Our audit activities do not include all suppliers with whom we have an active business relationship (around *20,000), but instead focus on strategically important and/or particularly high-risk supplier groups. We focus on roughly 250 suppliers that are regularly audited every two to three years. The majority of these audits are 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. If no certificates are available for the “Environment” and “Social Accountability” fields, such as ISO 14001 and SA8000, we nevertheless expect comparable management systems to be used. Our auditing experience shows, however, that the majority of our relevant manufacturing suppliers have an external certificate or comparable management systems. Verification of important social and ecological aspects as well as fundamental human rights during our audits is in line with internationally recognized guidelines and standards: these include the ILO Labour Standards, the UN Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises.
Of the 117 suppliers we audited in 2018 (13 of which were in accordance with the validated audit processes of the Responsible Business Alliance), around 24 percent (29 audits) were direct suppliers and 76 percent (88 audits) were tier 2, 3 and 4 suppliers – that is, indirect suppliers.
The audits carried out in 2018, revealed a total of 768 violations of Deutsche Telekom’s supplier requirements. In the process, a total of 594 violations were corrected in 2018, including several open improvement measures from previous years. Among the violations were 49 unacceptable incidents and 193 critical findings; 191 violations were rectified. Here are some examples of unacceptable and critical violations as well as the measures taken to improve these situations. Critical findings were discovered at 49 suppliers in the area of occupational health and safety field, at seven suppliers in the area of environmental protection, at three suppliers with regard to labor practices, at 50 suppliers with regard to working hours, and at nine suppliers with regard to wages and performance-related remuneration. There were no critical findings in the business ethics area. As in past years, most of the violations were related to occupational health and safety (47 percent, compared to 46 percent in 2017), followed by working hours with 16 percent (17 percent in 2017). The business ethics area took the third spot, with 14 percent (13 percent in 2017).
*In the past, the number of our suppliers referred to our approx. 30,000 total business relationships. We now have more precise reporting capabilities that allow us to specify the number of suppliers with whom we had an active business relationship in 2018.