Since 1997, Carrefour has been working side-by-side with the FIDH (International Federation for Human Rights) to control social manufacturing conditions in its supply chain. In 2000, this partnership resulted in the drafting of a social charter based on the provisions of the Universal Declaration of Human Rights and the principles of the ILO. In 2010, a new version of this Charter has been released, including ethical commitments from both Carrefour and its suppliers.
All suppliers of own-brand products are now required to sign the charter. To ensure that such companies comply with the charter, especially in countries that require particular attention, we conduct social audits outsourced to independent bodies.
Encouraging support for suppliers
Auditors provide suppliers with a rating that ranges from A (compliance with the charter and implementation of best practices) to D (critical situation requiring the implementation of major corrective actions). In the event of non-compliance, suppliers have to implement a corrective action plan. Its effectiveness is then assessed during a follow-up audit. The Group gives priority to assisting suppliers experiencing difficulty in complying with the social commitments of the “Carrefour Social and Ethical Charter for its suppliers”, only removing them from supplier lists if they are in serious breach of those commitments or refuse to apply corrective measures.
Sharing audit results
Very early on, Carrefour was convinced of the need to pool tools and audit results. A decade ago, Carrefour participated in the launch of the Social Clause Initiative, which enabled French retailers to share their databases. Hosted by the FCD (Trade and Retail Federation), this database contains the results of supplier audits carried out at the request of members, all of whom have access to the results, thus avoiding unnecessary repeat audits at shared suppliers and promoting effective follow-up on corrective actions.
Convinced of the value of harmonizing standards and tools at global level, the SCI’s main participants have now joined Carrefour as part of the international GSCP (Global Social Compliance Programme). The prerequisite for healthy global international competition is the definition of common rules that are applicable to all. The fact of clarifying and sharing the concept of social responsibility in the supply chain is a fundamental element in this exercise. Despite the ratification of ILO principles by most nations, they are, at present, not always perfectly applied in practice. Private firms clearly cannot resolve this problem by themselves, but demonstrating our common undertakings should help to raise greater awareness of each player’s responsibilities around the world. This platform, in which we have been joined by several major manufacturers, is aimed at harmonizing the systems used throughout the world and has already helped bring greater transparency and comparability to audit codes and systems.
The scale of this programme requires the participation of such civil-society stakeholders as the UNI and FIDH, which provide an additional perspective and ensure the relevance and validity of the commitments made. The FIDH has supported the Group’s policy on social responsibility in the supply chain from the outset, and in 2001 Carrefour signed a framework agreement with the UNI, undertaking to adhere to ILO principles in stores and head offices. These two historic Carrefour policies have been achieved in a constructive manner, and the fruit of this experience will be brought to bear in the GSCP.
Going further with training
Bangladesh, a training programme for management and workers on fundamental rights in the workplace, covering all plants operated by Carrefour’s suppliers, was launched in 2006. The programme was designed and organized by a local NGO, Karmojibi Nari, which was selected by the FIDH. These training sessions were intended to establish conditions that would enable the workers themselves to present demands on safety, working hours and salaries. Between 2006 and 2010, following the end of this three-year project, 56 plants had benefited from this process.
Focus on the 2009 social audit campaign
In 2009, the number of social audits and follow-up audits (39%) increased greatly compared to 2008. In the non-food department, nearly all audits are unscheduled. In the food department, this policy is more recent, and suppliers still need to be prepared for auditors’ inspections. As in previous years, working hours (overtime) and salaries are still the main areas of non-compliance. This observation highlights the limitations of the audit process and the need to support suppliers in their improvement processes. Carrefour has extended its unscheduled audit rule to all suppliers of non-food products in every risk area. This policy is even more important for follow-up audits, which allow the Group to verify that suppliers have made improvements in the noted areas of non-compliance over the long-term.
In Bangladesh, Carrefour and a local NGO continue to train employees and plant managers working for Carrefour. This policy aims to establish favourable social conditions so that workers understand their rights and can express their demands. Initial assessments already show an improvement in labour/management dialogue in these plants. In China, local teams are continuing to raise awareness among suppliers. In 2010, these efforts were continued, and previously implemented procedures were enhanced. Follow-up audits will take place more quickly when non-compliance is detected at suppliers that work with Carrefour. Training initiatives will be expanded, and social responsibility training will be offered to all Indian suppliers during the first half of the year.
Compliance with the Kimberley Process for diamond suppliers
The Carrefour Group ensures that the diamonds sold in its stores are supplied from legal sources, in line with UN resolutions, and are not“blood diamonds.” This commitment to respecting the Kimberley Process* is included in all contracts signed with suppliers.