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Dixons steps up pace with human rights code

March 2005

Dixons, the UK’s biggest electrical goods retailer, is developing a human rights charter.

The policy, which the FTSE 100 company will begin to implement in May, will seek to establish clear ethical principles for all its employees and suppliers. The group, which owns Currys, PC World, The Link and other high-street brands, says the decision to create a human rights policy is partly a response to its continued international expansion, particularly in China.

The charter marks a new phase in Dixons’ management of its supply chain. The programme was first introduced three years ago and covers the 90 global suppliers and subcontractors from which the retailer sources own-brand products.

Compliance with Dixons’ ethical purchasing policy is now mandatory for such suppliers. The group also recently wrote to all non own-brand suppliers asking them to adopt the basic principles enshrined in its WASH policy, which is based on the SA8000 labour standard and stands for wage, age, safety and hours. The policy criteria reflect established ethical sourcing requirements, among them payment of the local minimum wage and a ban on corporal punishment.

The group says that in ‘almost all’ cases its non own-brand suppliers already either had an ethical sourcing charter or were able to declare that they abided by the principles. Dixons says that this is an ‘acceptable’ position at present.

The WASH policy is unusual in that it also sets health and safety standards for employees’ accommodation, in recognition that many workers in the supply chain, particularly in Asia, live in factory dormitories.

Monitoring is by an in-house team of 22 led by Terry Greenwood, managing director of OmniSource, Dixons’ own-brand sourcing operation. The team includes two specialists specifically responsible for ensuring compliance by first-time suppliers. Dixons aims to monitor all its own-brand suppliers at least once a year, although it allows self-certification by the largest suppliers if they have proven management systems. Suppliers that fail to meet the criteria must submit a ‘corrective action plan’ and have six months to make improvements.
Dixons says it will terminate the contracts of any persistent offenders, although it has not taken such action to date.

Dixons, which works in a cut-throat retail niche where margins are constantly under pressure, has been criticized in some quarters for lacking transparency on its ethical supply chain management (EP4, issue 6, p2).

However, UK fund manager Insight Investment, which has had extended discussions with the company, recently praised its progress on supply chain management, while calling for more disclosure of the way that it considers social and environmental issues in its procurement.

Dixons says stakeholders can expect to see more details about suppliers’ performance on the group website this year, although there are no immediate plans to publicize the policy in stores or on product labels.



Further Information
http://dsgportal01.dixons.co.uk
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