Prepare procurement

If the contract relates to a service performed in Sweden, it may be relevant to set conditions regarding salary, vacation and working hours in accordance with a Swedish central collective agreement.

Labor law conditions in accordance with a collective agreement (in Swedish)

Many service contracts require the supplier to purchase goods from other countries. For example, crude oil for asphalt may come from Canada or Venezuela, textiles for laundry services from India or Bangladesh, and cleaning materials from China. In such procurements, it may be necessary to impose requirements both on labour law conditions in accordance with a collective agreement and on due diligence for sustainable supply chains.

The necessity assessment must be made in every procurement and the requirement must be proportionate to what is being purchased, in accordance with the fundamental procurement principles.

Fundamental procurement principles (in Swedish)

In some cases, the subject matter of procurement may make it disproportionate to impose the requirement. This is particularly true for services where the good constitutes a small part, such as in the case of printing services for invoices, where environmental requirements on the paper may be more appropriate. The sustainability maturity of the industry may also affect whether the requirement is proportionate. You should ensure that small entities, which can offer flexible solutions, are not excluded. For example, locksmiths and nurseries may be self-employed or micro-enterprises. The risks in the manufacturing of locks in Asia and in the growing of plants in Southern Europe may be high at the same time as the sustainability maturity is low. Raise the issue in dialogue meetings, RFIs and referrals.

Dialogue meetings with suppliers (in Swedish)

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

• Produce risk analyses that you share with suppliers.
• Flag that the requirements regarding due diligence will be imposed in the long term.
• Encourage suppliers to start building internal skills and capacity.
• Encourage suppliers to take note of this guidance.

Step 1: Map the supply chain

The first step is to map the supply chain to understand its structure. This involves identifying the countries and, if possible, the regions where the work is performed, especially if it takes place in high-risk areas. For certain industries, such as food, textiles, and IT, a wealth of information is available, whereas transparency can be lower in other industries, such as pharmaceuticals. To gather this information, you can consult category managers and suppliers, as well as review audit reports or market analyses.

You can use the template we have developed for suppliers.

It is also important to understand the type of work being performed and the actors involved. Is it an industry with low wages and hazardous work processes? Is the workforce composed of migrant workers or seasonal workers? Is the supply chain complex and lacking transparency? This information is crucial for assessing geographic risks, sector risks, and product risks.

Step 2: Gather information from credible and independent sources

After mapping the origin and supply chain, the next step is to collect information on human rights, workers’ rights, environmental impact, and business ethics in the countries where the work is performed including final production, component manufacturing, and raw materials. To do this, you should use credible and independent sources such as international organisations, government agencies, non-governmental organisations, and global trade unions.

Sources

Step 3: Identify and assess adverse impacts

The final step is to identify and assess adverse impacts in the supply chain based on the information gathered in Steps 1 and 2. Often, multiple risks are identified, requiring prioritisation based on likelihood and severity. You assess severity based on the scale, scope and irremediable character of the adverse impact:

• Scale refers to the gravity of the adverse impact.
• Scope concerns the reach of the impact, for example the number of individuals that are or will be affected or the extent of environmental damage.
• Irremediable character means any limits on the ability to restore the individuals or environment affected to a situation equivalent to their situation before the adverse impact.

Severity is not an absolute concept—it is relative to other identified adverse impacts in each specific case. Particularly vulnerable groups are often the most affected. Therefore, special attention should be given to these groups. If a potential human rights impact has a low likelihood but high severity, the severity should be the deciding factor. This means that if an adverse impact could result in loss of life, it should be prioritised even if it is less likely to occur.

If you use the template we have developed for suppliers, you can share the risk analysis with them, assisting them in their due diligence.

Investigate whether there are industry initiatives working towards better conditions in the supply chain. Such initiatives can save both time and resources and contribute to industry-wide improvements.

In some cases, you can also refer to a certification in the procurement documents.

Rules for the use of certifications (in Swedish)

Use of certifcations (in Swedish)

There are many different certifications and it can be difficult to know what they mean. Typically, a third party verifies that a product or service meets the certification’s criteria, but certifications do not always cover the entire supply chain. In complex supply chains, several production tiers may be missing, and some certifications lack independent party verification. Despite this, certifications can be a good tool.

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

Risk analyses (in Swedish)