What are
ethical contract terms
Also known as: ethical contract clauses, social contract clauses
Ethical contract terms are standardised clauses that contracting authorities include in public procurement contracts to ensure that goods and services are produced under decent conditions. They oblige suppliers to respect fundamental human rights, labour standards, and environmental requirements throughout their supply chains.
How do ethical contract terms work?
Under EU Directive 2014/24/EU, contracting authorities may impose contract performance conditions relating to social and environmental considerations (Article 70). These conditions must be linked to the subject matter of the contract and disclosed in the tender documents.
Ethical contract terms typically require the supplier and its subcontractors to comply with the ILO core conventions — covering forced labour, child labour, freedom of association, and non-discrimination. They also reference the UN Guiding Principles on Business and Human Rights (UNGP) and the OECD Guidelines for Responsible Business Conduct, using due diligence assessments as the compliance methodology.
The clauses are not part of the tender evaluation but bind the supplier throughout the contract period. In Norway, the Public Procurement Act § 5 mandates that contracting authorities maintain procedures to promote human rights where there is a risk of violations.
When are ethical contract terms used?
Ethical contract terms are most critical for high-risk product categories — such as textiles, electronics, food, and construction materials — where systematic human rights violations in supply chains have been documented. In Norway, DFØ publishes a high-risk list to guide procurers in identifying these categories.
Authorities can strengthen enforcement by combining contract terms with qualification requirements that demand evidence of due diligence systems. Recognised certification schemes like Fairtrade, FSC, and GOTS may serve as proof of compliance. Tools like Cobrief can help suppliers identify which ethical requirements apply across different competitions.
Effective contract monitoring — including spot checks and clear sanctions such as daily penalties or termination — is essential to make these clauses meaningful. Ethical contract terms ensure that public purchasing power drives responsible production globally. While labour integrity requirements address domestic working conditions in Norway, ethical contract terms extend fair standards to international supply chains.