Philips 2010 Annual Report Download - page 218

15 Sustainability statements 15.6 - 15.6
218 Annual Report 2010
Limited tolerance
• Lack of adequate management systems to safeguard compliance with
the EICC code for labor and ethics, health and safety and
environment
• Wages and benefits: payment of overtime premiums
Number of audits and non-compliances per country
Location initial audits 2010 continued conformance
audits 2010 workers employed at sites audited in 20101)
average number of
limited tolerance non-
compliances 20102)
average number of zero
tolerance non-
compliances 20102)
China 113 94 174,431 13 4
India 15 11 7,770 15 3
Indonesia 6 4 4,657 7 1
Philippines 1 − 1,627 8 6
Vietnam 2 − 42 10 −
Asia excluding China 24 15 14,096 12 3
Brazil 14 4 3,978 13 4
Mexico 7 − 2,096 17 6
LATAM 21 4 6,074 14 4
Ukraine 2 − 240 3 2
EMEA 2 − 240 3 2
Total 160 113 194,841 13 4
1) Based on information provided during audit
2) Average non-compliances per audit
The next table gives a detailed breakdown per non-compliance
category and per region of the percentage of audited suppliers where
such an issue was found.
During 2010 the majority of the zero tolerance issues were resolved
within the agreed deadlines. At the end of 2010 the identified zero
tolerance non-compliances were either resolved or within the agreed
deadline for resolution. For some zero-tolerance issues that needed
more time to resolve due to their complex nature, we agreed on an
extended deadline after detailed corrective action plans were reviewed
by the auditors. During 2010 for 14 supplier sites the phase-out
decision was taken due to, amongst others, a lack of sustainability
improvements.
China
In 2010, we conducted 207 full-scope audits in China. The major issues
identified during this year’s audits are working hours and wages and
benefits, emergency preparedness, occupational safety, hazardous
waste handling and management systems.
Working hours
Working hour issues continue to be the number one challenge among
suppliers in China due to the socio-economic climate, the economic
recovery in combination with labor shortages, especially in the
southern part of China.
In 2010 we piloted a program together with 5 Chinese suppliers to
better understand the rootcauses behind excessive overtime, ways to
structurally address the rootcauses and appropriate performance
indicators to monitor the resolution process.
More information on the Supplier Sustainability Involvement Program,
the EICC Code of Conduct and audit approach can be found at
www.philips.com/suppliers.