Working together for safe, fair and transparent subcontracting practices

Päivi Vistala-Palonen

Manager, Sustainability Communications, UPM

More than 50,000 contractor employees provide services such as maintenance, construction and forest management at UPM’s production sites and forestry operations globally every year.

Regular maintenance shutdowns and asset investment projects at our production facilities, such as pulp mills typically involve large numbers of subcontracted employees working on site for a specific time period. Many of these subcontracted workers are foreigners. The use of foreign seasonal labor has also grown in our forestry operations, particularly in manual forest handling tasks such as seedling planting and young stand maintenance.
Subcontracting chains are often long and complex, with one contractor potentially using several subcontractors and even subcontractors’ subcontractors. This can make it more challenging both for UPM and for our contractors to monitor and enforce appropriate labor terms and conditions.

Enhanced due diligence and controls are essential

UPM has zero tolerance for any form of labor exploitation, and we are committed to ensuring that everyone working at our sites is treated with dignity and can work in a safe environment.

The UPM Supplier and Third-Party Code sets the minimum performance standards for our suppliers and intermediaries. It is supported by a Practical Guide and an e-learning, all helping our partners navigate everyday situations and make integrity-driven decisions.

Enhancing contractor management in on-site works

“We recognize the elevated risk levels associated with long subcontracting chains and the root causes that may lead to labor exploitation. Strengthening our practices is a shared development focus for UPM’s Social Responsibility and Sourcing teams,” says Kaisa Vainikka, Head of UPM’s Social Responsibility team.

We have therefore created an enhanced contractor management model which we have been piloting in Finland for on-site works. The major elements include:

limiting subcontracting chains to a maximum of one main contractor and two subcontractor levels (1+2).
introducing a new, detailed appendix to contractor agreements, outlining additional social responsibility requirements.

In addition, we have improved and developed:

subcontractor approval and background checks.
model for face-to-face subcontractors’ employee interviews during construction projects and maintenance shutdowns.
internal training and capacity building.

“By limiting subcontracting tiers, tightening our contractual requirements appendices and meeting workers face-to-face, we’re turning expectations into everyday practice. That’s how we protect people, strengthen transparency and ensure reliable performance across projects,” says Nina Kivioja, VP, Sourcing, Indirect Materials and Services at UPM.

“We firmly believe that enhanced subcontractor management will not only yield better social responsibility, but it improves also safety, quality and schedule performance among our on-site subcontractors.”

Responsible subcontracting is an established part of project execution and supply chain management – Pilot case with Andritz

The enhanced model was piloted in 2025 with one of our key technology partners, Andritz, who played a central role in two major maintenance shutdowns at our pulp mills in Finland.
According to Andritz, the pilot confirmed the value of close and transparent collaboration in complex shutdown environments - involving multiple subcontractors, while also providing additional insights into how existing oversight and engagement practices can be further strengthened. The joint initiative created a strong foundation for continued development of responsible contracting practices.

“With Andritz, we openly shared supplier requirements and evaluated potential risks during the shutdowns—whether related to the workforce or potential safety hazards. We interviewed more than 100 subcontractor employees about their working conditions during the shutdowns. Both contractors and subcontractors on-site were willing to collaborate on these issues,” Kaisa explains.

Responsible subcontracting is an established part of project execution and supply chain managemen

Key findings and next steps

The findings reflect typical challenges associated with complex subcontracting chains during large-scale shutdowns and were addressed jointly with contractors as part of continuous improvement efforts. As an outcome of the interviews, we identified concerns regarding subcontractor workers’ terms and conditions of labor—particularly among foreign subcontractor employees. Issues included overtime, inconsistencies in compensation, and insufficient safety equipment. Root causes were discussed with contractors, and corrective actions have been initiated—but that alone is not enough.

“This is about continuously improving our human rights due diligence and daily practices to ensure our business is built on integrity and respect for people,” Kaisa says.

Promoting decent work: The foundation of our social responsibility

In line with international standards and national regulations, we have a responsibility to use our leverage to promote respect for people across all our operations.

“The use of foreign labor is common in many seasonal and manual jobs in Finland and many other countries. These people are often in a more vulnerable situation, and companies must take decisive action to identify risks for labor exploitation and engage with contractors and their workers. Genuine commitment to human rights due diligence means acting even when it is difficult,” Kaisa concludes.

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