Promoting respect of Human rights
Besides the adoption of a strict reference framework vis-à-vis its partners, PPR has developed a series of operating tools in order to promote respect for human, social and environmental rights among its suppliers.
Local purchasing and supply offices
To ensure that its business partners respect human and social rights, the Group’s branches and PPR Purchasing (PPR-P), the Group’s purchasing hub for white goods, brown goods, grey goods and consumables, are present on the international production sites.
At the 2007 year-end, the PPR branches had a network of 31 international sourcing or purchasing offices in Asia (China, India, Bangladesh, Vietnam, Philippines, etc.), in Europe (France, Italy, Poland, Germany, etc.), in the Americas (Brazil, El Salvador), as well as in Turkey and South Africa.
This permanent presence of the Group’s buyers, who are nearly all natives of the countries where these purchasing offices are located, is a key factor in terms of quality compliance for the products supplied and observance of the Group’s labour standards. Upstream, the labour and social criteria set forth in the Charter are part of the approval process for all PPR company suppliers.
Suppliers’ assessments
The PPR Group conducts internal and external assessments for its suppliers. With the integration of Puma, PPR now has two different evaluation systems that are nevertheless based on complementary evaluations, whether internal (self-assessment questionnaires for Redcats, PPR-P, Conforama, social compliance audits for Puma) or external (social compliance audits).
- Internal evaluations (Redcats Group, Conforama and PPR-P)
Sent automatically to every supplier, the self-assessment questionnaire is part of the internal auditing system enabling the Group’s purchasing teams to perform an initial analysis regarding the level of respect for human, social and environmental rights.
The questionnaire, completed and signed, must be returned to the branches by the suppliers, who are thus bound to know and respect the principles of the Supplier Charter. The results of questionnaires can be used to guide any future audits to be performed at the production sites of direct suppliers by specialised independent firms and PPR Group in-house staff.
The Group also commissions independent entities to conduct compliance audits within the pool of PPR suppliers. A measurement tool, these audits can identify where improvement is needed. In total, 734 audits were conducted by PPR in the 2007 Group structure. Of the 734 audits conducted, 83.7% took place in Asia (including 55.5% in China) and 9.4% in Europe.
> Breakdown of audits performed by PPR in 2007 by geographical area (as %)
In the event of a major case of non-compliance (child labour, forced labour…), a warning system was put in place since 2005: the Notification alert.
In this specific case, the measures put in place are more severe. Each time a case of non-compliance is detected, the manager responsible for the company’s social audits is notified. If the misgivings cannot be resolved rapidly or if the supplier does not undertake to change its practices within a reasonable timeframe, it is automatically removed from PPR’s panel of suppliers. For example, 4 Redcats Group suppliers were delisted in 2007 for reasons of non-compliance with regard to child labour.
Dialogue with suppliers
The implementation of supervisory measures for suppliers does not of itself help to establish long-standing partnerships with them. PPR therefore seeks to go beyond this approach to supplier relations by promoting exchanges via dialogue and encouraging the sharing of information to provide a constructive response to problems of common interest. This type of approach is long and tricky to set up but offers genuine results. The Group is striving to implement this type of initiative to obtain such results.
By way of illustration, in connection with its SA 8000 (1) certification strategy, initiated in 2006, Gucci and its trade unions wished to inform, promote, enhance and apply within the “Gucci system” (employees, shareholders, customers, suppliers, subcontractors, business and financial partners, local authorities, institutions, category-specific associations) lines of conduct that comply with fundamental ethical and social principles.
Accordingly, Gucci set up CSR training programmes in Tuscany with its network of suppliers and subcontractors. The brand has also developed a training course dedicated to its most significant suppliers. It includes modules on quality and production scheduling.