Healthy Supply Chains Initiative launch

This month ACTU President and Deputy Chair of Union Aid Abroad-APHEDA, Ged Kearney, launched the Health Supply Chain initiative. Here is an extract from her powerful speech.


Something is fundamentally wrong with the way that the world is doing business.

Global GDP has tripled in the last 30 years – and yet we have seen no corresponding strengthening of wages, secure work, safe work and other human rights protections.  In fact, we have seen the opposite: the devaluing of human lives and human dignity, and the denial of proper wages and conditions.

Major corporations control 60 per cent of global production, transport and services through their supply chains – and yet these corporations deny responsibility for the wellbeing of both their own workers, and the societies in which they operate.

These abuses are happening because of an economic system based on an ideology that sees human beings as expendable commodities.

This ideology has become so normalised that we regularly hear political, business and even NGO leaders describe human beings as “human capital” without blinking.

It has become so normalised that we have grown used to hearing big corporations argue that they can’t ‘afford’ to provide safe work, secure work, or minimum living wages.

It’s become so normalised that, even after the Panama papers leak, we still have to fight for the idea that big corporations should pay their fair share of tax.

At the forefront of my memory is the terrible tragedy of the factory collapse at Rana Plaza, in Bangladesh, which we all bore witness to in 2013.

But it isn’t just in Bangladesh that we witness these abuses. Examples of worker exploitation in our supply chains here in Australia abound. Those of us in the union movement see the impact of this exploitative, unsustainable global business model every day.

For example, just last year United Voice helped to expose the horrific exploitation of underpaid cleaners at businesses such as Myer and Spotless. Using sham contracting arrangements, these businesses were underpaying the low wage earners that clean their stores by thousands – even as their CEOs earn ever-increasing bonuses.   Cleaning based on ethical standards is important everywhere – and nowhere more so than in health related areas.

I shudder to think that the uniforms I wore, or the surgical equipment I used, in my years working as a nurse may have been made by people working under conditions like those we saw in Rana Plaza. And I shudder to think that the environments I worked in were cleaned by people exploited via sham contracts. I know that the patients I treated would also have been horrified to think that their healthcare came at the expense of others’ suffering. This is not a business model that reflects Australian values.

Unions are, of course, seen as the ultimate threat to the way that the world is doing business today, because the values we stand for – safe work, secure work, proper wages, and the belief that the economy should exist to serve people, and not the other way around – demand a different approach. As a result, we are seeing unprecedented attacks on unions – both here in Australia and around the world.

But I believe that we are reaching a tipping point. Around the world, people are raising their voices against corporate greed. And it is fundamentally corporate greed that we are talking about when we examine human rights abuses in global supply chains.

The Panama papers leak exposed an elaborate system of fraudulent shell companies that allow the richest corporations to hide money owed to the public.

We need to also expose the elaborate system of fraudulent sub-contracting arrangements that allow the richest corporations to hide human rights abuses in their global supply chains. Because it is through these sub-contracting arrangements that the big corporations, the ones that control 60 per cent of global production, transport and services through their supply chains, are hiding their workforce.

Just as these companies declare only a tiny portion of their true income to the tax office, hiding the rest in fraudulent shell companies, so too do they declare only a tiny portion of their official workforce. They employ six per cent of people directly, while hiding a workforce of 94 per cent in global supply chains. Many of the workers in this hidden workforce are children – something that unions and NGOs are working hard to fight across our region to expose.

As a spotlight has begun to shine on the issue of the hidden workforce, and associated issues such as child labour, these issues are being driven further underground. It’s not uncommon for companies to have 2 sets of books and auditing processes have been found to be corrupt.

So we can’t kid ourselves that this will be just a matter of “awareness-raising”, or “corporate social responsibility”. Consumers are often all too aware of the fact that murky supply chains lie behind many of the goods we purchase. But without proper mechanisms to monitor and enforce human rights due diligence, including strong, unionised workforces, the problem becomes overwhelming and complex.

This is where the Health Supply Chain Initiative comes in.

The core goal of the Healthy Supply Chain Initiative is ethical medical procurement. It calls on those who purchase medical goods – such as the government, and others procuring goods for hospitals and aged care providers, to incorporate human rights due diligence into their contracts and tendering processes as a mandatory requirement of medical goods suppliers. In Europe, there have already been developments in this area, such as a social clause in medical goods contracts. While there are some limitations to these models – for example the fact that they mostly impact only public procurers rather than private, and do not involve sufficient third party verification – they are an important step that we can learn from.

To move forward as Europe has done – and beyond – is a goal that will require everyone to cooperate. Federal and State governments and procurers, public and private, will need to work together to implement these changes. Public and private procurers will need to liaise with suppliers to get them up to scratch. Unions, as the key champions of worker’s rights, and as members of a global movement through which we can monitor the actions of suppliers, are also key players.

We need to remember that due diligence is about a lot more than “doing no harm”. The due diligence set out in the UN Guiding Principles on Business and Human Rights is proactive. It isn’t enough for companies to simply take positive action. For workers due diligence means that no business should do anything to discourage workers from exercising their right to join a trade union, and no business should avoid any genuine opportunity to bargain collectively.

The ACTU is very proud to be a founding member organisation of this important initiative. As a founding member organisation, we have pledged to

  1. Endorse the goal of workers’ rights throughout medical goods supply chains;
  2. Commit to advancing this goal through practical measures.

At the ACTU, we are actioning some of these practical measures through our international work. Through our work with APHEDA – Union Aid Abroad, we help to grow the capacity of local unions. These unions will be critical in helping to provide monitoring and evaluation of production sites necessary for Australian procurers, so that we can be sure that human and labour rights are being protected.

The ACTU and our affiliates are also advancing the Initiative’s goal through practical measures here in Australia. For example, the Australian Nursing and Midwifery Federation has organised workers to demand that their uniforms and other commodities are ethically sourced.

In 2014, the ANMF learned that Ansell, whose products such as surgical gloves are widely used in hospitals and health settings across Australia, was refusing to negotiate with unions in Sri Lanka, despite the Sri Lankan Supreme Court ordering them to do so.

Currently, Ansell workers are paid poverty wages in terrible working conditions.  Conditions in the Sri Lankan factories are so bad that workers are forced to urinate at their workstation, and 293 workers, many of whom had been with Ansell for 20 years, were sacked for taking industrial action.

In response, the ANMF resolved that the State and Territory Branches will meet with local health service and hospital purchasing officers to investigate alternatives to using Ansell products.

There is, of course, always a great power to collective demands for ethical trade behavior which we can never match on an individual consumer level. Organising medical workers to demand that ethical procurement standards are upheld will be critical to the success of the measures that we are pushing for in this initiative. So too will ensuring that unions play a substantial monitoring role, as it is through our connections to unions around the world, and our role in strengthening them, that we can test the claims of multinationals who claim to be upholding workers’ rights.

Finally, we also need to keep the importance of unions in mind as we consider the future of healthcare in this country, and the implications for ethical procurement. Plans for services to be delivered under the National Disability Insurance Scheme are an example of how the future will see us structure industries differently – with multiple public, private and NGO providers working together.

To ensure that ethical procurement standards are applied to these new industries, it will be critical for unions to be strongly represented.

In conclusion I want to take us back to the bigger picture that I sketched at the beginning.

The business model that dominates the world today is designed by choice and driven by greed. Unions have always rejected arguments that treat good wages, safe work, and secure work as things which can be traded away for the sake of maximizing profits. It is no different with ethical procurement. This is about recognising how off-kilter this business model has gotten, and choosing a different direction.

It’s about saying to suppliers of medical commodities that we will mandate standards for good wages, safe work and secure work. That these are rights we will never trade away.

It’s about saying that they must prove that these human rights are being monitored with due diligence, right throughout their supply chains.

This is about shining a light on the shameful abuse of workers upon whose labour we rely for our own wellbeing, and refusing to tolerate more of it.

Ultimately, this is about the choices we make as a nation. And it is through making these choices that we tell the world who we are.

Through this initiative, we will show the world that we can be better.

And that’s why I am so proud to be launching the Healthy Supply Chains Initiative today.



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