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SHARE Report Assesses Responsible Contracting and Procurement Policies in Canada’s Commercial Real Estate Sector

A new report by the Shareholder Association for Research and Education assesses contracting and procurement policies for workers who clean, maintain and provide security for commercial buildings in Canada. The report,Cleaning up, evaluates nine commercial real estate companies and five major commercial property tenants on the presence, quality and scope of policies addressing labour standards in the property service supply chain.

Evidence of complex property service supply chains characterized by low wages, insecure tenure, limited statutory entitlements, high levels of sub-contracting and labour-only contracting led SHARE and the Atkinson Charitable Foundation to engage with the commercial real estate sector to help identify practical solutions to these precarious employment practices. Since initiating this work in 2007, and releasing the model Responsible Property Services Code in 2009, SHARE and Atkinson felt it was time to look at how policies in the sector had progressed. A decision was also made to include a significant tenant group, Canada’s major banks, in the survey.

The report finds that companies have taken important steps to address precarious employment practices within their supply chains. Some companies have included labour standards in contracting and procurement policies and have articulated labour practice expectations in standard service agreements and as criteria in contract tendering processes. The top two companies in the assessment, Morguard Corporation and Bentall Kennedy, have developed responsible contracting policies that incorporate some of the principles outlined in the model Code.

Despite this progress however, there are still improvements to be made. Most companies are still reluctant to adopt policies going beyond the minimum legal requirements. Largely absent so far from the policies evaluated in the report are commitments to responsible contracting, prevailing or fair wages and freedom of association. The majority of companies still have not developed explicit policies dealing with labour standards in their supply chains but rather rely on standard service agreements or contracts to communicate expectations to potential service providers. Corporate policies make clear to potential contractors the companies’ labour standards and employment practices expectations.

The report also found that company disclosure of policies remains weak. Public disclosure of companies’ contracting and procurement policies allows consumers and investors to make informed choices and ascertain the degree to which companies are accounting for precarious employment in their supply chains. Only two companies in the report, the Bank of Montreal and Bentall Kennedy, fully disclose their policies on their websites.

SHARE and the Atkinson Foundation will continue to work with the sector to improve company policies and procedures. A follow-up assessment will be released in 2012. Given the significant developments reported in Cleaning Up, the second report is expected to show further policy improvements by commercial real estate companies and major commercial property tenants.

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