CSR's Next Step: The Buyer-Supplier Mutual Code of Conduct

A mutual buyer-supplier code of conduct will foster the two-way cooperation needed to improve human rights at work

June 2012

In the field of corporate social responsibility, there has been a lot of talk about how the buyers' purchasing practices influence suppliers' ability to comply with their code of conduct. Buyer actions, such as large rush orders or last-minute design changes, contribute to supplier inability to meet labor standards. The traditional top-down supplier code of conduct typically used by multi-national companies fails to include their social responsibility as buyers.  

Social Accountability International (SAI), in collaboration with the Interchurch Organisation for Development Cooperation (ICCO), will publish a Handbook and initiate a training program based on the UN Guiding Principles on Business and Human Rights. Scheduled for release in July 2012, the Handbook offers a practical, six-step guide to help companies to develop and implement management systems to operationalize the UN Guiding Principles in their supply chain. 

A major innovation in the Handbook is the Buyer-Supplier Mutual Code of Conduct as a tool for meeting the UN Guiding Principles on Business and Human Rights. 

"Think about expanding your Supplier Code into a Buyer-Supplier Mutual Code that states the actions you will take to avoid causing or contributing to the negative impacts of the supplier," said Craig Moss, SAI Director of Corporate Programs & Training. "This is a major differ­ence from today's typical Supplier Code of Conduct which focuses exclusively on what is expected from the supplier. Going forward, the Buyer-Supplier Mutual Code of Conduct is needed to define shared responsibilities. We're not telling companies to start over with their code, only to think about adding a section about their responsibility to help the supplier meet their code of conduct." 

The Handbook provides the tools for companies to expand their existing Supplier Code into a Buyer-Supplier Mutual Code, emphasizing shared responsibilities. Recognizing many companies' struggle with embedding the UN Guiding Principles into their daily business practice, the Handbook uses a six-step method to help companies implement a supply chain management system that integrates respect for human rights. The six-steps are: 

1. Committing to a human rights policy 
2. Assessing human rights impact 
3. Integrating human rights in policies, procedures and responsibilities 
4. Tracking human rights implementation 
5. Communicating human rights impact  
6. Remediating human rights impact 

"We aim to tie the two [buyers and suppliers] together into a more collaborative effort to improve social performance," said Mr. Moss.

Pre-subscribe Now: SAI Handbook on UN Guiding Principles. This article was written by SAI Communications Intern Shirley Wu (SWu@sa-intl.org). For inquiries, contact SAI Communications Manager Joleen Ong (JOng@sa-intl.org).