Responded to survey: yes

MSI involvement: Yes; Ethical Trading Initiative

Grade 2.0: Acknowledges that minimum and industry benchmark wages are not sufficient standards, but no real efforts to apply living wage. [what's this?]

Summary

Tesco continues to focus its efforts on increasing productivity and internal matters such as improving relationships with its suppliers. There is no work mentioned that explicitly aims to increase wages, apart from checking for compliance with the minimum wage in Bangladesh. 

Position on living wages

‘We seek to implement the ETI’s Base Code....[which] stipulates that “wages should always be enough to meet basic needs and to provide some discretionary income.” We subscribe to and require our suppliers to abide by, this definition..’

‘The lack of an agreed definition of living wage precludes our use of the term in our dayto- day work [but we]..agree that....a living wage should 1. cover basic needs, 2. include a small amount for savings and discretionary income, 3. cater for dependants. We apply this definition to all workers in our supply chain.’ 

Living wage benchmark

None given. 

Position on Freedom of Association

As an ETI member, Tesco are signed up in principle to support the right to freedom of association for workers in their supply chain, however, they failed to provide any information regarding work in support of freedom of association. 

Work so far on living wages

Tesco said: ‘We view improved productivity as vital in underpinning supplier’s ability to improve wages for workers. Our approach is therefore focused on: ensuring we understand the nature and scale of the issue, setting clear expectations, supporting suppliers to improve productivity and conditions, building long-term relationships to enable investment in workers.’

The work Tesco listed as wage-specific work included ‘Supply Chain Impact Assessments’ (in Thailand and elsewhere), and involvement in the DFID funded ‘Benefits for Business and Workers’ project to establish a model for improving productivity and working conditions.

Work on compliance with the minimum wage included: work to establish criteria for the appropriate use of training grades in Bangladesh; wage surveys in Bangladesh; and engagement with the Bangladeshi government to push for a regular salary review for garment workers.

Work on purchasing practices included: the development of ‘preferred supplier schemes;’ lengthening of lead times; stabilising orders; development of out of season production; and a scheme to give commercial incentives to good ‘ethical’ suppliers. 

Plans on living wages

Tesco plans to set up a Bangladesh Apparel Skills Foundation to support the delivery of training modules in improved productivity. 

Other significant information

Tesco appears to be doing some interesting work to establish grievance mechanisms in farms and packhouses in South Africa, working with government, NGOs and trade unions to oversee the process. Not much detail was given on this work but it would be interesting to see if and how Tesco plans to transfer learning to garment supply chains. 

Our comments

Another disappointing submission from Tesco, which should be engaging a lot more constructively in this area given its market power and long term involvement in the ETI. All its focus continues to be placed on improvements in productivity for its Bangladesh suppliers, supplier training on improving productivity, and developing better relationships with its suppliers.

The two specific wage-focused projects are, again, in Bangladesh and focus on preventing employers abusing loopholes on workers’ grades to avoid payment of the minimum wage.

Tesco’s continued failure to involve workers in any of its ethical programmes makes us sceptical that any benefits from improvements in productivity will go to the workforce. Our experience from Bangladesh is that suppliers are reluctant at best to tolerate any demands from workers in regard to wages or freedom of association. Tesco must confront this problem and build in mechanisms to address this if any of the gains from its productivity work are to be passed on to workers in a meaningful way. Without this important piece of the puzzle, none of the productivity work Tesco is currently doing can genuinely be described as work towards a living wage.