Responsible Electronics 2014 presentations

266
THE ELECTRONIC INDUSTRY CITIZENSHIP COALITION welcomes you to HP final assembly, China

description

Presentations from the EICC's Responsible Electronics 2014 conference, October 1-2, 2014.

Transcript of Responsible Electronics 2014 presentations

Page 1: Responsible Electronics 2014 presentations

THE ELECTRONIC INDUSTRY CITIZENSHIP COALITION welcomes you to

HP final assembly, China

Page 2: Responsible Electronics 2014 presentations

Day 1 Focus: Strategy, Future

•  All Day - Office hours for help on VAP, EICC-ON and the EICC e-Learning Academy

•  Keynote address: Christine Bader on business and human rights

•  C-Suite panel discussion on sustainable supply chains

•  Lunch – 12:00 p.m. -1:30 p.m. Atrium •  General Sessions – 1:30 p.m. – 6 p.m. •  Welcome reception – 6 p.m. – 7:30 p.m.

Ballroom Foyer

Page 3: Responsible Electronics 2014 presentations

Day 2 Focus: Implementation

•  All Day - Office hours for help on VAP, EICC-ON and the EICC e-Learning Academy

•  Peer Networking Roundtables 7:30 a.m. – 9 a.m.

•  Breakout Educational Sessions 9 a.m. – 12:30 p.m.

•  Lunch – 12:30 p.m. – 2 p.m. •  Breakout Educational Sessions 2 p.m. – 5:30

p.m. •  EICC New Strategic Plan: Members Town Hall

Meeting 5:30 p.m. – 7 p.m.

Page 4: Responsible Electronics 2014 presentations

EICC Members Only: Friday

EICC members, join us Friday to discuss: •  Working Group Roundtables 8:30 a.m.

– 10 a.m.

•  Members Only Meeting 10 a.m. – 3:30 p.m.

Page 5: Responsible Electronics 2014 presentations

EICC Exhibitors: Thank you!

•  Bureau Veritas •  Ecovadis •  Elevate •  Enablon •  SGS •  TÜV Rheinland •  UL

Page 6: Responsible Electronics 2014 presentations

2014: 10 Years of the EICC

http://vimeo.com/107696037

Page 7: Responsible Electronics 2014 presentations

EICC Over the Past Year

•  Hosted five conferences in Brussels, Shenzhen and San Francisco attracting over 1,000 attendees

•  Launched the EICC e-Learning Academy •  Revised Code of Conduct and VAP •  Upgraded tools – EICC-ON and SAQ •  Launched five publications – Conflict Minerals,

Business case for CSR, Student Workers, Carbon Product Footprinting, Working hours

•  Developed EICC Strategic Implementation Plan •  Reached 100 EICC members and 214 CFSI

members

Page 8: Responsible Electronics 2014 presentations
Page 9: Responsible Electronics 2014 presentations

HP final assembly, China

Page 10: Responsible Electronics 2014 presentations

10

TRANSPARENCY IN A CHANGING WORLD Henk Campher October 1, 2014

Page 11: Responsible Electronics 2014 presentations

11

Trust up but remain weak TRUST A GREAT DEAL

NGOS

BUSINESS

MEDIA

GOVERNMENT

12% 16%

2012 2013

Trust Total: 43%

Trust Total: 48%

14% 17%

2012 2013

Trust Total: 53%

Trust Total: 58%

15% 17%

2012 2013

Trust Total: 52%

Trust Total: 57%

19% 22%

2012 2013

Trust Total: 58%

Trust Total: 63%

TRUST IN INSTITUTIONS

There is a trust gap

Q11-14. [TRACKING] Below is a list of institutions. For each one, please indicate how much you trust that institution to do what is right using a 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. (Top 2 Box, Trust a great deal and Top 4 Box, Trust) Informed Publics ages 25-64 in 20-country global total

Page 12: Responsible Electronics 2014 presentations

58% 58%

43% 41% 40% 51% 47%

32% 26% 30%

65% 71%

56% 58% 52%

TRADITIONAL MEDIA

ONLINE SEARCH ENGINES

HYBRID MEDIA SOCIAL MEDIA OWNED MEDIA

Global Developed

Q178-182. When looking for general news and information, how much would you trust each type of source for general news and information? Please use a 9-point scale where one means that you "do not trust it at all" and nine means that you "trust it a great deal". (Top 4 Box, Trust) General Population in 26-country global total, Developed vs. Emerging Markets; Age breakdown for general population in 26-country global total

12

Trust in media landscape changing rapidly Youth trusts, older generations distrust non-traditional media

59% 61% 49% 47% 44%

61% 60% 48% 45% 43%

56% 56%

40% 37% 37% 54% 49%

29% 29% 31%

Traditional Media Online Search Engines

Hybrid Media Social Media Owned Media

18-29 30-44 45-64 65+

GLOBAL AGE BREAKDOWN

Many ways to use media for

trust

New opportunities for

engaging

Page 13: Responsible Electronics 2014 presentations

Skepticism and dispersion requires repetition

Q165. [TRACKING] Think about everything you see or hear every day about companies, whether it is positive or negative. How many times in general do you need to be exposed to something about a specific company to believe that the information is likely to be true? (Provide Space to Insert Number) Informed Publics Ages 25-64 in 26-country global total (excludes Don’t Know Responses)

4% ONCE (1)

14% TWICE (2)

64% THREE TO FIVE TIMES

12% TEN OR MORE TIMES (10+)

6% SIX TO NINE TIMES (6-9)

29% FOUR OR FIVE TIMES (4-5)

Majority needs to hear company information 3-5 times to believe messages

35% THREE TIMES (3)

13

Use various media

channels…

Page 14: Responsible Electronics 2014 presentations

86%  of  global  consumers  believe  that  business  needs  to  place  at  least  equal  weight  on  society’s  interests  as  on  business’  interests.  

Rise of Global Citizen

A>er  quality  and  price,  purpose  trumps  design,  innova@on  and  brand  loyalty  

Consumers  consistently  recommend,  promote  and  buy  brands  with  a  social  purpose  

There  is  no  one  “killer-­‐cause”  …  there  are  many  

Profit  and  purpose  are  no  longer  strange  bedfellows  

Page 15: Responsible Electronics 2014 presentations

90% of people globally want brands to share

Q13: You will be presented with things that a brand could do to build and maintain a connection with you or customers like you. For each one tell us if you feel that the brands that you like are currently doing each of these things too much, just right, or not enough? [Percent of people who selected “JUST RIGHT” or “NOT ENOUGH”]

10% of people globally think brands do it well

Q15: please select the statements that you feel apply to [BRAND]. Average % who stated sharing statements applied to [BRAND]

15

The opportunity gap…

Page 16: Responsible Electronics 2014 presentations

WATER

2006—2008 2000—2005 Now & Beyond

H U M A N

R I G H T S

E T H I C S

C A R B O N

Isolated risk to manage away

Linked to other operational issues

Leadership opportunity & Expectation

Not an issue (for most)

Voluntary; nice-to-do

Regulated & mandatory

Compliance issue; box-ticking

Corporate Reputation Issue

A competitiveness driver

Not free “Free” A Human Right

Issues Continuously Evolve

Chemistry Waste Compliance

Page 17: Responsible Electronics 2014 presentations

Public Engagement Cloud

Page 18: Responsible Electronics 2014 presentations

Our people believe passionately that what we do makes a difference for customers and our society as a whole.

Empty Messages are Dead

We are committed to being a great place to work, a thoughtful steward of the environment and a caring

citizen in the communities where we live and work. We are passionate about sustainably connecting people and

places and improving the quality of life around the world.

To us, CSR means taking steps to improve the quality of life for our employees and their families as

well as for the community and society at large. ”

” “

Page 19: Responsible Electronics 2014 presentations

THE (PUBLIC) RELATIONS

Page 20: Responsible Electronics 2014 presentations

Few areas of mutual interest, relevance and interactions

“Company A”

Co-Responsibility: Point of Mutual Interest and Start of Engagement

Major Impact Secondary audiences

Stakeholder

Major Interest

E.g. “Packaging”

Minor Impact but Major Engagement

Aim to move from centre (shared responsibility) to “extremes”

Note: Engagement points will vary from stakeholder to stakeholder. Activists, shareholders, regulators, employees, etc will all have different points of engagement.

Engagement Starting Points & Co-Responsibility

Prius CFL

Cup Toms Walmart

Page 21: Responsible Electronics 2014 presentations

21

The communications game has changed

SOCIAL OWNED

HYBRID TRADITIONAL

Need for Transmedia Storytelling

Explosion of media channels

Multi-screen world

Content needs to be social and sharable

Consumers need to hear information 3-5 times to believe messages

Millennials trust non-traditional media

Technical expert in the company and person like yourself are more trusted

Page 22: Responsible Electronics 2014 presentations

Influencers Amplifiers Mainstream Engagers

Co

nsu

me

rs,

Busin

ess

es,

Re

gu

lato

rs

22

Tell your story

Page 23: Responsible Electronics 2014 presentations

It’s not what you stand for, its how

23

.

Page 24: Responsible Electronics 2014 presentations

24

Problem:

Page 25: Responsible Electronics 2014 presentations

25

Solution:

Page 26: Responsible Electronics 2014 presentations

26

“Serving food with integrity.”

Page 27: Responsible Electronics 2014 presentations

27

“Inspiring solutions to the environmental crisis.”

Page 28: Responsible Electronics 2014 presentations

28

“Inspiring people to take small actions that

add up to big differences.”

Page 29: Responsible Electronics 2014 presentations

29

DOVE – CAMPAIGN FOR REAL BEAUTY

Page 30: Responsible Electronics 2014 presentations

30

LEVI’S – WATERLESS JEANS

Page 31: Responsible Electronics 2014 presentations

• Not everything that is important needs to be communicated PRIORITIZE

• Remain focused on the outcomes – not shiny objects FOCUS

•  The content, message, location and tone should be framed by the receiving audience

AUDIENCE

•  Tactics must ladder up to strategy & it’s 2013, not 1980… STRATEGY

•  Leadership is not from the middle of the pack… LEAD

•  It’s 2013 … You can’t hide and you can’t run TRANSPARENCY

•  It’s crowded & noisy – disrupt to break through DISRUPT

A few principles

Page 32: Responsible Electronics 2014 presentations

32

WHAT’S YOUR PURPOSE?

Henk Campher @angryafrican [email protected]

Page 33: Responsible Electronics 2014 presentations

HP final assembly, China

Page 34: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Connecting Transparency to Opportunity Ellen Jackowski October 1st, 2014

34

Page 35: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

HP Living Progress Creating a better future for everyone through our actions and innovations

35

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Page 36: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Seems riskier in theory than in practice

Has rewarding ripple effects

Alone is not enough

1

2

3

Transparency…

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Page 37: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

1. Transparency seems riskier in theory than in practice

37

2007

First weeks on the job

HP considers publishing list of suppliers

37

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Page 38: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

A legacy of transparency “firsts” in the IT industry

2002 Published a supplier SER code

2005 Published aggregated supplier audit results

2007 Published a list of our suppliers

2008 Published aggregated supply chain greenhouse gas (GHG) emissions

2012 Published supplier guidelines for the responsible management of student and temporary workers

2013 Published its supply chain smelter list

Published complete carbon footprint

Published supply chain water footprint

38

2014 Published complete water footprint

Published interactive supplier map with addresses, number of workers and sustainability reports

Page 39: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

2. Transparency has rewarding ripple effects

39 39

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Page 40: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

3. Transparency alone is not enough

Take responsibility to improve Be transparent Measure it Decide what matters

Page 41: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 41

Our Carbon Footprint, 2013

Page 42: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Our Carbon Footprint, 2013

Our Carbon Goals, 2020

20% reduction

20% reduction

40% reduction

Page 43: Responsible Electronics 2014 presentations

© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Let’s come together to solve society’s toughest challenges.

43

Page 44: Responsible Electronics 2014 presentations

HP final assembly, China

Page 45: Responsible Electronics 2014 presentations

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Forced  Labor  in  the  Production  of  Electronic  Goods                                      in  Malaysia  A  Comprehensive  Study  of  Scope  and  Characteristics  

Page 46: Responsible Electronics 2014 presentations

•  Bangladesh:    shrimp  •  Bolivia  -­‐  nuts,  corn,  peanuts,  cattle  ranching  

•  Burma/Myanmar  –  garments,  services  (upcoming)  

•  Cote  d’Ivoire  –  cocoa  growing  •  Dominican  Republic  –  sugar  •  Ghana  –  cocoa  growing  •  Guatemala  –  coffee,  palm  oil  •  Indonesia  –  fishing,  palm  oil  •  Liberia  –  rubber  •  Malawi  –  tea,  tobacco  

•  Malaysia  –ICT,  palm  oil,  service  •  Middle  East  –  construction,  service  •  Philippines  –  bananas,  fishing  •  Taiwan  –  fishing,  ICT  •  Thailand  –  food  manufacturing,  ICT,  garments  

• US  –  peanuts,  macadamia  nuts,  tomatoes,  cattle  Ranching,  fruits  

www.verite.org/commodities  

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Verité  Research  on  Risks  &  Mechanisms  of  Forced  Labor  

Page 47: Responsible Electronics 2014 presentations

Research  Questions  

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

1) Do  indicators  of  forced  labor  exist  in  the  producZon  of  electronic  goods  in  Malaysia,  including  in  the  manufacture  of  specific  electronic  components  and  finished  products?  –  What  are  those  indicators?  

2)  Does  forced  labor  exist  in  the  producZon  of  electronic  goods  in  Malaysia  in  more  than  isolated  incidents?  –  In  what  specific  components  and  finished  products?  –  How  widespread  is  each  indicator  in  the  electronics  sector?  

3)  What  is  the  relationship  between  labor  brokers,  recruiters,  other  intermediaries,  and  employers,  in  all  phases  of  the  recruitment,  transportation,  and  placement  of  migrants?  –  What  role  do  these  actors  play  in  forced  labor,  including  debt  bondage?  

Page 48: Responsible Electronics 2014 presentations

Research  Design  and  Data  Collection  

•  Cross-­‐sectional  study  •  Mixed-­‐methods  research  design  •  Nonprobability,  purposive  snowball  sampling  •  12  researchers  •  501  total  workers  (438  migrant  workers)  •  Survey:  closed-­‐  and  open-­‐ended  questions  •  Interviews  conducted  outside  of  workplace  •  3-­‐4  hours  to  recruit  workers  for  interview;  45  minutes  to  conduct  the  survey  

•  Approximately  200  factories  represented  •  20  Follow-­‐up  qualitative  interviews  •  Consultations  with  civil  society,  government,  and  business  stakeholders  

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Gender   Respondents  Female   270  Male   227  

Country  of  Origin  Bangladesh   36  Burma   95  India   2  Indonesia   108  Malaysia   63  Nepal   99  Philippines   9  Vietnam   89  

Region  in  Malaysia  Johor   136  Klang  Valley   159  Penang   140  Seremban,  Negeri  Sembilan   40  Other   26  

Page 49: Responsible Electronics 2014 presentations

ILO  Indicator  Framework  Indicators  of  Involuntariness  

Strong:  •  DecepZon  about  the  nature  of  the  work  

•  Forced  overtime  •  Limited  freedom  of  movement  and  communication  

•  Degrading  living  conditions  •  No  Freedom  to  resign  in  accordance  with  legal  requirements  

•  Forced  to  work  for  indeterminate  period  in  order  to  pay  off  outstanding  debt  or  wage  advance  

Medium:  •  Deceptive  recruitment  

Strong:  •  Sexual  Violence  •  Physical  Violence  •  Threats  against  Family  Members  

•  Other  Forms  of  Punishment  (deprivation  of  food,  water,  sleep)  

•  ImposiZon  of  Worse/Further  Deterioration  in  Working  CondiZons  

•  Withholding  of  Wages  •  Denunciation  to  Authorities  

•  Dismissal  

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

•  Confiscation  of  Identity  Papers  or  Travel  Documents  

•  IsolaZon  •  Locked  in  Workplace  or  Living  Quarters  

•  Constant  Surveillance  Medium:  •  Exclusion  from  Future  Employment  or  Overtime  

•  Financial  PenalZes  •  Extra  Work  for  Breaching  Labor  Discipline  

Indicators  of  Menace  of  Penalty  

Page 50: Responsible Electronics 2014 presentations

Forced  Labor   Percent  in  Forced  Labor  

Number  in  Forced  Labor  

Total  No.  of  Respondents  

All  workers   28%   139   501  Foreign  workers   32%   138   438  Gender  Female   26%   69   270  Male   31%   70   227  

Country  of  Origin  Bangladesh   28%   10   36  Burma   28%   27   95  India   100%   2   2  Indonesia   21%   23   108  Malaysia   2%   1   63  Nepal   34%   34   99  Philippines   67%   6   9  Vietnam   40%   36   89  

Region  in  Malaysia  Johor   23%   31   136  Klang  Valley   31%   49   159  Penang   29%   40   140  Seremban,  Negeri  Sembilan   38%   15   40  Ipoh,  Perak   0%   0   8  Kedah   25%   1   4  Malacca   21%   3   14  

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Page 51: Responsible Electronics 2014 presentations

Number  of  forced  labor  indicators  exhibited  by  all  study  respondents  

The  great  majority  of  respondents  who  were  found  to  be  in  forced  labor  exceeded  the  minimum  threshold  of  one  indicator  of  involuntariness  and  one  menace  of  penalty:  81%  of  respondents  exhibited  three  or  more  indicators  of  forced  labor.  

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Number  of  indicators   Respondents  not  in  forced  labor  

Respondents  in  forced  labor  

0  Indicators   133   0  

1  Indicator   111   0  

2  Indicators   69   26  

3  Indicators   34   39  

4  Indicators   14   28  

5  Indicators   1   11  

6  or  more  Indicators   0   35  

Total   362   139  

Page 52: Responsible Electronics 2014 presentations

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Fees  and  Debt  •  92%  of  foreign  workers  paid  recruitment  fees  to  get  their  job  •  94%  (of  those)  paid  illegally  or  unethically  high  fees  •  77%  (of  those  who  paid  fees)  had  to  borrow  money  to  pay  to  get  their  job  

Passport  Withholding  •  94%  of  foreign  workers  did  not  hold  their  passports  •  71%  of  those  did  not  have  unrestricted  access  to  their  passports  

Limited  Freedom  of  Movement  •  62%  of  foreign  workers  surveyed  were  unable  to  move  about  freely  

Inability  to  Resign  Contracts  •  57%  of  foreign  workers  could  not  resign  without  suffering  some  form  of  penalty  such  as  a  heavy  fine  or  losing  their  passport  

Deceptive  Recruitment  •  22%  of  foreign  workers  surveyed  were  deceived  about  the  terms  and  conditions  of  employment  

Top  Contributors  to  Forced  Labor  

Page 53: Responsible Electronics 2014 presentations

Recruitment  Fees  Fi

ndin

gs

10   0  

Range  of  Recruitment  Fees  Paid  (MYR)  

20  

30  

40  

80   70   60   50  

Num

ber  o

f  Respo

nden

ts  

Number  of  respondents  who  paid  recruitment  fees  within  the  given  range  

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

•  92%  of  all  foreign  workers  paid  recruitment  fees  in  order  to  get  their  jobs  •  Of  the  recruitment  fees  paid  in  home  country,  92%  were  excessive  •  Of  the  recruitment  fees  paid  to  agent  in  Malaysia,  99%  were  excessive  

Page 54: Responsible Electronics 2014 presentations

Find

ings

Recruitment  fee  and  monthly  wage  by  

country  of  origin*  

1000   500  

0  

Burma  Indonesia  Nepal  Vietnam  

*    Above  chart  only  includes  fees  data  for  respondents  from  countries  with  80  or  more  respondents.  Data  in  this  figure  combines  both  fees  paid  in  the  sending  country  and  those  paid  in  Malaysia  (if  reported  separately).  Not  all  foreign  workers  interviewed  reported  fee  data.  

1500  

2000  

4000   3500  

3000  

2500  

Average  recruitment  fee  (MYR)  Average  monthly  wage  (MYR)  

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Page 55: Responsible Electronics 2014 presentations

Indebtedness  

Years  working  in  Malaysia  among  respondents  who  reported  ongoing  debt  

5  

0  

10  

25  

20  

15  

<  1   1  2  3  Years  working  in  Malaysia  

>  4  

Num

ber  o

f  Respo

nden

ts  

Number  of  Respondents  

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

•  77%  of  workers  who  were  charged  fees  had  to  borrow  in  order  to  pay  them  •  95%  of  workers  who  borrowed  money  to  pay  recruitment  fees  took  longer  

than  three  months  to  pay  off  the  debt  •  50%  of  workers  who  borrowed  money  to  pay  recruitment  fees  took  longer  

than  a  year  to  pay  off  the  debt  

Page 56: Responsible Electronics 2014 presentations

Debt  Fi

ndin

gs

Of  respondents  that  had  not  yet  paid  off  their  debt:  •  92%  reported  feeling  compelled  to  work  overZme  hours  to  

pay  off  their  debt  •  85%  felt  it  was  impossible  to  leave  their  job  before  paying  

off  their  debt  The  rate  of  forced  labor  was  higher  among  currently  indebted  workers  than  it  was  in  the  general  respondent  pool:  48%  among  current  debt  holders,  versus  28%  in  the  general  respondent    pool  

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Page 57: Responsible Electronics 2014 presentations

Passport  retention  Fi

ndin

gs

•  94%  of  foreign  workers  reported  that  their  passports  were  held  by  the  facility  or  their  broker/agent  

•  71%  of  foreign  workers  reported  it  was  impossible  or  difficult  to  get  their  passports  back  when  they  want  or  need  them  

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Page 58: Responsible Electronics 2014 presentations

Limited  Freedom  of  Movement  

Incidence  of  “limited  freedom  of  movement”  indicator  among  all  workers  and  foreign  workers  

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

•  62%  of  foreign  workers  reported  that  they  are  unable  to  move  around  freely  and  safely  without  their  passports  or  other  travel  documents  

•  35%  of  foreign  workers  reported  needing  a  pass  or  permit  to  go  beyond  a  certain  distance  from  their  housing  

Limited  Freedom  of  Movement  and  Communication  Indicator  

Incidence  of  Indicator  (%)  

Incidence  of  Indicator  (No.)  

Total  No.  of  Respondents  

All  workers   41%   206   501  

Foreign  workers   47%   206   438  

Page 59: Responsible Electronics 2014 presentations

Living  Conditions  

Component  analysis  of  living  conditions  indicator  among  foreign  workers  

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

•  24%  of  foreign  workers  in  the  study  were  living  in  poor  conditions,  in  housing  that  was  provided  by  the  broker  or  employer  as  part  of  the  employment  arrangement  

•  For  92%  of  the  foreign  workers  that  Verité  interviewed,  housing  was  provided  by  the  employer  or  broker  

*Note  the  percentages  in  this  table  are  derived  from  the  total  number  of  respondents  who  answered  the  question.  

Component  of  Living  Conditions  Indicator  

Percentage  with  Indicator  

Number  with  Indicator  

Total  No.  of  Respondents  

Workers  that  sleep  in  a  room  with  more  than  8  people  

30%   129   436  

Workers  who  have  nowhere  they  can  safely  store  their  belongings  

43%   187   431  

Workers  who  do  not  feel  safe  at  their  housing  

22%   94   427  

Workers  that  describe  their  living  condiZons  as  "very  bad"  or  "unbearable"  

9%   41   437  

Page 60: Responsible Electronics 2014 presentations

No  Freedom  to  Resign  

Incidence  of  “no  freedom  to  resign”  indicator  among  all  workers  and  foreign  workers  

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

•  57%  of  foreign  worker  respondents  reported  they  could  not  leave  their  job  before  their  contract  was  finished  because  they  would  be  charged  an  illegally  high  fine,  would  forfeit  wages  or  runaway  insurance,  would  be  forced  to  pay  the  balance  of  the  levy,  would  lose  their  passport,  and/or  would  be  denounced  to  the  authorities  

No  Freedom  to  Resign  Indicator   Percentage  with  Indicator  

Number  with  Indicator  

Total  No.  of  Respondents  

All  workers   50%   248   501  

Foreign  workers   57%   248   438  

Page 61: Responsible Electronics 2014 presentations

Levy  Fi

ndin

gs

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

•  January  2013  –  burden  of  per-­‐capita  levy  shifted  from  the  employer  to  the  foreign  workers  themselves  

•  70%  of  all  foreign  workers  reported  that  they  felt  they  could  not  leave  their  job  before  the  levy  is  paid  off  

MYR  1,250  a  year  (USD  387)  

Page 62: Responsible Electronics 2014 presentations

Deceptive  Recruitment  Incidence  of  “deception  about  the  nature  of  the  work”  and  “decep@ve  

recruitment”  indicator  among  all  workers  and  foreign  workers  according  to  length  of  @me  in  Malaysia  

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Indicators  of  Involuntariness  among  all  workers  and  foreign  workers  according  to  length  of  time  in  Malaysia  

Both  “deception  about  the  nature  of  the  work”  and  “deceptive  recruitment”  

Percentage  with  Indicator  

Number  with  Indicator  

Total  No.  of  Respondents  

All  workers   20%   98   501  

Foreign  workers   22%   98   438  

Workers  in  Malaysia  for  less  than  1  year   32%   15   47  

Workers  in  Malaysia  for  less  than  2  years  

29%   35   121  

Workers  in  Malaysia  for  2  years  or  more   20%   63   315  

Page 63: Responsible Electronics 2014 presentations

Employment  Agents  

Incidence  of  forced  labor  by  who  pays  workers’  wages  

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Who  pays  workers’  wages  

Incidence  of  Forced  Labor  (%)  

Incidence  of  Forced  Labor  (No.)  

Total  No.  of  Respondents  

Employment  agent   34%   63   185  

Facility   25%   76   309  

Other   0%   0   3  

Page 64: Responsible Electronics 2014 presentations

RELA  

Incidence  among  foreign  workers  of  encounters  with  immigration  authorities,  police,  or  RELA  and  nature  of  such  encounters  

Find

ings

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

•  70%  of  foreign  workers  that  had  encounters  with  RELA,  immigration  officials,  or  police  were  forced  to  pay  bribes,  were  detained,  or  were  threatened  with  detention,  physical  harm,  or  general  intimidation.  

*This  number  is  not  the  sum  of  the  numbers  in  this  column  because  it  was  possible  for  workers  to  report  more  than  one  type  of  encounter  with  immigration  authorities,  police,  or  RELA  .  

Nature  of  encounters  with  immigration  authorities,  police,  or  RELA  

Percentage  with  Encounter  

Number  with  Encounter  

Total  No.  of  Respondents  

Workers  who  have  been  asked  by  immigraZon  authorities,  police,  or  RELA  to  show  their  passport  or  similar  document  

35%   154   438  

Workers  who  paid  bribes  to  immigraZon  authoriZes,  police,  or  RELA  

11%   49   438  

Workers  who  were  threatened  with  detention,  physical  harm,  or  general  intimidation  by  immigration  authorities,  police,  or  RELA  

26%   115   438  

Workers  who  were  detained  or  brought  to  lockup  by  immigraZon  authoriZes,  police,  or  RELA  

3%   15   438  

Migrant  workers  in  past  year  who  had  an  encounter  with  immigraZon  authoriZes,  police,  or  RELA  

46%   203*   438  

Page 65: Responsible Electronics 2014 presentations

•  Nepalese  man,  working  in  Penang  •  Recruitment  fee:  NPR  130,000  (USD  1,266)  •  Loan  from  a  creditor  with  a  monthly  interest  of  5%  •  Family  land  as  collateral  •  Passport  taken  upon  arrival;  stopped  by  police  and  

RELA  a  few  Zmes  •  Take-­‐home  after  deductions:  MYR  750  (USD  232)  •  Deceptive  Recruitment:  

–  Passport  retenZon  policy  –  Take-­‐home  pay  –  Employer  

•  2  years  to  pay  off  loan;  compelled  to  work  overZme  

Bishal  C

ase

Stud

y

Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Page 66: Responsible Electronics 2014 presentations

…….for  tomorrow  Addressing  forced  labor  risks  

66 Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Oct  2,  2014  

Page 67: Responsible Electronics 2014 presentations

Establish  criteria  

Business  Requirements  •  Ability  to  source  quality  

workers;  quantity  required;  within  a  specified  timeframe  

•  Competitive  price  

Legal  Requirements  •  Compliance  to  law  •  License  to  operate  business  

Social  Responsibility  Requirements  •  Limit  to  recruitment  fees  •  Presence  of    Code  of  

Conduct,  with  policies  and  procedures  for  enforcement  

Ris

k co

ntro

ls

67 Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Page 68: Responsible Electronics 2014 presentations

Conducting  Labor  Broker  Due  Diligence  •  Thorough  background  check  of  sending  country  agent  (SCA)  

•  Ensure  SCA  compliance  to  own  country  laws  •  Review  Complete  SCA’s  recruitment  process  review  vs.  Code  of  Conduct  

•  Educate  SCA  key  people  on  Code  of  Conduct,  social  responsibility  standards  

•  Establish  ongoing  performance  management  of  Labor  Brokers  

Ris

k co

ntro

ls

68 Verité  ©  2014  –  NOT  FOR  DISTRIBUTION  

Page 69: Responsible Electronics 2014 presentations

Verification  of  Fees  and  Expenses  

Pre-­‐departure  &  Deployment  

Provide   jobseekers  with  checklist  of  all  incurred  expenses  

Set  up  accessible  hotline  

Upon  arrival  

Require  new  hires  to  submit  a  list  of  

expenses  

Conduct  validation  interviews  

Develop  tools  for  validaZon  interview  &  

train  interviewer  

On-­‐site  follow-­‐up  

Monitor  grievance  channels  

Set  up  Hotline  number  

Create  Non-­‐reprisal  policy  

Communicate  Broker-­‐  born  sanctions  

Ris

k co

ntro

ls

25 Verite  ©  2013  –  NOT  FOR  DISTRIBUTION  

Page 70: Responsible Electronics 2014 presentations

HP final assembly, China

Page 71: Responsible Electronics 2014 presentations

71

The Electronic Industry Citizenship Coalition

2014 SENSING ASSESSMENT MAP

Page 72: Responsible Electronics 2014 presentations

2014 Sensing Assessment Objectives

Given the increasing breadth of electronics supply chain sustainability issues that the EICC has taken on in the past several years, the EICC conduced a “sensing” exercise to prioritize these issues for the purposes of:

q  Informing the organization’s annual activities, strategy, and budget planning

q  Providing broad guidance to its corporate members about current and future industry trends and issues that may also be increasingly relevant to them

72

The EICC engaged BSR to conduct this sensing exercise not only to help prioritize current and emerging sustainability issues in the electronics supply chain, but also to develop a replicable methodology that could be used by the EICC for future assessments.

Page 73: Responsible Electronics 2014 presentations

What Sensing IS and IS NOT

73

What the Sensing Assessment

IS

•  An inside and outside view of which issues or processes may be most important for EICC member companies

•  A relative ranking of issues or processes that establishes “direction” for prioritization

•  An assessment to inform EICC planning and strategy

•  An assessment to help the EICC and EICC member companies integrate sustainability deeper and more consistently across their respective organizations, and maximize decision-making and impact

What the Sensing Assessment

IS NOT

•  A static assessment (I.e. sustainability issues or processes may shift in significance over time as society and business change)

•  An assessment that tells the EICC and EICC member companies what to do on each sustainability issue or process

•  An assessment that tells the EICC and EICC member companies how well they are performing on each sustainability issue or process

•  A complete list of all sustainability issues or processes

•  A precise, exact science

Page 74: Responsible Electronics 2014 presentations

Sensing Issue List

74

1.  Forced Labor and Human Trafficking 2.  Child Labor 3.  Nondiscrimination and Humane Treatment 4.  Fair Wages 5.  Freedom of Association and Collective Bargaining 6.  Working Hours, Holidays, and Leave

1.  Diversity, Inclusion, and Equal Opportunity (Including Women Empowerment)

2.  Training, Career Advancement, and Capacity Building 3.  Fair Recruitment, Temporary, and Student Labor 4.  Employee Benefits and Social Security 5.  Social Dialogue, Grievance Mechanisms, and Remediation 6.  Health and Safety (Including Occupational, Fire, and Building

Safety) 7.  Safe Use of Process Chemicals

1.  Climate Change 2.  Water Resources Management and Sanitation 3.  Biodiversity Impacts 4.  Environmental Impact Assessment 5.  Effluents, Pollution, and Waste Management 6.  Environmental Accidents, Grievances, and Remediation 7.  Energy Management and Systems 8.  Fuel, Logistics, and Transportation 9.  Material and Resource Use Optimization

1.  Transparency, Reporting, and Accountability 2.  Compliance and Audits 3.  Business Ethics and Fair Behavior 4.  Anti-corruption 5.  Procurement Policies and Practices 6.  Respect for Property Rights (Including Intellectual Property) 7.  Privacy and Data Protection 8.  Conflict Minerals

1.  Human Rights Due Diligence and Impact Assessment 2.  Community Involvement and Development 3.  Stakeholder Engagement 4.  Access to Essential Goods and Services 5.  Disaster Risk Reduction & Emergency Preparedness

Labor Rights

Labor Practices

Environment

Governance and Ethics

Community

Page 75: Responsible Electronics 2014 presentations

Importance to EICC Member Companies: The degree to which a supply chain issue (or process) is important to EICC member companies’ business success. •  Quantitative / External Data (66%)

•  EICC Member Sensing Survey (33%) •  EICC SAQ and VAP Aggregate Findings (33%)

•  Qualitative Analysis (33%)

Sensing Assessment Criteria

75

Importance to Supply Chain Sustainability: The degree to which a supply chain issue (or process) is important to sustainability or broader sustainable development objectives in the electronics industry supply chain. •  Quantitative / External Data (66%)

•  EICC News and Media Monitoring Mentions (33%) •  EICC Transparency Taskforce External Stakeholder Survey

(33%) •  Qualitative Analysis (33%)

Page 76: Responsible Electronics 2014 presentations

76

Importance to EICC Member

Companies

33%

33%

33%

Importance to Supply Chain Sustainability

Quantitative / External Data

Qualitative Analysis

EICC Member Company Sensing Survey Results

SAQ Annual Results

VAP Annual Results

Cost Efficiency Reputation Supply Chain

Stability Worker

Productivity

Regulatory Requirement

Investor Demand

Business Innovation

License-to-Operate

Scope Scale Remediability Likelihood Vulnerability

News Media Mentions

EICC External Stakeholder Survey Results

EICC Compliance

Economic Development

Quantitative / External Data

Qualitative Analysis

33%

33%

33%

EICC 2014 Sensing Assessment Criteria

Page 77: Responsible Electronics 2014 presentations

77

EICC 2014 Sensing Assessment Map

Page 78: Responsible Electronics 2014 presentations

Sensing Discussion Questions

78

q  Are there any surprises?

q  Which of these issues are emerging and which of these issues have been around for a long time (but we haven’t effectively addressed?)

q  Should the EICC be working on all of these issues? Which issues should be accounted for?

Page 79: Responsible Electronics 2014 presentations

What Members Say EICC Should Do

79

79%

61% 55%

39% 38% 31% 30% 25%

0%

20%

40%

60%

80%

100%

Dev

elop

bes

t pra

ctic

e gu

idan

ce a

nd/o

r re

com

men

ded

pol

icy

Dev

elop

tra

inin

g to

ols

to

impro

ve u

nder

stan

din

g an

d p

erfo

rman

ce o

n t

he

issu

e

Dev

elop

ben

chm

arki

ng

and d

ata

stan

dar

diz

atio

n

tool

s to

sta

ndar

diz

atio

n

repor

ting

on t

he

issu

e

Pro

acti

vely

educa

te

gove

rnm

ent

and o

ther

st

akeh

older

s ab

out

the

indust

ry’s

per

spec

tive

on

Dev

elop

ris

k as

sess

men

t to

ols

on t

he

issu

e (e

.g.,

au

dit

ing)

Con

vene

in-p

erso

n

dia

logu

e op

por

tunit

ies

such

as

thro

ugh

co

nfe

rence

s an

d m

eeti

ngs

Build

aw

aren

ess

amon

gst

EIC

C m

ember

s

Incl

ude

and/o

r st

rengt

hen

req

uir

emen

ts

on t

he

issu

e in

EIC

C

mem

ber

com

plia

nce

Average Response Percent (n≈68)

Page 80: Responsible Electronics 2014 presentations

Other Key Information Sources

80

q  EICC Code of Conduct (Version 4.0) q  EICC-FSG Senior Executive Advisory Committee

(SEAC) Strategy Direction Report q  Global Reporting Initiative G4 Sustainability

Reporting Guidelines q  Sustainability Accounting Standards Board

(SASB) Disclosure Topics for the Technology and Communications Sector

q  ISO 26000 Social Responsibility Standards q  Fair Labor Association Code of Conduct q  UN Guiding Principles on Business and Human

Rights

Page 81: Responsible Electronics 2014 presentations

HP final assembly, China

Page 82: Responsible Electronics 2014 presentations

ALTERNATIVES TO AUDITING: SOLVING WORKPLACE PROBLEMS THROUGH COMMUNICATION David Foust, CEREAL

Monique Lempers, IDH

Marcel Jacobs, Philips 

Page 83: Responsible Electronics 2014 presentations

MOVING BEYOND AUDITS

¢ Rising sense of need to move beyond audits �  Audits help identify problems, but not solve them �  Solving requires additional efforts

¢  Investments in communication facilitate subsequent factory improvements �  Rossi, Arianna and Robertson, Raymond (2011)

“Better Factories Cambodia – An Instrument for Improving Industrial Relations in a Transnational Context” in Papadakis, Konstantinos (ed.) Practices and Outcomes of an Emerging Global Industrial Relations Framework, Palgrave Macmillan and the ILO.

Page 84: Responsible Electronics 2014 presentations

MOVING BEYOND AUDITS

Audits Audits

Page 85: Responsible Electronics 2014 presentations

MOVING BEYOND AUDITS

Communication

Working Conditions

Survival

Page 86: Responsible Electronics 2014 presentations

EFFECTS OF IMPROVING CONDITIONS

¢ Apparel Industry: Better Work �  7 countries �  Data from Cambodian factories

¢ Compare improvements in working conditions with factory survival

¢  Improvements in several areas correlated with improvements in factory survival rates

¢ Other similar results point in the same direction: improvements in working conditions are correlated with improved factory performance

Page 87: Responsible Electronics 2014 presentations

KAPLAN-MEIER SURVIVAL ESTIMATES 0.

000.

250.

500.

751.

00

0 2 4 6 8 10analysis time

upc_10 = 0 upc_10 = 1

Payment_of_Wages

0.00

0.25

0.50

0.75

1.00

0 2 4 6 8 10analysis time

upc_18 = 0 upc_18 = 1

Aid

0.00

0.25

0.50

0.75

1.00

0 2 4 6 8 10analysis time

upc_26 = 0 upc_26 = 1

Chemicals0.

000.

250.

500.

751.

00

0 2 4 6 8 10analysis time

upc_28 = 0 upc_28 = 1

Overtime

Page 88: Responsible Electronics 2014 presentations

HOW CAN WE IMPROVE COMMUNICATION?

¢ David Foust, CEREAL Presentation of a workers’ experience in the factory and how worker-management communication can resolve workplace issues

¢ Monique Lempers, IDH Presentation of IDH’s electronics program emphasizing working-management communication in China

¢ Marcel Jacobs, Philips Presentation of Philips’ new approach on 'beyond audits' incorporating supplier development, LEAN and worker-management dialogue

Page 89: Responsible Electronics 2014 presentations

PANEL FORMAT

¢  25 minutes for each presentation ¢ Questions and Answers following

Page 90: Responsible Electronics 2014 presentations

HP final assembly, China

Page 91: Responsible Electronics 2014 presentations

TOWARDS A BETTER AND MORE EQUITABLE COMMUNICATION RELATIONSHIP BETWEEN WORKERS AND MANAGEMENT

David Foust Rodríguez CEREAL (Center for Labor Studies and Action) Responsible Electronics, EICC, Oct 2014

Page 92: Responsible Electronics 2014 presentations

HUMAN RESOURCES AND HUMAN’S RIGHTS

“We were sold to the

new company without been asked”.

Page 93: Responsible Electronics 2014 presentations

OPEN COMMUNICATION BETWEEN WORKERS AND MANAGEMENT

¢  Is this “the best way”…? (Why?, how?, for whom?)

¢ Three different scenarios: �  An individual worker approaches management to

deal with a grievance, without a clear / effective grievance mechanism.

�  An individual worker approaches management …, with a (more) effecctive grievance mechanism in place.

�  A worker can approach management with the support of a workers’ organization / representative; this communication relationship is framed in a clear and effective grievance mechanism.

Page 94: Responsible Electronics 2014 presentations

WE LISTEN TO A WORKER’S EXPERIENCE…

Page 95: Responsible Electronics 2014 presentations

THE DIFFERENCE BETWEEN THE THREE DIFFERENT SCENARIOS

¢  In the first scenario, the solution (type, timing, etc.) is up to the company almost entirely.

¢  In the second scenario, the introduction of a more or less clear set of rules and timing (GM) and of a new entity (CEREAL, for example) gives the relationship a little more balance.

¢ But in the third scenario, the worker has the support of a workers’ organization / representative (not / not only from someone outside the workplace). This relationship is better and more equitable.

Page 96: Responsible Electronics 2014 presentations

HP final assembly, China

Page 97: Responsible Electronics 2014 presentations

Higher performing suppliers

through

advanced worker management dialogue

October 2014; EICC conference

Page 98: Responsible Electronics 2014 presentations

The IDH program brings together public and private partners

Page 99: Responsible Electronics 2014 presentations

A shared value approach to a

serious business risk

Page 100: Responsible Electronics 2014 presentations

The new generation of Chinese workers is more self-confident and empowered!

Page 101: Responsible Electronics 2014 presentations

With little space for sharing and discussing demands &frustrations, workers leave or strike !

Page 102: Responsible Electronics 2014 presentations

In 2014 we saw a 30% increase of strikes in China, most in the manufacturing sector !

Page 103: Responsible Electronics 2014 presentations

A high turnover of >33% comes with a cost!

Source: salary & employment forecast China 2014, Michael Page

Source: ELEVATE 2013

Page 104: Responsible Electronics 2014 presentations

Opening up dialogue is key to manage these risks, by releasing pressure and increasing satisfaction!

Page 105: Responsible Electronics 2014 presentations

The philosophy behind this is to create shared value between the business and social agenda!

Page 106: Responsible Electronics 2014 presentations

We measure impact on dialogue &

workers satisfaction and linkages with business values

Page 107: Responsible Electronics 2014 presentations

Worker Satisfaction Index Comparison by Supplier

Factory  No. Overall  Scale  (1-­‐10)

Working  Relationships

(0-­‐100)

Wage  Fairness  and  Transparency

(0-­‐100)

Working  Hours(0-­‐100)

Facilities(0-­‐100)

Health  and  Safety(0-­‐100)

Career/Personal  Development

(0-­‐100)Below  Average

6.39 67.77 62.92 41.54 56.72 65.54 62.26Above  Average

1 5.71 62.87 54.49 31.70 51.42 57.82 55.002 8.00 78.62 77.24 77.25 72.29 85.56 70.553 7.55 77.88 77.76 58.23 69.59 82.46 72.094 6.22 66.65 60.48 28.14 60.33 74.90 57.805 6.53 65.69 72.33 48.45 66.57 60.71 53.916 6.70 69.84 70.50 45.38 61.80 71.74 59.787 6.21 62.70 57.77 59.64 56.87 59.87 52.708 8.27 83.73 83.05 67.11 80.70 90.84 77.979 5.40 64.40 54.23 29.25 49.32 45.56 52.4610 5.68 63.08 57.64 33.67 56.27 61.18 45.2311 6.33 68.08 67.81 37.09 58.94 60.23 64.0912 6.34 64.53 63.67 59.93 56.09 56.22 57.5513 6.04 66.39 65.29 10.26 64.51 67.88 61.6614 5.67 63.18 63.92 23.40 46.57 59.08 55.0015 6.20 67.32 65.92 28.97 61.34 64.49 58.3316 6.30 67.59 60.22 24.95 65.44 69.91 65.2717 7.04 70.20 71.44 59.06 60.51 77.69 63.4118 6.70 66.59 70.02 41.89 62.65 73.20 64.3819 5.26 65.26 48.72 17.89 46.52 41.99 63.03

Worker satisfaction is measured and benchmarked!

Page 108: Responsible Electronics 2014 presentations

Non-worker representative comm systems Employees informed of enterprise policies 3 4 1

Employees give suggestions & report problems 3 3 3

Employee view of outcomes 2 3 2

Employee trust in management 4 5 4

Management use of comm system 2 5 3 Rep system & roles Rep structures 1 2 1 Confidence in reps 3 5 1.5 Depth of worker rep role 2 2 1 Depth of worker rep role 2 1 1 Representation & participation S/election of employee reps 4 4 1 Employee reps & employees 2 I 3 2 Scope of discussion 3 3 2 Degree of employee participation 2 3 2 Resources Time 2 2 3 Funding 2 1 2 Peer network 3 5 3 Info 3 4 4 Knowledge & soft skills Openness 3.33 4 4 Respect 3.67 4 4 Spirit of compromise 1.5 3 5 Objectives & outcomes Alignment 1.67 2 5 Problem solving 3 4 5 Difficulty 4 3 1

Non-rep comm systems 56% 80% 52%

14 20 13 Rep systems 51% 61% 53%

46 55 47.5

Strong worker reps,

no clear role

Dialogue maturity is quantified (darker colour = higher scoring)

Supplier #1 Supplier #2 Supplier #3

Low investment in systems

High compromiseon easy issues

Well informed by management

Respectful discussion, limited compromise

Some discussion difficult issues, limtd compromise

Page 109: Responsible Electronics 2014 presentations

Correlations social & business drivers analyzed

R²  =  0.51036  

0%  

20%  

40%  

60%  

80%  

100%  

0%   20%   40%   60%   80%   100%  

%  of  e

mployees  w

illing  to  work

harder  to

 aaain  bo

nuses

%  of  employees  who  trust  management

Higher  trust  =  higher  work  ethic  

Page 110: Responsible Electronics 2014 presentations

Buying companies are benchmarked on their suppliers’ performance to identify tailored action

Page 111: Responsible Electronics 2014 presentations

First signs of impact are there

Page 112: Responsible Electronics 2014 presentations

Dialogue is improving in a group of suppliers!

Management better informed and able to justify directions

Compromises and improvements

are made

Management more pro-active in seeking employees opinions

Workers feel engaged and share their true concerns

Workers understand pragmatic solutions, open to compromise

Workers and management satisfied

on positive engagement

Page 113: Responsible Electronics 2014 presentations

Positive experiments in workers’ representatives systems!

Page 114: Responsible Electronics 2014 presentations

First signs of improved working conditions

Page 115: Responsible Electronics 2014 presentations

Worker  Turnover  (%)   Worker  turnover  is  now  showing  a  clear  downwards  trend,  which  is  even  more  significant  if  seasonal  spikes  at  CNY  and  summer  workers  are  considered.  

 

 

Turnover is showing a downwards trend, from 16,5% to 14%

Page 116: Responsible Electronics 2014 presentations

Challenges for the future

Page 117: Responsible Electronics 2014 presentations

Not all companies see (yet) the (business) benefits of their investments in dialogue!

Page 118: Responsible Electronics 2014 presentations

Key is to further identify and strengthen the link between social and business performance!

Business  performance  

Social  performance  

Page 119: Responsible Electronics 2014 presentations

Less w hours and/or higher wages make business sense when part of higher efficiencies (like lean)!

Higher  producZvity  &  less  hours    

Less  peaks  &  less  

overZme  

Page 120: Responsible Electronics 2014 presentations

Higher efficiencies require worker engagement & dialogue providing insights for smarter processes!

Less  rework  &  smart  

efficiencies  

Worker  engagement  

&  input  

Page 121: Responsible Electronics 2014 presentations

Advanced dialogue is a key pillar for managing risk.

In productivity improvement theory & practice dialogue is also

a key pillar for higher business performance.

Linking business performance to social performance is the unlocking move to increase impact in the supply chain.

Page 122: Responsible Electronics 2014 presentations

HP final assembly, China

Page 123: Responsible Electronics 2014 presentations

October  2nd  ,  EICC  Conference,  San  Francisco,  Philips  Group  Procurement    123  

Beyond  audiZng,  what’s  next?  EICC  event  Burlingame  

 

Marcel  Jacobs      Director  Supplier  Sustainability,  Philips  Group  Procurement  October  2nd,  2014    

Page 124: Responsible Electronics 2014 presentations

October  2nd  ,  EICC  Conference,  San  Francisco,  Philips  Group  Procurement    124  

The  world  around  us  is  rapidly  changing,  what  are  we  waiZng  for?  Will  we  decide  our  direcZons  and  target  areas  or  will  others  do  so?  

Page 125: Responsible Electronics 2014 presentations

October  2nd  ,  EICC  Conference,  San  Francisco,  Philips  Group  Procurement    125  

How  effecZve  is  your  supplier  sustainability  audit  program?  New  strategy  developed  towards  end2end  collaboraZon  and  conZnuous  improvement  

Today;  •  Recognize  limita@ons  of  audits  •  IdenZfy  new  approaches  to  manage    impact  and  structural  improvement  

 Tomorrow;  •  Drive  operaZonal  excellence  by  engaging  your  supplier’s  employees  (Dialogue)  

•  Support  supplier’s  HRM  skills  and  systems  (Capability)  

•  Develop  relaZonships  with  NGO’s  and    trade  unions  (Understanding)  

•  Implement  scorecard  (Transparency)  

Page 126: Responsible Electronics 2014 presentations

October  2nd  ,  EICC  Conference,  San  Francisco,  Philips  Group  Procurement    126  

Stakeholders  want  to  see  improvements  Shareholders  increasingly  want  a  sustainable  and  transparent  Supply  Chain  (ESG)  

Page 127: Responsible Electronics 2014 presentations

October  2nd  ,  EICC  Conference,  San  Francisco,  Philips  Group  Procurement    127  

Summarizing  

Audit  Supplier’s  Social  Compliance  

IDH-­‐WMD  v1.0  

Manage  Impact;    Address  Social  and  Business  Value  Add  

Today   Tomorrow  

Page 128: Responsible Electronics 2014 presentations

October  2nd  ,  EICC  Conference,  San  Francisco,  Philips  Group  Procurement    128  

Thank  you    

[email protected]  

Page 129: Responsible Electronics 2014 presentations

HP final assembly, China

Page 130: Responsible Electronics 2014 presentations

VECTRA International – Enabling Positive Impact

[email protected]

Huge, complex, interwoven "   Agriculture / Manufacturing / Services

ü  (information / human)

"   An industry made up of companies that primarily earn revenue through providing intangible products and services (ref. Bus. Dic)

"   4 characteristics: ü  Intangibility: services deliver performances not physical objects. ü  Perishability: service capacity cannot be stored for sale in the

future. ü  Inseparability: Services are generally created or supplied

simultaneously. ü  Variability: Services are highly variable. Their quality depends on

who provides them and when and where they are provided

130

Page 131: Responsible Electronics 2014 presentations

VECTRA International – Enabling Positive Impact

[email protected] 131

Sources WorldBank / IMF) 2014: 1.2 billion people

Page 132: Responsible Electronics 2014 presentations

VECTRA International – Enabling Positive Impact

[email protected]

Pulling apart the complexity "  A different way to distinguish

ü Retail/consumer support ü Direct facilities “product” support ü Human resource support ü “IP”, mgmt, communications support ü Secondary support

"  Global Industry Classification Standard (GICS) / Industry Classification Benchmark

132

Page 133: Responsible Electronics 2014 presentations

VECTRA International – Enabling Positive Impact

[email protected]

Risks are very different "   Retail/consumer support

ü  Telecentres/retail centres ->L/E

"   Direct facilities “product” support ü Catering/maintenance – L/EHS

"   Human resource support ü  Labor agents/security agents –> L/E

"   “IP”, mgmt, communications support ü Design/marketing/consultants ->E

"   Secondary support ü  Travel/hospitality -> ???

Thought: risk prioritize based on narrow Global Industry Classification Standard (GICS) / Industry Classification Benchmark within EICC membership scope

133

Page 134: Responsible Electronics 2014 presentations

HP final assembly, China

Page 135: Responsible Electronics 2014 presentations

The ISS Way

October 2014

Page 136: Responsible Electronics 2014 presentations

Who are we?

"   Global leader in facility services offering single, multi and integrated services

"   Presence in 50+ countries

"   Self delivery capabilities with more than 530,000 employees globally

"   Site based business for approximately 80% of revenues

"   Recurring 75-80% portfolio based revenues offering strong revenue visibility

"   Growing share from

"   Emerging markets

"   Integrated facility services (IFS)

"   Global/regional contracts

Facilities Management (FM)

Support

Security

Cleaning

Catering

Property

136

Page 137: Responsible Electronics 2014 presentations

Single service

Single service

Single service

Single service

How we differentiate ourselves

137

Facility Management

Subcontractor

Subcontractor

Subcontractor

Subcontractor Facility

Management Provider

or So

lutio

ns to

out

sour

ce

Value added offering "  Credible and effective risk

management, including HSE and local labour law management

"  Brand protection

"  Efficiencies and financial certainty

"  Sustainability and transparency

Delivery capabilities "  Single Service Excellence

"  Consistent delivery globally

"  Flexible delivery model

What the customer needs

Integration of services "  One point of contact -

convenience

"  Further efficiencies

Self-delivery

Page 138: Responsible Electronics 2014 presentations

Corporate Responsibility

"   We are signatory to the United Nations Global Compact

"   TEN universally accepted principles in the areas of:

"   Human Rights

"   Labour

"   Environment

"   Anti-Corruption

Page 139: Responsible Electronics 2014 presentations

Stakeholder assessment

139

Page 140: Responsible Electronics 2014 presentations

Material issues

140

Page 141: Responsible Electronics 2014 presentations

CR issues

Human rights Labour rights

Environment Anti-corruption

Health & safety

Work time overtime Security

Responsible sourcing

Freedom of association

Child Labour Discrimination Wage

Harassment

Chemicals

Waste

Water

Energy

Page 142: Responsible Electronics 2014 presentations

THANK YOU

Page 143: Responsible Electronics 2014 presentations

HP final assembly, China

Page 144: Responsible Electronics 2014 presentations

United  States  29  Canada  3  Mexico  1  Panama  3  Colombia  2      

Brazil  3  Nicaragua  2  Netherlands  2  United  Kingdom  7  Italy  1    

Denmark  1  Germany  7  Spain  12  Portugal  3  Serbia  1    

France  4  Morocco  4  Poland  1  Bulgaria  1  India  5    

Philippines  12  Australia  1  New  Zealand  2  

Sitel  global  footprint  Sitel’s  soluZons  span  110+  domesZc,  nearshore  and  offshore  centers  in  23  countries  across  North  America,  South  America,  Europe,  Africa  and  Asia  Pacific.  

Founded  

1985  

Countries  23+   LocaZons  

110+  

Revenues  

$1.4b  

Employees  58,000  

Languages  40  

Page 145: Responsible Electronics 2014 presentations

Experience  shared.    

-­‐  145  -­‐  

Challenges  •  Global  versus  local  approach  •  Respect  to  local  differences  (client  local  

requirements  and  legal/regulatory  obligaZons)  •  Consistency  across  a  global  footprint  •  Raising  awareness  globally    (embedding  

standards  with  new  recruits)  •  Local  ownership  of  the  program  •  MulZple  industries  •  MulZple  standards  –  SMETA/EICC    •  Global  deployment  (flexible  and  scalable  

framework)  

Page 146: Responsible Electronics 2014 presentations

Experience  shared.    

-­‐  146  -­‐  

Global  management  system  

•  Legal  and  other  requirements  •  Risk  Assessments  

•  Improvement  objecZves,  plans  and  measures  

Do    How  we  do  it?  

•  Management  accountability  and  responsibility    

(Management  Review)  

Plan    What  we  need  to  do?  

•  Management  accountability  and  responsibility  

•  Processes  and  Procedures  •  Training  and  CommunicaZon  

•  Employee  parZcipaZon  

Check    Have  we  done  it?  

•  Audits  and  Assessments  •  CorrecZve  AcZon  Process  

•  Employee  Feedback  •  Documents  and  Records  

Act  How  are  we  managing  it?  

Plan

Check Act

Do

Page 147: Responsible Electronics 2014 presentations

Experience  shared.    

-­‐  147  -­‐  

OHS  risk  assessment  •  Summary  table:  high  level  overview  of  the  

potenZal  risks  and  required  treatment  

 

Page 148: Responsible Electronics 2014 presentations

Experience  shared.    

-­‐  148  -­‐  

OHS  risk  assessment  •  Assessment  of  the  level  of  control  for  each  risk  

area  (feeds  back  to  the  summary  table)  

Page 149: Responsible Electronics 2014 presentations

Experience  shared.    

-­‐  149  -­‐  

SR  risk  assessment  •  Assessment  of  the  level  of  control  for  each  risk  

area  (feeds  back  to  the  summary  table)  

Page 150: Responsible Electronics 2014 presentations

Experience  shared.    

-­‐  150  -­‐  

Risk  management  •  Risks  are  rated  based  on  the  impact,  the  

probability/prevalence  and  the  current  control  level  

•  Simplified  CAPR  approach:    •  Social  Responsibility    

>  Labour    (05  risk  areas)  >  Ethics  -­‐  AnZ  CorrupZon  (06  risk  areas)  >  Ethics  -­‐  Human  Rights    (14  risk  areas)  

•  Environmental  >  Pollutants    (10  risk  areas)  

•  Health  &  Safety  >  Hazards    (27  risk  areas)  

Page 151: Responsible Electronics 2014 presentations

Experience  shared.    

-­‐  151  -­‐  

How  could  EICC  help?  •  Single  audit  for  EICC  members  operaZng  in  the  

same  locaZon  •  Lighter/targeted  approach  for  service  providers  

(applicability/risk  weighZng)  •  Standardize  contractual  requirements  •  Accept  comparable  standards,  subject  to  

minimum  principles  (SMETA)  

Page 152: Responsible Electronics 2014 presentations

HP final assembly, China

Page 153: Responsible Electronics 2014 presentations

Intel Confidential — Do Not Forward

Look Inside, Explore Intel

Anisha Ladha

October 2, 2014

Page 154: Responsible Electronics 2014 presentations

Explore: What we will Cover Today •  Company Snapshot •  Sustainability Approach •  Transparency •  Shift the Transparency Paradigm •  Current State •  Improvements •  Challenges •  What is Next •  Engaging for a Sustainable Future

154

Page 155: Responsible Electronics 2014 presentations

Intel Snapshot

Year founded: 1968

Number of employees: >107,000

Revenues: $52.7 Billion (2013)

Products and services: over 450

Stock symbol: INTC

Worldwide offices and facilities: 294

Intel is the world's leading innovator in advanced silicon technology, with more than 40 years of leadership in computing and communications.

According to BusinessWeek and Interbrand Intel is the world’s 5th most valuable brand

The Intel audio signature is heard somewhere in the world every five minutes

“In the coming decade, Intel will create and extend computing technology to connect and enrich the life of every person on earth.”

Page 156: Responsible Electronics 2014 presentations

Caring for the People and the Planet

Our approach for the coming decade •  Pursuing a gentler footprint •  Innovation for the planet •  Engaging for a sustainable future

Intel’s Approach to Sustainability

Page 157: Responsible Electronics 2014 presentations

We estimate that Intel technology will enable the billion PCs and servers installed between 2007 and 2014 to consume half the energy and deliver 17 times the compute capacity of the first billion PCs and servers.

157

Hi-K Metal Gate

Strained Silicon

3D Transistors

65 nm

45 nm

32 nm

22 nm

14 nm

10 nm

7 nm

90 nm

Enabling new devices with higher functionality and complexity while controlling power, cost, and size

Executing to Moore’s Law

Page 158: Responsible Electronics 2014 presentations

1968 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

A History of Transparency

Driving continuous improvement in performance and governance

GRI

GRI G2

GRI G3

First EHS report and public goals

Stakeholder engagement and ‘SRI road shows’

CSR business function

Board-level responsibility established

First full CSR report

Culture & values established

CSR in ‘global strategy on a page’ & link pay with CSR

CSR Mgmt Review Committee

CSR blog and integration into AR/10K

GRI G3.1

CSR report limited assurance provided by Ernst & Young

10th CSR report

Explore Intel

Page 159: Responsible Electronics 2014 presentations

Transparency and Engagement

Close

Heat Noise

Noise Traffic Spills

Abatement

Same City

Energy E-waste

Air pollution Water use/pollution Local infrastructure

Country Level

Global warming E-waste

Global warming Chemical

Management Water use/pollution

Fab

Product

Our Focus: The Local Community

Paradigm Shift

Page 160: Responsible Electronics 2014 presentations

The Road to Transparency

Page 161: Responsible Electronics 2014 presentations

Look Inside, Explore Intel

161 http://exploreintel.com

Page 162: Responsible Electronics 2014 presentations

Look Inside, Explore Intel New Mexico

162

http://exploreintel.com/newmexico

Page 163: Responsible Electronics 2014 presentations

New Mexico Real Time Data

163

http://exploreintel.com/newmexico

Page 164: Responsible Electronics 2014 presentations

The Road Less Travelled

164

Page 165: Responsible Electronics 2014 presentations

Look Inside, Explore Intel Ronler Acres

165

http://exploreintel.com/ronleracres

Page 166: Responsible Electronics 2014 presentations

Site Data

166

http://exploreintel.com/ronleracres

Page 167: Responsible Electronics 2014 presentations

Site Quarterly Data

167

http://exploreintel.com/ronleracres

Page 168: Responsible Electronics 2014 presentations

Ronler Acres Photo Gallery

168

/

Page 169: Responsible Electronics 2014 presentations

Ronler Acres Video Gallery

169

/

Page 170: Responsible Electronics 2014 presentations

Improvements Along the Way Changes to the Home Page Standardization Data Consistency Local Weather Information

170

Page 171: Responsible Electronics 2014 presentations

Ronler Acres Real Time Weather Data

171

/

Page 172: Responsible Electronics 2014 presentations

172

What is next…. Continuous Improvement •  Additional Standardized Reporting •  Changes to the Real Time Data

Page 173: Responsible Electronics 2014 presentations

Notification Page

173

Page 174: Responsible Electronics 2014 presentations

Engaging for a Sustainable Future

174

•  Engage with your Local Community

•  Start Small, but Think BIG.

•  Harness the Power •  Collectively we can

make a Bigger Difference.

Page 175: Responsible Electronics 2014 presentations

Thank You!

Page 176: Responsible Electronics 2014 presentations

Intel Confidential — Do Not Forward 176

Page 177: Responsible Electronics 2014 presentations

HP final assembly, China

Page 178: Responsible Electronics 2014 presentations

OFAC  and  Other  Legal  Compliance  Issues  Involved  in  Managing  Supply  

Chain  Traceability      

Peter  Lichtenbaum  Covington  &  Burling  LLP  

October  2,  2014    

A  Presenta4on  for  the  Electronic  Industry  Ci4zenship  Coali4on  (EICC)  

Page 179: Responsible Electronics 2014 presentations

Privileged  &  ConfidenZal  

Overview  I.  North  Korea  Trade  Controls  Issue  in  Dodd-­‐Frank  Reports  II.  IntroducZon  to  Trade  Controls  and  the  Office  of  Foreign  

Assets  Control  (OFAC)  III.  Specific  Issues  Related  to  Conflict  Mineral  Disclosures  

(SancZons  and  the  Specially  Designated  NaZonals  List)  IV.  Other  Legal  Compliance  Issues  V.  Best  PracZces  VI.  QuesZons  

179

Page 180: Responsible Electronics 2014 presentations

Privileged  &  ConfidenZal  

180

U.S.  Dodd-­‐Frank  Repor@ng  Requirements  Regarding  Conflict  Minerals    

•  SecZon  1502  of  the  Dodd-­‐Frank  Act  requires  public  companies  to  annually  disclose  to  the  U.S.  SecuriZes  and  Exchange  Commission  (“SEC”)  informaZon  about  their  use  of  specific  minerals  originaZng  in  the  DemocraZc  Republic  of  the  Congo  (“DRC”)  or  in  countries  adjoining  the  DRC.      

•  Companies’  enZre  global  supply  chains  are  subject  to  this  due  diligence  requirement.    

•  Regulated  Minerals:    Gold,  tantalum,  Zn  and  tungsten  

•  Regulated  Countries:    Angola,  Burundi,  The  Central  African  Republic  (“CAR”),  The  Republic  of  Congo,  The  DemocraZc  Republic  of  Congo,  Rwanda,  South  Sudan,  Tanzania,  Uganda,  and  Zambia  

Page 181: Responsible Electronics 2014 presentations

Privileged  &  ConfidenZal  

181

U.S.  Dodd-­‐Frank  Repor@ng  Requirements  Led  to  Trade  Controls  Issue  for  Companies  

•  In  their  Dodd-­‐Frank  conflict  mineral  disclosure  reports,  several  companies  listed  North  Korea’s  central  bank  as  a  gold  refiner  in  their  supply  chain.    

•  U.S.  trade  controls  law  includes  sancZons  prohibiZng  the  import  of  materials  from  North  Korea,  regardless  of  where  in  the  supply  chain  the  materials  are  introduced  or  what  form  the  materials  take  when  received  by  end-­‐users.    

•  The  companies  involved  have  since  conducted  further  invesZgaZon.    As  publicly  reported,  some  determined  that  their  products  did  not  contain  gold  from  a  North  Korean  smelter.    Others  determined  that  any  use  of  a  North  Korean  refiner  occurred  more  than  five  years  ago.    

The Importance of Knowing Your Supply Chain

Page 182: Responsible Electronics 2014 presentations

Privileged  &  ConfidenZal  

182

What  are  Trade  Controls?  •  Sanc@ons  (OFAC):    Generally,  prohibiZons  on  U.S.  persons’  trade,  

financial,  and  investment  dealings  with  sancZoned  markets,  enZZes,  or  persons.    SancZons  also  forbid  U.S.  persons  from  “facilita4ng”  (broadly  defined)  acZviZes  by  non-­‐U.S.  persons  that  a  U.S.  person  could  not  lawfully  engage  in.    

•  Export  Controls  (ITAR/EAR):    RestricZons  on  the  supply  of  products,  so�ware,  and  technology:  

–  To  various  countries  due  to  naZonal  security,  foreign  policy,  or  nonproliferaZon  concerns;  

–  To  idenZfied  parZes  subject  to  parZcular  restricZons;  and/or  –  For  end-­‐uses  that  raise  policy/security  concerns.  

•  Enforcement:    ViolaZons  of  trade  controls  law  can  result  in  civil  or  criminal  penalZes,  and  very  large  penalZes  have  been  imposed  by  U.S.  agencies.    Other  potenZal  consequences  include  denial  of  export  privileges  and  reputaZonal  damage.        

 

 

Page 183: Responsible Electronics 2014 presentations

The  U.S.  Treasury  Department’s  Office  of  Foreign  Assets  Control  (OFAC)  implements  regula@ons  that  may  be  implicated  by  conflict  mineral  disclosures.    •  Programs:  OFAC  issues  economic  sancZons  against  countries  and  individuals.    

–  Comprehensive  sancZons  prohibit  virtually  all  business  and  financial  dealings  with  targeted  countries:  Cuba,  Iran,  Sudan,  Syria.  

–  Other  countries  are  subject  to  more  limited  sancZons  (ex:    Burma,  North  Korea,  Russia).    

•  In  most  cases,  OFAC  regulaZons  apply  to  “U.S.  persons,”  meaning:  

–  Any  enZty  organized  under  the  laws  of  a  U.S.  jurisdicZon,  including  a  foreign  branch/office  of  a  U.S.  enZty;  

–  Any  individual  who  is  a  U.S.  ciZzen  or  permanent  resident,  wherever  located  or  employed;  and  

–  Any  individual  or  enZty  physically  present  in  the  United  States,  including  a  U.S.  branch  of  a  non-­‐U.S.  enZty.  

•  SancZons  against  Iran  and  Cuba  also  apply  to  enZZes  “owned  or  controlled,”  directly  or  indirectly,  by  U.S.  persons.     183  

Page 184: Responsible Electronics 2014 presentations

Privileged  &  ConfidenZal  

OFAC  Enforcement  Tools  and  Consequences    •  Tools:    OFAC  enforcement  acZons  

may  result  in  civil  or  criminal  penalZes.  

   

 

•  Consequences:    Significant  fines  have  been  imposed  for  OFAC  violaZons.  

•  ReputaZonal  damage  to  companies  and  individuals  can  be  significant.  

•  Internal  and  external  invesZgaZons  of  alleged  violaZons  can  be  very  disrupZve  to  business.  

184

* ITAR penalties are similar, but $500,000 maximum civil penalty. ªSomewhat different civil penalties in force for violations of Cuba and narcotics trafficking sanctions.

Page 185: Responsible Electronics 2014 presentations

Privileged  &  ConfidenZal  

OFAC  Concerns  Related  to  Conflict  Mineral  Disclosures:  Sanc@oned  Countries  

•  Companies  should  be  alert  for  any  import  or  dealing  in  products  from  the  following  OFAC-­‐sancZoned  countries,  as  these  transacZons  may  be  prohibited:    Cuba,  Iran,  North  Korea,  Sudan  and  Syria.    

•  There  are  no  de  minimis  or  substanZal  transformaZon  provisions  for  sancZons  on  Cuba  or  N.  Korea.    

•  Imports  of  Iranian  and  Sudanese  products  are  allowed  if  they  are  incorporated  into  manufactured  products  or  substanZally  transformed  in  a  third  country.  

•  The  following  Syrian  imports  are  prohibited:    Imports  involving  the  Syrian  Government  or  blocked  persons  associated  with  the  Government;  the  importaZon  of  petroleum  or  petroleum  products  of  Syrian  origin  that  are  not  incorporated  into  manufactured  products  or  substanZally  transformed  in  a  third  country  by  a  non-­‐U.S.  person.      

185

Page 186: Responsible Electronics 2014 presentations

OFAC  Concerns  Related  to  Conflict  Mineral  Disclosures:  the  Specially  Designated  Na@onals  List    

•  OFAC’s  List  of  Specially  Designated  NaZonals  (“SDN  List”)  names  individuals,  enZZes,  and  vessels  with  which  trade  is  prohibited  and  whose  assets  (property  and  interests  in  property)  are  blocked.  

–  Companies  should  consider  whether  any  enZZes  on  the  SDN  List  are  involved  in  their  supply  chain  (smelters,  refiners,  recyclers,  scrap  processors,  etc.).  

•  The  SDN  List  features  the  following  persons,  including  certain  persons  in  countries  with  conflict  minerals:  

–  EnZZes  owned  or  controlled  by  governments  of  sancZoned  countries  

–  Persons  contribuZng  to  conflict  in  the  DRC,  CAR,  S.  Sudan  and  Cote  d’Ivoire    

–  Terrorists  and  terrorist  organizaZons  –  Designated  internaZonal  drug  

traffickers,  and  those  operaZng  on  behalf  of  or  controlled  by  narcoZcs  cartels  

–  Members  of  transnaZonal  criminal  organizaZons  

–  Proliferators  of  WMD  –  Specific  vessels  and  aircra�  

186

Page 187: Responsible Electronics 2014 presentations

The  Specially  Designated  Na@onals  List  (cont’d)  •  The  50%  Rule:    According  to  

OFAC  Guidance,  blocked  persons  “are  considered  to  have  an  interest  in  all  property  and  interests  in  property  of  an  enZty  in  which  [they]  own,  whether  individually  or  in  the  aggregate,  directly  or  indirectly,  a  50%  or  greater  interest.”  

•  Therefore,  if  a  listed  person  has  an  interest  in  an  enZty  of  at  least  50%,  that  enZty  is  also  blocked,  even  if  the  enZty  itself  is  not  a  designated  party.    

 

•  Screening:    Before  engaging  in  a  transacZon,  companies  should  screen  their  products  against  the  SDN  List,  and  should  assess  whether  individuals  or  enZZes  on  the  list  may  have  a  50%  or  greater  interest  in  another  enZty  that  the  company  seeks  to  transact  with.    

•  The  SDN  List  can  be  searched  online  at:  h�ps://sdnsearch.ofac.treas.gov/Default.aspx.  

187  

Page 188: Responsible Electronics 2014 presentations

DRC  Sanc@ons    •  On  July  8,  President  Obama  signed  an  ExecuZve  Order  (“EO”)  amending  the  

DRC  sancZons  program  under  EO  13,413  of  October  27,  2006,  which  imposed  sancZons  against  persons  furthering  conflict  in  the  DRC.    The  amendments  significantly  broaden  the  criteria  that  may  be  used  to  sancZon  such  persons.      –  If  the  new  criteria  are  used  to  sancZon  addiZonal  parZes,  companies  will  be  

more  likely  to  encounter  trade  controls  issues  during  their  conflict  mineral  due  diligence  process.  

•  The  new  EO  prohibits  “any  United  States  person  (including  any  foreign  branch)”  from  conducZng  business  with  an  enZty/individual  possessing  property  or  an  interest  in  property  originaZng  from  sancZoned  parZes.    

•  The  new  criteria  include  acts  supporZng  persons  involved  in  acZviZes  that  threaten  the  peace,  security  or  stability  of  the  DRC  through  illicit  trade  in  natural  resources.          –  This  provision  appears  to  target  the  conflict  minerals  trade.  

188  

Page 189: Responsible Electronics 2014 presentations

South  Sudan  and  CAR  Sanc@ons  •  On  April  3,  2014,  President  Obama  issued  ExecuZve  Order  13,664,  authorizing  sancZons  against  parZes  engaging  in  violence,  human  rights  abuses  or  destabilizing  acZviZes  in  South  Sudan.    

•  On  May  12,  2014,  President  Obama  issued  ExecuZve  Order  13,667,  imposing  sancZons  on  five  individuals  involved  in  the  CAR  conflict  and  authorizing  sancZons  on  other  parZes  who  engage  in  acts  that  undermine  the  democraZc  process  or  insZtuZons  in  CAR  through  illicit  trade  in  CAR  natural  resources,  human  rights  abuses,  or  other  destabilizing  acZviZes  in  CAR.  

189  

Page 190: Responsible Electronics 2014 presentations

Privileged  &  ConfidenZal  

Other  Poten@al  Issues  •  Generally,  companies  should  consider  whether  

informaZon  gathered  during  the  Dodd-­‐Frank  disclosure  process  may  present  other  compliance  or  reputaZonal  issues.  

•  For  example,  anZ-­‐corrupZon  laws  such  as  the  U.S.  Foreign  Corrupt  PracZces  Act  (“FCPA”)  may  be  implicated  by  a  company’s  supply  chain  discoveries,  especially  if  a  company’s  business  requires  it  to  interact  with  government  enZZes.    Look  for  corrupZon  “red  flags.”  –  The  FCPA’s  an@-­‐bribery  provisions  forbid  the  bribery  of  

government  officials,  payments  made  for  purposes  of  influencing/inducing  a  government  official  to  act/not  act,  and  the  securing  of  improper  advantage  or  obtaining/retaining  business.    

–  The  FCPA’s  accoun@ng  provisions  require  the  keeping  of  accurate  “books  and  records,”  adequate  systems  of  accounZng  controls,  and  compliance  by  all  subsidiaries  and  affiliates.    

–  There  is  no  excep@on  for  local  customary  payments  or  common  business  pracZces.    

190

Page 191: Responsible Electronics 2014 presentations

Privileged  &  ConfidenZal  

191

Best  Prac@ces  •  Create,  implement  and  update  trade  controls  and  anZ-­‐corrupZon  compliance  programs  that  are  tailored  to  your  company’s  specific  needs,  industry,  and  geographical  scope.  

•  Ensure  that  informaZon  gathered  during  conflict  mineral  evaluaZons  is  promptly  shared  with  compliance  personnel  for  internal  review.    

•  Conduct  regular  SDN  List  screening  of  potenZal  transacZons,  and  also  screen  supply  chain  partners  that  are  included  in  dra�  Dodd-­‐Frank  reports.  

•  IdenZfy  any  supply  chain  partners  located  in  countries  of  concern.    Determine  whether  they  have  been  involved  in  producZon  in  any  way,  and  if  so,  when.  

•  Consult  legal  counsel  well  in  advance  of  SEC  conflict  mineral  filing  deadlines.      

Page 192: Responsible Electronics 2014 presentations

Privileged  &  ConfidenZal  

Ques@ons?  

Peter  Lichtenbaum  [email protected]  

202.662.5557    

 

192

Page 193: Responsible Electronics 2014 presentations

THE ELECTRONIC INDUSTRY CITIZENSHIP COALITION welcomes you to

HP final assembly, China

Page 194: Responsible Electronics 2014 presentations

Process  Manufacturing  What  companies  are  doing  to  address  

worker  safety  and  on-­‐going  challenges  

Panelists:  •  Indira  Balkissoon  –  Vice  President,  AlterEcho  and  Program  Manager  of  

Northwest  Green  Chemistry  •  Gregory  Morose  –Research  Professor,  College  of  Health  Sciences,  University  of  

Massachusetts  Lowell  and  Research  Manager,  Toxics  Use  Reduction  Institute;  UMASS  Lowell  

•  Marcel  Jacobs  –  Marcel  Jacobs,  Director  of  Sustainability,  Philips  October  2,  2014  11:00  am  -­‐12:30  pm  

1

Page 195: Responsible Electronics 2014 presentations

HP final assembly, China

Page 196: Responsible Electronics 2014 presentations

Process  Manufacturing  Hazard/Risk  CommunicaZon  to  address  worker  safety  and  on-­‐

going  challenges  

196

Indira Balkissoon Vice President, AlterEcho

and Program Director Northwest Green

Chemistry October 2, 2014

Page 197: Responsible Electronics 2014 presentations

Hazard  and  Risk  CommunicaZon  •  Part  and  parcel  of  product  development  process  and  considers  – FuncZon  – Cost  effecZveness  – Safety  of  use  

•  Product  manager  balances  between  hazard  and  risk  for  workers  

•  Hazard  and  risk  for  workers  is  a  different  evaluaZon  than  for  consumer  exposure  

197

Page 198: Responsible Electronics 2014 presentations

Hazard  and  Risk  are  Different  

http://www.youtube.com/watch?v=_GwVTdsnN1E  

198

Page 199: Responsible Electronics 2014 presentations

OSHA’s  Hazard  CommunicaZon  Standard  

199

•  Purpose  is  to  ensure  the  knowledge  of  all  hazards  that  exist  in  the  workplace  and  all  hazards  associated  with  use  or  the  presence  of  chemicals  on  a  worksite  is  transmitted  or  provide  to  all.  

Page 200: Responsible Electronics 2014 presentations

OSHA  Hazard  CommunicaZon  

200

•  Performance  Standard  •  This  means  that  employees  need  to  know  and  be  able  to  idenZfy  hazards  in  their  workplace  and  about  all  hazardous  chemical  used  and  stored  in  their  workplace.  

Page 201: Responsible Electronics 2014 presentations

Employee  Required  Knowledge  

•  All  of  the  Hazards    (physical,  energy,  radiation,  etc.)  •  All  of  the  Hazardous  Chemicals  (list  of  chemicals)  •  There  is  a  written  Hazard  CommunicaZons  Program  and  where  to  find  it.  •  Appropriate  level  of  HazCom  Training  is  provided  for  ALL  Employees.  •  How  to  find  (M)SDSs  for  all  chemicals  in  the  workplace.  •  How  to  read,  interpret  and  understand  (M)SDSs  and  where  to  find  health  

information  on  the  (M)SDS.  •  How  to  obtain  proper  labels  for  any  chemicals  placed  into  new  

containers.  

What  every  employee  MUST  KNOW  about  their  workplace:      

Page 202: Responsible Electronics 2014 presentations

Hazard  CommunicaZon  

202

•  Can  create  more  fear  rather  than  easing  a  workers  mind.  

•  It  doesn’t  provide  information  to  tell  the  producZon  manager  or  worker  the  type  of  danger  the  worker  is  actually  in.  

•  Hazard  doesn’t  care  about:  – Degree  or  how  a  worker  is  exposed  or  to  what  extent  the  chemical  is  absorbed  by  the  body  

Page 203: Responsible Electronics 2014 presentations

Risk  CommunicaZon  

203

•  The  likelihood  of  harm:  – How  exposures  occur?  – Degree  exposed?  – PotenZal  to  elicit  adverse  effects?  

•  This  information  assists  the  producZon  manager  to  make  informed  decisions  on  how  to  protect  workers  -­‐  engineering  controls  and  administraZve  controls.  

•  Dose  Makes  the  Poison  

Page 204: Responsible Electronics 2014 presentations

TCE  Example  •  Trichloroethylene  

– Pervasive  • Widespread  use  as  industrial  solvent  •  Historical  disposal  pracZces  •  Persistence  in  groundwater.  

– Exposure  •  Ingestion  of  drinking  water  •  Dermal  exposure/inhalaZon  while  bathing  •  InhalaZon  of  indoor  air  –  Vapor  Intrusion  

204

Page 205: Responsible Electronics 2014 presentations

TCE  Air  Standards  

205

•  Commercial/OccupaZonal  Standards  – USEPA:  RfC  =  2  ug/m3  

– OSHA:  PEL  =  100  ppm  =  537,000  ug/m3  

– OSHA:  5  min  max  =  300  ppm  =  1,611,000  ug/m3  

– NIOSH:  TWA(10hr)  =  25  ppm  =  134,250  ug/m3  

– ACGIH:  TLV  (8hr)  =  50  ppm  =  268,500  ug/m3  

– ACGIH:  STEL  =  100  ppm  =  537,000  ug/m3  

Page 206: Responsible Electronics 2014 presentations

Assessing  and  CommunicaZng  Risk  •  Requires  a  mulZdisciplinary  team  to  idenZfy  and  monitor  potenZal  sources  of  emissions  –  including  toxicologists,  risk  assessors,  groundwater  and  vapor  intrusion  experts  to  assess  and  measure  risk  to  support  producZon  manager  decision-­‐making.  

•  ProducZon  manager  make  an   informed  decision  on  when  and  how  to  inform  potenZally  exposed  workers  –  before  or  after  sampling?  

•  If  necessary  the  installaZon  engineering  and  administraZve  controls  to  manage  work  place  exposures.   20

6

Page 207: Responsible Electronics 2014 presentations

Elimination  12  Principals  of  Green  Chemistry  

•  Prevention  •  Atom  Economy  •  Less  Hazardous  Chemical  

Syntheses  •  Designing  Safer  Chemicals  •  Safer  Solvents  and  Auxiliaries  •  Design  for  Energy  Efficiency  •  Use  of  Renewable  Feedstocks  •  Reduce  Derivatives  •  Catalysis  

•  Design  for  DegradaZon  •  Real-­‐Zme  Analysis  for  

Pollution  Prevention  •  Inherently  Safer  Chemistry  

for  Accident  Prevention  

2

* Anastas, P. T. and Warner, J. C. Green Chemistry: Theory and Practice. Oxford University Press: New York, 1998, p. 30.

Page 208: Responsible Electronics 2014 presentations

AlterEcho  

208

Indira  G.  Balkissoon  [email protected]  

703-­‐818-­‐3243  

Page 209: Responsible Electronics 2014 presentations

HP final assembly, China

Page 210: Responsible Electronics 2014 presentations

Responsible  Electronics  Conference:  Reducing  Toxic  Chemical  Use  Greg  Morose  Toxics  Use  Reduction  Institute:  Research  Manager  University  of  Massachusetts  Lowell:  Research  Professor   October  2,  2014  

Page 211: Responsible Electronics 2014 presentations

Toxic  Chemical  Use  

Manufacturing  Process  

In-­‐plant  treatment  recycling,  inventory  

Byproduct  

Toxic  Chemical  

Product  

Releases/Emissions  

Page 212: Responsible Electronics 2014 presentations

Toxic  Chemical  Use  in  Massachusetts  (2012)  

Manufacturing  Process  

895  million  lbs.  

Releases/Emissions  

33  million  lbs.  

(TRI,  National  3.6  billion  lbs.)  

In-­‐plant  treatment  recycling,  inventory  

Byproduct  

Toxic  Chemical  

Product  

318  million  lbs.  

Page 213: Responsible Electronics 2014 presentations

Occupational  Deaths  &  Illnesses  “American  workers  use  tens  of  thousands  of  chemicals  every  day.  While  many  of  these  chemicals  are  suspecte  of  being  harmful,  only  a  small  number  are  regulated  in  the  workplace.   As  a  result,  workers  suffer  more  than  190,000  illnesses  and  50,000  deaths  annually  related  to  chemical  exposures.1  Workplace  chemical  exposures  have  been  linked  to  cancers,  and  other  lung,  kidney,  skin,  heart,  stomach,  brain,  nerve,  and  reproducZve  diseases.”  

d  

https://www.osha.gov/dsg/safer_chemicals/  

Page 214: Responsible Electronics 2014 presentations

Solutions  

Source  reduction  

Control  mechanisms  

Hierarchy  of  Hazard  Controls  

Page 215: Responsible Electronics 2014 presentations

Control  Mechanisms  Don’t  Always  Work  

Coa@ng  Opera@on  Fined  $341K  Tuesday,  September  9,  2014  

“Workers  repeatedly  inhaled,  absorbed  and  even  ingested  toxic  hexavalent  chromium  through  a  variety  of  coating  tasks  at  an  Oklahoma  contractor,  federal  authorities  are  alleging.  

The  Occupational  Safety  and  Health  Administration  has  cited  Pride  Plating  Inc.  of  Grove,  OK,  with  38  violations—including  nine  repeat  violations—and  fined  the  company  $341,550.”  

“At  Pride  Plating,  workers  were  exposed  to  hexavalent  chromium  through  spray  painting  and  dip  tank  operations,  and  in  the  lunchroom  and  smoking  areas.”  

http://www.paintsquare.com/news/?fuseaction=view&id=11965&nl_versionid=231  

Page 216: Responsible Electronics 2014 presentations

Source  Reduc@on  Techniques  

Elimination  and  Substitution  achieved  by:  

1.  Manufacturing  Process  Chemical  Substitution  2.  Product  Redesign/Reformulation  3.  Manufacturing  System  Change  

7

Page 217: Responsible Electronics 2014 presentations

1.  Manufacturing  Process  Chemical  Substitution  

Replacing  a  toxic  substance  or  raw  material  used  in  a  manufacturing  process  with  a  less  toxic  substance.  

Case  Study:  V.H.  Blackinton  and  Co.  A  manufacturer  of  metal  badges  and  medals  substituted  solvent  

(trichloroethylene:  TCE)  parts  cleaning  with  aqueous  based  cleaning.  

Case  Study:    Crane  and  Company  

A  manufacturer  of  paper  modified  the  process  chemistry  of  its  re-­‐pulping  operations  by  using  liquid  carbon  dioxide  instead  of  sulfuric  acid.  

Page 218: Responsible Electronics 2014 presentations

2.  Product  Redesign/Reformulation  Reformulating  or  redesigning  end  products  to  be  non-­‐toxic  or  less  toxic  

upon  use,  release  or  disposal.  

Case  Study:  Hampden  Papers  A  manufacturer  of  paper,  aluminum  foil,  and  plastic  films  reformulated  various  coatings  used  on  their  productsand  eliminated  the  use  of  ethylene  glycol  monobutyl  ether.  

Case  Study:    Alpha  Gary  Corporation  

A  manufacturer  of  plastic  compounds  reformulated  their  products  for  the  wire  and  cable  industry  to  reduce  their  use  of  lead  heat  stabilizers.  

Page 219: Responsible Electronics 2014 presentations

3.  Manufacturing  System  Change  Developing  and  using  manufacturing  equipment/processes  of  a  different  

or  more  modern  design  than  those  currently  used.  

Case  Study:  Crest  Foam  A  manufacturer  of  flexible  foam  installed  a  new  foam  blowing  system  which  resulted  in  the  elimination  of  methylene  chloride.  

Case  Study:    ChemGenes  Corporation  

A  supplier  of  products  related  to  DNA  synthesis  installed  a  new  chromatography  system  that  reduced  their  use  of  chloroform  (55%)  and  

hexane  (35%).  

Page 220: Responsible Electronics 2014 presentations

Alternatives  Assessment  A  process  for  identifying,  comparing  and  selecting  safer  alternatives  to  using  chemicals  of  concern.  

Environmental,  Health,  &  Safety  

Financial  Technical  

performance  

Page 221: Responsible Electronics 2014 presentations

Alternatives  Assessment  

12

EHS   Financial/Economic   Technical  Performance  

Is  it  safer?   Is  it  affordable?   Will  it  work?  

• Flammability?  • Human  toxicity?  • Animal  toxicity?  • Ozone  depleZon?  • Persistence?  • BioacummulaZve?  • Etc.  

• Materials?  • Regulatory  compliance?  •  Insurance?  • Training?  • Equipment?  • UZliZes/energy?  • Etc.  

•  Equipment/process  changes?  

•  Industry  standards?  •  Material  compaZbility?  •  Product  quality?  •  Product  longevity?  •  Customer  specificaZons?  •  Etc.  

Page 222: Responsible Electronics 2014 presentations

Approaches  and  Tools  Area   Approach/Tool  

Overall  AA  methodology   •  Interstate  Chemicals  Clearinghouse  AA  Guide  •  OSHA  Steps  for  TransiZoning  to  Safer  Chemicals:  A  Toolkit  for  Employers  and  Workers  

•  TURI:  5  Chemical  AA  methodology  

Environmental,  Health,  and  Safety  EvaluaZon  

MSDS,  check  restricted  substances  list,  literature  and  database  search,  hazard  evaluaZon  (CPA  –  Green  Screen,  TURI  –  P2OASys)  

Technical  Performance  EvaluaZon  

Literature  review,  technical  expert  judgment,  performance   tesZng,   designed   experiments,  pilot/prototype  

Financial  EvaluaZon   Internal  Rate  of  Return,  Payback  Period,  Net  Present  Value  

Page 223: Responsible Electronics 2014 presentations

Industry  Collaborative  Alternatives  Assessment  Initiatives  

New England Lead-free Electronics Consortium Collaborative performance testing for safer alternatives (lead-free & halogen-free).

2001 to 2010 http://www.turi.org/Our_Work/Business/Industry_Sectors/Electronics

Defense & Aerospace Consortium Collaborative performance testing for hex chrome free topcoat primers, sealants, and bond primers. Also, safer sealant removers. 2012 – ongoing http://www.turi.org/Our_Work/Business/Industry_Sectors/Aerospace_Defense

Page 224: Responsible Electronics 2014 presentations

Massachusetts  Results  

Trichloroethylene  (TCE)  1990  –  2012  

3.65  million  pounds  to  350k  pounds  90.4%  reduction  

Toxic  Chemicals  in  Massachusetts  

Reduc@on  (1990  –  2005)  

Used  in  manufacturing   40%  

Shipped  in  products   41%  

Page 225: Responsible Electronics 2014 presentations

64  Thousand  Dollar  Question  These  

environmental  benefits  are  nice,  but  how  much  are  they  going  to  cost  

me?  

Page 226: Responsible Electronics 2014 presentations

Economic  Benefits  of  Toxics  Use  ReducZon  in  Massachusetts  Independent  study  conducted  by  Abt  Associates  Inc.  for  the  period  1990  to  1997  

Costs  •  TUR  reporZng  costs  •  TUR  fees  •  TUR  planning  costs  •  TUR  training  costs  •  TUR  capital  investments  

$76.6  million  

Savings  

Net  savings  in  annual  operaZng  costs  

$88.2  million  

http://www.turi.org/TURI_Publications/TURI_Methods_Policy_Reports/Benefit-­‐  Cost_Analysis_of_the_Massachusetts_Toxics_Use_Reduction_Act._1997  

Page 227: Responsible Electronics 2014 presentations

Academic  Research  Grants  •  TURI  provides  funding  to  University  of  Massachusetts  faculty  for  research  that  will  lead  to  new  opportunities  to  reduce  toxic  chemical  use.  

•  The  program  has  provided  over  $1.5  million  in  funding,  supporting  more  than  105  graduate  and  doctoral  level  students.  

•  Industry  partners  are  strongly  encouraged.  Dr.  Sammy  Shina:  Lead-­‐free  electronics  

Dr.  Zhiyong  Gu:  Lead-­‐free  nanowires,  nanosolder,  and  nanosolderpaste   http://www.turi.org/Our_Work/TURI_Grants/Academic_Research_Grants  

Dr.  Sanjeev  Manohar:  Green  chemistry  synthesis  of  polyaniline  surface  finishes  

Page 228: Responsible Electronics 2014 presentations

TURI’s Cleaning Laboratory •  Surface cleaning

–  Industrial parts –  Floors and building surfaces

•  Lab services –  Laboratory Testing per ASTM, Mil-

Spec, etc. –  Piloting in-lab or on-site –  Follow up technical assistance

–  Comprehensive solutions database Contact:  Jason  Marshall,  [email protected]  

www.cleanersolutions.org  

Page 229: Responsible Electronics 2014 presentations

Peer  to  Peer  Collaboration  

•  A  network  of  companies  and  other  organizations  working  collaboratively  to  advance  green  chemistry  across  sectors  and  supply  chains.  

•  80+  members  including  Dell,  Nike,  Hewlett-­‐Packard,  3M,  Staples,  Johnson  &  Johnson,  Dupont,  EMC,  etc.  

•  Conferences,  webinars,  ongoing  projects  such  as:  

–  Assessing  how  best  to  optimize  B2B  chemical  information  transactions  that  involve  CBI  concerns  

–  Working  with  retailers  to  promote  safer  chemicals,  materials  and  products  across  retail  supply  chains.  

http://www.greenchemistryandcommerce.org/  

Page 230: Responsible Electronics 2014 presentations

Toxics Use Reduction Institute

www.turi.org 600 Suffolk St

Wannalancit Mill Bldg, 5th floor Lowell, MA 01854

Greg  Morose  [email protected]  978-­‐934-­‐2954  

Thank  you  for  your  time!  

Page 231: Responsible Electronics 2014 presentations

Sources  of  Information  Toxics  Use  Reduction  Case  Studies:  http://www.mass.gov/eea/grants-­‐and-­‐tech-­‐assistance/education-­‐and-­‐  training/education-­‐and-­‐outreach/ota-­‐publications/ota-­‐case-­‐studies/   Massachusetts  Toxics  Chemical  Use  Data  (TURA  Data):  http://www.turi.org/Our_Work/Toxic_Chemicals/TURAData   PolluZon  Prevention  Options  Assessment  System  (P2OASys):  http://www.turi.org/Our_Work/Cleaning_Laboratory/TURI_Cleaning_Labo  ratory/Safety_Screening   GreenScreen  for  Safer  Chemicals:  http://www.greenscreenchemicals.org/  

Page 232: Responsible Electronics 2014 presentations

HP final assembly, China

Page 233: Responsible Electronics 2014 presentations

October  2nd,  2014_EICC  Conference  San  Francisco,  Philips  Group  Procurement              233  

Process  chemicals  EICC  event  Burlingame  

 

Marcel  Jacobs      Director  Supplier  Sustainability,  Philips  Group  Procurement  October  2nd,  2014    

Page 234: Responsible Electronics 2014 presentations

October  2nd,  2014_EICC  Conference  San  Francisco,  Philips  Group  Procurement              234  

Increase  in  demand  external  stakeholders  &  Brand  responsibility  

www.greenpeace.org  (2007)  

Page 235: Responsible Electronics 2014 presentations

October  2nd,  2014_EICC  Conference  San  Francisco,  Philips  Group  Procurement              235  

Don’t  know  doesn’t  mean  it  is  not  out  there!  EICC  survey  n  =  10  responses    

YES  %  

NO  %  

HAVE  YOU  ANALYZED  YOUR  SUPPLY  CHAIN  TO  IDENTIFY  WHERE  BENZENE  

AND  HEXANE  ARE  BEING  USED?  

In  [CATEGORY  NAME],    %  

At  [CATEGORY  NAME],%  

[CATEGORY  NAME],  %  

[CATEGORY  NAME],  %  

WHERE  IS  BENZENE  AND  HEXANE  BEING  USED?  

Page 236: Responsible Electronics 2014 presentations

October  2nd,  2014_EICC  Conference  San  Francisco,  Philips  Group  Procurement              236  

Benzene  eliminated  from  Philips’  own  operaZons  since  2012  Required  a  clear  exit  strategy  and  commitment  of  business  &  development  &  operaZons  

• Process  started  2006  to  idenZfy  usage  of  benzene  and  VOC’s  at  own  operaZons  

• Waiver  process  implemented  – Controlled  by  COO  and  CTO  – Focus  on  eliminaZon  where  no  alternaZve  available  (e.g.  wet  paint  specific  colors)  

– Usage  strict  controlled,  monitored  and  safe  and  healthy  environment  safeguarded  

– Health  checks  implemented  on  regular  basis  

•  Substances  eliminated  from  own  operaZons  include  for  example  benzene    

• New  acquisiZons  remain  point  of  a�enZon  

Page 237: Responsible Electronics 2014 presentations

October  2nd,  2014_EICC  Conference  San  Francisco,  Philips  Group  Procurement              237  

Philips’  approach  to  control  hazardous-­‐substances  in  our  supply  chain  Will  this  be  the  EICC  approach  as  well?  

IdenZfy  relevant  Hazardous-­‐Substances  

IdenZfy  applicable  manufacturing  processes  

IdenZfy  alternaZves  /  secure  safe  work  environment  

Update  Audit  protocol  

Train  Own  &  Third  party  audit  

staff  IdenZfy  and  

contact  selected  suppliers  

Train  suppliers  where  applicable  

Implement  waiver  process  

Verify  safe  use  &  health  checks  

Report  progress  

Part  of  annual  process  

e.g.  Wet  paint,  PCB/Metal  cleaning  

Philips    &  EICC  

Awareness  &  Recognize  

Annual  Report  Internal  KPI  

QuesZonnaire  site  visits,  follow-­‐up  

Secure  RACI  &  management  buy-­‐in  

E-­‐learning  &  site  visits  

QuesZonnaire  site  visits,  follow-­‐up  

Specialists  &  On-­‐site  checks  

Page 238: Responsible Electronics 2014 presentations

October  2nd,  2014_EICC  Conference  San  Francisco,  Philips  Group  Procurement              238  

PragmaZc  approach  to  avoid  unnecessary  complexity  and  paper  work  Think  in  applicaZons  and  relevant  processes  not  in  substance  list  

Example  for  illustra@on  purposes  only  

Check  Benzene

?  

Degreasing  Metal?  

Coloring  Metal?  Colored  Luminaires  

Wet  PainZng  

Powder  CoaZng  

Check  VOC’s  ?  

Applicable  product  group?  

Check  PPE/  

training  

Page 239: Responsible Electronics 2014 presentations

October  2nd,  2014_EICC  Conference  San  Francisco,  Philips  Group  Procurement              239  

What’s  next  Set-­‐up  a  specific  EICC  task-­‐force  on  process  chemicals    •  Finalize  list  of  app.  5-­‐10  relevant  substances  (Philips  and  key  stakeholders  e.g.  EICC)  

• Define  Zme  lines  (Deployment  and  roll-­‐out)  

• Assign  owners  (RACI)  

• Role  EICC  e.g.  act  as  Facilitator?  

• Role  NGO’s?  

•  Supply  base  coverage  à  supplier  selecZon  (e.g.  risk,  spend,  relevant  processes)    

•  Focus:  manufacturing  processes    

Page 240: Responsible Electronics 2014 presentations

October  2nd,  2014_EICC  Conference  San  Francisco,  Philips  Group  Procurement              240  

Thank  you    

[email protected]  

Page 241: Responsible Electronics 2014 presentations

HP final assembly, China

Page 242: Responsible Electronics 2014 presentations

“Insert” then choose “Picture” – select your picture. Right click your picture and “Send to back”.

The world’s leading sustainability consultancy

GRI and Sustainability Reporting

Presented by James Margolis and Jennifer Eastes - ERM

The world’s leading sustainability consultancy

Page 243: Responsible Electronics 2014 presentations

243 The world’s leading sustainability consultancy

243 The world’s leading sustainability consultancy

243 The world’s leading sustainability consultancy

Class Objectives

§  Become familiar with the GRI G4 guidelines

§  Discuss practical aspects of sustainability reporting

§  Share experiences and network with others

Page 244: Responsible Electronics 2014 presentations

244 The world’s leading sustainability consultancy

244 The world’s leading sustainability consultancy

244 The world’s leading sustainability consultancy

Class Facilitators

[email protected]

ERM Philadelphia

Office: 1.484.913.0405 Mobile: 1.484.343.2946

[email protected]

ERM Denver

1.303.741.5050

Page 245: Responsible Electronics 2014 presentations

The world’s leading sustainability consultancy The world’s leading sustainability consultancy The world’s leading sustainability consultancy

Overview of GRI and Reporting

Page 246: Responsible Electronics 2014 presentations

246 The world’s leading sustainability consultancy

246 The world’s leading sustainability consultancy

246 The world’s leading sustainability consultancy

What is Sustainability Reporting?

An extended, time-consuming and expensive process of unnecessary data gathering and

storytelling intended to hide problems and convince people you are a responsible corporate citizen.

Page 247: Responsible Electronics 2014 presentations

247 The world’s leading sustainability consultancy

247 The world’s leading sustainability consultancy

247 The world’s leading sustainability consultancy

What is Sustainability Reporting?

§  Systematic practice of disclosing sustainability vision, management practices and resulting performance

§  Addresses a company’s integrity, credibility, and transparency about issues beyond direct financial performance

§  Also known as corporate social responsibility, corporate citizenship, or ESG (environmental, social, governance) reporting

§  Largely a voluntary practice

Page 248: Responsible Electronics 2014 presentations

248 The world’s leading sustainability consultancy

248 The world’s leading sustainability consultancy

248 The world’s leading sustainability consultancy

Global Reporting Growth

Source: Corporate Register Does not include reports published in non-Latin scripts

Page 249: Responsible Electronics 2014 presentations

249 The world’s leading sustainability consultancy

249 The world’s leading sustainability consultancy

249 The world’s leading sustainability consultancy

Why report?

§  Meet what are increasingly basic expectations; including investors, customers, etc.

§  Control message

§  Improve reputation

§  Improve score with external raters and rankers

§  Reduce effort/cost for responding to inquiries

§  Build internal engagement

§  Refine strategy

Page 250: Responsible Electronics 2014 presentations

250 The world’s leading sustainability consultancy

250 The world’s leading sustainability consultancy

250 The world’s leading sustainability consultancy

Who might read your sustainability report?

NGOs

Customers

Policymakers and Regulators

Employees and Future Talent

Shareholders

Investors and Analysts

Media

Communities

Page 251: Responsible Electronics 2014 presentations

251 The world’s leading sustainability consultancy

251 The world’s leading sustainability consultancy

251 The world’s leading sustainability consultancy

Overview of GRI

§  Multistakeholder global non-profit

§  Initially created in 1996, officially established 1999 with the support of United Nations Environment Program

§  GRI Mission: To make sustainability reporting standard practice by providing guidance and support to organizations

§  4th generation launched in May 2013 (G4)

Globally accepted, voluntary standard for sustainability reporting

Page 252: Responsible Electronics 2014 presentations

252 The world’s leading sustainability consultancy

252 The world’s leading sustainability consultancy

252 The world’s leading sustainability consultancy

GRI G4

Page 253: Responsible Electronics 2014 presentations

253 The world’s leading sustainability consultancy

253 The world’s leading sustainability consultancy

253 The world’s leading sustainability consultancy

GRI Guidelines … key elements

§ Principles on report content and quality

§ General standard disclosures

§ Disclosures on management approach

§ Performance indicators and protocols

§  In-Accordance Model

Page 254: Responsible Electronics 2014 presentations

254 The world’s leading sustainability consultancy

254 The world’s leading sustainability consultancy

254 The world’s leading sustainability consultancy

GRI Principles

Principles for Defining Report Content

§  Materiality

§  Stakeholder inclusiveness

§  Sustainability context

§  Completeness

Principles for Ensuring Report Quality

§  Balance

§  Comparability

§  Accuracy

§  Timeliness

§  Clarity

§  Reliability

Page 255: Responsible Electronics 2014 presentations

255 The world’s leading sustainability consultancy

255 The world’s leading sustainability consultancy

255 The world’s leading sustainability consultancy

General & Specific Standard Disclosures

General:

§  Strategy and analysis (1-2)

§  Organizational profile (3-16)

§  Material Aspects and Boundaries (17-23)

§  Stakeholder Engagement (24-27)

§  Report Profile (28-33)

§  Governance (34-55)

§  Ethics and Integrity (56-58)

Specific:

■  DMA

■  Economic (EC1-EC9)

■  Environmental (EN1-EN34)

■  Labor Practices and Decent Work (LA1-LA16)

■  Human Rights (HR1-HR12)

■  Society (SO1-SO11)

■  Product Responsibility (PR1-PR9)

Page 256: Responsible Electronics 2014 presentations

256 The world’s leading sustainability consultancy

256 The world’s leading sustainability consultancy

256 The world’s leading sustainability consultancy

Core & Comprehensive Levels

Page 257: Responsible Electronics 2014 presentations

257 The world’s leading sustainability consultancy

257 The world’s leading sustainability consultancy

257 The world’s leading sustainability consultancy

Core & Comprehensive Levels

Page 258: Responsible Electronics 2014 presentations

258 The world’s leading sustainability consultancy

258 The world’s leading sustainability consultancy

258 The world’s leading sustainability consultancy

GRI Index

§  Specify which individual disclosures and indicators are subject to external assurance

§  Specify justification for any omissions

Page 259: Responsible Electronics 2014 presentations

The world’s leading sustainability consultancy The world’s leading sustainability consultancy The world’s leading sustainability consultancy

Reporting Process and Identifying Material Sustainability Issues

Page 260: Responsible Electronics 2014 presentations

260 The world’s leading sustainability consultancy

260 The world’s leading sustainability consultancy

260 The world’s leading sustainability consultancy

Why Conduct a Materiality Assessment?

§  Inform or validate sustainability strategy, programs and initiatives

§ Provide foundation for sustainability report

§ Engage with stakeholders

Page 261: Responsible Electronics 2014 presentations

261 The world’s leading sustainability consultancy

261 The world’s leading sustainability consultancy

261 The world’s leading sustainability consultancy

What is a Material Issue?

§  GRI – “… topics and indicators that reflect the organization’s significant economic, environmental and social impacts, or that would substantively influence the assessments and decisions of stakeholders.”

§  AccountAbility – “…A material issue is an issue that will influence the decisions, actions and performance of an organisation or its stakeholders.”

§  International Accounting Standards Board – “Information is material if its omission or misstatement could influence the economic decision of users taken on the basis of the financial statements.”

§  SASB – “…in the event such fact is omitted from a particular disclosure, there is a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of the information made available.”

Page 262: Responsible Electronics 2014 presentations

262 The world’s leading sustainability consultancy

262 The world’s leading sustainability consultancy

262 The world’s leading sustainability consultancy

Developing a Materiality Assessment

1. Review Business Strategy

2. Identify Stakeholders

3. Identify and Map Material Aspects

4. Prioritize Issues

5. Plot Results

6. Define Strategy and Next Steps

Page 263: Responsible Electronics 2014 presentations

The world’s leading sustainability consultancy The world’s leading sustainability consultancy The world’s leading sustainability consultancy

Roundtable Discussion

Page 264: Responsible Electronics 2014 presentations

264 The world’s leading sustainability consultancy

264 The world’s leading sustainability consultancy

264 The world’s leading sustainability consultancy

Reporting Challenges

§ Less trust than ever

§ Rising expectations, fewer resources

§ Show me and prove it

§ Defensive vs. offensive

§ One way vs. two way communication

§ Authenticity and transparency vs. risk management

§ Public relations vs. technical reporting

§ Multiple audiences

§  Integrated reporting vs. GRI reporting

§ Changing media landscape (paper, web, broadcast, social media)

Page 265: Responsible Electronics 2014 presentations

The world’s leading sustainability consultancy The world’s leading sustainability consultancy The world’s leading sustainability consultancy

Contact Information James Margolis Phone: 484.913.0405 Email: [email protected]

Jennifer Eastes Phone: 303.741.5050 Email: [email protected]

Page 266: Responsible Electronics 2014 presentations

HP final assembly, China