Introduction to the contract term
Here we describe the international frameworks that the code of conduct for suppliers and the contract terms are based on and explain why the terms exists, how it is used, what it covers and what responsibility you as suppliers have. We have also collected training and support as well as developed tips on how you can get started.
This section is about:
To get started
Good planning makes the work easier if you intend to participate in a public procurement with requirements on sustainability due diligence. Here's what you can do to be prepared:
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Find out what the contract terms means for your business by delving into this support.
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Ensure that your company has policies for its own operations and the supply chain that include commitments to human rights, workers' rights, the environment and business ethics.
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Identify which due diligence processes your company has in place today and which you need to develop to meet the contract terms.
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Start mapping the supply chain and obtain information about in which countries and regions final manufacturing or final assembly of your products takes place.
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Participate in dialogues with procuring organizations.
Doing business with the public sector (In Swedish only)
You are also encouraged to find out if you can collaborate with other organizations or companies in the industry, through industry initiatives. Also check if there are any labels you can use. You can find examples of industry initiatives and labels in the The National Agency for Public Procurement Authority's risk analysis service. (In Swedish only)
Due diligence for sustainable supply chains
The contract term on sustainability due diligence is based on several global frameworks:
The UN Guiding Principles on Business and Human Rights was the first global framework in this area when it was adopted in 2011. The OECD guidelines and the ILO Tripartite Declaration have been updated to be in line with the UN Guiding Principles. The OECD's guidelines are also broader than the UN's guiding principles, as in addition to human rights they cover, among other things, the environment, corruption and taxes.
The EU has also adopted a directive proposal on corporate sustainability due diligence, which builds on the aforementioned frameworks.
The Swedish concept tillbörlig aktsamhet corresponds to the English concept due diligence.
An introduction to the UN's guiding principles for business and human rights.
International frameworks for sustainable business
Within the scope of the contract term, the due diligence process includes identifying, preventing, mitigating and remedying actual and potential adverse impacts on people, the environment and society in your own operations and in the supply chains.
The contract terms also includes the code of conduct for suppliers which aims to ensure that you fulfill contracts in accordance with human rights, workers' rights, the environment and business ethics (sustainable supply chains). The code of conduct for suppliers are based on the ten principles of the UN's Global Compact and the OECD's guidelines for multinational enterprises.
This means that the code of conduct terms aims at ensuring that you fulfil the commitments and the due diligence terms aims at ensuring how this should be done.
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How to carry out a risk analysisStep 1: Mapping the supply chain The first step in a risk analysis consists of mapping the supply chain to find out its structure. This includes identifying in which countries the work is carried out, and if possible also in which regions. This is particularly relevant if the work is carried out in any region known to have high risks. Within certain industries such as food, textiles and IT there is a lot of information. For other industries such as pharmaceuticals, however, transparency is low. To obtain this information, you can ask the category manager, the category councils, ask questions of suppliers, find out import data, read audit reports and market analyzes for specific industries. It is also important to identify what type of work is carried out and what type of actors in the supply chain that performs it. Is it, for example, an industry characterized by low wages and health-hazardous processes? Does the workforce consist of migrant workers or seasonal workers? Is the supply chain complex with many subcontractors and a lack of transparency? This type of information is important as both geographical risks, industry risks and product risks need to be taken into account. Step 2: Gather information from credible and independent sources Once you have mapped the origin and the supply chain, the next step is to gather information about the situation of human rights, workers' rights, the environment and business ethics in the relevant countries where the work is carried out, that is, both for final manufacturing, component manufacturing and raw materials. For this you need to turn to credible and independent sources such as international organizations, authorities, voluntary and civil society organizations and global trade unions. Sources Step 3: Identify and assess negative impacts The last step involves assessing the actual and potential negative impact the supply chain is associated with, based on the information that has been compiled in steps 1 and 2. This is to be able to determine which concrete measures need to be taken to manage the risks. Often several risks have been identified and to prioritize them you need to make a seriousness assessment. The most significant risks are prioritized based on probability and seriousness ( read more under point d in process requirement 2 )
Training and support from international organisations
Here we have collected training and support from the UN, OECD, ILO and the Ethical Trading Initiative.
All courses are digital, free and in English.
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How to carry out a risk analysisStep 1: Mapping the supply chain The first step in a risk analysis consists of mapping the supply chain to find out its structure. This includes identifying in which countries the work is carried out, and if possible also in which regions. This is particularly relevant if the work is carried out in any region known to have high risks. Within certain industries such as food, textiles and IT there is a lot of information. For other industries such as pharmaceuticals, however, transparency is low. To obtain this information, you can ask the category manager, the category councils, ask questions of suppliers, find out import data, read audit reports and market analyzes for specific industries. It is also important to identify what type of work is carried out and what type of actors in the supply chain that performs it. Is it, for example, an industry characterized by low wages and health-hazardous processes? Does the workforce consist of migrant workers or seasonal workers? Is the supply chain complex with many subcontractors and a lack of transparency? This type of information is important as both geographical risks, industry risks and product risks need to be taken into account. Step 2: Gather information from credible and independent sources Once you have mapped the origin and the supply chain, the next step is to gather information about the situation of human rights, workers' rights, the environment and business ethics in the relevant countries where the work is carried out, that is, both for final manufacturing, component manufacturing and raw materials. For this you need to turn to credible and independent sources such as international organizations, authorities, voluntary and civil society organizations and global trade unions. Sources Step 3: Identify and assess negative impacts The last step involves assessing the actual and potential negative impact the supply chain is associated with, based on the information that has been compiled in steps 1 and 2. This is to be able to determine which concrete measures need to be taken to manage the risks. Often several risks have been identified and to prioritize them you need to make a seriousness assessment. The most significant risks are prioritized based on probability and seriousness ( read more under point d in process requirement 2 )