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2Nestlé Responsible Sourcing Audit
Background of the project
► Nestle has been implementing since 2006 HR and HSE corporate standards to improve the practices in all its sites worldwide. It is the CARE project
► It has been decided to extend this program to the supply chain, which is considered as an entire part of the whole process regarding HSE and HR.
► Nestlé is a member of the Sedex (Supplier Ethical Data Exchange), � a web based data system to share information on suppliers’ social and environmental
performance between suppliers and buyers and thus helps avoid multiple assessments and audits.
► Within Sedex, Nestlé is also part of a food manufacturer sub-group (Nestle, Cadbury, Danone, Diageo; Kraft, Unilever and Mars) called " AIM Progress" with a common objective to enhance responsible sourcing practices and sustainable production systems using a single HSE referential;
3Nestlé Responsible Sourcing Audit
Background of the project
► Nestlé has decided to "show the path" and has designed this Res-source project to audit HSE & social level of compliance for their key suppliers (5000 targeted) and co manufacturers (2000 targeted) .
► This is a Nestlé own project , even if for transparency, Nestlé will use the Sedex database to register the audits report (see later in the ppt)
4Nestlé Responsible Sourcing Audit
Principles of responsible sourcing at Nestlé
► The Nestlé Corporate Business Principles
stipulate values and principles to which Nestlé has committed worldwide.
« Key suppliers are audited in order to ensure that they comply with Nestlé’sprinciples or that they are working actively to achieve compliance. »
► The Nestlé Supplier Code
specifies and supports the implementation of non-negotiable minimum standards for suppliers, their employees, agents and subcontractors.
The Supplier Code is valid for all Nestlé suppliers and is available on www.nestle.com/suppliers
5Nestlé Responsible Sourcing Audit
Principles of responsible sourcing at Nestlé
► The Nestlé Supplier Code principles covers standards r egarding :
� Business integrity : compliance with applicable laws and regulations, improperadvantage
� Sustainability
� Labour standard : prison and forced labour, child labour, working hours, compensation, non discrimination
� Safety and Health : workplace environment, product quality and safety
� Environment
� Supplying farmers
� Audit and termination of the supply agreement
6Nestlé Responsible Sourcing Audit
Objectives of Nestlé Responsible Source Audits
► What does NESTLE want to achieve with the suppliers and C o-manufacturers audits ?
� know the risk when Nestlé works with a particular supplier/co-manufacturer
� stimulate improvement – get commitment to improvement
� ensure compliance with the Nestlé Supplier Code
7Nestlé Responsible Sourcing Audit
Responsible Sourcing as improvement partnership
► NESTLE aims at working together with its suppliers to achieve good standards
engage suppliers
assesssuppliers
monitor suppliers
qualifysuppliers
trackingKPIsobjectives
gap analysiscorrective actions
supplier self assessment,3rd party audit
supplier development
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2
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4
External
3rd party audits
communicate Supplier Coderaise awareness
9Nestlé Responsible Sourcing Audit
Benefits of the external audits
► Auditing Bodies are independent third parties ensuring neutrality and credibility
► An international network ensuring both worldwide presence and knowledge of local language, culture and legislation, senior experienced in human resources, safety, health and environment
► Benchmark against other companies
► Only three are referenced by Nestlé in order to :
� ensure quality and homogeneity,
� and above all generate a learning curve to counter the limitation of audits (shows one moment in time)
► Bureau Veritas, worldwide certification and inspection body, already partner of Neslé through the Care project, has been selected as one of the third party assessor
10Nestlé Responsible Sourcing Audit
Principles of the external audits
► External audits workflow
� Request for audits based on risk assessment (performed internally by Nestlé by région)
� Supplier commissions external auditors (from auditors pool)
� On site investigation of suppliers’ compliance
� List of gaps identified
� Corrective measures agreed
► Other principles :
� supplier bears the cost
� results can be shared with other customers via SEDEX:mutual recognition by various customers
► In case of Co-manufacturer (manufacturer of Nestlé branded products), the external auditors will be commissionned and paid by Nestlé purchaser.
11Nestlé Responsible Sourcing Audit
Scope of the audit :
1. Nestlé Responsible Sourcing Audits are based on 4 pillars.
2. The Sites will be audited based on the Nestlé Audit Report, which contains 47 questions.
Safety & Health *
Environment *
Labour
CARE
Standardized Audit Methodology and Questionnaire
Business Integrity
* For manufacturing sites, the « Safety & Health » and « Environment » pillars are progressively evolving towards recognized international certification (OHSAS 18001 for Safety & Health and ISO 14001 for Environment )
• Suppliers assessment encompass :
12Nestlé Responsible Sourcing Audit
Supplier Assessment Audit day(s) : Documents reviewLegal procedures,
safety and environment
records
Site TourCheck
working conditions
and environmenta
lpracticesClosing
meetingDiscuss each finding and
propose corrective action plan
Employeesreview
Individual and/or group
interviews
Opening meeting
Management interviews
Minor Gap: isolated and non-repetitive finding or minor issueMajor Gap : systematic and repetitive finding or major issueCritical Gap: exceptional issue, which requires informing the Compliance
Committee
14Nestlé Responsible Sourcing Audit
Bureau Veritas at a Glance
Marine 12%
Inspection & In-Service
Verification13%
Certification 12%
HSE10%
Industry14%
Government Services and International Trade 7%
Consumer Products13%
Construction19%
Asia Pacific & Middle East
24%
Europe23%
Americas16%
France32%
Africa 5%► Created in 1828
► A global leader in conformity assessment services in the areas of quality, health and safety, environment and social responsibility (QHSE)
� 2011 revenue: €3'359m
� 2011 adjusted operating profit: €544m
� More than 850 offices in 140 countries
► Over 52,000 skilled employees
► Eight global businesses providing a complete set of services
� Inspection, testing, audit, certification, risk management, outsourcing, consulting and training services
► Servicing 300,000 customers across a wide range of end markets
Broad Geographical Presence ( 2011)
Eight Global Businesses(2011)
15Nestlé Responsible Sourcing Audit
Extensive Geographic Footprint
Asia & Middle East
� 190 offices, including 58 laboratories
� 10,500 staff
France
� 175 offices, including 12 laboratories
� 7,200 staff
Americas
� 140 offices, including 26 laboratories
� 5,700 staff
Europe (excl. France)
� 290 offices, including 41 laboratories
� 8,600 staff
Africa
� 55 offices, including 9 laboratories
� 1,000 staff
Global network comprising more than 850 locations a cross 140 countriesGlobal network comprising more than 850 locations a cross 140 countries
16Nestlé Responsible Sourcing Audit
Bureau Veritas and Nestlé
► Bureau Veritas is a long-term and traditional partner of Nestlé,
► In 2008, Bureau Veritas delivered to Nestlé a value of 3.7 Millions € of services, all around the world, and covering services from inspection to certification
Mexico12%
Italy1%
France21%
Spain & Portugal4%
Andean pact1%Pacific
1%Asia3% Brazil
0,1%
Russia2%
UK6,6%
Benelux1,4%
Central Europe12%
USA4%
CPD22%
Middle East0,4%
Switzerland9%
Africa1%
17Nestlé Responsible Sourcing Audit
Bureau Veritas and Nestlé
► Bureau Veritas is involved since the beginning in the CARE project since 2006 (Compliance Assessment of Human Resource, Safety & Health, Environment)
� CARE project supported through an external audit program the implementation of corporate standard rules related to HR & HSE, in all Nestlé sites around the world.
� Only 3 audited bodies, included Bureau Veritas, have been selected to deliver the audits,
► The actual Res.Source program extends these principles to the supply chain.
► Bureau Veritas is one of the auditing bodies selected to perform, worldwide, ISO 22000 quality supplier assessments involved since the beginning in the CARE project