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Supply Chain Expectations
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Corporate Responsibility Expectations For Direct Suppliers
Each Mondelēz International employee must follow 10 key commitments in our Code of Conduct. Common to all of these rules is the imperative to “inspire trust” in all that we do. Underpinning our code is a comprehensive compliance and integrity program designed to ensure that we run our business consistent with our values and applicable legal standards.
We also work with thousands of suppliers, consultants and business partners around the world. Ideally, we and they will have comparably high standards of conduct. Of course, we cannot — and do not presume to — control how they run their businesses. But we certainly take pragmatic steps to align what they do for us with our own standards of fair and honest dealings.
1. SUPPLIER SELECTION AND RISK ANALYSIS
We begin with the selection process. As we evaluate suppliers, we want to be familiar with their own codes of conduct and reputations, as well as their ability to deliver quality, service and total value to Mondelēz International.
2. CORPORATE RESPONSIBILITY IN SUPPLIER CONTRACTS
Once we determine a good fit with a supplier or business partner, we develop a contract that not only provides the core commercial terms but specifically incorporates our corporate responsibility expectations (see below). For example, we would include legally enforceable provisions on child labor and worker safety. Over the next several years, we will work toward having these corporate responsibility expectations in all contracts with suppliers and business partners.
3. ASSESSING CORPORATE RESPONSIBILITY THROUGH PROGRESS
We are hardly alone in our approach as most major companies have supplier corporate responsibility requirements. Yet most companies are both suppliers and customers, leading to a proliferation of codes of conduct and assessment requests. We helped create a far simpler and better approach for society called Program for Responsible Sourcing (PROGRESS). This industry initiative allows a supplier to provide common information to its customers so each customer can independently reach business decisions in accordance with its own corporate responsibility standards.
We are currently rolling out PROGRESS to our suppliers and business partners. This is an ambitious global effort that will take several years to complete. When dealing with such an important issue as corporate responsibility, we have taken a long-term approach that we are confident puts us on the right path.
4. CORPORATE RESPONSIBILITY EXPECTATIONS (Supplier Contract Provisions)
In addition to complying with all laws and regulations, suppliers must comply with the following in connection with the goods and services provided to Mondelēz International:
Forced Labor. Supplier will not use any forced labor, which means any work or service performed involuntarily under threat of physical or other penalty. Supplier shall respect the freedom of movement of its workers and not restrict their movement by controlling identity papers, holding money deposits, or taking any other action to prevent workers from terminating their employment. If workers enter into employment agreements with Supplier, workers should do so voluntarily.
Child Labor. Supplier will not directly (or indirectly through the use of its subcontractors) employ any children under the age of 18 years unless legal, necessary, and appropriate and the following are met:
• Supplier will comply with the minimum employment age limit defined by national law or by International Labor Organization (“ILO”) Convention 138, whichever is higher. The ILO Convention 138 minimum employment age is the local mandatory schooling age, but not less than 15 years of age (14 in certain developing countries), subject to exceptions allowed by the ILO and national law.
• Supplier will ensure that employees working in facilities that are manufacturing or packaging Mondelēz International finished products, serving as temporary employees to Mondelēz International, or present at Mondelēz International facilities, are at least 15 years of age (and no exceptions allowed by the ILO or national law will apply).
• Supplier must demonstrate that their employment does not expose them to undue physical risks that can harm physical, mental, or emotional development
Diversity and Inclusion. Supplier will hire, compensate, promote, discipline and provide other conditions of employment based solely on an individual’s performance and ability to do the job (except as required under collective bargaining agreements). Supplier will not discriminate based on a person’s race, color, religion, gender, age, ethnic or national origin, veteran status, disability, sexual orientation or preference, gender identity, marital status, citizenship status, genetic information, or any legally protected personal characteristic or status.
Harassment and Abuse. Supplier will provide a workplace free from harassment, which can take many forms, including sexual, verbal, physical or visual behavior that creates an offensive, hostile or intimidating environment.
Safety and Health. Supplier will (i) endeavor to provide safe working conditions, (ii) provide its employees with appropriate protection from exposure to hazardous materials, and (iii) provide its employees with access to potable water and clean sanitation facilities.
Third-Party Representation. Supplier will respect the decision of its employees to join and support a union as well as their decision to refrain from doing so where legally permitted.
Working Hours and Compensation. Within the bounds of normal seasonal and other fluctuations in business requirements, Supplier will (i) maintain a reasonable overall pattern of required working hours and days off for its employees so that total work hours per week do not regularly exceed industry norms; (ii) pay fair and timely compensation, including any required premium payments for overtime work; and (iii) advise new employees at the time of hiring if mandatory overtime is a condition of employment.
Disciplinary Procedures. Supplier will not use corporal punishment or other forms of mental or physical coercion as a form of discipline.
Business Integrity. Supplier will promote honesty and integrity in its business conduct by raising ethical awareness among its employees and providing direction and education on ethical issues. Further, Supplier will not: pay or accept bribes, arrange or accept kickbacks, or participate in illegal inducements in business or government relationships.
Environment and Sustainability. Supplier will work to continuously improve its environmental performance by setting and then working toward quantifiable goals that reduce the environmental impact of its activities.
5. SUPPLY CHAIN TRANSPARENCY AND LABOR PRACTICES
As awareness and advocacy efforts around human trafficking and slavery grow among governments, NGOs and investors, so do expectations for businesses to demonstrate what they are doing to address this issue within their supply chains.
The Mondelēz International Statement on Human Rights guides our approach. In line with the California Transparency in Supply Chains Act (SB 657) and the UK Modern Slavery Act 2015, our 2018 Human Rights Due Diligence & Modern Slavery Report and provides more detail on our efforts to help make a difference in our operations and those of our suppliers.
6. INTERNAL ACCOUNTABILITY STANDARDS
We expect each employee to conduct business legally and ethically. Mondelēz International has policies that prohibit child and forced labor as noted in our Code of Conduct. We also audit our manufacturing facilities under the Program for Responsible Sourcing (PROGRESS). Failing to meet company standards on child and forced labor is a breach of corporate policy. As such, violators are subject to disciplinary action, up to and including termination of employment.
7. TRAINING
Mondelēz International provides specialized training for procurement employees. This training helps them identify and mitigate labor-related sourcing risks and includes a section on human trafficking and slavery.
8. CERTIFICATION BY DIRECT SUPPLIERS
Our purchasing contracts require direct suppliers to comply with all laws and support Mondelēz International’s policies on child and forced labor. We have various tools to address non-compliance, which may include, but are not limited to, a corrective action plan. If the supplier does not resolve the issues of concern in a timely and satisfactory manner, Mondelēz International reserves the right to take more drastic action, such as termination of the business arrangement.
9. VERIFICATION AND SUPPLIER COMPLIANCE AUDITS
Using announced third-party audits, we've begun to assess direct suppliers' compliance with our corporate responsibility expectations (including child and forced labor) through PROGRESS.
10. GOING BEYOND OUR DIRECT SUPPLIERS
In addition to assessing direct suppliers, we've been working with civil society, government and industry to tackle conditions at the farm level. Since its inception in 2002, we've supported the International Cocoa Initiative (ICI) to address child and forced labor issues on cocoa farms.
In October 2013 we published a new approach to tackling child labor in the cocoa supply chain. We have worked with experts in the field, including the world’s leading anti-slavery charity, Anti-Slavery International, to define this approach. More details are available on www.cocoalife.org.