Li & Fung discloses that it is a member of the Mekong Club, an industry initiative focused on addressing modern slavery, and that it contributed to the development of a remediation tool and a "Business Pledge against Modern Day Slavery." It further notes that in its function as a member of the Steering Committee of the Social and Labor Convergence Project, it contributed to developing an assessment and data collection framework, which the company notes also covers forced labor.
Li & Fung discloses that potential suppliers are audited against its supplier code of conduct (which covers forced labor) and are required to correct non-compliances before entering into contracts. The company takes part in the Better Work program and, as such, is required to refrain from terminating or reducing orders at any non-compliant factories (provided factories make sufficient progress) and to review internal buying practices that may impact compliance at its supplier facilities. Its supplier code requires suppliers to request written authorization for subcontracting and home work.
Li & Fung discloses that it monitors supplier compliance against its supplier code of conduct through audits conducted by its own staff, external third parties, or through its audit equivalency program. Under this program, it accepts audit reports generated through schemes such as Better Work, the Fair Labor Association, and amfori BSCI. Where the company does not conduct its own audits but accepts its suppliers' audit reports, it conducts unannounced spot checks. The company also takes part in the ILO's Better Work program in Vietnam, Cambodia, Nicaragua, and Haiti, which includes unscheduled assessments of facilities against indicators including forced labor. The company discloses the most frequent areas of supplier non-compliance and provides an overview of compliance ratings assigned to its suppliers.