12 December 2008 | Paul Snell

Deutsche Telekom, the parent company of T-Mobile, found "serious deficiencies" during annual audits of its Chinese vendors last year.

According to the group's 2008 Corporate Social Responsibility report, the company conducted three supplier audits of Chinese vendors and their supply chains last year.

Although the overall impression of production facilities was satisfactory, there were serious underlying problems around health and safety, workers' rights and environmental management.

Inspectors found staff workloads were "excessively high" and pay was not adequate. There was a lack of safety equipment and workers had not been informed of their right to join a trade union. Environmental training was irregular and living conditions in accommodation provided for employees were described as "totally unacceptable".

The firm has since worked with the suppliers, drawing up a list of improvements and deadlines to be met. These included the introduction of electronic systems to record hours worked by staff, replacing unsuitable equipment and improving accommodation.

In 2007 the company requested self-assessment audits from suppliers covering 55 per cent of the group's spend, and planned to increase this to 62 per cent by the end of 2008. The company spent ?19.7 billion (£17.6 billion) on procurement in 2007.

The group has also established a sustainable procurement policy, and set up a sustainable procurement working group, which incorporates buyers from Deutsche Telekom, T-Mobile, business-arm T-Systems and domestic provider T-Home.

SMdec2008