Rubber Gloves Made With Forced Labor Sold to EU National Health Systems

Rubber Gloves Made With Forced Labor Sold to EU National Health Systems

Imagine a doctor saving lives while wearing gloves manufactured using forced labor. The contrast is so stark that it’s difficult to process. However, recent investigations into two major Malaysian rubber glove manufacturers have revealed numerous allegations of human rights violations in the supply chains of the UK National Health Service (NHS) and other European Union (EU) member country health systems.

Top Glove and WRP, the two companies accused of forced labor, supply gloves to the world’s largest medical product companies. Workers at their factories said they work seven days a week, at least 12 hours a day, and between 120 and 160 hours of overtime a month. Production targets were also reported to be extremely high, with one worker claiming his daily target had increased by 400 percent. If workers did not meet the targets, money was allegedly deducted from their pay.

These labor violations prompted the Vice President of the European Parliament to call for the European Commission to strengthen the EU’s socially-responsible public procurement processes to protect human rights. The UK Department of Health and Social Care is investigating the allegations together with the NHS Supply Chain, the UK’s National Health Service (NHS) purchasing and procurement body. The Swedish government has also announced it will conduct audits of companies that supply rubber gloves to the country’s health care system.

Companies that sell medical supplies and devices to the national health systems of EU member countries should be prepared to demonstrate compliance with existing procurement requirements, and identify and address labor risks in their supply chains.

The Benefits of Having a Labor Standards Management System in Place.

Medical companies that sell to national health systems around the world are obligated to demonstrate compliance with existing public procurement requirements, such as those set by the UK NHS Supply Chain’s Labour Standards Assurance System (LSAS). Beyond specific customer requirements, companies in the medical industry need to manage their labor risks as part of wider corporate governance.

Increasingly, companies are recognizing the need to protect themselves from the following risks by establishing robust labor standards management systems:

Supply Chain Disruption: If a supplier is found to be using forced labor, this could compel a company to find a different supplier in order to continue doing business with a key customer, such as the UK NHS Supply Chain.

Legal Risk: The growing list of rules and regulations on human trafficking and slavery means increased penalties for non-compliance, including civil litigation.

Financial Risk: Many public and private contracts require companies to demonstrate they have robust due diligence programs in place to identify and address labor standards risks. An inability to present information on how labor standards are being managed in the supply chain could exclude a company from business consideration, as is the case when selling to the UK NHS, the world’s largest single-payer health system in the world. In addition, investors consider due diligence and supply chain transparency as strong indicators of a company’s corporate governance, and make investment decisions accordingly.

Reputational Risk: As more attention is focused on labor rights, companies that fail to take steps to combat illegal activities within their supply chains risk damage to their brand, regardless of where the transgression occurred. Data theft may be used for destroying the reputation of an organization and may lead to the commission of other frauds and criminal activities which may harm public at large.

Three Tips for a Comprehensive Labor Standards Management System.

While the specifications of their programs will differ based on program goals and regulatory requirements, companies in the medical sector and beyond need a robust labor standards management system to achieve compliance success, especially when selling to the UK NHS. This can be accomplished through:

  1. Efficient data management, which may include the automated collection, validation and centralization of data.
  2. Internal education. An educated team is better equipped to identify and mitigate risks in the supply chain.
  3. The use of technology to ensure programs are more efficient and offer a better return on investment than manual or internal compliance programs. Leveraging a software solution, for example, can support proactive compliance.

Find out how Assent’s LSAS solution can support you in complying with existing requirements, and automate the risk assessment and risk mitigation process within your supply chain.

For more information about how Assent can help medical device companies manage a robust, comprehensive compliance program, contact us at info@assentcompliance.com.

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