Social and Ethical Sourcing
Criteria for Key Product Groups 50037/D0602/Issue 2
June 2013
Annex A BMT Isis Ltd
ANNEX A
Case Studies and Examples
Social and Ethical Sourcing
Criteria for Key Product Groups 50037/D0602/Issue 2
June 2013
Annex A-i BMT Isis Ltd
Contents Page No.
A1 Case Studies A-3
A1.2 Ministry of Justice (MoJ) - Supply Chain Labour Assurance Control
Processes A-5
A1.3 Welsh Health Supplies - Supply Chain Assurance A-6
A1.4 London Underground - Labour Standards Assurance A-7
A1.5 Department for International Development (DfID) - Supplier
Improvement Programme A-8
A1.6 Home Office/ Remploy (2009) - Supported Businesses A-9
A1.7 RESPIRO Guide on Socially Responsible Procurement of Textiles and
Clothing - Guidance for Public Sector Procurers (2007) A-10
A1.8 Crossrail - Social objectives A-11
A1.9 Transport for London’s Highways Maintenance Contract - Equality
and Diversity A-12
A1.10 The Scottish Government - Community Benefits in Public
Procurement A-14
A1.11 London 2012 – Olympic Delivery Authority (ODA) Objectives (the
following is extracted from the ODA Report) - Social Objectives A-17
A1.12 London Organising Committee of the Olympic and Paralympic Games
- Policy Objectives and ITT A-19
A1.13 National Sustainable Public Procurement Programme (NSPPP) –
Risk Assessment/prioritisation methodology A-19
A1.14 BUFDG (British Universities Finance Directors Group) Commodity
Coding - Social and Ethical Risk Assessment A-19
A1.15 Durham County Council - Targeted Recruitment & Training A-20
A1.16 Church Village Bypass - partnership Between Costain, Rhondda
Cynon Taf Council and Welsh Government - Community Benefits A-21
A1.17 Glasgow Housing Association - Community Benefits A-22
A1.18 PAS 91:2013 Construction related procurement - Pre-qualification
questionnaires A-24
A1.19 Shotts Prison Phase 2 Development - Community Benefits
Requirements A-24
A1.20 Department for Work and Pensions - Land Securities Trillium &
Amaryllis Environmental Services - Example of Commercial Supplier
Delivering Social Outcomes A-25
A1.21 Reuse@Leeds - Leeds University - Reuse Links to Social Benefits A-26
A1.22 London Councils - Sustainable Furniture Disposal Toolkit - Social
objectives A-26
A1.23 London Fire Brigade - furniture disposal and social benefits:
sustainable furniture disposal toolkit tested - Social objectives and
Evaluation A-27
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A1.24 London 2012 - identifying key social issues through risk assessment
matrix - Social and Ethical Risk Assessment A-28
A1.25 Environment Agency - Wheal Jane Operations & Maintenance
Contract 2010-2020 - Delivering local employment through
procurement A-29
A1.26 APUC Supply Chain Code of Conduct – setting clear policy objectivesA-29
A1.27 National Skills Academy Construction Skills – toolkit for skills and
employment outcomes A-30
A1.28 Olympic Games, Responsible Procurement, Travel Ambassador
uniforms – tender requirements A-30
A1.29 West Midlands Procurement Framework for Jobs and Skills –
Guidance throughout procurement A-31
A1.30 Labour Standards Assurance System - Labour Standards Monitoring
and Improvement A-31
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A1 Case Studies
A1.1.1 The following case studies represent examples of social and ethical pre-procurement and procurement practice within UK public sector procurement.
A1.1.2 Important - Public sector procurers should ensure the relevance and
proportionality for their particular procurement and obtain legal advice where
necessary. These case studies should be considered given their context and
procurers should determine the suitability or otherwise of adopting similar
practices, given the subject matter of the contract. The case studies are not
presented as examples to be necessarily replicated in particular procurements,
but enable procurers to understand how others have considered such issues
and whether lessons can be learned. The principle of networking and sharing
good practice among procurers is to be encouraged and procurers should
discuss with colleagues, potentially including those represented here, how
social and ethical criteria may be applied in their procurement.
This should be read in conjunction with the main report which include the Legal
Framework: it is recommended that legal advice is taken about the potential for
using social or ethical criteria in any individual procurement process. You
should also ensure that the social and ethical criteria are incorporated is
relevant and proportionate to the subject matter of the contract. This must be decided on a case by case basis, in advance of commencing the procurement.
A1.1.3 The information in these case studies has been provided by key stakeholders
who have been engaged with during the development of this report, or from
the public domain. We are very grateful for information provided, where
relevant.
A1.1.4 Section Error! Reference source not found. ‘Further Examples and
Guidance’, provides more information, guidance and examples on relevant social and ethical issues and mechanisms.
A1.1.5 The following signposting table allows quick reference of case studies in
relation to their focus within the procurement cycle. This also allows efficient
reference from the corresponding procurement stage at Annex B ‘Product Category Matrices – Procurement Criteria’.
A1.1.6 Bold text within this document allows the reader to relate particular areas of text to the procurement process.
A1.1.7 The following colour coding (used within Table A.1) relates to particular product
categories. However, please note that where category focus can be useful, the
mechanisms presented can often be applied to other product categories beyond the original case study procurement scope:
- Textiles;
- Food;
- Building and construction;
- General;
- Furniture.
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Table A.1 - Signposting Procurement Stage
Pre-
procurement
Advertising Specification PQQ Tender /
Evaluation
Contract
Performance
A1.2
A1.3
A1.4
A1.5
A1.6
A1.7
A1.8
A1.9
A1.10
A1.11
A1.12
A1.13
A1.14
A1.15
A1.16
A1.17
A1.18
A1.19
A1.20
A1.21
A1.22
A1.23
A1.24
A1.25
A1.26
A1.27
A1.28
A1.29
A1.30
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A1.2 Ministry of Justice (MoJ) - Supply Chain Labour Assurance Control Processes
A1.2.1 Background: supply of uniforms, anti-slipwear and textile products since 2007.
A1.2.2 Setting policy objectives - labour standards assurance
The Ministry of Justice (MoJ) emphasised the importance of labour standards
and demonstrated a clear commitment: ‘The Supplier shall acknowledge that,
as a Government department, the Authority has a duty to ensure the integrity of its supply chain in accordance with the highest social and ethical standards’.
A1.2.3 Subject Matter of the Contract - labour standards assurance
Based on the MoJ policy objectives notice was given to the market describing these objectives and the nature of two contracts:
‘The provision of a managed service to supply officers' uniform and anti-slip
footwear through professionally controlled and ethical supply chains’;
‘The economical supply of clothing, textiles and textile products through
professionally controlled and ethical supply chains. (This contract supplies raw
textile materials to prison industries to manufacture prisoner clothing and
bedding)’.
A1.2.4 Contract conditions and management - labour standards assurance
These examples used a standard set of Corporate Social Responsibility (CSR)
control policies that have been developed and defined since 2007, when the Authority signed the first contract directly with a Chinese company.
It is the responsibility of the Supplier to control CSR and the Procurement
Directorate will continue to obligate the supplier to commission 3rd party
audits on MoJ’s behalf.
Each control process is tailored to the contract, the supplier and the
commodity. For example, the procedures followed to control the CSR aspect of
supply chains of the above 2 MoJ textiles contracts vary significantly as they are both targeting different tiers of a textile supply chain.
Through a Supply Chain Entities Disclosure form the Contractor should ‘provide
and monitor details of supply chain; names of suppliers, in supply chain, their
role, changes in last 12 months, and numbers that have been assessed within
previous 12 months in accordance with an appropriate standard, such as ETI
Base Code, SEDEX or equivalent’, the aim being to provide transparency
throughout the life of the contract. ‘It is essential that the Supplier does not
remove any entities from their supply chain. If a supplier no longer features in
the supply chain then the Contractor should stipulate ‘INACTIVE’ along with the
date that they became inactive in the category field of the form’.
A1.2.5 This focus on supply chain transparency through the Supply Chain Entities
Disclosure form also requires ‘Tier 1 supplier internal and independent audit of
the whole supply chain evidencing that it is operating according to ETI Base
Code, Worldwide Responsible Apparel Production, Sedex, SA8000 or
equivalent’.
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A1.3 Welsh Health Supplies - Supply Chain Assurance
A1.3.1 Background: In May 2009, the All Wales Nurses’ and Midwives’ Uniforms
Procurement Project Board was formed to provide leadership for a new
contract tender for an estimated 150,000 uniforms. The management and
coordination of the procurement contract was carried out by Welsh Health Supplies (WHS) on behalf of NHS Wales.
A1.3.2 Setting policy objectives - labour standards assurance
‘WHS recognises the important role it plays in supporting the Welsh Assembly
and UK Government sustainability agendas. It has developed a CSR policy which outlines its responsibility in twelve areas, including ethical procurement’.
A1.3.3 Pre-procurement - mapping supply chain - labour standards assurance
As a part of WHS’ approach to sustainable procurement, all contracts valued
over £25k are required to include a sustainability risk assessment. As a result,
a number of key issues were highlighted, including labour issues associated
within the uniforms supply chain.
As a further step, WHS mapped the supply chain for uniforms from
fabric manufacture through the dying process and garment production. This
mapping demonstrated that poor labour standards were a risk beyond the first tier, right down the supply chain.
A1.3.4 Contract requirements - labour standards assurance
The outcome of a competitive dialogue process was to include a requirement in
the contract for the whole supply chain to be compliant with the Ethical Trading Initiative (ETI) Base Code, or equivalent.
The contract also required a labour standards audit to have been conducted
within the last 6 months at each supplier’s site throughout the supply chain;
including the textile manufacturer, dye house, garment manufacturer and
warehousing.
Additionally, details of the most recent corrective action report were required.
If an audit was not available, the supplier was required to pay for an audit to be undertaken by WHS’ approved partner.
WHS worked with High Street Textiles Testing Services (HSTTS), a qualified
audit body, to review the documentation provided by potential suppliers.
HSTTS provided advice on non-compliances and closeout of issues identified in the audits.
The intention of this approach was to incorporate the requirement for ETI Base
Code compliance in the conditions of contract. This allowed WHS to agree, with
the supplier, reasonable timescales to achieve compliance and ensured that
action would be taken throughout the supply chain.
A1.3.5 Contract conditions – labour standards assurance
In December 2009, a contractor was selected for the manufacture of the
uniforms. WHS requested social audits from all sites, including fabric
manufacturing, production and dyeing. Sites without an audit were asked to
commission one immediately. Whilst no major issues were raised, HSTTS
continued to provide on-going support on corrective actions and closing out issues identified by these audits.
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A1.3.6 Lessons: impacts and outcomes:
WHS believes that the inclusion of compliance with the ETI Base Code as a
contractual obligation added minimal cost to the procurement process, as these
costs were borne by the successful contractor. Whilst the entire procurement
process was time consuming, with two people working full time for six months,
the inclusion of the assessment of the bidders against the ETI Base Code added very little extra time to the process.
Advertising: The supplier engagement process highlighted that although
suppliers understood the importance of labour standards, they did not
necessarily understand detail relating to labour standards.
A1.4 London Underground - Labour Standards Assurance
A1.4.1 Background: the supply of uniforms for London Underground staff.
A1.4.2 Policy objectives - labour standards assurance
As the world’s oldest and most famous underground railway system, London
Underground recognised that its reputation was a key consideration and stated
that: ‘We like to reassure our workforce that the garments they are wearing
have been made by workers who have been treated fairly, no matter what country they were made in.’
A1.4.3 Tender / evaluation:
As a result, those tendering were asked to explain how they monitored labour
standards within their overseas factories. The response was varied with some suppliers refusing even to provide details of the factories they used.
Other suppliers asked which standards London Underground wished to judge
them by. Eventually it was decided that the Ethical Trading Initiative’s Base
Code was the most appropriate standard for London Underground, both as a
measuring rod to gauge future suppliers as well as a way of demonstrating commitment to ethical sourcing.
A1.4.4 Lessons: impacts and outcomes:
At the time of the ITT in 2007 most of the suppliers embraced the requirements – especially those who also supply the retail sector.
London Underground’s procurement manager stated: ‘We are seeing that those
companies that can adapt to an ethical sourcing policy are also more likely to
be the best in category as regards production. They are also more likely to have better quality control procedures and be less likely to cut corners.’
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A1.5 Department for International Development (DfID) - Supplier Improvement Programme
A1.5.1 Policy objective: Improving suppliers
A1.5.2 The DfID Responsible and Accountable Garment Sector (RAGS1) Challenge
Fund has supported projects in Bangladesh, India, Lesotho and Nepal aimed at
improving conditions of vulnerable workers in the ready-made garment (RMG)
production sector. The aim of RAGS is to make responsible and ethical
production the norm in the garment manufacturing sector supplying the UK. The seven key areas of intervention that RAGS funds are as follows:
Building skills in garment production management;
Adopting better people management skills;
Harmonising codes and audit requirements;
Building awareness of workers’ rights and the capacity to enforce them;
Strengthening local audit capacity;
Capacity building and reach on fair trade principles;
Development of training tools to assist replication and expansion of
effective approaches.
A1.5.3 RAGS grants matching funds to non-governmental organisations, both for-
profit and not-for-profit, associated with labour conditions in the garment
sector in poorer African and Asian countries supplying the UK market. This
includes private businesses, trade unions and members of both ethical and fair
trade movements. RAGS does not work with procuring organisations in the UK
public sector nor support projects aimed at improving working conditions in
raw materials and fibre production, the wider textiles sector, footwear and accessories, and leather goods other than clothing.
A1.5.4 Lessons: impacts and outcomes:
Although it’s main focus is on suppliers who supply the retail sector, in reality
they may be in the same supply chain as those who supply the public sector.
This Programme highlights the importance of working with suppliers to improve
labour standards, rather than prohibiting them from supplying if they are unable to meet initial labour standards assurance requirements.
Lessons from the RAGS project will be shared with procuring organisations.
While the retail sector inevitably follows fashion and seasonal changes, with
suppliers having to respond quickly, the public sector has the advantage of
being more certain in its procurement requirements - in theory they could plan
well ahead to ensure that they and suppliers understand key issues and
opportunities.
As a result, central or collaborative procurement of uniforms, early dialogue
with suppliers, early risk assessment and clarification of requirements will help
the process.
1 http://old.dfid.gov.uk/Work-with-us/Funding-opportunities/Business/Responsible-and-
Accountable-Garment-Sector-RAGS-Challenge-Fund-/Project-Monitoring-and-Impact-
Measurement/
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A1.6 Home Office/ Remploy (2009) - Supported Businesses
A1.6.1 Background: The Home Office commercial directorate championed the use of
supported businesses, third-sector suppliers and small to medium-sized enterprises as an organisational objective.
In May 2009, companies were invited to promote their service offerings to the
Home Office collaborative commercial board. This is a group that includes the
commercial directors from each of the Home Office business areas. The
purpose of the event was to develop and encourage opportunities across the
organisation by supporting the benefits that can be derived from working with
these businesses, which include innovation, reliability, value for money and benefits to the wider community.
A1.6.2 Subject Matter: Supported businesses
While it is often an assumption that, in order to accommodate supported
business, such as Remploy, the clause under Article 19 of the public sector
procurement directive, which allows organisations to restrict bidding on certain contracts to supported businesses, must be used.
Although this is indeed a viable sourcing solution, Remploy in this case was
able to compete on its own merits and won a multi-million pound tender with
the Home Office in which the organisation competed against recognised global
competitors through a full OJEU competitive process. After extensive scientific
testing, Remploy's protective clothing products were found to be the best
suited to meet the Home Office business needs.
A1.6.3 Lessons: impacts and outcomes:
The procurement activity between the Home Office and Remploy resulted in a
number of benefits. While working in collaboration with a supported business
helped fulfil social responsibilities and bring wider benefits to society, Remploy
was selected primarily for its ability, competency and value for money. In this
case Remploy eradicated the notion of having to rely on being a supported
business or third sector supplier to win business by tailoring its capabilities
around the requirements of the department and delivering competitive value for money.
A1.6.4 The use of Supported Business Frameworks remains potentially relevant
although at the time of writing this report some have expired. Public sector
procurers may also seek the delivery of social objectives by encouraging social enterprises in the relevant supply chain, for example as sub-contractors.
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A1.7 RESPIRO Guide on Socially Responsible Procurement of Textiles and Clothing - Guidance for Public Sector
Procurers (2007)
A1.7.1 Background: The RESPIRO guide provides guidance for EU public sector
procurers of Textiles and Clothing, produced by ICLEI2 (Local Governments for Sustainability). This includes a staged approach to the procurement:
Carrying out a needs assessment - what are you looking for?
Analysis of the market - readiness of the market to meet social
sustainability requirements;
Develop a comprehensive social sustainability strategy and policy in
order to legitimize social criteria inclusion in the procurement;
Engage with relevant stakeholders and so obtain useful input into the
procurement.
A1.7.2 Procurement process guidance and specifications: labour standards assurance
A1.7.3 It also includes guidance for each stage of the procurement process, such as at
specification stage as detailed below, with an emphasis on ‘decent working conditions’.
2 http://www.respiro-project.eu/en/respiro-guides/
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A1.8 Crossrail - Social objectives
A1.8.1 Background: Crossrail is the biggest engineering project in Europe and forms
a major part of the Mayor of London’s Transport Strategy. It will connect 37
stations, including Heathrow airport and Maidenhead in the west with Canary Wharf, Abbey Wood and Shenfield in the east.
A1.8.2 Policy objectives “Crossrail have adopted the Responsible Procurement
requirements from Greater London Authority and embedded the requirements
into our contracts. We seek a sustainable approach to all aspects of the
project lifecycle, optimising opportunities wherever practicable to facilitate economic growth, environmental protection and social progress.”
As part of the agreement to build, Crossrail was to ensure a lasting legacy of skills and employment and community benefits.
A1.8.3 Policy: The Crossrail Responsible Procurement Policy sets out commitment in
the following key themes:
Encouraging a diverse base of suppliers
Promoting fair employment practices
Promoting workforce welfare
Meeting strategic labour needs and enabling training opportunities
Community benefits
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Ethical sourcing practices
A1.8.4 Contract Conditions: Several of the relevant themes form part of the Crossrail Act which requires Crossrail to deliver on:
Fair Employment - covers employment aspects such as London Living Wage;
Supplier Diversity - requires the supply chain to facilitate equal subcontracting
opportunity for all sizes and forms of business to work on Crossrail;
Skills & Employment – The Mayor of London was keen to ensure that such a
project affords the opportunity for apprentices and trainees to gain valuable
and real life working experience. (As a rule of thumb, every £3m contract
requires at least 1 apprentice or a pro-rata training opportunity and Crossrail
has made a firm commitment to provide opportunities to 400 apprentices as a
minimum and to work with Crossrail for at least 16 weeks);
Ethical Sourcing requires that contractors ensure compliance with the 9 points
of the base code formulated by the Ethical Trading Initiative (ETI);
Workforce Welfare addresses the fair treatment of workers covering issues
such as collective bargaining.
A1.9 Transport for London’s Highways Maintenance Contract - Equality and Diversity
A1.9.1 Background: Transport for London’s (TfL’s) Highways Maintenance contract
was awarded in April 2007. Surface Transport led the procurement activity and
along with TfL’s equality team were instrumental in pioneering an innovative
approach to responsible procurement, including consideration of equalities and diversity issues.
A1.9.2 Tender/evaluation: equality and diversity action plan
As part of the tender process each supplier was asked to submit an equality
and diversity action plan, which contained plans on 4 key issues including:
Equality Policy outlining equality objectives and how these will be achieved
over the duration of the Contract and how they will be implemented by
Subcontractors;
A Diversity Training Plan outlining how Employees and Contractors would
be trained in diversity issues relating to the delivery of the Contract;
A Supplier Diversity Plan outlining the bidders prospects for optimising the
participation of diverse suppliers, including details of how this will be
encouraged and measured;
A Communication Plan outlining the approach to managing external
relations and communications with the local communities and relevant
stakeholders who were directly affected by the contract.
To ensure the best possible outcome from the process and to develop good
relationships TfL worked closely with the suppliers to provide relevant support
and guidance. This took the form of initial briefing, submission of draft plan,
which was followed by feedback, and then final submission of plans. The plans
were required to be SMART and the evaluation focused on actions that would achieve measurable outcomes.
A1.9.3 Contract Management: Learning was taken from the engagement process
and the successful contractors then worked to a specified framework. This framework required suppliers to identify the following:
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Equality & Diversity (E&D) objectives for each aspect of the plan;
Their baseline/current position in relation to the objective;
Actions to be taken to secure achievement of objective;
Timeframe for the action to be taken;
Person responsible for the action;
Resource required to support the action being progressed; and
The measures of success.
A1.9.4 Lessons: impacts and outcomes:
Since the contract was let in 2007 there have been some significant achievements including:
Contractors now have E&D monitoring systems in place;
Contractors now understand their baseline position;
Contractors now understand the relevance of targets and are now
setting appropriate targets;
Contractors are investing in additional resources to ensure that they are
able to deliver to the E&D agenda;
Contractors are champions of the E&D agenda with other authorities and
to the rest of the industry;
Contractors are running and attending meet the buyer events targeting
SME suppliers;
Contractors are pro-actively approaching TfL for support and assistance
to develop their approaches to E&D.
For example, one of the contractors Accord as a result of the emphasis of E&D
consideration in the contract appointed a full time Equality and Diversity Officer
who is responsible for their policy, core values, collecting monitoring information, training and recruitment from the local community.
In addition, all three contractors Accord, Amey and Ringway along with others
in the industry have set up an E&D forum to share experiences of E&D
practices and to constantly challenge each other to improve their E&D
practices. This has been as a direct result of TfL’s innovative approach to responsible procurement.
Amey’s Managing Director for Local Government, Nick Sharman said: “The TfL
North Area contract really focused our minds on delivering a sustainable
service, minimising the impact of works on the local environment and engaging
with the local community. As a result we now go beyond the requirements of
the original contract and are undertaking a range of environmental and
community initiatives. We are also encouraging and supporting our supply
chain to do the same.”
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A1.10 The Scottish Government - Community Benefits in Public
Procurement3
A1.10.1 Background: The purpose of this note is to provide guidance on the use of
‘community benefits’ in public sector procurement. The note draws on the
findings of the Scottish Government’s pilot Community Benefits in Procurement
(CBIP) Programme, which focused on a pilot within construction related procurement projects.
‘Community Benefits’ in this context are contractual requirements which deliver
a wider social benefit in addition to the core purpose of the contract. In
particular, requirements in relation to targeted training and employment
outcomes.
A1.10.2 Specification: Community benefits programme
It has become clear over recent years that there is scope within the EU legal
framework which applies to public contracts, to use contracts to deliver wider
social benefits. However, notwithstanding the legal possibilities, there are
significant practical and value for money issues around adopting this approach.
The background for these type of programmes can be found in the following report; Achieving Community Benefits through Contracts4
The Scottish Government established a pilot programme to examine these
issues in a practical context (the ‘CBIP Programme’). The pilot programme
commenced in 2003 and included participation in pilot contracts by five
authorities: Glasgow Housing Association, Raploch Urban Regeneration Company, Inverclyde Council, Dundee City Council and Falkirk Council.
In addition to the targeted training and recruitment requirements, the pilot
projects involved the procurement of a wide range of works and services on
varying scales. The Community Benefits in Procurement Report summarises
the pilot projects and analyses the use of community benefit clauses and the
effectiveness of the procurement process in obtaining a contractor that is
committed to delivering the required community benefits. The report also
describes the supply-side initiatives (e.g. training and recruitment services)
that were needed to help contractors deliver their obligations under the various
contracts. Also included are recommended model clauses to assist public
bodies in recruitment and training matters in their contracting processes. The
full Community Benefits in Procurement Report was published on 19th
February 2008 and is available on the Scottish Procurement Directorate’s5 website.
A1.10.3 This note is not a comprehensive guide to the use of community benefit
clauses; it is intended to provide an overview of the legal and practical issues.
Those considering including community benefit clauses in contracts are advised to take appropriate legal advice.
A1.10.4 The CBIP Programme focused on one area – targeted recruitment and training
– where there is scope for incorporation of community benefit clauses in public
sector contracts.
3 http://www.scotland.gov.uk/Publications/2008/02/13140629/0
4 http://www.jrf.org.uk/publications/achieving-community-benefits-through-contracts-
law-policy-and-practice
5 http://www.scotland.gov.uk/Publications/2006/05/spdpolicymanual
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A1.10.5 Policy, rationale and organisational objectives:
The priority for all public procurement is to achieve Value for Money (VfM).
Value for money does not, however, mean ‘lowest price’. It is defined in the
Scottish Public Finance Manual 2 as “the optimum combination of whole life
cost and quality to meet the end user’s requirement”. The CBIP Programme
sought to examine the inclusion of community benefits clauses in contracts in a way which also achieved value for money.
At a national level, the importance of linking regeneration spend to
opportunities for disadvantaged communities is clearly stated in the Scottish
Government’s Regeneration Policy Statement. At a local level, many
Community Planning Partnerships have adopted policies to address social exclusion.
The Review of Public Procurement in Scotland recommended that the Scottish
Government should prepare and issue guidance on Corporate Social
Responsibility. The Scottish Procurement Directorate has published guidance on Social Issues in Public Procurement6 in line with this requirement.
A1.10.6 Summary of key lessons:
Legality: Community benefit clauses need to be carefully considered to ensure
that they meet the requirements of the EU procurement rules and general EU
law. In particular, care should be taken to ensure that clauses do not cause
either direct or indirect discrimination. Contracting authorities must have a
legal and policy basis for incorporating community benefit requirements in their procurement processes.
Clarity and commitment:
Subject Matter: It is essential that all involved have a full understanding of
community benefit clauses. A team or group dedicated to the project is
advantageous and, where possible, should involve those with previous experience of targeted recruitment and training clauses.
Procurement Officers should undertake an analysis of the labour content of the
contract. Professionals from the field of employment and training can also
provide invaluable advice on community benefits clauses. This ensures that the
clauses are given robust consideration in the tender documents and forces
providers to seriously consider how they will implement and report on the requirements.
Bids should be compared in a standardised format and community benefit
clauses judged solely on objective and measurable outcomes. Once in place,
the monitoring of deliverables needs to be robust with clearly defined detail.
Limitations
The following considerations should be borne in mind with relation to use of community benefits clauses in contracts:
a) Check legal and subsequently policy justifications;
b) All procurement of goods and services should achieve Value for Money,
having due regard to propriety and regularity (the cost of incorporating
community benefit clauses will vary with the requirements);
c) Contract suitability and capacity need to be addressed on a case-by-
case basis;
6 http://www.scotland.gov.uk/Resource/Doc/116601/0053331.pdf
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d) Key components which together indicate the appropriate targeted
recruitment and training (TR&T) clauses which can be used in a
particular case must be linked. Such components include employment
planning, industry capacity, funding, as well as possible routeways for
employment support and training providers to facilitate achievement of
TR&T clauses;
e) Responsibility for the whole process, including implementation and
monitoring, needs to be clearly set in advance;
f) Community benefit clauses must be mentioned in any OJEU notice by a
contracting authority and throughout the procurement process;
g) Community benefit clauses need to have a direct link to the core
purpose of the contract, in order that they can be included in the
technical assessment of potential contractors and in award of the
contract;
h) To avoid any form of discrimination, including indirect discrimination,
the wording of community benefit clauses needs to emphasise ‘social
inclusion characteristics’ and cannot be aimed specifically at employing
people from a certain locality, of a certain age or sex, etc. Targeted
training is permissible;
i) Indirect discrimination, to the disadvantage of non-local contractors,
must be avoided;
j) Monitoring of contract deliverables and outcomes to ensure compliance.
A1.10.7 Subject matter, Advertising: When use of Community Benefit Clauses can be appropriate
Market factors contributing to compliance with TR&T clauses, such as
beneficiaries, training, funding and the supply of trainees and recruits all need
to be aligned. In addition:
a) The mere act of considering the possibility of inclusion of a Community
Benefit clause can encourage authorities to rethink strategies and
encourage a more innovative approach to implementing these strategies
across the organisation;
b) Successful community benefit programmes can lead to the permanent
employment of formerly non-working people leading to a positive cycle
of experiences for these people;
c) Community benefit clauses can enhance the regeneration of deprived areas.
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A1.11 London 2012 – Olympic Delivery Authority (ODA) Objectives (the following is extracted from the ODA
Report) - Social Objectives7
A1.11.1 Background: The ODA has worked with LOCOG on communication and
consultation with communities neighbouring the Olympic Park and other
venues. This ongoing programme supports active local participation in the regeneration of the area.
Table A.2 below highlights the relevant social objectives and commitments
(and status as set out in the ODA Report):
Table A.2 - Progress for London 2012
Commitment Status
Promote supplier diversity and maximise opportunities for local
and UK minority-owned businesses and social enterprises to
benefit
On track
Inspire, engage and involve people and communities round the
Olympic Park in developing legacy plans:
On track
Create excellent architecture and urban design, based on
inclusive design principles, in the Olympic Park
On track
Recruit and develop a diverse workforce and ensure that
opportunity and training are available to all
On track
Promote sustainable employment opportunities and boost skills
levels locally and across the UK
On track
Bring opportunities for under-represented groups in the
construction industry, including women, BAME and disabled
people
On track
Deliver a construction workforce of which at least 10–15% are
residents from the five Host Boroughs
Exceeding
Ensure at least 7% of the construction workforce is made up of
people previously unemployed before working on London 2012
Exceeding
Place at least 2,250 people into construction traineeships,
apprenticeships and work placements (up to 2012)
Exceeding
Encourage contractors to pay the London Living Wage On track
The ODA also sought to use design to eliminate health and safety risks
associated with the construction, maintenance and use of the Olympic Park and
venues. It also looks to enhance the health of those working on the site now, and those using the facilities in the future.
7
http://www.london2012.com/mm%5CDocument%5CPublications%5CSustainability%5C0
1%5C24%5C09%5C14%5Clondon-2012-sustainability-report-a-blueprint-for-change.pdf
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A1.11.2 Advertising: Contractors and suppliers engagement
The ODA held a series of ‘meet-the-buyer’ events, putting local and UK
minority-owned businesses in contact with Tier 1 contractors. For the SMEs,
this increased their understanding of potential buyers’ requirements, while the
Tier 1 contractors were encouraged to register business opportunities on ‘CompeteFor’.
A1.11.3 Lessons: impacts and outcomes:
At the end of December 2010, there were 6,499 people working on the
Olympic Park and 5,381 people working on the Athletes’ Village.
A total of 222 women have received help in finding employment through
the ODA’s Women into Construction project.
75% of the previously unemployed people placed into work since April
2008 are from the five Host Boroughs.
Overall, 3,259 training interventions have been provided through the
ODA’s National Skills Academy for Construction.
In total, 408 apprentices have worked for the ODA on the construction
programme.
A1.11.4 The London Living Wage (Note: LLW is not a mandatory contract
condition for public sector.)
The ODA encourages contractors to implement the London Living Wage (LLW).
Of those who responded to a voluntary question, 82% of the Olympic Park
workforce said that they receive the London Living Wage. 8% indicated that
they were not and 10% preferred not to say. In the Athletes’ Village, 60% of
the workforce declared themselves as earning the London Living Wage, 8%
stated they did not and 32% preferred not to say. The London Living Wage (LLW) is £7.85 per hour from June 2010, and £7.60 per hour in 2009.
A1.11.5 Diversity and equality:
The ODA introduced a work placement initiative as part of the Women into
Construction Project which offers newly qualified women an opportunity to gain
experience of working on-site. A total of 47 women have done work
placements, of which 16 were students, and of the remaining 31 women, 87%
gained full-time employment at the end of the placement. By the end of
December 2010, 222 women had been brokered into employment on the
Olympic Park, 401 had received training in construction, and 601 had benefited
from employment support as part of this programme. In 2010, Opportunity
Now, part of Business in the Community, recognised the ODA’s gender equality
programme with the Innovation Award. Opportunity Now praised the fact that
women working on the Olympic Park were empowered and supported to use their skills to further develop their careers.
A1.11.6 Skills and training:
The London 2012 Apprenticeship Programme has exceeded its target. It has
now had 408 apprentices who have experienced working on the construction
programme. The ODA is the first initiative of its kind to be awarded National Skills Academy for Construction (NSAfC) status.
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A1.12 London Organising Committee of the Olympic and
Paralympic Games - Policy Objectives and ITT
A1.12.1 Background: The bid for the London Olympics made a commitment to host
the world’s first truly sustainable Olympic and Paralympic Games. The London
Organising Committee of the Olympic and Paralympic Games Ltd (LOCOG) has
identified the most effective way to support this commitment was to embed sustainability within the procurement process from the start.
A1.12.2 Tender/evaluation requirements:
The LOCOG ‘Invitation to Tender (ITT) for the provision of goods and
services’ sets out a clear vision and objectives for suppliers: ‘LOCOG will place
a high priority on environmental, social and ethical issues when procuring the
goods and services needed for the Games’ and refers them to the Sustainable Sourcing Code8 for guidance.
In terms of construction LOCOG procurement focuses on temporary structures
and ‘overlay’ for venues to make them Games-ready. Examples of
sustainability requirements include sourcing of materials, timber and timber
products in line with LOCOG policies and compliance with labour practices,
diversity and inclusion requirements. For example, all timber and timber
products must be from a known origin with credible evidence of legal
harvesting and FSC or PEFC certification (NB Central government bodies are
required to comply with the UK Timber Procurement Policy, the requirements
of which differ from this). Targets have also been set to ensure 20% of
materials purchased by LOCOG for venues, by value, are from recycled or
secondary sources. Additionally there is a target for 90% of materials, by
weight, arising from installation and deconstruction of temporary structures and overlay to be reused or recycled.
A1.13 National Sustainable Public Procurement Programme
(NSPPP) – Risk Assessment/prioritisation methodology
A1.13.1 The NSPPP prioritisation methodology9 is a tool available to all public
sector procurers to identify categories and sub-categories of procurement
where social and ethical issues are significant and where these issues they may
be addressed in the procurement process. It is therefore a strategic planning
tool.
Other methodologies have been developed that have a category or sector
specific focus. As with the NSPPP any prioritisation methodology must be relevant for your organisation and may be tailored to suit.
A1.14 BUFDG (British Universities Finance Directors Group)
Commodity Coding - Social and Ethical Risk Assessment
A1.14.1 Background: identifying the relevance and significance of social and ethical
issues for products and services is an essential step, supporting organisational policy objectives.
8 http://www.london2012.com/documents/locog-publications/sustainable-sourcing-
code.pdf
9 http://sd.defra.gov.uk/advice/public/nsppp/prioritisation-tool/
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A1.14.2 An example of sector or category specific methodologies include the BUFDG
Commodity Code Risk Analysis (available via the Sustainable Procurement
Centre of Excellence10). The Commodity Coding Risk Analysis includes a risk
assessment process for key categories of procurement (for Higher Education sector but potentially relevant for other public sector organisations)
This can be used to assess headline risk. Then evaluate in detail acquiring further expert advice as required and dependent upon level of risk/relevance.
A1.15 Durham County Council - Targeted Recruitment & Training
A1.15.1 Background: This contractor successfully secured a contract to build 2 large buildings.
A1.15.2 Policy: Targeted Recruitment and Training (TRT) Charter - contractor commitment
The contractor made a firm commitment by signing the Durham TRT Charter to
support the local community by creating employment and training
opportunities and supporting educational initiatives. This reinforced the
Council’s commitment to TRT and provided the contractor with a clear set of objectives.
A1.15.3 Contract conditions: key milestones set within the contract
Month 1 – work started;
Month 2 – School pupils from local community start a monthly programme of
activities, projects and site visits;
Month 3 – Company sign the TRT Employment & Skills Charter;
Month 4 – 8 jobs created & start on site (one with subcontractor);
Month 5 – a 6 week paid work placement was extended to 10 weeks;
Month 6 – 1st Apprentice starts work on site, 3 jobs created and started with
sub contractor;
Month 7 – 2 further jobs created and started, 5 jobs created and started with
sub contractor;
Month 8 – 1 further job created and started, 10 jobs created and started with
sub contractor
A1.15.4 Lessons: impacts and outcomes:
Working in partnership with Durham County Council’s TRT Officer, the contractor has successfully recruited:
4 bricklayers;
1 scaffolder;
1 paid work placement in administration;
2 Gate persons;
1 Apprentice;
10
http://spce.ac.uk/knowledge_base_cat/resources/aupo_sustainable_procurement_guidan
ce_and_documentation/
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3 General Construction Operatives;
1 Office Junior;
18 service engineers.
The number of jobs created on this project is 620% of the contract obligation. The 18 service engineers came from 1 main sub-contractor.
By signing the TRT Charter, a nominated contractor contact engaged regularly
with the TRT Officer within DCC to enable these opportunities to be targeted at
local unemployed people. Where training was to be provided these vacancies
were targeted at new entrants to the construction industry. The skilled trades were targeted at unemployed skilled people.
At week 35 of the project the above employment represents 304 person weeks.
In addition to the opportunities secured through the contract the contractor also agreed to additional support for training. This includes:
School visits from local primary schools;
Workshops for local primary schools;
Research projects;
Work experiences;
Construction Road shows;
Continual professional development of current workforce (including
H&S, short courses & vocational qualifications).
The project build for both buildings has secured a number of opportunities for
local residents and companies: By week 35 a total of 97% of staff employed on
the site on a monthly basis were from the North East region. 33% of these
are Durham residents. 96% of the 31 beneficiaries started through the project were unemployed prior to commencing work.
A total of 31.6% of sub-contracting opportunities were secured by Durham
companies through this contract. (84.2% NE). A total of 22.6% of supplier
opportunities were secured by Durham companies and 88.5% by North East companies. An analysis of the value of contract is to follow in a later report.
A1.16 Church Village Bypass - partnership Between Costain,
Rhondda Cynon Taf Council and Welsh Government - Community Benefits
A1.16.1 Background: In 2007/08 the Rhondda Cynon Taff County Borough Council
tendered for the design and construction of the 7km Church Village Bypass,
which involved five major civil engineering contractors. The Welsh Government
(WG) confirmed funding for the scheme in March 2008 and proceeded to utilise
an Early Contractor Involvement methodology for project delivery. This
involved establishing a partnering approach to design and build, in which the
main contractor (Costain) was engaged before the detailed design stage and
completion of statutory processes, to assist in planning the project and estimating its cost.
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A1.16.2 Costain reviewed the original outline plans as part of a value engineering
exercise and proposed a revised scheme which identified savings of £37 million
and 51% reduced carbon emissions compared to the original scheme, through
a number of initiatives, including:
Imported stone and primary steel being at least 60% recycled content;
70% recycled aggregate, from local suppliers;
As the scheme went through old landfill sites permission was sought
from the Environment Agency to use materials from these for the
scheme, including 300,000 tyres and 80,000m3 of pulverised fuel ash;
Community engagement and community benefits.
The revised scheme was presented at a public exhibition and outlined the
numerous benefits including a reduction in visual impacts through extensive
planting and the use of bunding to reduce traffic noise.
Additionally, Costain worked closely with the Council and Constructing
Excellence in Wales to consult with the public and key stakeholders to develop a Community Benefits Plan aligned with the Council’s own Community Plan.
A1.16.3 Lessons: impacts and outcomes:
On completion of the project in 2010, three months ahead of schedule and £1
million under budget, a total of 90% of waste had been diverted from landfill
and 70% of the bypass had been constructed from locally sourced recycled
aggregate. The local community was kept informed and involved throughout
the project by utilising newsletters and information notices along with a
dedicated website and visitor centre.
Additionally, 75 jobs were created for long-term unemployed during the project
and more than 90% of sub-contracts were awarded to local companies based
in South Wales. The project has won numerous awards and is part of
Constructing Excellence in Wales’ Demonstration Project Programme. This
example highlights the benefits of undertaking formal supplier relationship
management activities with key construction suppliers. In order to realise the
benefits of innovation a relationship between client and contractor which promotes partnership and collaboration is required to achieve mutual benefits.
A1.17 Glasgow Housing Association - Community Benefits
A1.17.1 Background: This Case Study is an extract from ‘Community Benefits in Public
Procurement, The Scottish Government’. The focus was on targeted recruitment and training requirements.
A1.17.2 Policy objectives and market engagement:
For each contract or group of contracts a contractors’ conference was held.
This included a presentation from GHA and Scottish Executive on the
employment and training requirements and opportunities to ask questions. A
leaflet setting out the objectives and contact information for labour and training supply organisations was provided at each conference.
A1.17.3 Subject Matter of the Contract:
In the Official Notice (OJEU), the following text was included in II 1.6 Description/object of the contract;
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‘Under this contract/these contracts, the contractor/supplier will be required to
support the awarding authority’s economic and social regeneration objectives.
Accordingly, contract performance conditions may relate in particular to social
and environmental considerations’.
A1.17.4 Appraisal Questionnaire (PQQ)
Information was requested on existing apprenticeship and training activity
including:
Recruitment and training of young people; adult returners and the
unemployed;
Willingness to invest in training;
The existence of contract monitoring arrangements (for training); and
the name and position of the person responsible for training in the
Company;
A1.17.5 ITT and specification
Bidders had to submit an Employment and Training Method Statement with their tender setting out how they would deliver:
Every vacancy (including those with subcontractors) to be notified to
agencies named by GHA;
10% of person-weeks delivered by new entrants engaged in a training
programme agreed by GHA;
The equivalent of 5% of person weeks to be available for unwaged work
experience placements;
The provision of records for monitoring and verification purposes,
including compliance with the Data Protection Act;
Provision of reports on performance against stated KPIs.
A1.17.6 Selection and Award
GHA’s Neighbourhood Renewal Team developed a scoring framework for the
Method Statements. This score represented between 5 and 12.5% of the
‘quality’ score, so typically between 1.5% and 3% of the overall scoring
framework (on a 30:70 quality/price ratio).
A1.17.7 Contract Conditions and management
Employment and Training requirements included in two of the four documents
that make up the suite of contracts.
The monitoring requirements are set out in a Constructor Training and
Employment Monitoring Pack. This contains:
An overview of the monitoring arrangements
Copies of the monitoring forms:
New Start Personnel Record
Employee leaver form
Quarterly Report form
New start definition flow-chart
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A1.18 PAS 91:2013 Construction related procurement - Pre-qualification questionnaires
A1.18.1 Background: A set of standard PQQ questions for construction related procurement, including equal opportunity and diversity11.
A1.19 Shotts Prison Phase 2 Development - Community Benefits
Requirements12
A1.19.1 Background: To ensure social sustainability considerations were embedded in
the Phase 2 development of Shotts Prison the Scottish Prison Service (SPS) specified the requirement for contractors to consider Community Benefits.
A1.19.2 Policy objectives and market engagement:
The key areas focussed on were Recruitment and Training; Involvement of
Small and Medium Sized Enterprises and Involvement of the Third (Voluntary)
Sector. North Lanarkshire Council (NLC) hosted a ‘Bidders’ Forum’ with SPS to
provide background to the requirements on existing regeneration and other Community Benefit programmes operational in the local area.
A1.19.3 PQQ requirements:
Working in partnership with North Lanarkshire Council (NLC) a Pre-Qualification
Questionnaire (PQQ) was developed which specifically tested bidder experience of including community benefit involvement within construction projects.
A1.19.4 Tender/evaluation requirements:
NLC also supported the SPS procurement process by providing specific
questions for inclusion within the Invitation to Tender along with an example format of an ‘Employability and Skills Plan’.
Bidders were requested to address these elements which were assessed as part of the tender evaluation process.
A1.19.5 Lessons: impacts and outcomes:
The winning contractor (Laing O’Rourke) for the design and build contract
(awarded in December 2010) outlined a number of community benefits
provisions that will be undertaken during the construction project. These
include: 16 employment opportunities for people who have been unemployed
for over 12 months; 354 unwaged training weeks and local sub-contractor engagement in support of the primary contract.
Laing O’Rouke were proactive in meeting with the SPS prior to works
commencing and engaging with proposed sub-contractors to outline
requirements, which included the delivery of a breakfast seminar to prospective supply chain companies.
Throughout the process the Laing O’Rouke Project Manager has been actively
engaged in driving the Community Benefits agenda with SPS and NLC. To date
(April 2012) excellent progress has been made so far with 8 higher level apprenticeships and 7 labouring jobs created.
11 http://shop.bsigroup.com/upload/PASs/PAS91-2013.pdf
12 http://www.sci-network.eu/snapshots/targeting-community-benefits-in-prison-
construction-in-scotland-uk/
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The example highlights the benefits of being proactive in seeking innovation
and clearly articulating this to suppliers. Undertaking ‘Early Market
Engagement’ (EME) activities early in the pre-procurement phase helped to
allow identification of new, innovative or alternative ways of meeting requirements.
Consideration of Community Benefit provisions needs to be developed and
reflected into the procurement process at this early stage to establish realistic
objectives and targets which then inform the specification, testing of bidder
capability at PQQ, and the subsequent contract. Community benefit provisions
which are relevant to the contract and performance of the contract can be included as part of the qualitative tender evaluation criteria.
Early engagement with the market regarding potential objectives through pre–
tender dialogue or Bidder Forum’s, joint working with the contractor to turn the
outcomes indicated in the contract into practice, and ensuring follow-up
monitoring during the performance of the contract are considered key success factors.
A1.20 Department for Work and Pensions - Land Securities
Trillium & Amaryllis Environmental Services - Example of
Commercial Supplier Delivering Social Outcomes
A1.20.1 Policy: As part of the PRIME contract to provide a range of services following
the transfer of the Department for Work and Pensions Estate and management
to Land Securities Trillium the furniture service delivery is ‘based around the
lifecycle management of all furniture, fittings and equipment on the Estate. All
existing furniture on the Estate will be maintained as ‘fit for purpose’ and will
meet statutory standards, as a minimum, at all times. All replacement
Furniture (whether new or remanufactured) will also meet the quality standards’.
The office modernisation process also involved the upgrading of large amounts
of office furniture. As part of this Land Securities Trillium sought to re-use
office furniture wherever possible, and to refurbish or remanufacture whenever re-use was not possible.
From 2002-2008, the modernisation process resulted in 31,000 refreshed
chairs, nearly 60,000 remanufactured desks and 15,000 remanufactured
storage units. Over 15,000 tonnes of surplus furniture were re-used or recycled
in 2007 and 2008. Of this, less than 4% went to landfill.
Amaryllis has a full de-manufacturing and remanufacturing process plant.
Within the public sector they have worked with the Home Office, DVLA, HMRC, Ministry of Justice and Surrey Police.
A1.20.2 Social outcomes: The link to social outcomes concerned the relationship Land
Securities has had with Remploy, which supports a process of refurbishing and
repairing furniture and creating employment opportunities for ‘people facing complex barriers to the world of work’.
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A1.20.3 While the focus of the Amaryllis service is to deliver enhanced recycling and
remanufacturing and therefore reduce environmental impacts this may be also
delivered through social enterprises, although in some cases they may not
have the scalability to be able to deal with large volumes. The link with
Remploy may be reinforced through contractual requirements where this meets the procurer’s sustainability objectives13.
A1.21 Reuse@Leeds - Leeds University - Reuse Links to Social
Benefits
A1.21.1 Background: In 2009 it was identified that a large amount of good-quality
furniture was being disposed of by the University. This led to the development
of an online reuse system. This system linked departments, saving over £380k
of furniture and over 80 tonnes of carbon savings in less than two years.
Building on this, in March 2011, a new site, ‘reuse@leeds’ was launched.
Developed with procurement in mind, this site offers a simple system of reuse across campus, including furniture, stationery and equipment categories.
A1.21.2 This system, while enabling financial and environmental savings, also delivers
social benefits - if re-use is unsuccessful, local company ‘Over2Hills’ take the
items and redistribute to local charities, with any profit generated from this being donated to a charity nominated by the University14).
A1.21.3 While not directly related to procurement activities this example highlights the
importance of re-thinking the need for procurement and considering the scope for links to social outcomes.
A1.22 London Councils - Sustainable Furniture Disposal Toolkit -
Social objectives
A1.22.1 Policy Objectives:
The toolkit15 for tendering office furniture disposal in a sustainable manner is
available from the link below. It includes specifications for the environmental
and social objectives listed below which were cleared by the legal team at
Camden Council (these would need to match the relevant organisation’s objectives, so may need to be adjusted accordingly).
Reducing waste, re-use .v. recycling;
Vehicle emissions, vehicles used and transport distances;
Promoting new markets and supporting SMEs;
Equalities- improvement of staff conditions in fire stations;
Social responsibility of contractors & training opportunities.
13 http://www.dwp.gov.uk/docs/026-sch-8-epc-generic-method-statement.pdf
14 http://reuse.leeds.ac.uk/
15
http://www.londoncouncils.gov.uk/search.htm?cx=012816060298198299354%3Aulbau
m7l6aw&cof=FORID%3A11&ie=UTF-8&q=furniture&sa=go
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A1.22.2 ITT: This includes a suggested method statement wording as follows:
‘Please outline your mechanisms for ensuring that the processes in place to
provide the service are sustainable and designed to reduce any environmental impact. Please concentrate your response on methods employed to:
Reduce waste in line with the waste hierarchy as detailed in the Waste
Strategy for England;
Reduce CO2 emission and other pollutants through vehicles used and
transport distances;
Promote new markets and support SMEs;
Demonstrate social responsibility including training and employment
opportunities provided;
Encourage your supply chain to meet the sustainability objectives of the
contract’.
A1.23 London Fire Brigade - furniture disposal and social
benefits: sustainable furniture disposal toolkit tested - Social objectives and Evaluation
A1.23.1 Background: The London Borough of Camden was the lead Local Authority on
a 2-year project for the London Centre of Excellence on sustainable
procurement. The London Borough of Camden assisted the London Fire and
Emergency Planning Authority (LFEPA) to determine the most affordable sustainable method for the disposal of excess office furniture.
A1.23.2 An inventory analysis carried out in February 2007 identified approximately
5,566 items of furniture were required to be disposed of with an approximate
weight of 297 tonnes. Whilst the furniture was in good condition it was not
recommended that the furniture be the first choice to furnish the new building
as there are a number of different styles and ranges of furniture and would be very difficult to manage such a mix of products across a single site.
A1.23.3 Subject Matter: The options available to dispose of the furniture were:
disposal to landfill;
disposal through a single social recycling service and;
disposal through a managed social recycling network.
The following is the summary of the analysis undertaken at the time:
A1.23.4 Landfill Disposal: Costs for landfill disposal are likely to be in the region of
£77,000 including site labour to dismantle the furniture and transport it to
allocated skips. This equates to £259 per tonne.
The environmental impact of landfill disposal is the fact that 297 tonnes of
mixed waste will be added to the waste stream. There are no environmental benefits from this option.
Socially this disposal option is neutral and has no significant bearing on employment or the wellbeing of the community.
A1.23.5 Single social recycling service: The likely costs for disposal by means of a
single social recycling service will be in the region of £71,000 including site
labour, transportation for processing and gate fees. This equates to £239 per tonne.
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The environmental impact is mixed as only a small amount of the furniture is
likely to be re-introduced into the reuse marketplace and the balance will be
processed for the recyclable materials. The energy required to recycle the
materials will be considerable although no accurate data is available to quantify this.
The social impact is very good as employment is secured in organisations that
require this type of work for their survival. There are undoubtedly public
relations opportunities from being seen to support the work carried out by
social organisations. This may have some benefit in developing wider
recognition of the work London Fire Brigade is doing to enhance their sustainable credentials.
A1.23.6 Managed social recycling network: The likely cost for disposal through a
large-scale managed social recycling network will be in the region of £48,300
including site labour and transportation to the process centre in Dundee, Scotland. This equates to £163 per tonne.
The reason behind the lower disposal costs are that a far higher proportion of
the furniture is sold into the reuse market thereby offsetting the single social
recycler’s likely disposal costs for timber and waste chipboard. Resale margins
are high as there is no cost for the product as the donor organisation covers the costs of dismantle and transportation.
Unlike the single social recycling process the managed social network offers
much higher levels of product being re-introduced into the marketplace with
very little material recycling. As with the single social recycler the social impact
is positive and represents an opportunity to enhance the social standing of London Fire Brigade.
A1.23.7 This includes the tender evaluation matrix with a focus on SME, training and supply chain sustainability.
A1.24 London 2012 - identifying key social issues through risk
assessment matrix - Social and Ethical Risk Assessment
A1.24.1 Background: The comprehensive LOCOG Sustainable Sourcing Code covers all key procurement categories.
A1.24.2 This includes furniture and fittings, which are assessed against broad social issues as follows:
Labour standards;
Health and safety;
Animal welfare;
Diversity and inclusion.
A1.24.3 The matrix16 therefore flags up key social issues which will need to be considered in relevant procurement documentation.
The matrix also confirms that for furniture and fittings LOCOG mandates Sedex
registration. Suppliers and licensees are encouraged to register with Sedex regardless of their particular category.
16 http://www.london2012.com/documents/locog-publications/sustainable-sourcing-
code.pdf
http://www.environment-agency.gov.uk/aboutus/112323.aspx
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A1.25 Environment Agency - Wheal Jane Operations &
Maintenance Contract 2010-2020 - Delivering local
employment through procurement
A1.25.1 Background: (From EA) The Environment Agency (EA) is a committed leader
in sustainable procurement and have contributed to the Government’s
strategy. We have an award winning approach as recognised by the European
Eco-Management and Audit Scheme in 2009 and we openly share and promote
this to others. This particular case study demonstrates that our approach can
deliver real improvement and drives a step change in supplier performance.
The outcomes benefit the environment, local community and economy, and contribute to EA corporate strategy, Creating a Better Place, 2010 – 2015.
A1.25.2 In 1992, over 45 million litres of heavily contaminated minewater burst out of
the disused Wheal Jane tin mine and into the Carnon River and Falmouth Bay.
As a result, the EA commissioned the Wheal Jane Minewater Treatment Plant (the Plant) to treat minewater and dispose of the toxic metals within it.
A1.25.3 A ten year contract was negotiated in 2000 to outsource the operation and
maintenance of the Plant. The EA have recently re-tendered this contract for
the £15m project for the period 2010 to 2020.
A1.25.4 As well as several environmental criteria the following social considerations were met:
A1.25.5 Local Employment: Maximum influence was exerted on the supply chain to
retain local people in their jobs because Cornwall has a high level of
unemployment. Additionally, the contract is labour intensive and requires input
from specialists.
A1.25.6 Local Economy: Contract conditions: Suppliers should be encouraged to
utilise local SMEs for sub-contracted work, material supply and maintenance contracts.
A1.26 APUC Supply Chain Code of Conduct – setting clear policy
objectives
A1.26.1 Background: APUC (Advanced Procurement for Universities and Colleges)
Limited is the procurement centre of expertise for Scotland’s 60 universities and colleges.
A1.26.2 APUC and its client community of Colleges and Universities is committed to
carrying out procurement activities in an environmentally, socially, ethically
and economically responsible manner and to entering into agreements and
contracts with suppliers that share and adhere to its vision. To demonstrate
this commitment, current and potential suppliers are asked to acknowledge
their compliance with the principles of the APUC Supply Chain Code of Conduct,
below, with respect to their organisation and their supply chain.
A1.26.3 To this end the Code includes a focus on:
Social Compliance
Ethical Compliance and Economic Development
Environmental Compliance
Full details are available here.17
17 http://www.apuc-scot.ac.uk/code.htm
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A1.27 National Skills Academy Construction Skills – toolkit for skills and employment outcomes18
A1.27.1 Background: The National Skills Academy for Construction Client-Based
Approach for use in Scotland provides a toolkit to deliver employment,
apprenticeships and training to public sector and other procuring clients
through their construction projects. It provides model documentation,
benchmarks, case studies and practical commentary. Based on successful
National Skills Academy for Construction projects, the guidance includes all
necessary components to deliver apprenticeships, employment and training
opportunities on any type and size of construction project.
A1.27.2 This guide has been commissioned by Construction Skills to provide the
working documentation for local authorities and other bodies procuring
construction projects to embed employment and skills, right through from
policy and strategies to procurement and operational implementation. It also
explains how progress towards the outcomes can be monitored. The guidance document includes:
Good practice information on use of an Employment and Skills Strategy and the development of an Employment and Skills Plan (ESP)
Legal, policy and process advice on procurement of contracts
Template benchmarks relating to a range of employment and skills areas
Guidance as to the inclusion of supply chain diversity
Appendices, including:
a template ESP
a summary of the employment and skills areas and potential issues
surrounding them
template procurement and contract clauses
an Employment and Skills Strategy Workbook.
A1.28 Olympic Games, Responsible Procurement, Travel
Ambassador uniforms – tender requirements
A1.28.1 In accordance with the GLA Group Responsible Procurement Policy and the
requirements of Games organisers LOCOG, it was important to ensure the
supplier could ethically source items ranging from polo shirts and hats to
backpacks and water bottles. After a rigorous tender process, in which ethical
sourcing requirements were a key element, Hull-based company Arco won the
contract. Arco are ETI members, and have a strong track record in ethical
sourcing. They commissioned third party independent social audits for eight
sites in China, Laos and the UK to understand current labour conditions at each site, and determine whether any corrective actions were required.
18 http://www.cskills.org/nsacademy/clientledapproach/procurement/client-approach-
scotland.aspx
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Some non-conformities against the ETI Base Code were discovered at several
of the sites. These ranged from a lack of emergency lighting systems and
broken sewing machine needle guards to inconsistent wage payments and
bank holiday pay issues. Clear, specific, time-bound corrective action plans
were agreed between TfL, Arco, and the factory managers. The plans were
overseen by Arco, who provided TfL with evidence that each issue had been resolved.
Full details are available here19
A1.29 West Midlands Procurement Framework for Jobs and Skills
– Guidance throughout procurement20
A1.29.1 The Main Guide to the West Midlands Procurement Framework for Jobs and
Skills – Harnessing Public and Third Sector Buying Power, The West Midlands Economic Inclusion Panel, March 2010;
A1.29.2 The Framework consists of three linked documents:
a Summary Guide, which provides an introduction to the Panel’s
approach to achieving its aim of embedding jobs and skills as core
considerations throughout the procurement process, and the issues to be considered when doing so;
a Main Guide containing information on legal and policy matters, supply-
side issues and the free, public sector recruitment and training support services that are available to procurers and prospective contractors;
and
a Toolkit for Stakeholders containing a series of model documents,
including template jobs and skills clauses, detailed legal guidance and
various tools, which can be downloaded and adapted to meet the needs
of individual public and third sector organisations and prospective contractors, including SMEs and social enterprises.
A1.30 Labour Standards Assurance System - Labour Standards
Monitoring and Improvement
A1.30.1 The Labour Standards Assurance System has been developed by the
Department of Health in partnership with NHS Supply Chain21. It has been used
initially on a pilot surgical instruments contract by NHS Supply Chain and will
now be used for other contracts where labour standards have been identified
as being of particular concern, using an initial risk assessment based on the Ethical Procurement for Health assessment process22.
19
http://www.london.gov.uk/sites/default/files/TfL%20TA%20Uniforms%20case%20study.
20 http://hub.westmidlandsiep.gov.uk/uploads/files/smes/main%20guide%20job.pdf
21 http://www.supplychain.nhs.uk/news/company/nhs-supply-chain-sets-the-standard-
for-ethical-procurement-in-new-bma-film/
22 http://www.ethicaltrade.org/ethical-procurement-for-health
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A1.30.2 The Labour assurance system covers the range of policies, procedures and
practices that an organisation employs to identify labour standards abuses, mitigate risks and drive improvement, within:
The organisation itself;
Contractors and sub contractors;
Suppliers and;
Parties in the supply chain.
A1.30.3 The System is designed to encourage improvement with levels of progression,
suppliers being responsible for demonstrating how they manage labour
standards and deliver improvement and they are initially expected to at least
meet Level 1. The LSAS recommends four levels of maturity: foundation,
implementation, established and progressive, with all awarded suppliers being
obliged to reach at least foundation level within six months of contract award
before being allowed to sell products through the framework. Clear milestones
are set for suppliers to progress through the remaining three levels of the LSAS
with support from NHS Supply Chain to help suppliers through the auditing process.
A1.30.4 It comprises a range of requirements:
A1.30.5 Policy: Top management shall define the organisations policy in relation to
labour standards as relevant to the organisation itself, its contractors, sub contractors, suppliers and parties engaged through the supply chain. It:
Is appropriate to the nature and scale of the organisation, its activities,
products, and services;
Makes a commitment to continual improvement and maintaining labour
standards in line with a defined set of minimum labour standards;
Includes a commitment to comply with applicable legal requirements,
and other requirement to which the organisation subscribes;
Is periodically reviewed to ensure it is appropriate to the nature, scale
and scope of the organisation’s activities, products and services;
Commits the organisation to make available sufficient resources for
implementation;
Provides a framework for setting objectives and targets;
Is documented and maintained;
Is communicated effectively to all persons working for or on behalf of
the organisation (including contractors and suppliers);
Is available to the public.
A1.30.6 Management Representatives: The organisation shall establish, implement
and maintain a procedure(s) to:
Identify how labour standards relate to the organisation, its activities,
products and services;
Assess the extent to which labour standards abuses do or could occur
within;
The organisation’s direct operations;
Its supply chains for goods and services;
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Consider the views of key interested parties.
A1.30.7 The organisation shall document this information and keep it up to date and use this information to define LSAS priorities.
A1.30.8 Legal and Other Requirements: The organisation shall establish, implement
and maintain a procedure(s).
A1.30.9 To identify and have access to information on relevant labour / employment /
human rights legislation and other requirements as they apply to its direct
operations, contractors, sub-contractors, suppliers and parties in the supply chain.
A1.30.10 Staff with responsibility for labour standards assurance have access to this
information and understand how it applies in relation to their roles and responsibilities.
A1.30.11 Objectives, Targets and Programmes: The organisation shall establish,
implement and maintain documented objectives and targets for labour standards assurance.
A1.30.12 Objectives and targets shall be:
Related to significant issues identified through the labour standards
status review;
Within the defined scope of the Labour Standards policy and are also in
line with the organisation’s overall strategy and objectives;
Specific, measurable, realistic and time-bound;
Assigned to an accountable owner(s), with responsibility for
achievement of the objectives and targets;
Agreed by top management;
Systematically reviewed to ensure they reflect the priorities of
organisation and its policy;
A1.30.13 The organisation shall establish, implement and maintain a programme for achieving its objectives and targets.
A1.30.14 Roles and Responsibilities: Management shall ensure the availability of resources essential to establish, implement, maintain and improve the LSAS.
A1.30.15 Roles, responsibilities and authorities shall be documented and communicated
in order to facilitate effective management of labour standards within the organisation’s direct operations and through its supply chains.
A1.30.16 Competence, Training and Awareness:
The organisation shall:
Ensure that any person (directly employed or working on its behalf) with
designated roles and responsibilities related labour standards assurance
is competent, on the basis of appropriate education, training or
experience;
Identify training and development needs to support effective labour
standards assurance and improvement;
Retain records to evidence this.
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A1.30.17 Communications: The organisation shall establish, implement and maintain a procedure(s) for:
Internal communication among various levels and functions of the
organisation;
Receiving, documenting and responding to relevant communications
from external interested parties;
Receipt and secure management of information from ‘whistle-blowers’
(internal or external) that protects the rights of the ‘whistle blower’;
The external communication of information on its labour standard
assurance practice and performance, clearly identifying the scope of this
procedure and any significant exceptions.
A1.30.18 Operational Control:
The organisation shall:
Identify its activities and decisions that are associated with labour standards
issues and assurance management (critical control points).
Establish, implement and maintain procedures to control situations where their
absence could:
(i) Lead to the contravention of relevant legal or other
requirements;
(ii) Present opportunities for labour standards abuse to arise or go
unchecked;
(iii) Undermine improvement or mitigation actions.
A1.30.19 Supply Chain Management:
The organisation shall establish, implement and maintain a procedure for:
Identifying suppliers and other parties within its supply chains (supply
chain mapping);
Identifying labour standards risks within the supply chain;
Communicating policy and other relevant information to suppliers and
other parties in the supply chain;
Collection of information on identified risks;
Verification, evaluation and communication of information on identified
risks;
Taking action in response to information collected.
A1.30.20 Emergency Response:
The organisation shall ensure that:
Significant risks, related to labour standards issues, and planned
mitigation actions are documented;
Periodic reviews of risks are undertaken to ensure they are still current
and that mitigation actions are appropriate and effective.
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A1.30.21 Management Review:
The organisation has internal monitoring procedures in place to ensure that the LSAS is operating effectively including:
Tracking progress against overall targets and objectives, and any annual
targets and objectives;
Tracking use of resources;
Evaluating impact of LSAS.
A1.30.22 In addition to:
regular monitoring, any substantial changes to an organisation’s
operations or organisational structure result in a re-evaluation of the
LSAS, its effectiveness and applicability;
reviewing the progress of the LSAS, the organisation regularly reviews
and updates the policies and procedures that constitute the
management system of their LSAS;
regular reviews, any substantial changes to an organisation’s operations
or organisational structure result in a re-evaluation of the labour
standards policies and procedures.