Protecting the people behind the products

If you’re a customer in the U.S. grabbing a roll of paper towels from Walgreens’ Complete Home line, do you ever wonder whether the workers who made those paper towels are paid fair and reasonable wages? If you’re at a Boots store picking up No7 serum, do you ask yourself if the factory where it was produced has safe equipment? Clean bathrooms? Clear exits?

Are working hours at these sites within their countries’ legal limits? Is the labor unforced? Is there any possible connection to human trafficking?

If you haven’t considered any of this until now, it’s all right – three WBA managers from different parts of the globe are constantly thinking about it on your behalf.

Melissa Kopf manages the ethical sourcing for WBA retail-brand products for the Americas, working closely with counterparts Danny Staples, who oversees quality and ethical assessments for the company’s brands in the UK and Europe, and Kenneth Tsang, who manages ethical assessments across Asia from WBA’s Hong Kong office. Altogether, WBA contracts with more than 1,800 facilities to make its owned-brand products – nearly 40 percent in North America and 43 percent in Asia, with the rest in Europe, Central and South America and elsewhere. It’s the job of Kopf, Staples and Tsang to help make sure these sites have safe and healthy working conditions and are in step with local laws, international ethical standards and WBA’s own code of conduct.

“The way I view the facilities, they’re an extension of WBA, so even though these workers aren’t our employees, if they’re making one of our products, it feels that way,” says Staples, who has been in his role in Nottingham, England, for about 10 years. “I believe everybody has a right to work in a safe environment and be treated fairly, get paid appropriately and on time, and just be treated with respect. For me, it’s a very rewarding part of working at WBA. You know you’re making a difference to hundreds of thousands of workers.”

It all happens through ethical auditing, a process in which third-party vendors contracted by WBA go to manufacturing sites to check things out firsthand. Here’s how it works:

Step 1: The first test

Before a WBA business decides whether to contract with a supplier, that facility has to pass an initial site audit. WBA is open to contracting with factories from any part of the world except certain countries – North Korea, for example – where such agreements are prohibited by trade embargoes or the United Nations.

“Doing this onsite audit and applying ethical sourcing standards and making sure the manufacturer can meet them is our way of helping to ensure the workers are being protected,” says Kopf.

During facility tours, auditors check a number of areas. Is all machinery and equipment safe? Is personal protective equipment provided and being used properly? Are chemicals stored safely? What’s behind any closed doors? Are bathrooms visible and clean, with appropriate privacy and supplies?

Employees are also asked – in confidential interviews, without supervisors present – about their working hours, pay, morale and possible discrimination or harassment. Documentation is checked to verify employees’ ages, hours and more.

Local labor laws and regulations are the default for what’s acceptable in all these situations. If there isn’t an applicable law or regulation, or if the law or regulation doesn’t meet WBA’s minimum standards, WBA will apply its own expectations based on its code of conduct and international labor standards and practices. It’s careful work and requires the right inspector.

“To do an ethical audit, you need to have special skills and be familiar with the local labor laws for each country,” says Tsang, who reviews findings from factories in China, Vietnam, Cambodia and a number of other nations across Southeast Asia. “And because a key element is interviewing management and the local workers, the auditor also needs to speak the local language.”

Once an audit is complete, a report is sent to the ethical sourcing manager – Kopf, Staples or Tsang – who combs through the results and grades the facility. There are three possible ratings: satisfactory, needs improvement and critical. The first two constitute “passing,” and may still require follow-up to address and correct any problems. More than 80 percent of facilities audited for WBA “pass” under this system. A “critical” grade is a fail, and in that case, WBA will not start up any business unless the issues are fixed.

That said, certain infractions are considered “zero tolerance” for WBA, namely forced labor, child labor, corporal punishment, trafficking and bribery. These problems are rare – only a handful out of 1,000 to 1,200 audits per year – but they do occasionally turn up.

Step 2: Guidance and correction

If a facility passes the audit with lesser infractions, or has a critical infraction that requires immediate correction, our businesses will work with the manufacturer to educate them on the expectations and help them create action plans to fix their problems. Kopf, Staples and Tsang also do this with sites already manufacturing WBA products, where new concerns may turn up during routine follow-up audits. Issues can range from the easily corrected (a cutting machine without a safety guard or lack of a recent evacuation drill) to more complicated matters (overworking or underpaying employees).

“We see issues with factories all over the world,” says Kopf. “In the U.S., for example, a lot of people might automatically assume that factories are compliant, but we’ve had issues with documentation, high overtime, high consecutive working days, blocked exits or aisleways ... All of these things we would consider to be critical concerns.

“If it’s a new site we haven’t used before, we would need to audit them again and make sure they’ve resolved their issue before we award business. And if it’s an existing site, that’s when we get really hands-on working with our auditing partners and the factory and supplier to make sure the root causes are being identified and actions are being taken before the next audit, usually within three months.”

Step 3: Consequences

For sites already manufacturing WBA products, suspending and ending business are both on the table.

“The frequency of audits increases when problems come up,” says Kopf. “If we’re seeing a site is struggling to resolve their issues or is really not engaged, we’re first flagging that up to our buying teams so they can start looking at potential replacement suppliers. And from there we can put a hold on business or walk away if we need to, depending on the severity of the issues and how many tries we’ve given the manufacturer.”

Fortunately, it doesn’t often come to that.

“What we tend to find is that in our existing supply base, the compliance rate is a lot higher than that of new suppliers who are new to the assessment program, new to our standards or just not as prepared or aware of what’s required,” says Staples. “Once you’ve onboarded a supplier, the likelihood is that they stay compliant.”

Step 4: Confidence

Staying on top of it all means that customers can feel good knowing that WBA’s product lines – from beauty supplies to home goods to snacks – are made safely and ethically.

“It’s my mission to make sure human rights are protected and labor conditions are good,” says Tsang. “I’ve been in this position more than 10 years, and when you do a job like this a long time, you may see many instances of noncompliance. As a person, you don’t like to see this happen. You’re determined to make a change.”

Adds Kopf: “Seeing a factory improve from audit to audit is really satisfying, because you know working conditions are directly improving because of the oversight and the enforcement of our standards.”

The victories are real.

“There have been a number of issues over the years where we’ve enforced the local law to get people paid what they deserve, with back pay,” says Staples. “There have been times where we’ve found people being paid off the books, which impacts things like pensions later in life, or working excessive hours – which can have a long-term impact on people’s health.

“When we work with suppliers to put processes and programs in place to correct these issues and help make sure they operate fairly and legally, this has a massive effect on real people all over the world.”