Commitment to Continuous Improvement
We are committed to working with our suppliers to remedy issues and establish systems to prevent future issues. We expect our suppliers to consistently monitor and enforce our standards in their own operations and supply chain as well as make improvements to meet or exceed our expectations. We use independent auditors to verify supplier compliance with our standards though regular on-site inspections and confidential worker interviews.
Our approach is based on a commitment to workers and to continuous improvement; we put the safety and interests of workers first. Suppliers are required to meaningfully participate in any investigation and take immediate action in the event that issues are found. An acceptable corrective action plan details the root cause of the issue and the steps, both short-term and long-term, that supplier management will take to fix it. In most situations, we will support suppliers through the remediation process, but where a supplier refuses to remediate, we may choose to terminate the relationship. Failure to meet our standards has been a factor in our decision to terminate hundreds of suppliers.
Key stages of supplier assessment and issue remediation:
- Supplier submits Amazon-approved audit of facility;
- If issues are identified, Amazon will issue a request for a Corrective Action Plan;
- Remediation of identified issues is tracked through follow-on verification audits;
- Once in production, supplier is audited on an ongoing basis;
- If supplier refuses to remediate an issue, Amazon may choose to terminate relationship.
Pre-Production AssessmentsSuppliers must submit an Amazon-approved assessment of their facilities before beginning production of Amazon-branded products.
- 44% of assessments conducted in 2019 were Pre-Production Assessments.
Ongoing AssessmentsSuppliers must submit Amazon-approved assessments on an ongoing basis while producing Amazon products.
- 35% of assessments conducted in 2019 were Ongoing Assessments of active suppliers.
Verification AssessmentsWhere issues are identified, suppliers must develop a corrective action plan detailing actions to address identified issues, a long-term plan to prevent reoccurrence, and where necessary, undergo a follow-up assessment to ensure issues are properly remediated.
- 21% of assessments conducted in 2019 were Verification Assessments to verify remediation.
About Our Assessment Results
Suppliers are assessed across four main categories:
- Health and Safety
These categories are divided into subcategories, such as non-discrimination, emergency preparedness, hazardous substances, and transparency. Findings within each subcategory are flagged as High, Medium, or Low depending on the level of severity.
Over the last three years, Amazon has focused on setting a high bar for new suppliers and refusing to go to production until suppliers remediate all High level findings identified in our assessments. Since 2017, the proportion of audits with High and Medium level findings on Labor and Health and Safety has decreased (Labor decreased by 15.7 percentage points and Health and Safety decreased by 8.8 percentage points).
We recognize that some issues may take time to effectively remediate. For Medium level issues, we expect suppliers to show they are making meaningful progress toward remediation within a defined timeline. For Low level issues, we monitor suppliers for continuous improvement. We have dedicated teams based in key sourcing countries around the globe that work directly with our suppliers to identify solutions to challenging problems and promote open dialogue. We seek to create long-term relationships with suppliers who align with our values and who are committed to constantly improving conditions for workers. Where we see trends in issues beyond individual suppliers, such as widespread health and safety deficits or industry-wide failures to responsibly protect migrant workers, we work to define regional or global strategies to address underlying systemic challenges.
The most common High and Medium level finding in 2019 was the Wages and Benefits subcategory. Examples of findings in this subcategory are: failure to pay overtime at the appropriate overtime rate, wage payments were delayed, or required government deductions have not been properly paid. The second most common finding in 2019 was Emergency Preparedness and Response—for example, a malfunctioning fire detection system or a blocked emergency exit. We are committed to driving improvement in these areas.
High and Medium Level Findings by Subcategory in 2019
(% of all assessment findings)
|Freedom of Association||0.4%|
|Freely Chosen Employment||3.2%|
|Subcontractor and Next-Tier Supplier Responsibility||0.1%|
|Wages and Benefits||40.7%|
|Worker Grievance/Complaint Mechanism||0.0%|
|Pollution Management and Prevention||0.1%|
|Health and Safety|
|Emergency Preparedness and Response||10.5%|
|Sanitation, Dormitory, and Canteen||2.3%|