply chains across the world.

Marshalls has acknowledged the industry’s need for an all-encompassing structure, which highlights potential issues when it comes to stone sourcing in a number of well-known countries, and brought varying measures together in the Ethical Risk Index.

The Marshalls Ethical Risk Index (ERI) uses a bespoke, independently audited scoring framework and gives a genuine insight into the multi-dimensional ethical challenges facing stone procurers to allow for more informed decision-making. It scores its own commercial stone portfolio against the industry ‘cluster’ for the corresponding origin of the stone in terms of ethical sourcing for that particular location.

The ERI has been developed in conjunction with Stirling Smith, an independent consultant who specialises in ethical trade and human rights at work. He has worked for DFID, British Council, Fair Labour Association, trade unions, NGOs and several companies. He is a lead trainer for the Ethical Trading Initiative, and his areas of expertise include child labour, HIV/AIDS in the workplace, migrant labour, social dialogue and industrial relations, and health and safety at work.

Stirling has worked in more than thirty countries and his training manuals have been translated into more than twenty languages.

He said: “The ERI is a huge step forward in transparency. Marshalls was the first company in the stone sector to join the Ethical Trading Initiative and has been a leader for more than a decade. The Ethical Risk Index will enable customers to see what kind of problems might exist in a particular country, and whether a supplier is better or worse than the average in that country.”

The ERI score is presented on two levels, a detailed breakdown across 10 assessment criteria, with a simple rating system derived from the average score, and consists of 10 different measures, all of which have equal bearing on the overall ERI score. These are:

1. Modern Slavery Act Awareness

This measures Marshalls’ journey on implementing the Modern Slavery Act and Marshalls’ declared actions from its Modern Slavery and Anti-Human Trafficking Policy and Disclosure Statement. The measure is scored on the suppliers ‘Awareness’ of the Act, ‘Understanding’ of the Act and ‘Implementation’ of a Corrective Action Plan (CAP) where this has been deemed appropriate This measure is not about the risk of modern slavery in the supply chain, but it is about embedding the awareness of the UK legislation into the Marshalls supply chain.

2. Supply Chain Visibility

Supply chain visibility is a measure of the transparency of the supply chain to raw material extraction. It is about how confident Marshalls can be that it knows how and where the product is extracted and processed into finished goods for re-sale. Supply chain visibility gives Marshalls the ability to be confident in assessing the ethical risks.

3. Income & Employment Security

This looks at how employees are paid and their contract of work. It is about how exploited the work force are, and gives some indication as to whether modern slavery may be present. The measure has four issues against which it is scored. These are wage levels, payment of wages, working hours and regular employment

4. Health & Safety

Health and safety precautions and the welfare of the workers are all considered in this measure. It is about the awareness of potential hazards and the measures which are undertaken to prevent these. The measure has four criteria relating to safe working conditions in the processing of natural stone (control of dust, noise level, and the guarding and personal protection compliance with regards to machine safety) and two of welfare facilities (on and off site facilities available).

5. Social Well-being

Social wellbeing measures how the supply chain treats its workers through harsh or inhumane treatment and how it engages with the wider community. The treatment of the workers is another potential sign of the potential of modern slavery in the supply chain.

The measure is scored for treatment on evidence for harsh or inhumane treatment through perceived treatment and finally exemplar treatment with good management systems. The Corporate Social Responsibility program is scored from none in place, through informal and limited up to embedded and exemplar.

6. Employment Freely Chosen

This looks at whether or not the workers freely chose to be employed at the location, and is the true indicator of modern slavery. Scored by two issues, child labour and forced, bonded or prison labour, both issues are scored on a scale of evidence for employment not being freely chosen via perceived opinion, to exemplar where formal management system are in place for each worker, documenting name, national reference number, contract of employment etc.

7. Empowerment

This is a measure of whether the worker has a voice with no consequences and whether they can join a labour organisation such as a Trade Union with the right to collective bargaining. Evidence of empowerment would suggest a very low risk of modern slavery

The measure is split into two issues, the first being Freedom of Association and the right to collective bargaining and the second is on levels of Discrimination

8. Environmental

This is a measure of the impact of the operation on the environment whether short or long term and what mitigation and future restoration is planned The measure is scored by two issues these being legal compliance and best practice engagement

9. Governance

This is a measure of the overall transparency of the supplier, that it is a legal entity with ownership clearly defined, and that it has management control with documentation and policies with management systems. A lack of evidence in governance may indicate issues with employment rights and potentially modern slavery

10. Corruption & Bribery

This is a measure of the supplier’s awareness, understanding and implementation of standards on corruption and bribery. The highest level of compliance would be the supplier prohibiting these activities with documented evidence including such things as ‘whistle blowing’.

The detailed scoring breakdown of each of the 10 measures not only illustrates how Marshalls score against the 10 criteria, but also against the score of the industry cluster – where other UK stone distributors draw from. The basic score consists of a simple visual rating, enabling a very quick and easily understood comparator.

Marshalls is trying to present more of the real picture to customers. The Ethical Risk Index can enable customers to see what kind of problems might exist in a particular country, and whether a supplier is better or worse than the average in that country. Ethical trade is only going to be successful when consumers are better informed, and the Ethical Risk Index is an important step in educating customers.

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