At HEINEKEN, we are looking beyond our direct employees, as we continue our work to ensure fair living and working standards for the people directly connected to our business. Outsourcing non-core activities means we have the right expertise on-site for the right job; allowing us to focus on what we do best, brewing and selling great beers. However, a lack of governance, oversight and credible third-party service providers can turn the opportunity into a reputational and legal risk. We want to ensure full visibility of the number of third-party service providers and the working conditions of their employees, who directly contribute to making and selling our brands.
Commitments around third-party workers are an essential part of our renewed Brew a Better World 2030 Ambition. Third-party employees are not directly employed by HEINEKEN, but work adjacent to our own employees, and play a valuable role in making, transporting and selling our brands. We have taken steps to be sure that they work reasonable hours in a safe, healthy and decent work environment and earn a fair wage. Within HEINEKEN, we refer to this as SMART Outsourcing.
SMART Outsourcing aims to ensure that all our contracts with third-party service providers meet our required standards.
The Programme is made up of 3 pillars: Mapping, Assessments and Corrective action as follows:
- Mapping our third-party service providers and their employees across all our operations to ensure full visibility of 3rd party workers in our organisation globally;
- Worker voice and on the ground assessments against our fair labour principles across a sample of our Outsourced service providers and their workers;
- Identifying any areas where service providers are not meeting our requirements such as paying above minimum wage, ensuring a safe and healthy work environment, and working in partnership with our service providers to encourage and support them to meet a higher bar (i.e. paying a fair wage using internationally recognised measures such as the Fair Wage Network).
Applying SMART Outsourcing in HEINEKEN South Africa
Working with social compliance assurance experts, Partner Africa, we are applying social sustainability and human rights best practices to how we do business with third-party service providers in Africa. We first embarked on this initiative in 2018 and have seen marked improvements in recent years. A good example of this progress is at HEINEKEN South Africa which built its own internal assessment programme with oversight from Partner Africa. The in-house specialist helps monitor the performance of our third-party service providers. The programme has driven meaningful improvement since its inception in 2019.
HEINEKEN South Africa has implemented a continuous review programme where they perform bi-annual Social & Ethics assessments on all their third-party Outsourced Service Providers (OSP). Any non-compliances that are discovered are discussed and agreed with the respective OSP and a follow-up assessment is carried out to ensure these issues are addressed.
Specifically, the reviews cover:
- OSP Policies and procedures review (including local laws and regulations)
- Employee document review (timesheets, payslips, employee and supplier contracts)
- Employee interviews
- Physical walkthrough of the areas
HEINEKEN South Africa noted a considerable change in the relationship with their third-party service providers. Through interviews with these employees, it was established that they feel valued, heard and respected. They believe that being able to raise their concerns with us and, due to our focus on social and ethics compliance, has raised management’s attention and resulted in action being taken.
Examples of these actions include:
∙ Improved working conditions
∙ Adequate work uniforms
∙ Fair pay for hours worked
∙ Improved relationship with the staff
∙ Improved productivity
∙ Tracking of KPIs as per service level agreements and addressed as required
∙ Increased comfort with compliance to laws and regulations and our Heineken Policies and standards
For HEINEKEN, as part of our Brew a Better World strategy for 2030 we have committed to raising the bar in Social Compliance and to embed social sustainability and human rights in our value chain. To further entrench this in the ethos of how we do business we have joined The Consumer Goods Forum Human Rights Coalition — Working to End Forced Labour (HRC) and will continue to identify and understand human rights risks and take action.