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  • AIM-PROGRESS

    Responsible Sourcing Forum

    Dubai

    September 30th, 2013

  • Agenda

    2

    Welcome and Introductions 09:00

    Leadership Welcome 09:10

    AIM-PROGRESS Overview 09:50

    Assessment Process: Demonstrating Continuous Improvement 10:15

    TEA BREAK 10:45

    Assessment overview and Q&A 11:00

    Supplier Testimonial 12:30

    LUNCH BREAK 12:45

    Migrant Labor Overview: Arche Advisors 13:45

    Supplier Testimonial 15:15

    Questions and Wrap-Up 15:30

    Conclusion 16:00

  • Safety and Logistics

    Location of Exits, Evacuation routes & Emergency procedures Location of rest-rooms, food & beverage, etc Person(s) to see if you have any questions throughout the day Other security/ safety polices

  • www.aim-progress.com

    Participants at the forum shall not enter into any discussion or raise questions that may infringe any applicable competition law. By way of example, participants shall not discuss, communicate or exchange any commercially sensitive information, such as non-public information relating to prices, marketing and advertising strategy, costs and revenues, trading terms and conditions. They shall not disclose any trading relationships in terms of identifying a particular manufacturer or supplier or other.

    ANTI-TRUST NOTICE

    http://www.aim-progress.com/http://www.aim-progress.com/http://www.aim-progress.com/

  • Importance of Responsible Sourcing

    Imad Benmoussa, Head of Middle East

    Operations, The Coca-Cola Company

  • Welcome Messages from Leadership

    Nabil Sousou, Global Procurement Sr.

    Director, MEA Region, PepsiCo

  • Welcome Messages from Leadership

    Rodney Monk, Head of Procurement, Nestl

  • Welcome Messages from Leadership

    Ferhan Alemdaroglu, Procurement Operations

    Director, Central Africa, Unilever

  • Welcome Messages from Leadership

    Brian Kramer

    Director Sustainable Supply Chain, Asia-Pacific

    Middle East Africa, McDonald's

  • AIM-PROGRESS Overview

    Stuart Kyle Director Workplace Accountability, Vice Chair of AIM-PROGRESS

  • Common Understanding of Responsible Sourcing

    Review AIM-PROGRESS Objectives and Activities

    Review Scope of Responsible Sourcing Assessment

    Customer Requirements

    Agree on Next Steps

    Seminar Goals

    11

    Forum Introduction

  • http://aim-progress.com/

    http://aim-progress.com/http://aim-progress.com/http://aim-progress.com/http://aim-progress.com/

  • What is AIM-PROGRESS?

    Global forum of 36+ consumer goods companies assembled to enable & promote responsible sourcing practices

    Sponsored by the Grocery Manufacturers Association (GMA) and the European Brands Association (AIM)

    Representing > USD$ 618 billion annual revenue

    www.aim-progress.com

    http://www.aim-progress.com/http://www.aim-progress.com/http://www.aim-progress.com/

  • AIM-PROGRESS Objectives

    To promote responsible sourcing through common, or mutually accepted Supply

    Chain Standards:

    To increase efficiency by sharing data an audit for one is an audit for all

    To seek convergence with other similar initiatives

    Environmental

    Management Business Integrity

    Health & Safety Social/Human

    Rights

  • Value Proposition

    Meets multiple customer requirements in a consistent manner

    Builds & protects reputation with:

    Consumers, Regulators, Wider society, Investors

    Increases employee morale and productivity:

    Improves retention rates

    Lower overtime

    Reduces health and safety incidents

    Reduces quality incidents

    Foundation for sustainable growth

    Its the right thing to do!

  • Reputations: HARD TO BUILD. EASY TO LOSE!

  • Current Performance Levels

    50%

    29%

    14%

    7%

    Regional Facility Ratings

    Moderate Major Minor Compliant

    Over 75% of facilities assessed in

    the area are initially not compliant

    to local law/responsible sourcing

    standards

    (Source: Aim-Progress member

    audit data 2005 present.

    Includes UAE, Saudi Arabia,

    Bahrain, Kuwait, Jordan)

  • Common Issues in the Region

    1. Hours of Work: Including excessive working hours/Rest day

    violation

    2. Health & Safety: Including emergency preparedness (fire drills,

    emergency exits blocked/not marked, inadequate fire detection

    systems, etc)

    3. Wages & Benefits: including improper overtime payments and/or

    mandated benefits not provided

    4. Forced Labor: Passport retention

    5. Discrimination: including treatment of migrant workers

  • Workstreams to maximize synergies

    NOT: to create a new set of codes (respect individual. companies codes of conduct)

    to create new audit standards

    19

    Benchmark company assessment protocols

    Sharing best practice

    Audit data exchange

    Mutual Recognition

    Promoting supplier awareness

    Building capacity

    Engaging industry groups

    Going beyond compliance

    Supplier Capability Building

    AIM-PROGRESS Workstreams

  • Mutual Recognition

    Purpose:

    Reduce Audit Fatigue through

    mutual recognition of assessments

    Reduce duplicative costs throughout supply chain

    Align standards and share best practices

    Results to date:

    86% of AIM-PROGRESS members

    have signed up to MR

    Companies have met up to 40% of

    audit needs through MR

    Audit avoidance resulting in an

    estimated savings of over

    $750,000 for suppliers MUTUAL RECOGNITION COMMUNICATION

  • Supplier Capability Building

    AIM-PROGRESS and our members have held 17 events around the world,

    reaching over 1,700 supplier companies. These events build

    understanding of responsible sourcing and customer expectations.

  • Supplier Comments

    Companies must take steps to manage

    their impact on the natural

    environment... External validation of

    our activities in this area is key to

    maintaining our credibility.

    Earn the trust of our customers, licensing

    partners, suppliers, and consumers by

    manufacturing and purchasing quality

    products using ethical standards

    MWV

    Tate & Lyle Sugars

    Over 20 customers have asked for SEDEX

    information All we have to do is go into

    SEDEX and give access to those companies

    to view the questionnaire and audit we already

    completed.

    Givaudan

  • Demonstrating Compliance

    Brian Kramer Director Sustainable Supply Chain,

    McDonald's Asia-Pacific Middle East Africa

  • RESPONSIBLE SOURCING PROCESS

    Step 1:

    Suppliers Engaged

    by Aim Progress

    Company

    Step 2:

    Supplier Self

    Assessment (if

    applicable)

    Step 3:

    3rd Party Assessment

    Step 4:

    Corrective Action

    Plan

    Take steps to address gaps in your responsible business practices

    Demonstrate continuous improvement to your customers

    Independent Activity

    Independent Activity

    Common Activity

    Common Activity

  • Suppliers Engaged

    Step 1:

    Suppliers

    Engaged

    Your customers may have differing ways to

    reach out to you: via e-mail, via supplier

    forums, via phone

    Contact could be made by the customer,

    audit firms or other third parties such as

    Sedex

    ENGAGE and PARTICIPATE

  • Supplier Self-Assessment

    Tool to help suppliers and buyers assess

    overall capabilities and ensure

    management processes are in place

    Only a requirement for some companies

    If applicable, an example is the Sedex self-

    assessment which covers the following:

    Site Profile

    Labor Policy & Standards

    Health & Safety, Hygienic Assessment

    Business Integrity (anti-corruption)

    Environmental Stewardship

    Step 2:

    Supplier Self

    Assessment

    Common Method

    among SEDEX

    members; McDonald's

    requires SAQ; not

    required by all

  • 3rd Party Assessments

    Auditors are independent and impartial professionals

    Trained to evaluate compliance to laws and standards.

    WHAT IS THE ROLE OF THE AUDITOR?

    Suppliers pay for the audit

    This allows you to own the data and share the reports with multiple customers through AIM-PROGRESS

    WHO PAYS FOR AND OWNS THE AUDIT?

    Processes ensure no personally identified information leaves the facility

    Goal of assessment is to protect employees not infringe on privacy

    PROTECTION OF PRIVACY

    Check with your customer if you are unsure

    ARE OTHER STANDARDS ACCEPTABLE?

    Step 3:

    3rd Party

    Assessment

    Common Method

  • 3rd Party Assessments

    Varies depending on size of facility and scope of production. In general, two auditors spend one day in a facility (2 person-day audit), but can take up to 4 person days

    How long does the audit take?

    Assessment Process Key Staff

    Opening Meeting Site Manager, HR

    Environment, Health and Safety

    Manager

    Site Inspection Site & Environment, Health and

    Safety Manager

    Document Revie