Working in partnership with the independent Danish Institute for Human Rights (DIHR) in 2017, we completed a pilot due diligence exercise focused on the use of contractor labour in Hong Kong and India. Hong Kong is our largest operational location, where we have experienced some employee relations issues in the contractor workforce. We also make extensive use of contractor labour in India, where issues have been raised in areas including safety performance.
The objectives of this exercise were to identify any salient human rights issues, and to build our organisational capability to manage human rights issues proactively and systematically.
The work carried out by the DIHR included confidential interviews with a sample of contractor employees to ensure independence. As a result of this exercise, DIHR recommended that we focus on three priorities for improvement:
- Policy commitments: Whilst we include respect for internationally proclaimed human rights in our Value Framework, DIHR recommended us to provide more clarity on our commitments including reference to internationally recognised human rights standards.
- Working hours: Whilst we meet all applicable local laws and regulations with regard to working hours for our employees, we do not have a policy to specify expected working hours for contractors in our operations. Given working hours is one of the basic labour rights, DIHR recommended that we consider developing a group-wide commitment on working hours across CLP operations to meet international standards.
- Living wage: Whilst we meet all applicable local laws and regulations with regard to minimum wage, DIHR recommended that we conduct a living wage study for Hong Kong and other significant markets of operation.
We recognise that we are taking the first step on a journey to embed human rights considerations into our policies and management processes, and the due diligence exercise is intended to be a foundation for future initiatives.
Use of contractor labour
The extensive use of labour hired through external contractors presents a number of risks:
- Whilst use of contractors is necessary to meet seasonal or other variations in workload, the habitual and consistent reliance on contractors, risks a lack of transparency and control over the real headcount required to manage our normal business operations;
- Risk of outsourcing our core capabilities;
- Poor safety performance of our contractors when compared to our permanent employees;
- Potential security risks; and
- Human rights and employee relations risks.
Given our extensive use of contractors and the associated risks, strengthening our understanding and reporting of our use of contractor labour is a priority. We will begin to report our utilisation of contractor employed labour with effect from 2018. As contractors are not our direct employees, this presents significant data collection and validation issues, and it may therefore take more than one reporting cycle to be able to report fully and completely.
Child and forced labour
We have put an increasing focus on due diligence activities in relation to human rights, and engaged independent consultants to conduct risk assessment in our contractor workforce. In 2017, no such violation has been discovered.
In 2017, we did not identify any operation or supplier as having significant risk of child labour, young workers exposed to hazardous work, or forced or compulsory labour. There was no breach of the laws and regulations in relation to child and forced labour across our Group in 2017.