European Commission: take action against unfair purchasing practices
July 16th, 2021
ECCJ and other human rights, labour rights and development organizations are asking the European Commission to ensure responsible purchasing practices by businesses to guarantee decent work conditions for workers in producing countries and a sustainable post-crisis economic recovery.

The COVID-19 crisis has evidenced the volatility and vulnerability of global supply chains. It has demonstrated how companies currently externalise risks and costs towards weaker supply chain partners.

Such business models and purchasing practices cause or contribute to adverse human rights impacts on workers, smallholders, communities and the environment, both in the EU and in third countries.

Extensive research by the International Labour Organisation has demonstrated the power imbalances and the effect of lead firms’ purchasing decisions. Their current processes to place and pay for orders constrain other supply chain partners’ ability to respect labour rights and to minimise the environmental impacts of their activity.

Unfair purchasing practices are linked to a host of risks and impacts ranging from low wages and unsafe working environments to modern slavery and gender-based violence.

For example, last-minute urgent orders (or changes to orders) can directly result in workers being forced to work overtime, sometimes in unsafe conditions. It also often leads suppliers to subcontract to unidentified or unauthorised suppliers where working conditions might be even more appalling.

The power imbalance also results in weaker supply chain partners being afraid to challenge these customers, even in the case of illegal actions (such as breaches of contract) for fear of jeopardising their relationship with their customers and future business.

For a corporate duty to respect human rights and the environment to work effectively in globalized supply chains, it must address the issue of unfair purchasing practices.

Civil society and trade unions are calling upon the European Commission to require companies to specifically address purchasing practices at all steps of the human rights and environmental due diligence process, and for those purchasing practices to be explicitly considered within the reporting obligations in the upcoming Sustainable Corporate Governance initiative.

Moreover, it is important to introduce guidance on what are “harmful purchasing practices” in the forthcoming legislation.

Lastly, the Commission should initiate sectoral parallel policy process to address unfair purchasing practices in specific sectors and couple it with a fit-for-purpose enforcement mechanism.

The letter is co-signed by Anti-Slavery International, Clean Clothes Campaign, the European Coalition for Corporate Justice, Fair Trade Advocacy Office, Fashion Revolution, Human Rights Watch, IndustriALL Europe, and Traidcraft Exchange.