CIB100 ASSIGNMENT 2: BUSINESS SUBMISSION SEMESTER 2 2014 NAME: A Student STUDENT NUMBER: 12345678 STUDENT EMAIL: [email protected] TUTOR: Chris Bright TUTORIAL TIME: Friday 10-12 COMPANY: Telstra WORD COUNT: 1148 (excluding references)   A. Student DIRECTOR OF CORPORATE COMMUNICATIONS TELSTRA CORPORATION OCTOBER 7 2014   OUR COMMITMENT As one of Australia’s leading telecommunications companies, with over 36 000 employees and the country’s most extensive mobile network, we at Telstra believe it is our duty to set the standard of corporate social responsibility, both in our industry and beyond. We are proud signatories of the United Nations Global Compact and endeavour to continually maintain, improve and expand our CSR programs to adhere to the Compact’s principles and fulfil the social contract we hold with our stakeholders. OBJECTIVES In this submission we will put forward our recommendations for obtaining compliance with the Global Compact principles two and seven. We will also outline our current efforts in these areas, proposed benchmarks, and the impact our recommendations will have on the stakeholders of our company should we choose to implement them. PRINCIPLE 2 “Business should make sure that they are not complicit in human rights abuses.” – UN 2014 PRINCIPLE 7 “Businesses should support a precautionary approach to environmental challenges.” – UN 2014 Through this submission we hope to encourage Telstra to take a proactive approach to CSR and improve our business practice to further abide by the principles of the Global Compact. We are well placed to achieve this, as we have been a member of the Compact since 2011. We are also part of Australia’s first Human Rights Working Group for Business (set up by this network in 2010 and run in partnership with the Australian Human Rights Commission), thus giving us significant experience and insight into managing satisfactory human rights business practices. HUMAN RIGHTS POLICIES PAST AND PRESENT As a significant portion of our business activities involves construction and production, we are conscious of the need to source ethically-produced materials and parts for these processes. We apply stringent risk-assessment standards to every supplier and industry partner before we commit to work with them. Our assessment process includes an inspection of the premises and a thorough examination of employment conditions including breaks and leave, workload, health and safety, workplace bullying, unions and equal opportunity (Supply Chain Standards 2014). Despite these measures, we have had previous issues with the working conditions of our suppliers. In 2012 it was found that the factories of one of our partners in China harboured “brutal sweatshop conditions”, according to the Institute for Global Labour and Human Rights (2012). In its report, the Institute found that this was because managers tended to temporarily improve their premises and coerce their employees to lie about their treatment prior to inspections. While this was certainly a regrettable incident, it has allowed us to learn from our mistakes and improve our partnership selection standards. In 2013 we introduced our Supplier Code of Conduct which outlines the standards required to conduct business with Telstra and ensures that social concerns are an important part of our selection process (Telstra Annual Report 2013). At Telstra, we believe that evaluating the working conditions of all business partners in this way is the bare minimum required to eliminate complicity in human rights issues. We present our Supplier Code of Conduct (Appendix A) as a suitable reference for a benchmark standard of supplier conditions. FUTURE We currently work with our suppliers at a managerial level to establish better practices to meet and exceed this code – but what about the workers themselves? With this in mind, and to aid in the fulfilment of principle two, we have devised the following recommendation: The development of Supplier Liaison Teams in each country that a) a significant number of suppliers are based in; and b) has limited employee protection (in the form of unions, etc), and is therefore of high risk. These teams would be in charge of a) carrying out ad-hoc inspections; b) gaining the trust of employees to obtain honest feedback; and c) managing a support hotline to this end. STAKEHOLDER IMPACT • Partner employees will have improved working conditions. Increased wages and reduced working hours will benefit their local communities (and their economies). • Partner companies will be held directly accountable for the treatment of their employees and will need to improve or risk losing business. • Customers can be assured that their products are made by workers with fair conditions, which will lead to greater trust and respect for the company. RISKS AND CHALLENGES • While these programs will incur significant financial costs, we believe it is necessary as it is no longer enough to assess high-risk suppliers infrequently and from the other side of the world. • Individual employees may find relocation challenging – in this case we propose employment on a temporary basis. • Difficult to support the workers of our partners to ensure their wellbeing without manager interference. • Lack of local knowledge – it may be necessary to hire support staff from the area for consultation on legal/cultural issues. ENVIRONMENTAL POLICIES PAST AND PRESENT At Telstra, we pride ourselves on our significant and ongoing environmental contribution in all areas of our business. As stated in our Sustainability Report (Telstra 2013), we are achieving compliance with the Global Compact by identifying and reducing our (and our suppliers) impact on the environment through key areas such as carbon emissions, paper wastage and e-waste. Further information is available in our ‘Environmental Stewardship’ and ‘Environmental Impact’ sustainability reports. Figure 1: A summary of our environmental achievements (Environmental Impact 2013). Our focus on incorporating effective environmental policies throughout our business has taught us that there are always ways to increase our sustainability; especially in terms of principle seven, which involves “a precautionary approach”. Many of our current measures are implemented after the event: recycling occurs after wastage and carbon offsetting after emissions. We want to improve this by instigating pre-emptive measures, especially in the area of construction. This has a direct impact on the environment through erosion, the disturbance of flora and fauna, and pollution from machinery (Guerin 2010). FUTURE We recommend the following to help achieve compliance with principle seven: Work with specialists to develop standards of environmentally-friendly construction that can be applied to the building of all company factories, offices, etc. These will include: a) Sustainable construction materials b) Efficient design c) Environmentally-friendly processes to minimise pollution during construction d) Avoiding environmental damage by building on land that has already been cleared, etc. STAKEHOLDER IMPACT • Benefits local communities by using less resources • Environmental interest groups and local communities will appreciate reduced pollution and preservation of local flora and fauna • Sourcing local construction materials benefits local suppliers • Acts as a symbol/demonstration of environmental efforts, thus improving company image to consumers RISKS AND CHALLENGES • Significant research and development costs • Possible high cost of land • Time commitment CONCLUSION Today, the onus is on businesses to recognise and uphold societal values and thus fulfil their social contract (Luetkenhorst 2004). We hope you will regard this submission as a set of useful guidelines to help achieve this, as well as to create positive change that benefits not only stakeholders but the world as a whole.  APPENDICES Appendix A: Telstra Corporation Limited. 2014. “Telstra Supplier Code of Conduct.” Telstra Corporation Limited. http://www.telstra.com.au/uberprod/groups/webcontent/@corporate/@aboutus/documents/document/uberstaging_255984.pdf REFERENCE LIST Australian Human Rights Commission. 2010. “2010 Media Release: Business Takes up Human Rights.” Australian Human Rights Commission. http://www.humanrights.gov.au/news/media-releases/2010-media-releasebusiness-takes-human-rights. Guerin, Turlough. 2010. “Working with Customers and Using ICT to Reduce Carbon.” Telstra Corporation Limited. http://pdf.aigroup.asn.au/environment/Sustainability_Forum_Turlough_Guerin_Telstra.pdf. Kernaghan, Charles. 2012. “Telstra/Australia Takes the High Road: Pulls Sweatshop VTech Phones from Store Shelves.” Institute for Global Labour and Human Rights. http://www.globallabourrights.org/alerts/telstraaustralia-takes-the-high-road-pulls-sweatshop-vtech-phones-from-store-shelves. Luetkenhorst, Wilfried. 2004. "Corporate Social Responsibility and the Development Agenda: The Case for Actively Involving Small and Medium Enterprises." Intereconomics 39 (3): 157-166. http://search.proquest.com/docview/211615701?accountid=10382. Telstra Corporation Limited. 2013. “Environmental Impact: Reducing our Environmental Impact.” Telstra Corporation Limited. http://www.telstra.com.au/uberprod/groups/webcontent/@corporate/@about/documents/document/uberstaging_244378.pdf. Telstra Corporation Limited. 2014. “Environmental Stewardship: Better Environmental Outcomes.” Telstra Corporation Limited. http://www.telstra.com.au/aboutus/download/document/bigger-picture-2014-sustainability-report---environmental-stewardship.pdf. Telstra Corporation Limited. 2014. “Supply Chain Standards.” Telstra Corporation Limited. http://www.telstra.com.au/abouttelstra/download/document/telstra-supply-chain-standards.pdf. Telstra Corporation Limited. 2013. Telstra Annual Report 2013 – Sustainability. http://telstra.interactiveinvestorreports.com/annualreport2013/responsible-business#sustainability. United Nations. 2014. United Nations Global Compact. Accessed September 28, http://www.unglobalcompact.org/index.htm.