APPAREL

Themes Key Findings

2016 Apparel & Footwear

The companies' average overall score across the benchmark methodology's seven themes, which were selected to capture the key areas where companies need to take action to eradicate forced labor from their supply chains: commitment and governance; traceability and risk assessment; purchasing practices; recruitment; worker voice; monitoring; and remedy. There are a total of 22 indicators across the seven themes. For each theme a company can score a total of 100 points.

46

Overall Score 2016 Apparel & Footwear
64 Theme Score

Summary of Results

With an average score of 64/100, the benchmark finds that most companies are monitoring their suppliers and disclosing information on the results of these processes. In fact, 17 out of the 20 companies audit their suppliers to measure compliance with their supply chain standards, yet only eleven out of those disclose they undertake at least some audits unannounced. Thirteen companies review relevant documents, which may include information on wages, benefits and deductions, working hours, labor contracts, termination documents, contract of recruiters, and training and grievance records. It is positive that 16 companies interview workers as part of their audit process. Details on how interviews with workers are conducted are limited. VF reports that interviews provide added insight into a facility's working conditions, including hiring practices, wages and hours, worker-management communications, worker treatment, and environmental issues. Notably, adidas reports it conducts worker interviews both on and off-site.
"No control system, regardless of how mature and tested it is, can guarantee the absence of risk." (Kering, 2015 Reference document) KnowTheChain acknowledges that audits on their own are limited in effectiveness. The findings on the monitoring theme should therefore be read in conjunction with the findings on the worker voice and other themes.
Some companies disclose monitoring elements particularly pertinent to detect forced labor. Supplier audits at adidas' include an evaluation of migrant labor issues, and, at Under Armour the use of recruitment agencies. Where auditors identify a supplier uses recruitment agencies, Under Armour engages the suppliers on risks such as passport retention, wage payment/deductions, or recruitment fees. PVH requires auditors to examine suppliers' recruitment policies, and, in cases where the factory employs migrant or foreign contract workers, the auditor must examine a listing of all contract workers identifying the recruitment agency, the date of hire, length of contract, and country of origin. PVH further verifies whether suppliers' workers are trained on using grievance mechanisms. Likewise, H&M monitors the existence and effectiveness of worker/management communication systems, such as grievance systems and effective workers' committees.
Sixteen companies disclose at least some information on the outcome of their audit program, such as who carried out the audit. Seven companies disclose the percentage of suppliers audited annually, and five companies disclose the percentage of unannounced audits. Eleven companies provide a summary of audit findings, including details regarding any violations revealed. Suppliers at seven companies are audited by third parties such as the ILO Better Work Program or the Fair Labor Association (FLA), which discloses the audit findings of its member companies on its website. Companies typically identify a higher number of incidents related to health and safety, working hours, and wages than on forced labor (issues which-when accumulated-can indicate forced labor). Some also report on incidents of subcontracting, freedom of association, child labor, and forced labor. H&M discloses a supplier compliance list including the overall percentage of compliant suppliers on every element of its audit program, which also incorporates questions on basic workers' rights (e.g., freedom to terminate work, same contracts for migrant workers, and local workers) and on home workers.

Auditing Process

The company audits its suppliers to measure compliance with applicable regulations and with its supply chain standards. The process includes scheduled and non-scheduled visits, a review of relevant documents, and interviews with workers.

The company has an audit process that includes: (1) scheduled and non-scheduled visits. (2) a review of relevant documents. (3) interviews with workers.

Low: 0
High: 100
71

Audit Disclosure

The company publicly discloses information on the results of its audits. This includes the number and percentage of suppliers audited annually, what percentage were unannounced, and information on who carried out the audits.

The company discloses: (1) the percentage of suppliers audited annually. (2) the percentage of unannounced audits. (3) information on who carried out the audits. (4) a summary of findings, including details regarding any violations revealed.

Low: 0
High: 100
57

Auditing Process: Leading Practice

Lululemon

Lululemon reports that its audits include meetings with facility management, site visits, document reviews, and interviews of employees at all levels of the organization. The documents reviewed includes contracts, payment records, wage slips, information on contracts of recruiters, training records, as well as grievances, and disciplinary action and response records. Worker interviews include questions on the recruitment process, contract terms, identification documents, wage processes, and broader questions with respect to human rights and labor practices. A typical assessment includes interviews with at least 20 workers.

Recommended Action

Auditing Disclosure

Disclose the percentage of suppliers audited annually, the percentage of unannounced audits and a summary of findings, including details regarding any violations revealed.