High risks in the Italian wine industry
Oxfam has conducted an HRIA on behalf of Systembolaget.
The final report was ready in September 2021. It showed that workers within the Italian wine industry is running a high risk of forced labor, insufficient wages, and uncertain contracts.
Recommendations have become actions
Many of Oxfam’s recommendations were related to Systembolaget’s purchasing practices, risk identification processes and risk mitigation. The recommendations were translated into an action plan in September 2021, which was updated in May 2022.
How we take charge of the actions
The actions have been incorporated into our existing annual processes. This way, they become part of everyday business operations. Responsibility to lead each action has been assigned.
This approach helps us to trickle down the necessary actions through various parts of the organization and yet allowing us to centrally monitor progress. We believe this will not only materialize in changes, but also transform us towards the underlying message from the HRIA; to recognize our own impact and thereby prevent and mitigate negative impact on human rights.
Selected snapshots from the action plan
Action: Most Sustainable Beverages
Several recommendations were related to the need of incentivizing more sustainable practices in our supply chains as well as communicating more to the consumers about our challenges.
Enter: Most Sustainable Beverages.
What is Most Sustainable Beverages?
Most Sustainable Beverages informs our customers about our most sustainable products in our set range. Most Sustainable Beverages is an answer to consumer interest in easily finding such products in our stores.
It has been developed by Systembolaget and our analysis covers different aspects of sustainability: environmental certification, packaging with lower climate footprint, traceability and working conditions.
Staff in our stores have been trained in what Most Sustainable Beverages is and what difference these products make.
By highlighting the most sustainably produced products, consumers can easily find them. But that is only one side of the coin. By visualizing Most Sustainable Beverages products, we, as a big purchaser, help to create a voice and a business case for the industry. It is a way to motivate suppliers and producers to raise the bar of their sustainability work.
The responsibility and work with the Most Sustainable Beverages products has been integrated to several roles:
- Purchasers and Category Managers,
- The head of sustainable procurement,
- The head of purchasers,
- The head of assortment.
Action: Internal capacity building
Our purchasing department wants to ensure that they fully understand the risks for different regions, different product categories and how they can prevent negative impact through purchasing practices.
Therefore, category managers and purchasers have participated in capacity building on responsible purchasing practices. This includes:
- What impact can the price point have on risks for human rights violations?
- Pinpointing category managers and purchasers important role in raising human rights in their commercial dialogues.
- Individual training on regional risks, labor production costs and challenges specific to their respective area.
Trainings will be conducted annually. We are currently assessing the suggestion from purchasers and category managers on how to best measure the impact of these trainings.
Action: External capacity building
In similar ways, we are currently conducting individual meetings with Swedish importers. They represent 80 percent of our sales volume.
- These sessions focus on human rights, environmental impact and different focus areas depending on which type of product the importer sells to Systembolaget.
- All importers will be offered capacity building on responsible purchasing practices annually, starting in the fall 2022.
Currently, we see great variations amongst our importers’ knowledge related to their purchasing practices and the potential negative impact.
By providing these types of trainings we believe that importers will be better equipped to identify potential risks as well as require improvements in their supply chains related to human rights.
Additionally, it is essential that importers are aware of how their purchasing practices affects risks for human rights violations since they often have a direct business relationship with the producers.
Action: Responsible Sourcing Framework
Another important action was to formalize sustainability into our purchasing practices. Therefore, we have launched a Responsible Sourcing Framework. It describes our sustainability ambitions and targets, and how they link to our purchasing processes.
For instance, the framework states that Systembolaget prior to every launch in the fixed assortment will ensure that the price point for each and every product enables production without contributing risk related to insufficient wages and precarious employment in the supply chain. The Swedish importer will have to provide information on how wages are sufficient at the various price points.
The intent of the framework is to be transparent about the changes in our purchasing process and to provide guidance to the industry in terms of our expectations. The framework will be annually updated and we invite stakeholders to provide feedback on what we can do better.
The challenge of stakeholder engagement
One challenge has been that we are still in the aftermath of the pandemic. This means that we have not been able to reach the level of stakeholder engagement we had previously, nor have we been able to establish new forums for engagement as planned.
We still consider meeting stakeholders in the supply chain a crucial part of our work in identifying, preventing and remediating risks for human rights violations. We have planned for local engagement in our biggest sourcing countries during the fall 2022.
Help us improve!
The above are mere snapshots of follow-up actions from the HRIA. We welcome input from organizations, trade unions, producers and other retailers; it helps us improve.
We hope that sharing these examples can open for dialogue and collaboration. By working together, we can strengthen the industry.