Ethical Sourcing of Construction Products

Document type: Good Practice Document
Author: Mike de Silva BSc PhD FCIWEM MIEEM CSci C.WEM
Publication Date: 18/04/2016

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  • Abstract

    The Crossrail commodity sheets were developed by Crossrail and its tier 1 contractors to address a gap in the information available on the ethical status and considerations in purchasing key materials for the project.

    Having had input from some of the major UK contractors they provide a valuable resource to the industry on the main ethical considerations when choosing these materials and what you can do to mitigate risks in procuring them.

    The production of the commodity sheets and several other resources by Crossrail has received commendation from the wide industry as a leading initiative and as part of the project’s learning legacy these have been disseminated via the BRE website and the Supply Chain Sustainability School.

    The commodity sheets are time stamped and reflect the situation at the time of publication, but are a valuable starting point for anyone who wants to gain an understanding of the ethical considerations in material procurement.

  • Read the full document

    Introduction

    Crossrail included a requirement in its Works Information that all materials should be procured in accordance with the ETI (Ethical Trading Initiative) basecode, founded on the conventions of the International Labour Organisation (ILO) and is an internationally recognised code of labour practice.

    It was soon recognised by Crossrail and its tier 1 contractors that a collaborative approach was required to achieve any significant progress in assuring the supply chains.  This led to the formation of the Crossrail Ethical Supply Chains in Construction(ESCIC) working group, Chaired by Crossrail with membership from procurement specialists within the Tier 1 contractors.  The group met regularly to identify key issues, risk areas and developed a process and outputs to help procure the selection of materials and products in a more informed manner.  Commitment to the group was agreed through a Terms of Reference for the participants.   The resources developed by the ESCIC include:

    • Risk assessment framework using the Kraljic matrix:

    Kraljic (1983) suggested that purchasing in many companies is based on routine transactional activities, that afford little strategic consideration to potential economic and political disruptions to materials supplies. His 2×2 matrix set out to provide companies with a way to distinguish between different types of purchasing strategies which maximise buying power while minimising supply risks.

    No company can allow purchasing to lag behind other departments in acknowledging and adjusting to worldwide environmental and economic changes. Such an attitude is not only obsolete but also costly”. (Kraljic)

    The principles of the Kraljic matrix were adapted by Crossrail’s ethical sourcing working group to attribute risk and opportunity to key construction materials and components. This decision was made after consultation with procurement colleagues within our tier 1 contractor organisations who identified that the method was equally suited to quantifying ethical sourcing risk.

    ENV49_Kraljic Matrix_2.jpg

     

    ENV49_Kraljic Matrix_1 Material Categories.jpg

     

    What is the benefit to future projects?

    Construction supply chains are very complex,  particularly when purchasing components that are composed of multiple parts procured through global supply chains.  In this globalised market, many of the raw materials and components originate in jurisdictions where human rights violations are either endemic or international codes of practice on labour are not adhered to.  Identifying these risks is important from both a reputational management perspective and increasingly enshrined in corporate strategies of clients, contractors and other tiers of the supply chain.  The Crossrail ESCIC working group identified a clear vacuum in this area and the collaborative outputs have helped to fill some of these gaps, thus providing a valuable resource for future projects.  It should be emphasised that this is a very complex area and there is still much to be done.  Crossrail is now ready to pass the baton to the next major project so that the resources developed to date can be used to address ethical issues in supply chains, but importantly so future projects can build on this legacy

  • Authors

    Mike de Silva BSc PhD FCIWEM MIEEM CSci C.WEM - Bechtel

    Sustainability Manager

    Mike has over 25 years of environmental and sustainability design and construction experience much of which has been gained in the rail industry. He has worked on the two largest rail link projects in the United Kingdom, Crossrail and High Speed 1. Mike worked as Sustainability Manager on the Crossrail between 2009 and 2017 and was responsible for delivering its sustainability strategy and reporting as well as leading on CEEQUAL and BREEAM project management, and had an assurance role on the management & measurement of the project’s carbon footprint. He is currently working on HS2 Phase 2b.

    He is well know in the industry and has published a number of works including the well reviewed Royal Institute of Chartered Surveyors publication “Sustainability & the Property Lifecycle”. He has also sat on a number of working groups including CEEQUAL International, BREEAM Infrastructure and BES6001 a voluntary standard on responsible sourcing of construction materials & products, and is currently on the editorial panel for the ICE Journal, Engineering Sustainability.

  • Acknowledgements

    Morgan Sindall, Balfour Beatty, Skanska, Costain, Dragados Sisk, Laing O’Rourke