5. City of Ottawa ETHICAL Procurement POLICY

POLITIQUE D'APPROVISIONNEMENT ÉTHIQUE DE LA VILLE D'OTTAWA

COMMITTEE RECOMMENDATIONS

That Council:

1. Commit to developing an Ethical Procurement Policy to ensure that purchases of clothing and fair trade agricultural products such as coffee and tea are manufactured or produced in accordance with established local and international environmental standards and applicable codes of conduct regarding wages, working conditions, safety, forced labour, and freedom of association as embodied in the United Nations Declaration of Human Rights, International Labour Organization Conventions, and other relevant Declarations and Conventions;

2. Direct that Supply Management Division, in conjunction with the Office of the Chief Corporate Services Officer, consult with all interested parties (including the Ottawa & District Labour Council and the Ottawa No Sweat Coalition) in the development of this policy for Council's consideration in 2007.

RECOMMENDATIONS DU COMITÉ

Que le Conseil :

1. de s'engager à définir une politique d'approvisionnement éthique qui garantisse que les achats de vêtements et de produits agricoles certifiés équitables, tels que le café et le thé, sont fabriqués ou produits en conformité avec les normes environnementales locales et internationales établies et avec les codes de conduite visant les salaires, les conditions de travail, la sécurité, le travail forcé et la liberté syndicale tels qu'ils sont énoncés dans la Déclaration universelle des droits de l'homme des Nations Unies, les conventions de l'Organisation internationale du Travail et d'autres déclarations et conventions pertinentes;

2. de demander à la Division de la gestion de l'approvisionnement, de concert avec le Bureau du chef des Services généraux, de consulter toutes les parties intéressées (y compris le Conseil du travail d'Ottawa et du district et la coalition Ottawa No Sweat) dans l'élaboration de cette politique, à soumettre à l'examen du Conseil en 2007.

DOCUMENTATION

1. Report from the Corporate Services and Economic Development Committee dated 18 April 2006 (ACS2006-CCS-CSE-0003).

Report to/Rapport au :

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

and Council / et au Conseil

18 April 2006 / le 18 avril 2006

Submitted by/Soumis par : Councillor Alex Cullen, Bay Ward

Contact Person/Personne ressource : Alex Cullen, Councillor, Bay Ward

City Council

(613) 580-2477, alex.cullen@ottawa.ca

City Wide

Ref N°: ACS2006-CCS-CSE-0003

SUBJECT:

City of Ottawa ETHICAL Procurement POLICY

OBJET :

POLITIQUE D'APPROVISIONNEMENT ÉTHIQUE DE LA VILLE D'OTTAWA

REPORT RECOMMENDATIONS

That Corporate Services and Economic Development Committee recommend that Council:

RECOMMANDATIONS DU RAPPORT

Que le Comité des services organisationnels et du développement économique recommande au Conseil :

BACKGROUND

Sweat shops are work environments where employees work long hours in unsafe conditions for low pay. Sweatshop workers, often women and sometimes under-age children, are often intimidated, harassed, and subject to abuse. The International Labour Organization (ILO) estimates that 246 million children (one in six children) in the world are involved in the kind of labour which jeopardizes their health, including sweatshops.

As a result there has developed a broad movement for public institutions to develop and implement "No Sweat" ethical procurement policies. A "No Sweat" ethical procurement policy ensures that taxpayer dollars are not being used to promote sweatshop abuses. An effective "No Sweat" policy requires companies supplying public institutions to better monitor working conditions in their supply factories and operations, and to work with their suppliers to improve conditions. As more and more public institutions adopt "No Sweat" ethical procurement policies these companies come under increasing pressure to find industry-wide solutions to the problems of sweatshop abuses.

"No Sweat" ethical procurement policies are based on the United Nations Declaration of Human Rights and the minimum labour standards contained in International Labour Organization Conventions (Canada is a signatory to these Declarations and Conventions). They include provisions on child labour, forced labour, discrimination, harassment and abuse, wages, hours of work, and health and safety practices. The onus of "No Sweat" policies is put on suppliers, which must provide evidence that they are compliant with the "No Sweat" policy. This generally includes public disclosure of the names and locations of supplier factories and operations, co-operation with third-party investigations of supply factories and operations where investigation is warranted, and evidence of corrective action where abuses have been identified.

The Ottawa No Sweat Coalition is part of the Ethical Trading Action Group (ETAG) and is made up of individuals and representatives from faith, labour, student and non-government organizations. The role of the Coalition is to represent the interest of workers and actively campaign to persuade universities, school boards, municipal and provincial governments to adopt "No Sweat" ethical procurement policies.

In a news article entitled “Going sweat-free in Ottawa” published in The Ottawa Citizen on Monday January 9, 2006, the Coalition stated its intention to present a draft resolution to the City’s Corporate Services & Economic Development Committee.

For that reason, City staff met with representatives of the Ottawa No Sweat Coalition and the Ottawa & District Labour Council and was advised of their active campaign plans for Ottawa. The campaign was officially launched at City Hall on Monday, March 6, 2006, and was attended by members of the Canadian Labour Congress, Oxfam Canada, Unite Here Canada, the Quebec Anti-Sweatshop Coalition and other members of the general public.

The Coalition has established a website (http://www.ottawalabour.org/nosweat/index.html) where the public are urged to get involved in the campaign by signing an online petition.

The goal of the Coalition is to present a draft resolution (see Document 1) to the Corporate Services & Economic Development Committee in May 2006 in the hope that City Council will direct staff to develop a binding policy for ethical purchasing of clothing (i.e. firefighters, police, transit workers), food and other goods by March 2007.

DISCUSSION

As mentioned above, City staff has met with representatives of the Ottawa No Sweat Coalition and the Ottawa & District Labour Council and was advised of their active campaign plans for Ottawa. Although a strong proponent of workers’ rights, the City of Ottawa does not currently have an Ethical Procurement Policy. A number of municipalities across Canada have, or are in the process of adopting, resolutions to develop binding policies for ethical purchasing of clothing, food and other goods. To date, the Cities of Vancouver and Hamilton are the only Canadian cities that have adopted No-Sweat procurement policies; however, Toronto is expected to have theirs endorsed by Council in April 2006.

In consideration of the Coalition campaign goals and the increased pressure on municipalities to take a stand on this issue, City staff has explored the impacts of implementing an ethical procurement policy in the City of Ottawa.

Staff recommends that the City of Ottawa could develop and implement such a policy providing the policy would place the burden of responsibility upon vendors competing for contracts with the City. The tendering process for certain items would be modified and vendors would be required to certify compliance with the local labour laws and those of the International Labour Organization.

Conditions of these contracts would require that suppliers provide annual reports that publicly discloses the names and addresses of the factories making their products, however the City would conduct no tracking and/or monitoring. It is estimated that development and implementation of such a policy (based on the experiences of other municipalities) could take 12-18 months to complete.

It should be noted that there is currently no capacity to absorb this project within the current staff complement in Supply Management; therefore, staff recommends that an additional Purchasing Compliance Officer will be required to develop and implement the policy, manage legal requirements and conduct ongoing research and reporting. The salary and benefits for such a position are estimated to be approximately $86,000 per annum and would be put forward as a 2007 budget pressure.

City Council may choose to endorse a more aggressive approach to such a policy in that the City could take on the added shared responsibility of monitoring supplier compliance. To achieve this additional budget resources would be required in addition to the establishment of a Purchasing Compliance Officer in order to implement a tracking function that would effectively monitor supplier compliance, investigate reported violations of the policy and manage related complaints. Preliminary estimates from other municipalities suggest that approximately $50,000 to $100,000 would be required on an annual basis to engage a third party agency to assist with the investigation of complaints and to audit supplier compliance.

Therefore, the City could proceed with the development of an ethical procurement policy for clothing and fair trade agricultural products such as coffee and tea, upon Council approval of the additional budget and staff resources identified to work on this policy commencing in 2007.

CONSULTATION

There has been no City-conducted public consultation regarding this item. However, a news article entitled "Going sweat-free in Ottawa" was published in the Ottawa Citizen on Monday January 9, 2006, and there was media coverage regarding the launch of the Ottawa No Sweat Coalition campaign at City Hall on March 6, 2006. This report was developed in consultation with City staff, and was advertised as part of the Corporate Services & Economic Development Committee agenda.

FINANCIAL IMPLICATIONS

The salary and benefits for a Purchasing Compliance Officer is estimated to be approximately $86,000 per annum and will be put forward as a 2007 budget pressure. Should additional resources be required, they will be identified and put forward as part of the 2007 budget.

SUPPORTING DOCUMENTATION

Document 1 - Ottawa No Sweat Coalition Proposed City of Ottawa Ethical Procurement Resolution

DISPOSITION

Upon City Council approval, the Supply Management Division will develop a budget proposal as part of the 2007 budget for Council's consideration. Subject to the approval of the 2007 budget, the Supply Management Division in conjunction with the Office of the Chief Corporate Services Officer will consult with all interested parties (including the Ottawa & District Labour Council and the Ottawa No Sweat Coalition) as part of the development of a City of Ottawa Ethical Procurement Policy, to be considered by City Council in 2007.

DOCUMENT 1

Ottawa No Sweat Coalition Proposed City of Ottawa Ethical Procurement Resolution.

WHEREAS environmentally and ethically unsustainable practices continue to spread throughout the global supply/purchase network;

AND WHEREAS environmentally and ethically unsustainable practices undermine international environmental sustainability initiatives and human rights standards and foster the abuse of workers in many sectors of the production and supply sector, including apparel, agricultural products and related items;

AND WHEREAS the spread of sweatshop practices in the apparel and related industries threatens the jobs and working conditions of all manufacturing workers in the City of Ottawa;

AND WHEREAS the City of Ottawa and its Agencies, Boarsds and Commissions purchase large volumes of uniforms, footwear, clothing bearing the City of Ottawa logo, coffee, tea, and sugar;

AND WHEREAS Ottawa is a community that does not tolerate child labour, forced labour, discrimination and/or abuse of workers in any form;

AND WHEREAS the citizens of Ottawa have a right to expect that their City’s procurement policies are consistent with their community values and that purchasing dollars are allocated in order to enhance, rather than degrade, the economic and social well-being of the City;

AND WHEREAS the City of Ottawa is committed to being a force for positive social change by purchasing goods and services from responsible manufacturers that provide quality products and services at a competitive price and abide by ethical standards and norms;

AND WHEREAS sweatshop abuses flourish when the conditions of workers are hidden and municipal purchasing authorities must verify the conditions under which goods have been produced;

AND WHEREAS pressure from institutional purchasers such as governments is an effective way to combat environmentally and ethically unsustainable practices and also protect the rights of workers both locally and internationally;

NOW THEREFORE BE IT RESOLVED that Ottawa City Council commit to developing a comprehensive Sustainable and Ethical Procurement Policy for Council’s review and approval by the end of June 2006;

AND BE IT FURTHER RESOLVED that the City of Ottawa and its Agencies, Boards and Commissions require all suppliers of apparel, agricultural products and other textile goods to provide the names, addresses and contact information of each subcontractor and manufacturing facility used in their manufacture. This information shall be considered as public information;

AND BE IT FURTHER RESOLVED that Ottawa City Council hereby declares its intention that the City Administration work with the Ottawa & District Labour Council and the public including community-based non-governmental organizations (such as the Ottawa No Sweat Coalition) in the development of the aforesaid Sustainable Environmental and Ethical Procurement Policy to ensure that items – including but not limited to garments, coffee and related items purchased by the City of Ottawa – are manufactured or produced in accordance with established local and international environmental standards and applicable codes of conduct regarding wages, working conditions, safety, forced labour and freedom of association as embodied in the United Nations Declaration(s) of Human Rights, International Labour Organization Convention(s) and other relevant Declarations and Conventions.

CITY OF OTTAWA ETHICAL PROCUREMENT POLICY

POLITIQUE D'APPROVISIONNEMENT ÉTHIQUE DE LA VILLE D'OTTAWA ACS2006-CRS-FIN-0019

Councillor Cullen introduced the item and briefly provided an overview of his report. He thanked the Ottawa No Sweat Coalition for their work on this initiative. Councillor Cullen stressed the issue before the Committee was the development of a policy for ethical procurement. The financial implications of this policy (e.g. $86,000 for the staff position) would be dealt with in a separate staff report as part of the budget process.

The Committee then heard from the following delegations.

Dave Calvert, Ottawa No Sweat Coalition and Mark Field, Oxfam Canada…Mr. Calvert urged the Committee to move forward with the ethical procurement policy for the City, that will ensure Ottawa’s tax dollars are not inadvertently being used to support sweat shop practices anywhere in the world including Canada. He spoke of global working conditions and noted workers are increasingly being forced to work in unacceptable conditions for wages that cannot sustain their families. Mr. Calvert spoke of the importance of large institutions and corporations (such as the City of Ottawa) using their buying power to set standards for suppliers that would force them to exert more influence over production by building in ethical codes of conduct. This in turn would force factory owners around the world to treat their employees with the dignity and respect they deserve.

Mr. Calvert went on to say that many cities around the world already have ethical procurement policies in place, including Vancouver and Toronto. He noted this endeavour would not represent a large cost to the City and he opined, as this movement grows around the world, there would be economies of scale (e.g. partnerships formed between cities, etc.). Mr. Calvert spoke of the significant community support for this initiative and he urged the Committee to support the recommendation before it.

Mr. Field provided members with an Oxfam publication entitled “Trading Away Our Rights” (on file with the City Clerk). He noted that Oxfam Canada has been working for the last forty years with poor communities around the world. With globalization changes over the past 20 years, more and more of these communities are producing the goods consumed in Canada. He pointed out the vast majority of the workers are women and they are systematically being denied their fair share of benefits (e.g. sick leave, maternity leave, health insurance, etc.). Mr. Field stressed the No Sweat policy idea does make a difference, noting instances where consumers have pressured companies to improve their purchasing practices and working conditions, wages, etc. have improved. He said with the hundreds of millions of dollars of purchasing the City does, it would make a huge difference.

Sean McKenny, President, Ottawa District Labour Council advised his association represents over 40,000 working men and women in over ninety different unions. Mr. McKenny declared the City of Ottawa to be a caring community and one that leads by example, even in the face of opposition (e.g. the smoking by-law approved by Council). He felt the recommendation before the Committee was no different than the smoking by-law and addresses concerns that all in the community have, namely there are factories in some countries that employ little children, have no regard for the health and safety of their employees and where working conditions are deplorable. Mr. McKenny urged the Committee to show leadership and compassion and approve the resolution as presented.

Mayor Chiarelli indicated he was in support of the resolution, however, he had questions with respect to how this endeavour could proceed, what products would be included and who would be responsible for monitoring compliance with the policy. Mr. McKenny noted discussions have taken place with City staff on all of these aspects. In terms of addressing these issues, he felt Ottawa could draw upon the experience of Vancouver and Toronto and also the many experts in this matter known to the Labour Council and Oxfam. Mr. McKenny acknowledged this is a very complex issue but stressed he and the coalition, were willing to work with staff to address all of these issues.

In response to questions from Councillor McRae, Mr. McKenny agreed there would be situations when it would not be possible to meet the intent of the policy and these situations could be addressed in the policy.

Councillor E. El-Chantiry sought confirmation from Mr. McKenny the coalition was not calling for a boycott of companies that have poor working conditions, etc.. Mr. McKenny confirmed the intent was not to stop any company from bidding on a City contract, rather companies bidding on City contracts will have to show they do not have deplorable working conditions, etc. Further, he confirmed for the Councillor, there was work under way on this issue at both the Provincial and Federal levels as well.

David Hall, Ottawa Fair Trade Network, provided a written submission, which is held on file with the City Clerk. Mr. Hall spoke in support of the efforts of the No Sweat Coalition and noted the goal of the two movements is the same – to provide the world’s poorest and most vulnerable citizens with safe, satisfying work with a decent income. He urged the Committee to support the resolution.

Michael Urminsky, University of Ottawa, spoke of his previous work with the International Labour Organization on this issue and noted in his eight years with that organization he saw improvements in the working conditions as a result of pressure from companies buying from manufacturers. He also pointed out there are dozens of international agencies that specifically certify companies on such things as environmental practices, social practices, labour practices, etc. As well, the City can choose to purchase from companies that employ people to monitor labour practices. He suggested perhaps it could be a phased in process, starting with a couple of products the City purchases. Mr. Urminsky said the wording and the monitoring of the policy will need to be worked out. He conceded it would not be easy, but it is very feasible, it will not necessarily be a huge cost for the City and it will make a difference.

Having heard from all delegations, the matter returned to Committee.

Mayor Chiarelli asked staff if the resolution were approved by Council, how they saw the matter proceeding. Glen Ford, Manager, Supply Management Division, advised staff would consult with applicable stakeholders (including interested suppliers), review what is happening in other Canadian municipalities and then develop a policy for Committee and Council’s consideration in 2007.

The Committee then approved the report recommendation.

That Corporate Services and Economic Development Committee recommend that Council:

CARRIED