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Corporate News

Update on Swedwood Danville IWAY
[National]  The following information is in response to the recent media coverage concerning Swedwood in Danville, VA.
May 18, 2011

IKEA products must be produced under acceptable working and environmental conditions. Suppliers are required to comply with the IKEA Code of Conduct, IWAY. They in turn are responsible for communicating the content of the IKEA code of conduct to their employees and sub-suppliers.

Through the IKEA code of conduct, IWAY, we demand that our suppliers comply with national law and the IWAY standard. We fully respect the right of co-workers to join or not to join a labor union or other forms of co-worker association – it is their choice.

The Swedwood Danville site was built five years ago bringing valuable job opportunities to the area. During the last months, the working conditions in the factory have been questioned in some media. The IKEA Group takes all allegations seriously. On May 3-4 2011, we carried out a thorough IWAY audit with our lead internal and external auditors. With the agreement of Swedwood Danville we are making the principle findings public.

The audit team found the Danville factory to be modern and well functioning. Many good IWAY examples were found and the internal state of the factory is on a high level from a health and safety perspective. The audit team identified one issue regarding excessive use of overtime. Although the use of overtime at Danville is within legal parameters, it does not live up to the high demands of IWAY. The remark has been taken seriously by the Danville management, which has designed a process to solve this issue and they are well on their way. IKEA will continue to monitor the situation to ensure an acceptable level of voluntary overtime in Danville.

Accusations about any kind of discrimination are taken very seriously by IKEA, but no such practices were found in the audit. No incidents of misbehavior or misconduct by management with respect to punishment and appeal were detected in the audit. During the audit, there was no evidence that Swedwood has prevented employees from exercising their right to become organised and thereby enter into collective bargaining.

Swedwood is committed to continuously improving Danville to make it a state-of-the-art factory.

In addition we also have the following information:

•A grand audit by the Occupational Safety and Health Administration (OSHA), in 2010 found Swedwood a safe place to work and received only minor remarks, which where all immediately corrected.

•One case of claimed discrimination at Swedwood Danville has been resolved and the National Labor Relations Board determined that Swedwood Danville was not in violation on this charge.

How the Audit Was Conducted:

Beside interviews with management, documentation review, inspection tours around the site and checks to HR registrations regarding contracts, hours worked and hours paid for, the audit team completed 24 interviews with employees chosen at random from a list from HR. The 24 interviews represent talks with employees at all 3 shifts and all 3 main production lines. All interviews were conducted in confidentiality and the audit team left business cards with the interviewees should any actions be taken towards them based on their statements. The audit was conducted in a positive and constructive atmosphere. At no point did the audit team feel that information was withheld or altered.

About the IKEA IWAY Code of Conduct

Through the IKEA code of conduct, IWAY, we demand that our suppliers around the world comply with national law and with the IWAY standard and respect the right of their co-workers to join or not to join a labor union. We also require our suppliers to pay at least legal minimum wage and to care for the safety of the co-workers. We audit all our suppliers and have documented more than 157,000 improvements.

By being on site in the factories we contribute to positive development. IKEA focuses on motivating and supporting suppliers to take increased responsibility themselves, so that future development is sustainable and independent of IKEA’s presence.

IKEA inspectors as well as third party auditors regularly visit suppliers to check that IWAY criteria are met. Since it was first introduced in 2000, IWAY has contributed to many large and small improvements in the IKEA supply chain. Many suppliers have also experienced that investments in working conditions and the environment often lead to more orders, better productivity and improved profitability and thereby improved competitiveness.

Contact: Mona Astra Liss ~ ~ 610.834.0180/ext. 5852