Effective January 1, 2012, the California Transparency in Supply Chains Act of 2010 (SB 657) require large manufacturers and retailers that sell goods in California to make certain disclosures regarding their efforts to address slavery and human trafficking. The Act is intended to ensure that retail manufactures and sellers are thinking about their efforts to eradicate slavery and human trafficking from their supply chains.
California Transparency in Supply Chains Act of 2010
The following are Henkel’s disclosures as required by the Act.
Verification of Product Supply Chains
Throughout its history, Henkel has been committed to sustainable and ethical development. As part of this commitment, Henkel works to ensure workers are treated with respect and dignity, that working conditions in Henkel’s supply chain are safe and that manufacturing processes are environmentally responsible.
Consistent with these principles, Henkel observes high ethical standards in the conduct of its business. Our Vision and Values, which can be accessed at: http://www.henkelna.com/company/corporate-culture/vision-values, reflect our commitment to establishing and maintaining relationships with third parties, including suppliers, that are committed to the same ethical standards, and that are not linked to activities that would be considered abusive or exploitive, including human trafficking and slavery.
In addition, Henkel requires that its suppliers adhere to the Association of Materials Management, Purchasing and Logistics (AMMPL) Code of Conduct (Code), which is fully aligned with the principles outlined by the United Nations Global Compact, and is intended to support our internal corporate values by providing guidelines designed to ensure that each of our suppliers is committed to maintaining ethical standards consistent with those of Henkel. The Code communicates that as a condition of doing business with Henkel suppliers are expected to meet Code requirements applicable to: Forced Labor; Child Labor; Human Rights; and Fair Working Conditions. Code provisions relevant to these issues are as follows:
- Forced Labor: The signing/acceding company rejects every form of forced labor.
- Child Labor: The signing/acceding company respects the regulations of the United Nations on human rights and children’s rights. In particular, the signing/acceding company commits to complying with the Convention concerning the minimum age for admission to employment (Convention No 138 of the International Labor Organization) as well as the Convention concerning the prohibition and immediate action for the elimination of the worst forms of child labor (Convention No 182 of the International Labor Organization). If a national regulation concerning child labor provides for stricter measures, these shall have precedence.
- Human Rights: The signing/acceding company respects and supports compliance of internationally-recognized human rights.
- Fair Working Conditions: The signing/acceding company respects its employees’ right of association within the bounds of prevailing laws and statutes.
The entirety of the Code can be reviewed at: http://www.bme.de/Code-of-Conduct.44959.0.html
Prior to initiating a relationship with Henkel, suppliers are required to fill out a questionnaire that requests certain information, and requires that they read, accept and agree to comply with the Code. This questionnaire is part of Henkel’s supplier management system, PURIS SM. Suppliers were initiated into the PURIS SM system in 2010, and by the end of 2011, Henkel will complete the global roll-out of PURIS SM, which will ensure that every direct supplier Henkel works with verifies the compliance of its operations with the Code and other related requirements including, but not limited to, those related to human trafficking and slavery.
In addition to the verification built into the PURIS SM system, our Corporate Purchasing department identifies and reviews specific procurement areas that require a regular follow-up. In areas where the human trafficking or slavery risk is high, Henkel has employed heightened verification practices, such as when dealing with conflict minerals suppliers. Neither of the verification tools described above involves a third party.
Audit of Suppliers
In addition, supplier audits are an essential part of Henkel’s quality management activities. Audits are intended to verify that Code requirements are being met by third-party suppliers and, in doing so, they address risks related to human trafficking and slavery. In general, Henkel uses its own personnel to audit its suppliers and has not retained third parties to do so. Such audits are announced. Audits are conducted according to Henkel internal standards and processes and cover issues including quality control, health, safety, environment and corporate responsibility.
When an audit uncovers evidence that a supplier is not in compliance with applicable laws and/or Code requirements, suppliers become subject to corrective action plan requirements. If the required corrective action plan is not implemented, Henkel may terminate its relationship with the supplier.
Certification of Materials
A certification that materials incorporated into any supplier product comply with the laws regarding slavery and human trafficking of the country or counties in which they are doing business is implied in the agreement to comply with Code provisions that is incorporated into the PURIS SM system described above. No additional supplier certification is required.
Internal Accountability Standards and Procedures
The internal accountability standards applicable to employees and contractors of Henkel are contained in the Vision and Values document referenced above, as well as in Henkel’s Code of Conduct, Code of Teamwork and Leadership, and Code of Corporate Sustainability, each of which can be accessed here: http://www.henkelna.com/company/corporate-culture.
To date, Henkel has never uncovered evidence that employees or contractors are or were engaged in activity that violated relevant slavery or human trafficking laws, or that employees or contractors failed to report a discovery that a supplier was engaged in such practices. In one situation, where a supplier failed to provide information satisfactory to Henkel regarding its work practices, Henkel severed relations with the supplier. Our Code of Conduct renders it clear that the violation of any law or Code of Conduct provision subjects an employee to discipline up to and including termination.
Henkel provides company-wide training programs on compliance. In addition, it conducts specific training programs for purchasing associates as part of the deployment of processes and tools like PURIS SM. All of these trainings cover supply chain management issues including managing and mitigating the risks of human trafficking and slavery within the supply chain. The training also covers the standards and processes to be utilized in assessing these risks and the consequences of any misconduct.