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Reducing supply chain risk by buying responsibly
It is through their purchasing practices that businesses can have among the most profound impacts on human rights. Conventional purchasing practices, including aggressive price negotiation, inaccurate forecasting, late orders, short lead times and last minute changes put suppliers under intense pressure and lead directly to poor working conditions and low pay for workers.
The United Nations Guiding Principles on Business and Human Rights (UNGPs) highlight the importance of acting on the findings of human rights impact assessments “across relevant internal functions and processes”. If purchasers do not consider the potential impact of their decisions on suppliers’ ability to comply with labour rights standards, “the enterprise risks contributing to adverse human rights impact.”
Similarly, the Organisation for Economic Co-operation and Development (OECD) guidance on due diligence for responsible supply chains in the garment and footwear sector recommends that businesses “implement control measures to prevent contributing to harm through their purchasing practices”.
Responsible purchasing means purchasing in a way that enables positive change at the supplier level, so that every part of the supply chain benefits. It requires a trusting, direct and honest relationship where both parties are able to negotiate and share risks equally, and a purchaser who is committed to supporting human rights within the supply base.
‘Buying Matters’ Consultation: Sourcing fairly from developing countries, Traidcraft