In the area of product procurement, Migros is an international player with supply chains that extend around the whole world. To ensure that the products come from suppliers that offer their employees safe and socially acceptable working conditions, Migros implements various social standards along its value-added chain. Migros and its partners also invest in empowering suppliers to improve working conditions themselves in factories. At the same time, Migros implements and refines international social standards as part of different committees and initiatives.
The systematic recording of this information makes it easier to conduct a risk analysis for each supplier and to introduce and implement the social standards. This analysis is performed on the basis of criteria such as the type of supply chain, the country of production, the industry and the sales volume. If a producer is identified as being risky, it is subjected to an audit. In the case of distributors, the first step is to make the supply chain transparent, so that the production companies can be clearly identified. Out of the 99 production countries from which Migros procures raw materials or products, 52 are high-risk countries.
In 2014, the Migros Group worked with 7705 suppliers. 4125 of these have potentially risky supply chains. This may be because there is little information about the supply chain or because production takes place in high-risk countries, for example. To check the social standards for these suppliers, Migros generally relies on the Business Social Compliance Initiative (BSCI) and gradually integrates them in the BSCI process.
The producers are integrated in the BSCI process on the basis of a risk assessment (e.g. country, industry, sales). During a BSCI audit, external specialists spend several days assessing the factories in question and recommending ways to remediate any deviations that are discovered. The implemented measures are then checked in a follow-up audit.
The requirements imposed on suppliers in the area of social standards are based on BSCI.
In 2014, 294 BSCI audits were conducted as part of BSCI, most of them in China. 44 companies (15%) achieved good results in the audits. Minor deviations were found at 149 companies (51%), and 101 companies (34%) need to remediate more serious deviations. These figures are within the sector average.
A minor deviation may occur, for example, if not all factory workers wear a protective mask when performing tasks that generate dust, or if no protective gloves are worn for certain tasks. Examples of more serious deviations include a lack of early warning systems for factory fires or insufficient fire extinguishers. The factories must remediate the deviations with the help of Migros' social standards specialists.
Most of the deviations at Migros' supplier companies are found in the areas of occupational health and safety (OHS), working hours and remuneration. This is a common problem at factories in the Far East in particular. On the other hand, deviations in the area of child labour, forced labour and discrimination are relatively rare. In relation to discrimination, a BSCI audit found that the corporate policy of one supplier only allowed women below the age of 25 to be employed, in order to avoid pregnancies in the workforce. Migros intervened immediately upon discovering this. The discriminating practice was subsequently stopped, and compliance was confirmed by a new BSCI audit.
Alongside continuously implementing the standard at its supplier companies, Migros, as a founding member of BSCI, is actively involved in refining the standard and adapting it to the changing requirements of the companies and society as part of various BSCI committees. As part of the revision of the BSCI Code of Conduct, the entire audit system was revised in 2014 together with the BSCI Secretariat in Brussels. The work is still under way and Migros continues to be active in various working groups.
Results BSCI Audits: first audits and follow-up audits
|Results BSCI audits: First audits and follow-up audits||2011||2012||2013||2014|
|Number of employees||248||246||206||294|
BSCI Audits: broken down into type of non-conformity
|BSCI Audits: broken down into type of non-conformity
(divided into non-conformities per audit chapter)
|2011 1||2012 1||2013||2014|
|Maximum working hours||97||92||50||65|
|Right to freedom of association and collective bargaining||2||3||1||0|
|Working conditions (cleanliness, ventilation, etc.)||3||5||1||2|
|Health and social facilities||2||7||15||14|
|Occupational health and safety (OHS)||36||27||50||59|
|Total amount of audits with Migros producers 2||248||246||206||294|
1 Due to the new data basis, the figures differ from the previous year's
2 More than one non-conformity can be discovered per audit
In Italy and the Spanish provinces of Almería, Murcia and Huelva, Cooperative Retailing implements the GlobalGAP GRASP standard at agricultural producers. Migros initially focused on Almería in particular, where it visited two producers.
Migros Cooperative Retailing implemented the Global GAP-GRASP standards for agricultural producers in Italy and the Spanish provinces of Almería, Murcia and Huelva.
In addition to the international standard for good agricultural practices (GlobalGAP), which sets requirements relating to cultivation, food safety, occupational health and safety and environmental protection, the module GRASP (Global GAP Risk Assessment on Social Practice) ensures good social practices and adequate working conditions in agricultural production (e.g. employee representatives, complaints procedures, minimum wages).
In 2014, the GRASP standard was implemented at 33 supplier companies and 250 producers in Italy. This constitutes 27% of Cooperative Retailing producers in Italy. In Spain, a total of 62 suppliers were integrated in the GRASP process. 2433 producers were audited according to GRASP, representing 65 percent of all Spanish producers that supply Cooperative Retailing. The proportion of products audited according to GRASP is growing continuously and will see another sharp increase after the expansion to Greece and Israel in 2015.
In the reporting year, Migros helped organise a round table in the Almería region on the subject of GRASP and invited the company's vegetable suppliers to attend. Around a hundred representatives of suppliers, unions and retailers participated in the event. This meant that around one in two Migros suppliers were represented in Almería. The content of the training and workshops focused on the revised GRASP checklist and the corresponding Spanish interpretation (GRASP requirements such as minimum wage and working hours adapted to Spanish conditions). In the workshops, the participants discussed issues such as how to elect employee representatives in the producer companies.
Migros is also represented on the GlobalGAP GRASP Stakeholder Committee, which meets quarterly. An important topic in 2014 was the revision of the checklist for producer audits and of the GRASP standard in general.
However, this target was already exceeded at the end of 2014: 101'496 people had been reached through training, courses or empowerment programmes by the end of the reporting year.
In 2014, the focus was on Asia: For example, Migros sent its own specialists to 45 production plants and factories in China, Thailand, Vietnam, India and Bangladesh, where they inspected working conditions as well as suggesting improvement measures. The deviations were documented with photos and the possible improvement measures were described in an audit report. Best-practice examples from comparable factories were provided to help remediate the deviations. The Migros purchasing offices in India and Hong Kong play a key role in this respect and also conduct a follow-up visit to help the factories remediate the deviations, if necessary.
E-learning seminars and external workshops are other tools that Migros specialists use to help producers implement the working standards. In 2014, a total of 14 suppliers and factories were invited to complete an e-learning course. The seminars teach subjects such as fire safety, remuneration management, occupational health and safety and environmental protection in a practice-oriented way in the local language.
Supplier empowerment – focus on Bangladesh
In response to the Rana Plaza factory collapse in 2013, Migros also stepped up its efforts in Bangladesh during the reporting year. In addition to ensuring socially acceptable working conditions, it organised building safety inspections in the textile factories of its suppliers. Qualified engineers evaluated the safety of all factories that produce products for Migros in Bangladesh, as well as suggesting improvement measures.
In response to the Rana Plaza factory collapse, Migros stepped up its building safety efforts in textile factories in Bangladesh during 2014
No serious breaches of the building safety regulations were discovered. Instead, the deviations tended to be minor, such as a lack of fire doors or broken smoke detectors. Migros helps the factories to remediate the deviations and regularly sends out its staff to the production sites. In addition, the management staff of the factories were invited to take part in fire safety training. To test the conveyed knowledge, the factory management of one producer held a fire drill under the watch of a social standards specialist. The result: More than 1000 employees evacuated the five-storey building in less than four minutes.
Capacity Building: number of factories and employees reached
(Number of factories and employees)
Socially acceptable ECO textiles
By the end of 2017 at the latest, all Migros own brand textiles will be produced fully in accordance with the strict Eco standard. Eco stands for traceability, safe working conditions and environmentally friendly, pollutant-free textile production. At the end of 2014, three quarters of all Migros clothing carried the Eco label.
Migros KIDS School in southern India
Around 1500 children now attend the Migros KIDS School in southern India, which was officially founded in 2000. This development project of Migros and the Kids Cologne Foundation, which started in a makeshift classroom in Tirupur in 1995 as a campaign against child labour, has since developed into a successful private school for low-income families. The schools are run by the local textile suppliers that supply Migros. The KIDS School became independent of Migros in 2014.
Global Social Compliance Programme (GSCP)
Together with the world's four biggest retailers, Migros is a founding member of the Global Social Compliance Programme (GSCP). The GSCP is a multi-stakeholder initiative that aims to make existing standards and initiatives in the areas of social acceptability and the environment comparable.