How can you make sure third parties comply with health and safety?

A well-functioning supply chain is critical to keeping business operations running successfully, from the products they sell to the services they offer consumers. This involves not only having a supply chain that is productive operationally, but also carries out its activities legally and ethically. Supply chains failing to perform legally and ethically can have a knock-on effect on your business, from reputational risk to fines or criminal action.

Not only that, these issues can affect the health, safety, and welfare of employees and those affected by your operations. 2024 was a year in which too many workers lost their lives or were seriously injured as a result of health and safety breaches. When companies fail to uphold basic safety standards, this all too often results in life-altering injuries and fatalities.

In the past few years, several high-profile health and safety violations resulted in fines reaching millions of pounds, underscoring the severe repercussions of failing to maintain basic safety standards—both in terms of human impact and legal accountability.

As part of the New Deal for Working People, Labour promised increased health and safety protection for workers including increased statutory protections for workers at high risk of breathing in polluted air, and they plan to pass a Clean Air Act and write standards for safer air developed by the WHO. Labour has also pledged to bring in new rights for workers, protections and access to training, and go after wage theft. Employees will have legal health and safety protections against extreme temperatures, and there will be a single enforcement body for workers.

While you have a responsibility to manage the health and safety risks within your own organisation, it doesn’t end there. You are also responsible for assessing and reducing the health and safety risks of third parties to protect people, the environment, and your organisation.

In other words, are your supply chains doing the right thing?

Supply chain due diligence

Supply chain due diligence plays a vital role in minimising health and safety risks within your organisation, including those associated with third parties.

Supply chain due diligence is the process of:

Engaging with a third party
Collecting data, verifying data, and evaluating the results to determine whether to move forward with the proposed agreement with the third party
Carrying out a risk assessment on their workplace and workplace practices
Implementing measures to reduce the risks
Continuously monitoring risks and control measures

Health and safety risks in supply chain management

There are a wide range of possible risks that can come up when dealing with supply chains: money laundering, modern slavery, fraud, or environmental sustainability. But one area of risk that often gets overlooked is working conditions and practices and the effect those can have on health and safety.

For example, in the fashion industry, garment workers are often exposed to toxic substances in the air, such as fibre dust and sand, with little ventilation in the buildings. And it is not uncommon for the working conditions to not meet health and safety standards, and for these conditions to result in accidents, injuries, fires and disease across the textile industry.

In 2013, 1,134 workers were killed, and over 2,500 injured, in Dhaka, Bangladesh after the collapse of the building that contained five garment factories. The collapse was due to faults in the building. The building owners were aware of these faults, but the garment workers were told they had to return to work despite the safety concerns. The knock-on effects were wide. The disaster impacted high street retailers across the world, and had a significant impact on their reputations. This is despite the fact high street retailers were not directly contracting with the factory in Bangladesh. It was all through third parties, nevertheless, those companies were selling their products and were responsible ethically, if not legally, for the health and safety of the workers who made them.

In 2020, 200 people were killed and thousands were injured when unsafe storage of 2,750 tons of ammonium nitrate led to a massive explosion in a warehouse at the Port of Beirut. The explosion serves as a stark example of third party and supply chain failures. The ammonium nitrate had been stored for years at the port after being confiscated from a cargo ship, the MV Rhosus, owned by a third-party company. Despite repeated warnings, authorities failed to take action to properly secure and monitor the hazardous material, and there was no effective oversight from the responsible shipping company or port management. This disaster could have been prevented with rigorous supply chain due diligence, including proper handling of dangerous materials, proactive regulatory enforcement, and more transparent communication between all parties involved in the storage and transport process. A focus on health and safety protocols within the supply chain would have identified the risks and prevented the catastrophic outcome.

In another recent fatal accident, six workers died in 2021 from asphyxiation due to liquid nitrogen leak in an accident at the Foundation Food Group poultry processing plant, Gainesville, Georgia. The accident highlighted critical third-party failures within the supply chain. The plant, owned by Foundation Food Group, relied on equipment supplied by Messer LLC, which had a design flaw in the immersion freezer that led to the leak. Inadequate air monitoring and lack of proper safety measures, such as alarms and training for emergency response, exacerbated the tragedy. Both Messer and Foundation Food Group failed to ensure sufficient safety protocols, which could have prevented the disaster. Effective supply chain due diligence in health and safety, including thorough vetting of third-party equipment and enforcing safety measures, would have identified these risks and ensured safer working conditions, making the accident entirely preventable.

Unfortunately, these and other accidents show that many industries across the world work in a way that poses health and safety risks to their workers, underscoring the need to remain vigilant in identifying these issues.

The benefits of good supply chain due diligence

It’s good for business

Increases brand reputation, resulting in more stakeholder and consumer confidence, helping your organisation stay competitive
Fewer disruptions in the supply chain due to better oversight and control of the supply chain, resulting in more productivity and innovation
Reinforces employee trust in the organisation, increasing employee motivation and retention
Fewer or no fines in the event of non compliance

Avoid legal action and mitigate repercussions

In case of a breach, your organisation can mitigate any consequences such as fines or legal action by showing proof that it took every possible step to identify and mitigate risks.

It’s the right thing to do

Practising due diligence is important from an ethical perspective. Doing so protects people from harm, for example, from experiencing injuries or fatalities from poor working conditions and procedures.

What can organisations do?

Here are some steps organisations can take to practice due diligence and promote good health and safety practices within your supply chain.

Establish a risk management system
Create a policy on supply chain due diligence that includes reporting procedures
Embed policies and procedures into your workplace culture, involving everyone from employees to directors
Assess the level of risk in the supply chain by identifying health and safety hazards and other risks
Implement control measures to prevent or mitigate the risks identified in the supply chain, for example creating a H&S contractual agreement or carrying out monitoring
Train your staff to spot the signs of issues in supply chains and encourage reporting
Monitor operations and control measures in place
Re-evaluate those measures if they aren’t working or take remedial action in the event of a violation
Communicate the organisation’s due diligence procedures, risks identified and control measures implemented to employees in your organisation. It is also good practice to display this information for the public, for example, as an annual statement on your company website.

Join our upcoming webinar

Join our free, 1-hour webinar on 13 January 2025 at midday UK time for the latest on maintaining health and safety compliance in 2025.

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