IBM's Supplier Conduct Principles were formalized in 2004. The Principles and their supporting IBM Supplier Conduct Principles: Guidelines are at the core of the company's Supply Chain Social Responsibility program and outline the company's expectations and requirements of suppliers doing business with IBM in regards to forced or involuntary labor, child labor, wages and benefits, working hours, nondiscrimination, respect and dignity, freedom of association, health and safety, protection of the environment, laws (including regulations and other legal requirements), ethical dealings, communications and monitoring/record keeping.
The Principles are integrated into new and existing contracts and relationships with suppliers and the company actively monitors suppliers' existing performance against them as a means to promote sound business practices across IBM's extended supply chain. The company has undertaken hundreds of on-location supplier audits to its Supplier Conduct Principles, focusing on suppliers in emerging markets where noncompliance may be likely to occur. Since 2004, more than 600 supplier audits against IBM's Supplier Conduct Principles have been conducted by third-party firms with local personnel in more than 15 growth market countries.
IBM's supplier audit program encompasses both manufacturing (production) and distribution (logistics) suppliers--which are historically where social audits are focused--as well as services and general procurement suppliers.