Philips 2011 Annual Report Download - page 193

14 Sustainability statements 14.5 - 14.6
Annual Report 2011 193
The category Other
Allegations in the category Other represented 5% of reported
complaints (2010: 7%). This number also shows a decrease in
comparison with 2010, in percentage as well as actual number.
Supply Management
All employees who are performing purchasing functions should adhere
to and fully comply with the Philips Supply Management Code of Ethics.
As in the previous two years, we noticed very few alleged violations in
2011.
More information on these categories can be found in the GBP
Directives on www.philips.com/gbp.
Breakdown of alleged violations GBP
2007 2008 2009 2010 2011
Health & Safety 10 10 6 3 2
Treatment of
employees 236 197 162 184 132
- Collective bargaining 1 1 − 1 −
- Discrimination 75 76 63 64 41
- Employee development 4 8 3 1 −
- Employee privacy 9 2 2 2 1
- Employee relations 3 14 15 4 1
- Respectful treatment 115 81 53 96 71
- Remuneration 11 7 22 12 6
- Right to organize 5 − − − −
- Working hours 13 8 4 4 2
Legal 14 8 4 13 10
Business Integrity 83 62 88 112 107
Supply management 10 5 4 4 3
Other 36 78 54 22 13
Total 389 360 318 338 269
Actual violations versus not proven allegations
Although 88 of the 269 GBP complaints reported in 2011 are still
pending (especially those lodged during the last three months of the
year), the following table provides an initial indication of the number of
actual violations compared with the number of complaints which, upon
investigation, proved to be non-violations.
Of the 181 complaints investigated, it was found that roughly one third
(32%) were justified, as was the case in 2010. In 2009, almost 40% of
complaints turned out to be justified after investigation.
In the other major category, i.e. complaints regarding Treatment of
employees, there was an increase in the number of justified complaints
in 2011 to 21% of the total number of complaints in this category (2010:
17%; 2009: 25%). With regard to the investigated complaints in the
Business Integrity category, the percentage of complaints that were
justified fell to 43%, below the level of the previous two years (2010:
46%; 2009: 60%).
In 2011, the focus of the internal communication in the context of the
extended and updated anti-corruption/anti-bribery guidelines was on
the need – at all times – to report possible violations.
Classification of the complaints investigated
2009 2010 2011
category
actual
violations
not proven
allegations
actual
violations
not proven
allegations
actual
violations
not proven
allegations
Health & Safety 2 4 1 2 − 2
Treatment of employees 30 88 22 111 18 68
Legal − 2 4 7 − 5
Business Integrity 41 27 39 45 33 43
Supply Management − − 2 2 2 1
Other 22 27 10 9 3 5
Total 95 148 78 176 56 124
14.6 Supplier indicators
Philips has direct relations with approximately 10,000 product and
component suppliers and 30,000 service providers. Given the size and
complexity of our supply chain we need to focus our efforts. Therefore,
we developed an approach based on the supplier’s sustainability risk
profile related to spend, country of production, business risk and type
of supplier relationship. 634 supplier sites have been identified as risk
suppliers, including 552 product and component suppliers, and 82
service providers. Different types of service providers make up our
audit program, including labor agencies and transportation companies.
All risk suppliers are by definition part of our audit program.
2011 supplier sustainability audits
In 2011, we audited 212 of our current risk suppliers, including 75
continual conformance audits with suppliers that we already audited in
2008. Risk suppliers from all recently acquired companies are also
included, and this year we completed the audit program with suppliers
from the acquisitions of Saeco, Dixtal, and Apex. As in previous years,
the majority of the audits were done in China, representing a substantial
part of our supply base.
On top of the audits with current risk suppliers, we also audited 58
potential suppliers as part of the supplier selection process. Below we
report on the findings at existing suppliers only; findings at potential
suppliers are not included in this report since these suppliers are not
(yet) part of Philips’ supply base.