The third-party audit process of Coca Cola, a Fortune 500 company

Third Party Auditing Procedure

To verify compliance with TCCC's Code, we have designated several third party auditing firms that specialize in social compliance monitoring (see Attachment C). Audits are performed by qualified auditors who are knowledgeable about local laws, living standards and cultural differences in each region. The third party audits will be an impartial assessment of the Merchandise Manufacturer's compliance with our code and local laws.

To verify compliance with TCCC's Code of Conduct, we have appointed several professional third-party audit companies. See Appendix C. Qualified auditors who are familiar with the local laws, living standards and cultural background of each region will conduct these audits. The third-party audit will be a fair assessment of the product manufacturer's compliance with our Code of Conduct and local laws.

All facilities, with special emphasis on manufacturing facilities, are subject to annual inspection and verifications of compliance with our code. Annul inspections are required because factory conditions change rapidly over time, creating a need for re-certification. All manufacturing facilities are subject to annual Code inspections, including factories that have a satisfactory audit history.

All organizations, especially manufacturing plants, are subject to annual audits. Because the factory's conditions change over time, annual audits and annual qualification are necessary. All manufacturing plants, even those that have been qualified in the past, must undergo annual code of conduct inspections.

TCCC recognizes global challenges and the differences between each manufacturer and level of their development. The following is a global pre-audit and post audit checklist for Merchandise Manufacturers.

TCCC is aware of the global challenges and differences between manufacturers and their development levels. The following are global checkpoints for pre- and post-audits of product manufacturers:

Note: Most auditing firms use the same standards for auditing but this may vary by company and procedural attributes. It is important that TCCC's requirements are shown with any audit firm used.

Note: Most audit companies use the same standards for auditing, but there may be differences due to different audit companies and operations. The key is that different audit companies reflect the requirements of TCCC.

1. It is the Merchandise Manufacturer's responsibility to ensure its management understands the requirements of TCCCs' Code and verification procedures.

Product manufacturers are responsible for ensuring that their management understands and comprehends TCCC's code of conduct and audit procedures.

2. The Merchandise Manufacturer must complete a pre-audit questionnaire and submit their response to third party auditing firm and to TCCC.

Product manufacturers must complete a TCCC audit questionnaire before the audit and send it to the third-party audit company and TCCC.

·Merchandise Manufacturers completes and returns the factory profile questionnaire which may include questions regarding labor contracts, wage/overtime policy, collective bargaining agreements, injury log, medical procedures, evacuation procedure, protective equipment polices, etc.

The product manufacturer completes and returns the factory data form, which may include some information such as contracts, wages, overtime hours and collective bargaining rights, work injury records, escape procedures, PPE, etc.

· Provide records of any previous audits of the facility to auditing firm

Provide some records of the product manufacturer to the audit company before the audit

· Provide factory layout and production flow chart

Provide factory floor plan and production flow chart

3. Upon completion of audit, Merchandise Manufacturer must send a copy of audit results to TCCC.

Once the audit is completed, the product manufacturer must provide TCCC with a copy of the audit results.

Note: Under no circumstances should confidential information, such as factory workers' names, be reported to the manufacturing facility.

Note: Never disclose the names of factory workers being audited to the factory.

4. Inspector will provide a summary of findings. If violations are found, the inspector will provide a detailed description of all Code violations and proposed timeline for corrective action/completion. The corrective action plan must be agreed upon by the inspector and the facility management prior to closing the audit.

The auditor will provide a summary of the findings. If there are any violations, the auditor will provide a detailed description of the violation and a plan for improvement. The improvement plan must be agreed upon between the auditor and the factory management before the end of the audit.

5. If violations have been cited, TCCC may require additional corrective actions or measures different from the third party auditor's action plan.

If a violation has been identified, TCCC may require different corrective actions or measures than those of the third-party auditor.

6. The Merchandise Manufacturers will incur all costs for Code audits and any follow-up audit thereafter.

The product manufacturer shall bear all costs of the audit or follow-up audit.

7. An audit notification by the third party auditing firm will be made 30 days prior to the audit date(s). A letter outlining permission to enter the manufacturing facility must be prepared by the relevant Merchandise Manufacturer or TCCC prior to audit date (see Attachment D).

Note: The audit is not contingent upon the production of Coca-Cola products at the time of the audit. The audit may take place at any time, but is only valid for one year from the actual date of the audit.

The third-party audit company must send an audit notice 30 days before the audit. Before the audit, the product manufacturer must provide a consent letter to allow the audit. Please see Appendix D.

Note: Audits are not necessarily conducted when the product manufacturer is producing Coca-Cola products. Audits will be scheduled whenever necessary and not necessarily on the exact date of the one-year expiration date.