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California Transparency in Supply Chains Act: IKEA Way on Purchasing Products and Services

CONSHOHOCKEN, PA, 2015-12-9 — /EPR Retail News/ — On January 1, 2012, the California Transparency in Supply Chains Act of 2010 (SB 657) went into effect. The law requires retailers operating in California to publically state the steps they have undertaken to eliminate slavery and human trafficking from their supply chain. At IKEA we have worked actively with our suppliers across the world to ensure that good working and environmental conditions are integrated into their operations and human rights respected.

The IKEA Way on Purchasing Products and Services (IWAY) is the IKEA Supplier Code of Conduct. It was created and implemented at all IKEA home furnishing suppliers in 2000. It outlines the minimum social, environmental and working conditions that IKEA suppliers are required to maintain.

IWAY requirements include:

  • Implementation of workplace health and safety
  • Management of wages and working hours
  • Prevention of forced and bonded labour
  • Prevention of discrimination
  • Prevention of child labour
  • Freedom of association
  • Requirements for ethical recruitment

Within these requirements prevention of slavery and human trafficking is monitored and compliance with local laws and international conventions and principles is required.

In addition to IWAY requirements for existing suppliers we evaluate potential suppliers according to our mandatory IWAY Start-up requirements. These include:

  • No child labour
  • No forced or bonded labour
  • Prevention of environmental pollution
  • Prevention of safety hazards
  • A transparent and reliable system for records of working wages and working hours.
  • Insurance covering medical treatment for work related accidents

All potential suppliers are evaluated through on site supplier assessments and must meet these start-up requirements before a contract is signed. Supplier orders are stopped immediately if a non-compliance with IWAY start-up requirements is discovered. Once the issue is fully resolved and the correct actions taken, suppliers are placed on probation for six months with intensified monitoring. Remedies must be implemented in accordance with the law, IKEA requirements and in the best interest of the worker(s).

IKEA regional purchasing co-workers regularly visit supplier factories to support implementation and maintain IWAY requirements. Their active presence contributes to suppliers’ development and helps to ensure adherence to the IWAY standard. Announced and unannounced audits are also conducted by IKEA and independent third party auditors to provide a more accurate picture of factory conditions. Each home furnishing supplier is audited at least every second year, and more frequently in some countries, depending on risk assessments. Follow-up audits are also conducted to ensure non compliance points are corrected. Audit results are registered and results followed up monthly.

The IKEA Compliance and Monitoring Group (CMG) is responsible for ensuring consistency across our global auditing procedures, including site tours, document checks and co-worker interviews. This is done through calibration activities and training as well as compliance audits to verify results.

All suppliers and purchasing teams in the IKEA purchasing organisation receive training in the requirements and working methods with regard to the IKEA supplier code of conduct IWAY. IKEA audit and support teams receive specific training on IWAY procedures, working methods and auditing skills.

At IKEA, we believe we can have a positive impact on people and the environment and are continually looking for ways to improve our sourcing practices and we will continue to do so.

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SOURCE: Inter IKEA Systems B.V.

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