Labour Standards

Adopting fair and ethical labour practices is central to our reputation and ongoing success. We require our business partners to maintain the high standards we set ourselves.

Supplier Code of Conduct

Richemont has developed a ‘Model’ or template Supplier Code of Conduct as part of the Group’s Corporate Social Responsibility Guidelines. The Code covers labour relationships, employment practices and ethical business principles. It also addresses specific industry-related issues such as animal testing, preservation of endangered and protected species and responsible sourcing of diamonds and gold.

Our Maisons have different products and different supply chains. As such, we believe that giving Maisons the freedom to tailor the Code to their own business needs ensures it remains at its most effective.

This year has seen real progress in formally sharing the Code content with our suppliers. We estimate that for over 70% of our product-related purchases (in value), suppliers have been presented with, received and/or signed a supplier code of conduct. We will continue with our efforts to increase coverage in 2008/09.

In common with accepted good practice, our Supplier Code of Conduct includes an endorsement of the Universal Declaration of Human Rights, International Labour Organisation Conventions and other internationally recognised standards of labour practices.

The Code covers the following areas:

Healthy and safe working conditions – providing a safe and healthy working environment in accordance with applicable laws and regulations
Wages and working hours – complying with local legislation on minimum wages, working hours and employee benefits
Freedom of association – allowing workers to associate with lawful and peaceful workers’ associations
No discrimination – not subjecting people to discrimination based on factors including race, age, religion and sexual orientation amongst others
No child labour – not employing people under the age of 15 or younger than the age for completing compulsory education
No forced employment – not using forced labour and where overall employment terms are not voluntary
No disciplinary treatment – not subjecting people to harassment , violence or intimidation
Responsible environmental management – fully complying with local legislation, industry regulations and should endeavour to comply with the Richemont Environmental Code of Conduct.

Compliance

Securing compliance with the Code must be a part of normal commercial practice. Each Maison is responsible for working with its own suppliers. Some of our Maisons - for example in watchmaking - share a number of suppliers. To facilitate internal collaboration, we have set up new tools for Maisons to share information and identify common suppliers who have been advised of Richemont’s expectations in this area.

This year, using a risk-based approach, some of our Maisons have started using third parties to audit compliance with the code by a number of suppliers. More than 20 of these external audits have taken place. Some areas for improvement were identified. These will be followed up as part of the ongoing supplier relationship.

Case Study: Cartier’s programme of supply chain audits

This year, Cartier started an ongoing programme of supplier audits, using an independent specialist to audit suppliers against the Supplier Code of Conduct. The comprehensive programme covers suppliers from all product lines and areas of the business, ranging from raw materials to packaging and furniture. Importantly, the programme has been developed in the spirit of partnership with suppliers and to this end, Cartier has invested significant time and resources to communicate the programme to its suppliers. This investment has paid off, as Cartier has been delighted with the positive response from suppliers who have taken part in the programme to date. Another notable feature of the programme is that Cartier ensured that its own manufacturing sites were audited using the same methodology, before extending to external suppliers.