1 HUMAN RIGHTS AT WORK Carrefour’s commitment to respecting fundamental human rights at work.

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HUMAN RIGHTS AT WORK

Carrefour’s commitment to respecting fundamental human rights at work

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AGENDA

Human Rights in the supply chain Part 1

Carrefour's Actions : auditing and more

Part 2

Social compliance in the sourcing process

Part 3

INTRO Carrefour's Commitments

Discussion Discussion on challenges

15 avril 09 Social présentation

Background & Commitments

For over 10 years, Carrefour has been committed to put in practice its commitment to respecting fundamental

universal principles (child labour, working condition, etc.).

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Carrefour gives practical effect to this commitment in a number of ways:

Cooperation with the International Federation for Human Rights (FIDH) since 1997/1998 : 10 years

Ⲅ The setting up of a cooperative framework FIDH: the INFANS association

Establishment and adoption of a supplier’s charter

Implementation of a methodology to ensure the charter is respected


Created in 1922

155 member organisations in over 100 countries

www.fidh.org


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= the most protective standard


NATIONAL LAW

CARREFOUR CHARTER

INTERNATIONAL LAW


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Why should Carrefour respect human rights?

BUSINESS RISKS

MEDIAS NGOS

CONSUMERS


Why Should Suppliers be Socially Compliant?

BUSINESS OPPORTUNITES


Why Should Suppliers be Socially Compliant? .

Moral and Ethical Reasons

Carrefour will not conduct business with critical factories.

Productive, more motivated workers

Lower worker turnover

Higher and more consistent sales volumes

Carrefour has social compliance requirements for all suppliers, but suppliers may wonder why they should oblige

BUSINESS OPPORTUNITIES

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Why should business respect human rights?

Good for global retailers

Customers pay more and more attention to ethics

Social Responsible Investment Funds growing

Good for suppliers

Productive, more motivated workers

Lower worker turnover

Higher and more consistent sales volume

All global retailers now demand social compliance

ECONOMIC BENEFITS


Respect human rights : benefits

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Time Off

Comfortable Working

ConditionsAdequate Payment

Safety Training

Safe, well maintained

machinery and facilities

Limit on Working

Hours

PPE – Masks,

Gloves, Boots

Healthy Workers Satisfied Workers Safe Workers

Why should suppliers respect human rights?

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To immediately eradicate slavery, servitude for debt and the use of forced or compulsory labour,

Not to employ or make children work who are under the age of 15

To ensure workers have the right to join Trade Union and to collectively bargain,

Commitment to protect Human Rights: the supplier charter

The supplier charter includes six obligations. Each obligation refers to the Universal Declaration of Human Rights and the principles of the ILO (International Labour Organization).

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To give workers remuneration which satisfies their basic needs,

To guarantee safety working conditions,

To respect equal opportunities in terms of recruitment and remuneration

Commitment to protect Human Rights

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Human rights issues in the supply Chain

In factories producing for Carrefour we pay attention to the following issues:

Child labour

Forced labour

Discrimination

Disciplinary practices, harassment and abuse

Freedom of association

Working hours and overtime

Remuneration

Health and safety


Credit: Ruben Dao

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HOW DO YOU DEFINE CHILD LABOUR?

HOW DO YOU RECOGNIZE CHILD LABOUR?

NO CHILD LABOR


NO CHILD LABOR

Globally:

According to UNICEF, one child out of every six works.

158 million children aged 5-14

69 per cent of child labourers work in the agricultural sector

22 per cent in the services sector

9 per cent in the industrial sector

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• Carrefour Charter : no worker under 15 years old

• China: 16 years old

• Bangladesh: 14 or 12 under certain conditions

• Pakistan: 14 years old (no more than 5 hours/day)

NO CHILD LABOR

What does the law say?

What does Carrefour Charter say?

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Young workers deserve special attention No one under 18 is to do hazardous work or work at night.

A policy to prevent recruiting child labor, checking and record employee’s ID copy

No presence of children allowed in factories

Importance of finding remediation measures

NO CHILD LABOR

ALERT

Jeanne

Be particularly vigilant to young workers hired when they have almost, but not yet, reach the legal age to work.

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HOW DO YOU DEFINE FORCED LABOUR ?

HOW CAN WE RECOGNIZE FORCED LABOUR?

NO FORCED LABOR

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DEFINITION AND FORMS

SCOPE

ALERT

NO FORCED LABOR

Spain : Agricultural workers shelter in the greenhouses

Jeanne

No forced, no threats or involuntary labor / Workers are free to come/go from work site / Workers free to leave employment after giving reasonable notice / Workers are not required to lodge deposits/ID Card


NO FORCED LABOR

No forced, no threats or involuntary labor

Workers are free to come/go from work site

Workers free to leave employment after giving reasonable notice

Workers are not required to lodge deposits/ID Card

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• Retention of ID documents

• Delay of wage payment

• Collecting Deposit

NO FORCED LABOR

ALERT

Jeanne

All the document below were deposited at the factory:Original ID cardsOne original floating population marry & bearing certificateOne original drive certificate / Concrete Example : 70% worker’s original ID cards were retained in the factory./ The factory would return the ID card to the workers at the end of the year.Delay of wage payment: Examples found in factories by social audit : Release only part of the salary to the workers once per month and release the residual wage at the end of the year in a lump.Paying wages three times per year to the workersCollecting deposit:Examples found in factories by social audit :Deposit required upon recruitmentDeposit for working uniform/time cardDeposit for trainingWhen conducting audits, make sure to look at:policies in placeemployees know they are free to leave....

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NO DISCRIMINATION

CAN YOU THINK OF GROUPS THAT ARE MORE LIKE TO FACE DISCRIMINATION IN THE WORKPLACE?

CAN YOU GIVE EXAMPLES OF DISCRIMINATION?

WHAT DO THESE PEOPLE HAVE IN COMMON?

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No discrimination in treatment hiring, compensation, access to training, promotion, termination or retirement based on:

Age, Race, Origin;Religion;Disability;Gender;Literacy;Marital Status etc.

VULNERABLE GROUPS

Migrant agricultural workers in Europe are often discriminated against. Some of them suffer from forced labor.

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Women Workers often suffer from discrimination

Women are often subject of harassement from male supervisors.

Women workers have specific rights: pregnant women shall be given adequate protection.

Maternity leave with pay is compulsory.

No discrimination against women

VULNERABLE GROUPS

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DISCIPLINARY PRACTICE, ABUSEMAIN RULES

Workers free from:

Sexual harassment

Verbal or physical abuse

Financial penalties.

NO HARASSMENT AND ABUSE

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WORKING HOURS

According to the law in your country, what is the maximum number of hours, including overtime, that a worker can do in a week?

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WORK HOURS AND OVERTIME

MAIN RULES

At least one day off in seven

Overtime only voluntary

Maximum 48 hours/ week . Max 60 Hours/ week including overtime!

Over time Max. 48 hours/month. Overtime paid accordingly to the law

EXCESSIVE WORKING HOURS

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MAIN RULES

Wages meet local minimum /industry standard,

Written & understandable info about wages (Pay slip),

To pay social insurances when mandated by law,

No deduction as a disciplinary measures,

Labor contracts signed with employees

EMPLOYMENT PRACTICES

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WHAT IS THE MINIMUM WAGE IN GARMENT SECTOR AS PER LAW?

DECENT LIVING FOR WORKERS

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Workers remuneration which satisfies their fundamental needs and those of the members of their family who are directly dependent on them, including :

• Food Water Health Housing Education

This remuneration must, at least, correspond to the minimum wage fixed by the legislation of the country in question.

DECENT LIVING FOR WORKERS

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WHAT IS GOOD WORKING CONDITIONS FOR WORKERS ?

WORKING CONDITIONS

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MAIN RULES

Fire Safety Equipment

Emergency Evacuation

First Aid Equipment

Safe Passage

Toilet Facilities

P.P.E.

Hazardous Substances

Electrical safety

Special equipment certificate

Hygiene certificate

Building safety certificate

HEALTH & SAFETY AT WORK

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NOT OK OK

Chemical storage and handle

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NOT OK OK

Personal Protective Equipment

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JUST AND FAVOURABLE CONDITIONS OF WORK

Harsh working conditions impact on the health and wellbeing of workers

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What is the usefulness of freedom of association?

Why is it important for workers?

Can you give examples of mechanism on how workers communicate with the management ?

RIGHT OF WORKERS TO JOIN TRADE UNIONS AND TO COLLECTIVE BARGAINING

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RIGHT OF WORKERS TO JOIN TRADE UNIONS AND TO COLLECTIVE BARGAINING

MAIN RULES

Recognition of the right of workers to join Trade Union and to collectively bargain;

Support independent workers representation where trade unions not allowed by law


CARREFOUR'S ACTIONS FOR THE RESPECT OF HUMAN RIGHTS IN THE SUPPLY CHAIN

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2. CARREFOUR'S ACTIONS FOR THE RESPECT OF HUMAN RIGHTS IN THE SUPPLY CHAIN

WHAT IS CARREFOUR DOING TO SUPPORT RESPECT OF HUMAN RIGHTS IN THE SUPPLY CHAIN?

1) Supplier charter in the contract with the supplier

2) Social audits and corrective actions

2) Sharing audit results with other retailers: ICS

3) Overcoming shortcomings of individual companies audits: GSCP

4) Experience in training suppliers on human rights at work

5) Question governments on respect of human rights

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Every supplier has to SIGN THIS CHARTER before beginning any cooperation with

Carrefour.

CARREFOUR SUPPLIERS’ OBLIGATIONS

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Carrefour supplier’s obligation contained in the Charter, Supplier Operation Procedure, Commercial Contract :

To allow all kinds of visits from Carrefour or agency on behalf of Carrefour ,to get a view of production conditions, including visits of INFANS representatives. To display the charter in the local language and in a visible placeTo distribute it to all its employees and to the unions present in the company,To ensure these commitments are respected by all factories used for Carrefour production

CARREFOUR SUPPLIERS’ OBLIGATIONS

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Social audits Deployment Policy in Carrefour

1. Priority on suppliers

Brand name/ First price/ no name Non Food and Food Product

1. Geographical risk defined through INFANS :

China, India, Pakistan, Bangladesh, Vietnam, Laos, Cambodia, Indonesia, Thailand, Taiwan,

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Results of Social audits

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2008

campaign 2008 of social audits

In 2008, 472 social audits:

362 Initial Audits

110 follow-up audits

Since beginning of social audits: some improvements in factories

A fin 2008, 2541 Audits Sociaux réalisés :478 Re audits et 2063 Audits Initiaux

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2008 Results : Not conform

Respect of the Charter

principles :

< 5 %

5 à 30 %

30 à 70%

> 70%

PAKISTAPAKISTANN

Discrimination

VIETNAMVIETNAMBANGLADESHBANGLADESHINDIAINDIACHINACHINA

Disciplinary Practice

Freedom of Association

Général Working Conditions

Forced labor

Child labor (Young Workers)

Working Hours and Overtime

Wages and benefits


Indicateurs RAPPORT dd AUDITS SOCIAUX

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Beyond Social audits

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The Situation today

Carrefour/ICS

Wal-Mart

Gap/SAI

Tesco/ETI Migros/BSCI

Company X

Social Audit Social Audit

Social Audit

Social Audit

Social Audit

- Audit Fatigue

- Confusion

- Inefficiency

- High Cost

- Focus on audits not on remediation

Shared Supply Base

All consumer goods

Sourcing Companies Result Today

Supplier A

Social Audit

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Audits are not enough to ensure improvement in social working conditions in the factories

An example of training of our suppliers with a local NGO : Karmojibi Nari

Support and participation in Social Compliance Programme: harmonizing and mutualising social audits

Questioning governments on respect for human rights at work

BEYOND AUDITS

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TOWARDS CONVERGENCE OF STANDARDS AND MECHANISMS

Supporting standards convergence with reference to an international model:

Initiative Clause Sociale (Fédération du Commerce et de la Distribution FCD)

A enlever

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ICS : Social Clause Initiative

14 members of the French trade and distribution federation (FCD) use the Carrefour methodology and share audit results

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GSCP Objectives

A global forum To build consensus on best practices To develop a clear and consistent message for suppliers

globally

A platform To drive convergence by building comparability and

transparency To reduce audit fatigue and duplicationTo develop collaborative efforts for building capacity and

training

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Task Force : Members

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An example of training of our suppliers with a local NGO : Karmojibi Nari

BEYOND AUDITS

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ENGAGE WITH GOVERNMENTS

As the second retailer in the world, Carrefour is in a position to influence positively States where it sources.

Multistakeholder forum Bangladesh

Demand raise of minimum wage

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Internal process

The role of Carrefour employees in promoting

human rights within the supply chain

3. INTEGRATING SOCIAL ISSUES INTO SOURCING PRACTICES

15 avril 09 Social présentation Fev 09

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Social In the Sourcing process

SOURCING

PROCESS

SOURCING

PROCESS

SUPPLIER - SOURCING

SUPPLIER - SOURCING

SUPPLIER - SELECTION

SUPPLIER - SELECTION

SUPPLIER - VALIDATIO

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SUPPLIER - VALIDATIO

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SOURCING - PRODUCT

SOURCING - PRODUCT

COLLECTION

COLLECTION

PRODUCTION

PRODUCTION

- Social Charter Signed - Supplier Form- Factory Form- Pre Audit

- Technical Audits - Social audits

- Follow up Social audits

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SUPPLIER MONITORING METHODOLOGY

INTERNAL MONITORING PROCEDURES AS PART OF THE COMMERCIAL PROCESS:: Commercial pre-selection of supplier, exchange of information and commercial visit. Technical audit performed by the Quality Department: “Factory Audit”: First initial social Investigation.

SUPPLIER MONITORING…

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Social commitment included during the Sourcing Process


1. EXTERNAL AUDIT BY DIFFERENT LOCAL PLAYERS :

• External auditors mandated and paid by Carrefour.

• Social audits are performed at the FIRST STAGE of the SOURCING PROCESS

• Initial Audit performed by SGS ITS STR ( CSCC) BVSGS ITS STR ( CSCC) BV

• Following the ICS Code of Conduct

• D result = failure: PSS prevent sourcing from D factory (major incompliance)

2. Corrective action plan shows non-compliances and suggests improvements, and a completion deadlines.

3. Follow up Audit:

to verify the implementation of the Corrective action Plan.

4. Possibility of unannounced visit by the FIDH

Social commitment included during the Sourcing Process


Mettre slide document Pre audit / audit Technique


Mettre slide sur PSS

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THE AUDIT ITINERARY COVERS FOLLOWING STEPS:

OPENING MEETING with the factory management.

SITE TOUR OBSERVATIONS to assess actual working environment physical conditions and working practices.

WORKERS AND STAFF INTERVIEWS, in focus groups and individually

CHECKING OF DOCUMENTS AND RECORDS to provide objective evidence of compliance or non-conformity with requirements.

CLOSING MEETING with the factory management to discuss and agree upon a Corrective Action Plan.

A TYPICAL AUDIT

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A written ALERT NOTIFICATION is sent within 24 hours,when Critical Situations are found :

CHILDREN physical presence in the factory.

Proved FORCED LABOUR

Proved NON-EXISTENT REMUNERATION.

Proved EXCESSIVE CRITICAL WORKING HOURS.

Proved PHYSICAL ILL-TREATMENT or proved EXCESSIVE DISCIPLINARY MEASURES.

DANGEROUS WORK ENVIRONMENT which implies an immediate risk for workers’ health and/or security.

CORRUPTION

SUPPLIER QUALIFICATION PROCESS / AUDIT

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WHAT CAN YOU DO?

1) Pay attention to working conditions in the factories: read audit

results and corrective action plans. Alert the person in charge in

your office (add names) if you suspect unconformities as

mentionned in the first part of the training.

Asia team : vay yi Chen and Jason

DCNAG : Virginie

Bangladesh : Bibek

etc


WHAT CAN YOU DO?

2) Pay attention to subcontracting: make sure you know where the production is really taking place.

3) Check if factory has set up the charter in local language. Explain to supplier importance for Carrefour of Human rights at work. Discuss results of audits with suppliers.


WHAT CAN YOU DO?

4) Raise issues with suppliers, ask questions on

implementation of corrective action plan.

5) Do not impose unfeasible conditions on suppliers: last

minute changes, short lead time, etc...

6) Consider social performance alongside quality and

price for future sourcing decisions


DISCUSSION

1. What is your opinion of working conditions in the factories?

- What are the main problems you witness

- Do you see improvements in the factories?

- To you, what is a good supplier?

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DISCUSSION

2. What is your role to support respect for human rights?

3. What are the obstacles / challenges that you face?

How do you think you can be influential?Do you have any successful examples of how you have used your influence to improve working conditions of a supplier?Do you see the usefulness of social audits?

What obstacles are you facing when discussing results of audits with suppliers? What are the solutions for these problems?How can global retailers help to promote social rights?How could purchasing practices be changed to improve the situation?

1 HUMAN RIGHTS AT WORK Carrefour’s commitment to respecting fundamental human rights at work.

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