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Intel gets tough with suppliers

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Releases details of corporate responsibility report

Intel has audited almost five times as many of its suppliers in 2011 than it did the previous year.

Chipzilla set itself a target of visiting 50 on-site, third-party audits of its suppliers during the last year. It had that target last year as well, but missed it by only carrying out 49 audits, while one had to be rescheduled.

In comparison Intel only carried out eight visits in 2010. The company also conducted 249 in-depth assessments and 289 self-assessments by suppliers.

But the findings were not that great. Intel found 426 priority and major findings, the highest class of non-compliance as defined by the company.

Most of the non-compliance related to management systems such as a lack of documentation and systems for CSR, inadequate communication with workers or suppliers and a lack of audits. But there were also 112 instances of labour abuse, which included working hours of more than 60 hours per week, and workers not being given at least one day off a week. There were also 28 issues relating to ethics, such as not having an anonymous reporting line for employees to raise issues or concerns through.

The report was interesting because it must have covered Foxconn, which has been the subject of criticism over its treatment of workers. During 2011, Intel carried out audits at three Foxconn facilities and found them about as bad as others in the region. Most of the breaches of rules were in the areas of labour conditions, safety systems, and management systems.

The company also carried out an audit on a potential supplier. Due to the results of the audit, it decided to delay using it as a supplier, and is now working with the company to address the issues before beginning sourcing. Brian Krzanich, chief operating officer at Intel, was quoted in the report: “If you want to do business with Intel, if you want to be part of our global supply chain, you’re going to have a clear understanding of these corporate responsibility issues and a roadmap for where you’re heading as a corporation.”

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