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
37 Theme Score

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 chains.

Corrective Actions

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.

Remedy

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.

Corrective Action Plans

The company has a process to create corrective action plans with suppliers found to be in violation of applicable regulations and/or the company's standards, with the goal of improving conditions and achieving compliance. The company's corrective action plans include potential actions taken in case of non-compliance; a means to verify remediation and/or implementation of corrective actions; and potential consequences if corrective actions are not taken.

The company's corrective action plans include: (1) potential actions taken in case of noncompliance, such as stop-work notices, warning letters, supplementary training, and policy revision; (2) a means to verify remediation and/or implementation of corrective actions, such as record review, employee interviews, spot checks, or other means; (3) potential consequences if corrective actions are not taken; and (4) a summary or an example of its corrective action process in practice.

Low: 0
High: 100
55

Remedy Programs and Response to Allegations

The company has a process to provide remedy to workers in its supply chain in cases of human trafficking and forced labor.
If no allegation regarding forced labor in the company's supply chain has been identified in the last three years, the company discloses examples of outcomes for workers of its remedy process.
If one or more allegations regarding forced labor in the company's supply chain have been identified in the last three years, the company discloses a public response to the allegation, and outcomes of the remedy process, including evidence that remedy(ies) are satisfactory to the victims or groups representing the victims.
If one or more allegations regarding forced labor in the company's supply chain have been identified in the last three years, and the company denies the allegation, the company discloses a public response to the allegation, a description of what actions it would take to prevent and remediate the alleged impacts, and that it engages in a dialogue with the stakeholders reportedly affected in the allegation, or requires its supplier(s) to do so.

A. If no allegation regarding forced labor in the company's supply chains has been identified in the last three years, the company discloses: (1) a process for responding to complaints and/or reported violations of policies and standards; and (2) at least two examples of outcomes for workers of its remedy process in practice, covering different supply chain contexts.
B.1. If one or more allegations regarding forced labor in the company's supply chains have been identified in the last three years, the company discloses: (1) a process for responding to the complaints and/or reported violations of policies and standards; (2) a public response to the allegation, which covers each aspect of each allegation; (3) outcomes of the remedy process in the case of the allegation(s); and (4) evidence that the remedy or remedies are satisfactory to the victims or groups representing the victims.
B.2. If one or more allegations regarding forced labor in the company's supply chains have been identified in the last three years, and the company denies the allegation, the company discloses: (1) a process for responding to the complaints and/or reported violations of policies and standards; (2) a public response to the allegation, which covers each aspect of each allegation; (3) a description of what actions it would take to prevent and remediate the alleged impacts; and (4) that it engages in a dialogue with the stakeholders reportedly affected in the allegation, or requires its supplier(s) to do so.

Low: 0
High: 100
18

Corrective Actions: Notable Example

L Brands

L Brands discloses that it has been engaged with two suppliers in China over 12 months to ensure that the factories are appropriately managing their working hours and paying overtime wages to workers. It states that consultants have visited the suppliers on a monthly basis to offer advice and training, and that the suppliers have now implemented appropriate overtime wage payments and are able to assess productivity levels and working hours correctly.

Recommended Action

Remedy Outcomes

Disclose examples of outcomes of remedy for suppliers' workers and evidence that remedial actions taken are satisfactory for affected workers.