Auditing Our Suppliers
Third-party social responsibility audits provide suppliers with feedback about how well they are meeting legal requirements and Ford’s expectations. They also help identify specific areas for improvement.
Our Audit Approach
Our human rights and working conditions audits, conducted by qualified third-party social auditors, consist of a pre-assessment questionnaire, a review of facilities and relevant documents, and interviews with both management and employees. Audits are generally announced and coordinated with the supplier in advance; however, in 2015, we conducted our first semi-announced audit of a supplier facility. An audit is defined as semi-announced when the supplier is aware that it will take place but is not aware of the exact date.
Auditors are provided with a list of key issues that must be immediately raised (within 24 hours) if found during an audit. These issues include:
The presence of child workers, forced labor or physical disciplinary practices
Noncompliance with minimum wage levels, fraudulent books or attempted bribery
Life-threatening situations such as blocked fire exits or an absence of lock-out procedures
In 2015, we received three auditor notifications that were immediately investigated and were deemed not to be priority violations. For example, in one case, a supplier had not posted a sufficient number of evacuation plans around the facility. When this was found in an audit, we worked directly with the supplier to rectify the issue and ensure that proper signage was put in place.
In 2015, 81 initial social responsibility audits and 120 follow-up audits were conducted, as detailed below:
2015 Audits: Assessment Results
|2014||2015||Total To Date1|
Data notes and analysis:
- Program Total represents cumulative data from 2003 to 2015.
2015 Audits: Prevalent Issues Identified
|Audits with Referenced Issues Identified (Number/%)||Finding||Sample Corrective Actions|
No procedures to ensure working hours and rest day limits are followed
Supplier revised “Excessive Working Hours” training procedure; deviations in daily procedure reported
Some employees working more than six consecutive days
Facility to ensure every employee has at least one day off per week
|Child Labor Avoidance||46/57%|
No child labor avoidance policy or procedures found
Supplier updated employee manual to include child labor remediation
No procedure in place to respond to potential discovery of underage workers
Facility now requires and keeps copies of proof of birth of all employees
|Category: Health and Safety|
|Emergency Preparedness and Response||59/73%|
Insufficient lighting around emergency exits
All non-working lights to be replaced during annual shutdown
Evacuation maps only posted in English
Evacuation maps to be translated into local languages of employees
No strobe/visible fire alarms in high noise areas to show emergency evacuation route
Facility will install visible fire alarm in high noise areas
No fire drill held in last 12 months
Fire drill planned for early 2016
|Occupational Injury and Illness||41/51%|
First aid material not clearly marked or accessible
First aid kits have been replenished and placed in each department
No record of designated individuals attending first aid training
First aid course will be given to all facility workers, and course completion certificates issued
No investigations into causes of safety issues or implementation of corrective actions
Preliminary analysis conducted; data now reviewed at monthly Safety Committee meetings
|Category: Labor and Ethics Management|
|Management Accountability and Responsibility||43/53%|
No assessment of the status of labor and ethics management system to identify improvement opportunities
A system review will be conducted and gaps will be discussed and addressed
Health and safety responsibilities for managers and supervisors not defined
Facility will define and document health and safety roles and responsibilities for managers, supervisors and workers
Taking Corrective Action
For any issues identified during an audit, the supplier is required to prepare a corrective action plan, which Ford reviews and monitors. Regular supplier reviews help ensure ongoing compliance with the agreed action plan, which serves as a blueprint to audit closure.
Should a supplier be unable or unwilling to address audit findings within our expected timeframe, we first engage with our regional and global purchasing communities to attempt to resolve the issue. However, we reserve the right to end our relationship with any supplier that fails to comply with our policies or local laws, or fails to address noncompliances within an agreed timeframe. This approach enables us to ensure that human rights are upheld throughout our supply chain, while mitigating any potential negative impact on the supplier relationship.
In 2015, seven suppliers that did not meet our expected timeframe were escalated within Global Purchasing, resolved all issues and were not removed from our supply base due to human rights concerns.