In its report on corporate responsibility, Dell Inc. says it uses the electronics industry's EICC Code of Conduct to ensure high work standards and ethical behavior. This is the same guideline Hewlett-Packard uses, in part, to measure worker safety and fair labor practices among its business partners.
Dell, Hewlett-Packard, and NEC are among the companies cited by a third-party watchdog for employee rights violations. (See Dell, HP & NEC Partner Flagged for Labor Practices.) This is second in a series of blogs I'm doing to look at the labor policies these companies have established, how they are measured and audited, the results of any such audits, and what corrective actions they may have taken.
Every Dell supplier is mandated by contract to operate in full compliance with the laws, rules, and regulations of the countries in which it operates and is required to adopt and actively pursue conformance to the EICC Code of Conduct. Using the industry-standard tools that have been developed by the EICC and the Global eSustainability (GeSI) Initiative, including the Self-Assessment Questionnaire, Dell asks suppliers to provide documented evidence of their commitment to implement Dell's supplier principles through a self-assessment tool. The tool covers commitment and policy, implementation and operation, self-monitoring and corrective action, management review, and continuous improvement. Dell reports 93 of its suppliers are on an improvement trend.
According to Dell's report:
- Our commodity managers complete a quarterly business review (QBR) scorecard that includes measuring suppliers’ social and environmental performance. The key issues of supplier noncompliance focused on labor issues (such as excessive working hours), occupational health and safety, and environment (for example, wastewater discharge). Dell worked with the suppliers identified to define and implement management systems or corrective actions. Dell also has raised supplier awareness regarding conflict minerals and requested due diligence in avoiding procurement of known conflict minerals.
Dell's policy is hitting all the right notes but is lacking one key criterion: There's no mention of audits conducted by Dell or any other organization. Based on the report, it appears Dell's supply chain chiefly self-polices its adherence to labor standards. I've asked Dell whether it has conducted any audits of its business partners' operations, and I'll post an update as soon as I hear back.
Of the reports I've reviewed so far, Dell's is the weakest. While the company goes to great lengths to outline its expectations for itself and its business partners, its 2010 report lacks detail and follow-through. It is possible that Dell keeps such information confidential, and that may be appropriate. But it also highlights the issue we've raised in previous blogs: Minus an auditing body, how certain can companies — and their shareholders — be that their foreign partners are treating their workers fairly?
At the very least, Dell should visit offshore factories and not rely on self-audits as assurance of compliance. Better yet, the electronics industry can take the EICC Code a step further and license third parties to monitor facilities. I'm sure there are all sorts of problems with this — national laws, for example, may prohibit this, and countries will use their own versions of the US's OSHA instead.
For better or worse, Apple's recent report has opened the door to increased public scrutiny of labor practices, and companies that aren't as forthcoming risk future criticism. (See What Did Apple’s Supply Chain Audit Uncover? Part 1.)