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Story | 05/26/2020 07:20:18

UPM in Uruguay sets a great example of the extent of contractor management

Contractors play an integral role in UPM’s operations in Uruguay. Whether at the Fray Bentos pulp mill, the Paso de los Toros construction site, on eucalyptus plantations, or in carinata fields or wood transportation, we want to ensure that our contractors and their employees enjoy exactly the same working conditions as all UPMers.

“Our contractors’ working conditions are a fundamental part of our social responsibility agenda. This point was addressed in our internal Human Rights Assessment, which highlights the unique characteristics of our contractor management system in Uruguay,” states Nina Norjama, social responsibility director at UPM.

“We have more than 300 contractors and 400 of their employees working in our operations, and all of them are covered by our contractor assurance system,” states Patricia Favre, head of UPM’s contractor assurance team in Uruguay.

Due to the large number of contractors we work with, it is extremely important for us to ensure that they all comply with our requirements and everyone working for us enjoys equal working conditions.

Uruguay has advanced, strict laws for outsourcing. “UPM’s standards comply with Uruguay’s law on issues such as pay, taxation and training, but we go even further and exceed the minimum legal requirements,” Favre explains.

“We have acquired various third party-verified certificates like FSC and PEFC as well as ISO and OHS standards. These standards go beyond the national legal requirements, but they underpin the way we do business,” Favre lists.

Three layers, triple assurance

UPM’s process of managing contractors in Uruguay is both unique and effective. The three-phased system helps us oversee and harmonise working conditions for all our contractors and their employees.

“First, we collect all requisite legal documentation from our contractors and their employees. This data is fed into a digital tool. Our documentation management system requires personal information and work permits and salaries,” Favre describes.

“With this information, the contractor management team ensures that there is no risk of infringements such as use of underage labour or employees being paid less than the minimum wage,” she explains.

“Then we move on to labour compliance, which includes so-called table audits. This essentially is a cross-examination of all the data we have gathered,” Favre notes. The table audits are outsourced to a third-party company. The third phase consists of field audits of contractors where the contractor employees are interviewed directly.

Moreover, on-field security, safety and working standards are observed carefully. The information gathered in field audits is then cross-examined against pre-existing data. “We make sure that working conditions are up to our standards and check that employees are not overworked, get holidays, and are paid properly,” Favre lists.

If any nonconformities are found, the contractor assurance team informs the contractor via the digital system, offering them the chance to correct missing or faulty data. In some cases, the team discusses the problems with the contractor and gives them time to take corrective action. The amount of time given depends on the severity of the issue. If the problem is not addressed, the contractor faces a penalty and their contract with UPM may be terminated.

Giving workers a voice

The contractors’ employees are also invited to point out potential issues. “Our system and audits provide a great channel for our contractors and their employees to voice their concerns regarding issues such as working conditions,” adds Kaisa Vainikka, social responsibility manager at UPM.

“Our system in Uruguay is unique, as it involves interviews with contractor employees and audits of various dimensions of social and environmental responsibility,” Vainikka comments. “Some elements of the system can easily be implemented at other locations as well. UPMers in Uruguay are truly setting a great example.”