How to deal with negative impacts?
Plans of action
A plan of action is a useful and practical tool for you as a company to avoid and minimise specific risks. Plans of action are not a requirement in the international guidelines, but they are worth having so that you can show your practices, initiatives, and progress. Important elements include specific measures, assignment of responsibilities to individuals, and necessary follow-up.
For an action plan to work and have a real effect, it must be based on an actual risk assessment of your particular supply chain made in collaboration with the supplier and other relevant stakeholders.
If you import goods, your suppliers become an important focus area. Here, a dialogue about joint plans of action with your suppliers is a great starting point. Focus on actions to prevent and minimise negative impacts on people. Example: how do we create healthy working conditions so that production workers do not become ill from going to work?
Some companies already have well-functioning systems for action plans and supplier follow-up. In such cases, the challenge is to continue to use those systems and processes while incorporating human rights. Whatever the approach, most importantly, the performance of due diligence should not be downgraded. There is no requirement for you to have separate plans of action for human rights, so choose the approach that works best for you.
Find a template for a plan of action here.
Plans of action can be based on:
The best supplier relationships are based on dialogue and mutual trust. Consider your suppliers as partners. Be curious about how production and processing take place, as well as what challenges they face.
Perhaps your supplier has a completely different understanding of the concept of “human rights” than you do. Speak openly about your challenges and understanding of human rights and listen to the supplier’s views. The more trust you build in the relationship, the easier it will be to get honest and helpful answers from the supplier.
This will make it easier to draw up joint plans of action that can create real change.
Questionnaires are effective in risk assessment as well as for creating plans of action. Initiating a dialogue on important topics is a great start but does not constitute a complete assessment of the supplier, as it offers only a self-evaluation.
Third party audits
Supplier audits can be helpful for avoiding negative impacts on human rights and ensure compliance with agreements entered into.
However, audits often offer only a snapshot. They must be followed up with plans of action and other measures. It is important to be clear which areas of human rights are included in the audit.
Is it exclusively about working conditions, or is it more broadly about human rights? Is the audit announced in advance, so the supplier has an opportunity to hide bad conditions? Are local employees interviewed?
If the supplier has one or more certifications, this may indicate that the company is already showing some degree of corporate responsibility.
However, certifications are not a guarantee that there will be no negative impact on human rights. Certifications differ, and only the specific standards required for certification are audited.
Before using certifications as a tool for due diligence for human rights, you should examine how the certification relates to human rights.
Training of stakeholders
Training your own employees, employees of the supplier and other stakeholders is another relevant tool to ensure lasting positive progress on human rights.
Training is well suited to promoting real long-term change for workers in producing countries at risk for human rights violations.
Human rights violations
If you discover a breach of human rights at a supplier, you should not immediately terminate the relationship or your contract. Instead, try to solve the problem with dialogue and improvements.
Motivate the supplier with win-win
Benefits are much more motivating than a negative approach and sanctions. Focus on how due diligence can be of benefit to both of you. Benefits may include:
- Fewer audit visits
- Strong cooperation resulting in longer term contracts for the supplier
- The strength that emanates from strategic collaboration on continuous improvements
- The supplier receiving help for improvements
- Lower costs for improvements through cost sharing
- Sharpened competitive edge for the supplier when living up to requirements that many other customers will have now and in the future.
Case stories from small and medium-sized businesses in the food cluster
About this guide
This guide is aimed at small and medium-sized businesses in the food cluster, i.e., companies with between two and 250 employees working in agriculture and horticulture, fisheries, fish farming, agroindustry, food production and ingredients. Human rights due diligence is relevant whether you are in the B2C or B2B market, importing, exporting or have your own production in Denmark.
The guide was prepared by the Danish Initiative for Ethical Trade, in collaboration with the Danish Agriculture & Food Council and Arla Foods, and co-sponsored by the Danish Business Authority. The guide may not be changed, reproduced or translated without prior written permission from the Danish Initiative for Ethical Trade. If used in a teaching context, it must be with a clear acknowledgement of the partners behind the development of the guide, crediting them clearly, including use of relevant logos.