NXP has a strong commitment to sustainability and social responsibility. NXP pursues mutually beneficial relationships with its suppliers and contractors and seeks to award business to those suppliers that are committed to observe the applicable rules of law and to support and respect human rights. NXP is committed to ensuring that working conditions in our supply chain is safe, that workers are treated with respect and dignity, and that our products and processes are environmentally responsible.
NXP depends on more than 10,000 suppliers from countries around the world. Regardless of region, NXP recognizes that innovative thinking, collaboration and transparency creates long term sustainability. We proactively work with our suppliers to:
Our suppliers range from external manufacturing partners, direct materials suppliers, tools and machines manufacturers as well as logistics and packaging services, and onsite service providers. We hold our suppliers accountable for responsible conduct and performance by requiring them to comply with applicable laws and regulations as well as the NXP Supplier Code of Conduct.
NXP’s suppliers commit in all of their activities on behalf of NXP to operate in full compliance with the laws, rules, and regulations of the countries in which they operate. Beyond this, NXP's suppliers are expected to comply with the NXP Supplier Code of Conduct. The NXP Supplier Code of Conduct is based on the NXP Code of Conduct and the NXP Auditable Standards on Social Responsibility, and draws on internationally recognized standards to advance social and environmental responsibility. The NXP Supplier Code of Conduct uses the structure and contains language from the Electronic Industry Citizenship Coalition (EICC) Code of Conduct, version 5.1. Other recognized standards used as references for the Code are the Universal Declaration of Human Rights, the International Labour Organization, Social Accountability International, and the Ethical Trading Initiative.
The NXP Supplier Code of Conduct is owned by the Sustainability Office and is approved by the Social Responsibility board, consisting of executive NXP leaders. The Supplier Code of Conduct is reviewed annually to determine the need for a revision based on changings social and regulatory landscape, industry changes or customer requirements and expectations.
The NXP Supplier Code of Conduct consists of standards relating to labor and human rights, health and safety, environment, business ethics, and elements of an acceptable system for managing code conformity. If you’d like to download the NXP Supplier Code of Conduct, please click below:
Suppliers must adopt or establish a management system that is related to the content of the NXP Supplier Code of Conduct. The management system must be designed to ensure (a) compliance with applicable laws, regulations, and customer requirements related to the supplier’s operations and products; (b) conform to the NXP Supplier Code of Conduct and (c) identify and mitigate operational risks related to the NXP Supplier Code of Conduct. It must also facilitate continuous improvement.
NXP’s purchasing policies require our suppliers to certify that they comply with NXP standards and with the laws of the country or countries where such suppliers do business. In 2015, NXP inserted language into our supplier contracts that require suppliers to abide by the NXP Supplier Code of Conduct. Suppliers submit a signed conformance letter stating that they abide by the NXP Supplier Code of Conduct.
All NXP suppliers are required to go through an annual Supplier Risk Assessment and complete an NXP Self-Assessment.
NXP works with all of our suppliers to meet our requirements. We provide suppliers with opportunities to rectify problems and implement a corrective action plan. It is our goal to improve worker conditions and make an impact on the supply chain, not just pass or fail. In the rare instance that a supplier is unable or unwilling to meet our requirements and work on a corrective action plan, NXP will terminate the business relationship.
NXP suppliers must have adequate and effective written employment policies and procedures. Suppliers must take measures to ensure compliance with laws on recruitment of workers in sending and receiving countries. Suppliers must ensure workers are not required to pay fees, deposits, or debt repayments for their recruitment or employment. Suppliers must provide the worker, prior to departure or hiring, with accurate written details of working conditions in the host country, including nature of work, wages, benefits, and duration of contract at the time of recruitment in the workers native language. Suppliers must not require workers to surrender original identification documents. Suppliers must also ensure the same with its employment agencies. Suppliers must ensure that workers are free to leave their employment upon giving reasonable notice, with no penalty. Suppliers must not place unreasonable restrictions on movement of workers and their access to basic liberties. Suppliers cannot require workers to participate in any form of forced savings or loan program where repayment terms are indicative of debt bondage or forced labor. Suppliers must clearly communicate the NXP’s Supplier Code of Conduct and requirements pertaining to recruitment of workers. Suppliers must regularly evaluate these contractors’ performance and conformance against these requirements.
NXP has adopted an Employer Pays policy in the recruitment of workers. This policy is a clear contractual agreement with partners in our supply chain. The NXP Employer Pays policy requires that the supplier shall be responsible for payment of all fees and expenses. Such fees and expenses include, but are not limited to expenses associated with recruitment, processing, or placement of workers.
Additional details on NXP’s efforts to investigate ethical recruitment practices is available in our ethical recruitment documentary.
NXP is required to provide information and evidence to its customers of compliance to the European Union‘s Directive on the Restriction of Hazardous Substances (RoHS), and other product regulations such as Registration, Evaluation, Authorization and Restriction of Chemicals (REACH). Suppliers shall therefore meet the requirements of the NXP “ECO-Products Substance Control for Products and Packaging”. The supplier must provide NXP with full material content declarations and provide annual analytical test reports performed by a third-party laboratory certified to ISO/IEC 17025. For all material groups, specific substances shall be analyzed annually on a homogeneous material level to verify compliance with the NXP requirements. NXP’s “Dark Green” Policy specifically targets materials that should not contain RoHS Substances, Halogens and Antimony Oxides above the established limits. Suppliers have to certify that they have gathered and verified information about substances present in raw materials, parts, or products it supplies to NXP using appropriate methods (i.e. internal design controls, declarations and analytical testing) to ensure its accuracy and completeness, and attest that such information is true and correct to the best of their knowledge.
Below are the supplier requirement documents for Legacy NXP suppliers and Former-Freescale suppliers. The requirements itself for F-Freescale and L-NXP are not different, rather they are managed differently. One set of supplier documents for the combined company will be available in September of 2017.
|Supplier Documents for L-NXP||Supplier Documents for F-Freescale|
|List of hazardous substances in products and packaging||ECO-Products Substance Control for Products and Packaging|
|Test requirements for hazardous substances in products and packaging|
|Material declaration form|
Suppliers must have a policy to reasonably assure that the minerals in the products they manufacture do not directly or indirectly finance or benefit armed groups that are perpetrators of serious human rights abuses around the world. Key areas of concern include the Democratic Republic of Congo and adjoining countries and other high-risk regions for the extraction or transit of raw materials.
Tantalum, tin, tungsten, and gold smelters and refiners must be certified by an approved third-party audit program. Suppliers must exercise due diligence on the source and chain of custody of these minerals and make their policies and due diligence measures available to NXP upon NXP’s request. In addition, suppliers must submit Conflict Mineral Reporting Template (CMRT) to NXP.
NXP is participating in a number of engagements to address the conditions related to the minerals in the supply chain. We are also participating in initiatives to add cobalt and other minerals to the scope and are committed to continuous improvement of the entire conflict minerals due diligence infrastructure.
More information regarding our conflict minerals program is located on the NXP Conflict Minerals website.
NXP conducts an annual risk assessment on our suppliers to determine the high risk suppliers that are identified to participate in the NXP Social Responsibility Audit program. This risk assessment is conducted on existing suppliers and all new suppliers onboarding with NXP. In addition, all NXP suppliers are required to sign a statement of conformity with NXP’s Supplier Code of Conduct.
NXP subscribes to a third party monitoring service, which uses a multi-level process to identify and evaluate the potential risks to the NXP Supplier Code of Conduct. This robust risk assessment methodology enables NXP to pinpoint and prioritize hotspots across our supply chain. The monitors’ evaluation of risks are based on a variety of factors, such as a business’s geographic location, manufacturing processes and a workforce profile.
NXP’s Social Responsibility Audit is a collaborative and consultative process aimed at guiding suppliers and ensuring they can meet the NXP Supplier Code of Conduct and the associated requirements of the auditable standards.
While, NXP reserves the right to conduct unannounced audits on our supply chain, we have rarely found that an unannounced audit is required. NXP conducts announced audits on our supply chain which analyzes three main aspects 1) Documentation 2) Management Interviews and 3) Worker Interviews. We require that self-assessments, policies, processes and procedures are sent to NXP before the audit
In 2013, NXP began auditing suppliers and has since audited over 90 suppliers, with 30 of them occurring in 2016. We monitor the progress of the supplier until the issues are satisfactorily resolved. This may involve repeat audits to close out the findings. In 2016, 10 of our suppliers received re-audits or verification audits. Should a supplier continue to not meet our standards, NXP will limit new business and or seek to eliminate the supplier from our supply chain.
Supplier audits are led by a NXP Lead Auditor and a qualified audit team from a NXP-approved 3rd party audit firm. Audits include many different components, such as document reviews, employee and management interviews and facility inspections. Audits also include interviews with labor agents and inspection of the employees living conditions. The NXP Social Responsibility Audit program is conducted in accordance with the following process flow:
The audit can result in one of three classifications of findings that require corrective and preventive action plans to be submitted by a supplier within a set period of time. The three classifications are core violation, major non-conformance, and minor non-conformance.
If a core violation is discovered, the supplier is given the opportunity to improve performance, but the supplier’s response to, and adequate resolution of, a core violation is non-negotiable. In the case of immediate risk of life, the supplier is given 24 hours to complete corrective actions. In other cases, the auditee is allowed seven days for submission of the corrective action plan and 30 days for completion of plans. Sanctions for unresolved core violations can result in the withdrawal or termination of business.
Other findings can be registered as major or minor non-conformance. A Corrective Action Plan (CAP) report for these findings is issued to the auditee within two weeks after the closing meeting. All corrective actions for major and minor actions must be approved by NXP. In this case, the auditee must send NXP an action plan update every 30, 60, and 90 days, and all corrective actions must be closed within 90 days
The audit findings and the resulting corrective action plans help us to identify trends and create an opportunity to help suppliers enhance their sustainability capabilities. The top ten findings for each year are summarized in the chart below for our supplier audits:
Training is focused on our suppliers and onsite service providers. The mode of training is either a 2-hour classroom training or through a webinar session, conducted by the NXP Social Responsibility Office with support from the site subject matter experts. The training is the full requirement of the NXP Supplier Code of Conduct. Supplier training is done:
In 2015, NXP conducted two supplier face-to-face training sessions and one webinar. In 2016, NXP conducted a training session with 289 suppliers in Malaysia. Training is also conducted when the supplier requests training. Coaching the supplier of best practices and providing links to the EICC’s eLearning academy are also a part of our supplier trainings.
In addition to the traditional face-to-face and webinar training, NXP is also in the process of developing eLearning tools that will enable continuous learning on social responsibility topics. An eLearning module is in development in collaboration with an institution of higher learning. This module will be an innovative game-based program with specific focus on Human Trafficking and Forced/Bonded Labor.
Each year we report publically on our annual top ten supplier audit findings. Each quarter key performance indicators are reported to the Sustainability Office and the Management team on topics such as core violations from our supplier audits, signed conformance letters from our supply chain, and quarter over quarter risk indicators within our supply chain.
The Sustainability Office reports to the Social Responsibility Board, composed of NXP executive leadership, at least twice per year. Midyear review discusses the progress that has been made, areas for improvement and what has gone well. The end of year review discusses targets and the overall improvement the team has made.
The Sustainability Office meets with the purchasing organization monthly during the NXP Materials Sourcing Board meetings, chaired by the Chief Procurement Officer, and sometimes weekly, to discuss key supplier audit results, the approved corrective action plan and their progress towards closing out their findings.
NXP monitors improvement by measuring the number of core violations, repeat audits, frequency of findings, and the number of months required to eradicate the core violations.
NXP measures our supplier’s improvement by monitoring and approving the Corrective Action Plan (CAP). The CAP acts as a tool for communication to NXP on how issues will be remediated. NXP is committed to collaborating with suppliers to design management systems that address the issues. An effective CAP includes remediation plans that fix the immediate issue and create a management system to prevent the issue from reoccurring
NXP has seen improvement with the results and the closure of findings and the attention to detail to close out such findings. The supplier self-assessment scores is also a measure that we review year over year to see how their scores are improving as they begin to strengthen their program.
NXP has clear and widely communicated procedure in place for reporting concerns or potential violations to the Supplier Code of Conduct within our supply chain. NXP suppliers shall have a grievance mechanism in place for their employees.
Any stakeholder can report incidents to NXP. Even workers of our suppliers are given NXP’s anonymous, confidential internal complaint email and the local phone number.
When worker interviews are conducted during a supplier audit, the worker receives a NXP business card that has the internal complaint local phone number and email address if they have additional information, concerns or they experience retaliation.
NXP also encourages anyone to report issues or concerns to our NXP Ethics Reporting email account: email@example.com. Although you may submit your concern anonymously, providing your name and contact information will enable us to contact you if we need additional information during the course of the investigation.
The Ethics Committee in coordination with the Sustainability Office monitors the investigations as they appoint a team that has the correct experience to investigate the allegation. The Ethics Committee along with the Sustainability Office then considers the approach to the allegation. These discussions focus on the grievance, the remediation plan when violations are substantiated and a corrective action plan is established.
The Ethics Committee consists of NXP’s Senior Vice President & Chief Corporate Counsel, an executive from Human Resources, the Sr. Director Sustainability, Environment, Health & Safety and the NXP Chief Audit Executive. The Ethics Committee advises the Management Team in defining and deploying the Code of Conduct, assure the completeness of recording of the allegation of misconduct and assure appropriate action has been taken for the allegation of misconduct. The assurance part of the role is managed by a subcommittee of the Ethics Committee consisting of the SVP & Chief Corporate Counsel and the Chief Audit Executive. The Ethics Committee reports to, and provides assurance to the Management Team and the audit committee to the NXP Board of Directors about the completeness and adequacy of the actions taken on allegations of misconduct.