November 2006

Background

We have a long tradition of supplier assessments at Nokia. As stakeholder expectations and Nokia requirements have evolved, so have our methodologies and tools. In-depth assessments of labor conditions and environmental assessments are examples of this development.

In 2003, we piloted an in-depth labor conditions assessment at supplier sites throughout China and used the results to help define and improve our overall global assessment methods. The pilot outcome included a new methodology, a checklist for all supplier assessors, and further development of training material.

The requirements for an in-depth labor conditions assessment are based on local legal requirements, the SA8000 standard, and the Nokia Supplier Requirements. These assessments are a complementary addition to our regular supplier assessments. Our aim is to carry out 5-10 in-depth assessments per year.

Methodology

An in-depth labor conditions assessment covers the following:

• factory site tour (covering all facilities including dormitory, canteen, and chemical storage)
• interviews with relevant management
• interviews with workers
• review of relevant documentation (e.g. payroll records, working hours)

The interviews with workers are conducted in complete confidence and in the worker's native language by local interviewers.

The process for reporting and following up is the same as in the system assessments.

Experiences

Typical challenges which arise in these assessments include:

• disciplinary practices (fines)
• freedom of association (where it is legally restricted)
• health and safety requirements
• overtime hours
• pay structure
• sub-supplier monitoring system
• waste management

Ensuring good labor conditions and environmental practices within a global supply chain depends on the responsibilities and efforts of each tier in the supply chain. The enforcement of local labor and environmental laws can also affect the process.