Policy
: SunRice Group Procurement Policy (GPP) clearly defines the Ethical Sourcing requirements for both suppliers and suppliers’ sub-contractors. This policy requires suppliers to demonstrate: (i) zero use of child labor, or forced labor; (ii) compliance to relevant and applicable local labor regulations and laws; (iii) workers’ entitlement to freedom of association and to work in an environment free from discrimination, harassment and threats; (iv) workers’ accommodation (where provided) to meet minimum requirements of basic needs; and, (v) sub-contractors compliance to the Ethical Sourcing requirements. This policy covers 100% of its offshore rice suppliers and is applied in all sourcing countries. Food Safety requirements are covered under the Supplier Management Assessment Program (SMAP) and is also applicable to 100% of its overseas supply chain. As set forth in ESAP #1, SunRice shall update their GPP and the SMAP to include OHS, labor and environment criteria, and a commitment to apply IFC Performance Standards requirements within the primary supply chain procurement process. As set forth in ESAP #2, SunRice shall amend and update their primary supply chain procurement process (based on the revision of the GPP) to include auditing steps to evaluate supplier OHS, labor and environmental aspects sufficient to ensure compliance to SunRice GPP E&S needs.
The Ethical Sourcing needs as per the GPP are included as part of the supplier contract where it is explicitly stated the right of SunRice to terminate business relations if there are serious breaches of this policy. Zero tolerances under SunRice policies include: (i) child labor and/or forced labor at supplier or sub-contractor facilities; (ii) case of systematic nonpayment of wages, or wages paid below legal requirements; (iii) failure to maintain adequate records; and, (iv) harassment of workers. Currently suppliers do not sign a commitment to adhere to GPP Ethical Sourcing needs, nor are required to make this policy and Ethical Sourcing needs freely accessible to workers in the local language. Suppliers are not required to train their workers on their rights and obligations as defined by the policy requirements. As set forth in ESAP #3, SunRice shall require their suppliers and traders to: (i) sign up to the revised GPP as a condition of engagement; (ii) require all suppliers and traders to display the SunRice Ethical Sourcing needs in an appropriate language within their facilities, or place of operations and, (iii) communicate the GPP Ethical Sourcing requirements with workers in an appropriate manner.
Management Programs:
SunRice supplier Environment and Social Management System (ESMS) is referred to as the SAMP and is managed under the Research, Development and Quality (RDQ) department. This ESMS dated April 2017, screens all food manufacturing companies that enter the SunRice supply chain. The scope of the SMAP applies to: (i) raw material suppliers (agent, importer, broker); (ii) raw material manufacturers; (iii) third party manufacturers (including co-packers and toll manufacturers); (iv) packaging, suppliers and manufacturers; and, (v) service providers (including pest control, laundry services, contracted cleaning, contracted servicing and equipment maintenance, transport and distribution, off sight storage of ingredients, packaging or products, laboratory testing, catering services and waste management).
The SMAP has in place a risk evaluation process entitled the SunRice Supplier Risk Assessment (SSRA) that works as by scoring each proposed supplier based on the criteria of: product, volume, level of expenditure, existence of food safety standards in place, geographic origin, market risk, supply chain risk, and social monitoring. The scores determine the level of assessment and subsequent monitoring program that will be applied to the supplier, with high risk suppliers subject to annual audits and annual supplier review meetings. All potential suppliers must obtain at a minimum a recognized GFSI certificate such as Hazard Analysis and Critical Control Points (HACCP), prior to becoming a SunRice supplier.
RDQ team review the audit reports and determine if non-compliances have been identified. In case of corrective actions being a requirement, an action plan is developed and agreed with the supplier including a specific time line to implement these actions. Currently, audits of potential suppliers have been limited to food safety assessments (by qualified SunRice staffs) with the Ethical Sourcing and labor requirements only included as a representation in rice supplier contracts.
To strengthen management of E&S risks and impacts in its supply chain, and as set forth in ESAP #4, SunRice shall implement its revised supplier management system to 100% of offshore rice suppliers within an agreed timeline.
Organizational Capacity and Competency
: SunRice E&S requirements are integrated through the departments that are responsible for operations, quality control, health and safety, and procurement. SAMP is managed by the RDQ department with one Asia regional representative responsible to undertake the risk evaluation process. SunRice is recruiting two additional staffs to be located within Asia to support auditing and monitoring of suppliers. Staff covering the offshore supplier audit function audit 4 potential suppliers per year. RDQ is managed by a competent manager based at SunRice headquarters in Australia.
Recruitment of additional Asia based staff is ongoing to support suppliers in strengthening production practices, including programs to reduce use of chemicals and awareness raising about the SRP standards, and food safety.
Monitoring and Review
: The company monitors all suppliers on its rice supply chain against food safety requirements on an annual basis. Monitoring of high risk suppliers require site visits and meetings with supplier management to assure compliance to food safety needs. SunRice has recently engaged a third-party consultancy company to undertake a review of labor, and OHS risks in SunRice supply chain in Vietnam, and advise SunRice on the required actions and resources needed to strengthen its supply chain management system, including its risk screening and auditing process.
