EICC Membership

As a coalition member since October 2006, Xerox has continued its rollout of the Electronic Industry Citizenship Coalition's (EICC's) Code of Conduct, a standards-based approach for monitoring suppliers' compliance across several areas of social responsibility, including labor, health, safety and environmental activity. Xerox has validated its compliance with EICC guidelines and is working to ensure compliance by our key vendors that contribute to the manufacturing of Xerox products and systems. We continue to actively participate in EICC quarterly conferences, where members share industry best practices for managing and monitoring the supply chain.

We have also developed a process that measures suppliers' compliance and incorporates EICC activities into our internal management reviews. We have prioritized EICC compliance reviews for our non-EICC or U.N. Global Compact member vendors located in “high-risk” regions, or 12% of our key suppliers. We have completed assessments for 50% of these suppliers. We expect the remainder will be completed by year-end 2008. Any identified gaps are addressed through a rigorous corrective action process, which is monitored regularly. In addition to EICC compliance reviews, Xerox requires all its vendors to commit to complying with the principles of the EICC standards. All new supplier contracts will include social responsibility language that reinforces this commitment.

Supply Chain Security

Xerox is committed to implementing security controls within its supply chain to enable the uninterrupted flow of products from the point of manufacture to the customer. Xerox is U.S. Customs and Border Protection certified under the Customs-Trade Partnership Against Terrorism (C-TPAT) program that audits specific security measures protecting our supply chain. We have cascaded the security requirements of the program to our suppliers and require certification indicating they are in compliance.

Ethical Business Environment

To report concerns that suppliers feel may jeopardize otherwise constructive business relationships, we provide them with an ethics hotline and P.O. Box address, and we promptly investigate all concerns. More information on the EICC Code of Conduct can be found online at www.eicc.info/code.html.