Philips 2012 Annual Report Download - page 54

5 Group performance 5.2.10 - 5.2.10
54 Annual Report 2012
As a leading company in sustainability, Philips will act as a
catalyst and support our suppliers in their pursuit of
continuous improvement of social and environmental
performance. We recognize that this is a huge challenge
requiring an industry-wide effort in collaboration with
other societal stakeholders. Therefore, we remain active,
together with peers in the industry, in the Electronic
Industry Citizenship Coalition (EICC) and encourage our
strategic suppliers to join the EICC too. We will also
continue to seek active cooperation and dialogue with
other societal stakeholders including governments and
civil society organizations, either directly or through
institutions like the EICC, the multi-stakeholder program
of the Sustainable Trade Initiative IDH, and the OECD.
Supplier Sustainability Involvement Program
The Philips Supplier Sustainability Involvement Program is
our overarching program to help improve the
sustainability performance of our suppliers. We create
commitment from our suppliers by requiring them to
comply with our Regulated Substances List and the Philips
Supplier Sustainability Declaration, which we include in all
purchasing contracts. The Declaration is based on the
EICC code of conduct and we added requirements on
Freedom of Association and Collective Bargaining. The
topics covered in the Declaration are listed below.
• Freely Chosen Employment
• Child Labor Avoidance
• Working Hours
• Wages and Benefits
• Humane Treatment
• Non-Discrimination
• Freedom of Association
Labor
• Occupational Safety
• Emergency Preparedness
• Occupational Injury and Illness
• Industrial Hygiene
• Physically Demanding Work
• Machine Safeguarding
• Sanitation, Food, and Housing
Health and Safety
Environmental Ethics
• Environmental
Permits and Reporting
• Pollution Prevention and
Resource Reduction
• Hazardous Substances
• Wastewater and Solid Waste
• Air Emissions
• Product Content Restrictions
• Business Integrity
• No Improper Advantage
• Disclosure of Information
• Intellectual Property
• Fair Business, Advertising
and Competition
• Protection of Identity
• Responsible Sourcing of
Minerals
• Privacy
• Non-Retaliation
• Company Commitment
• Risk Assessment and Risk
Management
• Management Accountability
and Responsibility
• Improvement Objectives
• Legal and Customer
Requirements
• Training
• Communication
• Corrective Action Process
• Worker Feedback and
Participation
• Documentation and Records
• Audits and Assessments
• Supplier Responsibility
Management system
We monitor supplier compliance with the Declaration
through a system of regular audits.
2012 supplier audits in risk countries
Philips conducted 159 full-scope audits in 2012, including
four joint audits conducted on behalf of Philips and other
EICC member companies. On top of this, 65 audits of
potential suppliers were performed. Potential suppliers
are audited as part of the supplier approval process, and
they need to close any zero-tolerance issues before they
can start delivering to Philips. The number of audits done
this year is lower due to new audit criteria introduced in
2011, which place more focus on capacity building
programs to realize structural improvements.
As in previous years, the majority of the audits in 2012
were done in China. The total number of full-scope audits
carried out since we started the program in 2005 is now
close to 2,000. This number includes repeated audits,
since we execute a full-scope audit at our risk suppliers
every three years. The audit program covers 90% of our
active risk supplier base. Most of the audits done in 2012