Crossrail – Ethical Labour Sourcing Commodity Sheets

Context

Crossrail is a railway project being constructed in London, United Kingdom, by Crossrail Ltd – a subsidiary of Transport for London (TfL). The project aims to provide a high-frequency passenger railway service underneath the City of London from east to west, connecting several major underground railway lines.
Cost is often the driving force behind major projects, taking precedence over the ethical values behind supply chain purchasing decisions.

Problem

Multi-billion-dollar mega projects such as Crossrail have complex and globalised supply chains that account for thousands of people and large scales of material requirements. Ethical considerations and responsibilities are becoming more important for these projects. Many raw materials and components originate in jurisdictions where human rights are violated, and without adherence to international codes of practice on labour.
As a means of ensuring the ethical sourcing of labour and materials, Crossrail Ltd included a requirement in its works information that all project materials were to be procured in accordance with the Ethical Trading Initiative (ETI) Base Code, an internationally recognised code of labour practice based on the International Labour Organisation conventions.

Innovation

Crossrail Ltd and its contractors identified early, that to achieve significant progress in assuring supply chains and complying with the ETI Base Code, a collaborative approach was required. This led to the formation of Crossrail Ethical Supply Chains in Construction (ESCIC) working group, chaired by Crossrail Ltd with membership from procurement specialists within the contractors.
ESCIC met every three months (and ad-hoc as required) to identify key risks and issues and developed a process and outputs to help procure the selection of materials and products as committed by the group through an agreed Terms of Reference.
ESCIC adopted a risk assessment framework using the Kraljic matrix. The two-by-two matrix provides companies with a way to distinguish between different types of purchasing strategies that maximise buying power and minimise supply risks. Crossrail Ltd decided to proceed with the adapted matrix after consulting its contractors’ procurement colleagues, who identified that the method was equally suited to quantifying ethical sourcing risk. The principles of the matrix were subsequently adapted by the ethical sourcing working group to attribute risk and opportunity to key construction materials and components.
ESCIC developed six commodity sheets, which concisely detailed key issues and risks associated with a particular material commonly purchased throughout the construction process, listed the relevant trade associates and procurement certification schemes, and detailed the proposed risk mitigation actions and their associated outcomes.
ESCIC developed a best practice social audit template for evaluating risk for any materials not covered by an identifiable responsible procurement certification.

Stakeholders

Crossrail Ltd
Crossrail Ltd tier 1 contractors
- Tunnels West – BAM Nuttall, Ferrovial Agroman and Kier Joint Venture
- Tunnels East – Dragados and John Sisk Joint Venture
- Thames Tunnels – Hochtief Construction and J Murphy & Sons Joint Venture.

Timeline

2011 – Terms of Reference for ESCIC published
2011-present – ESCIC meets on an ongoing basis every three months and ad-hoc where required
2011-present – ESCIC holds an annual event with other invited stakeholders exploring progress to date and future opportunities
2015 – Commodity sheets published.

Results / impact

Adoption of the working group format drove a collaborative approach between Crossrail Ltd and its tier 1 contractors. Driving this ethical culture collaboratively from the top-down through the entire supply chain was critical to procuring the materials in accordance with the ETI Base Code.
Construction industry participants have commended the commodity sheets and other resources produced by Crossrail Ltd and the working group as leading initiatives.

Key lessons learnt

Materials procurement for mega projects is a complex area with specialised requirements and globalised supply chains, and the manner of managing these supply chains is still evolving. Other major projects are continually building upon the work of Crossrail Ltd and its working group.
The commodity sheets are time stamped and reflect work done at the time of publication. They are a valuable starting point to gain an understanding of the ethical considerations in material procurement in respect to the requirements within the ETI Base Code.

Last Updated: 16 October 2021