Modern Slavery Act: Deadline approaches for universities

CFTI 2013 Congo visit

UK universities – at least, those that turn over more than £36m per annum – have just three weeks to comply with Home Office guidance for the publication of their Statement on Slavery and Human Trafficking, a key transparency requirement of Part 6 of the Modern Slavery Act 2015.

The guidance requires relevant commercial organisations, including universities, to publish their Statement within six months of their financial year-end.  For most universities, that means by 31 January.

The Statement needs to be approved by the senior governing body, signed by a director (or equivalent) and posted on the institution’s website with a link from the homepage.

As of today, we could find nine Members that have posted a Statement on their website:

Goldsmiths, University of London

Jisc

Kingston University

London Business School

London Metropolitan University

Royal Holloway, University of London

Royal Veterinary College

UK Shared Business Services Limited

University of London

LUPC’s own, second annual Statement can be found here.

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Collaborative Procurement doesn’t have to exclude SMEs

We’ve just audited the number of our suppliers that meet the criteria for genuine small- to medium-sized enterprises (SMEs).

Our SMEs contribute a great deal not only to our Members, by providing high quality goods and services, but also to the economy.  Many of our Members find that levels of service and bespoke capability can often be bettered by those suppliers at the smaller end of the scale.

We’ve found that, of the 98 suppliers on framework agreements led by LUPC, 31 of them turn over less than 50m euros (or £42.2m) and employ fewer than 250 people.

We think that, for a collaborative buying consortium where our Members are used to enjoying the benefits and scale economies of our collective buying power, having just under one in three of our supplier community represented by SMEs is a statistic we can be proud of.

Of course, we value our relationships with larger businesses, too!  Remember, every single one of them has been through a rigorous, EU-compliant process.

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“No True Accountability Without Transparency” – a report on the 2nd International Learning Lab on Public Procurement and Human Rights

learning-lab

Angus Warren, CEO of Advanced Procurement for Universities and Colleges and I were pleased to participate in the second annual workshop of the International Learning Lab on Public Procurement and Human Rights, held at the World Meteorological Organisation’s headquarters in Geneva on 17 November.

LUPC, through our partnership with the Business Human Rights and Environment Research Group (BHRE) at the University of Greenwich, has played a full part in developing the workshop with our colleagues from Europe and the United States.  Ours is the only public procurement authority to be represented on the international steering committee.

The event has grown noticeably in stature since I attended last year.  It’s an opportunity for NGOs, civil society, academia and public procurement practitioners to come together to share knowledge, developments and examples of good practice, broadly with the aim of supporting the UN Guidelines on Business and Human Rights and, in particular, UNGP6, which requires “States [to] promote respect for human rights by business enterprises with which they conduct commercial transactions”, i.e. through public procurement.  (In August this year, LUPC submitted written evidence to the UK Parliament’s Inquiry on Human Rights and Business making five recommendations to bring UK public procurement into line with UKGP6.)

We were particularly pleased to see more public procurement practitioners presenting their work developing practice in the discipline this year, many more than in the first workshop a year ago.  For me this contributed to a very high quality of discussion.  Of notable distinction were Pauline Göthberg of Swedish County Councils on electronics; Kathryn Schwenn of the City of Madison, Wisconsin, USA on apparel; and we were honoured to hear Trinidad Inostroza, who is Director of ChileCompra, the public procurement agency in Chile.  BHRE’s (and our own) Dr Olga Martin-Ortega updated workshop delegates on our experience with the UK Modern Slavery Act.

The afternoon involved a series of smaller, parallel discussions giving delegates to opportunity to get to grips with the issues in greater depth and for the pioneers to get feedback on their developing thinking and practice.  Topics focused on apparel, electronics (led by Electronics Watch, of course), human trafficking, EU Procurement Directives and security services.

It’s clear that it’s the Nordic countries – in particular Sweden, Norway and Denmark – that have powered ahead of the field when it comes to practising due diligence to protect human rights in public supply chains.  Therese Sjöström launched a new report Agents for Change, updating us on the activities of Swedwatch, an independent, non-profit organisation reporting on Swedish business relations in developing countries, focusing on social and environmental concerns.  The report sets out valuable, practical guidance on implementing social criteria, based on the Swedish experience.

Indeed, the call from public procurement practitioners like us for more practical, useable guidance to help us protect human rights in our supply chains is being heard.  Perhaps the most promising example came from Kevin Funk, in Geneva representing the US General Services Administration.  His Social Sustainability Tool provides “a framework for how best practices and resources for improving social sustainability can be incorporated within procurements”.  In my view this is a fantastic piece of work, drawing together experience and good practice into a useable resource for practitioners.  We’d very much like to see our own Crown Commercial Service – who, happily, accepted our invitation to attend the workshop – take this piece of inspiration and develop something similar for us here in the UK.

Professor Robert Stumberg, who is Director of the Harrison Institute for Public Law at Georgetown University Law Center, for me always brings great clarity to his academic treatment of the subject.  His message – that “you cannot have true accountability without transparency” reminds us that unless we work with our contractors to disclose the right information to the right people, this scourge of our society will be allowed to continue.

Our particular thanks to Nicole Vander Meulen at the international Corporate Accountability Roundtable for her effort and skill in organising this workshop.  

If this sort of thing interests you, register free for the third Greenwich Symposium on Responsible Public Procurement on 8 December at the historic Old Royal Naval College in Greenwich.

 

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New Cleaning and Security Agreements Help Prevent Human Trafficking

securityLUPC’s brand new, innovative framework agreements for cleaning and security services are specially designed to help prevent human trafficking in these high-risk spend categories.  LUPC is launching both agreements at a free event for Members at the Museum of London on 31 October (0930).

Many of our Members will doubtless be finalising their Slavery and Human Trafficking Statements for publication, as required under Part 6 of the Modern Slavery Act.  These agreements will enable Members to state that, owing to LUPC’s supplier due diligence processes coupled with an in-built supplier management programme, mitigating actions are taken to help manage the risk of human trafficking in these sensitive markets.

All our security services suppliers are committed to responsible provision in accordance with the rule of law and with respect to human rights of all people, while our cleaning contractors have all committed to the ETI Base Code.

Both new framework agreements require that suppliers must work with LUPC to identify and mitigate the risk of potential modern slavery, human trafficking, forced and bonded labour and labour rights violations in its supply chain.  Within 90 days of the commencement date, each supplier must produce a Modern Slavery in the Supply Chain Due Diligence Report identifying the main risks of modern slavery, human trafficking, forced and bonded labour and labour rights violations in its supply chain, highlighting the main areas, countries and suppliers at risk and the steps to be taken to mitigate such risks in the short, medium and long term.

Suppliers must update the Report annually for the duration of the contract.  More regular updates are to be provided when the risks are assessed as imminent, either by the supplier or LUPC.  Suppliers must also draft a Modern Slavery Action Plan and must nominate a person to liaise with LUPC in its drafting and implementation.

Special conditions in the framework agreements were designed by the Business Human Rights and Environment (BHRE) Research Group at the University of Greenwich.

LUPC’s own first Slavery and Human Trafficking Statement was published in December last year.

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It’s Anti-Slavery Day

foxconn-employee

LUPC became a founding member of Electronics Watch, an independent supply chain monitoring organisation, in 2014.

Today (18 October) is Anti-Slavery Day.  A day for reflection.  A day for thinking about this scourge of our society and what we can do to help alleviate the suffering.

We know that abusing and exploiting people is both easy and lucrative.  The International Labour Organisation estimates that 21,000,000 people across the world are in forced labour.  This evil crime generates $150,000,000,000 in illegal profits around the world, every year.  While here in the United Kingdom, the Home Office estimates that up to 13,000 people are living in modern slavery today.

But we, being involved in the purchase of millions of pounds worth of goods and services every year, with and on behalf of our Members, have the power to influence markets and decision-makers.  We can and do make a difference together.  Purchasing consortia shouldn’t be just about getting better value.  We should also be about getting best value without causing harm to others.

To protect people from modern slavery, human trafficking, forced and bonded labour and other human rights abuses, we in the procurement profession are going to have to acquire new skills.  We will have to learn to do things a little differently.  Like working with our suppliers to find risks in our supply chains, and taking action to mitigate those risks.  We need to be ready to share that responsibility.  This is a problem in our society – not just our supplier base – and that means it’s one we have to work together to manage.

At LUPC, we’ve made a good start, as we hope you’ll agree.  Becoming a leader in ethical and sustainable procurement is an important part of our corporate strategy.  And we think we’ve done quite a lot so far.  But there is a long way to go and a lot more to do.

2014

  • Awards innovative new framework agreement for sustainable waste management services.
  • Becomes founding member of Electronics Watch, an independent monitoring organisation for public buyers in the global electronics industry.

2015

2016

  • Introduces Electronics Watch clauses to new, national higher education agreement for Apple products, requiring suppliers to respect labour standards in Apple’s supply chain.
  • Awards new cleaning and security services agreements committing suppliers to take steps to protect workers from human trafficking.

We know there’s a lot more we can be doing to protect human rights and the environment in our supply chains.  And we’ve learned that we can do much more when we work in collaboration with others.  Now we want to work more closely with students, sustainability managers, academics and other experts, as well as buyers.

And starting when our new LUPC Ethical and Sustainable Procurement Advisory Group meets for the first time on 11 November, we will expand our ethical and sustainable procurement programme, so that we can better reflect the values and direction of our Members.

We will report on our progress.

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Developing collaboration Down Under Part II

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In my second and final blog from Sydney (the first is here), I shall be describing what colleagues at the Australian Universities Procurement Network (AUPN) are planning to do to complement the University Procurement Hub and other collaborative activities in HE procurement here in Australia.

Firstly, though, I managed to catch up with Richard Allen yesterday morning at a trendy cafe in Darlington near to his base.  It gave me the ideal opportunity to put to him some of the questions that had occurred to me about the University Procurement Hub.

Richard is director of procurement and CPO at the University of Sydney, Australia’s oldest with 54,000 students.  According to its 2015 financial statements, the university turns over AUS$1.9bn (£1.08bn) and has net assets of AUS$4.2bn (£2.38bn), so, needless to say, his is a big job.  A PPE graduate from the University of Edinburgh with a background in rail and at PwC, he now leads a team of thirteen, including specialists managing all the categories you’d expect.  I asked him first why it was felt necessary to partner with Accenture in establishing and operating the hub.  (Collectively, 17 universities are investing AUS$20m over five years with the aim of saving AUS$300m NPV.)

“Why we are doing it this way is why we haven’t done so in the past.  And as for the investment, it’s equivalent to two FTEs.  It’s not big for us at all.”  Affordable enough for the third largest university, you might think.  But Australian universities do tend to be bigger than their UK counterparts.  The UK’s largest, the University of Manchester, were it possible to transport it and its 38,000 students here, would only rank about 13th in the country by size.

Is he happy that a partner incentivised by gainshare won’t sacrifice quality to achieve their targets?  “Yes, because the Hub’s members aren’t committed to accept any of the contracts Accenture negotiates for us.  The Category Councils will make recommendations, but it will be up to the universities whether they actually take up the deals.”  So none of the members are, in fact, committed to the contracts up-front?  “No, we can’t do that. But I do believe take-up of the first wave of contracts will be strong and that that will give us the momentum to carry forward into the waves that follow.”

“Once the five-year project is over, and skills and knowledge have been transferred, one of our options will be to establish a procurement consortium like LUPC,” Allen said.

One of the main objectives of the Hub is to uplift its members’ procurement capability. Allen intends to achieve this in partnership with AUPN, which is managed for the sector by Higher Ed Services Pty Ltd (HES), based in Sydney’s business district.  On the previous evening, I’d met with HES’s new CEO Andrew Trnacek, himself a former manager at Accenture and latterly a partner at Grant Thornton.  Andrew is keen to build on AUPN’s capability offering.  At present they offer a procurement maturity self-assessment tool, with which they plan to amass benchmarking data.  It sounds very similar in nature to our own PMA.

Andrew and AUPN’s members showed a strong interest in HEPA and in particular, the on-line discussion forum and eLearning package.  My hope is that we will be able to reach a more formal partnership agreement to support HE procurement development in both countries.  It certainly sounds promising.

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Developing collaboration Down Under

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Universities in Australia are taking giant leaps to better collaboration in the procurement of goods and services, a meeting of the Australian Universities Procurement Network was told, which I attended this week in Sydney as a guest of AUPN.

Roughly half of the sector has signed up to an exciting collaborative sourcing programme run jointly with a major consulting firm, while many more are developing a best practice sharing model under the AUPN banner, including a procurement capability assessment programme quite similar to our own in the UK.  I’ll write more on the best practice endeavour in a later blog.

Australia’s University Procurement Hub went live on 4 April this year.  Seventeen of Australia’s 39 institutions, supported by their partner Accenture, who were selected following a rigorous procurement process, are aiming to save around AUS$300m NPV (£172m) over an ambitious five-year programme (see their striking promo video here).

As Executive Board Chair and director of procurement at the University of Sydney Richard Allen set out the programme, it was obvious that the Australians certainly mean business. They plan to attack an addressable spend of AUS$1.2billion in four waves of collaborative procurement exercises across no fewer than 60 spend categories.

The first wave, Allen believes, will be the easiest to master as they seek to optimise the operating effectiveness of the Hub, ready to tackle the trickier categories later on. These initial categories will sound familiar to LUPC Members: IT, office supplies, furniture, travel and accommodation and laboratory consumables.

The programme has three principal objectives:

  • to achieve savings by aggregating the buying power of its members;
  • to achieve end-to-end effectiveness through innovation and the use of technology; and
  • to uplift organisational procurement capability through process improvement.

Governance is important to the programme.  An Executive Board (EB), made up of finance directors and CPOs in equal measure, oversees the project, while a Program Committee (the “engine of the Hub”, according to Allen) consists of representatives of 8 or 9 universities nominated by the EB.  This group, in turn, co-ordinates five Category Councils, involving 50 participants drawn from all seventeen participating institutions. Their task is to plan sourcing and contracting milestones, provide legal support and work in tandem with the Accenture team.  A single point of contact (SPOC) ensures that each university’s requirements are met throughout the programme.

It doesn’t look easy, though, as they will need to be equal to some hefty challenges if they’re to succeed.  Clearly the deal with Accenture is a complex one.  The good news is that Accenture’s minimum participation level, its critical mass, has been achieved.  This means the project is viable as a commercial proposition.  I understand that the project aims to achieve purchase cost savings of between 8 and 12%, with additional commercial incentives available to Accenture if they perform beyond that.

More universities are considering signing up, but there is a sizeable investment to be considered first.  Between them the seventeen will part with in excess of AUS$20m (£12m) in fees spread over the five years and front-end loaded (incrementally reduceable if sufficient further institutions join).  For that, they will receive all the technology (proper spend analysis, procure-to-pay systems and so on) and the services of a 15 FTE-strong highly skilled and motivated Accenture team.  Even with systems included, this still works out at a weighty daily rate for our sector and especially for such a big chunk of work.  Of course, it’ll look small if the savings get delivered, but I do hope they’ll be good for it.

And, of course, not every institution is going to be able to enjoy the benefits of every deal that’s done, as presumably some will be locked into existing contracts, for a while at least. For the first wave of (less contentious) categories, there’s just about complete participation from every institution – and that’s good news.  But in the later waves, fewer appear quite as interested.  Indeed, for the management consultancy category, hardly anyone has shown a strong interest in participating, but perhaps that’s not such a surprise given the nature of the relationships involved.

I also wonder about the wisdom of a model where the partner is incentivised purely by savings at a time when we are seeking to extol the virtues of good procurement as a value-adding discipline.  It might be a challenge building in safeguards to ensure that targeted savings aren’t delivered at the expense of quality.

But you can’t fault the collective ambition or the steely Aussie resolve on show here.  The project clearly has momentum and the CPOs I spoke to whose institutions have signed up are dedicated to the project and to its success.  In my next blog I’ll describe how AUPN plans to complement this activity with a different kind of collaboration, one about raising standards of professionalism and providing support for one another, for the greater good.

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