ICT

Themes Key Findings

2018 Information & Communications Technology

The 40 ICT companies were assessed across the benchmark's seven themes, which were developed to capture the key areas where companies need to take action to eradicate forced labor from their supply chains: commitment; traceability and risk assessment; purchasing practices; recruitment; worker voice; monitoring; and remedy. There are a total of 23 indicators across the seven themes. For each theme a company can score a total of 100 points.

32

Overall Score 2018 Information & Communications Technology
40 Theme Score

Summary of Results

Companies typically did not disclose how they were adapting their purchasing practices to mitigate risks of forced labor, though there was greater disclosure on inclusion of standards on forced labor in supplier contracts, and most companies had provisions in place to push supply chain standards to lower-tier suppliers.

Only 12 out of 40 companies outline the steps that they are taking to source raw materials responsibly. Companies typically limit their disclosure to describe conflict minerals due diligence, following the OECD Due Diligence Guidance for Responsible Mineral Supply Chains which includes some level of forced labor due diligence. However, only two companies (Apple and Microsoft) explicitly outline how they address forced labor risks at the raw material level. For example, Apple requires smelters and refiners of tin, tantalum, tungsten, gold, and cobalt to participate in independent third-party audit programs, which include assessment of forced labor risks.

Four companies disclose how they adapt purchasing practices in the first-tier of their supply chains to avoid exacerbating the risk of forced labor, for example by regularly reviewing forecasting with suppliers and analyzing suppliers' capacity to avoid excessive overtime for workers. Only three of 40 companies (Hewlett Packard Enterprise, HP, and Intel) describe the efforts they make to incentivize good labor practices at first-tier suppliers. The companies record suppliers' social responsibility performance, including in relation to forced labor, and tie this performance to procurement decision-making and award schemes.

Half of companies indicate that they assess suppliers for forced labor risks prior to entering into a contract with them, but only six out of 40 companies describe such a supplier selection process in detail or disclose outcomes of this process. Similarly, over half of companies (23 out of 40) disclose that they include provisions that prohibit forced labor in their contracts with suppliers. However, only seven companies publicly disclose the language of supplier contracts or the contract itself.

Twenty-seven out of 40 companies have provisions in place for cascading standards incorporated into their Supplier Code of Conduct or other standards further down their supply chains. However, the extent to which these policies are effective is not clear. For example, Largan Precision, BOE Technology, Broadcom, Corning, Keyence and Amphenol Corporation all score below 10 out of 100 in the benchmark (i.e., have limited if any provisions in place to address forced labor risks in their supply chains), but their customers include Apple, Hewlett Packard Enterprise, HP and Microsoft, all of which have provisions in place for cascading their supply chain standards. These companies likely also supply to other big brands included in the benchmark, but it is not possible to identify who they work with as few companies publish supplier lists.

Purchasing Practices

The company is taking steps towards responsible raw materials sourcing. It is adopting responsible purchasing practices in the first tier of its supply chains, and provides procurement incentives to first-tier suppliers to encourage or reward good labor practices.

Purchasing practices and pricing may both positively impact labor standards in the company's supply chains, and increase risks of forced labor and human trafficking. The company: (1) is taking steps towards responsible raw materials sourcing; (2) is adopting responsible purchasing practices in the first tier of its supply chains; and (3) provides procurement incentives to first-tier suppliers to encourage or reward good labor practices (such as price premiums, increased orders, and longer-term contracts).

Low: 0
High: 75
14

Supplier Selection

The company assesses risks of forced labor at potential suppliers prior to entering into any contracts with them.

The company: (1) assesses risks of forced labor at potential suppliers prior to entering into any contracts with them.

Low: 0
High: 100
32

Integration into Supplier Contracts

The company integrates supply chain standards addressing forced labor and human trafficking into supplier contracts.

The company: (1) integrates supply chain standards addressing forced labor and human trafficking into supplier contracts.

Low: 0
High: 100
38

Cascading Standards through the Supply Chain

The company extends its supply chain standards beyond its first tier by requiring that its first-tier suppliers ensure that their own suppliers implement standards that are in-line with the company's standards.

The company: (1) requires its first-tier suppliers to ensure that their own suppliers implement standards that are in-line with the company's supply chain standards addressing forced labor and human trafficking.

Low: 0
High: 100
75

Raw Material Sourcing: Notable Example

Microsoft

Microsoft states that its Responsible Sourcing of Raw Materials Policy extends all provisions of its Supplier Code of Conduct, which covers human and labor rights, to all of its raw material supply chains. It also partners with organizations that address human rights in the upstream mining and smelter industries to improve conditions for workers in raw material supply chains.

Recommended Action

Purchasing Practices

Companies should take steps to mitigate the risks resulting from purchasing practices such as lack of provision of purchasing forecasts to suppliers, and incentivize good labor practices, for example through longer-term contracts, increased orders, or financial incentives.