Supply Chain & Ethics
Supply Chain & Ethics
Supply Chain and Ethics
BlackBerry is committed to ensuring that the management of our supply chain activities is socially and environmentally responsible.
As a multinational company we recognize that our supply chain operations reach many parts of the globe and a diverse range of communities, each with their own culture and business norms. As a responsible organization, we also recognize that there are certain standards of employment and environmental performance that must be respected wherever we operate or have business relationships.
BlackBerry is an active participant in industry initiatives that champion social and environmental responsibility, including the Electronic Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI).
Supply chain social responsibility implementation
Supplier Code of Conduct
The BlackBerry Supplier Code of Conduct (‘Supplier Code’) details the ethical, labor, health and safety, and environmental standards that BlackBerry expects its suppliers to comply with. Our Supplier Code is based on the EICC Code of Conduct and has been updated since its inception in January 2011 to incorporate the latest revisions to the EICC Code. Compliance with the Supplier Code is an expectation for doing business and is included in new supplier contracts and contract renewals. We also encourage our suppliers to apply the same standards within their own supply chain operations.
We recognize that across the broad spectrum of suppliers we engage and the geographies in which they operate, there is the potential for unethical social and environmental practices. BlackBerry uses a risk assessment process to identify which suppliers have the highest risk of noncompliance with our Supplier Code and to help quantify and manage these risks.
We apply this process to suppliers of materials and components directly associated with the manufacturing of BlackBerry products. We assess our total supply base on an annual basis. We start with a high level risk assessment model that measures suppliers against four major criteria: geographic location of the supplier’s facilities, commodity type and manufacturing process, the nature of the supplier’s relationship with BlackBerry, and the supplier’s history of social and environmental issues including previous audit results.
Each supplier is scored and as a result will be classified High, Medium or Low risk. As new suppliers are introduced between annual programs, they will be assessed on a case by case basis and risk classified to reflect the existing spread of supply based risk.
We require suppliers classified as high risk to complete a self-assessment questionnaire using the EICC-ON supplier management tool. Based on the results, BlackBerry can then engage with suppliers either directly or through an on-site audit to verify the shortfalls, understand the root causes, and to agree on appropriate corrective and or preventative actions.
BlackBerry launched the Supplier Social and Environment Responsibility (SER) Audit Program in 2010. BlackBerry conducts SER audits of suppliers not only to monitor and assess their level of conformance with our Supplier Code, but also to mitigate supply chain SER risks and ultimately drive supplier SER performance improvement.
BlackBerry uses an independent third-party, EICC-approved SER audit firm to conduct our supplier factory audits, and we also use reports of audits carried out under the EICC Validated Audit Program (VAP). When non-conformances are found the supplier will submit and implement an effective Corrective Action and Preventative Plan which will include a detailed root cause analysis. We closely monitor the supplier’s progress and regularly request status updates as well as closure evidences including on-site closure verification audits as necessary.
In fiscal 2013, 85 supplier audits were carried out. Of these audits, 39 were initial audits and 46 were follow-up audits. This has brought the total number of audits since the inception of our audit program to 195, comprising 124 initial audits and 71 follow-up audits. This year we focused on conducting more follow-up audits to verify the closure of non-conformances found during initial audits. Geographically, our audits have covered supplier facilities in all higher-risk locations: 108 in China, 70 in the rest of Asia, 9 in Latin America, and 8 in Eastern Europe.
Audit results are expressed as percentage scores that represent the supplier’s level of conformance with our Supplier Code requirements. For supplier management purposes, we classify the scores into four ranges: 100%, 90-99%, 80-89%, and <80%. Since inception, 72% of our supplier facilities have received audit scores of 90-100% (in their most recent audits). Of these, 29% have achieved audit scores of 100%, (mostly in follow-up audits), meaning full conformance with our Supplier Code. Furthermore, 97% of re-audited suppliers have improved their audit scores in the follow-up audits.
The most frequently observed areas of non-conformance are: excessive working hours, inadequate emergency preparedness and response and improper hazardous substance management. These issues are common across the electronics industry supply chain; therefore, we are working with the EICC on industry-wide initiatives and solutions to address these issues in addition to our own audit process.
Investigating Claims of Supplier Code Violations
Beyond the standard audit process, BlackBerry is occasionally made aware of allegations that a supplier may have violated our Supplier Code. These can come from a variety of sources, both internal and external to the company. In these instances BlackBerry will investigate and assess the particular circumstances which will typically involve direct contact with the supplier and may include completion of a self-assessment questionnaire and an on-site audit. Any follow on action will be dependent on the particular circumstances. In FY2013 BlackBerry had two such instances brought to its attention, both of which were brought to a satisfactory conclusion.
Freely chosen supply chains
BlackBerry supports the principle of freely chosen employment and does not support the use of slave labor in any of its forms, including forced labor and child labor.
Building capabilities through training
In addition to our audit program, BlackBerry is involved with capability-building activities to promote sustained and lasting change at supplier facilities. BlackBerry leads the EICC and GeSI working group that develops training courses and other resources to help develop knowledge within the supply chains for electronics. BlackBerry encourages our suppliers to participate in the EICC and GeSI’s courses in health and safety and in worker-management communications. Training courses can also be part of a supplier’s preventative action plan to address a non-conformance. In 2012, 14 of our suppliers attended courses conducted in China and Malaysia.
Worker-Management Communication Training Event hosted by AT&S, a supplier to BlackBerry.
Supply Chain and the Environment
BlackBerry recognizes the importance of understanding the scale of the environmental impacts of our supply chain, such as greenhouse gas (GHG) emissions, waste generation and water use, so that we can identify opportunities to reduce these impacts and increase supplier efficiency. BlackBerry collaborates with suppliers to ensure environmental strategies are place, including resource reduction commitments and programs to achieve their targets.
In fiscal 2013, we took our first steps towards measuring the environmental impact of our supply chain, focusing on the management of energy and water resources. We requested our suppliers of product components and materials to complete a questionnaire through the EICC Carbon and Water Reporting System. We received an above average response rate of 57%.
This initial exercise provided valuable information about the extent of carbon and water measurement. Among the suppliers that responded to the questionnaire:
- 91% of respondents reported Scope 1 and 2 data
- 13% reported Scope 3 data
- 68% have emissions reduction targets
- 6% reported using renewable energy
- 41% have a water strategy, plan or policy
- 20% have water reduction or reuse targets.
BlackBerry will use this information to help structure future programs.
In 2013 BlackBerry started work with Trucost Plc to assess our total supply chain’s dependence on natural capital, including the assessment of both direct suppliers of product-related components and materials as well as indirect suppliers. This environmental performance data, accounting for more than 90 percent of total spend with suppliers, serves as a benchmark for BlackBerry to measure our performance in relation to the industry overall and to assess the impact of our improvement strategies over time.
The assessment also identifies which suppliers and purchasing sectors have the highest impacts within BlackBerry’s supply chain, helping us to focus our improvement efforts.
Note: All data is for calendar year 2012
|Distribution of GHG, water and waste impacts across BlackBerry’s supply base.|
|Direct supply base||Indirect supply base||Total supply base|
|GHG emissions (tCO2e)||1,069,506||238,402||1,307,908|
|Water Consumption (m3)||83,802,861||38,964,752||122,767,613|
BlackBerry expects our suppliers to commit to resource reductions and to share their environmental strategies with us upon request. We are actively working with key suppliers to understand their existing programs and will continue to seek supplier carbon and water data through the EICC-ON reporting tool.
Read about BlackBerry's approach in an article in Climate Change: The New Economy, published to coincide with the G7 Summit in Brussels 4-5 June 2014.
BlackBerry is concerned about humanitarian and environmental abuses related to the illegal mining, transportation and trade of minerals in conflict-affected regions of the world, including the Democratic Republic of Congo (DRC) and its neighboring countries. We are particularly concerned that such illegal activities play a role in fueling armed conflict and violence in these regions. BlackBerry does not support the use of minerals that are illegally mined, transported or traded, nor metals derived from such minerals, including gold, tantalum (columbite-tantalite), tin (cassiterite) and tungsten (wolframite). In January 2012, BlackBerry published a Responsible Minerals Policy to clearly state our position.
Responsible Sourcing Due Diligence
BlackBerry recently expanded its due diligence program in order to validate the responsible sourcing of minerals.
BlackBerry established the framework for its responsible mineral sourcing management systems based on lessons learned from participation in the pilot of the 3Ts Supplement of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the “OECD Guidance”) as well as other multi-stakeholder activities. Since 2012, all new supply agreements contractually require supplier conformance to our Responsible Minerals Policy. Multiple mechanisms are in place to allow reporting of supply chain issues concerning conflict minerals, including BlackBerry’s established Ethicslink process.
BlackBerry began assessing supply chain risk from all first-tier suppliers of components and materials using the EICC and GeSI Conflict Minerals Reporting Template. This exercise provided valuable insight into the level of awareness of the US Dodd Frank Act and of the US Securities and Exchange Commission (SEC) rules governing the supply chain and into the accuracy of the information being provided by suppliers. As an important part of our due diligence we are identifying confirmed smelters and refiners of tin, tantalum, tungsten and gold used in BlackBerry products. BlackBerry also provides guidance to suppliers suggesting opportunities in improving their own due diligence efforts.
This process has continued to be refined and supplier information updated throughout 2013, culminating in the filing of our first Form SD and Conflict Minerals Report in accordance with the SEC rules, on June 2 2014.
Conflict-Free Sourcing Initiative
BlackBerry consistently works to improve the capability of the electronics industry to validate the responsible sourcing of metals. We are an active member of the Conflict Free Sourcing Initiative (CFSI, formerly the EICC and GeSI Extractives Work Group). CFSI is the global leader for the responsible sourcing of minerals and provides information on conflict-free smelters and refiners, common tools to gather sourcing information and forums for exchanging best practices on addressing conflict minerals.
Conflict Free Sourcing Initiative 2014 Goals
- Continually evolve the Conflict- Free Smelter Program (CFSP).
- Continue development and implementation of the Conflict-Free Sourcing Initiative (CFSI).
- Continually evolve common cross-industry approaches to support the disclosure and due diligence expectations of the U.S. SEC, OECD, ICGLR, and UN; consider and support other models as they are developed.
- Support the implementation of verifiable traceability programs for the Democratic Republic of Congo (DRC) and other covered countries for conflict minerals. Build and maintain strong relationships and increase transparency, communications and efficiency to enhance credibility in the CFSI activities.
Our participation in the CFSI includes supporting the Conflict Free Smelter (CFS) program. CFS is a voluntary program that determines, through an independent audit, whether or not a smelter or refiner purchases materials from conflict-free sources. After being smelted or refined, the origins of the material become difficult to track, as these smelters or refiners purchase materials from a variety of sources. The smelter or refiner therefore represents the critical point in the supply chain where we can look for assurances about whether or not the material has been purchased from conflict-free sources. Additionally, BlackBerry holds one of six seats on the CFS Audit Review Committee, which reviews audit reports before recognizing smelters and refiners as CFS-compliant. The names of CFS-compliant smelters are published to help companies responsibly source refined materials.
BlackBerry is leading the development and refinement of the EICC and GeSI Conflict Minerals Reporting Template, a key tool for companies to gather supply chain sourcing data. This has become the de facto format for data collection and is also being adopted by other solution providers. The template is designed to gather data from suppliers about the smelters or refiners in their supply chains that are delivering any of the gold, tin, tantalum and tungsten used in their products. It represents a key element of a company’s conflict minerals due diligence program, in line with the OECD Guidance, and supports compliance with section 1502 of the US Dodd Frank Act. BlackBerry also chaired an IPC committee to establish a data-exchange standard for conflict minerals due diligence information based on the Conflict Minerals Reporting and other stakeholder inputs.
Supporting Conflict-Free Sourcing in Central Africa
BlackBerry is supportive of the development of in-region solutions that not only secure the supply of conflict-free minerals but also reinforce the commitment to not abandon Central Africa as a viable sourcing region. The company participates in a number of initiatives to support conflict-free sourcing in Central Africa.
Public-Private Alliance for Responsible Minerals Trade
The Public-Private Alliance for Responsible Minerals Trade is a joint initiative between governments, companies and civil society to support supply chain solutions to conflict minerals challenges in the DRC and the Great Lakes region of Africa. BlackBerry actively supports this initiative, which aims to help the governments of the DRC and other countries in the region break the link between the illicit minerals trade and ongoing violence and human rights abuses.
Solutions for Hope
BlackBerry has been a participant in the Solutions for Hope project since 2012. The project aims to create a process to deliver conflict-free tantalum material from the DRC in accordance with the OECD Due Diligence Guidance. The process is based on a "closed pipe" principle in which tantalite ore mined from specific sites within the DRC is traced along its secure supply chain to the smelter. The smelter, who is a participant in the CFS Program, converts the ore to capacitor grade powder and wire that is then shipped to AVX Corporation, who in turn manufactures the capacitors and ships them to participating customers, including BlackBerry. Not only does this program help to ensure that tantalum used in our products comes from verifiably conflict-free sources, but it also provides hope to the small artisanal miners and communities who rely on this work to support themselves and their families.
Conflict Free Tin Initiative
BlackBerry is also a participant in the Conflict Free Tin Initiative established by members of the industry and convened by the Dutch Government, which is aimed at sourcing conflict-free tin in accordance with the OECD Due Diligence Guidance. This initiative helps support the lives of some 1,200 artisanal miners in the South Kivu province of the DRC. Since its inception, approximately 200 ton of tin have been produced through this initiative.
ITRI Tin Mining Supply Chain Initiative (iTSCi)
BlackBerry has joined as an Associate Member of the iTSCi Membership Programme. iTSCi is a traceability scheme which helps companies conform with OECD Due Diligence guidance and assists them in complying with the requirements of the Dodd Frank Act.
Tin Mining in Indonesia
Recent reports by both media and environmental campaigners have brought attention to the social and environmental impacts that tin mining activities are having in regions of Indonesia. The production of tin is an important contributor to the economy of Indonesia, and the electronics industry is a significant user of the end product.
The Indonesian tin mining industry is also an important part of BlackBerry’s supply chain. We have confirmed this through our responsible sourcing due diligence activities which support the principle of mineral traceability. We are very concerned about the reported environmental and health risks associated with the industry and are committed to the multi-stakeholder effort led by the Sustainable Trade Initiative (IDH) to better our collective understanding of the situation and identify opportunities to influence the improvement of conditions for the people of Indonesia.
Tin Mining Operation in Indonesia
The BlackBerry Supplier Diversity program works to create strengthen local economies and support the diverse businesses we rely on to deliver products and services. BlackBerry works to include more businesses owned by women, ethnic minorities, Canadian aboriginals and veterans into our supply chain. By partnering with these diverse suppliers, we support economic development, generate innovation and increase competition in the communities we serve. BlackBerry also plays an important role in providing diverse businesses with training, mentoring and technology.
The BlackBerry Supplier Diversity Program includes all parts of the business that define purchasing requirements. Program objectives include:
- Actively seeking out certified diverse suppliers that can provide competitive, high-quality goods and services with business models that align with our business strategy.
- Ensuring the inclusion of diverse suppliers as a part of our strategic sourcing and procurement process.
- Communicating the value of supplier diversity both internally and externally to stakeholders.
- Leveraging our supplier diversity results to help meet the supplier diversity expectations of our customers.
- In 2012, BlackBerry’s supplier base included six new diverse suppliers. We increased our spending in several different diversity categories, including women owned businesses, Canadian woman owned businesses, minority owned businesses and Canadian Aboriginal owned businesses. BlackBerry’s suppliers also represent a wide range of ethnicities including African American, Hispanic, Asian, Asian-Indian and Aboriginal businesses.
Business Development Strategies
BlackBerry has several initiatives in place to mentor and develop diverse suppliers and prepare them for doing business.
- Networking - Project managers, commodity managers, buyers and contractors are encouraged to attend diverse supplier trade fairs and expositions to identify and establish business relationships. BlackBerry endeavours to meet with diverse businesses at procurement conferences in order to explain purchasing processes and expectations and to communicate our needs for products and services.
- Mentoring - BlackBerry offers a mentoring program where employees have the opportunity to provide assistance to diverse suppliers in the areas of business planning, product/service pricing, financial planning, marketing, technical knowledge, brochures, the bidding process, paperwork simplification and workflow. We also encourage some of our largest suppliers to mentor diverse suppliers.
- Supplier Development Councils – BlackBerry will host a Diverse Solutions program to invite diverse suppliers to learn how to do business with BlackBerry as well as receive information about upcoming contracting opportunities.
Supplier Diversity Affiliations
BlackBerry is committed to growing our diverse supplier network through partnerships with the following organizations and other local diversity councils:
- National Minority Supplier Development Council (NMSDC)
- Women Business Enterprise National Council (WBENC)
- Canadian Aboriginal and Minority Supplier Council (CAMSC)
- Women-Owned Enterprise Connect, CA (WeConnect - Canada)
- Minority Supplier Development, China (MSD China)
BlackBerry participates on the Board of Directors for WeConnect Canada and CAMSC. We also participate in regional councils within the United States and actively participate in certifying diversity councils in the United States, Canada and China.
BlackBerry is pleased to be recognized for our supplier diversity efforts:
- BlackBerry received the AT&T 2012 Supplier Diversity Crystal Award, which AT&T presented to a select group of its prime suppliers who attained or exceeded 21.5 percent diversity utilization in 2012. The award recognizes our commitment and performance, which contributed to AT&T exceeding its diversity spend target for its Prime Supplier Program.
- Melinda Painter, Director of Supply Chain Social Responsibility and Diversity at BlackBerry, was recognized by Diversity Canada as one of the 2013 Influential Women in Diversity
- BlackBerry's Supplier Diversity program was featured by the Georgia Diversity Council
- Melanie Handy, Supplier Diversity Specialist was featured in WeConnect Connexions
UN Guiding Principles on Human Rights and Business
At BlackBerry we have been assessing the potential impacts of the United Nations Guiding Principles on Human Rights and Business. We are a member of the BSR Human Rights Working Group and also participate in similar activities run by the EICC and GeSI.