Respecting rights

Our commitment to human rights

The Universal Declaration of Human Rights calls upon "every individual and every organ of society" to promote respect for human rights. The foundation of international human rights law is the United Nations' 1948 Universal Declaration of Human Rights (UDHR). The UDHR is not legally binding but is an aspirational set of standards and principles. Securing and delivering human rights is ultimately the responsibility of government, but businesses can play their part, too, by upholding and promoting human rights within their spheres of influence.

We seek to do this in three ways:

• in our operations by upholding our values and standards

• in our relationships with our suppliers, and

• by working through external initiatives, such as the United Nations Global Compact.

Our Code of Business Principles

Our Code of Business Principles sets out our commitment to human rights. It confirms that "We conduct our operations with honesty, integrity and openness, and with respect for the human rights and interests of our employees".

The section of our Code dealing with employees clearly states our opposition to forced and child labour and sets out our respect for employees' right to freedom of association.

In 2008 we conducted a survey of our businesses around the world. In all the countries surveyed (55 countries covering over 95% of turnover), wages paid by Unilever meet or exceed the minimum wage requirements established by the relevant national authority. The survey showed that our three  youngest employees are aged 16 and work in compliance with local legislation in Germany, the UK and Turkey. For legal reasons, it is not always possible to collect information about the number of employees who are members of trade unions. However, responses from 35 of our surveyed countries (representing 55% of our turnover) showed that 43% of eligible employees were members of a trade union.

Reviewing our approach

We are reviewing our approach to human rights to ensure that we continue to live up to the standards in our Code of Business Principles and that we have effective communications and compliance mechanisms in place.

Our review has shown that further training would be beneficial to explain the different elements of human rights. Employees would also benefit from clearer definitions of these elements, such as freedom of association, collective bargaining, forced/bonded labour and child labour. We are in the process of upgrading these definitions in the detailed employee guidelines that explain our Code of Business Principles. These updated guidelines will ensure our employees understand the importance and intent of the human rights elements of our Code.

Compliance monitoring of our human rights obligations is delivered via our positive assurance process. This will be complemented by a system of continuous improvement (akin to the systems we use for safety, health and environment), based primarily on self-assessment at site level and supported by periodic external audits. The self-assessment methodology is designed to be consistent with that used to monitor our suppliers' compliance with our Business Partner Code. We pilot tested this enhancement to our processes in 2008 and are analysing the findings in detail in 2009. This will help us further develop and refine our processes.

Human rights & our business partners

Our human rights commitment is also reflected in the way we work with our business partners and suppliers. Our Business Partner Code makes clear the standards to which we expect our business partners to adhere. It contains ten principles covering business integrity and responsibilities relating to employees, consumers and the environment. Four of its principles address human rights, stating that there shall be:

• respect for human rights, and no employee shall suffer harassment, physical or mental punishment, or other form of abuse

• no use of forced or compulsory labour, and employees shall be free to leave employment after reasonable notice

• no use of child labour, and specifically there will be compliance with relevant International Labour Organisation (ILO) standards

• respect for the right of employees to freedom of association.*

* The right to collective bargaining is implicit in the recognition of freedom of association. In line with its own long-standing practice and its adherence to the United Nations Global Compact, Unilever expects its suppliers to recognise the right to collective bargaining (where allowable by law).

Living out our commitments with our employees

These commitments are of no practical use unless they are part of an active process of compliance, monitoring and reporting. The board of Unilever is responsible for this process and day-to-day responsibility lies with senior management around the world. As part of our worldwide positive assurance process, each year our company chairmen give written assurance that their business is in compliance with our Code of Business Principles.

Breaches of the Code are reported to the General Counsel of Unilever. We expect and encourage employees to bring to our attention any breach of the Code. All our employees can access our 'ethics hotline' – a 24-hour toll-free number through which they can raise any concerns in complete confidence and, if they so wish, on an anonymous basis. In 2008, 54 employees were dismissed as a result of breaches of the Code.

Living out our commitments with our business partners

We also use a positive assurance process with our suppliers. We have communicated our Business Partner Code to all our current suppliers of 'production items' (ie the raw materials and packaging we use to make our products) to gain their assurance that they adhere to its principles. We are now following up with those suppliers we have prioritised for more detailed assessment and a programme of audits.

Together with some of our peer companies, in 2007 we established a global Programme for Responsible Sourcing (PROGRESS). As part of this, we have agreed on a common approach to evaluate the social and environmental performance of suppliers across specific groups of goods and services. We believe this collaborative approach will help reduce duplicated effort for PROGRESS members and suppliers alike, accelerating the process of assessing suppliers and freeing up resources to focus on implementing improvements within the supply chain.

See the Suppliers section for more detail.

Promoting human rights

We seek to work with other companies, labour and civil society organisations to promote human rights issues globally and locally.

Global initiatives

We are a founding signatory to the Global Compact, a United Nations initiative which sets out commitments for business in relation to human rights, labour, the environment and anti-corruption. We are committed to upholding these principles across our business.

To mark the 60th anniversary of the Universal Declaration of Human Rights in December 2008, we joined members of the Global Compact in endorsing support for human rights:

"On the occasion of the 60th anniversary of the Universal Declaration of Human Rights, we, business leaders from all corners of the world, call on governments to implement fully their human rights obligations. We also reiterate our own commitment to respect and support human rights within our sphere of influence. Human rights are universal and are an important business concern all over the globe."

One hundred and fifty six CEOs from companies of all sizes, sectors and regions signed the CEO Statement that appeared in all editions of the Financial Times worldwide on 10 December 2008. See download in related links.

Local initiatives

In five municipalities in the state of Goias in Brazil, Unilever Brazil works with the local community and government to ensure children are not exploited in the tomato plantations of its suppliers.

The Infancia Protegida (Protected Childhood) initiative has been running since 2003 and is aimed at preventing children from working in the plantations. So far it has reached around 22 000 children.

In partnership with the Councils of Children's and Adolescents' Rights, Tutorship Councils, local government and the community, Unilever Brazil has devised practical initiatives that support children's development and ensure they do not have to be left alone while their parents are at work. These include crèches, medical care and advice on nutrition, as well as systems to prevent pupils from dropping out of school.

A complementary initiative, Rural Responsavel (Responsible Rural Project), focuses on raising awareness of health and safety issues to farm workers, reinforcing the message that child labour should not be tolerated. Rural Responsavel covers more than 50 farmers and around 2 000 farm workers. In 2007 Unilever Brazil terminated a contract with one of its suppliers for failing to maintain our health and safety standards.

Labour relations

Between 2006 and 2009, four complaints were brought to Unilever's attention by the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Association (IUF) relating to our operations in India and Pakistan. A further complaint was submitted by the Turkish transport union TUMTIS in 2008.

These complaints concerned site closure (Sewri factory, India), freedom of association and collective bargaining (Doom Dooma, India) and the use of temporary and contracted labour at our factories in Pakistan (Rahim Yar Khan and Khanewal).

Under the terms of the OECD Guidelines for Multinational Enterprises, the unions referred their complaints to the OECD's National Contact Points in the UK and Turkey for investigation.

Four out of the five complaints have now been resolved:

• The TUMTIS complaint at our supplier's factory in Turkey was resolved locally in January 2009.

• Unilever Pakistan reached agreement with the IUF to resolve the dispute at the Rahim Yar Khan factory in June 2009. More recently, on 21 October, Unilever Pakistan reached an agreement relating to a further IUF complaint at Khanewal (retroactively applicable to 15 October 2009).

• A settlement payment was agreed by Hindustan Unilever and local trade union representatives (HLEU) in October 2009 relating to the closure of the Sewri factory in 2006.

Unilever is still seeking local resolution of the issue at Doom Dooma, India.

A more detailed summary of four cases is given below, along with a summary of the OECD complaints process.

Rahim Yar Khan, Punjab, Pakistan

In November 2007, the IUF submitted a complaint to the OECD on behalf of the Unilever Employees Federation regarding the treatment of temporary labour at our Rahim Yar Khan factory in Pakistan.

This case was subsequently withdrawn at the request of the local union.

However in November 2008 the IUF re-submitted the complaint on behalf of another local union, the Pakistan National Federation of Food & Beverage Workers. The complaint alleges that Unilever Pakistan dismissed 292 temporary workers who had decided to join a trade union. The company was also accused of retaining workers through third-party service providers in order to reduce the costs associated with the provision of welfare and other benefits.

Unilever Pakistan denied any breach of the OECD Guidelines. Temporary workers were not re-employed because of their desire to join a union but as part of the wider re-organisation of the factory. This involved outsourcing most of the packing and non-core operations on the site to a third-party supplier. Outsourcing is a common business practice in Pakistan.

All temporary workers were advised of this fact in line with the requirements of national labour law. A number of the affected temporary workers were offered employment by the outsourced service provider.

Unilever Pakistan's use of workers employed through third-party service providers is consistent with local employment law and practice. We require our third-party suppliers to comply with our Business Partner Code (which recognises the right to freedom of association) and ensure that our service providers comply with minimum wage, social security and retirement contribution requirements.

Throughout the period of this dispute, we had been in dialogue with local trade union representatives to discuss the issues of outsourcing in the Pakistani market and seek to agree a possible way forward that could allay the concerns of all involved. We also maintained an open and ongoing dialogue with the IUF at international level.

While we refuted any breach of the OECD Guidelines or any discrimination against union members, Unilever Pakistan agreed to co-operate fully with the OECD process to seek resolution of this case. In particular, we agreed to address the numbers of permanent employees relative to outsourced workers at the Rahim Yar Khan site.

In June 2009 Unilever Pakistan reached agreement with the IUF as part of the conciliation process of the OECD UK National Contact Point. Through this agreement we have established an additional 120 permanent posts at Rahim Yar Khan.

A minimum condition of employment at our factory is proof of secondary education qualifications. Those who can substantiate this will be appointed to these posts as of 24 June 2009. For those few people who cannot prove they have obtained these qualifications, we will offer scholarships equivalent to either one or two years' basic salary to help them attain them. These posts will be held open until the qualification is attained.

Those temporary workers who were dismissed in October and who accept permanent employment will also receive a one off lump sum payment conditional upon their confirmation of withdrawal of any related court cases.

For those remaining workers for whom we are not in a position to offer permanent employment we have agreed to offer a one off lump sum payment equivalent to an average of three years' salary. This offer is conditional on the agreement that current and future legal action relating to this matter is dropped.

Khanewal, Punjab, Pakistan

Unilever Pakistan's Khanewal tea factory employs a mix of permanent and outsourced workers. To keep operations effective and competitive, Unilever Pakistan uses third-party service providers to supply workers for our non-core operations. Non-core elements include end-of-line packaging operations as well as ancillary services such as housekeeping, catering and security. Outsourcing non-core operations is widespread in Pakistan, and Unilever Pakistan's practice is in line with that of other multinationals and local competitors.

On average, some 533 people are employed at Khanewal, including 22 permanent employees who work in roles such as process, plant and utilities operators and technicians. The number of people employed varies due to the demand-led nature of the business which affects the number of people required for packaging operations. The outsourced workers are employed by licensed third-party service providers. Unilever Pakistan ensures that the service providers comply with minimum wage, social security and retirement contribution requirements.

In March 2009 the IUF lodged a complaint with the OECD alleging that Unilever's employment practices undermine the rights of workers to fair or decent pay as well as freedom of association.

Local market practices had evolved to the point where the ratio of permanent to outsourced workers commonly skewed in favour of outsourced workers. We acknowledged that this was an issue for workers and their union representatives and recognised the need to address it. We offered to increase the numbers on permanent contracts using fair and transparent criteria.

On 21 October 2009, Unilever Pakistan and the IUF reached an agreement under the auspices of the OECD to resolve the issue (retroactively applicable to 15 October). Under its terms Unilever Pakistan will create 200 permanent positions at the facility in addition to the existing 22 positions at Khanewal.

To ensure a fair and transparent selection procedure for the appointment of these permanent positions, the IUF and Unilever Pakistan will form a committee to oversee and implement the process. The selection of workers will be made on the basis of seniority and skill with priority being given to members of the local trade union Action Committee (Unilever Mazdoor Union Khanewal).

Furthermore, Unilever Pakistan has agreed that it will ensure its third party service providers make lump sum payments to all contract agency workers (whether they will be given a permanent position or not) to cover any outstanding mandatory financial obligations. The company will also ensure that the third party service providers have fulfilled their statutory obligations regarding payment of state pension and social security related benefits for all their employees.  In return, the Action Committee members have agreed to withdraw all pending court actions. 

Unilever Pakistan has confirmed its intention of continuing operations at Khanewal and has made a commitment to invest in these operations. However, this will include implementation of automation or other efficiency measures to ensure business viability.

Both Unilever Pakistan and Action Committee members have committed to a process of ongoing dialogue. The IUF and its affiliates will be entitled to exercise full representational functions within the facility without interference.  Implementation of this agreement will be monitored by the IUF and Unilever at national, regional and global levels.

Sewri, Mumbai, India

In 2006, Hindustan Unilever (formerly known as Hindustan Lever) closed its Sewri factory in Mumbai as the factory had been uncompetitive for a number of years. It had been plagued by strikes throughout its history, for example in 1987 alone there were over 50 stoppages.

The closure was carried out in compliance with Indian labour laws and all the workers were offered a full and fair redundancy package, the terms of which were between eight and 22 times greater than the legal minimum. Over 100 workers accepted the redundancy terms. The remainder of the workers (790 people) rejected the package and chose to contest the closure in the Indian Courts. These workers were paid their legal separation dues.

Acting on behalf of local Indian trade union HLEU, the IUF logged a complaint to the OECD in 2006 alleging that the factory had been closed illegally and that workers had been financially disadvantaged as a consequence.

In September 2007, the OECD agreed not to proceed further with the complaint subject to Hindustan Unilever and the HLEU negotiating a settlement at local level. Hindustan Unilever has always sought to explore ways of finally settling the matter with the HLEU.

In October 2009 a settlement was reached with the mutual consent of the IUF and local trade union and Hindustan Unilever.

Doom Dooma, Assam, India

In November 2007 the IUF logged a complaint with the OECD on behalf of the Hindustan Lever Workers Union (PPF) at our Doom Dooma factory in Assam, India.

The complaint alleged that Hindustan Unilever had conspired to force workers to join a new trade union as a pre-condition for their continued employment at the factory, and by doing so, breached the freedom of association provisions of the OECD Guidelines.

We maintain that Hindustan Unilever has not breached the OECD Guidelines or our own Code of Business Principles.

There had been significant disorder at the factory over a long period. In one instance a group of managers, including a woman, was held hostage by the workers. The establishment of a new trade union at our Doom Dooma factory was undertaken by the majority of the workers themselves and was also subject to the review and approval of the State Government. This union was recognised by the State Labour Commissioner.

Hindustan Unilever is willing to recognise any trade union that is duly registered and authorised to represent the majority of employees at the facility.

However, both unions are making claims that they have the support of the majority of the workers. This dispute is now the subject of a High Court case. In order to help resolve the situation, Hindustan Unilever has offered to petition the High Court in Assam to request the Court's view on how best to organise "free and fair" elections. This would enable workers to determine which trade union they would seek to represent their interests in future. The High Court has yet to reach a conclusion.

The OECD is awaiting the outcome of the High Court proceedings, which have been subject to some delay, before conducting any further investigation of this case. Hindustan Unilever remains committed to working with the OECD, the local government and unions and the IUF to find an appropriate solution.

OECD Guidelines for Multinational Enterprises

The OECD's Guidelines for Multinational Enterprises are recommendations addressed by governments to multinational enterprises.

The Guidelines provide voluntary principles and standards for responsible business conduct in a variety of areas including employment and industrial relations. Through national contact points (government offices) the Guidelines provide a mechanism to bring issues to the attention of companies and a forum in which to discuss them.

National contact points seek to resolve issues through amicable discussion to the satisfaction of all parties involved – a process the OECD describes as conciliation. If conciliation fails, complaints are referred to the second stage in the process – mediation – in which an independent facilitator takes a more formal role in brokering an agreement. Should this also fail, the national contact point issues a statement or makes a recommendation.

Inherent in the OECD process is an investigation of the facts in order to validate the substance of the complaint. As a responsible business, Unilever supports the OECD's Guidelines.