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Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
Responsible Electronics 2013: Beyond the Audit
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Responsible Electronics 2013: Beyond the Audit

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Presentations from our Beyond the Audit panel at the EICC conference Responsible Electronics 2013, Oct 1-3 in California.

Presentations from our Beyond the Audit panel at the EICC conference Responsible Electronics 2013, Oct 1-3 in California.

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  • Add personal intros… DK: Former mediator, company/community dialogue, experience in the Niger Delta with oil companies and communities…George: Principal researcher… (introduce himself)
  • Our entry point for the conversation … the UN Guiding Principles on Business and Human Rights… (Familiarity of Audience? Quick show of hands?)… Basic obligation on companies: Avoid infringing…
  • Not going to take you through the Guiding Principles… But want to highlight a few key elements that shape our interest in these topics…How companies can have impacts on stakeholders… cause and contribute… that was always clear… should prevent or avoid impacts… and if they occur, remediate them *GPs added concept of LINKAGE* -- that is, a company has a responsibility for impacts that it is directly linked to through its Business Relationships… including supply chain… differentiated responsibility.. Seek to prevent or mitigate (but not remediate)
  • - And in those ‘linkage’ situations: introduce the concept of leverage… Used to be that a company’s responsibility was defined by where it had leverage (or influence) over its business relationships… Under GPs… that responsibility exists independently… what you do about it depends on your leverage… that is, your ability to influence the actions of your business relationships
  • Specifically, companies are expected to conduct Human Rights Due Diligence…That is, to assess actual and potential impacts… to integrate and act on those findings, in order to prevent and mitigate… to track their performance.. And to communicate on those efforts…-- In supply chain context, HRDD for most companies is limited to the ‘compliance audit and corrective action plan’ paradigm…-- so we have a real interest in helping companies think through whether and how this is effectively meeting that responsibility… whether its achieving the desired outcomes with respect to impacts on stakeholders… and helping companies to think through how to do this more effectively
  • But when one looks at the paradigm… one is confronted by the limitations of this paradigm… borne out in company experience…1. Assessing Impacts in supply chain context requires visibility into supply chain…-- Visibility: lack of transparency around sub-contracting or sub-supplier relationships… lack of transparency around audit process, double books, etc…Addressing Impacts in supply chain context requires that there be capacity and incentives within the supplier base…-- Capacity: suppliers may not have management systems, may not have knowledge… so CAPs may not work…-- Incentives: no motivation… either internal or external… why should I? If it increases cost, you’ll go somewhere else…if it increases cost, you’re not going to pay me more3. And then there are challenges that suppliers can’t solve… even if they have the know-how and the motivation…-- Systemic/Endemic: supplier can’t solve the problem… industry-wide, government regulation or enforcement….4. And lastly in supply chain context, we’re quick to look at ‘linked’ impacts… but often fail to see as buyers our own role in contributing to those impacts…-- Purchasing Practices: Changing designs, changing orders, changing volumes… but not thinking through what that means on supplier end…Combine these… and you often see patterns of repetition… same audit findings appearing again and again… despite CAPs
  • So we know that the basic compliance audit paradigm has these limitations…but so many companies still rely solely on it because it’s considered to meet the basic expectation of companies…But we also know that it no longer reflects what leading companies are doing in response… Companies have all kinds of innovative programs to promote sustainable improvements in social performance in their supply chains…One of my colleagues was facilitating a discussion among GSCP companies… Global Social Compliance Program… and they shared all kinds of examples of these types of approaches… but weren’t collected anywhere…So that was the catalyst for this research… to try to help spark a conversation… what else are companies doing that seems to be working?- Companies like: Chiquita, Disney, H&M, HP, Marks and Spencer, Philips Van Heusen, Starbucks, Tesco,Timberland,
  • Based on these interviews… able to pull out some common themes… categorize these approaches…and share examples…
  • Three approaches that – among other things – help build trust between buyer and supplier… promote transparency and visibility into supply chain… (among other things)..1.Comprehensive Continuous Improvement: Build trust and transparency… Catch phrase… Lots of companies say they have ‘continuous improvement’ approaches… In practice, often simply means ‘we don’t terminate supplier relationships due to non-compliance, except on most egregious issues like forced labor… we don’t have a ‘three-strikes and you’re out’ policy… we hold suppliers more accoutnable for making progress on audit findings than for findings themselves…“We have two conditions: First, you have to be honest… and second, you have to commit to working with us over time to make improvements”but it can end up being a free-pass… or a race-to-the-bottom… So it has to also incentivize continuous improvement… not minimum standards… tiered supplier bases… ‘driving through the standards’… from bronze to silver to gold… from non-compliance, to minimum compliance, to good practice, to sustainable or leading practice… 2. Collaborative Assessment: Taking it one step further… to build trust in the relationship… really focus on root cause analysis… and put workers at the center… Timberland… policeman to partner… required retraining their former audit staff in new skills… able to build trust with workers and suppliers… 3. Grievance Mechanisms… Effective grievance mechanisms provide many different kinds of value… and the beauty is there’s a really strong business case to be made for them… -- Companies: see GMs as a key part of risk management processes, as an early warning system, as a ‘pressure release’ valve… they can be particularly important where organized labor is less prevalent or less mature…-- Workers: they can provide both substantive outcomes and meet process interests – being heard, being respected… -- Brands: they can provide another data point of what’s really happening on the factory floor or farm…So several companies are supporting supplier-level grievance mechanisms… Tesco – agriculture… PVH – Apparel…
  • Capacity-Building: -- Big incentive for suppliers… but also something brands and retailers want…-- Importantly, not only focused on social performance… strong correlation between good management systems and good social performance…-- a few examples of very effective supplier peer-learning forums… common challenges, shared projects… worker survey tool example…-- Good practice guides…-- Chiquita case study…These are well-thought out, structured programs…NGO Partnerships:-- capacity is only part of the story… -- also increased credibility… with suppliers, workers, and global stakeholders… -- also help to identify and understand impacts (particularly on some of the systemic or endemic – really hard – issues…-- Interestingly, features prominently in several of the case studies… Chiquita and RFA… HP and student workers, or HP in Mexico…
  • These are some of the most important challenges…deep in the supply chain… endemic and structural… individual supplier can’t fix it, even if they want to…even if they knew how to…Regulatory Change: businesses have leverage not just with their suppliers… but often with governments as well… and they can use that leverage to engage for regulatory change… H&M in Bangladesh… Living wage… we can double our presence… but government needs to work on underlying structural issues… Myanmar… Extractives… on the conditions (transparency) around which extractives bidding and contracts-- Multilateral Collaboration…
  • Transcript

    • 1. The Electronic Industry Citizenship Coalition Welcomes you to Sponsored by
    • 2. The Electronic Industry Citizenship Coalition Welcomes you to Sponsored by

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