Latest updates on Ukraine heightened due diligence

To enhance alignment and information sharing, Fair Wear and Ethical Trading Initiative (ETI) agreed to align responses to the Ukraine crises and run activities together aimed at the support of their members.

As part of the joint activities, on Monday 11th April 2022, Fair Wear and ETI organised a joint meeting for their members sourcing from Ukraine. The purpose of the meeting was to support Fair Wear and ETI members in their responses to heightened due diligence within the Ukraine supply chain during wartime.

Joint Fair Wear and ETI guidance on heightened due diligence in Ukraine was presented during the meeting. The guidance outlines ETI’s and Fair Wear’s expectations and recommendations on conducting human rights due diligence in Ukraine. The guidance is available to read here.

This meeting was the first for ETI and Fair Wear members, having joined the ETI workstream group on Ukraine in-country employment.

 Country situation up-date

• Amid continued conflict, more than 10 million people are displaced. Current estimates state that there are 6 million people displaced within the country, and another 4.5 million have left the country, 66% of whom have fled to Poland, Moldovia, Hungary, Slovakia, and Romania.
• In this situation, it is vital for the Ukrainian government to have a continued functioning economy. To this end, the Ukraine Government has initiated a free platform to help and support companies to continue and/or relocate their operations within the country to areas less affected by the war https://relocate.prozorro.sale. The government of Ukraine continues to support the local economy and the national business sectors. Other measures to facilitate businesses within the country include a new scheme to reduce V.A.T. and relieving for new companies to open, e.g., reducing the bureaucracy around obtaining required permissions and provision of stimuli packages to individuals wanting to open small companies from home.
• The government has also tried to introduce safe corridors through which companies can export their commodities. The desire to continue to run the Ukrainian economy is demonstrated by the revival of businesses in Kyiv after the Russian withdrawal. For example, more than 400 cafés reopened immediately as soon as the circumstances permitted.
• Marshall law was introduced at the start of the conflict. To implement limitations imposed with the Martial law, on March 24, 2022, the Law of Ukraine “On Organization of Labor Relations under Martial Law,” dated March 15, 2022, entered into force. The proposed “Law” introduces certain limitations of labour and employment rights and envisages specific regulations for some aspects of employment relations. The new law significantly curtails employees’ rights (on working hours, working conditions, dismissal, and compensation after dismissal) and increases employers’ leverage over their workforce. The said act will be in force only during martial law and will cease to exist after the latter’s termination. Considering the above, the need for heightened due diligence for companies is essential.

Conclusions

• ETI/Fair Wear member companies are recommended to access and follow the ETI / Fair Wear heightened Due Diligence Guidance and familiarize themselves with the content. The guidelines mention the importance of trying to continue communication to assess the issue that suppliers face and the type of support and assistance required.
• ETI and Fair Wear will complement the guidance with some further advice on good practices around providing financial support to suppliers.
• The ETI/ Fair Wear workstream leads will call for a new meeting but are, in the meantime, encouraging members to share updates and questions on the workstream room on ETI’s community platform, which can be accessed here.
• A benefit of this partnership with ETI, is that Fair Wear members can participate in joint meetings within ETI Ukraine response workstream groups, mainly focusing on the situation for workers, businesses, and s suppliers within Ukraine. Therefore, members from both organisations will have access to ETI’s community platform related to the focus on Ukraine. For any access issues, please get in touch with Sara Petersson, Global Partnerships Programme Manager at Ethical Trading Initiative.