CA Transparency in Supply Chains Act of 2010

On January 1, 2012, the California Transparency in Supply Chains Act of 2010 (SB 657) went into effect. This law seeks to increase the quantity of information made available by manufacturers and retailers regarding their efforts, if any, to address the issues of slavery and human trafficking in their supply chains. This in turn allows consumers to make better, more informed choices regarding the products they buy and the companies they choose to support.

HP's Electronic Industry Citizenship Coalition (EICC) Code of Conduct includes provisions that address international labor and human rights standards. HP requires its suppliers to agree to conform to the standards contained in the HP EICC Code of Conduct ensuring workers at supplier facilities have: (i) the right to freely choose employment; (ii) the right, in accordance with local laws, to associate freely, join or be represented by worker councils, join labor unions on a voluntary basis, and bargain collectively as they choose; and (iii) the right to a workplace free of harassment and unlawful discrimination. HP's Global Human Rights Policy further outlines HP's commitment to and respect for human rights.  Additionally, HP introduced guidance for the treatment of student and dispatch workers in China in 2013.

HP is aware that slavery and human trafficking can take many forms, including forced labor and child labor. Since HP began its Supply Chain Responsibility program in 2000, HP has undertaken efforts to ensure and verify there is no slavery or human trafficking of any form in its supply chain. These efforts include:

  1. Evaluation and verification of product supply chains. HP evaluates the risk of slavery and human trafficking in its supply chain through risk-based supplier assessments and supply chain due diligence. 
    • Risk-based supplier assessments. HP performs assessments of potential suppliers according to HP's risk-based approach. This approach includes preliminary risk assessments, supplier assessment questionnaires, and specialized onboarding assessments.
    • Due diligence. HP's Supplier Performance Management (SPM) scorecard is one method HP uses for measurement and tracking. The Scorecard is used to periodically assess supplier performance throughout the year and covers performance on issues such as regular business requirements—including compliance, legislation, and product quality—and social, ethical, and environmental considerations. In 2013, HP updated HP’s procurement scoring process to place greater emphasis on SER performance in the business award process. (See “Procurement integration” on page 2 of Our approach for more information.)  

    HP also verifies the absence of slavery and human trafficking in its supply chain through the use of comprehensive and specialized audits as described in Part 2, "Audits of suppliers," below.

  2. Audits of suppliers. HP's audit program evaluates and verifies suppliers' compliance with HP's EICC Code of Conduct, which, among other things, prohibits both forced and child labor. With few exceptions, audit verification is substantiated by at least three different, independent sources of evidence including documents, records, management interviews, worker interviews, and physical observations. Various types of announced assessments are conducted under this program, including comprehensive on-site audits attended by HP, collaborative audits, and third-party on-site audits of supplier practices and underlying management systems. In addition to comprehensive audits, HP uses specialized assessments to engage on issues or questions specific to individual suppliers that are identified through the comprehensive audits, our Key Performance Indicator (KPI) program, and external stakeholder feedback. A finding of nonconformance with HP's EICC Code of Conduct relating to the issue of forced or child labor does not necessarily indicate that forced or child labor has occurred, but could indicate a lack of systemic processes or procedures to prevent such an occurrence. Following an audit and finding of nonconformance, suppliers are required to produce corrective action plans to outline how they intend to resolve the issues, which HP then reviews and approves. HP has a zero-tolerance policy for the presence of forced and child labor. If any zero-tolerance items are uncovered in audits, HP requires suppliers to rectify these items no later than 30 days after the original audit. HP then reexamines the zero-tolerance item between 30 and 90 days after the audit with an in-person visual verification to confirm resolution of the issue.  80% of HP's suppliers audited in 2012 and 2013 confirmed that HP's EICC Code of Conduct requirements were communicated to their next tier suppliers. Approximately 65% of HP's suppliers also demonstrated that they had implemented an effective process to ensure that their respective next tier suppliers implement HP's EICC Code of Conduct. (See page 6 of Our approach for more information on our audit strategy.)
     
  3. Certification requirements for direct suppliers. HP has purchasing agreements or purchase order terms and conditions in place with our direct suppliers and Original Design Manufacturers (ODMs), requiring each to comply with international standards and applicable laws and regulations regarding forced and child labor as specified in HP's EICC Code of Conduct. HP's direct suppliers and ODMs certify that their operations comply with the laws regarding slavery and human trafficking through their assent to the terms and conditions regarding the same in these HP agreements. Although the terms of the HP’s EICC Code of Conduct do not specifically address "materials" that suppliers incorporate into products, HP presents the Code of Conduct as a total supply chain initiative and requires suppliers and ODMs to certify, at minimum, that they require their next tier suppliers to comply, including compliance with laws regarding slavery and human trafficking.

  4. Internal accountability standards and procedures. HP requires all of its employees and contractors to comply with HP's Standards of Business Conduct (SBC), which includes provisions aimed to ensure that bonded, child, forced, indentured, or involuntary prison labor are not permitted or enabled by any HP business partner or within supplier operations. HP's SBC is enforced through the HP Global Misconduct Policy which includes procedures for employees who fail to meet these standards, and we train employees on these standards annually. HP's SBC has also been adapted for contingent workers in the HP Contingent Worker Code of Conduct, which is re-enforced through labor contracts.
     
  5. Employee training. HP trains employees responsible for supply chain management on how to identify and respond to supply chain issues, such as forced labor or child labor through HP's procurement training program. The program explains the definition, purpose, and enforcement of HP standards against forced and child labor as well as how to mitigate the risks within the supply chains of products. HP also partners with a number of nongovernmental organizations (NGOs) and training partners to raise awareness of and conformance to HP's EICC Code of Conduct through various programs. Among other things, these programs look to improve supplier capabilities to comply with HP's EICC Code of Conduct and reduce the risk of nonconformance. HP's supply chain capability building programs have included worker-management communications training, which provides employees access to mechanisms to raise any issues with management or superiors. Since 2008, HP has partnered with labor NGOs to provide training on HP’s EICC Code of Conduct, as well as an independent direct hotline for workers in China, to increase workers' knowledge of labor rights. Since 2011, HP has conducted two training sessions with a total of 39 suppliers in Malaysia and Singapore on best practices for employing foreign migrant workers. The trainings were based on guidance developed in partnership with Business for Social Responsibility (BSR) through the International Labor Migration working group. Key HP suppliers as well as their respective sub-tier suppliers attended these sessions. 

In addition to the efforts described above, minerals mined in the Democratic Republic of Congo which may have directly or indirectly benefitted armed groups engaged in human rights violations is another area of concern for the industry. HP has been a leader in conducting due diligence of its supply chain, publishing a list of smelters of these minerals which were identified as being in the supply chain for HP products and being a leader in advancing industry programs and tools that enable companies to source conflict free minerals. (See Conflict minerals for more information.)

As an EICC member, HP benefits from the opportunity to participate in the identification and sharing of best practices to combat slavery and human trafficking in our supply chain with other EICC members. This includes evaluation of the EICC Code of Conduct and development of tools and training to help build the capability of EICC suppliers. Other collaborative alliances with Social Accountability International (SAI) and the Global Social Compliance Programme (GSCP) allow HP to exchange information on issues and best practices.

For full details of our Supply Chain Responsibility program and specific audit findings, see Supply chain responsibility.