Building a strong relationship with our suppliers

Our supply base management process is summarized in Figure 1. Environmental and ethical considerations have been integrated into all the applicable processes. Supplier assessments play a key role in the supply base management process.

Figure 1 We carry out regular supplier assessments as a tool to help promote good performance and also to monitor compliance. This is not, however, a policing activity. We see on-site assessments as an opportunity to raise awareness, identify potential risks and share best practices.

A thorough assessment is carried out according to our supplier management processes by trained Nokia assessors. If there is no non-conformance, the next assessment will be organized on an as-needed basis.

If we find a supplier is not meeting Nokia's expectations, we compel them to commit to and implement corrective action. This is the best solution for the supplier, for Nokia, for the workers, and for the environment. In practice, our suppliers have generally reacted positively and seen this as a way to improve their business. However, if a supplier were to refuse to address any of these issues we would be prepared to reconsider our business relationship.

We conduct different types of on-site assessments. At the moment, we do not use third-party assessors within our supplier assessments. However, we invite our suppliers to use NGOs or similar parties for the purpose of assuring the effectiveness of their own labor standards and environmental practices.

Finally, it is important to highlight that supplier assessments are always based on sampling and evaluating the current situation at the time of the assessment. Despite the fact that we have systematic practices to perform assessments, these results typically provide a "snap shot" of a situation. Assessments are part of a development tool; used alone, they do not always provide the right solution. To drive sustainable change we often need to combine them with other tools and approaches. This is an area which we are continually working to improve.