Summary of Results
Companies typically disclose a corrective action process and outline some steps they take when their suppliers fail to implement corrective actions. However, disclosure on a remedy process and
outcomes of remedy for their suppliers' workers is poor, with the majority of companies failing to provide any information on how they respond to allegations of labor rights violations in their supply
The majority of companies (32 out of 43) disclose a corrective action process that is used to remediate supplier non-compliances identified during audits. Twenty-nine companies describe
how they verify that corrective action plans are being effectively implemented, such as through follow-up audits. Twenty-six companies disclose consequences for suppliers that fail to implement
corrective actions, the majority of which refer to the termination of business with the supplier. Li & Fung discloses further detail, reporting that, when it ends business with suppliers that fail to
implement corrective actions, it agrees on "responsible exit plans" with those suppliers. It states that it discontinued relationships with 2% of its suppliers in 2017.
Ten companies provide a summary or an example of their corrective action process in practice. Ralph Lauren discloses that it found that a supplier was using monetary fines as a disciplinary practice. As such, it recommended that management adopt controls to prevent the use of fines as disciplinary action. It states that the factory committed to issuing warning notices and educating its staff on the issue. The company verified that fines had stopped in a follow-up audit.
Far fewer companies disclose information on their remedy process for responding to and addressing grievances or allegations of labor rights violations in their supply chains, such as identifying responsible parties, approval procedures, timelines for dealing with allegations, and how they engage with affected stakeholders. Only five companies (Adidas, Hanesbrands, Lululemon, VF Corp, and Walmart) provide some information on this process. Hanesbrands reports that its grievance mechanism is initially managed by a third-party service, Navex Global, which immediately notifies the company if there is a grievance filed. A small team of trained personnel will receive these grievances and prioritize them. Cases are then assigned to trained investigators; typically there is a code of conduct officer assigned by the company in every country where it has operations. It discloses that each issue is "fully investigated" and reported back to headquarters with a recommendation for next steps, and reviewed again by the headquarters team before disciplinary measures are taken. For issues of particular severity, especially those that may be considered material to the organization, the senior management team will be engaged throughout the process. Hanesbrands discloses that the typical investigation lasts 14-30 days, and the complaining party is often contacted multiple times during the process, always in their local language, to provide additional information if necessary. The complainant is also appropriately informed of the outcome.
Fifteen companies disclose remedial outcomes for workers in their supply chains, although only nine gave two or more examples. For example, Lululemon discloses that, during second-tier supplier assessments, it discovered that workers' passports were being withheld. It subsequently ensured that the supplier created safe spaces for workers to store and access their passports and all documents were returned to workers. VF discloses that canteen staff at one of its suppliers were provided with back wages and opportunities for proper employment after they were found to be working in conditions of forced labor. Since 2016, Inditex, Lululemon, Primark, and Ralph Lauren disclosed one or more examples of remedy outcomes for workers in their supply chains. Ralph Lauren has disclosed that it reimbursed fees charged to 33 Bangladeshi workers at one of its suppliers in Jordan.