HUMAN RIGHTS AT WORK A DISCUSSION WITH THE GLOBAL SOURCING OFFICE BANGLADESH, 3 APRIL 2009

1. HUMAN RIGHTS AT WORK A DISCUSSION WITH THE GLOBAL SOURCING OFFICEBANGLADESH, 3 APRIL 2009

2. AGENDA Carrefour's Commitments INTRO Human Rights in the supply chain Part 1 Carrefour's Actions : auditing and more Part 2 Social compliance in the sourcing process Part 3 Discussion on challenges Discussion

3. Background & Commitments • For over 10 years, Carrefour has been committed to put in practice its commitment to respecting fundamental universal principles (child labour, working condition, etc.). • Carrefourgives practical effect to this commitmentin a number of ways: • Cooperation with the International Federation for Human Rights (FIDH) since 1997/1998 : 10 years • Establishment and adoption of a supplier’s charter • Implementation of a methodology to ensure the charter is respected • The setting up of a cooperative framework FIDH: the INFANS association

4. Non Food Quality Seminary Social présentation • FIDH: International Federation for Human Rights • Non-governmental organisation, created in 1922 • 155 member organisations in over 100 countries • International Secretariat based in Paris • Objective: promote respect of the Universal Declaration for Human Rights: civil and political rights and economic, social and cultural rights. • FIDH believes that states have the primary responsibility to uphold human rights, Business also have the obligation to respect human rights. • www.fidh.org

5. Background & Commitments • Carrefour commits to respect the internationally recognised standards in terms of Human Rights, in particular: • The Universal Declaration on Human Rights (1948) • The International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work • The fundamental ILO Conventions • National labour laws The most protective standard (national or international) should be applied in Carrefour's supply chain

6. Background & Commitments Why does Carrefour need a supplier charter for the respect of human rights? - Business as part of society has to respect human rights. - Most States where Carrefour operates have ratified international human rights instruments and national legislations also protect rigths of workers. However, in many countries human rights are not implemented. - All major global companies have accepted their Corporate Social Responsibility (CSR) including respect for human rights (Global Compact etc.)

7. Why should Carrefour respect human rights? BUSINESS RISKS • Not respecting human rights can be bad for business: • Medias, NGOs and consumers are increasingly attentive to the respect of human rights • Multinational corporations can suffer from campaigns from NGOs and medias if accused of complicity and if they do not take serious measures • Ex: Primark, Recent Clean Clothes Campaign and CASHING IN Report targets CARREFOUR, WALMART, LIDL, TESCO, ALDI

8. Why should business respect human rights? ECONOMIC BENEFITS • Good for global retailers Customers pay more and more attention to ethics Social Responsible Investment Funds growing • Good for suppliers Productive, more motivated workers Lower worker turnover Higher and more consistent sales volume All global retailers now demand social compliance

9. Why should suppliers respect human rights? Safety Training PPE – Masks, Gloves, Boots Time Off Safe, well maintained machinery and facilities Comfortable Working Conditions Limit on Working Hours Adequate Payment Healthy Workers Satisfied Workers Safe Workers

10. 1. Commitment to protect Human Rights: the supplier charter The supplier charter includes six obligations. Each obligation refers to the Universal Declaration of Human Rights and the principles of the ILO (International Labour Organization). • To immediately eradicate slavery, servitude for debt and the use of forced or compulsory labour, • Not to employ or make children work who are under the age of 15 • To ensure workers have the right to join Trade Union and to collectively bargain,

11. Commitment to protect Human Rights • To give workers remuneration which satisfies their basic needs, • To guarantee safety working conditions, • To respect equal opportunities in terms of recruitment and remuneration

12. Human rights issues in the supply Chain • In factories producing for Carrefour we pay attention to the following issues: • Child labour • Forced labour • Discrimination • Disciplinary practices, harassment and abuse • Freedom of association • Working hours and overtime • Remuneration • Health and safety

13. NO CHILD LABOR • HOW DO YOU DEFINE CHILD LABOUR? • HOW DO YOU RECOGNIZE CHILD LABOUR?

14. NO CHILD LABOR • MAIN RULES • Carrefour charter says no worker under 15 • For China:16 year old • Bangladesh labour laws: 14 or 12 under certain conditions • Pakistan: 14 years old: no more than 5 hours/day • Young workers deserve special attention(No one under 18 is to do hazardous work or work at night) • A policy to prevent recruiting child labor, checking and record employee’s ID copy

15. NO CHILD LABOR These images of child labour come from a subcontractor of a factory working for GAP

16. NO CHILD LABOR NO CHILD PRESENCE IN FACTORIES ALERT • Child presenceat workplace is also forbidden because of safety issues; • In this case a child care area should be set up. NOT OK

17. NO FORCED LABOR • HOW CAN WE RECOGNIZE FORCED LABOUR?

18. NO FORCED LABOR ALERT MAIN RULES No forced, no threats or involuntary labor Workers are free to come/go from work site Workers free to leave employment after giving reasonable notice Workers are not required to lodge deposits/ID Card Spain : Agricultural workers shelter in the greenhouses

19. NO FORCED LABOR • Retention of all kind of ID documents • All the document below were deposited at the factory: • Original ID cards • One original floating population marry & bearing certificate • One original drive certificate • 70% worker’s original ID cards were retained in the factory. • The factory would return the ID card to the workers at the end of the year.

20. NO FORCED LABOR Delay of wage payment to workers Examples found in factories sourcing for Carrefour: Release only part of the salary to the workers once per month and release the residual wage at the end of the year in a lump. Paying wages three times per year to the workers ALERT NOT OK

21. NO FORCED LABOR FORCED LABOR TYPICAL EXAMPLE Collecting deposit Deposit required upon recruitment Deposit for working uniform/time card Deposit for training

22. NO DISCRIMINATION • CAN YOU THINK OF GROUPS THAT ARE MORE LIKE TO FACE DISCRIMINATION IN THE WORKPLACE? • CAN YOU GIVE EXAMPLES OF DISCRIMINATION?

23. VULNERABLE GROUPS • Prisoners ALERT Using Prison labor in China The factory was sub-contracting some of their orders to prison authority. NOT OK

24. VULNERABLE GROUPS • No discrimination in treatment hiring, compensation, access to training, promotion, termination or retirement based on: • Age, Race, Origin; • Religion; • Disability; • Gender; • Marital Status etc. Migrant agricultural workers in Europe are often discriminated against. Some of them suffer from forced labor.

25. VULNERABLE GROUPS No discrimination against women • Women Workers often suffer from discrimination • Women are often subject of harassement from male supervisors. • Women workers have specific rights: pregnant women shall be given adequate protection. • Maternity leave with pay is compulsory.

26. NO HARASSMENT AND ABUSE DISCIPLINARY PRACTICE, ABUSE • MAIN RULES • Workers free from: • Sexual harassment, • Verbal or physical abuse, • Financial penalties.

27. WORKING HOURS According to the law in Bangladesh, what is the maximum number of hours, including overtime, that a worker can do in a week?

28. EXCESSIVE WORKING HOURS WORK HOURS AND OVERTIME MAIN RULES At least one day off in seven Overtime only voluntary Maximum 48 hours/ week . Max 60 Hours/ week including overtime! Over time Max. 36 hours/month. Overtime paid accordingly to the law

29. EMPLOYMENT PRACTICES MAIN RULES Wages meet local minimum /industry standard, Written & understandable info about wages (Pay slip), To pay social insurances when mandated by law, No deduction as a disciplinary measures, Labor contracts signed with employees

30. WHAT IS THE MINIMUM WAGE IN GARMENT SECTOR AS PER LAW?

31. DECENT LIVING FOR WORKERS Bangladesh Minimum Wage in Garment industry is not a living wage • Food • Water • Health • Housing • Education

32. HEALTH & SAFETY AT WORK ALERT MAIN RULES Fire Safety Equipment Emergency Evacuation First Aid Equipment Safe Passage Toilet Facilities P.P.E. Hazardous Substances Electrical safety Special equipment certificate Hygiene certificate Building safety certificate

33. HEALTH & SAFETY AT WORK Chemical storage and handle NOT OK OK

34. HEALTH & SAFETY AT WORK Personal Protective Equipment NOT OK OK

35. JUST AND FAVOURABLE CONDITIONS OF WORK Harsh working conditions impact on the health and wellbeing of workers Exemple: Unfair conditions for workers in banana plantation in South America

36. RIGHT OF WORKERS TO JOIN TRADE UNIONS AND TO COLLECTIVE BARGAINING MAIN RULES Recognition of the right of workers to join Trade Union and to collectively bargain; Support independent workers representation where trade unions not allowed by law

37. RIGHT OF WORKERS TO JOIN TRADE UNIONS AND TO COLLECTIVE BARGAINING • What is the usefulness of freedom of association? • Why is it important for workers?

38. 2. CARREFOUR'S ACTIONS FOR THE RESPECT OF HUMAN RIGHTS IN THE SUPPLY CHAIN WHAT IS CARREFOUR DOING TO SUPPORT RESPECT OF HUMAN RIGHTS IN THE SUPPLY CHAIN? 1) Supplier charter in the contract with the supplier 2) Social audits and corrective actions 2) Sharing audit results with other retailers: ICS 3) Overcoming shortcomings of individual companies audits: GSCP 4) Experience in training suppliers on human rights at work 5) Question governments on respect of human rights

39. CARREFOUR SUPPLIERS’ OBLIGATIONS • Every supplier has to SIGN THIS CHARTER before beginning any cooperation with Carrefour.

40. CARREFOUR SUPPLIERS’ OBLIGATIONS • Carrefour supplier’s obligation contained in the Charter, Supplier Operation Procedure, Commercial Contract : • To allow all kinds of visits from Carrefour or agency on behalf of Carrefour ,to get a view of production conditions, including visits of INFANS representatives. • To display the charter in the local language and in a visible place • To distribute it to all its employees and to the unions present in the company, • To ensure these commitments are respected by all factories used for Carrefour production

41. Social audits Deployment Policy in Carrefour • Priority on suppliers • Brand name/ First price/ no name • Non Food and Food Product • Geographical risk defined through INFANS : China, India, Pakistan, Bangladesh, Vietnam, Laos, Cambodia, Indonesia, Thailand, Taiwan,

42. Results of Social audits

43. 2007 Synthesis of non compliances Important campaign of social audits In 2007, 609 social audits: 492 Initial Audits 117 follow-up audits Since beginning of social audits: some improvements in factories Report 2007: No important improvement/ regrettably permanent situation of non-compliances

44. CHINA INDIA BANGLADESH PAKISTAN VIETNAM Wages and benefits Working Hours and Overtime Child labor (Young Workers) Forced labor Général Working Conditions Freedom of Association Discrimination Disciplinary Practice 2007 Results : Not conform Respect of the Charter principles : < 5 % 5 à 30 % 30 à 70% > 70%

45. Synthesis of Non-conformities 2007:Issues complex and variable • China : - Supplier Park not fixed - Recurring non-conformities in chapters Working Hours and Wages. -No freedom of Association in China

46. Synthesis of Non-conformities 2007:Issues complex and variable . • India : - High Number of non-conformities due to a campaign of systematic social audits before integration in Carrefour supplier list - Project related to the audit of several subcontractors of our suppliers

47. Synthesis of Non-conformities 2007:Issues complex and variable • Bangladesh - Political instability and problems of the country, choice to increase social audit campaigns. -Problem of implementation of new law on child labor (lowering to 12 years) and Minimum Wage Act. - unannouncedCampaign for social audits for 92% of the audits done on this area.

48. Non conformities Bangladesh FIDH mission to Bangladesh finds human rights are still not respected in the supply chain: - no freedom of association - no living wage - excessive working hours etc. The report also highlights the limits of social auditing in itself.

49. The Situation today Shared Supply Base All consumer goods Sourcing Companies Result Today Carrefour/ICS Wal-Mart Gap/SAI Tesco/ETI Migros/BSCI Company X - Audit Fatigue - Confusion - Inefficiency - High Cost - Focus on audits not on remediation Social Audit Supplier A SocialAudit SocialAudit SocialAudit SocialAudit SocialAudit

50. Audits are not enough to ensure improvement in social working conditions in the factories BEYOND AUDITS • Support and participation in Social Compliance Programme: harmonizing and mutualising social audits • Questioning governments on respect for human rights at work • An example of training of our suppliers with a local NGO : Karmojibi Nari