APPAREL

Themes Key Findings

2018 Apparel & Footwear

The 43 Apparel and Footwear companies were assessed across the benchmark's seven themes, which were developed 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 23 indicators across the seven themes. Each theme is weighted equally and determines the company's overall benchmark score on a scale from 0 to 100.

37

Overall Score 2018 Apparel & Footwear
18 Theme Score

Summary of Results

Recruitment is the lowest scoring theme of the benchmark. Although some leading companies demonstrate stronger practices in relation to recruitment, no company achieved a full score under this theme.

Recruitment Approach

Adidas and Lululemon are the only companies that disclose a policy requiring the direct employment of workers in their supply chains, thereby eliminating the risks associated with the use of employment agencies. Nike and Burberry have provisions that encourage suppliers to employ workers directly, but they do not require this practice. Generally, benchmarked companies do not disclose information on the recruitment agencies used by their suppliers, though six companies do describe mapping processes that they have in place to ascertain where such agencies are based. Similarly, only three companies (Adidas, Amazon, and Page Industries) disclose policies which clearly require both employment and recruitment agencies in their supply chains to comply with their supply chain standards or policies on forced labor. An additional five companies have policies which require either employment or recruitment agencies to comply with their standards.

Recruitment Fees

Of the 43 companies evaluated, only ten disclose a policy that prohibits worker-paid recruitment fees in their supply chains. These policies include the Employer Pays Principle, which specifies that the costs of recruitment should be borne by the employer, not the worker. This is an unacceptably low number, given the clear risks associated with recruitment fees and their potential to render workers vulnerable to bonded labor. While 11 companies disclose that they require such fees to be reimbursed to workers, only four companies (Adidas, Lululemon, Primark, and Ralph Lauren) disclose evidence that recruitment fees have been reimbursed to workers. Adidas reports that it reimbursed unlawful fees to Burmese workers at a supplier factory in Malaysia. The fees had been deducted from workers' wages for transportation, forced savings, and illegal termination. It discloses that it worked with the factory in question to reimburse RMB4,500 (approximately USD$650) to each worker and reinstated the workers' employment. Other companies describe the means by which they seek to ensure that fees are repaid to workers. Gap reports that it verifies that fees are reimbursed when it discovers that fees have been paid by workers in its supply chains. The company also reports that t conducts outreach to foreign migrant workers "to get a better understanding of the costs incurred by them to attain employment" and uses this information to estimate the amount that it requires employers to reimburse to workers.

Ethical Recruitment

Thirteen companies disclose some provisions to ensure the monitoring of recruitment and employment agencies used by their suppliers. However, only four provide evidence that such monitoring has taken place. For example, Lululemon discloses that recruitment agencies used by ten out of 19 suppliers known to use foreign migrant workers have been reviewed by Verité.

Only seven companies describe how they support ethical recruitment in their supply chains, such as by training suppliers on ethical recruitment or implementing a screening process for recruitment agencies. Lululemon discloses that it has launched a plan to achieve "no fees" paid by workers in Taiwan by the end of 2019. It discloses supplier training on ethical recruitment delivered in Taiwan, China, and Vietnam, and notes that it provided suppliers with tools and guidance to achieve ethical recruitment. These tools include a recruitment agency screening, an evaluation and selection tool, a sample "no fees" approach and implementation plan, and direct and indirect hiring cost comparison tools. The company also participates in the Foreign Migrant Worker Brand Collaborative, a group of six apparel and footwear companies collaborating on the monitoring and remediation of forced labor issues in shared facilities. Only one company, Walmart, discloses membership in the Leadership Group for Responsible Recruitment. As a member of this group, Walmart is required to map supply chains for recruitment risk, offer guidance and training for hiring managers on the Employer Pays Principle, share tools and guidance, and promote the Employer Pays Principle among its peers.

Migrant Workers' Rights

Only three companies (Adidas, H&M, and Lululemon) provide evidence of how they work with their suppliers to ensure that migrant workers' rights are respected, beyond providing training or policy commitments. Lululemon discloses that its suppliers were involved in the development of its Foreign Migrant Worker policy and the Implementation Roadmap for this policy.

A disappointing number of companies have provisions in place for addressing common indicators that can lead to situations of forced labor: only 12 companies have policies that require suppliers to take steps to ensure that workers understand the terms and conditions of their employment and labor rights. Only five describe how they ensure that migrant workers are not discriminated nor retaliated against when raising grievances. Twenty companies disclose policies that prohibit passport retention, which is often used to restrict workers' freedom of movement.

Recruitment Approach

The company has a policy that requires direct employment in its supply chains, and requires employment and recruitment agencies in its supply chains to uphold workers' fundamental rights and freedoms. The company discloses information on the recruitment agencies used by its suppliers.

The company: (1) has a policy that requires direct employment in its supply chains; (2) requires employment and recruitment agencies in its supply chains to uphold workers' fundamental rights and freedoms (those articulated in the International Labour Organization's Declaration on Fundamental Principles and Rights at Work), including the elimination of forced labor; and (3) discloses information on the recruitment agencies used by its suppliers

Low: 0
High: 100
8

Recruitment Fees

In its relevant policies or standards, the company requires that no fees be charged during any recruitment process in its supply chains-the costs of recruitment should be borne not by the worker but by the employer ("Employer Pays Principle"). In the event that it discovers that fees have been paid by workers in its supply chains, the company ensures that such fees are reimbursed to the workers.

The company: (1) requires that no worker in its supply chains should pay for a job-the costs of recruitment should be borne not by the worker but by the employer ("Employer Pays Principle"); and (2) ensures that such fees are reimbursed to the workers, in the event that it discovers that fees have been paid by workers in its supply chains.

Low: 0
High: 100
20

Monitoring and Ethical Recruitment

The company ensures employment and/or recruitment agencies used in its supply chains are monitored to assess and address risks of forced labor and human trafficking, and provides details of how it supports ethical recruitment in its supply chains.

The company: (1) ensures employment and/or recruitment agencies used in its supply chains are monitored to assess and address risks of forced labor and human trafficking; and (2) provides details of how it supports ethical recruitment in its supply chains.

Low: 0
High: 100
18

Migrant Worker Rights

To avoid the exploitation of migrant workers in its supply chains, the company ensures migrant workers understand the terms and conditions of their recruitment and employment, and also understand their rights. It further ensures its suppliers refrain from restricting workers' movement, and that migrant workers are not discriminated against, and not retaliated against, when they raise grievances. The company provides evidence of how it works with suppliers to ensure migrant workers' rights are respected.

The company: (1) ensures migrant workers understand the terms and conditions of their recruitment and employment, and also understand their rights; (2) ensures its suppliers refrain from restricting workers' movement, including through the retention of passports or other personal documents against workers' will; (3) ensures migrant workers are not discriminated against, and not retaliated against, when they raise grievances; and (4) provides evidence of how it works with suppliers to ensure migrant workers' rights are respected.

Low: 0
High: 100
25

Recruitment Fees: Notable Example

Lululemon

Lululemon discloses that it discovered, in 2017, that a supplier was not reimbursing airfare costs to workers, as had been agreed in labor contracts. It states that it partnered with another brand to engage with the supplier and ensure that costs were reimbursed to workers.

Recommended Action

Recruitment Fees

Ensure that no fees are charged to workers in supply chains and incorporate the Employer Pays Principle into policies to ensure that the costs of recruitment are borne by the employer and not the worker. Require fees to be repaid when charged and publish evidence that these policies are being implemented.