A visit to suppliers in India more than 10 years ago brought about a profound change in procurement within the UK building materials group Marshalls.
This following case study is extracted from the Chartered Institute of Building’s report on modern slavery, Building a fairer system.
It clearly shows that any building project can have not only embedded carbon, a concept with which we have become familiar, but also embedded blood, a concept that must now be addressed. What happens at the bottom of the supply chain should not be ignored by those at the top. Evidence presented by the CIOB report shows that Marshalls clearly stands out within the construction industry as a beacon for the way in which it has addressed this issue.
Marshalls: streamlining supply chains in quarrying and manufacturing to protect children and migrant workers
Established in the UK in the 1880s, Marshalls has been manufacturing and supplying hard landscaping products to the commercial, public and consumer retail sectors for more than a century. Supplying to 60 countries, Marshalls directly employs more than 2,500 people and has 50 operational sites in the UK and several offices around the world.
Marshalls became member of the Ethical Trading Initiative in 2005, signatory to the UN Global Compact in 2009 and entered the FTSE4Good Index in 2005.
Marshalls’ natural stone products are now sourced from quarries and manufacturing plants from a narrow group of countries, most notably India, China and Vietnam.
In 2005 Marshalls group marketing director Chris Harrop visited suppliers in the Rajasthan state of western India. Keen to gain a better understanding of sandstone production, he did not explain the purpose of his visit, gaining access to a wide range of facilities.
Harrop was shocked at the levels of exploitation he witnessed. Children as young as six were working in the quarries and manufacturing plants. They were living in squalid conditions, and were regularly being exposed to high levels of noise, dust, vibration and dangerous activities.
With parents working, sick or injured, many children were labouring not only due to poverty, but because there was no one to care for them off site. They had no access to education.
Workers of all ages were at risk of exploitation and abuse, hunger and food insecurity, inadequate healthcare and contaminated water. These conditions were having a disproportionate impact upon children.
“What struck me was that this was so blatant,” Harrop says. “Locally it was seen as a normal and accepted practice.”
It was clear that the causes and drivers of exploitation in the sector were complex and intertwined cultural and socio-economic factors.
As a foreign buyer, Marshalls also recognised that its influence was limited: exports account for only 5 per cent of the total Indian sandstone market.
“The scale of the challenge was immense. We realised that the only way forward was to bring in experts and to start working collaboratively,” Harrop says.
Unaware of any existing industry initiatives to tackle such problems, Marshalls sought out best practice in other sectors.
In 2005 it joined the Ethical Trading Initiative (ETI) – an international alliance of companies, trade unions and NGOs, originally founded by British retailers.
Marshalls adopted the ETI Base Code which is based on International Labour Organisation (ILO) principles and covers areas such as child and bonded labour, living wages, health and safety, discrimination and inhumane treatment.
“Joining ETI was particularly useful because it helped us understand root causes of child labour,” Harrop says. “It would have been easy to throw money at a small project and give children books and clothes, but the ETI process helped us dig deeper. It showed us the importance of consulting with local communities and NGOs before forming our strategy.”
“We discovered that lack of access to education was a major contributor to the problem, as were the very low wage levels, which meant that whole families had to work to survive.”
Marshalls engaged the services of business and human rights consultant Elaine Mitchel-Hill that same year.
Until 2005, Marshalls had been working with several sandstone suppliers in Rajasthan. In order to drive change efficiently, the company decided to simplify procurement, forming an in-depth relationship with a single supplier.
“The partner that we chose – Stone Shippers India – was by no means the largest in the market,” Harrop says. “We selected them on the basis of shared values and a commitment to quality, showing that, by doing the right thing, we could grow our business together.”
He adds that a period of collaboration was necessary to build trust.
“We had to create a shared vision and understanding. Instead of asking our partner for outcomes through box-ticking exercises, we wanted to establish meaningful processes and lasting change.”
“For example, simply having the paperwork to check masks were being issued, and wages were being paid on time, was not enough. We had to educate people on why masks were essential safety equipment, and the impact of late wages.”
Marshalls introduced a range of activities to support the supplier and the wider community including:
- Integrating systems. Marshalls now shares a common ERP system with Stone Shippers.
- Helping the supplier establish a professionally run human resources department.
- Forming a long term partnership with local a NGO to deliver child education, health camps, and workers’ rights education.
- Raising awareness of social insurance with workers. Marshalls collaborated with a local NGO on this project, providing seed funding for the scheme, which took off and became self-sustaining after three years.
Marshalls uses third party organisation Just Solutions to check that the processes agreed with suppliers are in place and being upheld. Just Solutions was chosen because of its previous experience working with the ILO and its strong local connections.
“They’re forensically checking the processes and embedded behaviours,” Harrop says. “This is important because if you just send an auditor into a facility, they will only witness what is happening on one particular day. As well as conducting in-depth assessments, Just Solutions also train and educate, wherever they see the need.”
The launch of Fairstone brand and expansion to new regions
After launching Fairstone India, ‘the first ethically sourced sandstone range’ in 2009, Marshalls began to assess its supply chains in other source countries.
Although some trends were similar – inadequate wage levels being a common problem – major risks differed from region to region. In China, for example, the critical issues were not child labour, but health and safety and excessive working hours. Fake or fraudulent certification was also a major problem within the supply chain.
By contrast, prison labour was a problem in Vietnam, as bonded labour is widely used and even sanctioned by government.
“As the Vietnamese government has sanctioned a programme for using prison labour in heavy manufacturing and construction, we’ve had to do lots of detailed work with a very limited number of suppliers to help ensure that no prison labour is used in our supply chains,” Harrop says.
Since addressing supply chain issues in these regions, Marshalls has been able to expand the Fairstone brand to its Chinese and Vietnamese-sourced products.
Raising awareness with consumers
In 2007, Marshalls launched a campaign to highlight the issues of child labour and to help consumers make more informed product choices. This included the publication of a booklet The Truth about Indian Sandstone. This was followed up by another consumer publication Behaving Ethically – Marshalls in India.
Marshalls signed up to the UN Global Compact (UNGC) in 2009. A mandatory part of becoming a UNGC signatory is undertaking and reporting human rights impact assessments annually.
Mitchel-Hill says: “One of the stimuli for joining the UNGC was that we were doing lots of activities, such as carbon reporting, work on water, carbon footprint, child labour and health and safety. The UNGC brought them together into one framework. It has given us a clear focus.”
Harrop chaired the UNGC Local Network UK between 2014 and 2016.
“Becoming a signatory has driven us to look not only within our own supply chains, but also to collaborate with other UNGC signatories and trade associations to look at wider industry issues,” he says.
2012: UNICEF and the Indian government
Although Marshalls has been successful in eradicating child labour from its supply chain in Rajasthan, there are still an estimated 200,000 children working elsewhere in India’s stone quarry industry.
Committed, as a UNGC signatory, to addressing this wider problem, Marshalls engaged with UNICEF in 2012 in piloting UNICEF’s Children’s Rights and Business Principles assessment framework.
“We used that assessment process to look at our business in its entirety,” Mitchel -Hill says: “It enabled us to expand our focus beyond the issues of child labour. We started to see things from new perspectives, including how children’s rights and business principles interface with women’s empowerment principles.”
Marshalls engaged in a strategic partnership with UNICEF’s in 2014 which included funding research on child labour in Rajasthan. The findings will be used to engage the government, private sector and third sector and other stakeholders in adapting policies and creating a regulatory framework to eliminate child labour in the quarrying industry.
Ongoing work and next steps
More than a decade on from Harrop’s trip to Rajasthan, Marshalls continues to develop its ethical sourcing initiatives.
“We’re still on this journey and we will be for a very long time,” Harrop says.
This is reflected in the fact that human rights specialist Mitchel-Hill, who has advised the company as a consultant for ten years, has gone in house, becoming a Marshalls employee in 2015.
“The scope of work continues to expand throughout our operations, and we recognise the need to dig even deeper in our procurement and HR practices,” Mitchel-Hill says.
Recent and ongoing work includes:
- Becoming an accredited Living Wage Employer in the UK by the Living Wage Foundation.
- Becoming a Fair Tax Mark company for the 2014 financial year and recertified for 2015/16.
- A project to establish a living wage benchmark for the Indian supply chain, using Living Wage Foundation and preferred Oxfam methodologies.
- The launch of Marshalls Certificate of Sustainability in 2016. This online training programme, certified by UNGC Local Network UK, harnesses the core values of leadership, excellence, trust and sustainability to address the UNGC principles of human rights, labour rights, environment and anti-corruption.
- A Modern Slavery Awareness programme rolled out across all UK operations in 2016.
- An ongoing commitment to report annually to the UNGC.
Widening the lens on procurement
“The next step is to look beyond our immediate building materials supply chains, into areas where our sphere of influence is more limited, for example, office equipment, workwear, services that we contract in. This potentially presents even greater challenges and will require wider cross sector collaboration,” Harrop says.
What started as the goal of tackling child labour in one region has created a momentum that is informing and shaping all activities at Marshalls. The ripples are spreading outside the company and its immediate partners and into communities.
Ten years on sustainability is central to business strategy, but Harrop urges against complacency.
“Even today, I can’t guarantee 100 per cent that activity in any part of that supply chain is free of exploitation because there are so many variables. We have to constantly check that our processes are in place and working.”
By following international humanitarian guidelines, such as those set down by the ETI or UNGC, Marshalls is not allowing local laws to become the default setting for treatment of workers. This is evidenced by its refusal to use prison labour in Vietnam, and its initiative to establish a living wage, as opposed to government-approved minimum wages in developing countries.
As Marshalls has shown, endemic exploitation issues are often better tackled by forming in-depth relationships with a limited number of partners.
But as Harrop readily acknowledges, far wider collaboration is necessary if a real and lasting impact can be made in the sector.
“We need the rest of the industry to formalise and develop its ethics and supply chain behaviours,” he comments. “Procurement needs to change. I still regularly talk to contractors that are aware of some of the issues in developing countries, but only want to go for cheapest price products.”
“However, we are noticing a change of attitude, driven in part by the Modern Slavery Act. Consumers are also becoming more aware of ethical issues, and are asking more questions of retailers. We anticipate that consumer pressure will help to drive the agenda in the future.”
This article was published on 13 Jul 2016 (last updated on 13 Jul 2016).