Seven & i Holdings is strengthening implementation of the Business Partner Action Guidelines to provide customers with safe, reliable products and fulfill our societal responsibilities in cooperation with our suppliers on matters such as human rights, labor issues and the environment.
Seven & i Holdings has formulated the Seven & i Holdings Business Partner Action Guidelines (the "Guidelines") and requires all business partners to understand and complyobserve them. These guidelines are designed to not only guarantee the safety and quality of products and services, but also consideration for promote legal compliance, environmental conservation and labor conditions throughout the supply chain so that we can fulfil our corporate social responsibility together with our business partners. The Guideline is communicated to business partners of Group companies through various meetings.
To ensure that business partners understand the Guidelines and to assist with effective CSR initiatives, Seven & i Holdings administers a self-check sheet for business partners, explaining all of the specific requirements of the Guidelines.
In drafting the check sheet, we referred to sources such as the ISO 26000 standard, the Japanese Business Federation's Charter of Corporate Behavior, and the OECD Guidelines for Multinational Enterprises. Business partners asked to submit the check sheet annually include manufacturers of the Group's universal strategic private-brand products Seven Premium and Seven-Eleven original daily manufacturers, as well as distribution centers and IY's direct import suppliers overseas. We administer these check sheets to ascertain the status of our business partners' CSR activities.
In the check sheets, the respondents answer 61 questions, including whether there are any breaches in compliance, whether a consulting desk is available to plant workers, whether a business partner requests that its own suppliers comply with the Seven & i Holdings Business Partner Action Guidelines, and whether the formation of labor unions is permitted. The check sheet also asks business partners to confirm the CSR-related certifications (SA8000, BCSI, SMETA, ICS, ICTI, WRAP, EICC) that its factories have obtained.
Responses to this check sheet are entered into a database, and can be confirmed at any time by all employees in the relevant departments, not just the buyers directly involved in transactions with a given plant. Buyers determine whether or not to continue doing business with a business partner based partly on the business partner's level of engagement in CSR, which is shown in the database.
(Questions about whether a business partner has prepared documentation and implementation records that prove compliance with the Guideline.)
The Flow of Business Partner Action Guidelines: Seven Premium as an example
Since the fiscal year ended February 28, 2013, Seven & i Holdings has conducted CSR audits to determine the status of compliance with the Guidelines at a selection of factories of the business partners we have asked to submit check sheets. The CSR audits are performed annually, mainly targeting factories of business partners producing private-brand products in developing countries.
The CSR audit is performed by an external third-party auditing organization based on our independently established CSR audit program (about 114 items in 16 categories.) The CSR audit items are based on the content of ISO 26000, and the audit examines whether a factory complies with the principles laid out in the Business Partner Action Guidelines in the following 16 categories. These categories are aligned with the international labor standards established by the International Labour Organization (ILO).
Factories are given prior notice before being visited for audits, and compliance with CSR audit items is confirmed through interviews with managers and workers. If the audit finds items that do not comply with the audit program (unacceptable items), the external audit organization provides guidance to the business partner concerned. The business partners must submit a corrective action plan (CAP) to the auditing organization within 10 days of the audit being completed, and must take immediate action to improve the items. After receiving a report on the completion of improvements for the relevant items, the completion of improvements is confirmed based on the submission of photos showing the improvements, guarantee documents and other materials. However, in cases that exceed certain standards, such as when numerous serious unacceptable items are found, the resolution of issues is confirmed by performing a re-audit, in which conditions are verified by revisiting the factory.
When the unacceptable items are remedied or the auditing organization and Seven & i Holdings judge that the content of the CAP to be satisfactory, a Certificate is issued to the relevant business partner.
In the fiscal year ended February 29, 2016, CSR audits were conducted at 322 factories in 11 countries, including China, Vietnam, Thailand, Indonesia, Cambodia and Myanmar. The average compliance rate across all audited factories was 90%, with re-audits at 31 factories. The majority of items for improvement were due to insufficient recognition or misinterpretation of items required under local laws and regulations, and mainly involved labor environment, safety and hygiene, and approvals and authorizations. After their audits, each factory provided a CAP that included photos showing the improvements, guarantee documents, and a re-audit, enabling us to confirm that improvements were successfully made.
(All problem items have now been remedied)
|Number of factories for audit||Number audited||Re-audit rate||Number of re-audits|
Buyers and all other employees involved in procurement-related duties receive training on the Seven & i Holdings Corporate Action Guidelines. They are also educated about the Company's CSR audit requirements to enable them to consider product manufacturing sites in terms of environmental, social, and governance aspects.
The evaluation standard used for all buyers in the quarterly personnel evaluation review includes questions not only about product quality, but also about the manufacturing site audit results. In this way, the level of CSR performance at the business partners covered by each buyer is reflected in the buyer's compensation.