3 Loreal Social Audits Program Suppliers Subcontractors

5/28/2018 3 Loreal Social Audits Program Suppliers Subcontractors

1/24

11

LOREAL

Social audits program

Suppliers & Subcontractors

EXTERNAL INFORMATION KIT


2/24

2

Why Such a Program ?

LOral has been a signatory of the UnitedNations Global Compact since June 2003and iscommitted to a set of core values in the areasof human rights, labour standards, the

environment and anti-corruption as set out inthe Global Compacts ten principles.


3/24

3

Social audits program

LORAL has decided to reinforce the social auditprogram in order to ensure compliance with theLORALsGeneral Terms of Purchase and Payment, ILOconventions and local laws.

LORALis reinforcing its 2006 action plan:

Internal social audits : plants and distribution centersExternal social audits : our suppliers and sub-contractors

- all sub-contractors: wherever located- packaging components, raw materials, POS &

promotional items suppliersfor factories located

in countries at risks

The social audits program will be realized by a third partauditing body Intertek.


4/24

4

Third part auditing body : Intertek

Global quality control service provider with 15000employees in 110 countries and 309 laboratories

15'000 audits per year in more than 100 countries

Global Network of more than 300 qualified auditors close tomost of the main industrial areas

Professionals in terms of social and environmentalresponsibility

Already working in this area with many internationalGroups

www.intertek.com
http://www.intertek.com/http://www.intertek.com/


5/24

5

What is a Social Audit ?The social audit will cover the following areas:

> child labor

> forced labor

> health and safety

> freedom of association

> non-discrimination> disciplinary practices

> sexual and moral harassment

> pay

> working time

> relations with sub-contractors and suppliers

The auditors will check the compliance with both theLOREAL General terms and conditions and with the ILOconventions and local laws


6/24

6

Audit Scope & Texts of reference

Themes Principles listed in our GTP

Child Labor ILO Conventions 138 et 182+ specific requirement from LOral

child = under the age of 16

+ laws and regulations of the country

Forced and Prisoner Labor ILO Conventions 105 et 29,


Health and Security Laws and regulations of the country

Freedom of Association ILO Conventions 87 et 98


Equality, Non discrimination ILO Conventions 100 et 111+ laws and regulations of the country

Disciplinary practices,

harassment and abuse,

hours of work, wages and

primes, sub-contractor.

Laws and regulations of the country


7/247

Possible Audit ResultsFinal Social

Audit Result

Actions

Zero toleranceChild labor < 16 years/

Concealed, forced, prison,dangerous labor

Alert sent to LOREAL HeadquartersInterruption of business relationship with the

factory

Needs MajorImprovement

Major and recurrentissues

Re-audit within 90 days maximumFollow up audit with a Needs Major

Improvements result twice in the samesection = Zero Tolerance

Needs Improvement

Isolated Problem

Periodic re-audit to be planned

Satisfactory

Best Practices

Periodic re-audit to be planned

Access denied Completely or partially

Re-audit to be planned as soon as alertreceived

2nd Access denied = Zero tolerance


8/2488

LORALLORALLORAL

Day + 7

LOral

Opening meeting

Facility tour

Documents reviewEmployee interviews

Pre-closing meeting

Closing meeting

Sign Corrective

Action Plan

SITE MANAGER

& INTERTEK

Intertek

Audit Window Audit

Sends Audit

request to Intertek

Intertek

Satisfactory

Needs Improvement

Needs Major Improvement

Zero Tolerance

Intertek

Contact Intertek

Local Office

Supplier facility

Initiation of

Audit RequestDay + 7

Posts report on

the Web Platform

Audit Report

Logs in on the

Web Platform to

check audit

results

Provides LOral

and site with

audit window

Prepares

documentation &

available

management

resource for audit

day

Process Flow

LOral


9/2499

LORAL

Audit Process

Documentary

Review

FacilityTour

Pre-Closing

Meeting

Opening Meeting

With INTERTEK

Closing Meeting

Employee

Interviews


10/2410

Opening Meeting

Explain to the management representatives:

The aim and scope of the audit,

The standards and policies against which thefacility will be audited,

The audit procedure,The agenda of the audit,

Learn about the facility,

The site Manager, a health and safety managerand a human resources manager should bepresent at the opening meeting.


11/2411

Facility Tour

Verification of the Workplace Conditions, Fire

Prevention, Dormitories,

Cleared and Identifiable Alleys

Cleanliness, First Aid

Fire Prevention Equipment

Temperature, Ventilation

Lighting, Potable WaterAccess to safety Exits

Accessibility in case of fire

Earplugs, Masks

Gloves, Protective glasses

Safety shoes, HelmetsUse of Chemicals

Dormitories Toilets

etc..


12/2412

Documentation ReviewA review and analysis of :

Personnel recruitment file and contractWorking Hours recording system for normal/OT hours

Payslip records

Social Security payment

Proof of salary payment

Health and safety records & certificatesFire protection records and SOP

Health & Safety Management systems

Minimum Wages, OT hourly rate

Paper/money deposits

Salary Payment delay

Unauthorized deductions/fines

Clarification on normal/OT working hours

Rest days, leaves

Health & Safety and other local regulations


13/2413

Interviewing Employees

Key Elements of the employee interview :

Without Management or site representatives

Only upon acceptance of the employee itself

Confidentiality of the interview and source ofinformation ensured

Informal way to ensure efficiency

Interview in 1 by 1 (or group)

Random Selection of the personnel list, based onfacility ratio (Women/Men, Packaging/ admin dept..)

Also employees identified during the facility tour


14/2414

Pre Closing Meeting

A meeting between auditors to :

Clarify and cross check information & issuesfound

Clarify and Debate among themselves ifnecessary

Write down the Non conformities in theCorrective Action Plan

Quote the Local laws to address the findings


15/2415

Closing Meeting

A meeting with the management representativesto:

Present the Best Practices /Observations/ NonConformities

Clarify and Debate necessary issues

Explain and find an agreement on the CorrectiveAction Plan

A copy of the Corrective Action Plan is providedto the management representatives at the endof the audit


16/2416

Reporting

The report given to the requestor is made of:

A photo report (whenever possible) on main nonconformities & best practices,

The audit report itself with details of thefindings, objective evidence and details of locallaws if applicable

A copy of the Corrective Action Plan (CAP) inEnglish that will help the requestor to follow upwith the supplier

A copy of the signed CAP in the local language toget the proof that it has been signed by thefacility representatives


17/2417

Example of an Audit Report

1st Page information on Factory and global result

To: From:

Audit Type: Initial

Name of Factory: XXXFactory Address: YYYYMailing Address: Same as aboveTelephone No.: 86-512-000000 Tel-Fax No: 86-512-00000

OVERALL

RATING:

Zero Tolerance X Needs MajorImprovement NeedsImprovementSatisfactory Access Denied


18/2418


Overall result by section(1/2)

Themes ComplianceLevel BestPractices Non Conformity Summary

1 Child Labor Satisfactory NIL

2 Forced &Compulsory

LaborSatisfactory NIL

3 Health & Safety Needs MajorImprovement

NIL 1. No ventilation system wasequipped to expel the foul

air at the raw material

department.

2. No belt guard was

equipped to two Sponge

Grinding machines in Pen

making department.

4 Freedom ofAssociation Satisfactory NIL

5 NonDiscrimination Satisfactory NIL


19/2419


6 DisciplinaryPractices Satisfactory NIL

7 Harassment andAbuse Satisfactory NIL

8 Compensation &Benefits Needs MajorImprovement

NIL 1.The factory had not signed laborcontracts with 11 out of 16

interviewees.9 Hours of Work Needs Major

ImprovementNIL Hours of Work could not be verified

during this audit due to:1)The factory only provided the

manual attendance records of

January 2006, which issued by

department supervisor, and no

detailed working hours and overtime

hours were registered on the

records. The manual attendancerecords for 2005 were not maintained

as the factory had finished the year-

end sum-up.10 Subcontracting Satisfactory NIL

Overall result by section(2/2)


20/2420


Overall AssessmentFactory Overview

XXXX., Ltd is located in Province, China. The total land area occupied by the

facility is about 60,000m. They have started their operation in existing location

since February 1991. The main products manufactured by the factory are

High-Class Cosmetic Packaging Components.Percentage dedicated to LOral: 10%Other brands in the factory: X, Y, Z ..

Number of employees interviewed: 16Number of Record reviewed & review period: 16Last period paid: January 2006

Peak period: N/ARandom Period: December 2005 and October 2005Peak Months of the Facility: N/A

Communicated Findings with (Facility Manager): Mr. XXX / Vice General ManagerAgreed to and signed Corrective Action Plan (CAP): Yes


21/2421

Example of an Audit ReportDetailed Findings by section, example8. Comp ensat ion & B enef its:Zero Tolerance Needs Major

Improvement X NeedsImprovement SatisfactoryAccess Denied

Subject : Labour contractLaw:In accordance with the PRC Labor Law article 16, a labour contract shallbe concluded where a labour relationship is to be established.Finding/Objective evidence:It was noted that the factory had not signed labor

contracts with 11 out of 16 interviewees.Management response:During the audit, the factory provided one copy of

, signed between the audit factory and Kunshan

XXX Due to the factory could not provide the original version of the and there were several unclear points on it, the copy was not

accepted during this audit. The factory explained that XXX., Ltd. exported the

8 out of 11 interviewees who did not sign labor contracts with the factory. And

the rest 3 were new workers and their labor contracts were in process.

Proposed corrective action:It is recommended that the factory should sign

labor contracts with all workers.


22/2422

Example of a Photo ReportDetailed pictures on non conformities &

best practices

Blocked Emergency Exit of Dormitory

Electric Appliance Controller Boxwithout Cover and Warning Sings

Evacuation Plan provided

Sponge Grinding Machines without BeltGuard


23/2423

Example of a Corrective Action

Plan (CAP)

Section NON CONFORMITY CORRECTIVE ACTION DEADLINEHealth &Safety No ventilation system

was equipped to

expel the foul air

at the raw material

department.

Factory will equip ventilation

system of the raw material

department to ensure

workers working under

healthy condition.

1 week

factory did not

supervise and trainemployees to

properly wear and

to use the

personal protective

equipment such as

respirator, two

workers in raw

material

department did notwear respirator.

factory should supervise and train

employees to properly wearand use the personal

protective equipment.

Immediate for

workers nottrained yet

and training

plan for

others.

CAP is

submitted in

both local

language and

translated in

english.

CAP is signed

by both the

audit team and

facility


24/24

Need Social Audit countries list PC / RM / POS & Promotional Items suppliers plants located in :

rgentinaBoliviaBrazilChiliColombiaDominican RepublicEcuadorHondurasMexicoNicaraguaParaguayPeruUruguayVenezuelaGuatemala

BangladeshBruneiCambodiaChinaHong KongIndiaIndonesiaMacauMalaysiaPakistanPhilippinesSouth KoreaSri LankaTaiwanThailandSingaporeVietnam

DubaiEgyptGhanaIsraelKenyaLesothoMauritiusMoroccoSouth fricaSwaziland

BulgariaCroatiaEstoniaHungaryLatviaLithuaniaPolandRomaniaRussiaSerbiaSlovakiaSloveniaTurkeyUkrainia

3 Loreal Social Audits Program Suppliers Subcontractors

Documents

Transcript of 3 Loreal Social Audits Program Suppliers Subcontractors