Carrefour - 2017 Registration Document

2 CORPORATE SOCIAL RESPONSIBILITY Supporting our partners CARREFOUR | 2017 REGISTRATION DOCUMENT 65 The charter prohibits any concealed or unreported subcontracting, and demands, as a knock-on effect, that suppliers have the same social compliance requirements for their own suppliers. Based on reciprocity, the charter states that Carrefour may not impose any conditions on suppliers that would prevent them from complying with the charter. Moreover, Carrefour undertakes to support its suppliers as much as possible in implementing these social principles, specifically by deploying corrective measures in the event of non-compliance. To identify the countries most likely not to comply with the charter, Carrefour has established a country-by-country risk map based on public risk indexes, the experience of its own teams and information from its partners. This mapping is currently being revised as part of the risk assessment programme. In high-risk countries, the Group conducts full social audits on all plants that manufacture Carrefour-brand products. The audit process is as follows: preliminary review: the sourcing teams perform on-site checks 1. to verify if the plant complies with basic social, environmental and quality requirements. This is the first key stage in the process; initial audit: an independent firm performs an unannounced 2. social audit. If the plant complies sufficiently with the standard defined by the social clause initiative (initiative clause sociale – ICS), it may be added to the list of suppliers. A report and accompanying action plan are issued systematically to correct any instances of non-compliance or to make improvements to any identified areas of weakness. If the audit findings contain an alert, i.e., a critical point of non-compliance, the supplier will not be added to the list in its current state. The alerts, defined using ICS methodology, reflect cases including child labour, forced labour, disciplinary measures, attempted corruption, document falsification, and safety conditions threatening the lives of workers; follow-up audit: once added to the list of suppliers, 3. unannounced follow-up audits are carried out periodically by independent firms. The frequency of these audits depends on how critical the non-compliance points recorded were during previous audits. Carrefour carries out second-opinion audits on a regular basis to ensure its requirements are being correctly complied with by the independent firms employed. If the follow-up audit findings contain an alert, the supplier must take immediate corrective action. An inspection is then carried out within a reasonable timeframe to ensure the corrective action has been taken; specific audit: Carrefour may hire an external firm to check 4. one-off or specific items, as with the Bangladesh Accord signed in 2013 by a coalition of international brands and the biggest trade unions to promote fire safety and the safety of buildings in the country. For suppliers located outside high-risk countries, the inspection system is adapted to take the business, local problems and on-site practices into account, as external audits are not performed systematically. Carrefour trains its suppliers in partnership with consultants or local NGOs. Carrefour Sourcing teams roll out specific training programmes every year. Carrefour has also created the Good Factory Standard manual for training purposes. Broken down by industry and/or type of product (household goods, textiles, wood, leather, etc.), it contains photographs to ensure that all factory workers can understand it, regardless of their geographic location or level of education. Carrefour is also committed to harmonising the various social verification systems in place and developing shared instruments and standards for implementing international labour standards. This is one of the reasons Carrefour uses the ICS standard, a benchmark shared by 27 French companies. To go even further, it worked on a business social compliance programme (BSCI) pilot scheme in 2017. With the UN, the Group is also lending its support to the drafting of legally binding universal corporate and human rights standards, as well as more demanding European standards. Carrefour’s performance Carrefour has performed compliance audits on all supplier factories located in high-risk countries. The audit is not an end in itself, but rather a tool that paves the way for dialogue and the implementation of a compliance plan to bring the supplier’s working conditions in line with requirements. In 2017, the audits conducted by the Group covered just over 700,000 workers in the factories audited. The Group is continuing with its efforts to stabilise its list of suppliers. More than 60% of audits were conducted to follow up on the implementation of action plans or as part of regular repeat audits of existing suppliers (every two years at most).