BUS 475: Business and Society
Hello, my name is Christine Street, and I have been selected by the Powers that Be of Amazon.com to the position of Chief Compliance Officer. I must oversee all of the company’s policies and procedures and ensure that all of our suppliers have a deep understanding of our Supplier Code of Ethics. The purpose of this presentation is to share some recent changes to the Suppliers Code Ethics and the reasons behind the changes. It is essential that the changes be clear to all of our suppliers to maintain a strong working relationship with our company.
Amazon Supplier Code of Conduct
Amazon issues a copy of the Supplier Code of Conduct to each supplier as well as any amendments or modifications. The code of conduct is signed by every supplier and kept on file. Amazon requires all suppliers and their subcontractors to comply with the Supplier Code Of Conduct at all times and in every location working to serve Amazon. The terms of this code are regularly reviewed and modified as needed to continue to strive for ongoing improvement of global working conditions. Failure to comply with this Supplier Code may result in corrective actions plans or termination of the business relationship between Amazon and the supplier. The following sections outline the changes to the Suppliers Code, which are available at https://www.amazon.com/gp/help/customer/display.html?nodeId=200885140 and justification for the changes.
Wages and Benefits
Our suppliers must pay their workers in a timely manner and provide compensation (including overtime pay and benefits) that, at a minimum, satisfy applicable laws. (Amazon, 2018)
A joint investigation by China Labor Watch and the Guardian has found that nearly forty percent of workers in the Chinese factories that manufacture Echo and Kindle devices were severely underpaid and were not paid for sick days or holidays. While the standard in Chinese factories allows for about ten percent of the workers to be paid lower the forty percent is more than the legal limit and unacceptable. Furthermore, the investigation discovered that workers in the Hengyang factories were paid almost $100.00 less than workers at the Foxconn factories (Carbone, 2018). While a corrective action plan is implemented and regular audits are being performed to rectify the situation, this type of disregard for the Supplier Code is costly and damaging in many aspects. The investigation also discovered that the workers were paid the same rate for regular and overtime hours and workers who were late more than two times per month were paid a lower hourly rate than prompt employees (Goodkind, 2018).
In addition to the reports from the factories in China, it seems that Amazon has issues with employee wages in the United States. As Schiller (2018) stated, Amazon has become one of Ohio’s largest employers while also becoming the largest employer of employees that need help from the Ohio government to supply food assistance to the Amazon warehouse workers. A staggering 1,430 Amazon employees need SNAP (Supplemental Nutrition Assitance Program) launching them to the 19th spot in the states ranking where it was not even in the top 50 a few months prior.
Except in unusual or emergency situations, (i) suppliers must not require a worker to work more than 60 hours per week, including overtime, and (ii) each worker must be entitled to at least one day off for every seven-day work period. In all circumstances, working hours must not exceed the maximum amount permitted by law. (Amazon, 2018)
The Hengyang and Foxconn factories in China were also found to be forcing workers to work at least 100 hours of overtime each month while the Chinese law limits overtime to 36 hours per month.
Safety and Health
Occupational Safety. Suppliers must educate workers on safety procedures and also control worker exposure to potential physical safety hazards by implementing physical guards, barriers, and/or engineering and administrative controls. (Amazon, 2018)
Emergency Preparedness and Response. Suppliers must identify and plan for emergency situations and implement and train their workers on response systems, including emergency reporting, alarm systems, worker notification and evacuation procedures, worker training and drills, first-aid supplies, fire detection and suppression equipment, and unblocked exit facilities. (Amazon, 2018)
The report from China Labor Watch found that workers did not receive proper safety training and that the dormitories did not meet fire safety standards (Goodkind, 2018).
All workers must be treated with respect and dignity. Our suppliers must not engage in or permit physical, verbal, or psychological abuse or coercion, including threats of violence, sexual harassment, or unreasonable restrictions on entering or exiting work and residential facilities. Workers must be free to voice their concerns to Amazon or its auditors, and allowed to participate in the Amazon audit process, without fear of retaliation by supplier management. (Amazon, 2018)
In the past, Amazon was under fire for abusive managerial practices, a driving push for bigger and better results at any cost, and a company culture based on fear, tension, and conflict (Swartz, 2017). The amendments made to the Supplier Code seem to have had a ripple effect into all areas of Amazon.
Our suppliers must comply with applicable environmental laws. Amazon encourages our suppliers to implement systems that are designed to minimize the impact on the environment through the supply chain system, the production process, and the products themselves. (Amazon, 2018)
Amazon has become a retail giant with growth and technology mastered in a way that few companies can match. The Supplier Code has been established to make sure that every person and business connected with Amazon is conducting business in the best interest of the company and the employees. It is essential for every company, but more for a company the size of Amazon to protect the environment. All environmental laws must be strictly adhered to, and suppliers are encouraged to continuously improve policies to reduce waste.
It is essential for the continued growth and success of Amazon and all of their suppliers to follow this Suppliers Code entirely and thoroughly. When a supplier notices something missing from the code that could benefit the company, it is imperative that they share the information with their supervisor. Through cooperation and initative Amazon and their suppliers can enjoy the fruits of a lasting business partnership.