Albert Heijn commits to become a leader on human rights
By Ioan Nemes, Business and Human Rights expert at Oxfam Novib - After the launch of Oxfam’s Behind the Barcodes campaign in the summer of 2018 and following a series of public actions by concerned consumers aimed at supermarkets, coupled with dialogue and engagement between Oxfam and supermarket executives, the moment has finally arrived: the Dutch supermarket chain Albert Heijn recently became the first supermarket in the world to publish a new human rights and due diligence policy in response to Oxfam’s campaign, including significant commitments that are in line with Oxfam’s recommendations to supermarkets. I take a closer look at Albert Heijn's new policy in this blog and show why this is an important step in the right direction. I also discuss a number of limitations and formulate recommendations for future action.
In the new policy, Albert Heijn recognizes that they are part of the problem that leaves the most vulnerable people in their supply chains - workers, farmers and women - unable to live decently with the income they earn from producing our food. Albert Heijn also recognizes that it can and must play a role in solving this problem. The company has now promised to implement an extensive due diligence process in compliance with the most recent UN conventions and OECD guidelines. Albert Heijn has committed to undertake an iterative process of continuous improvement through which, as of 2019, they will investigate the potential and actual adverse impacts of their own actions on the people, animals and the environment in their supply chains. The process will also include setting priorities, reporting on them and tackling the adverse impacts that are identified. Albert Heijn is thus one of the first supermarkets in the world to publicly commit to implement the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines in a systematic way, by involving potentially affected stakeholders in both the development of the due diligence process and in resolving the negative impacts identified.
An important element of a credible due diligence process is the establishment of complaints mechanisms that provide for remediation if negative impacts are identified. Albert Heijn has committed to implement such mechanisms which comply with the UNGPs and the OECD guidelines, by 2020. Albert Heijn also says it plans to "talk to the various players in our chains (such as our suppliers, farmers, trade unions, etc.) about how we can realize improvements in human rights and the environment together with them." By doing this Albert Heijn is moving away from its previous approach of demanding compliance from suppliers, to one in which solutions are sought together with supply chain partners. It is positive to see that Albert Heijn is moving away from an approach of solely delegating responsibility for human rights to their suppliers. It now also sees an active role for itself in tackling the challenges that the other supply chain partners experience in improving human rights.
Albert Heijn has promised to engage in further dialogue with its stakeholders, such as local government authorities, to address the systemic causes of human rights violations. Through this type of engagement, Albert Heijn seems prepared to use its influence to promote respect for human rights amongst policy makers. The company has also promised to sign the UN Global Compact Women's Empowerment Principles before 2020, which indicates that Albert Heijn wants to join the international community of companies and other institutions who promote women's rights through their actions.
Albert Heijn's new policy also marks the first instance in which a Dutch supermarket dares to acknowledge that it not only bears responsibility for its own brand products, but also for the premium brand products that are on its shelves. In my engagement with supermarkets I have frequently heard comments such as "It is not our business to care about how Unilever makes its peanut butter, or about where Coca-Cola gets its sugar". But as Oxfam's research last summer showed, supermarkets do have a big say over whether a product ends up on their shelves and reaches the consumer or not. The fact that Albert Heijn has now publicly committed to engage with other brand owners about human rights and sustainability is a striking and important change in mentality.
The new policy is also remarkable in that Albert Heijn now openly admits that a sole reliance on social audits and certifications is insufficient to protect human rights. The limitations of social audits and certifications have been the subject of many debates yet many supermarkets continue to rely heavily on them. This is why Oxfam's Behind the Barcodes campaign calls on supermarkets to supplement certifications and social audits with their own due diligence investigations. Albert Heijn is responding to this call by committing to carrying out at least six impact assessments per year in supply chains where human rights are at risk. It is positive to note that Albert Heijn also states that it will involve local workers, trade unions, farmers and representatives of communities (including women) and NGOs in these impact assessments. It is also promising to see that the supermarket commits to undertake these impact assessments using globally recognized methodologies. The value of these impact assessments in addressing the identified human rights issues will depend greatly on the quality of how they are undertaken and the implementation of the action plans that result from them. Albert Heijn could follow the recent example of SOK Corporation – the procurement arm of the largest Finnish retailer S-Group – to make sure that the impact assessments are of high quality and that the results are published in full. Oxfam Novib will closely monitor the progress and implementation of Albert Heijn’s impact assessments and will also encourage other stakeholders to engage in the process. Albert Heijn has announced that it will publicly update on the progress of the impact assessments on an annual basis, which is a major improvement compared to the current lack of transparency regarding social audits.
Another significant improvement in transparency is Albert Heijn's proposal to publish an interactive map which will show where the ingredients processed in its own-brand products come from. The public availability of this information will enable various stakeholders, including the workers and farmers at the beginning of the supply chains, to have a better understanding of the ‘who, where, and how’ of the trade of ingredients that they produce. The increased transparency will also make it easier to map out how power and value are distributed in the supply chain and which players are involved. Albert Heijn has also committed to publish a first Human Rights Due Diligence Report by 2020 at the latest, which would constitute a first in the Dutch food retail landscape, as no other Dutch supermarket has done this.
Perhaps at first sight less impressive, but certainly no less relevant are Albert Heijn's commitments about how the new policy will be embedded in its own organization. This is the first time that a Dutch supermarket has publicly committed to make human rights part of the standard training for its own buyers before the end of 2019. The company states that all current buyers will be required to complete the new training by 2020 at the latest. Buyers are one of the most important interfaces between a company and its suppliers. Their knowledge, attention and behaviour on human rights is decisive for how Albert Heijn will use its influence for the benefit of vulnerable workers and farmers in its supply chains. To incentivise the right behaviour, Albert Heijn has also committed to link the remuneration policy of relevant employees to improvements in human rights and sustainability by the end of 2019. Other supermarkets should take note of Albert Heijn’s ambitious commitment in this area and review their own internal incentive systems.
As important as what Albert Heijn does state in its new policy is also what the company does not state this time. It is noticeable that Albert Heijn does not place the responsibility for making the right decisions on consumers. This is a very welcome stance, as discussed in this opinion piece Oxfam published earlier this year.
Limitations and recommendations
While Albert Heijn's new policy is certainly progressive, there is also room for improvement. For example, the policy says nothing about how Albert Heijn wants to tackle the currently skewed balance in distribution of value between powerful parties such as supermarkets on the one hand and the more vulnerable ones such as workers and farmers on the other. The new policy also does not address Oxfam's recommendations for supermarkets to support and invest more in alternative business models, which would enable workers and farmers to get a fairer share of the value that is being created. We hope that this will be included in the scope of the impact assessments and the further due diligence work. As Oxfam’s research shows, supermarkets profit disproportionately from the unequal power relations in value chains and their position has only grown stronger over the years.
Another gap in is that the new policy lacks concrete steps about how the results of the human rights impacts assessments will be converted into action. The commitments are promising, but in the end their effectiveness will depend on how they are implemented. For example, Albert Heijn's policy describes very extensively its internal mechanisms to manage risks - and those of its parent company Ahold Delhaize - but it is comparatively less detailed about how the company plans to shape the mitigation actions, the monitoring, reporting and remedy of the negative impacts on human rights. It is good that Albert Heijn's due diligence process is anchored in clear internal processes, but the real test will be how meaningful the interaction will be with potentially affected stakeholders such as workers and farmers.
The positive commitments that Albert Heijn has made on transparency of first-tier suppliers should also be seen as a first step. It should in due course also provide insight into the entire supply chain, not just the immediate business partners.
The ultimate goal of the Behind the Barcodes Campaign is to ensure that the most vulnerable people at the beginning of the supply chains share fairly in the benefits of producing our food. The too low income of workers and farmers is the main barrier to a decent life. Albert Heijn should set itself a higher ambition in this area. For example, Albert Heijn could make living wages for workers and living incomes for farmers a fixed component of the price they pay to suppliers. The recent reports about Albert Heijn's participation in price wars in The Netherlands and Belgium continue to cause us concern. Experience shows that price wars too often translate into extra pressure on vulnerable parties in the chains, primarily farmers and workers, rather than affecting supermarkets’ own margins.
The new policy is also too vague about how Albert Heijn intends to engage with trade unions or farmers' organizations in production countries. Supermarkets such as Albert Heijn have long neglected setting up meaningful dialogues with these important stakeholders. It is important that Albert Heijn recognises that building trust in these relationships can therefore prove to be a challenge and rising to it will require meaningful engagement from the supermarket.
Oxfam is very disappointed that the parent company of Albert Heijn, Ahold Delhaize, has so far failed to follow the good example of its Dutch subsidiary. Ahold Delhaize has supermarket chains in several countries and generates more than 60 percent of its turnover in the United States, where it has prominent supermarket chains such as Giant and Stop & Shop. If Ahold Delhaize were to implement the same policy as Albert Heijn, the positive impacts on vulnerable workers and farmers would be many times greater. In the coming period Oxfam will intensify our engagement with Ahold Delhaize to convince them to follow suit. If Albert Heijn can do it, so can Ahold Delhaize.
Oxfam will be closely monitoring Albert Heijn’s implementation of its new policy. We cannot do this alone. We call on other interested parties and stakeholders to join us and, if and when necessary, to further encourage Albert Heijn to take concrete action. We will also continue to appeal to the parent company Ahold Delhaize to follow the good example of its subsidiary. And we will also continue to engage with and encourage the other Dutch supermarkets Jumbo, Lidl, Aldi and Plus to follow Albert Heijn’s example.
In conclusion, Albert Heijn's new policy looks good on paper, despite a number of limitations. The real work for Albert Heijn on human rights is only starting now. The effective implementation of the new policy will depend on the amount of (extra) human resource and budget that the company will make available for the new due diligence process. We welcome Albert Heijn on this road, which will undoubtedly be difficult at times, but which will lead to sustainability and greater respect for human rights.
Ioan Nemes is Business and Human Rights expert at Oxfam Novib. He negotiates with supermarket chains such as Albert Heijn and Jumbo to ban the exploitation in our food.
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