Business Ethics Audits &Reporting

As part of our Code of Conduct and Global Responsible Purchasing Policy, we carry out auditing activities for our suppliers. Audits check whether our suppliers comply with Arçelik’s expectations in areas including compliance with human rights and environmental laws.

Our suppliers are audited to check whether they comply with Arçelik’s expectations in areas including compliance with human rights and environmental laws during the business ethics audits, while the first step of Supplier Sustainability Index Analysis is based on survey which includes qualitative and quantitative questions on environmental, social and governance.

The suppliers, which are out of the scope, are subjected to solely on the business ethics audits depending on certainsectors. In addition to the determination of the current suppliers to be evaluated, we require all newly commissioned suppliers to conduct self-evaluation audits on quality, the environment, and business ethics.

During the audits conducted by the independent audit firm, suppliers are audited under the following headings:

• Child labor

• Discrimination

• Forced labor

• Environment

• Freedom to Association

• Occupational Health and Safety

• Management Systems

• Regular Employment

• Wages & Benefits

• Working Hours

In case of at least one of the following nonconformities as a result of the audit, cooperation with the supplier is terminated:

• Child labor

• Forced labor

• Harassment case

• Bribery case

• Discrimination

We plan corrective actions for non-compliance identified in Supplier Sustainability Index and these business ethics audits., We check whether the required actions have been taken after both evaluations. Sustainability risk levels of the supplier are revised depending on the closing of the nonconformities which are found throughout the Supplier Sustainability Index Assessment and the Ethics Audits. 

We require full compliance with Arcelik Global Responsible Purchasing Policy in these audits and terminate contracts with any supplier in cases where child labor, forced labor, discrimination, bribery, or incidences of corruption are detected.

Every year the suppliers corresponding to 90% of purchasing volume are aimed to be evaluated in the way described above. Additionally, the number of the critical suppliers is determined annually, and the improvement of critical suppliers within the maximum of 12 months of correction action plan’s launch, are closely followed by Arçelik Purchasing Directorate and Product Sourcing Directorate.

Once a supplier is determined as a critical in the annual critical supplier determination process, the supplier is audited at least once in every three years. The suppliers, which are out of the scopes mentioned above, are subjected to solely on the business ethics audits depending on certain sectors. In addition to the determination of the current suppliers to be evaluated, we require all newly commissioned suppliers to conduct self-evaluation audits on quality, the environment, and business ethics.

Our stakeholders can also inform us about suspicious behavior or supplier violations of business ethics via our website www.ethicsline.net, or the telephone numbers given in our Global Responsible Purchasing Policy. Arçelik undertakes to handle all notifications about suspicious behavior and violations confidentially, protects those who provide such notifications, and does not tolerate retaliation.

Please see also our Human Rights Due Diligence Process for further information about the identification, prevention and mitigation actual and potential adverse impacts of salient human rights issues considered relevant for Arcelik’s operation network in the entire value chain. 

Based on the survey results and third-party audits, 24 suppliers have been rated as high-risk supplier. A total of 1,249 areas open to improvement were identified. In addition, the findings of the previous period were taken into consideration. As a result of our audits findings, 19 follow-up audits were carried out by third party auditors and a total of 41% of the nonconformities were improved. No actual cases of child labor, forced labor, discrimination, bribery, or corruption were detected during these audits. There were no terminations of contacts in 2021.