Challenge
Intel is a multinational technology corporation headquartered in Silicon Valley, specialising in the design and manufacturing of essential technologies that power the cloud and an increasingly smart, connected world. It is highly committed to corporate responsibility and has set ambitious goals for environmental sustainability, supply chain responsibility, diversity and inclusion, and social impact that benefit the environment and society.
The company is committed to creating frameworks and processes to actively combat environmental, social and government (ESG) issues. Most recently Intel has focused on identifying and addressing human rights violations related to its operations and supply chain. In the past few years, Intel has significantly increased due diligence to identify and prevent forced and bonded labour.
Intel believes that focusing on responsible recruitment is a critical part of eliminating the root causes of the issue. Since 2014, it has developed programs focused on responsible recruitment across its own supply chain, and has also spearheaded initiatives across its industry to amplify positive change.
Approach
Intel’s procurement processes are built on a strong foundation of transparency, governance, and ethics, and in 2014 Intel’s Global Supply Chain team launched a multi-year initiative to:
- Gain better visibility into its global, multi-tier supply chain, and
- Improve tracing of the complex levels of labour agents who source workers.
Since 2014, Intel has taken multiple steps to verify, evaluate, and address risks of slavery and human trafficking in their supply chain, adapted based on the level of risk of the supplier:
- Code of Conduct to all suppliers: Intel set clear expectations for all of their 11,000 suppliers – both those who provide direct materials as well as those who provide services and staffing – by ensuring all suppliers are contractually obliged to comply with Intel’s Code of Conduct. These expectations are codified in Intel’s publicly available Code of Conduct and the industry standard Responsible Business Alliance Code, which Intel helped to draft.
- Assessment and audits of higher-risk segments: To assess compliance to expectations, Intel conducts assessments and onsite audits of higher-risk suppliers, either using a certified third-party audit firm or trained Intel auditors. During these audits there is an extensive review of supplier policies and performance indicators, meetings with supplier’s senior management, direct interviews with a sampling of workers, and if applicable, visits to worker housing.
Expanding their visibility deeper into the supply chain
In 2017, Intel designed an innovative approach to expand visibility into their multi-tiered supply chain. Intel requested 17 of their suppliers who employ foreign and migrant workers to embark on deep analyses of their risk-management approaches, including mapping the journeys of workers from home country to place of employment.
The process included an audit of at least one recruiting agent per supplier. By 2018, 11 audits had been conducted, with positive results overall. Suppliers addressed common findings such as inconsistent oversight of recruiting agents. In 2018, Intel further built upon the program by going deeper into the supply chain. Intel requested approximately 50 of their suppliers to adopt their approach to each work with at least three of their own major suppliers to assess and address their risks of forced and bonded labour.
Their work at this tier 2 level has resulted in changes to supplier policies and procedures, and stronger engagements with recruiting and labour agents across a wider number of at-risk suppliers.
Outcome
Between 2014 and 2018, the audits and assessments uncovered more than 300 violations that contribute to a high risk of forced and bonded labour. Some examples of compliance gaps identified and resolved include:
- excessive fees,
- passport holding,
- substandard living conditions, and
- differences between job promised and job assigned.
Through these audit and mitigation efforts their suppliers have returned over $14 million in fees to more than 13,000 workers, new worker contracts were issued, the labour agents returned the passports, and foreign workers moved into modern living quarters. Since then, Intel has steadily expanded the scope of their efforts to evaluate more than 100 suppliers in 12 countries.
These efforts have resulted in Intel establishing a strong system to detect and address risks of forced and bonded labour among their highest risk suppliers and their recruiting and labour agents. Suppliers continue to realize positive business impacts from the program, all of which lead to improved productivity and product quality that benefit the supplier, Intel, and their customers.
A testimonial from a Tier 1 factory equipment supplier: “In Malaysia, we repaid worker recruitment fees and returned passports to our foreign contract workers. These workers are much happier now as they feel they have been treated equally to other employees who did not have to pay to secure employment. Overall, we feel they are more motivated and committed to their work and the organization now.”
Success factors
Intel contributed to the publication of standardised cross-industry guidance on fee repayment and communication to suppliers across the supply chain which clearly articulated the expectations around combating conditions of forced labour. These combined efforts will continue to drive the electronics supply chain towards greater compliance and enhance the livelihood of vulnerable workers across the globe.
Next steps
Between 2020 and 2030, Intel intends to increase the number of suppliers in scope by 5 times, amounting to assessments of approximately 500 suppliers. Intel also aims to extend their impact through collaboration with other like-minded organisations. Intel co-founded the multi-industry, multi-stakeholder Responsible Labour Initiative (RLI), which aims to protect and promote the rights of vulnerable workers. Through their partnership, many in-depth workshops with suppliers and recruiting and labour agents have taken place across Malaysia, Singapore, and Thailand. Intel estimates that the 7 capability building sessions undertaken so far have reached in excess of 200 suppliers already since 2014, and they look to see that number grow significantly through continued efforts. Image: Alexander_Safonov/ Shutterstock.com
