Policy and strategy document

Ethical Procurement Policy

Commercial and procurement - a guide towards sustainable and ethical procurement practices.

Executive summary

This Ethical Procurement Policy is designed to guide the organisation towards sustainable and ethical procurement practices. This policy is crucial for achieving our goal of net zero carbon emissions and promoting social responsibility.

The policy prioritises suppliers who demonstrate strong environmental practices and contribute to reducing carbon footprints. It ensures that all suppliers adhere to ethical labour practices, including fair wages and safe working conditions. Innovation is encouraged, promoting solutions that support sustainability and ethical practices. The policy ensures that transparency in procurement processes is maintained to build trust and accountability.

Officers are encouraged to interact with the relevant procurement resources on the intranet and procurement officers early in the procurement cycle. This policy encourages the collaboration and early engagement of suppliers to ensure this policy can be met. It will be the responsibility of the service area to ensure that this policy is complied with throughout the procurement and contract management lifecycle.

Introduction

Oxfordshire County Council (“OCC” and “the Council”) is committed to acting with integrity, transparency and fairness in all commercial and business dealings. The Council places ethics, accountability and good conduct at the heart of its procurement procedures and strives to obtain the ‘best for Oxfordshire’ outcome in every sourcing and/or purchasing decision.

This policy sets out the approaches and resources the Council can use to ensure its procurements and contracts are managed in an ethical way. These should be applied in specific, appropriate and proportionate ways, as determined by the team managing the procurement and/or contract.

Suppliers the Supply Chain and Regulation

The Council proactively works with its suppliers to maintain high ethical standards when conducting business together. In OCC contracts, this is achieved through contractual obligations, at least in the areas where law and ethics meet. OCC requires that, in performing their contracts, suppliers must comply with all applicable legislation including case law. OCC also requires that suppliers at least use their best endeavours to meet governmental codes of practice and best practice guidelines.

Compliance

Compliance with modern slavery and/or equality legislation for example are mandatory where the supplier engages staff, subcontractors, agents, independent contractors or consultants in the delivery of services. As compliance with the law is also a contractual obligation, it means that any breach of applicable legislation is also a breach of the OCC contract, which could lead to a claim in damages where a supplier breaches legislation. This ensures our suppliers are clear on OCC’s expectations and minimum required standards.

In addition to the general requirement to comply with all applicable legislation, OCC contracts contain specific requirements relating to equal opportunity, equality and non- discrimination on grounds of race, gender, age etc in the provision of services or in the employment of persons for the purpose of performing the services. Suppliers are also expected to assist OCC in meeting its own duties under the Equality Act 2010. OCC contracts also contain health and safety obligations and reporting requirements as standard.

Regulation

Throughout its procurement activities the Council must abide by the Procurement Regulations, including but not limited to Public Contracts Regulations 2015, The Public Procurement (Amendments, Repeals and Revocations) Regulations 2016, Concession Contracts Regulations 2016, The Health Care Services (Provider Selection Regime) Regulations 2023 and the Procurement Act 2023.

As per the Procurement Regulations the Council has the right to include questions relating to ethical procurement topics in the selection element of its Invitation to Tender (ITT) process. As a result, the Council bears the right to exclude a tenderer from progressing further in the ITT process should one or more of its responses be deemed as mandatory or discretionary grounds for exclusion. The Council is also enabled to prevent a tenderer from progressing further in a particular ITT process if it fails to provide a satisfactory response to and/or meet a standard set out in one or more of the pass/fail questions (whether or not these relate to ethics).

Supply Chains Due Diligence and Termination

These high ethical standards apply equally to all types of sourcing (goods, works and services) and to all third-party suppliers regardless of their location around the world. If a supplier is found to have breached these standards, an investigation will follow and, if necessary, the commercial relationship will be terminated.

OCC expects its suppliers to maintain these high ethical standards within their own supply chains. They are expected to report back any instances of unethical behaviour to the Council, so that appropriate mitigating steps can be taken. The supplier will also be expected to conduct their own investigation into the unethical behaviour of their sub-contractor(s) and, if necessary, to terminate those commercial relationship(s) accordingly.

Sustainability in Supply Chain

Ethical procurement is a system of policies and practices that help uphold the organisations commitment to social, environmental and legal ethics. This area of the policy looks at three factors that help shape this commitment and how OCC actions through procurement can result in positive change.

Background

The Councils supply chain has been identified as a key part in meeting OCCs Biodiversity Duty and Net Zero targets in the 2020 Climate Action Framework (and its Beyond Net Zero commitment), with the supply chain being a key aspect of the targets. This Ethical Procurement policy aims to build upon, improve and replace previous Supply Chain Emissions Policy, which built upon requirements set out in PPN 06/21.

To improve upon previous policy, this policy introduces the ‘Silver’ contract threshold in alignment with the new Procurement Contract and Supplier Management Framework. This establishes strategic categorisation of suppliers in relation to risk and expenditure, with risk factors including climate change impacts and emissions levels of suppliers in relation to OCC total supply chain emissions. The latest framework thresholds can be found on the intranet.

During the procurement process service areas are encouraged to collaborate across the extended supply chain for decarbonisation opportunities including innovation funding.

Carbon

Following the Supply Chain Emissions Policy, this Ethical Procurement Policy will ensure that OCC’s supply chain is increasingly aligned to Paris Agreement decarbonisation by seeking to work with suppliers who already have science based accredited targets.

We will look to work collaboratively with suppliers to establish cost-effective low carbon principles and specifications in council contracts to drive down supply chain emissions, including in lower value contracts. OCC will also support suppliers who need to outline their actions within a statutory Carbon Reduction Plan (CRP). OCC is continuously acting within its contracts to improve reporting standards and expects all suppliers to find the best way to report and reduce both its carbon emissions, impact on biodiversity and impact on circular economy.

OCC has taken one step further to develop a Beyond Net Zero commitment as all credible decarbonisation pathways that maintain our climate within earth’s safe operating space require removal at very significant scale of carbon emissions already in our atmosphere, over and above acceleration of emissions reduction. Therefore, actions will need to be undertaken by our partners throughout the supply chain to sequester carbon within Oxfordshire and beyond to help meet this target.

Biodiversity

Conservation and enhancement of biodiversity is a key consideration for OCC’s supply chain, recognising that healthy biodiverse ecosystems are critical in maintaining clean air, water, food and a stable climate and therefore underpin our ability to adapt to climate change and support health and wellbeing. OCC has a duty to further the conservation and enhancement of biodiversity under Section 40 of the Natural Environment and Rural Communities Act 2006. OCC is developing a Biodiversity Action Framework which will set out our policy approach to biodiversity including how we will seek to address biodiversity conservation and enhancement through our supply chain alongside carbon emission reductions.

Circular Economy

Circular Economy is and emerging priority for national government and a key pillar in OCCs supply chain as it enables the Council to maximise its waste reduction and improve its resource use, which has a positive impact on our resilience as a county and our impact on Oxfordshire’s overshoot in use of global resources. Within this procurement process, OCC will assess the need for procurement of a good or service following the waste/ circularity hierarchy, (Refuse, Reduce, Replace, Redesign, Remanufacture, Repair, Repurpose, Recycle and Dispose) and carbon reduction hierarchy, and where practical giving priority to businesses whose operations provide best value through the longevity of its products, giving OCC the option to both use long term or give second life to its procured goods. OCC aims to empower suppliers to innovate throughout the life of their contracts through trials of new materials in products and services, including construction and roadworks, and end of life schemes. These are key in ensuring OCCs resource use is kept at a minimum, whilst keeping essential development in this space within Oxfordshire.

Requirement

It is highly recommended that all OCC contracts adhere to this policy as a standard. However, any contract classified as silver or higher must address all three sustainability aspects outlined in this section within the Sustainability Strategy, with a particular emphasis on reporting carbon emissions including scope 1, 2 and to the best extent possible scope 3 emission.

Staff responsibilities

When working for us, all staff are expected to act with the highest standards of ethics, integrity, transparency and fairness in all commercial and business dealings. All staff will declare and register any Directorships or offices they hold in other organisations, in accordance with their conditions of employment. All Council staff will recuse themselves from any sourcing and/or purchasing decisions where they have a conflict of interest (whether previously declared or not). Failure to comply with these requirements may result in disciplinary action.

All staff working for the Council, including Procurement Hub staff, are expected to be accountable for their actions and to abide by:

  • The organisational Code of Conduct (see Annex 1 below), which includes the Anti-Fraud and Corruption Policy, and
  • when procuring and/or managing contracts on behalf of the Council, the Chartered Institute of Procurement & Supply (“CIPS”) Code of Conduct (see Annex 1 below).

All Council staff, including those working for the Procurement Hub, will report any acceptable gifts or hospitality, in line with the Councils’ Gifts and Hospitality procedures, and will return any gifts and/or refuse any offers of hospitality that are not allowable under such procedures. Failure to do so may be a criminal offence.

All staff working for the Council will not allow their decision-making to be influenced by any accepted gifts or hospitality; all commercial and business decisions will be made freely and fairly in line with our stated aim of obtaining the ‘best for Oxfordshire’ outcome.

Council staff should direct any questions or requests for guidance on ethical matters relating to their conditions of employment to their line manager in the first instance. Questions or requests for guidance on ethical matters relating to procurement or contract management activities can be directed to their usual Procurement Hub contact and/or to an appropriate representative from Legal.

Modern slavery

We define modern slavery as the abuse and/or exploitation of human persons (adults and/or children), which may occur in one or more of the following ways:

  • Forced labour and labour exploitation (e.g. working for little or no pay)
  • Sexual exploitation
  • Criminal exploitation (e.g. county lines, cuckooing, organised crime)
  • Human trafficking
  • Domestic servitude and slavery (i.e. this can include coercive control)
  • Other forms of exploitation, such as:
    • Forced marriage
    • Illegal or forced adoption
    • Forced begging
    • Forced benefit fraud
    • Organ removal.

We strongly condemns modern slavery and is committed to opposing it, both in the local Oxfordshire area and in its supply chain. The council asserts that an individual’s human rights should always be respected and that includes having freedom of choice in all aspects of their lives, including where they live and work, and in those with whom they associate.

Where evidence comes to light that may indicate modern slavery is taking place in OCC’s local and/or global supply chain, the Council and its suppliers will take every appropriate action, wherever possible, to:

  • Identify and refer victims for safeguarding, support and recovery
  • Work with their Police Partnerships to disrupt modern slavery and support prosecution of criminal activities (where jurisdictions allow),
  • Promote community safety and reduce the risk of further instances,
  • Work together with suppliers and sub-contractors to manage the overall risk of modern slavery in the supply chain, until the lowest possible risk level is achieved and maintained in a sustainable way.

Modern slavery is a complex, global issue that is constantly changing, and appropriate training is required to ensure staff are prepared to tackle it within their roles. All procurement staff regularly undertake CIPS training on Ethical Procurement, which includes a module on modern slavery. All staff at the Council undertake regular Safeguarding training, which also covers topics relating to modern slavery.

Modern Slavery Assessment Tool

Central Government has made available a Modern Slavery Assessment Tool which it encourages public sector organisations to use ‘with existing suppliers’ (rather than during the tendering process). However, OCC is mindful of enabling fair and open access to all types of suppliers wishing to work in the public sector and thus of avoiding the creation of barriers to entry or of building in onerous administrative activities that may cause e.g. MSMEs to leave the sector altogether. As such, care needs to be taken in deciding which areas of purchasing and categories of supplier are most suitable for such an assessment to take place. This is not a tool to be used across the board or with every supplier in a given procurement category.

As an indication, the following areas of purchasing and/or categories of supplier may have higher risks of modern slavery and, as such, greater justification for making a request to such suppliers to use the Modern Slavery Assessment Tool. This list is not exhaustive, but rather demonstrates the most common risks:

  • Goods (particularly textiles, clothing and footwear) manufactured wholly or in part in developing countries, particularly where there is no set minimum wage in their country of operation;

  • Labour in industries where ‘off the books’ or cash-in-hand work is prevalent,

    e.g. farm labour, construction labour, cleaning or housekeeping, portering or orderly work, kitchen work, and so on;

  • The logistics and haulage industry (particularly those taking shipments across borders) is at a higher risk of exposure to e.g. human trafficking, goods and drug smuggling and other organised crime offences. This is either by being intentionally involved or, more often, through poorly managing the security of their vehicles and containers at border crossings.

Where a Procurement Hub Category Manager and a Service Area representative have together decided that a particular area of purchasing or category of suppliers poses a greater than average risk of modern slavery occurring within the OCC supply chain, they should ask those particular existing suppliers to use the Modern Slavery Assessment Tool. Once responses have been received, these should be reviewed in full, and any recommendations should be acted on as early as possible. If any suppliers or their sub-contractors (and so on) are found to have committed any modern slavery offences (or to have knowingly ignored or enabled the commission of such offences by others), then the commercial relationship should be terminated. Where relevant, the information should be passed onto law enforcement authorities in the supplier’s or sub-contractor’s county of operation.

Fair Employment Practices

When conducting business with third parties, OCC has high expectations that these organisations will uphold appropriate standards in their employment practices, that protect both Council employees’ and their own employees’ individual rights to fair treatment in the workplace. As a minimum, these standards should meet all legal obligations in the given organisation’s main country of operation and should comply with all contractual obligations set out in the relevant purchasing agreement.

Appropriate standards for upholding employees’ individual rights to fair treatment in the workplace include but are not limited to the following core principles:

  • A healthy and safe working environment, with a supportive and transparent culture that promotes appropriate work-life balance for all employees;
  • Working conditions that are fair and legal, complying with all relevant laws and any union agreements, and where possible align with industry best practices;
  • Encouraging open communication in a collaborative workplace, where diverse voices are welcome and considered essential to the organisation’s success;
  • Professional development opportunities, including training, coaching and mentoring, are available to all and at least partly funded by the organisation;
  • A published set of core policies that clearly explain the various rights and obligations that apply to either or both the employer and the employees, and which should include both grievance and whistleblowing procedures;
  • Keeping employees fully informed in advance of significant changes to the organisation, enabling employees to contribute their views on such changes and, where possible, adjusting the planned approach accordingly.

OCC strongly discourages its suppliers and supply chain from engaging in unethical employment practices, such as that commonly known as ‘Fire and Rehire’. Such practices are ethically unacceptable, even where technically permitted by law.

Companies wishing to update employees’ terms and conditions, for example, could instead explore appropriate options through consultation processes, and should engage with trade unions where relevant. Through proper communication and consultation, a mutually acceptable proposal can be found, that balances business needs and viability with employees’ rights and welfare.

Reporting and whistleblowing

All staff of the Council have a duty to raise concerns about unethical behaviour and/or law-breaking and/or breach of contract, including suspicions about instances of modern slavery, by following the Council’s Whistleblowing Procedure. Confidentiality will be respected as far as possible, in line with the procedure.

Any staff member of a supplier or sub-contractor may raise concerns about unethical behaviour and/or law-breaking and/or breach of contract, including suspicions about instances of modern slavery, by making a report to their usual Procurement staff contact, or to that contact’s line manager. Confidentiality can be requested and will be respected as far as possible, in line with the Council’s Whistleblowing Procedure.

Members of the public may also make such a whistleblowing report by following the instructions set out here. Again, confidentiality can be requested and will be respected as far as possible, in line with the Council’s Whistleblowing Procedure (arrangements for the public).

All such reports (as set out in this section) will be investigated thoroughly and actions will be taken as set out in the Council’s Whistleblowing Procedure. If necessary, disciplinary action will be taken against relevant employees, and/or relationships with commercial partners, suppliers or sub-contractors will be terminated.

Reference documents

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