Supply chain responsibility

HP is the world’s largest information technology (IT) company and has one of the industry’s most extensive supply chains. We work with more than 1000 production suppliers (responsible for product materials, components, and manufacturing and distribution services) in more than 1200 locations worldwide (see map). Nearly 50,000 nonproduction suppliers provide goods and services not used in electronic product manufacturing. We take seriously the challenge of raising social and environmental responsibility (SER) standards in our supply chain and lead the IT industry in monitoring our suppliers and helping to build their SER capabilities.

The supply chain landscape is constantly evolving, and is vastly different than 10 years ago when we launched our supply chain SER program. For example, with its rapidly growing manufacturing economy, China is now the dominant electronics manufacturing region. These changes mean that while some supply chain concerns have been addressed, others continue to require attention, and new issues frequently emerge (see below).

As our supply chain develops, our priorities remain constant: to protect workers’ rights and dignity, ensure strong health and safety standards, reduce environmental impacts, and uphold high standards of business ethics.

Stakeholder collaboration

We work with more than 95% of our high-risk profile suppliers as well as other stakeholders on SER issues. The collaboration includes:

• Setting clear expectations and integrating social and environmental requirements into our sourcing operations
• Evaluating performance through self-assessments, audits, and key performance indicators
• Improving performance by approving corrective action plans developed by suppliers, and engaging workers and management in capability-building initiatives
• Engaging with local and global stakeholders to better understand and address issues in our supply chain
• Reporting fully and transparently the results of our efforts to improve supplier SER performance

Prominent SER issues in 2010

Heightened media, government, and customer attention, as well as the involvement of new governmental and nongovernmental organizations (NGOs), has increased the public profile of many issues we are working to resolve.

Recent issues include:

• Conflict minerals Minerals used to derive tantalum, tin, tungsten and gold, which originate from the eastern Democratic Republic of Congo (DCR), have been associated with financing armed conflict. HP is taking many steps to enhance transparency in the supply chain and ensure that DRC conflict minerals are excluded from our products. (See Conflict minerals for more information.)
• Foxconn suicides In 2010, more than a dozen workers at Foxconn (a supplier to HP and other electronics companies) committed or attempted suicide in Shenzhen, China. HP’s senior management has worked with Foxconn to improve conditions for workers. Our response included third-party worker surveys, corrective action, and monthly monitoring programs, among others. (See the case study for more information.)
• Legislative focus on forced labor There is a growing focus on the issue of forced labor, including the possibility of human trafficking or slavery, in product supply chains. In California for example, a new law will go into effect on January 1, 2012, that requires manufacturers and retailers doing business in the state to provide more transparency into efforts made to address this issue. The law is designed to help consumers make more informed decisions about the products they purchase. (Learn more about the California Transparency in Supply Chains Act of 2010.)
• Student workers NGOs have raised concern about suppliers in China recruiting labor from vocational schools under the pretense of internships to learn valuable technical skills. Reports suggest these young workers are used as cheap, unskilled labor for manufacturing, rather than in the stated capacity for which they were hired. In addition to our work to improve understanding of HP’s Electronic Industry Code of Conduct (EICC), we are implementing pre-departure training for suppliers and schools to address the issue. (See Goals for more information.) This equips facility and school trainers with knowledge to teach students about preparing for work life, including knowledge of labor rights and occupational health.

HP's Electronic Industry Code of Conduct and General Specification for the Environment

In 2003, HP was the first electronics company to publish a Social and Environmental Responsibility Supplier Code of Conduct. In 2004, we co-led the development of the EICC, the standard applied across the industry's global supply chain. HP endorses the EICC in its entirety. We have supplemented it with additional requirements specific to freedom of association (standard A7) . We believe workers at supplier facilities have the right to freely choose employment and the right to associate freely and join or be represented by works councils or labor unions on a voluntary basis and bargain collectively as they choose. We refer to the EICC as supplemented by HP, collectively, as HP's EICC. All suppliers must conform to HP's EICC.

HP's suppliers must also comply with our General Specification for the Environment , which contains, among other things, HP's global product content requirements. This includes restricting or prohibiting certain chemical compounds or materials in HP brand products or manufacturing processes. (See Materials for more information.)

1. ¹ This number includes PCs, printers, and servers.