Working With Our Suppliers

Our Commitment to Human Rights

Respect for human rights is expressed in CVS Caremark’s Supplier Ethics Policy, which all vendors around the world must adhere to as a condition of doing business with the company. The policy conforms with the conventions of the International Labour Organization (ILO) and prohibits human trafficking and the use of child, forced or imprisoned labor; requires that working conditions are safe and fair; forbids any form of discrimination with regard to age, gender, minority status and/or other protected classes; and upholds the right to freedom of organization. We monitor compliance with the Supplier Ethics Policy through risk-based audits conducted by external third parties. Details of our Supplier Ethics Policy are outlined below.

The same principles that apply to suppliers are also reflected in our workplace policies and practices, and in the CVS Caremark Code of Conduct. We believe every employee is entitled to a safe and healthy work environment that is free from discrimination and harassment, and where all employees have an equal opportunity to grow and develop their careers and be appropriately compensated for their contributions to the company’s success. In the United States, the company complies with local labor laws regarding employment of youth. The minimum age of employment at CVS Caremark is 16, or older in some instances.

Supplier Ethics Policy

CVS Caremark requires all suppliers to conduct business in accordance with the CVS Caremark Supplier Ethics Policy and other applicable legal and ethical standards. We seek suppliers that share our values as well as our promise to deliver outstanding service. CVS Caremark suppliers are required to adhere to our company’s ethical standards, supplier requirements, and business processes, which are published on www.cvssuppliers.com and communicated in our CVS Caremark Supplier Ethics Policy.

As defined by this policy, suppliers must:

• Adhere to standards that prohibit child labor, forced or imprisoned labor and any form of human trafficking, and ensure a safe workplace for their workers
• Pay workers a fair and legal wage and not withhold wages for coercive purposes
• Not discriminate against their employees in hiring practices or any other term or condition of employment on the basis of age, gender, gender identity or expression, marital status, sexual orientation, race, color, religion, national origin, veteran status, military status, disability or any other characteristic protected by federal, state or local law 
• Conduct business in accordance with established legal and ethical standards, including without limitation the California Transparency in Supply Chains Act
• Be compliant with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act
• Adhere to import requirements of United States Customs and Border Protection, and other United States government or regulatory agencies

In addition, CVS Caremark vendors/suppliers and their related subcontractors and employees must not appear on the U.S. Department of Health and Human Services or the General Services Administration’s Lists of Parties Excluded from Federal Programs.

Our Code of Conduct also addresses the company’s standard of ethics when interacting with suppliers. Employees with direct responsibility for import supply chain management have been trained on mitigating risks within the supply chain of products, including risks associated with human trafficking and slavery.

Global Supplier Audits

As a condition of doing business with CVS Caremark, all import suppliers and global supply chain partners must be in compliance with the CVS Caremark Supplier Ethics Policy. In 2011, this policy was communicated to all import suppliers at the time a purchase order was issued.

To help ensure our import suppliers and global supply chain partners are in compliance with the CVS Caremark Supplier Ethics Policy and abide by social, legal and trade security standards, including prohibitions against human trafficking and slavery, CVS Caremark launched an enhanced factory audit program in early 2012 called the Workplace Conditions Assessment program. This program utilizes a third party auditing firm to monitor supplier adherence and conduct audits of all factories outside of the United States from which we directly purchase imports. As of April 5, 2012, all import suppliers and global supply chain partners must register for and schedule a factory audit within five days after receiving a purchase order from CVS Caremark.

Our social accountability standards are based on standards set by the International Labour Organization, an agency of the United Nations that is responsible for overseeing international labor standards, and our security standards reflect guidelines established by the Customs-Trade Partnership Against Terrorism.

Import suppliers are subject to audits that encompass good manufacturing processes and social and environment and security audits to help ensure we provide our customers with safe, quality products that are produced in a socially responsible manner.

Types of information and practices that may be reviewed, include:

• Monitoring, Validation and Documentation
• Management Systems
• Child Labor
• Forced or Compulsory Labor
• Health & Safety
• Right to Collective Bargaining
• Non-discrimination
• Disciplinary Practices
• Harassment or Abuse
• Compensation & Benefits
• Hours of Work
• Sub-contracting
• Environmental
• Home Work
• Access Control
• Procedural Security
• Personnel Security
• Education & Training
• Container Security 

Where supplier shortcomings are identified, we work with the supplier to promptly rectify the problem to meet CVS Caremark’s compliance standards. For example, in 2011, there were two instances identified where suppliers did not meet standards with respect to under age employees. In the first instance, the employee submitted false identification; in the second instance, the supplier did not follow their own written policy during the hiring process. Both have been rectified to our satisfaction.

Supplier Diversity Program

We are dedicated to developing procurement opportunities with a diverse community of suppliers. Our Supplier Diversity Program complements the CVS Caremark commitment to sound business practices and social responsibility to the communities we serve, recognizes the critical role diverse-owned businesses play in our continued success and in providing outstanding service and solutions to our customers and clients.