How we treat our workers
15/03/2017
The BBC is publicising their story about the treatment of drivers in the Ikea supply chain. From the BBC report it appears that suppliers to Ikea are finding loopholes in the law to pay the drivers in their home country on their home country rates rather than meeting the minimum wage requirements of the countries that they are driving in. There is also the issue that drivers are camping out in their cabs, although they are being paid some expenses which should be used to stay in accommodation away from the cab to meet road safety legislation.
Why is Ikea in the dock? Well they are a household name and if you are going to make a headline it is very useful to have a company like Ikea to be portrayed as the villain. But what is the responsibility of the Leaders of the Supply Chain, the position that Ikea ultimately holds?
Legally, they have subcontracted the work so are not responsible, but ultimately they need to look to their position. The fact that BP were not running the oil rig in the Gulf of Mexico was no real defence when disaster struck. Similarly in the clothing supply chain, companies were reputations were tarnished when the building collapsed in Bangladesh killing local workers. And that is why a number of companies take the treatment of workers in their supply chain very seriously.
“But we audited our suppliers” claimed Ikea. Well they didn’t actually say that, they said their audits didn’t provide the same picture as the BBC report, but the implication was there. So I would make two points.
- If they audited their suppliers did they fully understand the business model the suppliers were using to provide the services? If they did they should have noticed the way drivers were being paid as it is fundamental to the model. But was that actually the purpose of the audit (and if it wasn’t, what was the purpose of the audit)?
- How did Ikea not notice the lorry parks, which were in effect camps, outside their distribution centres? Was this simply that local employees and management didn’t care or was it that people knew but senior management didn’t do anything about it?
And then there is the issue of expenses. It is all too easy for the hauliers to pay drivers fixed rate expenses, which they then don’t spend on accommodation, and then claim the responsibility for the accommodation has been passed to the drivers. I have worked with companies who have done exactly that and the temptation to save on expenses is always there. However, there are alternatives: only pay what the driver has spent, which may actually cost more to administer, could have the desired effect. Or provide the accommodation yourself. So companies do just that.
Not a good day for the reputation of private enterprise, but probably not a good day either for the national governments who should be enforcing minimum wage and road safety legislation. But who are we going to hold to account?
My position is that people are responsible for their supply chain and they need to really look at what is going on. People will get caught out, but reputational damage for not doing this is often very significant.
Mike Bourne
Categories & Tags:
Leave a comment on this post:
You might also like…
From Pakistan to sustainable manufacturing: My Cranfield journey
Hello my name is Dr Shoaib Sarfraz and my journey into the world of manufacturing began with a deep fascination for how things are made, how they can be made better, ...
Check out the updates to our Bloomberg guide!
Attention all finance enthusiasts, data wizards, and curious minds! Our Bloomberg: a basic guide just got a refresh. This is a great place to go if you’re thinking about getting started with Bloomberg. Here’s what’s ...
My Transformative Experience: Reflecting on the Global Clinical Supply Chain Conference 2024 in Malta.
As a scholarship recipient, I recently had the incredible opportunity to attend the 2024 Global Clinical Supply Chain Group Conference in Malta. I could not be more grateful for the experience. This conference was ...
Shaping the future of aviation: The NAC Women in Aviation Scholarship and me
Aviation has always been more than just a career choice for me – it’s a passion that began in my childhood and has only grown stronger over the years. Raised in ...
Breaking barriers in aerospace: my journey of passion, persistence, and progress
The aerospace and aviation industries have always fascinated me. From the complex technology to the incredible innovations, I’ve always wanted to be part of it. But my journey into this field ...
The successful scaling of SAF production depends on a skilled workforce
In a two-year project called Waypoint 2050, the aviation sector outlined several potential pathways to reach its 2050 goal and how, with the right support from governments, net-zero emissions could potentially be achievable a ...