A Danish TV documentary broadcast in May 2008, revealed unacceptable working conditions, pollution and underage labour at the facilities of suppliers to Grameenphone in Bangladesh. Telenor has drawn up unambiguous guide lines to ensure our corporate responsibility and that operation is run in accordance with our ethical standards. After having been informed about the unacceptable conditions, Telenor immediately initiated measures to ensure that required standards are adhered to. Telenor has a 62 per cent stake in Grameenphone.

President and CEO Jon Fredrik Baksaas' written comment to Norway's buiness daily on 4 June 2008 which was as follows (as is) :

Telenor has operations in 12 very different countries. In all of these countries we wish to be a significant player making a positive contribution to society. The conditions exposed over the past few weeks at Grameenphone's suppliers show that we are not always successful in this aim. We take this situation very seriously. The fact that Telenor's legal responsibility is limited to its own companies is no excuse. Our moral responsibility also extends to Telenor's suppliers. So far we have not lived up to that responsibility. This case shows that we have not been active enough in following up Grameenphone's subcontractors.

Sadly several people have died whilst working for our contractors in Hungary and Bangladesh. One of these was a ten-year-old girl, who died outside the construction site at Grameenphone's headquarters. It saddens us to know that better control systems and inspection routines for following up the company's subcontractors could have prevented lives from being lost. The work of dealing with these issues is now being given the highest priority.

It is vitally important that developing countries have access to the same information technology as the rest of the world. Through our operation in Bangladesh we employ more than 100,000 people, directly and indirectly. Grameenphone is also the country's biggest taxpayer: its contribution last year was NOK 2.5 billion. We believed that our standards regarding working conditions would be adhered to by our contractors.

We were naive. The gap between the working environment at our own operations and working conditions at our suppliers' facilities was much greater than our local representatives had managed to uncover. It is our duty to use our authority as a buyer of services to exert our influence on the suppliers and induce them to conduct themselves properly. Telenor has both the resources and the will to use this authority. And that is what we intend to do.

Ethics and corporate responsibility are an important part of Telenor's set of core values. We have clearly defined rules and guidelines covering human rights, health, working environment, safety and the external environment. Our agreements with our suppliers therefore stipulate concrete requirements with respect to each of these areas. However, that is of little help when our inspections fail to uncover serious discrepancies, as has been the case in Bangladesh. The fact that it was a journalist who discovered unacceptable working conditions on a scale such as this at our suppliers' facilities shames all of us at Telenor. This should have been brought to light by our own inspections.

We have implemented measures that will apply for all our operational companies to ensure that this does not happen again. To this end we have decided to set up a unit at group level to secure implementation of health, safety and environmental (HSE) regulations by our suppliers and to ensure effective follow-up routines. We have begun work on reviewing the HSE status of our suppliers in several markets. In addition, we are looking into the reporting procedures at our operational companies in case of work-related accidents at their suppliers' facilities.

Despite the fact that we are tightening and reviewing procedures across the whole group, the situation at Grameenphone has demanded particular attention:

• Grameenphone's suppliers have been asked to confirm legally that conditions at their companies are in accordance with standards specified in the contracts.
• Grameenphone and Telenor have inspected the factory premises of the four suppliers that appear in the film 'Flip the Coin: A tower of promises', as well as one supplier not appearing in the film.
• Grameenphone's contract with supplier Mizan Hatim Engineering has been terminated, due to a lack of willingness on the part of the supplier to implement the necessary changes to its work practices. If the company has now reconsidered its stance and takes steps to improve working conditions, it will be able to compete for contracts in the future.
• We are carrying out a review of the working conditions at the facilities of the four remaining suppliers of mobile antenna towers to Grameenphone. We are specifying the improvements needed regarding manufacturing conditions and emphasise our right to carry out unannounced inspections.
• We are reviewing and improving Grameenphone's follow-up and control routines.
• Det Norske Veritas has been commissioned to advise on improvements to working conditions and production standards at the suppliers' facilities.
• A review of Grameenphone's other suppliers has been initiated to ensure that other supplier groups comply with existing agreements.
• We are investigating the extent of the damage waste water from our suppliers' facilities has caused the environment. When we have an overview of the actual damage steps will be taken to address the situation.

At Telenor, we have a busy time ahead of us. We will work towards closing the gap between theory and practice. We need to work on attitudes, work culture and control routines, both at the group's own companies and at its subcontractors. We must work together with good advisors and learn from other businesses that have been through similar processes in order to establish how and where we should draw the line on what we can achieve. We cannot guarantee that accidents will not happen again, but as EU founder Jean Monnet once said: "Nothing is possible without men, nothing is lasting without institutions". Telenor has a motivated workforce with a high level of ethical awareness.

In order to ensure that the changes become permanent, we must also institutionalise our ethical requirements so that in the future, any breaches are immediately uncovered.

Source:

1. http://www.telenor.com/working-conditions-in-Bangladesh/
2. http://www.telenor.com/working-conditions-in-Bangladesh/baksaas-chronicle-dn.shtml