Our cooperation with Systembolaget

The people behind Sweden's Italian wine

Systembolaget is the Swedish alcohol monopoly with 436 stores in the country. It is a state-owned company with the exclusive right to sell alcoholic beverages. Its aim is to reduce alcohol-related problems by selling alcohol without being driven by profit.

In 2019-2022, we conducted a Human Rights Impact Assessment (HRIA) of Systembolaget's Italian wine supply chain on behalf of Systembolaget. The review can be seen as part of Systembolaget's attempt to develop robust due diligence processes that go 'beyond audits' - the tool the industry uses to measure compliance with corporate codes of conduct.

The objectives of the HRIA were to examine actual and potential human rights violations by Systembolaget at the production stage of Italian wines, to identify the root causes of the violations, and to make recommendations to Systembolaget on actions to address the identified violations.

Identified violations

• Forced labour. There is a high risk of workers being dependent on employment agencies for recruitment, transport and accommodation. They charge for their services and make workers vulnerable, while at the same time being their only means of livelihood. This increases the risk of several elements that would qualify as forced labour under the International Labour Organisation (ILO).
• Low wages. Several workers testify that their income was not enough to cover their basic needs and that they had to work overtime. Workers are also unaware of minimum wages and lack written contracts, which reduces their ability to claim their rights. There is also a high risk of wage inequality between men and women.
• Unreasonably long working hours. Because of low wages, many workers feel compelled to work overtime, but in some cases they are not paid extra for the overtime they work.
• Health and safety risks. There are several deaths per year in the workplace and workers do not have access to personal safety equipment.
• Lack of effective legal assistance. The complaint mechanisms in place are not adequate, many did not know how to file a complaint or were too afraid to do so. Many workers are afraid to join trade unions.
• Restrictions on freedom of association. Many workers did not feel free to join a trade union for fear of reprisals from the workplace. Knowledge about trade unions was also low.
• Sexual harassment and gender discrimination. Female workers did not know if they were paid the same as their male colleagues for the same work. Women were also more afraid to file complaints. Many women did not feel that they were treated fairly compared to other workers.

Oxfam's recommendations to Systembolaget

To address the problems, Oxfam provides a series of recommendations that Systembolaget and its suppliers can take in relation to their own policies and purchasing practices, as well as actions they can take to influence others in the right direction. At an overall level, Oxfam urges Systembolaget to:

• Educate buyers and subcontractors about the risks of human rights abuses in their operations
• Educate buyers on the impact of their purchasing practices on human rights
• Work with subcontractors to educate workers and employers about rights and laws
• Encourage subcontractors to commit to the UN Guiding Principles on Business and Human Rights
• Consult with stakeholders on the issues in the report and how they can be addressed

Next step:

Systembolaget has written an action plan with concrete measures that Oxfam will follow the further development of.

Update June 2022:

Nine months after Oxfam's report was published, Systembolaget has taken a number of actions:

• Managers and buyers within Systembolaget have been trained in responsible purchasing practices, and they will be conducted annually.
• Systembolaget holds meetings with Swedish importers selling to Systembolaget on human rights and the environment. They will also offer training in responsible purchasing practices to these importers from autumn 2022.
• Systembolaget has created a framework for responsible purchasing that describes sustainability ambitions and goals. The framework states, among other things, that before any new permanent addition to the range, Systembolaget must ensure that the price of the product allows production without risks of substandard wages and precarious employment. The framework will be further communicated within the industry and will be updated annually.
• From autumn 2022, Systembolaget plans to involve local stakeholders in the countries where it buys most of its raw materials and products. Due to the pandemic, this has not started earlier.

At Oxfam, we appreciate Systembolaget's open communication about the actions they are taking. It is important that companies are transparent, because only then can they be held accountable to workers affected in their supply chains. It is also good that Systembolaget has taken concrete action on specific sourcing practices, as these were found to be a risk for human rights violations. Systembolaget shows that it is possible to find solutions and take responsibility for their company's impact on human rights.

At Oxfam, we continue to recommend:

• that Systembolaget continues to take action on Oxfam's recommendations. Where it is perceived as difficult to take action, Oxfam wants Systembolaget to communicate why it is difficult.
• Systembolaget continues to implement its action plan in full
• that Systembolaget communicates how the measures it takes create change in practice. For example, what are the results of the training that Systembolaget provides?
• Systembolaget continues to involve stakeholders, such as workers, trade unions and local communities, in the development and follow-up of measures

Oxfam will continue its contact with Systembolaget and follow up on what actions they are taking to improve conditions for the people who produce our food and drink.

Read more about the collaboration on Systembolaget's website