Digitisation, connectivity and social innovation
Sustainability checks
[G4-DMA Supplier Human Rights Assessment], [G4-DMA Employment] Activities intended to verify the sustainability performance of common suppliers and sub-suppliers continued in 2016 in the framework of the Joint Audit Cooperation (JAC1) initiative, in accordance with the Memorandum of Understanding signed at the end of 2009 by TIM, Orange and Deutsche Telekom. In 2011, Proximus, KPN, Swisscom and Vodafone Group signed up to the memorandum, followed by Telenor and Telia Company (formerly TeliaSonera) in 2012, Verizon in 2013 and AT&T, Telefónica and Rogers in 2016.
The purposes of the Joint Audit Cooperation initiative are:
- to verify the sustainability of the most important suppliers/sub-suppliers that are common to the members of the JAC, with production plants located in geographical areas with a significant degree of socio-environmental risk. The checks are carried out by means of audits conducted by third parties using a specific method developed by the JAC members themselves, who share the results of the verifications;
- to contribute to the increased sustainability of suppliers/sub-suppliers involved by devising and implementing corrective actions and ongoing improvement programmes, establishing long-lasting and mutually beneficial cooperation with them in terms of efficiency, productivity and risk reduction in the supply chain.
[G4-HR4b], [G4-HR5c], [G4-HR6b], [G4-HR11c], [G4-HR11d], [G4-LA15] Between 2010
and 2016, thanks to the gradual increase in the number of members of JAC, 278 audits were carried out – including 69 in 2016 - in production plants (suppliers and sub-suppliers) located in Asia, Central and South America, North Africa and Eastern Europe. The checks were carried out through international specialised companies selected by competitive tender and related to a total of more than 743,000 workers. The suppliers included in the audit campaign belonged to the user devices and appliances, network appliances and IT equipment production sectors.
The table below shows the non-conformities recorded during audits on Group suppliers, including those relating to Human Rights.
| Environment | 2016 | 2015 | 2014 |
|---|---|---|---|
| Discriminations | 31 (23) | 27 (22) | 14 (12) |
| Business Ethics | 67 (61) | 38 (35) | 18 (18) |
| Forced Labour | 6 (4) | 8 (7) | 5 (4) |
| Child Labour | 7 (6) | 7 (5) | 8 (8) |
| Freedom of association | 8 (8) | 2 (2) | 2 (2) |
| Working Hours | 49 (36) | 33 (27) | 23 (20) |
| Pay | 17 (13) | 22 (18) | 6 (3) |
| Discipòinary proceeding | 4 (4) | 5 (4) | 4 (3) |
| Healt and Safety | 188 (167) | 130 (115) | 79 (68) |
(data relating to suppliers also operating for the Brazil BU is given in brackets)
For all the non-conformities encountered, specific corrective action plans were drawn up that established resolution procedures and timetables amongst others. The implementation of these plans is monitored on a constant basis by the JAC members2.
On 14 January 2016, Nanjing (China) hosted the fifth annual forum with suppliers involved in the JAC programme, on the matter of: “How Sustainability can accelerate the delivery of business benefits”. The event was attended by over 110 delegates, representing members of the JAC, suppliers, members of the press, entities operating in sustainability and NGOs.
2 [G4-DMA Supplier Human Rights Assessment], [G4-HR11e] As the aim of the initiative is to help suppliers in the countries at greater risk in terms of the application and respect for sustainability principles improve their performance, non- conformities always result in corrective action and not the termination of the purchase contract.