Philips uncovers ethics violations at 138 suppliers

23 February 2012

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23 February 2012 | Angeline Albert

Philips has investigated suppliers and found excessive working hours, safety hazards and failure to pay overtime at 138 of them in 2011.

In the firm’s Annual Report 2011 published today, instances of major non-compliance with the company’s code of ethics for suppliers was found at more than half of the 212 vendors audited last year. These included seven-day working weeks, worker exposure to safety hazards such as electric shocks and blocked fire exits.

Philips identified 138 suppliers where working weeks exceeded 60 hours and a further 89 cases where workers were not provided with one day off a week. On average, the company identified 15 major non-compliances per audit. A total of 151 audits took place in China, 24 in other Asian countries, 34 in Latin America, and three in Europe, the Middle East and Africa.

“In China, there is a wide gap between legislated working hours and reality,” the report said. “Especially in regions with high shares of migrant workers, a 72-hour working week is not uncommon. While this issue is not unique to Philips, we have decided to take a step-wise approach by working with our suppliers to first reduce to a maximum of 60 work hours per week and at least one day off per week, except in emergency, or unusual, circumstances.”

Philips has also asked suppliers to submit a corrective action plan, taking into account employee turnover, seasonality, demand planning and workforce size. The company has 10,000 product and component suppliers and 30,000 service providers in total.

The annual report also revealed the business had both reduced its carbon footprint and increased its overall operational energy efficiency by 4 per cent. It has also invested more than €479 million (£405.6 million) in green innovation to address global challenges related to materials and energy efficiency.

 

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