Corporate Responsibility
Motorola Mobility

Risk Based Assessment Program

We apply a risk-based approach to supplier monitoring, utilizing the EICC supplier engagement model. The program enables us to improve suppliers’ CR performance by promoting compliance with our Supplier Code of Conduct and local legal requirements.

We prioritized our resources in 2012 to target our production suppliers and will progressively extend our risk assessments to other suppliers based on material risk. We also require our tier-one suppliers (suppliers from which we buy directly) to monitor the corporate responsibility performance of their suppliers.  We select suppliers for on-site audits based on risk. Audit findings are reported and categorized by severity and we work with suppliers to correct the issues identified. We may use a follow-up audit, conducted by a third party or our team, to verify that suppliers have made the necessary improvements.

The factors used in our risk assessment are:

  • Results of self-assessment questionnaires in which suppliers provide information on their systems for addressing environmental, ethics, labor and health & safety performance;
  • Strategic factors, such as manufacture or service delivery location, processes, relationship, and reputation;
  • Past audit results; and
  • Information from any specific reports made to our Ethics Line and other reporting channels, as well as allegations identified through the media or NGOs.

Monitoring and auditing

We conducted 51 on-site audits of our suppliers in 2012. Our supplier audits follow the EICC protocol to assess compliance with our Supplier Code of Conduct and local legal requirements. In addition to highlighting violations of our code, audits also raise supplier awareness of the issues and enable us to target improvements.

Responding to audit findings

Working with suppliers to improve labor and environmental conditions is crucial to our program. In most cases, we do not simply terminate contracts, because we believe that this can result in deteriorating conditions for workers.

When we identify issues during an on-site audit, our process requires the supplier to develop a corrective action plan. The plan must specify a timely schedule for implementation - our guidelines on timing depend on the severity of the issue. Our Supply Chain and CR teams coordinate communications with the supplier to ensure root causes are identified and milestones are reached in the resolution of all pending issues.

If a supplier does not meet corrective action deadlines or develop appropriate corrective action plans, we apply an escalating series of enforcement penalties ranging from placing the supplier on “new-business hold”— meaning no new business will be placed until the issue is resolved—to termination if a supplier does not respond by taking necessary corrective actions.

2012 Audit findings

Audit findings are shown in the tables below. 71 percent of the 1088 findings have been closed.  We are actively managing the open findings to ensure implementation deadlines are met and the actions are acceptable.

Detailed Audit Findings Number of Findings Identified
ENVIRONMENT
Air Emissions 13
Chemical and Hazardous Materials 64
Environmental Permits and Reporting 32
Pollution Prevention and Resource Reduction 3
Wastewater and Solid Waste 12
     SUBTOTAL ENVIRONMENT 124
ETHICS
Business Integrity 41
No Improper Advantage 19
Disclosure of Information 2
Fair Business, Advertising and Competition 19
Protection of Identity 11
Protection of Intellectual Property 4
Responsible sourcing of minerals 5
Privacy 3
Non retaliation 1
     SUBTOTAL ETHICS 105
GENERAL
EICC Code 15
     SUBTOTAL GENERAL 15
HEALTH AND SAFETY
Dormitory and Canteen 29
Emergency Preparedness and Response 73
Industrial Hygiene 51
Machine Safeguarding 32
Occupational Injury and Illness 40
Physically Demanding Work 23
Safety 48
     SUBTOTAL HEALTH AND SAFETY 296
LABOR
Child Labor Avoidance* 31
Freedom of Association 1
Freely Chosen Employment 31
Humane Treatment 9
Non-Discrimination 10
Wages and Benefits 74
Working Hours 105
     SUBTOTAL LABOR 261
MANAGEMENT SYSTEM
Audits and Assessments 38
Communication 17
Company Commitment 20
Corrective Action Process 16
Documentation & Records 11
Legal and Customer Requirements 25
Management Accountability & Responsibility 53
Performance Objectives with Implementation Plan and Measures 32
Risk Assessment and Risk Management 37
Training 28
Worker Feedback and Participation 6
Supplier Responsibilitiy 4
     SUBTOTAL MANAGEMENT SYSTEM 287
     GRAND TOTAL 1088

Most significant and prevalent issues

The five most prevalent audit findings revealed by our audits are shown in the table:

Most Common Audit Findings Total
Working Hours 105
Wages and Benefits 74
Emergency Preparedness and Response 73
Chemical and Hazardous Materials 64
Management Accountability & Responsibility 53

Audit findings 2012

Working hours

Excessive or higher than legally permitted working hours was a common finding for on-site audits conducted in 2012, with 105 instances identified. We measure suppliers’ working hours against our supplier code, the EICC code of conduct, and applicable legal requirements. Suppliers are audited against normal working hour limits, overtime working hour limits, and limits on consecutive days worked. This means that a single supplier can have multiple findings related to working hours.

When issues are identified, we request suppliers to provide us with working hours data so that we can track progress closely.

Wages/benefits

Incorrect payment of wages and benefits continues to be a frequent finding, with a total of 74 instances. The most common issue related to workers not being provided the locally required insurance. We also identified issues linked to fines and penalties, and a lack of proper documentation.

Emergency preparedness

There were 73 findings relating to emergency preparedness. Deficiencies identified included the lack of exit signs, exit doors not opening outward, and fire drills not conducted.

Chemical and Hazardous Materials

There were 64 audit findings related to hazardous substances. The majority of these findings focused on improper storage of hazardous substances, and a lack of material safety data sheets.

Management Accountability and Responsibility

The 53 audit findings in this category relate to non-compliant systems, procedures and documentation. For example, company representatives responsible for implementing the CR management system at suppliers must be clearly identified.

*Child Labor Avoidance

Although findings in this section were not among the most prevalent, we consider them to be significant. In our audits, there have been no instances of underage workers identified. All of our 31 audit findings in this area are related to employees above 16 but under 18 years of age, for which there are more stringent legal requirements related to working conditions. The audit findings primarily related to working hours in excess of legal limits or with hazardous materials or processes that are not permitted for this age-group. We continue to work with our suppliers to address all issues which are not yet closed.

Other issues included the absence of:

  • Controls to prevent the hiring of underage workers
  • Young workers policy
  • Effective implementation mechanisms
  • Proper documentation
  • Completion of appropriate physical examinations.

Motorola Mobility has zero tolerance for underage workers on a supplier's production line. In the event an underage worker is identified during one of our supplier audits, our process requires that the issue be contained immediately.  See our supplier code of conduct.