Towards ethical procurement

There is mounting evidence that a number of medical products manufactured around the world are made under unethical conditions. It’s time for justice and moral leadership in NHS procurement policy, says Dr Mahmood Bhutta

Over the last few years, research by the Medical Fair and Ethical Trade Group, amongst others, has uncovered evidence that a number of commodities we are buying for use in healthcare are produced under conditions that are unethical and illegal under international labour law.

For example, in 2007 it was reported that Swedish nurses uniforms were made in factories in India using illegally long working hours and child labour. In 2006, I discovered problems in the manufacture of millions of surgical instruments made in Pakistan and destined for global markets, including the NHS.

As a surgeon myself, I was surprised to learn that in this industry many employees work twelve hours a day, seven days a week, in dangerous working conditions and for as little as $1 per day. There is also evidence of the widespread use of child labour with some full-time employees as young as seven.

I recently returned from Mexico where, in some cases, surgical masks or plastic medical products are made by workers with no permanent employment contract. Such a labour force enables owners to pay low wages and obviates the need to provide costly health insurance to employees.

Perhaps this should not be that surprising. Healthcare is a competitive industry, like many other global businesses and, particularly for high volume products, we’ve been demanding these products as cheaply as possible. This means producing things in places like Asia or Mexico, where human labour is cheap. Unfortunately, global trade competition drives down wages, often to compensate for fixed raw material costs. Inadequate pay, long hours, dangerous working conditions and sometimes the use of child labour, are the results.

This problem extends beyond medical products, and can be found closer to home. A competitive market exists for the procurement of services by the NHS, and again basic labour rights are at risk. Reports of subcontracted cleaners in the NHS being paid less than in-house cleaners for doing the same job, or of immigrant construction workers building NHS hospitals being paid well below national minimum wage, demonstrate how the NHS is driving poor practice.

The size and complexity of NHS procurement can mask the scale of unethical practice in the goods and services that the NHS procures. However, an assessment commissioned by the NHS from the Ethical Trading Initiative in 2008 suggested that, considering the type and quantity of goods and services procured by the NHS, there is a significant risk of abuse of labour standards in a number of instances. Multiplied by the £20 billion of NHS procurement every year, this is a substantive issue potentially affecting every NHS organisation in the UK.

It seems perverse for us to provide healthcare in the UK at the expense of the health of others. The solution is strong moral leadership from those working in the provision of medical care.

In late 2008, the UK government (then under the auspices of the NHS Purchasing and Supply Agency) launched for consultation Ethical Procurement for Health: a guidance document for NHS executives on how to incorporate social responsibility into their procurement for the NHS in England.

A key recommendation of this guidance is that senior level buy-in and senior level championing is critical to success. Prior to the finalisation of this document, the British Medical Association is undertaking research, including with senior NHS management and clinicians, to identify how to support ethical procurement decisions.

We recognise it is not easy for an NHS organization to become a beacon of ethical procurement practice, but the challenges are far from insurmountable.

Looking beyond the moral imperative, where’s the business case for adopting ethical procurement policy? Firstly, the reputational risk of inaction could be significant. Stakeholders in the NHS, including the public, healthcare professionals or charity and voluntary organizations, care about the ethical conduct of their local hospital or other healthcare provider.

While it may not be at the forefront of their minds on a day-to-day basis, a recent BMA survey showed that 80% of doctors support fair and ethical trade in the NHS and a campaign launched by the BMA in January 2010 to mobilize clinician involvement received national media interest (www.fairmedtrade.org.uk)

Potential costs are at the forefront of any procurement decisions given the current financial climate. But the cost of fair or ethically traded products does not need to be substantially higher: a few pennies in the UK go a long way in the developing world.

In fact, costs don’t even have to be higher. The fair trade model involves a much closer relationship between the supplier and the manufacturer and shortened supply chains can lead to cost savings. This is happening in the NHS right now. Certified fairtrade and organic surgical scrubs were recently trialled at the Oxford Radcliffe Hospitals NHS Trust and at a cost less than the previous non-fairtrade supplier.

The most difficult challenge for procurers is getting a clear idea of the practical steps needed to put ethical procurement into practice. Ethical Procurement for Health provides a flexible and progressive framework for the direct implementation of ethical procurement policies and practices by each and every NHS organisation. The tools and benchmarking exercises that it contains can enable and monitor change - slowly but surely.

It must be admitted that the selection of certified fairly or ethically produced medical products is at present limited, making it difficult to know what to buy. And it is also difficult to know what to avoid. For example, boycotting surgical instruments made in Pakistan will not solve these problems, only serving to reduce the income to these communities even further and compounding the problem. Developing sustainable solutions, in partnership with manufacturers, is key.

NHS Supply Chain, the logistics agency that alone supplies over £1 billion worth of goods to the NHS every year, is working in parallel to help support ethical procurement strategy.

It has developed a code of conduct for its suppliers, asking them to verify where goods are produced and that they are in line with minimum labour standards throughout their supply chain. This paper exercise must be backed up by independent verification or audits but it is a strong signal of intent from the NHS.

Fair trade cotton bandages, latex surgical gloves, and surgical instruments are also being explored by a number of commercial organisations but are hampered by manufacturers not seeing a viable market– yet. The NHS can and should show signs of demand.

This returns to the critical role of senior executives and managers in adopting ethical procurement practice in the NHS. A clear signal must be sent that we will not be continuing with business as usual but rather from now on the NHS wants the goods and services it uses not to be at the expense of the health of workers in the global community.

Dr Mahmood Bhutta is a founding member of the British Medical Association’s Medical Fair and Ethical Trade Group