1. Prepare procurement

If Swedish labour law does not apply to the supply chain, you may in some cases be obliged to require the supplier to fulfill the contract in accordance with the ILO fundamental conventions, if necessary.

Labour law conditions in the procurement rules (external Swedish link)

The requirements must also be proportionate, in line with the fundamental principles of procurement.

The fundamental principles of procurement (external Swedish link)

In practice, this means that you need to weigh the supply chain risks against the market conditions. In industries dominated by small players or where sustainability maturity is low, the requirements may need to be adapted.

For services performed in Sweden, it may be relevant to set labour law conditions according to collective agreements (salary, working hours, leave). At the same time, many services have international supply chains. For example may:

• materials in construction and civil engineering services,
• or input goods in other services

originate in countries with higher risk.

In these cases, it may be justified to set requirements for both:

• due diligence for sustainable supply chains, and
• labour law conditions according to collective agreements.

The contract clauses contain recommended deadlines, in square brackets, for:

• Supplier’s reporting obligation (clause 3)
• Dialogue (clause 4.2)
• Self-assessment (clause 4.3)
• Supply chain transparency (clause 4.4)
• Audit (clause 4.5.1)
• Action plan (clause 5.2)

Through dialogue meetings, requests for information (RFI) and referrals, you can collect valuable information and, if necessary, adapt the deadlines to the specific procurement.

Dialogue meetings with suppliers (external Swedish link)

Request for information (RFI) and external referral (external Swedish link)

The transparency requirement means that the supplier, upon request, must report which sub-suppliers are used to fulfill the contract, including legal names and physical addresses. Transparency is different from traceability, which refers to the ability to track materials and products through each stage of production.

The first bullet of the clause, on final manufacturing facilities, is a minimum level. Specify whether the requirement shall apply to a specific product, all products or an entire assortment. Other levels, indicated in square brackets, shall only be used if it is proportionate based on the complexity, risks and maturity of the industry.

In order to be able to make this assessment, you need to ensure, through dialogue meetings, RFIs and referrals, what the suppliers can actually deliver. If this is not done, there is a risk that the requirements will become disproportionate, which in turn may lead to suppliers refraining from submitting tenders or the procurement being challenged.

Dialogue meetings with suppliers (external Swedish link)

Request for information (RFI) and external referral (external Swedish link)

At the same time, the situation is changing rapidly with new EU legislation making more information available for certain raw materials and products. This applies, for example, to the origin of cobalt, graphite, lithium and nickel in batteries under the Battery Regulation, the origin of cattle, cocoa, coffee, palm oil, rubber, soy and wood under the Deforestation Regulation, and the origin of materials, such as silicon, in high-risk forced labour products under the Forced Labour Regulation. In these cases, more far-reaching requirements can often be proportionate, as the information is already available or is about to become available in the supply chains.

Increased demands for security of supply also change the conditions, but do not set separate requirements in other parts of the procurement. Instead, ensure that all relevant products, components and raw materials are included in the transparency requirement in the due diligence contract clauses.

For support on how the transparency requirement can be applied in the supply chains for electronics and electric cars, see the presentation from Electronics Watch.

For information on how to monitor the transparency requirement, see Manage contract.

The contract clauses contain a liquidated damages provision to ensure that the supplier takes the necessary measures. A liquidated damage is a predetermined compensation for deviations from the contract clauses. For the buyer, the liquidated damage provision simplifies the handling of sanctions, while providing the supplier with clarity about any costs in the event of deviations. You determine the amount of the liquidated damage based on what is appropriate for the specific procurement, taking into account the subject-matter of procurement and the contract value.

In practice, only yes/no questions about accepting due diligence contract clauses are often used. Such questions provide limited information about the technical and professional capacity of the supplier and are not an effective selection instrument. As a complement, you can use qualification requirements that focus on policies and processes.

Supplier qualification (external Swedish link)

The aim is not to reward the best suppliers, but to ensure that public contracts are not awarded to operators without basic risk management. A proportionate design – for example, a focus on the existence of policies and processes rather than an evaluation of their effectiveness – helps to keep the resource consumption of contracting organisations down and lower the threshold for SMEs.

This is also the starting point for how the City of Oslo applies its qualification requirements.

Award criteria play a central role in creating incentives for improvement. In many procurements today, award criteria that clearly distinguish suppliers based on their due diligence are missing – which means that investments do not always have an impact in the evaluation.

Basis for evaluation (external Swedish link)

Well-designed award criteria can be used to reward suppliers that have made further progress in their work with traceability and transparency, that have taken measures linked to prioritised risks – such as forced labour, child labour or living wages – or that participate in credible industry or multi-stakeholder initiatives, provided that equivalent solutions are allowed. Below are examples of how Dutch contracting organisations have set requirements:

Fairly produced coffee (external Dutch link)

Responsibly produced stone (external Dutch link)

If sustainability criteria are given low weight in the evaluation of tenders, they will have limited effect and risk being treated as a marginal price adjustment rather than a strategic incentive. A higher weight creates clearer drivers for suppliers to develop their work. Within this share, space should be allocated for both environmental and social criteria, to avoid environmental aspects crowding out work on human rights.

In many contracting organisations, focus is still on environmental criteria. At the same time, the risks linked to human rights and, above all, workers’ rights are increasing. The EU Forced Labor Regulation will apply from December 2027, which means that goods suspected of being produced using forced labor can be stopped at the border. This in turn could affect the security of supply of critical goods such as medical gloves.

In some cases, you may require labels in the procurement documents.

Label requirements may be set out in the technical specifications, in the award criteria or in the contract clauses.

There are many different labels, and they vary in scope, focus and quality. Often a label means that a third party verifies that a good or service meets certain criteria, but labels do not always cover the entire supply chain and are not always verified by a third party. Labels sometimes also focus on either environmental or social aspects, and are therefore not always directly comparable or “equivalent”.

Despite this, labels can be a useful complement in procurement, especially when used consciously and in combination with other requirements and tools.

Rules for the use of certifications (external Swedish link)

Use of certifcations (external Swedish link)

Examples of lables can be found in the Swedish National Agency for Public Procurement’s risk analysis service.

Risk analyses (external Swedish link)

Ensure that templates for price lists and statistics contain specific fields for the country of final manufacturing and factory addresses, and that filling in this information is mandatory for the supplier.

The information makes it possible to select relevant samples during office audits, based on where the risks of adverse impact are greatest. It also facilitates the monitoring of adverse impacts in the supply chain (incidents), for example if a severe adverse impact is linked to a specific region or production site.

The information also strengthens security of supply. In the event of disruptions, such as conflicts or natural disasters, you can more quickly identify affected suppliers and manage consequences in the supply chain.

A free tool you can use to visualise your supply chains is Open Supply Hub. For a fee, you can embed the map on your website.