Corrective Action Plans
When we receive RBA audit reports, individual nonconformances are recorded and tracked through various phases from discovery until closure. Suppliers must develop Corrective Action Plans (CAPs) for individual nonconformances. In this process, suppliers identify the root cause for the nonconformance and develop an action plan with proposed changes to policies, procedures, worker training, or communications. They also propose key performance indicators to measure the effectiveness of their actions. Plans are submitted to Cisco and approved only if they meet our requirements.
If a CAP does not meet our requirements, we coach suppliers in root cause analysis using best practice frameworks, such as the 5 Whys or Fish-Bone mapping. This work drives lasting positive change by addressing the root cause rather than implementing short-term fixes.
Supplier CAPs must adhere to Cisco deadlines informed by the RBA VAP Protocol. Suppliers must close nonconformances according to Cisco's policies, depending on the severity of the nonconformance. We consider nonconformances closed after we review evidence confirming that workers have been remediated, communicated to, and/or trained on revised policies and procedures. As needed, we use third-party auditors to conduct closure audits onsite, as informed by the RBA VAP protocol.
In fiscal 2022, our closure rate of priority and major nonconformances was 92 percent, excluding nonconformances for working hours and social insurance. We do not include working hours and social insurance nonconformances when calculating closure rates, as they can take longer to implement than RBA's recommended closure guidelines. Of the nonconformances that were not closed during the year, most were due to specific permits awaiting government approval and related activities that did not pose particular risks to workers or the environment.
Most of the social insurance nonconformances are identified in China. A nonconformance occurs when social insurance deductions exclude overtime as part of the worker's total wages, resulting in lower contributions toward social insurance withholdings. Sometimes, in-country migrant workers prefer lower deductions if they know they will have trouble accessing future benefits. When addressing these nonconformances, we ask suppliers to survey their workers to understand their workers' preferences before adjusting paycheck deductions. In most cases, workers prefer to use their base wages for calculating social insurance withholding so that they can increase their take-home pay.
Capability building
Training and building the capabilities of our suppliers is necessary to make lasting improvements to working conditions. Some suppliers require more coaching and monitoring than others. This depends on the maturity of their programs and the complexity or severity of issues discovered in audits.
Cisco may coach suppliers or assign e-learning courses delivered through RBA's e-Learning Academy. For suppliers undergoing the RBA audit for the first time, or that received a low audit score, we conduct a CAP kickoff meeting to comprehensively review nonconformances and provide in-depth coaching on how to improve. We will share best practices with suppliers and assign courses to suppliers new to RBA audit and according to their audit nonconformances. These courses help them gain an understanding of requirements and build more effective CAPs.
For fiscal 2022, Cisco delivered the following trainings to address the most frequent issues identified in fiscal 2021 audits, as well as to ensure compliance with the overall RBA requirements. The goal is to proactively train suppliers who are not yet aware of best practices.
- Newly onboarded RBA code supplier training: This training focused on helping newly onboarded suppliers understand general RBA Code requirements, including elevating the top issues Cisco sees in RBA audits. In addition, the training offered newly onboarded suppliers an overview of best practices on how to address common issues, including fees passed on to workers, and Cisco's expectations on supplier evaluation risk performance. More than 31 attendees from at least 20 sites attended this session.
- Protection of pregnant women and nursing mothers training: This training for suppliers highlighted the latest RBA code's requirement on protecting pregnant women and nursing mothers. The training also shared emerging best practices not yet captured in the code. At its core, the training covered the physiological and psychological changes affecting pregnant women and nursing mothers, and related workplace risks for these workers. There was a discussion of processes suppliers can implement to assess these risks for these workers and best practices to protect them. A total of 156 attendees from more than 90 sites joined this session.
- Next-tier supplier management training: This event trained Cisco suppliers in management systems to effectively hold their own suppliers accountable to the RBA Code. The goal is to strengthen the cascading of our standards to the sub-tiers of our supply chain. At this training, 89 attendees from more than 60 sites attended.
At the end of the trainings, participants were surveyed on their understanding of the content. Survey results showed the modules had improved suppliers' overall clarity around due diligence processes and human rights protections. We will continue developing trainings based on suppliers' needs and trends that we identify throughout the year.
