Introduction to fair medical trade
The provision of healthcare goods and services is big business. The NHS spends in excess of £40 billion on the procurement of goods and services every year.
The market for such commodities is global and is increasingly being outsourced to minimise costs. Unfortunately, there is evidence that such outsourcing is harming basic labour rights, and consequently the health of populations elsewhere.
Ethical procurement is about the overall sourcing practices of purchasing organisations - such as NHS Providers - and the steps they take to ensure that employment conditions and workers' rights, in the supply chains of the products and services they procure, are maintained in line with internationally recognised conventions and local laws, as a minimum.
This includes working with supplier companies throughout the supply chain to help their workers to access fundamental rights such as:
- the right to safe and decent working conditions
- to be paid at least the legal minimum wage
- to join and form unions so they can bargain collectively for their rights
- the elimination of child labour.
It is paradoxical to provide healthcare using goods and services that may harm health because they fail to protect basic labour rights. However, because the levels of spend are so high in healthcare, the medical community also has the capacity to change this and to significantly impact upon global trade, and consequently global health.
Watch 'The Human Cost of Healthcare'
Problems exist in different medical product categories
Unethical practices have been documented in the manufacturing and supply of several medical commodities, including surgical instruments, latex gloves, uniforms and surgical masks.
For example, there are documented problems in the manufacture of surgical instruments. Although most surgical instruments are supplied by companies in Europe or the US, at least a fifth are produced in northern Pakistan. Labourers in surgical instrument manufacture are often paid less than US$1 per day, have poor job security, have woefully inadequate protection of health and safety, and many employees are children, some as young as seven years old.
A range of rights violations experienced by migrant workers employed by the companies producing surgical gloves and condoms have also been documented in Malaysia. These included: unsafe factory conditions, confiscation of passports, illegal withholding of pay, and debt bondage resulting from high recruitment fees paid to agents to secure the job.
Ethical procurement can make a difference to workers' lives
Free and fairer trade is recognised as key to global development; it lifts people out of poverty and improves their long-term wellbeing.
Public procurement is a powerful driver of development. In addition to providing goods and services a country needs, the act of procurement itself can strengthen local economies, support marginalised groups and boost local capacity for commerce.Ban Ki Moon, former UN general secretary
Procurement decisions can also support development and the creation of jobs around the world. For example, procurement directors in Sweden included labour rights clauses into a regional contract for healthcare uniforms. With appropriate support, the manufacturing facility in India was able to demonstrate better pay and reduced working hours for its employees in a few months.
Ethical trade is about addressing issues where they arise not boycotting products
Manufacturers of medical products based in developing countries produce high quality goods that are used by the NHS every day.
Directly pulling out of these markets can have a negative impact on the local labour force. Losing a contract may result in worse working conditions or job losses, which can result in whole families being thrown into poverty.
Due to its large purchasing power, the NHS is ideally placed to have a positive impact on the lives of workers by not withdrawing their orders completely but, instead, demanding changes in the way these factories are run: adequate wages for the workers and working conditions that fully comply with International Labour Organisation (ILO) standards and regulations.
The aim of ethical procurement is not to move manufacturing from countries where there are problems, but work to solve the problems, wherever they are.
Ethical trade is achievable and affordable
Ethical procurement does not have to be more expensive, nor does it mean compromising on quality, or safety. Providing decent working conditions for workers often leads to improved productivity and better quality as a result of boosted morale and worker retention.
Research has also shown that closer links between buyers and suppliers helps to improve efficiency and bring down costs. This means that the cost of increasing wages to a living wage or improving working conditions doesn't mean increased prices.
Increased demand for ethical products will also lead to decreasing production costs due to economies of scale which will, over time, lead to bringing the price of ethically produced products in line with standard products.
Ethical procurement is important for the NHS
- Stakeholder expectations: There is a risk to the reputation of the NHS if these labour standards abuses are exposed. Maintaining the trust and confidence of members of the community served by a health and social care organisation is of paramount importance. While many factors contribute to patient and public perceptions, it is important that health and social care organisations strive to maintain standards in line with the expectations and values of their communities.
- Security of supply: Ethical procurement helps to maintain a robust supply chain, reducing disruption in supply and inefficiency in the procurement process. Risks of unethical procurement include having to identify alternative suppliers at short notice and contract severance and retendering.
- Quality: There is, commonly, a link between poor labour standards and poor quality of goods and services, for example, because of the relationship between poor conditions of employment and the ability or motivation of an employee to maintain required quality standards.
BMA and fair medical trade
For 10 years, we’ve campaigned for fair medical trade and ethical procurement across the healthcare industry. The Medical Fair and Ethical Trade Group was instigated in 2007 to investigate, promote and facilitate fair and ethical trade in the production and supply of commodities to the healthcare industry.
We highlight labour rights abuses in healthcare products supply chains, we lobby parliament, and we work with our partners and fellow stakeholders, including the International Working Group on Ethical Public Procurement and the Ethical Trading Initiative.
Our work on fair medical trade aims to:
- raise awareness in the NHS that many medical products are likely to have been manufactured under unethical working conditions
- call upon the Government, NHS trusts and consortia, and purchasing bodies to support the implementation of the ’Ethical Procurement for Health‘ workbook to ensure fair working conditions for those who produce commodities or provide services
- encourage health care professionals to support the campaign for medical fair and ethical trade in the health sector and call on their organisation to adopt an ethical purchasing policy
- call on procurers to question suppliers to establish the origin of the instruments and materials that they use and to inquire about labour standards under which products are manufactured
- call on suppliers to demonstrate that they are actively committed to improving working conditions for manufacturers by working within credible codes of conduct, and by submitting to independent worker-led monitoring. Purchasers should not boycott unless this has been specifically advocated by the workers that are affected by the boycott.
Our reports and guidance
The BMA has a proven track record of highlighting the abuse of labour rights within supply chains. We have published reports on surgical instruments and surgical gloves manufacturing.
- Healthier procurement: This is a joint report from the BMA and Swedish lobbying group Swedwatch detailing research into the working conditions and labour rights in Pakistan following the inclusion of social criteria in procurement contracts. The report sets out the findings of the research, the challenges, potential solutions and recommendations for key stakeholders.
- In good hands: A BMA report that highlights the high risk of labour rights abuse in the medical gloves industry but also details some of the positive changes we noted that had occurred in the industry at the time. We set out a range of recommendations for stakeholders on how to address the labour rights concerns and risks that are identified in the report.
Our parliamentary lobbying
We helped secure crucial new measures within the Modern Slavery Act to protect workers’ human rights in global supply chains in 2015. As a result, commercial organisations carrying out business in the UK are legally required now to provide annual modern slavery statements – ie a formal publication that details what they are doing to investigate and prevent slavery in their own supply chains.
We have continued to lobby the Government to improve the Modern Slavery Act by:
- extending the scope of the act’s reporting requirement to include public sector organisations – including the NHS
- setting up a central state-supported database for modern slavery reports.
We believe it is important to update the act to ensure that the same standards of ethical procurement are being applied to health and social care organisations as they are to banks and businesses. Mandating a central state-supported database for these statements would facilitate improved compliance with the act – and therefore greater transparency in the mission to end modern slavery.
We have lobbied Parliament on both these issues, supporting the Modern Slavery (Transparency in Supply Chains) private members bill and submitting evidence to the Home Affairs Select Committee’s review of the Modern Slavery Act. In 2018, the BMA co-signed a 2018 joint statement, led by the Independent Anti-Slavery Commissioner, urging the Government to introduce a single state-owned central registry for these modern slavery reports.
In 2019, the Government announced that it would set up a central registry and consult on extending the scope of the QCT’s reporting requirements. The BMA will continue to engage and lobby the government to introduce these important measures to update and improve the Modern Slavery Act.
Read our fair medical trade parliamentary briefing and our submission to the Home Affairs Select Committee’s review of the Modern Slavery Act.
Whoever you are and whatever your profession, you can help us to raise awareness of fair medical change.
- Doctors, nurses and other healthcare professionals can be powerful advocates for change, influencing from ground level.
- Procurement professionals have the power to make a big difference. You can improve conditions for workers by introducing an ethical procurement strategy at your organisation. It is your purchasing decisions that can ultimately achieve change.
- Organisations can pledge their support for fair medical trade. You can take a lead and introduce ethical procurement strategies throughout the business.
- Members of the public can raise awareness among friends, family and colleagues. You can ask local NHS hospitals whether they purchase their supplies and services ethically.
If you’d like to raise awareness or take part in the process to bring about change you can:
- become an ethical champion in your organisation – your voice be very powerful in integrating consideration of labour standards into purchasing decisions in the NHS
- raise awareness among your colleagues, family and friends - show the campaign film The Human Cost of Healthcare and discuss the issues. Or share it on social media
- campaign for your NHS organisation to purchase medical supplies ethically - write to the chief executive of your NHS organisation. Ask them to improve conditions for workers by implementing the Ethical Procurement for Health Workbook. Increase your influence by asking your colleagues to sign the letter too
- ask healthcare suppliers where they produce their goods - more people asking this question will influence suppliers to bring more transparency to supply chains.
Ethical procurement – case studies
Nottingham University Hospitals: In 2003, the Nottingham University Hospitals (NUH) took the initiative to change the way food was produced and supplied by specifying new ethical and sustainable standards for their suppliers.
NUH is the fourth biggest trust in the country, and its catering manager realised the impact its purchasing power could have on ethical procurement. Despite experiencing initial challenges and setbacks, the catering manager continued to believe that this was the right thing to do.
NUH managed to implement ethical trade at the core of its catering operations, cost saving at the same time. The catering manager urged others to put aside preconceptions regarding ethical procurement, saying: "If we can do it, everyone can".
From the start, he received support from across the organisation. The board took on a leadership role and acted on their vision of integrating sustainability throughout the entire organisation.
NUH is recognised as an innovative trust and has received several awards for their ethical and sustainable practices.
Welsh Health Supplies - national uniform contract: In May 2009, the All Wales Nurses' and Midwives' Uniforms Procurement Project Board was put together to provide leadership for a new contract tender for an estimated 150,000 uniforms. The management and co-ordination of the procurement contract was carried out by Welsh Health Supplies on behalf of NHS Wales.
As a part of Welsh Health Supplies' approach to sustainable procurement, all contracts valued over £25k are required to include a sustainability risk assessment. As a result, several key issues were highlighted, including the labour issues associated with the supply chains. As a further step, Welsh Health Supplies mapped the supply chain for uniforms from fabric manufacture through the dyeing process and garment production. This mapping demonstrated that poor labour standards were a risk beyond the first tier, right down the supply chain.
The outcome of a competitive dialogue process was to include a requirement in the contract for the whole supply chain to be compliant with the Ethical Trading Initiative (ETI) Base Code. The contract also required a labour standards audit to have been conducted within the last six months at each supplier's site throughout the supply chain. Details of the most recent corrective action report were also required. If an audit was not available, the supplier was required to pay for an audit to be undertaken by WHS' approved partner.
In December 2009, a contractor was selected for the manufacture of the uniforms. WHS requested social audits from all sites, including Greige fabric manufacturing, production and dyeing. Sites without an audit were asked to commission one immediately. While no major issues were raised, ongoing support was provided on corrective actions and closing out issues identified by these audits.
Welsh Health Supplies believes that the inclusion of compliance with the ETI Base Code as a contractual obligation added minimal cost to the procurement process, as these costs were borne by the successful contractor. While the entire procurement process was time consuming, with two people working full time for six months, the inclusion of the assessment of the bidders against the ETI Base Code added very little extra time to the process.
Tools and resources
We can provide you with and point you in the direction of tools and resources to help you raise awareness and fight for fair medical trade.
Ethical Procurement for Health Workbook
In partnership with the Sustainable Development Unit, the Ethical Trading Initiative, and the Department of Health, the BMA has produced the Ethical Procurement for Health Workbook.
This resource provides practical guidance for organisations in the health and social care sector to embed labour standards considerations into procurement and supplier management activities.
It reinforces the importance of ethical procurement for the health sector and can help organisations apply effective due diligence to suppliers and their supply chains, in line with the principles of the Modern Slavery Act.
The Ethical Procurement for Health framework model of continuous improvement has been simplified and streamlined to provides a clear structure for implementation and tracking progress over time.
Read the overview to the workbook
Ethical procurement guidance for GPs and CCGs
The NHS England document 'Clinical Commissioning Group Authorisation: Guide for Applicants' envisages an opportunity for CCGs to consider the wider impact of their procurement decisions, and to put sustainability principles at the core of their approach.
As leaders of the new NHS commissioning system, CCGs have an opportunity to use their significant purchasing power to foster improvements in the working conditions and health of workers around the world.
The BMA, in collaboration with the Royal College of General Practitioners, has published new guidance detailing how to introduce ethical and sustainable criteria into your commissioning and procurement policies.
BMJ blog series
Read a BMJ blog series that takes an in-depth look at issues surrounding ethical procurement.
- Shining a torch on medical supply chains, Arthy Santhakumar, BMA.
- The wider consequences of healthcare delivery, Dr Tim Ballard, Royal College of General Practitioners.
- How NHS organisations can learn from other public sector bodies, Tim Rudin, Transport for London.
- Apply social value into your commissioning process, David Maher, NHS England, Public Health England, City & Hackney CCG and David Pencheon, NHS England, Public Health England.