Overview

In 2010, HP conducted 70 production supplier site audits (including third-party investigative audits) and 22 HP-initiated Electronic Industry Citizenship Coalition Validated Audit Process (VAP) audits, bringing our total since 2005 to 681. In 2010, we placed additional focus on helping to make key improvements with a small set of major suppliers. Fifty-two of our 2010 audits were follow-up audits to measure progress in reducing nonconformances found during initial reviews. The results of these follow-up site audits showed that major and minor nonconformances had on average reduced by 30%, from an average of 20 to an average of 14 findings per facility.

Working hours

Excessive working hours remains one of the most common issues in our audits, especially in China. HP is making a concerted effort to reduce the instances of working hour nonconformances. In 2010, we asked suppliers with major working hours nonconformances to regularly report key performance indicators (KPIs) to us. Chinese labor law stipulates a lower working hour limit than HP’s EICC. Suppliers may therefore be in compliance with HP’s EICC, but not with local law. Suppliers must comply with the stricter rules to avoid a nonconformance. Our working hours KPIs show that in the past year, 60% of suppliers with major nonconformances related to working hours were in compliance with HP’s EICC requirement of fewer than 87 overtime working hours per month, but not in compliance with local law.

In 2011, we will continue to expand the number of suppliers reporting working hours KPIs.

Rate of nonconformance in sites audited:
0%
 0%
1-10%
 1-10%
11-25%
 11-25%
26-50%
 26-50%
51%+
 51%+
EICC provisions Nonconformances*
General Major Minor Trend**
EICC awareness
1-10%
11-25%
 no change
Compliance with laws
0%
1-10%
 no change
Supplier management program
11-25%
26-50%
 decreasing
Labor Major Minor Trend
Freely chosen employment
1-10%
1-10%
 no change
Child labor avoidance***
1-10%
26-50%
 decreasing
Working hours****
51%+
1-10%
 no change
Wages and benefits
11-25%
11-25%
 decreasing
Humane treatment
1-10%
1-10%
 no change
Nondiscrimination
11-25%
11-25%
 decreasing
Freedom of association
1-10%
1-10%
 no change
Labor management system Major Minor Trend
Overall
11-25%
1-10%
 no change
Health and safety Major Minor Trend
Occupational safety
11-25%
11-25%
 decreasing
Emergency preparedness
26-50%
26-50%
 decreasing
Occupational injury and illness
11-25%
11-25%
 no change
Industrial hygiene
11-25%
26-50%
 no change
Physically demanding work
1-10%
26-50%
 decreasing
Machine safeguarding
1-10%
11-25%
 no change
Dormitory and canteen
1-10%
11-25%
 no change
Environmental health and safety management Major Minor Trend
Overall
1-10%
1-10%
 no change
Environmental Major Minor Trend
Environmental permits and reporting
1-10%
1-10%
 decreasing
Pollution prevention and resource reduction
1-10%
1-10%
 no change
Hazardous substances
11-25%
26-50%
 decreasing
Wastewater and solid waste
1-10%
1-10%
 decreasing
Air emissions
1-10%
1-10%
 no change
Product content restrictions
See Materials section
Ethics Major Minor Trend
Business integrity
1-10%
1-10%
 no change
No improper advantage
1-10%
1-10%
 no change
Disclosure of information
0%
0%
 no change
Intellectual property
1-10%
1-10%
 no change
Fair business, advertising and competition
1-10%
1-10%
 no change
Protection of identity
1-10%
1-10%
 no change
Community engagement
0%
1-10%
 no change
* These data reflect the results of HP’s last site audit and do not show supplier corrective actions not yet validated by HP through a follow-up audit. Sites with follow-up audits tend to have higher initial levels of nonconformance than other audited sites.
** Increases are generally caused by auditing additional suppliers or facilities.
*** A major nonconformance in the underage worker provision of HP’s Electronic Industry Code of Conduct (EICC) does not necessarily indicate the presence of child labor. For example, an auditor may uncover inappropriate working conditions for young workers (16–18 in China), or insufficient management systems and age checks to prevent child workers from being employed. These would be considered a major nonconformance, but do not necessarily signify the presence of workers under the legal minimum, or the minimum age specified by HP’s EICC. While there were instances of underage worker nonconformances uncovered in 2010, no child labor was uncovered.
**** A major nonconformance in the working hours provision of HP’s EICC indicates that at least one of the following requirements was not met:
  • Workers are allowed mandated breaks, holidays, and vacation days to which they are legally entitled
  • The average hours worked in a work week over the last 12 months at the facility do not exceed 60 hours or the legal limit (whichever is stricter)
  • Workers are provided with at least one day off per every seven workdays on average
Asia Pacific

Asia Pacific findings

Location Initial audits Follow-up audits Workers at site audited
Indonesia 1 1 3,000
Malaysia 2 2 4,000
Philippines 0 1 15,000
Singapore 4 1 2,000
South Korea 1 0 (Not available)
Thailand 1 2 5,000
Total 9 7 29,000

In 2010, we conducted nine initial and seven follow-up audits at 16 sites across Indonesia, Malaysia, the Philippines, Singapore, South Korea, and Thailand. Our audits identified working hours and hazardous substances handling as significant issues, similar to 2009. Nonconformances decreased in 2010, as capability-building programs such as our EICC labor rights awareness training helped to improve performance.

Supplier audits in 2010 showed a significant reduction in nonconformances relating to emergency preparedness in 2010, another major issue raised in 2009.

Rate of nonconformance in sites audited:
0%
 0%
1-10%
 1-10%
11-25%
 11-25%
26-50%
 26-50%
51%+
 51%+
EICC provisions Nonconformances*
General Major Minor Trend**
EICC awareness
1-10%
1-10%
 decreasing
Compliance with laws
0%
1-10%
 no change
Supplier management program
1-10%
11-25%
 decreasing
Labor Major Minor Trend
Freely chosen employment
1-10%
11-25%
 no change
Child labor avoidance
0%
1-10%
 no change
Working hours
26-50%
11-25%
 decreasing
Wages and benefits
0%
1-10%
 decreasing
Humane treatment
0%
1-10%
 decreasing
Nondiscrimination
1-10%
11-25%
 decreasing
Freedom of association
0%
0%
 no change
Labor management system Major Minor Trend
Overall
1-10%
0%
 decreasing
Health and safety Major Minor Trend
Occupational safety
1-10%
11-25%
 decreasing
Emergency preparedness
11-25%
11-25%
 decreasing
Occupational injury and illness
1-10%
11-25%
 decreasing
Industrial hygiene
1-10%
11-25%
 decreasing
Physically demanding work
1-10%
11-25%
 no change
Machine safeguarding
1-10%
1-10%
 no change
Dormitory and canteen
0%
11-25%
 decreasing
Environmental health and safety management Major Minor Trend
Overall
1-10%
0%
 decreasing
Environmental Major Minor Trend
Environmental permits and reporting
0%
0%
 decreasing
Pollution prevention and resource reduction
0%
0%
 no change
Hazardous substances
11-25%
11-25%
 decreasing
Wastewater and solid waste
0%
1-10%
 no change
Air emissions
0%
1-10%
 no change
Product content restrictions
1-10%
1-10%
 no change
Ethics Major Minor Trend
Business integrity
0%
0%
 no change
No improper advantage
0%
1-10%
 no change
Disclosure of information
0%
0%
 no change
Intellectual property
0%
0%
 no change
Fair business, advertising and competition
0%
0%
 no change
Protection of identity
0%
1-10%
 no change
Community engagement
0%
0%
 no change
* These data reflect the results of HP’s last site audit and do not show supplier corrective actions not yet validated by HP through a follow-up audit. Sites with follow-up audits tend to have higher initial levels of nonconformance than other audited sites.
** Increases are generally caused by auditing additional suppliers or facilities.
Greater China

Greater China findings

Location Initial audits Follow-up audits Workers at site audited
China 19 31 220,000
Total 19 31 220,000

In 2010, we conducted 19 initial and 31 follow-up audits at 46 sites in Greater China. The major issues identified during the most recent audits included emergency preparedness, hazardous substances handling, occupational safety, wages and benefits, and working hours.

Since 2009, we have asked certain supplier sites in China with major nonconformances related to working hours to report monthly KPIs that track the average number of hours worked, and amount of overtime. (See Key performance indicators for more information.)

HP has introduced health-related educational programs, such as the Health Enables Returns Project (HERproject), to teach workers about general and reproductive health needs of women in manufacturing, as a way of addressing occupational safety concerns. HP’s worker-management communications training program, started in China in 2009, also helps workers understand their labor rights, and provides an independent workers’ grievance hotline for communicating concerns about their working environment. (See Capability building for more information.)

Rate of nonconformance in sites audited:
0%
 0%
1-10%
 1-10%
11-25%
 11-25%
26-50%
 26-50%
51%+
 51%+
EICC provisions Nonconformances*
General Major Minor Trend**
EICC awareness
1-10%
11-25%
 decreasing
Compliance with laws
0%
1-10%
 no change
Supplier management program
11-25%
26-50%
 no change
Labor Major Minor Trend
Freely chosen employment
1-10%
1-10%
 decreasing
Child labor avoidance***
1-10%
26-50%
 decreasing
Working hours****
51%+
1-10%
 no change
Wages and benefits
26-50%
11-25%
 decreasing
Humane treatment
11-25%
1-10%
 no change
Nondiscrimination
11-25%
11-25%
 decreasing
Freedom of association
1-10%
1-10%
 no change
Labor management system Major Minor Trend
Overall
26-50%
1-10%
 increasing
Health and safety Major Minor Trend
Occupational safety
11-25%
11-25%
 no change
Emergency preparedness
26-50%
26-50%
 decreasing
Occupational injury and illness
11-25%
26-50%
 no change
Industrial hygiene
26-50%
26-50%
 no change
Physically demanding work
11-25%
26-50%
 no change
Machine safeguarding
1-10%
11-25%
 decreasing
Dormitory and canteen
11-25%
26-50%
 no change
Environmental health and safety management Major Minor Trend
Overall
11-25%
1-10%
 increasing
Environmental Major Minor Trend
Environmental permits and reporting
1-10%
11-25%
 decreasing
Pollution prevention and resource reduction
1-10%
1-10%
 no change
Hazardous substances
26-50%
26-50%
 decreasing
Wastewater and solid waste
1-10%
1-10%
 decreasing
Air emissions
1-10%
1-10%
 decreasing
Product content restrictions
1-10%
1-10%
 no change
Ethics Major Minor Trend
Business integrity
1-10%
11-25%
 no change
No improper advantage
1-10%
1-10%
 no change
Disclosure of information
0%
0%
 no change
Intellectual property
1-10%
1-10%
 no change
Fair business, advertising and competition
1-10%
11-25%
 no change
Protection of identity
1-10%
1-10%
 no change
Community engagement
0%
1-10%
 no change
* These data reflect the results of HP’s last site audit and do not show supplier corrective actions not yet validated by HP through a follow-up audit. Sites with follow-up audits tend to have higher initial levels of nonconformance than other audited sites.
** Increases are generally caused by auditing additional suppliers or facilities.
*** A major nonconformance in the underage worker provision of HP’s Electronic Industry Code of Conduct (EICC) does not necessarily indicate the presence of child labor. For example, an auditor may uncover inappropriate working conditions for young workers (16–18 in China), or insufficient management systems and age checks to prevent child workers from being employed. These would be considered a major nonconformance, but do not necessarily signify the presence of workers under the legal minimum, or the minimum age specified by HP’s EICC. While there were instances of underage worker nonconformances uncovered in 2010, no child labor was uncovered.
**** A major nonconformance in the working hours provision of HP’s EICC indicates that at least one of the following requirements was not met:
  • Workers are allowed mandated breaks, holidays, and vacation days to which they are legally entitled
  • The average hours worked in a work week over the last 12 months at the facility do not exceed 60 hours or the legal limit (whichever is stricter)
  • Workers are provided with at least one day off per every seven workdays on average
Europe

Europe findings (including Russia)

Location Initial audits Follow-up audits Workers at site audited
Czech Republic 0 3 4,000
Germany 1 0 400
Hungary 0 3 400
Netherlands 0 1 1,500
Russia 1 0 100
Total 2 7 6,400

In 2010, we conducted two initial audits and seven follow-up audits at nine sites in Czech Republic, German, Hungary, the Netherlands, and Russia. The major issues identified during the most recent audits related to emergency preparedness and working hours. We found fewer nonconformances in provisions relating to occupational safety and industrial hygiene compared with previous audits.

Rate of nonconformance in sites audited:
0%
 0%
1-10%
 1-10%
11-25%
 11-25%
26-50%
 26-50%
51%+
 51%+
EICC provisions Nonconformances*
General Major Minor Trend**
EICC awareness
0%
11-25%
 no change
Compliance with laws
0%
1-10%
 no change
Supplier management program
1-10%
26-50%
 decreasing
Labor Major Minor Trend
Freely chosen employment
0%
0%
 no change
Child labor avoidance
0%
0%
 no change
Working hours
0%
0%
 no change
Wages and benefits
0%
0%
 no change
Humane treatment
0%
0%
 no change
Nondiscrimination
0%
0%
 no change
Freedom of association
0%
0%
 no change
Labor management system Major Minor Trend
Overall
0%
0%
 no change
Health and safety Major Minor Trend
Occupational safety
11-25%
26-50%
 no change
Emergency preparedness
11-25%
26-50%
 decreasing
Occupational injury and illness
0%
0%
 no change
Industrial hygiene
1-10%
11-25%
 no change
Physically demanding work
0%
26-50%
 decreasing
Machine safeguarding
0%
1-10%
 no change
Dormitory and canteen
0%
0%
 no change
Environmental health and safety management Major Minor Trend
Overall
0%
0%
 no change
Environmental Major Minor Trend
Environmental permits and reporting
0%
0%
 no change
Pollution prevention and resource reduction
0%
0%
 no change
Hazardous substances
11-25%
11-25%
 increasing
Wastewater and solid waste
0%
0%
 no change
Air emissions
0%
0%
 no change
Product content restrictions
1-10%
26-50%
 decreasing
Ethics Major Minor Trend
Business integrity
0%
0%
 no change
No improper advantage
0%
0%
 no change
Disclosure of information
0%
0%
 no change
Intellectual property
0%
0%
 no change
Fair business, advertising and competition
0%
0%
 no change
Protection of identity
0%
0%
 no change
Community engagement
0%
0%
 no change
* These data reflect the results of HP’s last site audit and do not show supplier corrective actions not yet validated by HP through a follow-up audit. Sites with follow-up audits tend to have higher initial levels of nonconformance than other audited sites.
** Increases are generally caused by auditing additional suppliers or facilities.
Latin America

Latin America findings

Location Initial audits Follow-up audits Workers at site audited
Brazil 5 5 8,000
Mexico 1 2 3,000
Total 6 7 11,000

In 2010, we conducted six initial and seven follow-up audits at 13 sites in Brazil and Mexico. Major issues identified during the most recent audits in Brazil included emergency preparedness, nondiscrimination, and working hours. Mexico’s primary issue identified during the most recent audits was working hours, although performance in this area has improved. In Brazil, we found improvements in labor and ethics management systems compared with previous audits.

Rate of nonconformance in sites audited:
0%
 0%
1-10%
 1-10%
11-25%
 11-25%
26-50%
 26-50%
51%+
 51%+
EICC provisions Nonconformances*
General Major Minor Trend**
EICC awareness
1-10%
11-25%
 no change
Compliance with laws
0%
1-10%
 no change
Supplier management program
11-25%
26-50%
 increasing
Labor Major Minor Trend
Freely chosen employment
0%
1-10%
 no change
Child labor avoidance
0%
26-50%
 no change
Working hours
26-50%
11-25%
 no change
Wages and benefits
1-10%
1-10%
 no change
Humane treatment
0%
11-25%
 no change
Nondiscrimination
1-10%
11-25%
 decreasing
Freedom of association
0%
0%
 no change
Labor management system Major Minor Trend
Overall
26-50%
1-10%
 decreasing
Health and safety Major Minor Trend
Occupational safety
1-10%
26-50%
 decreasing
Emergency preparedness
26-50%
26-50%
 no change
Occupational injury and illness
1-10%
26-50%
 decreasing
Industrial hygiene
11-25%
11-25%
 no change
Physically demanding work
1-10%
26-50%
 decreasing
Machine safeguarding
11-25%
11-25%
 no change
Dormitory and canteen
11-25%
11-25%
 no change
Environmental health and safety management Major Minor Trend
Overall
11-25%
11-25%
 no change
Environmental Major Minor Trend
Environmental permits and reporting
11-25%
1-10%
 decreasing
Pollution prevention and resource reduction
0%
11-25%
 no change
Hazardous substances
11-25%
26-50%
 increasing
Wastewater and solid waste
0%
1-10%
 decreasing
Air emissions
0%
0%
 no change
Product content restrictions
26-50%
11-25%
 increasing
Ethics Major Minor Trend
Business integrity
1-10%
1-10%
 decreasing
No improper advantage
1-10%
1-10%
 increasing
Disclosure of information
0%
0%
 no change
Intellectual property
0%
1-10%
 no change
Fair business, advertising and competition
1-10%
1-10%
 no change
Protection of identity
11-25%
11-25%
 increasing
Community engagement
0%
0%
 no change
* These data reflect the results of HP’s last site audit and do not show supplier corrective actions not yet validated by HP through a follow-up audit. Sites with follow-up audits tend to have higher initial levels of nonconformance than other audited sites.
** Increases are generally caused by auditing additional suppliers or facilities.