10.    ETHICAL PURCHASING POLICY

POLITIQUE D'APPROVISIONNEMENT ÉTHIQUE DE LA VILLE D'OTTAWA

 

 

Committee RecommendationS

 

That Council approve:

 

1.         The City of Ottawa Ethical Purchasing Policy as outlined in Appendix “A”;

 

2.         That City staff respond to non-compliance issues on a complaint basis;

 

3.         That City staff, in consultation with the Stakeholder Committee comprised of business, labour and fair trade representatives, continue to explore certification system options to further enhance compliance monitoring and report back to the Corporate Services and Economic Development Committee by Q2 2009; and

 

4.         That the Manager of Supply Management undertake discussions with the City’s local boards and encourage them to endorse similar ethical purchasing policies within their respective organizations.

 

 

Recommandations du comité

 

Que le Conseil :

 

1.         Approuve la politique d'approvisionnement éthique de la Ville d'Ottawa énoncée à l'annexe A;

 

2.         Demande au personnel municipal de répondre aux situations de non-conformité en fonction des plaintes reçues;

 

3.         Demande au personnel municipal, en consultation avec un comité d'intervenants composé de représentants du milieu des affaires, de syndicats et d'organismes de promotion du commerce loyal, de poursuivre son examen des options qui, dans un régime de certification, permettraient de renforcer les contrôles de conformité et de présenter son rapport au Comité des services organisationnels et du développement économique d'ici le deuxième trimestre de 2009; et

 

4.         Demande au gestionnaire de l'approvisionnement d'ouvrir des discussions avec les commissions et conseils locaux d'Ottawa afin de les inciter à adopter pour eux-mêmes des politiques d'approvisionnement éthique similaires à celle de la Ville.

 

 

 

Documentation

 

1.   Director’s report (Financial Services) dated 15 May 2007 (ACS2007-CMR-FIN-0004).

 



Report to/Rapport au :

 

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

 

and Council / et au Conseil

 

15 May 2007 / le 15 mai 2007

 

Submitted by/Soumis par : Marian Simulik, Director, Financial Services and City Treasurer/Directrice des services financiers et trésorière municipale

 

Contact Person/Personne ressource : Nadine Byrne,

Strategic and Business Initiatives/Initiatives strategiques et d'affaires

(613) 580-2424 x22658, Nadine.Byrne@ottawa.ca

 

City Wide

Ref N°: ACS2007-CMR-FIN-0004

 

 

SUBJECT:

CITY OF OTTAWA ETHICAL PURCHASING POLICY

 

 

OBJET :

POLITIQUE D'APPROVISIONNEMENT ÉTHIQUE DE LA VILLE D'OTTAWA

 

 

REPORT RECOMMENDATIONS

 

That the Corporate Services and Economic Development Committee recommend Council approve:

 

1.                  The City of Ottawa Ethical Purchasing Policy as outlined in Appendix “A”;

 

2.                  That City staff respond to non-compliance issues on a complaint basis;

 

3.                  That City staff, in consultation with the Stakeholder Committee comprised of business, labour and fair trade representatives, continue to explore certification system options to further enhance compliance monitoring and report back to the Corporate Services and Economic Development Committee by Q2 2009; and

 

4.                  That the Manager of Supply Management undertake discussions with the City’s local boards and encourage them to endorse similar ethical purchasing policies within their respective organizations.

 


RECOMMANDATIONS DU RAPPORT

 

Que le Comité des services organisationnels et du développement économique recommande au Conseil :

 

1.                  D’approuver la politique d'approvisionnement éthique de la Ville d'Ottawa énoncée à l'annexe A;

 

2.                  De demander au personnel municipal de répondre aux situations de non-conformité en fonction des plaintes reçues;

 

3.                  De demander au personnel municipal, en consultation avec un comité d'intervenants composé de représentants du milieu des affaires, de syndicats et d'organismes de promotion du commerce loyal, de poursuivre son examen des options qui, dans un régime de certification, permettraient de renforcer les contrôles de conformité et de présenter son rapport au Comité des services organisationnels et du développement économique d'ici le deuxième trimestre de 2009; et

 

4.                  De demander au gestionnaire de l'approvisionnement d'ouvrir des discussions avec les commissions et conseils locaux d'Ottawa afin de les inciter à adopter pour eux-mêmes des politiques d'approvisionnement éthique similaires à celle de la Ville.

 

 

EXECUTIVE SUMMARY

 

On May 10, 2006, City Council approved report ACS2006-CCS-CSE-0003, directing staff to develop an Ethical Purchasing Policy that would ensure that purchases of clothing, apparel, and certain agricultural products meet the highest possible ethical standards where practical and are produced in accordance with established local and international labour standards and applicable codes of conduct regarding wages, working conditions, safety, forced labour, and freedom of association.

 

The report also recommended that City staff consult and collaborate with all interested parties in the development of this policy for Council's consideration in 2007.  In response to this directive, City staff met with representatives of the Ottawa No Sweat Coalition and the Ottawa & District Labour Council in order to formulate a plan to develop a practical, effective, and sustainable policy for the City of Ottawa.  In July 2006, a Stakeholder Committee was established and comprised of both internal and external parties, including City staff, representation from the labour community, humanitarian and labour organizations, environmental groups, and business advocacy groups.

 

Based on the research and consultation conducted by the Committee, it is clear that validation and enforcement of any Ethical Purchasing policy is a key challenge, and a primary consideration if meaningful change is to be realized.  Although the City has the authority to implement the policy, the application and enforcement of the policy raises concerns from a procurement fairness standpoint.

 

For this reason, the Stakeholder Committee recommends that:

 

1.   the Ethical Purchasing Policy attached as Appendix “A” to this report, be approved; and

2.   that City staff respond to non-compliance issues on a complaint basis, continue to explore options for monitoring compliance, and report back to the Corporate Services and Economic Development Committee following two years implementation.

 

The policy will apply to the City’s suppliers of clothing and apparel and, where practical, fair trade products.  The policy includes provisions on child labour, forced labour, discrimination, harassment and abuse, wages, hours of work, health and safety practices, freedom of association and collective bargaining. 

 

The burden of responsibility will rest with vendors competing for contracts with the City.  Bidders will be required to certify compliance with the policy, and the labour standards outlined in Appendix “A”, at the time of bid submission, at which point the City has significant leverage in this regard.  The policy will simply provide that the City, as a consumer, can make the business decision not to deal with suppliers and manufacturers that choose not to operate responsibly in accordance with the governing laws of their jurisdictions.  The City will monitor the policy on a complaints basis only and will determine the level and the degree necessary to investigate and act upon complaints.

 

During the first year of implementation, City staff will collaborate with other Canadian municipalities and the stakeholder committee to continue to investigate options for the possible sharing of external support mechanisms in regard to tracking and monitoring compliance with the policy.  A status report containing options for consideration of the Corporate Services and Economic Development Committee and Council will be completed by Q2 2009, and will rely on the actual city experience over the first years of the policy.

 

RÉSUMÉ

 

Le 10 mai 2006, le Conseil municipal a approuvé le rapport ACS2006-CCS-CSE-0003, qui enjoignait le personnel de définir une politique d'approvisionnement éthique qui garantirait que les vêtements et certains produits agricoles achetés par la Ville répondent, dans la mesure du possible, aux normes éthiques les plus strictes et qu'ils sont fabriqués ou produits en conformité avec les normes du travail locales et internationales établies et les codes de conduite pertinents visant les salaires, les conditions de travail, la sécurité, le travail forcé et la liberté syndicale.

 

Le rapport demandait également au personnel municipal d'élaborer cette politique, à soumettre à l'examen du Conseil en 2007, en consultation et en coopération avec toutes les parties intéressées. Donnant suite à cette directive, le personnel a rencontré des représentants de la coalition Ottawa No Sweat et du Conseil du travail d'Ottawa et du district afin de planifier l'élaboration d'une politique pratique, efficace et viable pour la Ville d'Ottawa. En juillet 2006, un comité d'intervenants a été mis sur pied, composé de parties internes et externes, notamment de fonctionnaires municipaux et de représentants du monde syndical, d'organismes humanitaires et syndicaux, de groupes écologiques et de groupes de promotion des affaires.

 

Il se dégage clairement de la recherche et la consultation menées par le comité que la validation et la mise en application d'une politique d'approvisionnement éthique constituent le défi clé et le principal facteur de la réalisation d'un véritable changement. Bien que la Ville ait le pouvoir d'adopter la politique, sa mise en application et les mesures d'exécution s'y rapportant soulèvent des questions au plan de l'équité de l'approvisionnement.

 

Pour cette raison, le comité d'intervenants recommande :

1.   que la politique d'approvisionnement éthique énoncée à l'annexe A soit approuvée;

2.      que le personnel municipal réponde aux situations de non-conformité en fonction des plaintes reçues, qu'il poursuive son examen des options pour assurer le contrôle de la conformité et qu'il présente un rapport au Comité des services organisationnels et du développement économique après deux années de mise en application de la politique.

 

La politique s'appliquera aux fournisseurs de vêtements et, dans la mesure où cela s'avère pratique, de produits commerciaux avec qui la Ville fait affaires. La politique comporte des dispositions visant le travail des enfants, le travail forcé, la discrimination, le harcèlement et le traitement abusif, les salaires, les heures de travail, les pratiques de santé et de sécurité au travail, la liberté syndicale et la négociation collective. 

 

Il incombera aux fournisseurs concurrents pour les contrats de la Ville d'assurer le respect de la politique. Les soumissionnaires seront tenus de certifier leur conformité à la politique et aux normes du travail énoncées à l'annexe A lorsqu'ils présenteront leur soumission, moment auquel la Ville bénéficie d'un pouvoir décisionnel considérable à cet égard. La politique prévoit tout simplement  que la Ville, en tant qu'acheteur, doit être en mesure de décider de s'abstenir de faire affaires avec des fournisseurs et des fabricants qui ont choisi de ne pas adopter un mode d'exploitation responsable, conforme aux lois applicables dans les lieux où ils sont implantés. La Ville exercera un contrôle de conformité à la politique seulement sur la base des plaintes reçues et déterminera le niveau et le degré du contrôle qui sont nécessaires pour enquêter sur les plaintes ou leur donner suite.

 

Durant la première année de mise en application, le personnel municipal collaborera avec d'autres municipalités canadiennes et le comité d'intervenants afin de poursuivre l'étude d'options de mise en commun éventuelle de mécanismes externes de soutien pour les activités de suivi et le contrôle de conformité à la politique. Un rapport d'étape, assorti d'options à soumettre à l'examen du Comité des services organisationnels et du développement économique et du Conseil et fondé sur l'expérience acquise par la Ville au cours des premières années de mise en application de la politique, sera rédigé d'ici le deuxième trimestre de 2009.

 

 

BACKGROUND

 

On May 10, 2006, City Council approved report ACS2006-CCS-CSE-0003, directing staff to consult with the Ottawa & District Labour Council and the Ottawa No Sweat Coalition in the development of an Ethical Purchasing Policy. 

 

Adopting an ethical purchasing policy will ensure that clothing and certain fair trade products purchased by the municipality are produced subject to minimum labour standards, forcing suppliers to better monitor working conditions in the supply factories and operations, and to work with their suppliers to improve conditions.

 

In preparation of this report and in the development of the recommended policy, staff considered the following:

 

1.   the size and scope of supplier contracts it would apply to

2.   the existing federal and provincial statutory framework

3.   existing City procurement policies

4.   the No-sweatshop policies adopted by other Canadian municipalities

5.   consultation with the City’s internal stakeholders and external vendor community

 

The policy, which includes provisions on child labour, forced labour, discrimination, harassment and abuse, wages, hours of work, health and safety practices, freedom of association and collective bargaining, is outlined in Appendix “A”.

 

 

DISCUSSION

 

There has developed a broad movement for public institutions to develop and implement "No Sweat" ethical procurement policies to ensure that purchases of clothing and fair trade products are manufactured or produced in accordance with established local and international labour standards.  Applicable codes of conduct regarding wages, working conditions, safety, forced labour and so forth, are embodied in the United Nations Declaration of Human Rights, International Labour Organization Conventions, and other relevant Declarations and Conventions.

 

Municipal and provincial governments, universities and school boards buy much larger quantities of goods than do individual consumers and therefore have greater power to influence the labour practices of their suppliers. 

 

Through policy advocacy, municipalities can demonstrate their commitment to and promotion of humane labour conditions where all workers are treated with dignity and respect and are provided decent wages and healthy workplaces.  As more and more public institutions adopt No-Sweat policies, companies will come under increasing pressure to find industry-wide solutions to the growing problem of sweatshop abuses.

 

Sweatshops are work environments where employees work long hours in unsafe conditions for low pay.  Sweatshop workers, often women and under-age children, are often intimidated, harassed, and subject to abuse.  The International Labour Organization (ILO) estimates that 250 million children in the world are involved in the kind of labour that jeopardizes their health, and tens of millions of these are victims of the worst forms of child labour.

 

The International Labour Organization (ILO) is the UN specialized agency which seeks the promotion of social justice and internationally recognized human and labour rights.  The ILO formulates international labour standards in the form of Conventions and Recommendations, setting minimum standards of basic labour rights.

 

Similar labour issues exist in the production of Fair Trade Certified Products such as coffee, tea, cocoa, sugar, bananas and other tropical fruit.  Fair Trade certification systems seek to improve the lives of producers in origin countries by ensuring that the owners of farms receive a guaranteed fair price for their harvest as well as fair working conditions.  Fair Trade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. 

 

The Fair trade Labelling Organizations International (FLO) is the leading fair trade standard setting and certification body.  TransFair Canada is the certification body for Fair Trade products sold in Canada. It is the only national, independent, not-for-profit certification organization in Canada, and the only one affiliated with the Fair Trade Labelling Organizations International.  Only the TransFair Canada logo guarantees that a product is Fair Trade Certified.

 

 

Procurement Practices in Ottawa and the Public Sector

 

The City of Ottawa is a strong proponent of workers’ rights, and although somewhat limited, it has had some history dealing with ethical issues in business practice.  For example, in March 1998, when the former City of Ottawa was considering a sporting equipment sponsorship proposal, the main debate centered on labour practice issues.  The City’s ongoing misgivings forced the sponsor to rescind their offer.  Another ethical debate took place in 2003 when a select group of City employees discovered that their uniforms were being made in a factory in Myanmar (Burma), a country notorious for human rights abuses and oppressive labour conditions.   In response to this discovery, the City’s contractor was requested to terminate the contract with this supplier, which he did and subsequently entered into a manufacturing agreement with a more acceptable facility in a different country.

 

The procurement policy of the City of Ottawa is to be open, fair, competitive and non-discriminatory.  The City’s purchasing professionals adhere to the industry accepted Purchasing Management Association of Canada Code of Ethics and they continuously undertake due diligence reviews of the suppliers past performance and current standing in the community.  An Ethical Purchasing Policy will provide staff with additional criteria for which to evaluate suppliers, ensuring that City spending is leveraged in a manner intended to improve working conditions for the most vulnerable members of society.

 

At its official meeting on the 21st day of October, 2006, the Board of Directors of the National Institute of Governmental Purchasing Inc. (of which the City of Ottawa purchasing unit is a member) endorsed a resolution which encourages all its members to recognize and support Socially Responsible initiatives in public procurement.  Considering that the combined expenditures of federal, state and local governments in the United States exceed $700 billion for goods and services each year, it recognized the "power of the purse" as a tool with which to bring about social change, and public procurement is an appropriate area for public policy enactment.

 

Since April 2005, the Supply Management Division has collaborated with other Canadian municipalities to exchange ideas on how to address these ongoing issues.  A number of municipalities across Canada have, or are in the process of adopting resolutions to develop binding policies for ethical purchasing of clothing (for firefighters, police, transit workers, etc), food and other goods.  To date, the Cities of Vancouver, Toronto and Hamilton are the only Canadian municipalities that have adopted No-Sweat procurement policies. 

 

Vancouver: The “Ethical Purchasing Policy” and “Supplier Code of Conduct” for apparel and agricultural goods was adopted on February 17, 2005.  Monitoring compliance is done on a complaints basis and after more than one-year’s experience with the policy; few complaints have been registered that required the intervention of the City.  A Contracting Specialist position was created to train staff, work with suppliers, manage the investigations, and to conduct further research that will enable the City to expand the program to other goods and services.

 

Toronto:  The “Responsible Garment Manufacturer (No Sweat) Policy” was adopted on April 25, 2006 and the Treasurer was directed to investigate the potential to collaborate with other government jurisdictions on a verification program.  In the interim, compliance is being monitored on a complaints basis only.

 

Hamilton:  The “Purchasing Policies and Procedures” were updated to include a “Policy for Anti-Sweatshop Procurement” in October 2005.

 

The Cities of Halifax, Saskatoon, and Calgary also obtained Council approval to develop ethical procurement policies.  The City of Calgary was mandated to develop and implement a Sustainable Ethical and Environmental Policy over a 3-year period.  This policy will include standards for the ethical treatment of employees as well as specific provisions for the purchase and disposal of goods. 

 

Policy Development

 

In July 2006, City staff met with representatives of the Ottawa No Sweat Coalition and the Ottawa & District Labour Council to initiate the development of an ethical purchasing policy for the City of Ottawa.  A Stakeholder Committee was established and comprised of both internal and external parties, including City staff, representation from the labour community, humanitarian organizations, environmental groups, and business advocacy groups.

 

The goal of the Committee was to develop a policy that would address the following key elements:

 

1.   That purchases of clothing, apparel, and certain agricultural products such as coffee and tea, are manufactured in accordance with minimum applicable national laws and in consideration of the principles set out in the International Labour Organization (ILO) Conventions.

2.   That the burden of responsibility would rest with the supplier to provide evidence that they, and their subcontractors, respect and are compliant with the policy. 

3.   That the City would establish a mechanism to investigate and address complaints of abuses in workplaces that are involved in the manufacture of products purchased by the City.

4.   That the City would not overlook a non-compliant “low bidder”, but instead encourage vendors and help them to move towards compliancy by improving working conditions over a gradual imposed timeframe. 

 

To achieve these goals, the Committee researched the current state of the City, internationally accepted labour standards, use of third party monitoring agencies, best practice in the municipal sector, and consulted with the business and vendor community.

 

During the current state review, it was determined that City purchases of garments and apparel amounted to about $1.7 million annually, distributed as follows: 

·        46% - Community and Protective Services (EMS, Fire, Paramedics, By-Law, Parks & Rec.)

·        16% - Planning, Transportation and Environment (Transit)

·        11% - Public Works & Services (Fleet, Parking)

·        10% - Corporate Services (Materials, RPAM)

·        17% - Police

 

Most coffee and tea purchases are made on behalf of the Long Term Care Branch and the value is estimated to be about $32,000 annually.  These products are also offered through third party service providers in City facilities; however, the value is difficult to determine. 

 

Due to increased pressure to keep prices down and remain competitive, in many cases the City’s suppliers engage offshore factories to make the products that will be supplied to the City.  With this in mind, City staff made contact with a representative range of suppliers to collect information on their offshore experiences and to determine the potential impacts of implementing any variety of compliance monitoring systems.  Although the response was light, feedback was positive and encouraging.  Several organizations reported that they already had social compliance processes in place, including a combination of third-party audits, internal assessments and factory self-assessments.

 

One real question remains, and that is, what is the best method to ensure compliance with the City’s policy without instituting unnecessary burdens and costs on its suppliers.  The Committee considered a variety of options, however, it was agreed that an in-depth investigation over the first years of the policy implementation would be preferable in order to arrive at an optimal solution.  The three main options being considered at present are as follows:

 

1.   City Developed Policy and Complaints-based monitoring system:  This approach would involve the City adopting a policy and supplier code of conduct made up of a select set of labour standards.   No formal monitoring and evaluation system would be implemented.  Bidders would be required to certify compliance at the bid stage, and investigations of non-compliance would be conducted on a complaints basis only.

Advantage:  The City would get the exact standards it wants and there would be little cost or impact on most of its suppliers.

Disadvantage:  The potential that bidders would be less than truthful in the “honour system”, and the burden of proving or disproving allegations of non-compliance would fall to the City, where staff have limited expertise in these matters and it may prove difficult to investigate allegations.

City cost:  The City would incur cost of third party audits if allegations of non-compliance are proven to be incorrect.

 

2.   City Developed Policy and Formal evaluation system:  The key characteristics of this approach would involve the City adopting a policy and supplier code of conduct (similar set of standards as those identified in Option 1), a self-contained formal monitoring and evaluation system (a process by which the City and its partners can be assured that each supplier is meeting the standards in the code), and a system of governance that may or may not involve stakeholders to varying extents.  Bidders would be required to certify compliance at the bid stage and the City would conduct regular compliance monitoring through a third party audit company.

Advantage:  The City would get the exact standards it wants and would appear to be pro-active rather than reactive in enforcing compliance of its policies.

Disadvantage:  This is the most resource intensive option and would likely exceed any budget that the City might want to consider.

City cost:  The City would incur the cost of retaining a third party auditor to conduct regular compliance monitoring and audits.

 

3.   City adopts recognition system for existing certification initiatives:  This approach would involve the City adopting a policy that recognizes other existing certification and labelling initiatives on ethical purchasing instead of developing its own free standing system. Suppliers to the City would be required to meet the requirements of an existing system such as that of the Fair Labour Association or International Standards Organization.

Advantage: This option requires the least amount of manpower invested by staff and increases the labour standards by which suppliers will have to adhere.

Disadvantage: Suppliers would be required to apply for and maintain certification, and absorb these costs even though there is no guarantee that they will be awarded contracts with the City.  It is also clear that numerous certification “authorities” exist and a final determination, of which bodies are most representative of the international standards being endorsed by the City, has proven difficult. 

City cost:  Experience with other procurement initiatives has shown that the imposition of such a mandatory requirement would likely result in reduced competition for City goods and services, and therefore could result in increased product costs.

 

 

RECOMMENDATION

 

In order to ensure a meaningful, effective and sustainable Ethical Purchasing Policy, the Committee recommends a phased implementation and enforcement system.  This approach would entail the implementation of a City Developed Policy and Complaints-based monitoring system, described under Option 1, concurrent with an ongoing research and development phase.

 

The Policy and Supplier Code of Conduct will contain a select set of labour standards.  These particular standards, outlined in Appendix A, are considered to be the most critical and are the main focus of other public institutions today.  These standards will be applied to the purchase of uniforms, apparel and where practical, fair trade products.  Fair Trade certification of agricultural products will not be imposed, as it is believed that the labour standards to be implemented will address most areas of concern.  Over time, demand may force suppliers of agricultural products to provide consumers with a choice between regular and Fair Trade certified products.

 

With respect to monitoring vendor compliance with the policy, the City would impose a self-declaration system whereby the burden of responsibility would rest with vendors competing for contracts with the City.  At the time of bid submission, vendors will be required to certify compliance with the policy and the labour standards outlined in Appendix “A”.  The policy will not apply to any tendering process or any contracts for the supply of such items that are issued, awarded or entered into prior to the effective date of the policy.  However, suppliers of existing contracts will be encouraged to comply with the policy and they will be required to certify compliance if and/or when the contracts are eligible for renewal.

 

Conditions of contracts will require that suppliers publicly disclose the names and addresses of supplier factories and operations.  Suppliers will also be required to co-operate with third-party investigations of production facilities where the City has deemed an investigation is warranted, and to provide evidence of corrective action where abuses have been previously identified.  It is the intent of this policy that vendors be encouraged to become compliant through a reasonable transition period, which period may be specific to the product.  All costs incurred in bringing working conditions up to an acceptable standard will be the responsibility of the supplier.

 

During the first year of implementation, City staff will collaborate with other Canadian municipalities and the stakeholder committee to continue to investigate options for tracking and monitoring compliance of the policy, all while experiencing the realities of the policy enacted.  In order to properly assess the impacts on longer-tem multi-year contracts, it is recommended that City staff report back to the Corporate Services and Economic Development Committee and Council by Q2 2009.  The status report will provide details of compliance issues experienced during the first two years and make recommendations for a sustainable, long-term certification and monitoring program.  Alternatively, the experience with the complaints based monitoring system may prove sufficient to meet city needs. 

 

 

CONSULTATION

 

There has been no City-conducted public consultation regarding this item. However, a Stakeholder Committee was established and comprised of both internal and external parties, including City staff, representation from the labour community, humanitarian organizations, environmental groups, and business advocacy groups.  Direct consultation was also undertaken at several points in the policy development with a number of the major City suppliers, and staff are encouraged with the very positive feedback that suggests that the supplier community have been involved with, and supportive of the basic policy objectives for some time.

 

Previously, a news article entitled "Going sweat-free in Ottawa" was published in the Ottawa Citizen and there was media coverage regarding the launch of the Ottawa No Sweat Coalition campaign at City Hall on March 6, 2006.

 

On March 12, 2007, staff took the draft policy to the Business Advisory Committee (BAC), to seek its opinion and support for the policy moving forward.  The initial feedback from the BAC was to challenge staff to ensure that the labour conditions being imposed on the city vendors were not outside of the norm in developing countries.  Staff then undertook additional research and provided the Chair of BAC with the results of its analysis that suggested the City policy was in line with those of other Canadian municipalities, and the applicable international conventions, and given that assurance, the BAC has agreed to endorse the policy as proposed by staff, and included herein.

 

This report was developed in consultation with City staff, and was advertised as part of the Corporate Services and Economic Development Committee agenda.

 

 

FINANCIAL IMPLICATIONS

 

There are no immediate financial implications as a result of this report.   Opponents of No-Sweat policies often argue that it will cost the City more to buy No-Sweat products, however, No-Sweat activists believe that Cities should purchase apparel at the lowest responsible price, not at a price that can only be met by using sweatshops.  It is difficult to provide an estimate of the incremental purchasing costs that may be attributed to the City of Ottawa as a result of the policy implementation.  However, it is possible that the City, in keeping with the principles endorsed in this policy, may have to by-pass vendors who fail to comply with the standards, and award to the next lowest compliant bidder at increased cost.

 

It is believed that the staff resources required to administer this policy will be negligible, as the policy will be administered on a complaints basis only.   If a complaint is registered, staff would expect to expend 2 to 3 person days investigating the allegation, issuing a notice of violation, and managing vendor obligations and reporting requirements.  If warranted, the City will inform the vendor to engage the services of an independent third-party evaluator to assess and report back on the compliance issues.  The supplier will be responsible to absorb these costs and those required to achieve compliance.

 

The City will be required to absorb the costs of any audit where it has been confirmed that the supplier was in fact compliant with the policy.  Preliminary investigation suggests that the cost to engage a third party agency to investigate complaints is in the range of $1,200 to $1,800 per day plus travel expenses.   

 

 

SUPPORTING DOCUMENTATION

 

Appendix A – Ethical Purchasing Policy

 

 

DISPOSITION

 

Subject to City Council approval, the Supply Management Division will implement the policy and advise the supplier community of the compliance and self-declaration requirements.

 

The Supply Management Division will consult semi-annually, or more often as necessary with the Stakeholder Committee, on the implementation of the policy, investigation of future options for monitoring compliance and improving enforcement of the policy, making a final determination regarding vendor compliance, and consideration of new products the policy may be extended to in the future.


APPENDIX A


Corporate Policy

 

Title:

Originating Department:

Originating Branch:

Ethical Purchasing Policy              Reference No:

 

City Manager’s Office

 

Financial Services

Effective Date:

May 23, 2007

Last Revision Date:

April 3, 2007

 

 

Policy Statement

The City of Ottawa is committed to being a force for positive social change by purchasing goods and services from responsible producers that supply quality products at competitive prices and abide by ethical standards and norms. The Ethical Purchasing Policy ensures that purchasing activities are aligned with the City’s values by seeking to ensure workplaces producing  products for the City of Ottawa, respect  human and workers rights, as specified in the Supplier Code of Conduct.

Purpose

The primary objective of this policy is to ensure that clothing, apparel, and certain fair trade products such as coffee and tea, purchased by the City, or by suppliers/contractors operating on City premises, meet the highest possible ethical standards where practical by following the principles set out in the International Labour Organization (ILO) Conventions and referred to in Addendum ‘A’.

 

The policy establishes an avenue whereby complaints of abuses in workplaces that are involved in the production of goods purchased by the City can be made to the City. The City will determine the level and the degree necessary to investigate and act upon complaints.

 

scope and Application

 

This policy applies to the City’s suppliers of clothing, apparel, and where practical, fair trade products. The policy does not apply to any tendering process or any contracts for the supply of such items that are issued, awarded or entered into prior to the effective date of the policy.  Suppliers of existing contracts are encouraged to comply with this policy and where possible, will be required to certify compliance if and/or when the contracts are eligible for renewal.

 

 

Policy

 

The City of Ottawa will not knowingly purchase any products that have been manufactured in sweatshops or under sweatshop conditions. All clothing, apparel, and certain fair trade products purchased by the City must be produced in accordance with the standards set out in Addendum ‘A’.  

 

SUPPLIER CODE OF CONDUCT

 

Every supplier shall ensure that it’s production facilities, and those of its subcontractors, comply with national and other laws applicable in each workplace and shall respect this policy. Where national law differs from the principles set out in this policy, the standard that provides the greater right, benefit or protection to the worker shall apply.  If there is any question as to the meaning of these policies the correct interpretation will be based on the principles laid out in ILO Conventions and the relevant interpretations.

 

At the time of bid submission, the supplier must confirm in an affidavit to the City that:

Ö        it will comply with ethical labour practices that meet or exceed the minimum labour standards in the policy; and

Ö        it will acquire goods and services from subcontractors who agree to comply with labour practices that meet or exceed the minimum labour standards.

 

In addition to the confirmation mentioned above, a supplier shall provide the names and addresses of each subcontractor and production facility to be used in the production of the goods. This information shall be considered public information and will be posted on the City’s website at www.ottawa.ca.  The City reserves the right to request the vendor to supply any additional supporting documentation that will enable the City to determine policy compliance.

 

Suppliers are responsible for monitoring their production facilities to ensure ongoing compliance with the policy.   Preference will be given to suppliers that use the services of third-party verifiers to perform regular monitoring activities and assessments.

 

The City will monitor the policy on a complaints basis only.  The Manager of Supply Management will assess the validity of complaints in accordance with the approved policy and where practical, in consultation with the Stakeholder Committee comprised of business, labour and fair trade representatives.  Where warranted, the City will notify vendors of suspected policy violations and they will be required to investigate the reported complaints by employing an independent third-party investigation firm, or by other means of verification deemed acceptable to the City, in the opinion of the Manager of Supply. 

 

Within 30 days from the date of the notice of violation, the vendor will provide to the City, a report containing information on the verification program undertaken, the name of the third-party verifier, if appropriate, the findings of the investigation, and the corrective action taken to resolve the violation and achieve compliance with the policy.  Costs involved in the determination of compliance or non-compliance will be borne by the vendor unless a third-party audit determines that the supplier was in fact compliant with the policy.  In these cases, the costs will be the responsibility of the City.  All costs associated with the improvement of working conditions that would lead to compliance would be the responsibility of the vendor.  

 

The Manager of the Supply Management Division shall have sole discretion to decide on issues of non-compliance, including awarding a reasonable time period to achieve compliance, and his/her decision shall be final and binding on all parties.  When exercising this discretion the Manager of the Supply Management Division will seek the advice and input of the Stakeholder Committee on all matters of importance. 

 

Any vendor complaint related to the Ethical Purchasing Policy, or the application thereof, will not be considered a substantive objection, as defined in the City of Ottawa Purchasing By-Law.

 

TERMINATION

 

The City reserves the right to discontinue business with suppliers who are not responsive to requests to address concerns around workplace practices and instances of non-compliance with the Policy. 

 

If the City terminates a contract with a vendor as a result of a breach of this policy, the City has the authority to terminate the contract without notice or penalty and shall cease to be liable to the vendor or to any other person for any unpaid amounts that would otherwise have been payable under the remaining term of the contract.

 

The City, at its discretion, may terminate a contract or prohibit a vendor from holding contracts with the City for filing false information or for failing to file information required under this policy.  The termination provisions and responsibilities under this clause shall be vested in the City Treasurer, based on the recommendation of the Manager, Supply Management Division.

City Responsibilities

The Supply Management Division is responsible for implementation of the policy and for ensuring that City staff and the vendor community are informed of their responsibilities and obligations.

 

Departments are responsible for following the provisions of the policy and for advising the Supply Management Division of suspected policy violations.

 

The Supply Management Division is responsible for collecting vendor certification materials and for publishing the names and locations of vendor production facilities on the City’s website.

 

The Supply Management Division is responsible for receiving complaints, monitoring and managing policy violations, and for ensuring that vendors undertake 3rd party investigations as requested by the City.

 

The Supply Management Division will consult semi-annually, or more often as necessary with the Stakeholder Committee comprised of business, labour and fair trade representatives.  Where practical, the City will seek the advice of the Stakeholder Committee on the implementation of the policy, investigation of future options for monitoring compliance and improving enforcement of the policy, making a final determination regarding vendor compliance, and consideration of new products the policy may be extended to in the future.

Contraventions

Failure to comply with this policy may result in employee disciplinary action and the termination of vendor contracts.

 

Definitions

Child means any person less than 15, unless local minimum age law stipulates a higher age for work or mandatory schooling, or less than 14 if minimum wage law is set at that age in accordance with developing country exceptions under ILO Convention 138.

 

Employer means an entity that employs or contracts a worker in the production of a product.

 

Factories or Production Facilities means a facility that is used to produce products for the City, whether it is a supplier’s factory or subcontractor’s facility.

 

Fair Trade Certified Products means products that are Fair Trade Certified by Transfair Canada, or if unavailable, another National Initiative (NI) of the Fair Trade Labelling Organization (FLO) International. Examples of commodities currently include coffee, tea, cocoa, sugar, rice, quinoa, flowers, wine, sports balls, cotton, bananas and other tropical fruit.

 

Fair Trade certification means a system that seeks to improve the lives of agricultural product producers in origin countries by ensuring that the owners of farms receive a guaranteed fair price for their harvest. Transfair is the recognized certification body in Canada.

 

Fair Trade Labelling Organization (FLO) International means the global Fair Trade standard setting and certification organization for products bearing Fair Trade certification labels. FLO certifies producer organizations, and audits trade between certified producer organizations and registered traders in consuming countries, including all steps of processing and industrial manufacturing.

 

ILO Core Labour Conventions means the minimum labour standards set out in the Supplier Code of Conduct.

 

International Labour Organization (ILO) means the UN specialized agency which seeks the promotion of social justice and internationally recognized human and labour rights. The ILO formulates international labour standards in the form of Conventions and Recommendations setting minimum standards of basic labour rights.

 

Minimum labour standards means the minimum labour standards set out in Appendix “A”

 

Product means, any article of clothing, headwear or footwear, or any item made of fabric or by knitting, weaving or felting manufactured for the City

 

Purchasing means the process of procuring products from manufacturers or vendors.

 

Sub-contractor means an entity that has been sub-contracted to by a supplier. They do not have a direct business relationship with the City however they provide the supplier with goods and/or services integral to the manufacture, provision or maintenance of textile products for the City.

 

Supplier Code of Conduct (SCC) means the minimum performance standards for the City of Ottawa’s Ethical Purchasing Policy. The goal of the SCC is to ensure safe and healthy workplaces for the people who make products for the City of Ottawa; where human and civil rights are upheld in accordance with the conventions of the ILO.

 

Supplier means an entity that in the course of a commercial business sells a product or service to the City. These companies may have factories or production facilities of their own or they sub-contract parts or their entire production.

 

Sweatshop means a facility where individuals manufacture, assemble or produce consumer goods under working conditions that do not meet or exceed the labour standards set out by the International Labour Organization.

 

TransFair Canada means the only third-party independent certifying body for Fair Trade products in Canada. TransFair Canada provides independent certification services and is the only Canadian member affiliate of the Fairtrade Labelling Organizations International (FLO).

 

Worker means a person involved in the manufacture or provision of services for a product.

References

Key Word Search

Contact

Corporate Services Department

City of Ottawa

Manager, Supply Management Division

Telephone: 613-580-2424 ext. 21305


Addendum A

 

Supplier Code of Conduct

 

The Supplier Code of Conduct sets the minimum performance standards for the City of Ottawa Ethical Purchasing Policy. City suppliers and their sub-contractors agree to comply with the minimum labour standards noted below.    Where national law differs from the principles set out in this policy, the standard that provides the greater right, benefit or protection to the worker shall apply.

 

Labour Standards

Definitions

Child Labour

ILO Conventions 138 and 182

 

No child labour will be used in the manufacture of the product supplied to the City of Ottawa.  Employers will not employ workers under the age of 15, or 14 where the country has made the appropriate declaration in accordance with ILO Convention 138. If local law stipulates a higher age, it shall apply. Adequate transitional economic assistance and appropriate educational opportunities shall be provided to any displaced child worker. Workers under the age of 18 shall not be exposed to situations in the workplace that are hazardous, unsafe or unhealthy.

Forced Labour

ILO Conventions 29 and 105

 

No forced labour will be used in the manufacture of products supplied to the City of Ottawa.  Forced labour includes involuntary prison labour, indentured labour, bonded labour or otherwise. Workers shall not be required to lodge financial deposits or their original identity papers with their employer.

Harassment and Abuse

 

Workers involved in the manufacture of products supplied to the City of Ottawa will not be subject to physical, sexual, psychological abuse or harassment, verbal abuse, or any other form of abuse, including corporal punishment.

Discrimination

ILO Convention 111

 

Workers involved in the manufacture of products supplied to the City of Ottawa will not be discriminated against. Employers shall not discriminate against a worker in hiring, compensation, access to training, promotion, or termination on the basis of age, race, caste, national origin, religion, disability, gender, marital status, sexual orientation, union membership or political affiliation.  No worker shall be subject to the forced use of contraceptives or pregnancy testing.

Hours of Work

 

Workers involved in the manufacture of products supplied to the City of Ottawa will not be forced to work in excess of 48 hours per week.  Employers will provide each of its workers with one day off for every seven-day period. If a worker is requested to work overtime, such overtime shall not exceed 12 hours per week. Overtime will only be requested in exceptional and short- term circumstances, be voluntary, with workers compensated either according to law, or where the law is silent at a premium rate.

Wages and Compensation

 

Workers involved in the manufacture of products supplied to the City of Ottawa will be paid wages and benefits for a standard working week, at a minimum, national legal standards or industry benchmark standards, whichever is higher. Workers will receive wages that meet basic needs by local standards. All workers shall be provided with written and understandable information about their employment conditions with respect to their wages. Deductions from wages as a disciplinary measure shall not be permitted.

Health and Safety

ILO Convention 155

 

Workers involved in the manufacture of products supplied to the City of Ottawa will not be subjected to unsafe working conditions. The employer shall provide its workers with a safe and healthy workplace in compliance with country and local health and safety laws and regulations, including access to clean toilet facilities and potable water. If accommodations are provided, such accommodations shall be clean, safe, and meet the basic needs of the workers. Adequate steps shall be taken to prevent accidents and injury to health by minimizing the causes of hazards inherent in the working environment.

Freedom of Association and the Right to Bargain Collectively

ILO Convention 87 and 98

 

Workers involved in the manufacture of products supplied to the City of Ottawa will not be denied the freedom of association and the right to collective bargaining. Workers shall have the right to join or form trade unions of their own choosing and to bargain collectively. Workers’ representative shall not be discriminated against and shall have access to carry out their representation functions in the workplace. Where the right to freedom of association and collective bargaining is restricted under law, the employer will not hinder the development of parallel means for independent and free association and bargaining.