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  • 2017 Corporate Responsibility Report

2017 audit results

In the audit program, which was established and is controlled at the Group level, a total of 89 audits was carried out in 2017. Like in the previous year, our activities focused on suppliers in Asia, particularly China, South Korea, Thailand, and India. We also conducted social audits in Latin America and Eastern Europe.

Audited suppliers included manufacturers in the areas of IT hardware, software, and services, as well as networks and devices. No cases of corruption or bribery nor any critical violations of compliance policies or the right to intellectual property were found during the audits.

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The 2017 audit results at a glance

Legend: Area (Number of violations)

Antonio Veloso

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Antonio Veloso

Detailed results

We do not audit all of our suppliers (over 30,000) equally, but instead focus on strategically important and/or high-risk supplier groups. We focus on roughly 250 suppliers that are regularly audited every two to three years. The majority of these audits is conducted within the scope of the Joint Audit Cooperation (JAC).

The JAC Guidelines require suppliers to grant their employees the freedom of association and the right to collective bargaining, as well as a healthy and safe working environment. The following minimum requirements are applicable regarding working hours: a maximum of 48 working hours per week, a maximum of twelve hours of overtime each week and one day off after six consecutive days of work. We also demand a fair wage that enables employees a decent standard of living. Compliance with all these requirements is reviewed regularly during our on-site audits. This also includes inspection of the features and quality of the working, sleeping, and cafeteria areas.

We do not require our suppliers to obtain external environmental or social certificates. Based on our audits, however, the majority of our relevant manufacturing suppliers have an external certificate confirming compliance with ecological and social standards. Reviews of the major ecological and social aspects during our audits are compliant with the relevant international regulations and standards, such as the ILO img core labor standards, the UN Guiding Principles on Business and Human Rights, and recognized management systems such as ISO14001 and SA8000.

Of the 89 suppliers we audited in 2017 (nine of which were in accordance with the validated audit processes of the Responsible Business Alliance), around 29 percent (26 audits) were direct suppliers and 71 percent (63 audits) were tier 2 and 3 suppliers – that is, indirect suppliers.

In the course of the audits in 2017, a total of 581 violations of Deutsche Telekom's supplier requirements were discovered. In the process, a total of 634 violations were corrected in 2017, including several open improvement measures from previous years. Among the violations were 22 unacceptable incidents and 156 critical findings; 94 violations were rectified. Examples of unacceptable and critical violations, as well as introduced improvement measures, are published here. Critical findings were discovered at 68 suppliers in the areas of occupational health and safety, environmental protection, labor practices, working hours, and wages and performance-related remuneration. There were no critical findings in the business ethics area. Like in past years, most of the violations were related to occupational health and safety (46 percent, compared to 47 percent in 2016), followed by working hours and wages with 17 percent (12 percent in 2016). The business ethics area took the third spot, with 13 percent (18 percent in 2016).

CR report from the previous year

Examples of problematic findings

Area   Findings at suppliers   Initiated improvements Status
(end of 2017)
Discrimination   The "New Employee Orientation Health Check Standards" showed that the factory did not hire pregnant women. The company's management stated that they did not demand pregnancy tests as part of the application process, but still rejected visibly pregnant women.   This practice was discontinued and management issued an official confirmation of this fact. Completed
  In its job advertisements, the factory mentioned gender and age as follows: "Technician: Older than 23". "Operator: Male, age 18-28". "QC: Age 20-27". "Warehouse worker: Age 20-27".   In the case of public job advertisements, the factory will not define any requirements for age, gender, nationality, etc. Ongoing
Environmental protection   According to an interview with management and a review of the relevant documents, the audited factory had neither inspected the environmental facilities nor received a permit.   An environmental permit was issued on August 25, 2017. Completed
 

1. The manager for chemicals in the warehouse did not strictly follow the instructions for waste management procedures and had mixed different liquid wastes together in the same container.

2. The manager for chemicals lacks the necessary knowledge about chemicals management, because he does not know that multiple chemicals must not be kept on the same shelf.

 

1. Employees who are responsible for handling chemicals should undergo training in chemicals management. Each barrel should bear a label with the name of the chemical it contains, as well as other specifications and information about dangers and handling.

2.1 Trained managers for chemical waste in the warehouse should ensure that the requirements of the Hazardous Waste Management Procedure are visible on the waste barrels.

2.2 A list for daily safety checks for chemical waste inspections in the warehouse, including barrel labeling, should be introduced.
Ongoing
Occupational health and safety   No emergency exit signs installed. Emergency exit is not illuminated.   Emergency exits labeled and repaired. Completed
 

The factory does not meet the legal requirements applying to processes for accidents and emergencies.

 
  1. More evacuation instructions for the evacuation drills.
  2. Establishment of an additional escape corridor for a warehouse.
  3. Establishment of an escape corridor in "Silk Legend".
Completed
  The company instructed its logistics employees in the use of the fire suppression equipment; however, no evacuation drills were held.   The factory carried out an evacuation drill in the workers' dormitory. Completed
Wages and performance-related remuneration   15 percent of the examined workers did not receive any overtime pay.   The factory has been advised that overtime work should be compensated in accordance with the legal requirements. Ongoing
Working hours   The weekly hours worked exceed the legally permitted 60 hours.  
  1. The parameters for overtime work should be defined.
  2. The new measures for recording overtime should be communicated within the company.
  3. Overtime worked should be reported weekly.
Completed
 

The monthly overtime hours worked exceed the legally permitted 36 hours.

The weekly overtime hours worked exceed the legally permitted 12 hours.
 
  1. Create a management plan on production capacity, adjustment of production planning, planning of production capacities, and corresponding arrangement of orders.
  2. Optimize the production processes and improvement of production efficiency.
  3. Hire additional workers.
Completed
  There is no legally prescribed limit on overtime worked.  
  1. Work arrangements will be changed such that any overtime worked in excess of 48 hours will be strictly on a voluntary business.
  2. The factory complies with local, federal, and national laws.
  3. The factory will conduct a follow-up every quarter to prevent health problems and accidents caused by overtime.
Completed