sweatshops 2000 words
clark Lee
CSR2.zipCSR??ҵ2/2015Multinationals and sweatshops.ppt
Multinationals and Sweatshops
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$9,783 v 28C
$3,000!!!!
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Michael Eisner ex-CEO at Disney: salary and share option made equivalent of $9,783 per hour.
Tea-break= 15-20 minutes= $3,000. Unproductive but equal to earnings of worker in sweatshop for 4 or 5 years.
“Disney’s universe is built around a fantasy. But there is no fantasy to working in sweatshops: Disney’s children’s books are made with the blood, sweat, tears of young workers in China”
Charles Kernaghan, Director, National Labour Committee
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National Labor committee report on Disney’s Mickey and Friends book being made in China: time and again children had their fingers crushed in the book making machinery:
Crushed and broken fingers
Cut hands
Broken legs
Even some fatalities.
This report should still be available on the NLC website.
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Disney : a “family” centred company. When it went into action films called itself “Buena Vista”!
So imagine the disconnect between Xmas display in Disney Shops and allegations about production in Bangladesh.
Brand factories
339.47
(14 copies)
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Naomi Klein “No Logo”:
Increasingly companies are “brand factories”.
“Strut over stuff”
The idea; the lifestyle; the attitude.
Branding/advertising/sponsorship is extremely expensive.
So a squeeze on production: sweatshops in Asia and Central America take the brunt of cost savings
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“Strut over stuff: no surprise sweatshops exist:
they take brunt of cost savings”
Naomi Klein
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Klein: Canadian journalist and voice of anti-globalisation protestors.
Let’s take a look at example of Puma shoes (again a report from the NLC)
Total labour cost $1.16c
[2.7 hours to make a pair
of trainers @ 43c an hour]
Puma’s advertising costs $6.78c
Puma’s advertising costs are nearly 6 times more than it pays
workers in China to make the trainer
Source:”Puma’s Workers in China” report. National Labour Committee USA
“Sweatshops take the Brunt”
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Information from: publicly available documents/ whistleblower documents from Puma and port of Los Angeles/ knowledge about the Chinese factory (send in investigators- talk to people at factory gate- see if you can get in). EG knowing it takes 2.7 hours to make a pair of trainers and hourly pay is 43c.
How did NLC estimate mark-up?
Source: National Labour Committee website USA:
“Puma’s Workers in China”
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What is mark-up for Puma and how can we estimate it?
Puma trainers cost $70 retail
Customs documents: “Bill of Lading”:basically insurance value of each pair of trainers is $5.80. Plus the $6 advertising plus other costs- still leaves much room for profit.
Laded customs value includes:
All materials; accessories; direct and indirect labour shipping and profit.
NLC then went to Puma internal documents and calculated and determined it takes 2.7 hours to make a pair of trainers and workers get paid about 43c
“Doing good is very do-able”
Report: Puma in China
National Labour Committee
see website
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On a $70 pair of trainers labour amounts to 1.66% of the retail price
Advertising amounts to 9.7% of the retail price.
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On a $70 pair of trainers labour amounts to 1.66% of the retail price. Almost rubbed out.
Advertising amounts to 9.7% of the retail price.
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To climb out of absolute “misery” (43c an hour) to “poverty” ( 63c an hour)
A rise in worker wages of 46% but negligible impact on Puma/consumer
It would add 54c to cost of $70 trainers (63c x 2.7=$1.70c-$1.16= 54c)
National Labour Committee: “doing good is very do-able”: consumers willing to pay $70 are not going to be price sensitive over another 54c: indeed the 54c could easily be absorbed in to the existing price.
“The race to the bottom”
58c
17c
43/48c
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Hourly sweatshop wage:
37c in Central America
48c in China (NLC)
17c in Bangladesh (NLC)
Called “The Race to the Bottom”.
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“When in Rome, do as the Romans”:
One’s actions will be judged according to norms of the environment in which they take place.
So for years designers/retailers hid behind argument that things are just different abroad: don’t judge say Bangladesh working conditions / pay by out standards.
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We’re designers: but protestors not accepting this.
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Primark dubious distinction of not only sweatshops in Far East but evidence of sweatshops in UK!
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When in Rome
=an excuse
Ch13
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The rule is used to ethically remove Western firms who do business in emerging world
Rule allows for conditions and pay that are intolerable in the West.
RELATIVE POVERTY OR ABSOLUTE POVERTY?
ABSOLUTE POVERTY BECAUSE THEIR WAGES DON’T GIVE THEM THE BASICS: live in shanty towns, poor sanitation, illness.
Absolute Poverty: "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."
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In the movie “Manhattan” Woody Allen’s character talks about the hotel where the food was dreadful AND there was not enough of it either.
Likewise multinationals get the same treatment: they are accused of causing harm in the Third World with their use of sweatshops and in the same breath accused of by-passing countries that need them (eg Africa).
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Harvard economist Richard Freedman argues it isn’t just a case of WAL MART rules and exploits the third world.
Consumers at Wal Mart want dead cheap products.
Consumers are unwilling to pay a premium for Fair Trade products and as the difference in price becomes greater fewer and fewer people will pay.
Argues absolute cheapness determines labour conditions
BUT! Remember NLC report on Puma: the cost is only a few cents on a pair of trainers.
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Globalisation involves some pain: what poor countries go through today
Korea and Taiwan went through in the 1950s
UK and USA went through 100 years ago.
Pro-sweatshop arguments:
What argument applicable even to the factories used by Puma in China might be put forward in defence of Sweatshops?
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“Agglomeration Economy”:
Phenomenon of economic activity congregating in or close to a single location.
Picture of a foot: “KICK START” economy.
Sweatshop attracts local suppliers, cleaning, catering; outlets for workers to spend cash: shops, entertainment, communication. More local tax, more infrastructure etc.
SEE BHAGWATI’S book “In defense of globalisation”.
To anti-sweatshop protestors.
Two words.
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“Agglomeration Economy”:
Phenomenon of economic activity congregating in or close to a single location.
Picture of a foot: “KICK START” economy.
Sweatshop attracts local suppliers, cleaning, catering; outlets for workers to spend cash: shops, entertainment, communication. More local tax, more infrastructure etc.
Again- Bhagwati book.
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For all their bleating anti-sweatshop protests don’t match up to hard factual economic research: not opinions but hard data. One of poorest countries- Vietnam.
Glewwe: in Vietnam: sweatshop workers better paid! See article on reading-list.
Also Powell and Skarbeck!
200 million
Ch 6
“Child labour: increased
or decreased”
338.88/BHA 5 copies
“parents will choose to feed their children instead of schooling them if forced to make a choice”
Jagdish Bagwati
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Bhagwati argues globalisation overall has (and is having ) a tremendous impact on the poor. Globalisation and sweatshops can alleviate the problems for which it is being blamed!!
Third World Governments have failed the poorest people: p68:200 million children work . 100 million don’t even get primary school education.
Ch 6
“Child labour: increased
or decreased”
1. Credit constraint.
2. Income Effect.
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Bhagwati: in countries that avoid or are by-passed by globalisation “CREDIT CONSTRAINT” exists in many third world countries: that is the poor, especially agricultural workers/peasants have no access to loans (other than those leading to debt slavery as India):
One research paper on Tanzanian agricultural workers showed that ability to access credit is associated with a reduction in child labour:
When household income seasonally declines: households unable to borrow take children out of school; those able to borrow kept their children in school by borrowing money.
Globalisation= not just McDonalds and TACO BELL improvements in the financial sector: small borrowers are able to access credit on reasonable terms; clear this is the case in “Travels with a Gringo!”: sweatshop workers have very easy access to credit. SWEATSHOP= consistently paid throughout year. PEASANTS UNPREDICTABLE.
”Income Effect”: when income improves poor parents generally put children back to school: education of one’s children is a “superior good” consumption rises as income rises.
Even if still in poverty there is much economic evidence that globalisation brings with it credit: poor parents are able to borrow money and send children to school- then repay loans later.
Globalisation= more school enrolment and reduced child labour. BREAK CYCLE OF ILLITERACY AND LOW PAID WORK=EDUCATION FOR THE BRIGHEST CAN LEAD TO GREAT THINGS.
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Kristoff:
Sweatshops are an escalator out of dispair.
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Kristof and Wudunn journalists who travelled through Asia observing and talking to local people.p126-132.
“Sweatshops are an escalator out of despair”: example of Tratiwoon a women with a son living by side of rubbish tip. Her existence was scavenging the rubbish: her aspiration was for her son to work in a sweatshop.
Kristof: in the West we neglect the fact sweatshop jobs are not the bottom tier: even worse are the standard jobs the poor drift into:
FARM LABOUR
CONSTRUCTION LABOUR
SORTING RUBBISH
BEGGING
Argues that campaigns are counter-productive: if wages rise in a country like Indonesia because of publicity: why not relocate to Mexico-USA border or Malaysia or Taiwan where productivity is higher and infrastructure better?
“why are we concerned with factories and not rural peasants? Unlike the starving subsistence farmer, the women and children in the shoe factory are working on slave wages for our benefit- this makes us feel unclean.”
Kristoff 2001
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Kristof:why are we concerned with factories and not rural peasants: unlike the starving subsistence farmer, the women and children in the shoe factory are working for slave wages for our benefit- this makes us feel unclean.
“…the problem with sweatshops is that there isn’t enough of them”
Professor Jeffrey Sachs
The Earth Institute
Columbia University
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Sachs argues that sweatshops are the bottom-rung of a ladder out of poverty.
How could you argue that sweatshops are a good thing?
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Jeffrey Sachs, economist to pop stars, is by any definition a liberal.
He has visited many sweatshops around the world.
He is pro-sweatshop. His argument is two-fold:
First: in acutely practical terms a job in a sweatshop is a more promising alternative to death through starvation. Bottom rung of ladder but 8 million people a year die because they can’t get on the ladder.
Second: sweatshops offer better LIFE CHANCES, a better future.
Protestors use example of Bangladeshi garment workers. So does Sachs: but he points out opportunity for employment far outweighs the alternative of rural poverty: teenage marriage; 5 or 6 kids; whole family remain illiterate; unskilled; malnourished. Patriarchy structure of rural peasant villages.
In a factory LIFE CHANCES and “unprecedented personal liberation”.
See also ch7:”Women harmed or helped?” Bhagwati evidence of liberating effect of sweatshops in Bangladesh: onerous working conditions BUT PRIDE in earnings self-resepct and freedom from traditional gender work (peasantry).
“Sweatshops should be loved not hated.”
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“…out there in the villages, the best and the brightest escape and head for the factories of Nike sub-contractors, where machines do most of the work, where there is light to see by, a dormitory to sleep in, and wages to send home”
306.342 NOR 05
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“The home-made, the artisan-crafted, the organic,
the peasant, the un-marketed, and unpackaged
are all available”
Richard North
Rich is beautiful
306.342 NOR 05
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North argues that the “hip young children and grand-children of the Flower Power generation” are deluding themselves by buying artisan crafted goods.
Ignorant of ill-health caused by unregulated and dangerous working conditions: eg
in mud huts families kill themselves by breathing in “dioxin-laden smoke from dung fires”.
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North argues that the “hip young children and grand-children of the Flower Power generation” are deluding themselves by buying artisan crafted goods.
Ignorant of ill-health caused by unregulated and dangerous working conditions: eg
In mud huts families kill themselves by breathing in “dioxin-laden smoke from dung fires”.
TEMPTATION- next slide.
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Not just “low pay” and “long hours” but also abusive management
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Abusive working conditions
Source: Puma in China
National Labour Committee
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Depending on demand the working DAY is 13-16 hours. Working weeks 76 to 100 hours. CHEATED out of OVERTIME.
Only 10 days ANNUAL LEAVE PER YEAR. NO SICK PAY.
Fired for talking while working!.
Late 5 minutes fined 3 hours pay!!
“Workers are stripped of their rights”: any criticism and they are fired.
Food is described as “pig slop” .
Oxfam and NLC research
“forbidden to talk or use restrooms during shift”
(El Salvador)
“not paying overtime”
(China)
“punched;slappedears pulled”
(Indonesia)
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“Consumers want to trust you and never be let down”
Jesper Kunde “Corporate Religion”
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P503-508
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We’re designers= 3600 supplier factories in 50 countries
US/Canadian media/trade unions:
Deeply concerned by factory in El Salvador/Child labour//“Boycott” Gap
Leafleting consumers outside stores
SUPPLIER COMPLIANCE:
Global Compliance Team of 90
Orders only placed when GCT happy that supplier able to comply with Code
Compliance monitored
MOVIE
Not just GCT but also independents: ILO; Civil society: Trade Unions/Church
- Following bad publicity and media coverage of the working conditions at the Shan Makhdum factory in Bangladesh (which made Winnie-the-Pooh garments for Disney) Disney “pulled the contract” with the factory resulting in all 350 workers losing their jobs.
What could Disney have done instead of “cut and run”?
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Are there any rights or wrongs?
- As a CEO you want to improve the top line (sales) and bottom-line (profit). One way of growing bottom-line even if top line is static is to globally source production as cheaply as possible.
- Are there any objective rights or wrongs in what is acceptable from a supplier in terms of conditions of workers?
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Freedom from torture
Physical security
Right to free speech
Freedom of association
Right to subsistence
Basic rights
Hypernorms: convergent values of human decency
P744-752
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“Just do it-boycott Nike!”
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CSR??ҵ2/2018 Ethics and news.ppt
Ethics and the news
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Yesterday all British Airways flights took off and
landed on schedule. GOOD but not newsworthy because it is COMMONPLACE and not worthy of comment.
There were no delays or problems and passengers
were very happy with the service.
Employees/suppliers/ and management were in harmony.
NOW LOOK AT THIS CLIP OF THE BA STRIKE: what is it that makes this event NEWSWORTHY?
Video from National Labour Committee “The Hidden face of Globalisation” (Sweatshop lecture):
- 50 women died in a fire in a sweatshop
- Not news in USA or UK
- Ethnocentric/condescending?
- 1 person injured in a train crash in UK= national news
- 2 people die in a car crash in UK= not national news
- Brave dog rescues drowning child-video footage= world news
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On SKY NEWS often see “dramatic footage” of sister station in USA (FOX or its affiliates) of a chase: eg bank robbers. DRAMATIC but a small event of no consequence to us in UK.
24/7 news: need to fill every minute of the day.
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What is news?
Golding and Elliot argue that:
“ news values are qualities of events, and the more of such qualities a story exhibits the greater its chance of inclusion as news”
Source: Golding and Elliot
“News Values and news production”
p632-643 ch 50
in “Media Studies: a reader”
302.23 MAR01
News is the construct of people- primarily editors- choosing events and making them ”NEWS”. The driving force for choosing news can be:
Numbers driven (maximise audience to drive advertising revenue)
Political (as in dictatorships the “party line”)
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SIZE:
The “Big Story”
The scale of the event
Number of people
Proximity
Domestic news
DRAMA:
Joy
Shock
Sorrow
Fear
Achieved through
conflict
News qualities
NEGATIVITY:
“Bad news is good news”
Disruption to normal events
RECENCY: the “scoop” exclusive capture of news
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BAD NEWS IS OFTEN GOOD NEWS:
Disruption to normal events:
the strike,
the recalled product.
News is of human construction.
So a company doing well (say posting a huge profit) is too normal and undramatic an event BUT a strike is disruptive and so more likely to be newsworthy.
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“Private Eye test”.
“News is all the things people want to keep out of the papers.
All the rest is advertising”
Richard Donkin, FT journalist
BBC News journalist
“News is a recent, made up human commodity”
“What is news?”
P50-113
My Trade
070.9 MAR 04
Lose customers
Share price decline
Tarnished reputation
Profit warnings/analyst downgrades
Press Release:
“World’s greatest
Company”
by CEO
FIGHT/Conflict
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CEO agenda (good news)
Journalist agenda (bad news=interesting)
What you want is to tell people you are the world’s greatest company (advertising)
Journalist wants sensationalism: recalled product; accidents. (they want a ROW)
Thomas Cook Coach Crash
26 dead.
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Major UK travel company
A trusted international brand
Coach in South Africa with 34 elderly Brits
Crashed killing 28
Thomas Cook response?
- Outstanding response to families:
- Messages of sympathy
- Backed with visible action
Library E-book
Ch 9 “The Media in Crisis Situations”
Incident Management Team
- Relative helpline
- Set up in 30 minutes
- Well trained staff
- Very professional
- 700 branches “briefed”
- Families:
- Flown to South Africa
- Given counselling
- Visited crash site
- Flown back with bodies
- Fast track through customs
And:
Incident Team and CEO Tim Laxton relocated to South Africa
Deputy took over day to day running of company.
Air Ambulance for all survivors even though many could go home on commercial airlines= MAXIMUM COMFORT.
Thomas Cook helped families get closure.
700 branches- staff fully briefed.
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Sent independent bus engineers to South Africa to check cause of crash- was it mechanical.
In fact it was driver heart attack.
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Media management
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Within 2 hours a Press Release sent to international news wires
Company and CEO, Simon Laxton, became seen by journalists as reliable and trustworthy source of information for international media
No material backlash
Only 6 trips cancelled
No significant financial impact
Neutral media coverage
No impact on reputation
Employees proud of CEO
CEO, Simon Laxton=“caring”
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Public confidence restored
Successful because of crisis mgt.
Planning and training for just such an event.
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CEOs need to be media savvy
CEOs need to understand the primary motivators of news media:
- Commercial news (eg Sky) is business
- Often very big business (eg News Corporation=SKY= Fox News).
- Driven to reward shareholder
- Advertising revenue depends on large audience figures
- News is “ratings driven”
Whatever it takes to get public to “tune in”.
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“Being ratings driven means engaging with consumers and ensuring interest in any particular story. If necessary journalists will plump for interest over objectivity”
David Wallace CEO of
Television News Release
Risk: the driver for journalists is gripping/interesting story which could equal CONFLICT.
Opportunity to place interesting stories.
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“What is news?”
P50-113
My Trade
070.9 MAR 04
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Marr:
Worrying trend= “desk-bound journalism”
Reporting seen as expensive so reliant on “fixers”
PR companies
Desk-bound journalists prone to accept carefully packaged stories
“Microwave meal news”: just heat and serve!
TNR
- David Wallace TNR CEO
( speaking at CIPD Conference)
TNR can “create” news for your organisation.
Create “B-rolls”. TV news/ internet.
Could be defending yourself from criticism.
Could be driving sales.
TNR= Television News Release= a specialist PR company that can help businesses create news items (see their website ).
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TNR website December 2007
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Creating and packaging and distributing NEWS: one company that does this is Television News Release.
TNR= an audio-visual Press Release
10-12 minutes of footage
Deliberately unedited
More likely to be picked up by broadcasters: gives them a sense of INDEPENDENCE: but however edited it will project right message.
ALSO VIDEO PRODUCTION PAGE: footage for internet such as You Tube.
TNR website accessed
23/11/12
ITV and SKY NEWS
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Part of PA: stories go through PA to be picked up by new makers.
Help clients make news.
Training company spokespeople. Training for crisis.
Advises 2 out of 3 clients not to invest in a TNR because story is not newsworthy
TNR boasts “our success rate in placing commissioned news stories is 95%”
Only takes stories it is confident it can place
MODEST COSTS.
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BABY MILK ACTION WEBSITE:
WHO: 1,500,000 babies die each year in 3rd world due to formula baby milk:
- Contaminated water
- Not mixed properly/expensive and quantities small
- Formula milk is no substitute for natural milk.
Nestles: 40% of world baby milk. Criticised for aggressive marketing:
Free samples; uniform with NAN picture; advertising.
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Deflect attention.
One brand of coffee is fair trade in UK.
When launched heavily advertised along lines of Nestle being a GOOD and CARING company. Even though the 3,000 farmers who benefitted were a fraction of one percent of all farmers Nestles buys coffee from.
Even the tin looks like it is made fron re-cycled paper (as does the website)!
Just like Good Business: adopt a cause and tell the world.
In the case of Nestle= deflect attention from scandals (baby-milk and low price of coffee beans).
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CSR??ҵ2/assignment critier and essay question/ASSIGNMENT TWO Marksheet Current Issues in Business Ethics and CSR (4) (3) (1).docx
School of Social Science, Business, and Law.
Current Issues in Business Ethics and CSR Assignment TWO (SWEATSHOPS) Feedback Sheet:
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Criterion |
Indicative Weighting % |
Mark % |
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Wide Reading (wide reading, use of academic literature, thorough knowledge) |
40 |
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Application of concepts (informed thinking; effective use of source material to create well-informed, compelling and robust argument) |
40 |
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Introduction and Conclusion (appropriate, thoughtful introduction and conclusion) |
5 |
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Contribution and Presentation: Class Contribution (10): One side of self-reflection on: how you contributed to group presentation and management insight activities in seminars. Assignment presentation (5): written in clear error-free English and in correct format; correct and accurate referencing in both text and bibliography)
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15 |
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Total |
100 |
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Note that pass mark is 40%. |
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Comments
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"This feedback is being given for purposes of advice and guidance and to assist your learning and development in this module. References to standards or marks are entirely provisional and subject to confirmation following University procedures. Only University Assessment Boards are able to issue confirmed, definitive marks”
CSR??ҵ2/assignment critier and essay question/BB 2018 assignment 2 Sweatshop(1) (1).doc
Current Issues in Business Ethics and CSR.
ASSIGNMENT 2 (the question is towards the end of the document)
If you are not sure about anything ask me in class or email me (click on blue).
SUBMIT ON BLACKBOARD IN WORD FORMAT FRIDAY 12 JANUARY 2018
Assignment learning objectives/outcomes:
· To be able to prepare and write a well-informed sustained argument that clearly shows your voice in response to a set question. This is one of the most valuable skills you can develop at University and make use of for the rest of your life.
· to develop your learning in current issues in Current Issues in Business Ethics and CSR.
· to stimulate your analytical, critical, and evaluative faculties. To
put topics into a particular context.
· to help prepare you for the kinds of situations you may face as a future manager.
· to encourage and develop your information gathering and processing skills (investigative skills)
· to be competent at applying relevant theory/literature/best practice to reality
· to encourage and develop your written presentation skills
· all the above as part of a broader aim to produce professional managers with an awareness and understanding of CSR and ethics.
SOME ADVICE BASED ON TWO DECADES OF TEACHING:
The marksheet is on Blackboard. Here are 4 pieces of advice from me based on nearly 22 years lecturing and marking assignments:
BE INFORMED IN YOUR THINKING
· display capacity for objective thinking
· make use of sources from the course reading-list
· alongside sources from the course find some additional academic sources.
· demonstrate original thinking
· apply thoughtfully theory/literature to the question
· INFORMED THINKING demands wide reading
READ WIDELY AND DO JUSTICE TO THAT WIDE READING
· meaningful and relevant literature references in text of response
· it is essential that you read widely from Current Issues in Business Ethics and CSR reading-list -some additional references through students own literature search but not at expense of ignoring the module literature.
· detail beyond lecture-your voice informed by the literature is required.
· ensure you reference your sources clearly in the text of your answers and not just in the bibliography.
DEVELOP A COHERENT ARGUMENT
· strong attention grabbing
· articulate continuous prose developing relevant points
· incisive and without waffle
· comprehensiveness/relevant/punchy
PRESENTATION:
· clear unambiguous English
· essay format
· reader friendly
ASSIGNMENT TWO:
QUESTION:
“In your view a) can the use of so-called sweatshops as suppliers be justified? b) what could a company do to ensure that sweatshops supplying them treat employees humanely and with dignity?
AT END OF ESSAY ATTACH A ONE PAGE SELF-REFLECTION ON YOUR CLASS CONTRIBUTION DURING THE YEAR: GROUP PRESENTATION AND MANAGEMENT INSIGHT ACTIVITY.
[note: your answer MUST be widely informed by the academic literature. MAXIMUM 2,000 words in essay format. (excluding bibliography AND ONE-PAGE SELF-REFLECTION on your class contribution: GROUP PRESENTATION and MANAGEMENT INSIGHT)
[THIS ASSIGNMENT BRIEF WILL BE USED IN THE EVENT OF RESUBMISSION]
CSR??ҵ2/Code of Conduct is No More than False Advertising, Disney Suppliers Continue Exploiting Chinese Workers. November 2010.pdf
While every effort will be made to keep the materials accurate and up-to-date, China Labor Watch is not personally responsible for accuracy and currency. This report contains confidential information and is intended only for the individual named. If you are not the
named addressee you should not disseminate, distribute or copy this report.
SOME RIGHTS RESERVED. 2010
Code of Conduct is No More than False Advertising, Disney Suppliers Continue Exploiting Chinese Workers
By China Labor Watch
November, 2010
China Labor Watch
147 W 35 TH ST STE 406
New York, NY 10001
Phone: 212-244-4049
Fax: 212-244-4146
E-mail: [email protected]
Report NO. I00404E
Content
Summary.......................................................................................................................................................................3
Yiuwah Accident .........................................................................................................................................................3
Disney Consumer Products .........................................................................................................................................4
“Cut and Run” ..............................................................................................................................................................5
Establishment of “Code of Conduct” .........................................................................................................................6
Production Line in China .............................................................................................................................................6
Sweatshops in Southwest China ............................................................................................................. 6
Questions around “Auditing System” .................................................................................................... 8
New Efforts: Project Kaleidoscope .............................................................................................................................9
Disney Ceased Orders from Yiuwah ....................................................................................................................... 11
Disney’s Supply Chain and Workers’ Future ......................................................................................................... 12
Appendix 1: Henry Merton Labor Conditions from 1998 to 2009………………………...………………….14
Appendix 2: Disney’s Code of Conduct for Manufacturers……..………………………...………………….18
Report NO. I00404E
SUMMARY
Founded in 1923, Walt Disney Co. has grown from a small animation studio to today’s world entertainment empire. The history of Disney Consumer Products (DCP) began in 1929, when Walt Disney first licensed the image of Mickey Mouse for use on a children’s writing tablet. DCP extends Disney’s brand to merchandise ranging from apparel, toys and home décor to books and magazines, foods and beverages, stationery, electronics and animation art. Disney consumer products are sold in Disney Stores and Resort Parks, and in supermarkets everywhere in the world.
In 1995 and 1996, a number of cases of labor abuse were uncovered in Disney’s suppliers in California, Central America, and East Asia. In January of 1996, after a series of investigations of Disney’s suppliers in Haiti, the National Labor Committee released a report titled “The U.S. in Haiti: How to get rich on 11¢ an hour.” In the years since, Walt Disney has been widely criticized for licensing its copyrights to “sweatshops.”
In response to public criticism, in 1996, Walt Disney established Code of Conduct for Manufacturers and started an International Labor Standards program. In 2002, Project Kaleidoscope was initiated by a collaborative effort of the Walt Disney Company, the McDonald’s Corporation, and seven organizations engaged in addressing international labor issues. With all the efforts made by Disney and labor advocacy groups, the overall conditions in Disney’s Chinese suppliers have been improved during the past decade. Yet, violations of Disney’s Code of Conduct and China Labor Law remained, especially in aspects related to overtime, wages, underage labor, and workers’ living conditions. Accusations and criticisms have been long existed around Disney’s audit system. Labor activists urge Disney to transparentize its supply chain and allow independent organizations and shareholders to participate in the monitoring process.
YIUWAH ACCIDENT
On April 17, 2009, a 17-year-old worker was crashed to death by a paper crushing machine he was operating. The young victim was named Liu Pan, who had worked in the factory for more than 2 years until he died on the job. The accident factory, Yiuwah Stationary Factory, is located in Dongguan, Guangdong. This Hong Kong- invested factory specializes in color printing and binding, and produces greeting cards, packaging, bags, notebooks, address books, paper gift boxes, stationary, books and publications, calendars, posters, business cards, picture frames, portrait books, and POLY handicrafts.
Shortly after Liu Pan’s death, China Labor Watch investigated Yiuwah factory. In a report titled “Shattered Dreams: Underage Worker Death at Factory Supplying to Disney, Other International Brands”
1 , China Labor Watch noted that, “the machines are old and outdated, which can often lead to work
injury”; “dormitory conditions are poor”; “the factory violates China’s Labor Law in terms of working hours, wages, and labor contracts”. Through worker interviews, the investigators found that, Liu Pan actually was not the youngest in his factory – during peak season, the factory hires workers who are even as young as 13 years old. However, regardless of age, workers all “operate” like machines day and night. Often times, they can take only two days off in a month.
1 China Labor Watch. (2009, April 30). Shattered Dreams: Underage Worker Death at Factory Supplying to Disney, Other International Brands. Retrieved September 21, 2010, from http://www.chinalaborwatch.org/investigations/2009_04_30/4-29%20Liupan.pdf
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The Yiuwah accident caught public attention to the labor conditions in Chinese factories, especially those supplying for multinational companies, like Disney. In a New York Times article “Despite Law, Job
Conditions Worsen in China” 2 release in June, 2009, it was mentioned that, Disney “has called the
situation at the factory ‘unacceptable’”, and “cease new orders of any Disney-branded products in the Yiuwah factory until conditions were improved.”
DISNEY CONSUMER PRODUCTS
Founded in 1923, Walt Disney Co. grew from a small animation studio to today’s world entertainment empire. The Disney Company has four major business divisions: media networks, parks and resorts,
studio entertainment and consumer products 3 .
The history of Disney Consumer Products (DCP) began in 1929, when Walt Disney first licensed the image of Mickey Mouse for use on a children’s writing tablet. DCP extends Disney’s brand to merchandise ranging from apparel, toys and home décor to books and magazines, foods and beverages,
stationery, electronics and animation art 4 . Disney consumer products are sold in Disney Stores and Resort
Parks, and in supermarkets everywhere in the world
Each year, sales of consumer products generate a significant part of Disney’s profits. Taking 2009 as an example, about 2, 425 millions dollars of income was brought to Disney’s revenue by consumer products. However, DCP only shares a relatively small piece of pie compared with other three major segments. According to Disney’s financial reports from fiscal year 1997 through 2009, the annual revenue contribution due to DCP swung between 5%~7% from year to year. Nevertheless, benefiting from the affordable prices of its consumer products, Disney heroes have become more accessible to people, especially children from families with lower economic capacity, and Disney’s brand has been even more widely known all across the world.
The majority of Disney-branded products are manufactured by licensees, managed by DCP 5 . According
to Disney’s licensee application requirements (2010) 6 , the applicant company “must be a manufacturer,
not a middleman or distributor”. A list of numbers in Disney’s 2008 Corporate Responsibility Report
2 DAVID BARBOZA (2009,June 23). Despite Law, Job Conditions Worsen in China. The New York Times, pp.B1.
3 Walt Disney Co. (2010). Company Overview. Retrieved September 21, 2010, from http://corporate.disney.go.com/index.html
4 Disney Consumer Products. (2010). About us. Retrieved September 21, 2010, from https://www.disneyconsumerproducts.com/Home/display.jsp?contentId=dcp_home_ourbusinesses_comp any_overview_us&forPrint=false&language=en&preview=false&imageShow=0&pressRoom=US&transl ationOf=null®ion=0&ccPK=null
5 Walt Disney Co. (2009). Content and Products. The Walt Disney Company 2008 Corporate Responsibility Report. Retrieved September 21, 2010, from http://disney.go.com/crreport/products/consumerproducts/supplychain.html
6 Disney Consumer Products. (2010). Become a Licensee. Retrieved September 21, 2010, from https://www.disneyconsumerproducts.com/Home/display.jsp?contentId=dcp_home_help_help_become_li censee_en&forPrint=false&language=en&preview=false&imageShow=0&pressRoom=US&translationOf =null®ion=0&ccPK=null
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illustrated the distribution of Disney’s business partners in the supply chain – the majority of Disney’s active vendors and licensees are located in North America (35%), Asia and Middle East (20%) excluding China and Japan; at the same time, Chinese factories (including Hong Kong and Macau) counted 39% of all the factories actively supplying Disney in 2008.
In an article titled “From Disney to the Producers”, the Dutch “Clean Clothes” campaign 7 pointed out
that, Disney consumer products are usually produced in countries or in sites “where wage standards are very low, where labor conditions are not under control, and where it is difficult for the workers to organize themselves to defend their rights”. Unfortunately, the Chinese labor market seems to meet all these “criteria”. The sweatshop conditions in Disney’s Chinese suppliers have been “nominated” multiple times by medias. Meanwhile, Disney’s liabilities for poor labor conditions in its overseas supply chains have also concerned many labor activists as well as conscious consumers.
“CUT AND RUN”
In the summer of 1993, No Sweatshop Initiatives was launched by former Secretary of Labor, Robert Reich, to fight against the increased sweatshop manufacturing conditions both in the United States and abroad. A series of discussions took place in the following years in California, New York City, Chicago, and other regions with a large manufacturing labor force. In 1996, The Apparel Industry Partnership was formed by representatives of industry, unions, consumer, human rights, and religious organizations, and was challenged by former President Clinton to “take steps to assure that company products are made in compliance with acceptable labor standards, and to inform consumers that the products they buy are not made under exploitative conditions”
8 . Under this atmosphere, multinational companies were expected to
be more conscious than ever before to take actions to eliminate human rights exploitations and to ensure acceptable labor standards in their global supply chain.
During 1995 to 1996, a number of cases of labor abuse were uncovered in Disney’s suppliers in California, Central America, and East Asia. In January 1996, after a series of investigations of Disney’s suppliers in Haiti, National Labor Committee released a report “The U.S. in Haiti: How to get rich on 11¢ an Hour”. The report noted that workers on Disney’s production line were forced to work more than 10 hours a day for consecutively 50 days. However, the price of Haitian workers’ hard work was as cheap as 1 dollar a day.
In this case, H.H. Cutler, a U.S.-based Disney licensee, subcontracted Disney orders to local Haitian factories. It was assumed that this was in a time when Disney still allowed its licensee to outsource the orders to other contractors. These Haitian local factories lying at the bottom of Disney’s supply chain were most likely to practice lower labor standards and violate workers’ human rights.
After Haitian sweatshops were exposed, instead of taking any active steps to address the labor violations, H.H. Cutler decided to abandon its Haitian contractors, which would cause immediate layoffs for more than 2000 employees, in equal to one tenth of all the assembly workforce of Haiti. At the same time, Disney Company took a silent strategy. When requested by labor activists to use its “weight as the
7 Clean Clothes Campaign. (1998). From Disney to the producer. Retrieved September 21, 2010, from http://www.cleanclothes.org/news/4-companies/917-from-disney-to-the-producer
8 United States Department of Labour. (1997). Apparel Industry Partnership's Agreement. Retrieved September 21, 2010, from http://actrav.itcilo.org/actrav-english/telearn/global/ilo/guide/apparell.htm
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licensing company to pressure Cutler from not pulling out of Haiti”, Disney “categorically refused” 910 .
National Labor Committee criticized two companies’ “cut and run” strategies. In the same year, Disney established its first Code of Conduct for Manufacturers. Despite Disney’s efforts to build its first Code of Conduct, the company was nominated by Albion Monitor one of the “worst companies of 1996”11 for the widespread sweatshop conditions in its global supply chain.
ESTABLISHMENT OF “CODE OF CONDUCT”
In April 1997, the Workplace Code of Conduct was developed by the White House Apparel Industry Partnership to fight against sweatshops in the U.S. and abroad, with the hope that “consumers can have confidence that products that are manufactured in compliance with the standards are not produced under exploitative or inhumane conditions”. The Code defined a set of labor standards in the apparel industry in relation to forced labor, child labor, harassment or abuse, health and safety, freedom of association and collective bargaining, wages and benefits, hours of work, and overtime compensation.
Shortly after the Code was formulated, Disney modified accordingly its own Code of Conduct for Manufacturers
12 . In a 1997 letter to the Dutch “Clean Clothes” Campaign regarding the concerns over
poor working conditions in Haitian factories, vice president and managing director of Disney stated that
Disney had developed a program that was “among the most comprehensive and sophisticated program among all multinational companies”
13 , which could be the “International Labor Standards Program”
announced later by the Disney. In addition to these steps, as noted by National Labor Committee, Disney was relocating its production to China.
PRODUCTION LINE IN CHINA
Sweatshops in Southwest China
Between 1998 and 2000, Hong Kong Christian Industrial Committee (CIC), a faith-based organization, ran a series of labor investigations in Southern China covering sixteen factories supplying Disney. CIC released two reports based on its findings, namely“Mulan's sisters: Working for Disney is no fairy tale”(1999) and“BOM- Beware Of Mickey Disney sweatshops in the South China”(2000).
9 Jennie, B. (1996). Disney, Others Exploit Haitian Labor. Albion Monitor. Retrieved September 21, 2010, from http://www.albionmonitor.com/1-31-96/haitilabor.html
10 Ray. L. (1997). This Week in Haiti. Haiti Progres, 15(21): 13-19. Retrieved September 21, 2010, from
http://www.hartford-hwp.com/archives/43a/281.html
11 Russell. M. (1996). The Ten Worst Corporations of 1996. Multinational Monito, 17(12). Retrieved
September 21, 2010, from http://multinationalmonitor.org/hyper/mm1296.04.html
12 Clean Clothes Campaign. (1998). From Disney to the producer. Retrieved September 21, 2010, from
http://www.cleanclothes.org/news/4-companies/917-from-disney-to-the-producer
13 Clean Clothes Campaign. (1998). From Disney to the producer. Retrieved September 21, 2010, from
http://www.cleanclothes.org/news/4-companies/917-from-disney-to-the-producer
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A number of violations of China’s Labor Law and Disney’s Code of Conduct were identified in these factories. Workers were forced to work excessive overtime, whereas their pay was far below the legal minimum wage standards and often times delayed. According to a worker, he and his co-workers were allowed to take only two days off all through the year except the annual leave during Chinese New Year. With minimum labor protections, workers were exposed to chemical hazards and dangerous working conditions. They lived in poor accommodation conditions, in which usually more than 20 people shared one dormitory room. Although the Code of Conduct had been established, workers were barely benefiting from it. Almost no worker interviewed had ever heard of Disney’s Code of Conduct or its International Labor Standards program.
CIC noted that, Chinese workers were “in a very disadvantageous situation” – few of them have knowledge about their own legal right; they have minimum network or resources to help them defend their rights; they do not know how to seek help from brand companies or request international support. “In the face of exploitation by management, they can do nothing but tolerate it because they must keep a
job to support their own livelihoods and those of their families.” 14
In addition, several concerns were raised by CIC in its reports:
First, instead of taking further constructive steps to address the labor issues identified by CIC, Disney simply stopped placing orders to three of the four factories focused in the first report. As a result, the workers of these three factories lost their income and were left in a worse situation. For this reason, CIC
did not disclose the identifiable information about the later 12 factories in its second report 15 . CIC pointed
out that as the licensing company, Disney should take responsibilities and leverage the improvement of labor conditions in its suppliers, rather than just “cut and run”.
Second, apparently Disney had failed to fully implement its Code of Conduct, evidenced by the widespread labor violations in Disney’s suppliers. Although the Code requires manufacturers to communicate the code to their employees, very few workers were aware of the Code, let alone knew the Code was supposed to protect their rights. CIC criticized that the Code was used as a public propaganda by Disney, instead of a tool to ensure social compliance in its supply chain.
Third, CIC indicated that Disney’s multi-level subcontracting system is “too complicated to monitor”. During CIC’s investigations, the Geneva-based quality control firm, SGS (Societe Generale de Surveillance), was hired by Disney to carry out audits in their Chinese toy factories. The audit procedure includes 4 components: 1) Disney designs a questionnaire focused on the issues of “child labor, wages, and safety”; 2) the auditors visit the factories with a checklist and collect data by observation and asking questions; 3) based on the data, the auditors evaluate the factories’ performance for each of the issues and decide whether the factory’s conditions are acceptable; 4) Lastly, Disney decides what to do with the findings. This audit activity was called by “Clean Clothes” Campaign the “company controlled or internal
14 Hong Kong Christian Industrial Committee. (1999). Mulan's sisters, Working for Disney is no fairy
tale. Retrieved September 21, 2010, from http://www.cleanclothes.org/news/4-companies/910-mulans- sisters-working-for-disney-is-no-fairy-tale
15 Hong Kong Christian Industrial Committee. (2001). Labour rights violations at 12 China factories.
Retrieved September 21, 2010, from http://www.cleanclothes.org/news/4-companies/912-labour-rights- violations-at-12-china-factorie
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monitoring” 16 . CIC urged Disney in its report to introduce an independent monitoring system and
“disclose all information on its suppliers for public scrutiny”.
Questions around “Auditing System”
In September, 2005, the fifth Disneyland on the world opened in Hong Kong. In June, a labor activist group, Students and Scholars against Corporate Misbehavior (SACOM), was formed by a group of Hong Kong-based students and professors. While Disney was preparing for its opening, SACOM was busy assigning its first investigation to Disney’s suppliers in Southern China. In August 2005, collaborating with National Labor Committee (NLC), SACOM published its report “Disney's Children's Books Made with the Blood, Sweat and Tears of Young Workers in China”
17 .
All three factories under investigation belong to a Hongkong-invested company and were situated in Pearl River Delta region. In addition to a number of labor violations in relation to excessive overtime, compulsory labor, illegal low pay, and poor living conditions, bloody accidents took place at a shockingly high rate in these factories.
Some surveyed workers reported that “almost every day someone is injured”. “While producing a book like this ‘Mickey and Friends, Haunted Halloween’”, according to a female worker, “there are many chances that injuries could happen. When making this cover, we use a machine to press this edge. There is no safety device – all depends on your carefulness…When we put it in, if we are not careful, our fingers will be pressed together with this book.” The company ranked in 2004 among the top 30 factories in Shenzhen Industrial Area with highest number of work-related injuries. However, it is believed that the incidence of injuries was seriously underreported as the factories always tried to hind the numbers from authorities. Some workers reported that less serious injuries were simply treated in factory clinic; the factory would send injured workers to hospital only when serious accidents took place.
The terrifying and sad contrast between lovely Disney animation characters and the bloody Disney production line gathered quite an amount of attention. Medias, including the New York Times and CNN, covered the bloody story as well as the criticisms raised by labor activist groups against Disney. However, Disney denied the accusation and responded that the company “conducts regular social compliance audits of the independently run factories that produce Disney branded merchandise." The company said none of the 20 such audits at its Chinese supplier factories since 1998 exhibited "the severity of the violations reported by the NLC and SACOM"
18
However, Disney’s audit procedure was just another target of criticism. Labor activists 25 believed that
Disney’s audit system was defective. Factories usually were well informed beforehand and thus were able to coach their workers and prepared perfectly for the audit. In addition, as mentioned before, the independence and objectiveness of the so-called “company controlled”audit activities were doubtable.
16 Clean Clothes Campaign. (1998). Codes of Conduct for Transnational Corporations: An Overview.
Retrieved September 21, 2010, from http://www.cleanclothes.org/component/content/article/3-codes-of- conduct/574-codes-of-conduct-for-transnational-corporations-an-overview
17 National Labor Committee & SACOM. (2005). Disney’s Children’s Books: Made with the Blood,
Sweat and Tears of Young Workers in China. Retrieved September 21, 2010, from http://www.ci- romero.de/fileadmin/download/cora/sacom_national_labor_committee_2005_disneys_childrens_books.pd f
18 Roben.F.(2005). Group calls Disney site sweatshop. The New York Times. Retrieved September 21,
2010, from http://www.nytimes.com/2005/08/19/business/worldbusiness/19iht-disney.html
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Similar like what CIC requested years ago, SACOM and National Labor Committee addressed an open letter
25 to Disney Company and stated that Disney should disclose its Chinese factories information to
allow other independent organizations to monitor the factories’ compliance to labor standards, that Disney should allow labor rights and human rights organizations to deliver training to workers in order to raise workers’ awareness of their rights.
Since 2006, Disney started to work with Verite to audit Disney’s suppliers in China 27 . Verite is a non-
profit organization based in Amberst, Massachusetts, which monitors international labor conditions in multinational corporate supply chain. A representative of Verite’s Shenzhen office disclosed that
“normally when Disney gives Verite a factory to audit, it is because it has failed a previous audit.” 19 In
this sense, it is possible that factories which have passed the audit by coaching the workers and lying to the auditors are less likely to be monitored by Verite, and thus, the labor issues lied in those factories remain under the radar.
NEW EFFORTS: PROJECT KALEIDOSCOPE
In 2002, Project Kaleidoscope was initiated by a collaborative effort of the Walt Disney Company, the McDonald’s Corporation, and seven organizations engaged in addressing international labor issues. Disney and its project partners were hoping to facilitate the internal communications within factories by engaging “key stakeholders, including workers and supervisors, as well as managers, in collaborative efforts to identify issues, develop solutions and monitor progress”
20 . The project formulated a set of
compliance guidelines to serve as a “uniform code” based on Disney and the McDonald’s codes of conduct. In addition, a self-assessment tool and audit tool were developed as a part of the systems-based approach. Ten factories in Southern China producing apparel, footwear, toys, and other promotional items were selected to pilot the project. All the factories produced for both Disney licensees and McDonald’s restaurants. The project was aimed to form a new compliance approach to “develop factory-based systems that can further pinpoint the source of recurring compliance issues with the objective of resolving and
preventing them from recurring” 21 .
In February, 2005, shortly after the interim report was released, Disney held its annual board meeting in Minnesota. A shareholder resolution titled “China and Labor Standards” was introduced by the Office of the Comptroller of New York City. The proposal pointed out that a number of violations of Disney’s corporate code of conduct had been revealed by labor advocacy groups in factories supplying products for Disney, and a large majority of workers surveyed at those supplier factories were unaware of the corporate code of conduct of Disney. These labor issues would lead to “negative publicity, public protests and a loss of consumer confidence”, which could have a “negative impact on shareholder value”. The
19 China.Org.Cn.(2009). Campaigners keep up pressure in Disney child labor storm. Retrieved September
21, 2010, from http://www.china.org.cn/china/news/2009-08/14/content_18335073.htm
20 Project Kaleidoscope.(2008). Executive Summary. Retrieved September 21, 2010, from
http://www.asyousow.org/human_rights/docs/Project%20K%20summary.pdf
21 Project Kaleidoscope.(2008). Final Report. Retrieved September 21, 2010, from
http://www.asyousow.org/human_rights/docs/ProjectKaleidoscope-final-report2008.pdf
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resolution requested that Disney’s Board of Directors should review these issues and report to shareholders by September 200522.
However, the Disney Board of Directors recommended that shareholders vote No on the resolution. The matter was left unsettled.
The final report of Project Kaleidoscope was released in 2008. It pointed out the limits of conventional audits: first, conventional audits can only reflect facility conditions at a particular point in time; second, as negative findings from audits are “linked to potential loss of business”, factory management often times only focus on “securing passing scores” rather than “identifying opportunities for improvement”. The report then remarked that conventional audits alone cannot systematically address labor issues, and that “sustainable solutions to systemic issues require something different”. It was concluded at the end of the report that factories participating in Project kaleidoscope have “expanded and/or improved their systems for communicating with workers and receiving feedback”; “between 78% and nearly 100% of workers surveyed said conditions in their factories had improved since the systems-based approach was implemented”, especially in aspects such as “timely pay, good treatment by supervisors, congenial living environments”; in addition, the factories also “see value in actively managing the compliance process”,
particularly in “reduced worker turnover, increased productivity, and enhanced competitiveness” 23 .
Henry Merton – A Case of a Kaleidoscope Factory
Henry Merton is a Hong Kong-invested company and a major plastic toy producer in Dongguan. Its customers include Walt Disney, McDonalds, and other multinational brands. In 2002, the two brand companies with other organizations initiated Project Kaleidoscope to facilitate the improvement of labor conditions in their global supply chain. Merton was selected as one of the 10 pilot factories for the project
Since 1998, China Labor Watch has followed the labor conditions in Merton factories in Southern China. A 2001 report revealed a variety of labor violations in Merton factories – workers were required to work underpaid overtime, regularly lasting through the night; the workers were kept working 120 consecutive workdays without rest while being paid at illegally low rate; they had to keep themselves very “well- behaved” to prevent various penalties set by the factories; the dormitory rooms were very poor and usually 20 people had to crowd in one room; workers had few ideas about their legal rights; when workers signed the labor contracts with the factories, they were not explained or provided with a copy of the contract; workers were coached and threatened to lie to the auditors and authorities, and so on. It is easy for people to associate these findings to sweatshops conditions. Nevertheless, Merton was one of the best
factories in Disney’s supply chain（2009）.
Four years after Kaleidoscope's launch, CLW returned to Merton after a major protest in 2006 involving nearly a thousand workers, numerous injuries and arrests. In a CLW follow-up investigation, many of the same wage, working hour and safety violations from the 2000 report persisted. Disney and Merton’s other major customers refuted CLW's investigation stating that the strikes were merely caused by a “disgruntled
22 National Labor Committee & SACOM. (2005). Disney’s Children’s Books: Made with the Blood,
Sweat and Tears of Young Workers in China. Retrieved September 21, 2010, from http://www.ci- romero.de/fileadmin/download/cora/sacom_national_labor_committee_2005_disneys_childrens_books.pd f
23 Project Kaleidoscope.(2008). Final Report. Retrieved September 21, 2010, from
http://www.asyousow.org/human_rights/docs/ProjectKaleidoscope-final-report2008.pdf
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worker”. Rather than explaining how Kaleidoscope was enabling changes at Merton, its customers denied
the existence of serious problems that need to be fixed（2009）.
In a report issued in 2009 after the implementation of the Project Kaleidoscope, China Labor Watch noted that many of the worst violations that led to Merton's long history of worker strikes have been addressed. However, the violations of Disney’s Code of Conduct and China Labor Law remained in aspect of overtime, wages, underage labor, and workers’ living conditions.
China Labor Watch pointed out that the systematic failure of Disney's auditing force allows the company to produce toys and other products in sweatshop conditions, defend itself with flawed audits, and address serious problems only when called upon to act by external allegations.
（See Appendix I for a comparison of findings from investigations conducted by China Labor Watch
between 1998~2009.）
DISNEY CEASED ORDERS FROM YIUWAH
On May 7 th , 2009, right after the Yiuwah accident, China Labor Watch addressed an open letter
24 to the
president of Disney, Robert A. Iger. CLW stated that although the factory had been gone through multiple audits by Disney, the serious labor violations had not been remedied, which indicated that Disney’s audits were defective to identify the reoccurring labor violations. Disney should address this systematic problem to prevent other young workers, like Liu Pan, from being exposed to dangerous and hazard working conditions.
In response 25 to China Labor Watch, Disney stated that they were in discussion with licensees, vendors
and Yiuwah factory to find out an “effective and sustainable” solution to address the labor issues identified in Yiuwah. In terms of the issues of audit system corruption, Disney did not give direct answer. Rather, the company emphasized on its corporation with independent labor monitoring organizations including Verite and CREA. In addition, Disney noted that similar labor issues were arising in factories both within and outside of China, particularly in factories that “are not often owned by Disney licensees and vendors, are geographically distant, and produce for a number of brands and retailers”.
The statement made by Disney indicated: 1) labor violations are widespread in multinational corporate supply chains in China and many other areas, and conditions identified in Disney’s suppliers are not the only cases; 2) because many problem factories produce for several brands at the same time and due to distant geographic locations, Disney has very limited influence on these factories.
In the Disney Customer Products licensee application instructions, Disney requires that the eligible company “must be a manufacturer, not a middleman or distributor”; Disney’s Code of Conduct also requires that the licensee must use subcontractors for the manufacture of Disney products, the licensee must get a written authorization from Disney Company and the subcontractor also should “enter into a
24 China Labor Watch.(2009, May 7). An Open Letter to Disney. Retrieved September 21, 2010, from
http://www.chinalaborwatch.org/investigations/2009_08_05/CLW%20letter%20to%20Disney%20CEO.p df
25 Walt Disney Co. (2009, May 21). A Letter to China Labor Watch. Retrieved September 21, 2010, from
http://www.chinalaborwatch.org/investigations/2009_08_05/Disney%20Letter.pdf
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written commitment with Disney to comply it Code of Conduct”. Apparently, Disney has not been able to enforce its influence on manufacturers through these criteria or regulations.
In Disney Corporate Responsibility Report of 2008, the company explained its multi-level supply chain system, which includes licensees and vendors on the second layer, agents, sub-vendors, and distributors on the third layer, and factories and workers at the bottom of the supply chain. Disney stated that the “selection of the factories is a key component of” each licensee’s and vendor’s “business operations”, that Disney only has “some influence” on the business entities, like the factories, that they work indirectly
26 .
Within one month after Disney promised to work on Yiuwah’s issues, the company announced on June 17, 2009, that it would cease new orders of any Disney-branded products in the Yiuwah factory until conditions were improved
27 . China Labor Watch then allied with the France-based Peuples Solidaires in
an open letter campaign pressuring Disney to make changes to the factory, and face public outcry, which then generated thousands letters from consumers and shareholders to Disney. Under this pressure, Disney released a letter on July 30 outlining a number of changes it would implement at Yiuwah.
DISNEY’S SUPPLY CHAIN AND WORKERS’ FUTURE
The page of Yiuwah accident has turned over. However, related discussions and efforts made to protect workers’ rights are continuing. In the past decade, the accusations and criticisms have been long existed around Disney’s audit system. China Labor Watch suspected that Disney’s audit system is corrupted and urged Disney to disclose its list of auditing companies. Requests were also made repeatedly by labor activist that Disney should make factory information accessible to allow independent organizations and shareholders to participate in the monitoring process. Yet, Disney has not taken any meaningful steps to improve the transparency of its supply chain. Disney says, “In our contracts with licensees and vendors, many of them have required us to agree to keep their factory sources confidential”.
In August, 2010, China Labor Watch ran an investigation of two factories supplying for Disney.
The “historical issues” remain:
Underage and child labor are widespread in the factories. These young workers work as many hours as their adult counterparts;
Averagely, weekly working time exceeds 72 hours. The workers are required to work overtime as many as 130 hours a month, while they can usually take one day off each month;
The overtime compensation is as low as 97 centers/hour, far below the legal standard;
Workers are not provided the minimum social insurance required by law;
Long-term exposure to chemical hazards has led to a running nose, dry lips, rashes, among other allergy symptoms. The factory took a stand-by strategy without providing education, adequate labor protection or physical examinations to the workers.
This reminds us again of Disney’s Code of Conduct for Manufacturers:
26 Walt Disney Co. (2009). The Walt Disney Company 2008 Corporate Responsibility Report. Retrieved
September 21, 2010, from http://corporate.disney.go.com/files/FINAL_Disney_CR_Report_2008.pdf
27 China Labor Watch.(2009, May 7). An Open Letter to Disney. Retrieved September 21, 2010, from
http://www.chinalaborwatch.org/investigations/2009_08_05/7-1%20CLW%20letter%20to%20Disney.pdf
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Child Labor - Manufacturers will not use child labor. The term “child” refers to a person younger than 15 (or 14 where local law allows) or, if higher, the local legal minimum age for employment or the age for completing compulsory education.
Manufacturers employing young persons who do not fall within the definition of “children” will also comply with any laws and regulations applicable to such persons.
Health and Safety - Manufacturers will provide employees with a safe and healthy workplace in compliance with all applicable laws and regulations, ensuring at a minimum reasonable access to potable water and sanitary facilities; fire safety; and adequate lighting and ventilation. Manufacturers will also ensure that the same standards of health and safety are applied in any housing that they provide for employees.
Compensation - We expect manufacturers to recognize that wages are essential to meeting employees’ basic needs. Manufacturers will, at a minimum, comply with all applicable wage and
hour laws and regulations, including those relating to minimum wages, overtime, maximum hours,
piece rates and other elements of compensation, and provide legally mandated benefits. Except in extraordinary business circumstances, manufacturers will not require employees to work more than the lesser of (a) 48 hours per week and 12 hours overtime or (b) the limits on regular and overtime
hours allowed by local law or, where local law does not limit the hours of work, the regular work
week plus 12 hours overtime. In addition, except in extraordinary business circumstances, employees will be entitled to at least one day off in every seven-day period.
Manufacturers will compensate employees for overtime hours at such premium rate as is legally required or, if there is no legally prescribed premium rate, at a rate at least equal to the regular hourly compensation rate.
An investigator wrote the following words in her dairy:
“Whenever the machines were operating, some of the workers must be ready to work. They are affiliating with machines, just like a screw. The workers, especially those who look fresh and young, have no choice but to exchange the best time of their life for a job to support their own livelihoods. After this peak season, some of them might be moving forward to find a job in another factory. Would their future also lie in the next factory as well?
Report NO. I00404E
Labor
Issues 1998~2000 2006 2009
Violations of
Disney’s Code of
Conduct
Recruitmen
t and hiring
The factory will hire any female but selection for males is stricter;
Nondiscrimination ; Child Labor
There are a large number of underage workers (school workers) in the factory.
Labor
contracts
In order to deal with the inspections by the authorities, the factory signs fake contracts with workers;
The labor contract is signed 3 months after hiring;
Other Laws
Only the boss has the copy of signed contract.
Both the factory and the worker get a copy of the signed contract.
Wages and
working
hours
Each day, workers work about 12.5~14hours;
Only the three-hour night shift is counted as overtime work;
Each day, workers work about 11 hours; overtime hours go up to 70 hours/month;
The factory is on a 6day/week, 6 hour and 40 minute/day system;
Each day, workers work about 11.5 hours; Working time after 3:30 pm is considered overtime;
The first 6 hours and 40 minutes on Saturdays counts as regular working hours;
Workers work around 123 hours overtime/month;
Compensation;
Involuntary Labor
One day off each month if there is no production deadline; many workers have to work 120 days consecutively before getting one day off;
Workers take Sunday off.
Workers have to work overtime; those not working overtime are considered absent from work, and will be fined 49 RMB on each occasion;
Overtime is required and those refusing to work overtime are subject to salary deductions;
Overtime is generally voluntary;
APPENDIX 1：：：：HENRY MERTON LABOR CONDITIONS FROM 1998 TO 2009
Report NO. I00404E
Workers are paid on product count;
After all kinds of deductions, the average monthly pay is below 400 RMB.
Workers are paid minimum wage in Dongguan;
No base pay for workers who get piece rate.
Regular workers are paid 770 RMB ($113) base wages/month;
No overtime pay. No overtime pay. Regular overtime wages are 1.5 times normal wages, weekend overtime is 2 times and holiday overtime is 3 times
Wages of the first 40 days are held up as deposits.
Workers do not get pay slips;
Worker’s salaries are normally withheld for a month.
Labor
protection
Workers have to wear uniforms and pay out of their own pockets to buy the uniforms; if the workers lose the uniform or do not return the uniform when they quit, a deduction will be made from their wages;
Gloves or masks are not provided to workers;
Workers are required to wear uniforms and hats at work;
Heath and Safety
The fume in the spraying department is very strong, but the workers are never explained the safety hazards with paints;
Workers in the Assembly Department are not protected when using super glues that harm their skin; Although required, earplugs are not provided to the machine operators working under an ear piercing noise; Workers feel the plastic smell is very strong in the Fuel Injection Department, even after wearing masks;
Factory clinic is accessible, but the medical expenses are deducted from workers’ wages.
First aid kits are locked, thus are not accessible to the workers
Report NO. I00404E
Canteen
and
Dormitory
Conditions
Each month, 111 RMB is deduced for living expenses, water and electricity bills, and miscellaneous fees, from workers’ monthly pay;
Each month, workers must pay 250 RMB (31.25) for room and board;
The factory adds 250 RMB ($37)/month to each workers’ dining card;
Health and Safety
Food is not enough for workers and many workers are left hungry;
Workers all feel the food smells badly;
Each dormitory room houses at least 17 workers;
Most dorm rooms house 10 workers;
Drinking water is not provided;
In winter, they have enough hot water for shower, but hot water is not available after 23:30pm.
No hot water to shower or electrical outlets to charge phones.
Rewards
and
punishment
s
Workers are paid 25 RMB as bonus if they do not take any leave in a month;
The perfect attendance bonus is given when workers are not absent and do not ask for time off for one month;
Workers are loosely fined, or even fired for various reasons.
If workers make mistakes, the factory will post a public announcement as punishment.
Leaving the
Factory
If workers quit, they cannot get back the deposit which is the 40 days’ wages.
Turnover is high, and 40~50 people leave and are hired daily;
Other Laws
Workers do not get paid on the day they take leave.
It is hard to resign.
Benefits Pregnant women get three months of paid vacation;
Other Laws
No annual vacation;
Report NO. I00404E
2001 Report is available at
http://www.chinalaborwatch.org/investigations/2001_11_01/index.php
2006 Report is available at
http://www.chinalaborwatch.org/investigations/2006_07_27/index.php
2009 Report is available at
http://www.chinalaborwatch.org/investigations/2009_11_17/20091029merton.php
The factory dose not provide workers with adequate insurance; half of the workers have work injury insurance, which is required by law to be provided to all workers.
The factory does not buy insurance for workers in the probationary period;
After the probationary period, workers must apply to the factory to purchase social insurance.
Trade
Union
Workers don’t know if the factory has a union.
Others Workers are required to lie to the inspectors and auditors.
Report NO. I00404E
APPENDIX 2：：：：DISNEY’S CODE OF CONDUCT FOR MANUFACTURERS
CSR??ҵ2/Code of Conduct_en.pdf
Version 2 – published 2010
1
Code of Conduct INTRODUCTION This Code of Conduct is applicable to all suppliers, their subcontractors and other business partners that do business with H&M Hennes & Mauritz AB (publ.), registered in Sweden, corporate organisation number 556042-7220, or any other company, wholly or partly owned, directly or indirectly, by H&M Hennes & Mauritz AB ("H&M"). This Code of Conduct is drafted and valid in the English language. Where there are different language versions of this document these shall be considered translations of convenience only and the English version will prevail in any case of discrepancy H&M’s business concept is to offer fashion and quality at the best price. Quality also means that our products must be manufactured in a way that is environmentally and socially sustainable. We have a responsibility towards everyone who contributes to our success. We are therefore committed to working closely with our suppliers and business partners to achieve a long-term, sustainable social and environmental standard in the factories that manufacture H&M’s products and in the operations of other business partners. This Code of Conduct specifies what we require from our suppliers, their subcontractors and other business partners in order to fulfil our commitment to our Board of Directors, to our employees, to our customers, to our shareholders and to other stakeholders. It is the responsibility of H&M’s suppliers and other business partners to inform their subcontractors about H&M’s Code of Conduct and Policy for Homework, and to ensure that these are implemented in every factory and workplace that produces, finishes packs or otherwise handles goods or performs services for H&M. We base our requirements mainly on internationally agreed standards such as the Universal Declaration of Human Rights, The UN Convention on the Rights of the Child and applicable ILO Conventions, as well as national legislation. 1. LEGAL REQUIREMENTS Our general rule is that all our suppliers and other business partners must, in all their activities, follow the national laws in the countries in which they operate. Should any requirement in this Code conflict with the national law in any country or territory, the law must always be followed. In such cases the supplier must notify H&M immediately, before signing this Code. However, H&M's requirements may go beyond the requirements set out in national law.
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2. CHILD LABOUR IS NOT ACCEPTED (Refer to ILO Conventions 138 and 182 and to the UN Convention on the Rights of the Child) 2.1 Child Labour H&M does not accept child labour. No person shall be employed at an age younger than 15 (or 14 where the national law so allows) or younger than the legal age for employment if this age is higher than 15. The company must take the necessary preventive measures to ensure that it does not employ anyone below the legal age of employment. 2.2 Young Workers All legal limitations on the employment of persons below the age of 18 years must be followed. We acknowledge that according to the UN Convention on the Rights of the Child, a person is a child until the age of 18. We recognise the rights of every child to be protected from economic exploitation and from performing any work that is likely to be hazardous or to interfere with the child's education, or to be harmful to the child's health or physical, mental, spiritual, moral or social development. For further clarification regarding the prevention and remediation of child labour please see our Code of Conduct Guidance for Implementation of Good Labour Practice. 3. HEALTH AND SAFETY 3.1 Building Safety We require our suppliers and other business partners to make employees' safety a priority at all times. No hazardous equipment or unsafe buildings are accepted. 3.2 Fire Safety Emergency exits on all floors must be clearly marked, well lit and unblocked all the way out of the building. Evacuation through emergency exits must always be possible during working hours. Everyone working on the premises, including managers and guards, must be regularly trained in how to act in case of fire or other emergency. Regular evacuation drills for all employees are required; evacuation plans and fire fighting equipment must be in place. 3.3 Accidents and First Aid The employer must work proactively to avoid accidents causing harm to any employee in the workplace. Relevant first aid equipment must be available and where legally required a doctor or nurse should be available during working hours.
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3.4 Working Environment The premises must be regularly maintained and cleaned and must provide a healthy working environment. 4. WORKERS' RIGHTS 4.1 Basic Rights 4.1.1 We do not accept any forms of forced or bonded labour and we do not accept the use of prison labour or illegal labour in the production of goods or services for H&M. (Refer to ILO Conventions 29 and 105) 4.1.2 Migrant workers shall have exactly the same entitlements as local employees. Any commissions and other fees in connection with employment of migrant workers must be covered by the employer. The employer must not require the employee to submit his/her identification documents. Deposits are not allowed. Workers employed through an agent or contractor are the responsibility of H&M’s supplier and other business partners, and are thus covered by this Code. 4.1.3 Every employee shall be treated with respect and dignity. Under no circumstances do we accept the use by our suppliers, their subcontractors or other business partners of humiliating or corporal punishment, and no employee shall be subject to physical, sexual, psychological or verbal harassment or abuse. 4.1.4 All employees have the right to form or join associations of their own choosing, and to bargain collectively. H&M does not accept disciplinary or discriminatory actions from the employer against employees who choose to peacefully and lawfully organise or join an association. (Refer to ILO Conventions 87, 98 and 135) 4.1.5 No employee shall be discriminated against in employment or occupation on the grounds of sex, race, colour, age, pregnancy, sexual orientation, religion, political opinion, nationality, ethnic origin, disease or disability. (Refer to ILO Conventions 100 and 111) 4.1.6 All employees are entitled to a written employment contract, in the local language, stipulating the employment terms and conditions. The employer has a responsibility to ensure that all employees are aware of their legal rights and obligations. 4.2 Wages, Benefits, Working Hours and Leave As background to this chapter we quote from the Universal Declaration of Human Rights Article 23:3, as guidance concerning our ambition for our suppliers and business partners: “Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity...” 4.2.1 Wages must be paid regularly, on time, and must reflect the experience, qualifications and performance of the employee. H&M’s minimum requirement is that employers shall pay at least the statutory minimum wage, the prevailing industry wage or the wage negotiated in a collective agreement, whichever is higher. All other types of legally mandated benefits and compensations shall be paid. No unfair deductions are
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allowed, and the employee has the right to a written specification of how the wage has been calculated. 4.2.2 Ordinary working hours must not exceed the legal limit and shall never exceed 48 hour per week. Overtime hours must not exceed the numbers allowed by the law of the country. If such limits do not exist, overtime work should not exceed 12 hours per week. Overtime work must always be voluntary and compensated in accordance with the law. Piece-rate work should not be exempted from the right to overtime compensation. Employees are entitled to at least one day off in every seven-day period. 4.2.3 The employees shall be granted and correctly compensated for any types of paid leave to which they are legally entitled. Examples of such leave include annual leave, maternity/parental leave and sick leave. 5. HOUSING CONDITIONS If a company provides housing facilities for its employees, the requirements regarding fire safety and cleanliness under point 3 above should also cover the dormitory. The dormitory must be separated from the workplace and have a separate entrance. Employees should have free access to the dormitory. 6. ENVIRONMENT The environment is of increasing concern globally and H&M expects its suppliers and other business partners to act responsibly in this respect. Our suppliers must comply with all applicable environmental laws and regulations in the country of operation. In particular, we are concerned about how the production of our garments and other products contributes to climate change and water stress. 6.1 Environmental Permits The company must have the relevant environmental permits and licences for its operations. 6.2 Handling of Chemicals Chemicals used must be in compliance with H&M’s Chemical Restrictions for the relevant product type. Chemical containers must be properly labelled and safely stored. A material safety data sheet (MSDS) must be available (in the local language) in the workshop. The instructions in the MSDS must be followed. (Refer to ILO Convention 170) 6.3 Water Management and Wastewater Treatment Water is a scarce resource in many parts of the world and should be used as efficiently as possible. All outgoing wastewater from wet processes must be treated before it is discharged. The treated wastewater quality must meet the requirements in local legislation or the BSR guidelines1, whichever is stricter.
1 Business for Social Responsibility (BSR) has coordinated a working group consisting of a number of companies that have developed an industry standard for
wastewater quality
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6.4 Waste Management Any waste and in particular hazardous waste must be taken care of in a responsible manner and in accordance with local law. 7. SYSTEMS APPROACH In order to maintain compliance with H&M’s Code of Conduct, local labour laws and environmental laws, it is important that H&M’s suppliers and other business partners have the necessary policies and management systems in place. 8. MONITORING AND ENFORCEMENT 8.1 Transparency and Co-operation H&M expects all its suppliers and other business partners to respect this Code of Conduct and to actively do their utmost to achieve our standards. We also expect our suppliers and other business partners to be transparent and not intentionally mislead our auditors. We believe in co-operation and we are willing to work with our suppliers and other business partners to achieve sustainable solutions and to promote suppliers and other business partners who are in compliance. Ethical behaviour is required by H&M’s auditors and any breaches of H&M’s Code of Ethics must immediately be reported to H&M’s local management or to [email protected]. 8.2 Monitoring All suppliers and other business partners are obliged to keep H&M informed at all times of where each product is being produced, including subcontracting and homework. Relevant documentation must be maintained for auditing purposes. We reserve the right to make unannounced visits to all units producing goods or services for H&M, at any time. We also reserve the right to appoint an independent third party of our choice to conduct audits in order to evaluate compliance with our Code of Conduct. H&M is a member of the FLA, which randomly carries out unannounced audits on behalf of H&M. During audits we require unrestricted access to all areas of the premises, to all documents and to all employees for interviews. We also demand the right to provide employees with contact details for H&M. 8.3 Supply Chain H&M’s Code of Conduct applies only to our direct suppliers, other business partners and manufacturers of goods or services for H&M and their downstream subcontractors. However, we encourage our suppliers and other business partners to impose social and environmental requirements upstream in their supply chain, for example on suppliers of fabric, labels, leather, wood, cotton and other components and raw materials. Examples of such requirements include banning the use of forced labour and child labour, chemical restrictions and treatment of wastewater.
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8.4 Corrective Action H&M’s audits aim to identify gaps between the requirements in this Code of Conduct and the actual practices and conditions in the workplace. The audited company will usually be given the opportunity to propose and implement a corrective action plan. H&M will follow up the implementation of the plan and verify that violations have been remedied. A supplier failing to undertake sustainable improvements within the stipulated time frame would seriously damage its relationship with H&M. Unwillingness to cooperate or repeated serious violations of H&M’s Code of Conduct and local law may lead to reduced business and ultimately termination of the business relationship with H&M. For further clarification concerning the implementation of our requirements, refer to our Code of Conduct Guidance for Implementation of Good Labour Practice.
CSR??ҵ2/CodeofVendorConduct_FINAL.pdf
CODE OF VENDOR CONDUCT REVISED JUNE 2016
2
TABLE OF CONTENTS 3 OVERVIEW
5 PROVISIONS & STANDARDS
5 Compliance with Laws
9 Environment
12 Labor
28 Occupational Health and Safety
36 Management Systems
3
OVERVIEW
4
G A P I N C . C O D E O F V E N D O R C O N D U C T | O V E R V I E W
This Code of Vendor Conduct (COVC) applies to all facilities that produce goods for Gap Inc. or any of its subsidiaries, divisions, affiliates or agents. Gap Inc. recognizes that there are different legal and cultural environments in which facilities operate throughout the world. This Code sets forth the basic requirements that all facilities must meet in order to do business with Gap Inc.
This Code is based on internationally accepted labor standards and guidance, including the International Labour Organization (ILO)’s core conventions, the Universal Declaration of Human Rights, and the United Nations (UN) Guiding Principles for Business and Human Rights. This Code also supports Gap Inc.’s human rights commitments, as outlined in the company’s Human Rights Policy. This Code provides the foundation for Gap Inc.’s ongoing evaluation of a facility’s employment practices and environmental compliance.
Facility assessments promote increased awareness of labor conditions to Gap Inc., facilitate greater partnership with the company’s suppliers, drive improvements in sustainability performance, and ultimately generate positive change.
5
PROVISIONS & STANDARDS
COMPLIANCE WITH LAWS
6
G A P I N C . C O D E O F V E N D O R C O N D U C T | C O M P L I A N C E W I T H L AW S
The facilities that produce goods for Gap Inc. shall operate in full compliance with the laws of their respective countries and with all other applicable laws, rules and regulations as a condition of doing business with Gap Inc. Should there be a difference in the requirements set out by local legislation and those in the Gap Inc. COVC, the more stringent requirement shall apply. Vendor and Vendor Affiliates shall use only Gap Inc.-approved facilities for the production of goods. Vendors shall obtain written authorization from Gap Inc. to use these facilities prior to the start of production.
7
C O M P L I A N C E W I T H L AW S The facility shall operate in full compliance with all applicable laws, rules, and
regulations including those relating to labor, worker health and safety, and
the environment.
W O R K E R I N T E R V I E W S The management at the facility shall not coach or require workers to provide
certain answers to assessors during confidential worker interviews.
B R I B E RY The facility shall not tolerate, permit, or engage in bribery, corruption, fraud,
or unethical business practices in dealing with business partners, public
officials, or any Gap Inc. representatives.
U . S . F O R E I G N C O R R U P T P R A C T I C E S A C T ( F C PA ) The facility shall comply with the U.S. Foreign Corrupt Practices Act (FCPA)
and must not engage in corrupt or unethical practices, such as accepting or
offering bribes in exchange for preferential treatment or employment.
T R A N S PA R E N C Y The facility shall be transparent with their policies, processes, and records
applicable to their operations and compliance levels with the Gap Inc. COVC
and any Supplemental Requirements. All records and documents provided
to Gap Inc. representatives, including but not limited to payroll and time-
keeping records, should be complete and accurate.
U N R E S T R I C T E D A C C E S S The facility shall allow Gap Inc. representatives or agents unrestricted access
to its’ facilities, workers for interviews, and the review of relevant records at all
times, regardless of whether advance notice is provided.
E M P L O Y M E N T C O N T R A C T S The facility shall keep all applicable records and documentation referenced in
this standard on-site and available to Gap Inc. representatives for at least 12
months from termination date of an employee.
S U B - C O N T R A C T I N G Vendors shall only use Gap Inc.-approved facilities for the production of
goods. Vendors shall obtain written authorization from Gap Inc. to use these
facilities prior to the start of production.
G A P I N C . C O D E O F V E N D O R C O N D U C T | C O M P L I A N C E W I T H L AW S
8
FA C I L I T Y E X PA N S I O N In the case of expansion of the existing approved facility, the facility/vendor
shall inform Gap Inc.’s Supplier Sustainability team as soon as the expansion
is ready. The vendor shall not move any Gap Inc. production to the expanded
area before receiving written approval from Gap Inc.
S U B C O N T R A C T O R M O N I T O R I N G ( H A N D W O R K ) The facility shall engage in monitoring and verification of their handwork
subcontractors to assess and address any risk associated with all sections of
the COVC.
G A P I N C . C O V C P O S T E R The facility shall ensure that Gap Inc.’s COVC poster is posted in at least one
conspicuous location in the facility that is regularly accessible to workers and
is written in the predominant language(s) of the workers.
W O R K E R - M A N A G E M E N T C O M M U N I C AT I O N The facility shall constitute and manage worker-management communication
forums in compliance with applicable laws.
C H I L D C A R E FA C I L I T I E S The facility shall provide childcare facilities wherever required by law.
A P P R E N T I C E A N D V O C AT I O N A L P R O G R A M S Any apprenticeship or vocational education programs provided at the facility
shall be legal, documented, and designed for the educational benefit of the
workers.
G A P I N C . C O D E O F V E N D O R C O N D U C T | C O M P L I A N C E W I T H L AW S
9
PROVISIONS & STANDARDS
ENVIRONMENT
10
G A P I N C . C O D E O F V E N D O R C O N D U C T | E N V I R O N M E N T
The facility shall comply with all applicable environmental laws and regulations. The facility must manage their environmental impacts, including energy and greenhouse gas (GHG) emissions, air pollution (air emissions), water consumption, water quality, wastewater, waste diversion and disposal, as well as chemical use and handling.
E N V I R O N M E N TA L M A N A G E M E N T S Y S T E M The facility shall have an Environmental Management System (EMS).
E N V I R O N M E N TA L E M E R G E N C Y P L A N The facility shall have an Environmental Emergency Plan (EEP) that includes
procedures for notifying local community authorities in case of accidental
discharge or any other environmental emergency.
WA S T E WAT E R T R E AT M E N T P O L I C Y A N D P R O C E D U R E The facility shall maintain an up-to-date Wastewater Treatment Policy and
Procedure. All industrial and domestic wastewater shall be treated to meet the
discharge requirements of local laws. In addition, the facility shall comply with
all applicable monitoring and reporting requirements. As such, the treatment
facility must be appropriately sized to process effluent of all production
processes and shall not be left idle during production times.
11
WAT E R Q U A L I T Y P R O G R A M The denim laundry facilities shall comply with the requirements of the
Gap Inc. Water Quality Program (WQP).
C H E M I C A L S I N V E N T O RY The facility shall maintain a current Chemical Inventory that lists all chemicals
used in the facility and the supplier’s name.
R E S T R I C T E D S U B S TA N C E S L I S T The facility shall adhere to chemical restrictions, as described in the
Gap Inc. Restricted Substances List (RSL), and shall prohibit the use of
banned chemicals in manufacturing processes, as described in the
Zero Discharge of Hazardous Chemicals - Manufacturing Restricted
Substances List (ZDHC MRSL).
C H E M I C A L S S T O R A G E The facility shall ensure that the chemicals and hazardous substance storage
areas are maintained in an organized and safe manner, with clear and proper
labelling of chemical containers.
C H E M I C A L H A N D L I N G P R O C E D U R E S The facility shall have defined safe chemical handling procedures and shall
train workers on these procedures and the hazards of chemical exposure.
C H E M I C A L D I S P O S A L The facility shall segregate hazardous from non-hazardous materials and shall
dispose of both types of materials in a safe and legal manner.
S A C H I G G I N D E X FA C I L I T Y E N V I R O N M E N T M O D U L E The facility shall complete and submit the Higg Index Facility Environment
Module as per Gap Inc.’s required timeline.
G A P I N C . C O D E O F V E N D O R C O N D U C T | E N V I R O N M E N T
12
PROVISIONS & STANDARDS
LABOR
13
G A P I N C . C O D E O F V E N D O R C O N D U C T | L A B O R
The facility shall only employ workers who meet the applicable minimum legal age requirements or who are at least 15 years of age, whichever is greater. The facility must also comply with all other applicable child labor laws. The facility is encouraged to develop lawful workplace apprenticeship programs for the educational benefit of their workers, provided that all participants meet both Gap Inc.’s minimum age standard of 15 and/or the minimum legal age requirement.
14
C H I L D L A B O R At the facility, all workers shall meet the applicable legal minimum age
requirements or are at least 15 years of age, whichever is greater. If the
minimum legal age is higher under local law, the higher age applies.
No workers under the age for mandatory schooling shall be employed by
the facility.
Facility management shall have a rigorous age verification procedure
that includes maintaining copies of official government-authenticated
documentation for every worker and confirmation of the worker’s date of
birth. In countries where official proof-of-age documents, birth certificates,
or government-issued IDs are not available, the facility shall employ
independent and reliable means for determining workers’ age.
In countries where no reliable documentation exists, the facility shall
implement a recruitment system that appropriately assesses the age of
potential workers.
The facility shall take all necessary precautions to ensure that young/juvenile
workers, under the age of 18, are protected from working conditions that could
pose a danger to their health, safety, or development (this includes restrictions
on night work, any job function considered hazardous, etc.).
The facility shall obtain necessary authorizations and pay the appropriate
minimum wages, overtime, and legally entitled bonuses for workers. The
facility shall follow legal exceptions to the minimum wage and any legally
entitled bonuses and/or benefits of young workers.
The facility shall obtain necessary legal approvals (permits/medical check-up
records, etc.) for all young/juvenile workers.
The facility shall have the required tracking system for all young/juvenile
workers (e.g. young worker register).
The facility shall comply with all education-related government programs.
G A P I N C . C O D E O F V E N D O R C O N D U C T | L A B O R
15
F O R E I G N C O N T R A C T L A B O R The facility shall ensure, if it recruits or employs Foreign Contract Workers,
that these workers are treated fairly and on an equal basis with its local workers.
The facility shall ensure that migrant workers are not subject to any form of
forced, compulsory, bonded, or indentured labor. The facility shall ensure
that all work must be voluntary and workers must be free to terminate their
employment at any time, without penalty. The facility shall ensure that
migrant workers (or their family members) shall not be threatened with
denunciation to authorities to coerce them into taking up employment or
preventing them from voluntarily terminating their employment, at any time,
without penalty.
EMPLOYMENT CONTRACTS
The facility shall ensure that employment contracts are legally enforceable,
clear, written in the employee’s language, and executable the worker’s
home country. The facility shall ensure that applicants have an opportunity
to review or are guided through the provisions before signing and
receiving a copy of the contract. The facility shall provide each applicant
with a contract for employment (“Employment Contract”) and ensure that
the terms and conditions of the contract do not contravene applicable
laws or the Foreign Contract Labor standards of this Code.
EMPLOYMENT TERMS
The facility shall ensure that Employment Contracts are aligned with all
requirements in this Code and must specify:
– Worker’s namePassport details
– Detailed address in home country
– Secondary contact (contact for emergencies)
– Type of work to be performed, job title, occupation category if
applicable, and location
– Term (duration) of the contract
– Minimum and overtime wage rates to be paid
– Bonuses, any indemnities, or allowance to be paid
– Maximum allowable overtime hours consistent with the laws of the
host country and Gap Inc. COVC
G A P I N C . C O D E O F V E N D O R C O N D U C T | L A B O R
16
– All benefits to be provided (including medical coverage, sick leave,
annual leave, and holidays)
– All deductions to be taken (including charges for food and housing)
– Estimated minimum net pay that the worker can expect per month
– Summary of the living conditions
– Detailed information on any Medical Testing that is required by laws
of workers’ home country or host country
– Payments to be received at the end of contract, including transportation
– Terms of recourse for early contract termination with and without
reasonable notice by the employer or the employee with regards to
payments due and travel expenses for repatriation.
HOST COUNTRY EMPLOYMENT CONTRACT
The facility shall not modify or impose any additional terms or
requirements on the worker after the Employment Contract is signed
unless expressly required by law. Under no circumstances is contract
substitution permitted. If the receiving/host country law requires an
additional contract to be signed, the facility shall ensure that it contains
exactly the same content and provisions as that signed in the sending/
home country.
ORIENTATION TRAINING
The facility shall ensure that Orientation Training is provided for all foreign
contract workers (where possible, Orientation Training is provided in
the home country prior to departure). In all cases, Orientation Training
shall include the following and be in a language the worker understands:
Employment terms and conditions; Living conditions in the host country;
Dormitory rules; Workplace conditions; Rights and responsibilities; and
Required job skills.
RECRUITMENT AGENCIES
If the facility uses recruitment agencies, they shall only be used under
the following conditions: A) The agency is licensed by the home country
government, and where applicable the host country government.
B) A written contract exists between the facility and the recruitment agency
that clearly defines all hiring practices. C) Recruitment agency discloses all
the information regarding the use of any sub-contractors, sub-agents or
G A P I N C . C O D E O F V E N D O R C O N D U C T | L A B O R
17
any individual for recruiting workers for the facility. D) The facility (including
its employees and representatives) does not accept any reimbursements,
kickbacks or other amounts from the recruitment agency or other person
involved in the recruiting process.
RECRUITMENT AGENCY DUE DILIGENCE
The facility shall have in place a mechanism to ensure that all third-party
employment agencies (in sending and receiving countries, as applicable)
recruit workers ethically and in compliance with relevant laws and the
COVC. The facility shall maintain documentation demonstrating third-party
employment agencies’ abide to relevant laws and the COVC.
HOST COUNTRY FEES
The facility shall pay all fees and costs payable to the host government for
the documentation of Foriegn Contact Worker’s employment in the host
country, including any levies, fees for work permit, and fees for renewing
work documents. The facility shall not at any point deduct from wages,
charge workers, or otherwise accept reimbursements to re-coup these
fees. The facility or the recruitment agency shall not collect from Foreign
Contract Workers a deposit or bond or withhold part of Foreign Contract
Workers’ earnings at any point of their employment.
CONTROL OF EARNINGS
The facility shall allow workers full and complete control over earnings and
shall not withhold any “guarantee money” or recruitment fee sums from
pay otherwise due to Foreign Contract Workers.
RECRUITMENT FEE CHARGEBACK
The facility shall pay all fees and costs payable to the Foreign Contract
Workers’ home government for the documentation of their deployment
to the host country, including recruitment agency fees, visa fees, medical
checks, and any costs that are not the legal responsibility of the worker.
The facility shall not at any point deduct from wages, charge workers or
otherwise accept reimbursement to re-coup these fees (including those
payable to the home government).
TRANSPORTATION
The facility shall arrange and pay for all of the workers’ airfare and/or other
reasonable transportation costs back to the workers’ home country at the
end of the contract term or if the contract is terminated by the facility.
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In cases where the worker wishes to leave the facility prior to the end of
contract for any reason, the travel costs shall be paid on a pro-rata basis,
as agreed in the contract. The facility shall not at any point deduct from
wages, charge workers, or otherwise accept reimbursement to re-coup
these fees.
FINAL PAYMENT AND RETURN FEE
The facility shall ensure that at the end of the worker contract, workers
are paid and receive all settlement owed to them, including last-salary
payments, return fee (if applicable), end of service bonus, and any annual
leave days owed to the worker.
NEW FACILITIES—FOREIGN CONTRACT LABOR REQUIREMENTS
For all existing contract workers that paid home country fees, recruitment fees,
or host country fees prior to facility’s approval by Gap Inc., the facility must:
A) Pay to the worker a “Return Fee” in addition to any wages, benefits,
or other amounts due and owing to the worker at the time of his/her
return to the home country based on the completion of their contract.
B) Reimburse any host country fees paid by existing workers. C) Provide
written communication to the worker with the amount of the Return Fee and
conditions of payment.
CONTROL OF PASSPORTS
The facility shall allow the worker full control over his or her identity papers,
passports or similar documentation and shall provide the worker with a
locked and secure storage space in which to keep this documentation.
FOREIGN CONTRACT WORKER DISCRIMINATION
The facility shall not engage in discriminatory practices against foreign
contract workers on the basis of their status as Foreign Contract Workers.
Foreign Contract Workers shall be given equal treatment as local workers,
having equal access to opportunities to working conditions, such as wages
and benefits, as legally permissible as possible.
DOCUMENTATION
The facility shall ensure that the recruitment and employment of Foreign
Contract Workers complies with applicable laws. The facility shall maintain
that the Foreign Contract Workers have the proper legal documents as to
their stay and employment in the host country.
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FOREIGN CONTRACT WORKER LIST
The facility shall maintain and update relevant documentation of its
Foreign Contract Workers, including a register of Foreign Contract
Workers/roster with details on contract dates, validity of work
permit, passports, etc.
D I S C R I M I N AT I O N The facility shall employ workers on the basis of their ability to do the
job, not on the basis of their personal characteristics or beliefs.
DISCRIMINATORY EMPLOYMENT PRACTICES
The facility shall hire, promote, pay wages and benefits, terminate,
and provide access to trainings, without regard to race, color, gender,
nationality, religion, age, maternity, marital status, indigenous
status, ethnicity, social origin, disability, sexual orientation, HIV/AIDS
status, or membership in workers organizations including unions or
political affiliation. The facility shall ensure that hiring, promotion,
and other human resource decisions shall be made on the workers’
qualifications, skills, ability, productivity, and overall job performance.
The facility shall comply with applicable wage and hour labor laws
and regulations governing worker compensation and working
hours. Workers with the same qualifications, skills, experience, and
performance shall receive equal pay for equal work in accordance
with applicable labor laws.
DISCRIMINATION: RECRUITMENT PROCESS
The facility shall ensure that hiring notices and job descriptions do
not specify discriminatory factors, such as gender, age, race, etc.
DISCRIMINATORY MEDICAL EXAMINATIONS
The facility shall ensure that the use of medical examinations, such as
pregnancy or HIV/AIDS tests, to prevent a worker from being hired
is prohibited. Medical tests, if required by law, shall comply with
requirements and shall not be used in any discriminatory manner.
DISCRIMINATION FOR PREGNANCY AND MATERNITY
The facility shall ensure that pregnancy shall not be used as a basis
for discriminatory practices like termination/demotion/pay cuts etc.
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RELIGIOUS OBSERVANCES
The facility shall ensure that religious observances, prayer breaks, and
religious holidays are not prohibited.
F O R C E D L A B O R The facility shall not use involuntary labor of any kind, including prison labor,
debt bondage, slave labor, or forced labor by governments.
FREE EGRESS
The facility shall ensure that if entrances are guarded for security reasons,
workers shall have free egress at all times.
RESTRICTIONS TO VOLUNTARILY ENDING EMPLOYMENT
The facility shall not employ tactics to prevent workers from leaving at will,
such as withholding salary as a “year-end bonus” or charging a penalty
when workers terminate their contract, or by withholding any personal
identification documents such as IDs and passports.
RESTRICTIONS ON WORKER MOVEMENT
The facility shall ensure that beyond reasonable restrictions, workers can
move freely within the facility to use the toilets, drink water, and take
designated breaks.
WORKER TIME OFF DUE TO EMERGENCIES
The facility shall ensure that workers are allowed to leave freely at the end
of the shift or during the shift under extenuating circumstances like illness
or family emergencies.
F R E E D O M O F A S S O C I AT I O N The facility shall recognize that workers are free to join associations of their own
choosing. The facility shall not interfere with workers who wish to lawfully and
peacefully associate, organize, or bargain collectively. The facility shall support
that the decision whether or not to do so shall be made solely by the workers.
COMPLIANCE WITH APPLICABLE LAWS
The facility shall ensure that workers are free to choose whether or not to
lawfully organize and join associations. If freedom of association and/or
collective bargaining are restricted by law, workers shall be free to develop
parallel means for independent and free association and collective bargaining.
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THREATS TO FREEDOM OF ASSOCIATION
The facility shall not threaten, penalize, restrict, or interfere with workers
lawful efforts to join associations of their choosing, carry out their union
activities including union meetings, demonstrations, and lawful strikes.
COLLECTIVE BARGAINING
The facility shall ensure that workers have the right to negotiate a
collective bargaining agreement. If a collective bargaining agreement
exists, the facility shall comply with all contractual provisions.
DEDUCTING UNION MEMBERSHIP FEES
The facility shall not deduct union membership dues, fees, or fines from
workers’ wages without the express and written consent of the individual,
unless otherwise specified in a freely negotiated and valid collective
bargaining agreement or when required by law.
INTERFERENCE WITH ASSOCIATION PROCESS
The facility shall ensure workers have the right to elect leaders and
representatives of their unions without management interference.
SPECIAL PROTECTION TO WORKERS
The facility shall ensure worker representatives are not discriminated
against and have regular access to company management in order to
address grievances and other issues.
ACCESS TO FACILITIES
The facility shall not prohibit representatives of the trade union from
interacting with workers so long as the terms of the engagement meet
the conditions established by the law or mutual agreement between the
facility and the union.
FREEDOM TO CHOOSE ORGANIZATIONS
The facility shall not interfere where more than one union exists within a
facility and shall not favor one union over another.
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H U M A N E T R E AT M E N T A N D D I S C I P L I N A RY P R A C T I C E S The facility shall treat all workers with respect and dignity. The facility shall not
use corporal punishment or any other form of physical or psychological coercion.
PHYSICAL ABUSE
The facility shall not use physical corporal punishment, force that causes bodily
harm or pain, or other forms of physical contact to punish or coerce workers.
VERBAL AND SEXUAL ABUSE
The facility shall not engage in or permit psychological coercion or any
other form of non-physical abuse, including threats of violence, sexual
harassment, screaming, or other verbal abuse.
DISCIPLINARY ACTIONS
The facility shall have a policy that clarifies and standardizes discipline.
Disciplinary actions and processes shall consist of an escalating series of
actions, starting with warnings, followed by disciplinary actions (e.g. from
verbal warning, written notice, to suspension and termination). The facility
shall maintain written records of disciplinary actions taken. Discipline,
either in policy or in practice, shall meet applicable laws and requirements
of this Code. The facility shall formally communicate with workers the rules
and disciplinary processes at the time of hire.
GRIEVANCE CHANNELS AND RETALIATION
The facility shall ensure that workers have means to report grievances
to management, including a channel that provides for confidentiality
and anonymity. The facility shall also ensure workers can bring to
management’s attention grievances through means other than their
immediate supervisor. The grievance system shall include addressing
grievances in a timely manner and documenting grievances and
management action on grievances.
The facility shall provide for a system for addressing disputes in the
workplace, whether between co-workers or between workers and
supervisor or manager. The facility shall ensure that such grievance
channels and mechanisms for resolving disputes and grievances provide
for protection from retaliation.
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SECURITY PERSONNEL
The facility shall ensure that on-site security personnel, including workers
hired directly by the facility or workers hired by a third-party service
provider, conduct routine and emergency activities in a way that ensures
the highest levels of safety and security while also protecting the dignity of
the worker.
The facility shall ensure that no force is used except in self-defense and in
situations where there is a clear and present danger to themselves or other
workers. The use of force in these limited circumstances is proportional to
the situation and within the boundaries of the law.
PAT-DOWNS
The facility shall ensure that should worker searches, such as “pat-downs”
or hand bag searches be necessary, all worker searches are conducted in
the open and any physical searches are performed by security personnel
who are of the same gender as the worker. The facility shall ensure that
such searches are applied equally to all workers regardless of position.
HARASSMENT AND ABUSE POLICY
The facility shall have a policy that defines and prohibits all forms of
harassment and abuse and includes a list of penalties for violations.
WA G E S , B E N E F I T S , A N D T E R M S O F E M P L O Y M E N T The facility shall pay wages and overtime premiums in compliance with all
applicable laws. Workers shall be paid at least the minimum legal wage or a
wage that meets local industry standards, whichever is greater. The facility is
encouraged to provide wages and benefits that are sufficient to cover workers’
basic needs and some discretionary income.
MINIMUM WAGE REQUIREMENT
The facility shall ensure workers are paid at least the minimum legal wage
or a wage that meets local industry standards, whichever is greater.
UNREASONABLE PRODUCTION QUOTAS
The facility shall not set production quotas or piecework rates at such a
level that workers need to work beyond regular working hours (excluding
overtime) to earn the legal minimum wage or prevailing industry wage.
Any quotas or rates must be reasonable for workers to meet within a
regular shift.
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OVERTIME AND INCENTIVE RATES
The facility shall pay overtime and any incentive (or piece) rates that meet
all legal requirements or the local industry prevailing standard, whichever
is greater. Hourly wage rates for overtime must be higher than the rates for
the regular work shift.
UNPAID OVERTIME ADJUSTMENTS
The facility shall ensure that overtime hours not be adjusted against
leaves/holidays/absent days unless permitted by local law.
OVERTIME ALLOWANCES
The facility shall ensure that workers are paid all legally applicable
overtime allowances.
DISPLAY OF LEGAL MINIMUM WAGES AND WAGE CALCULATION
The facility shall ensure that Legal Minimum wage rates, overtime rates
and wage calculation shall be displayed prominently throughout the facility
in the local language of workers.
ON-TIME AND DIRECT PAYMENT TO WORKERS
The facility shall ensure that workers are paid directly and at least once per
month within no more than 31 days after the end of the previous month or
within the legally mandated period, whichever is earlier.
The facility shall ensure payments must be made in cash, and “in-kind”
payments are prohibited.
MONETIZE OR ENCASH BENEFITS
The facility shall not monetize/encash any benefit or allowance as outlined
under local law.
WAGE STATEMENTS
The facility shall ensure that for each pay period, workers are provided
understandable wage statements that includes all relevant details written
in a language they understand.
RIGHT TO REFUSE EMPLOYER SERVICES
The facility shall ensure that workers have the right to use or not to use
employer provided services, such as housing or meals.
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EXCESS CHARGE FOR GOODS AND SERVICES
The facility shall ensure that deductions for services/goods to employees
(housing, meals, and supplies) provided by the employer shall not exceed
the actual cost.
SHORT TERM/TEMPORARY/FIXED TERM CONTRACTS
The facility shall ensure that where training wages are legally allowed, they
are for a limited time frame and the facility shall not modify or terminate
worker contracts (including the signing of a series of short-term contracts
in immediate succession), work schedules, or location for the sole purpose
of avoiding wage requirements.
USAGE OF LAYOFFS AND REHIRING TO AVOID BENEFITS
The facility shall not modify or terminate worker contracts, work schedules,
or location for the purpose of avoiding wage requirements.
SUSPENSION/TERMINATION OF CONTRACTS
The facility shall ensure that contract suspension/terminations are in
accordance with the law and with full payment of legal termination benefits.
ILLEGAL DEDUCTION FROM WORKER WAGES
The facility shall ensure that deductions from wages as a disciplinary
measure are not permitted, including wage deductions for tardiness that
exceed the wage equivalent of actual time missed.
LEAVES AND HOLIDAYS
The facility shall provide paid leaves and holidays as required by law or
that meet the local industry standard, whichever is greater.
LEAVE PROCEDURES
The facility shall have clearly written leave procedures and these must be
made accessible and communicated to workers in their local language.
LEAVE/HOLIDAY/WEEKLY OFF PAYMENTS
The facility shall ensure that workers be paid for their leave not taken in addition
to the leave days/holidays/weekly off days worked, as required by local law.
LEAVE RECORDS
The facility shall maintain all documentation related to worker eligibility for
leaves and leaves availed accurately and up to date.
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PAYMENT OF BENEFITS
The facility shall ensure that benefits, such as social insurance, retirement
benefits, severance, maternity benefits, etc., are paid on time and in
accordance with local law.
LEGALLY REQUIRED WITHHOLDINGS
The facility shall ensure that deductions or withholdings for benefits must
be remitted to the proper authority in the time period required by law.
WORKER TOOLS PROVIDED FREE OF CHARGE
The facility shall ensure that work tools be provided free of charge at the
time of employment.
TAKING WORK HOME
The facility shall ensure that workers not take work home or to their
dormitories, even if this work is voluntary.
W O R K I N G H O U R S The facility shall set working hours in compliance with all applicable laws.
While it is understood that overtime is often required in garment production,
the facility shall carry out operations in ways that limit overtime to a level that
ensures humane and productive working conditions.
NORMAL WORK SCHEDULE
The facility shall comply with all applicable laws, regulations, and industry
standards on working hours. The maximum allowable working hours in any
week shall be the lesser of a) what is permitted by national law or b) a total
of 60 hours of work in any consecutive 7-day period.
OVERTIME HOURS
The facility shall ensure that overtime hours not exceed legal limits or 12
hours in a week, whichever is lesser.
INVOLUNTARY OVERTIME
The facility shall support workers refusal of overtime work without any
threat of penalty, punishment, or dismissal. Under no circumstances shall a
facility impose punitive measures such as salary deductions, apply coercion
of any kind, deny future opportunities for overtime, or take disciplinary
action against workers for refusing overtime.
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OVERTIME AS CONDITION OF EMPLOYMENT
The facility shall not allow workers to sign a document agreeing to work
overtime on demand as a condition of employment.
TIMEKEEPING SYSTEM AND RECORDS
The facility shall have a functioning, reliable, and accurate timekeeping
system that allows workers to record their regular and overtime hours.
Timekeeping records shall be maintained and workers shall have access to
their attendance records upon request.
WORKING HOURS ONE DAY OFF IN SEVEN
The facility shall allow workers at least one day off in seven days, or the
local legal standard if more stringent. A day off must be at least 24 hours of
continuous rest.
DAILY REST PERIODS
The facility shall ensure that all legally required daily rest periods are
provided to all workers.
OVERTIME MANAGEMENT SYSTEM
The facility shall have a system that demonstrates that all overtime hours
are voluntary.
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PROVISIONS & STANDARDS
OCCUPATIONAL HEALTH & SAFETY
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G A P I N C . C O D E O F V E N D O R C O N D U C T | O C C U PAT I O N A L H E A LT H & S A F E T Y
The facility shall comply with all applicable laws and regulations regarding working conditions and shall provide workers with a safe and healthy environment.
C O M P L I A N C E W I T H L AW S The facility shall comply with all applicable laws and/or manufacturer
instructions regarding working conditions, including personal protective
equipment, machine safety, chemical handling and safety, first aid, medical
care, food service, emergency preparedness, fire safety, structural, and
electrical safety.
H E A LT H A N D S A F E T Y C O M M I T T E E The facility shall, if required by law, have a health and safety committee
available in accordance with local law. The facility shall ensure that meeting
logs are maintained.
G E N E R A L S A F E T Y The facility shall comply with all applicable laws regarding risk protection.
V E N T I L AT I O N The facility shall ensure that adequate and effective ventilation exists for
the comfort of workers and that there is proper circulation of air, especially
in areas of frequent or heavy use of chemicals and paints, or in areas with
significant dust and material particles.
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G E N E R A L S A F E T Y: L I G H T I N G The facility shall ensure appropriate and sufficient lighting is installed so
workers are aware of their surroundings, are able to perform their work safely,
and are able to see any potential barriers or obstacles on their way to the
nearest exits.
F L O O R S A F E T Y The facility shall ensure that floors have proper construction, drainage and
maintenance.
S A N I TAT I O N A N D H O U S E K E E P I N G The facility shall maintain good housekeeping and sanitation in all areas
including outside stairs/exit paths and corridors.
S TA I R WAY S A N D R A I S E D P L AT F O R M The facility shall ensure that stairs, platforms, and elevated floors are well
protected to eliminate safety hazards.
C O N F I N E D S PA C E S The facility shall ensure that confined spaces do not pose a danger to
worker safety.
S E AT I N G A N D E R G O N O M I C M AT S The facility shall take adequate measures to prevent fatigue and long-term
health problems to workers.
S M O K I N G The facility shall ensure that smoking is not permitted in the areas where
smoke may pose health risk for other workers and/or a fire hazard.
P R E G N A N T A N D B R E A S T F E E D I N G W O M E N The facility shall take all required measures to ensure the health and safety of
groups of workers with special requirements.
W O R K E R S W I T H D I S A B I L I T Y The facility shall take all required measures to ensure health and safety of
groups of workers with special requirements.
T O I L E T S The facility shall ensure there are an appropriate number of clean, functional,
and sanitary toilet areas and there is no unreasonable restriction of their use.
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P E R S O N A L P R O T E C T I V E E Q U I P M E N T The facility shall ensure that appropriate personal protective equipment such
as masks, gloves, goggles, ear plugs and rubber boots are made available at
no cost to all workers and instructions for use are shared with the workers.
M A C H I N E / E Q U I P M E N T S A F E T Y The facility shall comply with all laws regarding machine and equiptment
safety and take all steps to ensure safety.
F I R S T A I D A N D M E D I C A L FA C I L I T Y The facility shall ensure adequate arrangement for first aid and medical care.
C A N T E E N A N D E AT I N G A R E A The facility shall make adequate arrangements for provision of food and
eating area for workers.
D R I N K I N G WAT E R The facility shall make adequate arrangements for provision of sufficient and
safe drinking/potable water for all workers.
F I R E S A F E T Y C E RT I F I C AT E S The facility shall comply with all applicable laws regarding fire safety.
E X I T S / E X I T R O U T E S / E M E R G E N C Y R O U T E S The facility shall ensure there are sufficient, marked exits and clear routes from
all areas of the facility to support safe and smooth evacuation from the facility.
E M E R G E N C Y L I G H T I N G The facility shall ensure that sufficient, powered back-up emergency lights are
provided throughout the facility.
F I R E F I G H T I N G E Q U I P M E N T The facility shall provide appropriate firefighting equipment in sufficient
number throughout the facility. These shall be maintained in functional
condition at all times.
F I R E D E T E C T I O N A N D A L A R M S Y S T E M S The facility shall have a functional and well-maintained alarm system for early
emergency warning.
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E M E R G E N C Y P R O C E D U R E S A N D E VA C U AT I O N D R I L L S The facility shall have an emergency response system and team with defined
responsibilities. The facility shall ensure that emergency evacuation drills are
conducted and recorded.
B U I L D I N G S A F E T Y The facility shall comply with all applicable laws regarding structural safety.
The facility shall take all necessary steps to ensure that the facility is
structurally safe and well-maintained.
E L E C T R I C A L S A F E T Y The facility shall comply with all applicable laws regarding electrical safety.
The facility shall ensure that all electrical boards, panels, wiring, circuit
breakers, etc. are adequately marked and protected.
D O R M I T O RY The facility shall ensure if housing is provided for workers that these facilities
are kept clean and safe.
HEALTH AND SAFETY
The facility shall ensure that dormitory facilities meet all applicable
laws and regulations related to health and safety, including fire safety,
sanitation, risk protection, and electrical, mechanical, and structural safety.
EXITS, EMERGENCY LIGHTING, AND FIRE ALARM
The facility shall ensure that there are at least two clearly marked exits on each
floor and emergency lighting installed in halls, stairwells, and above each exit.
CLEAR HALLS AND EXITS
The facility shall ensure that halls and exits are kept clear of obstruction for
safe and rapid evacuation in case of fire or other emergencies.
POSTED EVACUATION DIRECTIONS
The facility shall ensure that directions for evacuation in case of fire or
other emergencies are posted in all sleeping quarters.
FIRE EXTINGUISHERS
The facility shall ensure that dormitory facilities are adequate and that
accessible fire extinguishers are installed.
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FIRE FIGHTING EQUIPMENT
The facility shall ensure that a fire hydrant and other firefighting
equipment, if required by law, are installed and properly maintained.
FIRE DRILLS AND EVACUATION DRILL LOG
The facility shall conduct fire drills are at least once every six months, with
appropriate documents maintained.
YELLOW BOX OR MARKINGS
The facility shall ensure a yellow box is painted in all areas with fire
extinguishers or control panels to indicate areas that shall be kept free and
without obstruction.
FIRST AID KIT
The facility shall ensure that well-stocked first aid kits are provided in
dormitory facilities.
DORMITORY LOCATION
The facility shall ensure that dormitories are separate from any production
or warehouse locations.
SEGREGATED HAZARD AND COMBUSTIBLE MATERIAL
The facility shall ensure that hazardous and combustible materials used in
the production process are not stored in the dormitory.
FREE ACCESS
The facility shall ensure that dormitory residents are free to come and go
during their off-hours under reasonable limitations imposed for their safety
and comfort. Such limitations may not prohibit workers from entering or
exiting the dormitory at any time.
SEPARATE ROOMS BY GENDER
The facility shall ensure that sleeping quarters are segregated by gender.
SANITATION
The facility shall ensure that all areas in the dormitory are clean and
well-maintained.
SUFFICIENT SPACE
The facility shall ensure that there is sufficient living space per worker in
the sleeping quarters, which at a minimum meets both the minimum legal
requirement and the local industry standard.
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LAUNDRY
The facility shall ensure there is sufficient space provided to dry clothes
and belongings in the open air.
WORKER STORAGE SPACE
The facility shall provide a private and secure storage space for workers,
such as a locker, for valuable personal belongings.
BARE FLOORS AND PERSONAL MATS
The facility shall provide workers their own individual mats or beds, which are
exclusively theirs for the time period that they are employed by the facility.
SUFFICIENT TOILETS AND SHOWERS
The facility shall ensure sufficient toilets and showers are segregated by
gender and provided in safe, sanitary, accessible, and private areas.
TOILET SANITATION
The facility shall ensure toilets are clean, sanitary, functioning, and
well-maintained.
PRIVACY
The facility shall ensure that toilets and showers are in covered areas and
shielded from view by those outside these areas.
TOILETS BY GENDER
The facility shall ensure that in larger dormitories where there are multiple
toilets in one bathroom, the bathrooms shall be segregated by gender and
clearly marked.
KITCHEN FACILITIES
The facility shall ensure that kitchen facilities or facilities used for food
preparation, such as sinks, shall be separate from the toilet and shower area.
DORMITORY CONDITIONS
The facility shall ensure that dormitory facilities are well ventilated. The
facility shall ensure that there are windows to the outside or fans and/or air
conditioners and/or heaters in all sleeping areas for adequate circulation,
ventilation, and temperature control.
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SUFFICIENT LIGHTING
The facility shall ensure that dormitory facilities have adequate lighting.
WATER
The facility shall ensure that potable water or facilities to boil water are
available to dormitory residents.
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PROVISIONS & STANDARDS
MANAGEMENT SYSTEMS
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G A P I N C . C O D E O F V E N D O R C O N D U C T | M A N A G E M E N T S Y S T E M S
The facility shall establish sustainability management systems designed with appropriate operational controls to ensure compliance with applicable laws, regulations, and the COVC. Management systems shall identify and control sustainability risks, and facilitate continuous improvement.
C O M PA N Y S TAT E M E N T A N D M A N A G E M E N T O V E R S I G H T The facility shall have a written statement confirming its commitment to
sustainability and to continuous improvement (as embodied in relevant
laws and the COVC). The facility shall ensure there is a senior manager or
management team member with designated responsibility for overseeing
implementation of effective labor management systems, and for ensuring
that the facility meets COVC and legal requirements.
M A N A G E M E N T R E S P O N S I B I L I T Y A N D W O R K E R F E E D B A C K The facility shall ensure that responsibilities for meeting COVC requirements
are defined for management and supervisory personnel. The facility shall
ensure that workers have access to mechanisms to provide feedback on
practices related to the COVC and to facilitate continuous improvement.
38
R I S K A S S E S S M E N T P R O C E S S The facility shall ensure there is a risk assessment process in place that
identifies legal and COVC risks associated with facility operations. The facility
shall ensure the process covers significant risks, and results in implementation
of appropriate procedural controls to ensure mitigation of identified risks.
M A N A G E M E N T A N D W O R K E R T R A I N I N G S The facility shall deliver management and worker training programs that
support effective implementation of sustainability management systems and
meeting of legal and COVC requirements.
P E R F O R M A N C E O B J E C T I V E S A N D TA R G E T S The facility shall ensure that there are performance objectives, targets, and
implementation plans for sustainability management systems. These must be
complimented by a management and internal review process to assess and
monitor performance against sustainability requirements, and to effectively
correct issues when they arise and adjust objectives and targets when these
are off track.
G A P I N C . C O D E O F V E N D O R C O N D U C T | M A N A G E M E N T S Y S T E M S
CSR??ҵ2/Disney Code_of_Conduct_(English).pdf
Page 1 of 2 English - Code of Conduct for Manufacturers © Disney January 2007
Code of Conduct for Manufacturers
At The Walt Disney Company, we are committed to:
• a standard of excellence in every aspect of our business and in every corner of the world; • ethical and responsible conduct in all of our operations; • respect for the rights of all individuals; and • respect for the environment.
We expect these same commitments to be shared by all manufacturers of Disney merchandise. At a minimum, we require that all manufacturers of Disney merchandise meet the following standards: Child Labor Manufacturers will not use child labor.
The term “child” refers to a person younger than 15 (or 14 where local law allows) or, if higher, the local legal minimum age for employment or the age for completing compulsory education.
Manufacturers employing young persons who do not fall within the definition of “children” will also comply with any laws and regulations applicable to such persons.
Involuntary Labor Manufacturers will not use any forced or involuntary labor, whether prison, bonded, indentured or otherwise.
Coercion and Harassment Manufacturers will treat each employee with dignity and respect, and will not use corporal punishment, threats of violence or other forms of physical, sexual, psychological or verbal harassment or abuse.
Nondiscrimination Manufacturers will not discriminate in hiring and employment practices, including salary, benefits, advancement, discipline, termination or retirement, on the basis of race, religion, age, nationality, social or ethnic origin, sexual orientation, gender, political opinion or disability.
Association Manufacturers will respect the rights of employees to associate, organize and bargain collectively in a lawful and peaceful manner, without penalty or interference.
Health and Safety Manufacturers will provide employees with a safe and healthy workplace in compliance with all applicable laws and regulations, ensuring at a minimum reasonable access to potable water and sanitary facilities; fire safety; and adequate lighting and ventilation. Manufacturers will also ensure that the same standards of health and safety are applied in any housing that they provide for employees.
Compensation We expect manufacturers to recognize that wages are essential to meeting employees’ basic needs. Manufacturers will, at a minimum, comply with all applicable wage and hour laws and regulations, including those relating to minimum wages, overtime, maximum hours, piece rates and other elements of compensation, and provide legally mandated benefits. Except in extraordinary business circumstances, manufacturers will not require employees to work more than the lesser of (a) 48 hours per week and 12 hours overtime or (b) the limits on regular and overtime hours allowed by local law or, where local law does not limit the hours of work, the regular work week plus 12 hours overtime. In addition, except in extraordinary business circumstances, employees will be entitled to at least one day off in every seven-day period.
Manufacturers will compensate employees for overtime hours at such premium rate as is legally required or, if there is no legally prescribed premium rate, at a rate at least equal to the regular hourly compensation rate.
Where local industry standards are higher than applicable legal requirements, we expect manufacturers to meet the higher standards.
Protection of the Environment Manufacturers will comply with all applicable environmental laws and regulations.
Other Laws Manufacturers will comply with all applicable laws and regulations, including those pertaining to the manufacture, pricing, sale and distribution of merchandise. All references to “applicable laws and regulations” in this Code of Conduct include local and national codes, rules and regulations as well as applicable treaties and voluntary industry standards.
Subcontracting Manufacturers will not use subcontractors for the manufacture of Disney merchandise or components thereof without Disney’s express written consent, and only after the subcontractor has entered into a written commitment with Disney to comply with this Code of Conduct.
Monitoring and Compliance Manufacturers will authorize Disney and its designated agents (including third parties) to engage in monitoring activities to confirm compliance with this Code of Conduct, including unannounced on-site inspections of manufacturing facilities and employer-provided housing; reviews of books and records relating to employment matters; and private interviews with employees. Manufacturers will maintain on site all documentation that may be needed to demonstrate compliance with this Code of Conduct.
Publication Manufacturers will take appropriate steps to ensure that the provisions of this Code of Conduct are communicated to employees, including the prominent posting of a copy of this Code of Conduct, in the local language and in a place readily accessible to employees, at all times.
* * * * *
Page 2 of 2 English - Code of Conduct for Manufacturers © Disney January 2007
CSR??ҵ2/eti_base_code_english.pdf
The ETI Base Code This document was amended 01 April 2014 with revisions to clause 6, Working hours are not
excessive.
1. Employment is freely chosen 1.1 There is no forced, bonded or involuntary prison labour.
1.2 Workers are not required to lodge "deposits" or their identity papers
with their employer and are free to leave their employer after reasonable notice.
2. Freedom of association and the right to collective bargaining are respected 2.1 Workers, without distinction, have the right to join or form trade unions of their
own choosing and to bargain collectively.
2.2 The employer adopts an open attitude towards the activities of trade unions and
their organisational activities.
2.3 Workers representatives are not discriminated against and have access to carry out
their representative functions in the workplace.
2.4 Where the right to freedom of association and collective bargaining is restricted
under law, the employer facilitates, and does not hinder, the development of
parallel means for independent and free association and bargaining.
3. Working conditions are safe and hygienic 3.1 A safe and hygienic working environment shall be provided, bearing in mind the
prevailing knowledge of the industry and of any specific hazards. Adequate steps
shall be taken to prevent accidents and injury to health arising out of, associated
with, or occurring in the course of work, by minimising, so far as is reasonably
practicable, the causes of hazards inherent in the working environment.
3.2 Workers shall receive regular and recorded health and safety training, and such
training shall be repeated for new or reassigned workers.
3.3 Access to clean toilet facilities and to potable water, and, if appropriate, sanitary
facilities for food storage shall be provided.
3.4 Accommodation, where provided, shall be clean, safe, and meet the basic needs
of the workers.
3.5 The company observing the code shall assign responsibility for health and safety
to a senior management representative.
4. Child labour shall not be used 4.1 There shall be no new recruitment of child labour.
4.2 Companies shall develop or participate in and contribute to policies and
programmes which provide for the transition of any child found to be performing
child labour to enable her or him to attend and remain in quality education until
no longer a child; “child” and “child labour” being defined in the appendices.
4.3 Children and young persons under 18 shall not be employed at night or in
hazardous conditions.
4.4 These policies and procedures shall conform to the provisions of the relevant ILO
standards.
5. Living wages are paid 5.1 Wages and benefits paid for a standard working week meet, at a minimum,
national legal standards or industry benchmark standards, whichever is higher. In
any event wages should always be enough to meet basic needs and to provide
some discretionary income.
5.2 All workers shall be provided with written and understandable Information
about their employment conditions in respect to wages before they enter
employment and about the particulars of their wages for the pay period
concerned each time that they are paid.
5.3 Deductions from wages as a disciplinary measure shall not be permitted nor shall
any deductions from wages not provided for by national law be permitted
without the expressed permission of the worker concerned. All disciplinary
measures should be recorded.
6. Working hours are not excessive
6.1 Working hours must comply with national laws, collective agreements, and the
provisions of 6.2 to 6.6 below, whichever affords the greater protection for workers.
Sub-clauses 6.2 to 6.6 are based on international labour standards.
6.2 Working hours, excluding overtime, shall be defined by contract, and shall not
exceed 48 hours per week.*
6.3 All overtime shall be voluntary. Overtime shall be used responsibly, taking into
account all the following: the extent, frequency and hours worked by individual
workers and the workforce as a whole. It shall not be used to replace regular
employment. Overtime shall always be compensated at a premium rate, which is
recommended to be not less than 125% of the regular rate of pay.
6.4 The total hours worked in any seven day period shall not exceed 60 hours, except
where covered by clause 6.5 below.
6.5 Working hours may exceed 60 hours in any seven day period only in exceptional
circumstances where all of the following are met:
• this is allowed by national law;
• this is allowed by a collective agreement freely negotiated with a workers’
organisation representing a significant portion of the workforce;
• appropriate safeguards are taken to protect the workers’ health and safety;
and
• the employer can demonstrate that exceptional circumstances apply such as
unexpected production peaks, accidents or emergencies.
6.6 Workers shall be provided with at least one day off in every seven day period or,
where allowed by national law, two days off in every 14 day period.
* International standards recommend the progressive reduction of normal hours of work, when appropriate, to 40 hours per week, without any reduction in workers’ wages as hours are reduced.
7. No discrimination is practised 7.1 There is no discrimination in hiring, compensation, access to training,
promotion, termination or retirement based on race, caste, national origin,
religion, age, disability, gender, marital status, sexual orientation, union
membership or political affiliation.
8. Regular employment is provided 8.1 To every extent possible work performed must be on the basis of
recognised employment relationship established through national law and
practice.
8.2 Obligations to employees under labour or social security laws and regulations
arising from the regular employment relationship shall not be avoided through
the use of labour-only contracting, sub- contracting, or home-working
arrangements, or through apprenticeship schemes where there is no real intent
to impart skills or provide regular employment, nor shall any such obligations be
avoided through the excessive use of fixed-term contracts of employment.
9. No harsh or inhumane treatment is allowed 9.1 Physical abuse or discipline, the threat of physical abuse, sexual or other
harassment and verbal abuse or other forms of intimidation shall be prohibited.
The provisions of this code constitute minimum and not maximum standards, and this code should not be used to prevent companies from exceeding these standards. Companies applying this code are expected to comply with national and other applicable law and, where the provisions of law and this Base Code address the same subject, to apply that provision which affords the greater protection. Note: We make every effort to ensure that the translations of the ETI Base Code and Principles of Implementation are as complete and accurate as possible. However, please note that in both cases it is the English language documents which should be treated as the official versions.
CSR??ҵ2/global-sourcing-principles.pdf
Marks and Spencer Global Sourcing Principles 1 Updated November 2016
Global Sourcing Principles For many years Marks & Spencer has worked to ensure that our suppliers’ employees, producing our products, are provided with good working conditions. This drive supports our core brand value of integrity – our customers expect high standards and trust us to work ethically. In addition, we understand that when people are treated with respect, work in decent conditions and earn fair rates of pay, both they and their companies benefit from increased commitment and productivity. Ultimately, our customers benefit too, from better quality, better value products and peace of mind. We achieve these objectives by developing agreed standards with our suppliers, supported by regular site visits and a policy of continual improvement. Strict sanctions are applied when standards are not met, or where there is no commitment to improve standards. Increasing global expansion and international competition bring new challenges. We are a major retailer, selling a diverse range of exclusive own-brand products in more than fifty countries. Marks & Spencer products are now manufactured around the world. Because our suppliers often have their own complex supply chains, it would be impossible for us to monitor or control the working conditions of each individual who contributes to what ultimately becomes a Marks & Spencer product. We will not under any circumstances accept production from non-approved factories or goods supplied from sites that differ from our contracts system for each specific contract. However, we are determined to do everything we can to bring fair sourcing principles to all stages of our supply chain. We have therefore published our Global Sourcing Principles (also referred to as the ‘Principles’) to set out our beliefs and standards and guide our suppliers. A copy of the Principles is attached to this letter. These principles set out what is required and expected from our contracted suppliers – i.e. those with whom we have a direct contract for goods or services – to ensure their facilities meet acceptable standards, and are continually improving. We take appropriate measures to promote and enforce compliance with these principles by our contracted suppliers and expect them to do the same within their supply chain. Suppliers of branded goods and are franchise partners are expected to have noted the requirements and to have established similar arrangements. At Marks & Spencer, we take great care selecting the companies who supply us directly with products and services. Our Global Sourcing Principles establish the standards for suppliers working with us.
Marks and Spencer Global Sourcing Principles 2 Updated November 2016
As our business relationship develops, we expect suppliers to raise their standards and improve working conditions, taking account of internationally recognised codes of practice. We have adopted several elements of international codes as well as the Ethical Trading Initiative (ETI) Base Code into the Principles. Supplier’s responsibility
We have a clear set of standards appropriate to the industries and countries manufacturing our products. It is the supplier’s responsibility to achieve and maintain these standards and to enforce these standards with their own supply chain. Transparency
In today’s increasingly transparent world there is a greater need than ever to make these standards and management systems part of our suppliers’ everyday business and for them to be able to demonstrate they are doing so. In this spirit M&S is committed to working with our suppliers in an open, constructive and transparent manner and we request our suppliers do the same. Workforce and Human Rights
The people working for our suppliers are to be treated with respect, and their health, safety and basic human rights must be protected and promoted. Each supplier must strive to comply with all relevant local and national laws and regulations and its obligations in the Principles particularly with regard to:
HR Management Systems and Processes
Labour Standards and Human Rights
No Discrimination and Equal Opportunities
Decent Working Conditions
Health and Safety
Terms of Employment
Working Hours and Wages
Avoidance of Modern Slavery and Forced Labour
Production sites and labelling
Suppliers must agree with us in advance the production site or sites to be used for each order: no subcontracting of our orders from these agreed locations is allowed.
All products sold by Marks & Spencer must be labelled with their country of origin. Regular assessment
All product production sites are visited and assessed regularly by our suppliers and by our own people. Together we strive for continual improvement.
Marks and Spencer Global Sourcing Principles 3 Updated November 2016
Environmental responsibility
At the very least, suppliers must meet all relevant local and national regulations. In addition, we expect them to meet all the relevant Marks & Spencer standards relating to the environment. Extending these principles throughout the supply chain
We expect our suppliers to adopt similar principles in dealing with their own suppliers. Our commitment to suppliers
M&S acknowledge that it has responsibilities to its suppliers. The final section of the Global Sourcing Principles sets out some of the key commitments M&S gives to its suppliers.
Suppliers must apply these principles at all times, and must also be able to demonstrate that they are doing so. We will work with suppliers to support any necessary improvements but we will also take action, which may involve cancelling contracts and ceasing to trade, if suppliers are not prepared to make appropriate changes.
Marks and Spencer Global Sourcing Principles 4 Updated November 2016
Marks and Spencer Global Sourcing Principles
I, the undersigned, hereby acknowledge receipt of copies of the revised Global Sourcing Principles (GSP).
By signing, we understand our legal obligation to comply with GSP as part of our terms and conditions of trade with Marks and Spencer plc.
(Insert signature)
………………………………….
(insert name and position held)
for and on behalf of
(Insert company name)
Date:…………………………….
Marks and Spencer Global Sourcing Principles 5 Updated November 2016
GLOBAL SOURCING PRINCIPLES
General
This table sets out the standards that we expect our suppliers to comply with and the processes and
systems that we expect them to implement in order to promote respect for human rights, sustainability
and decent working conditions. Each supplier must strive to comply at a minimum with the following
standards, and apply the following processes. They do not preclude adopting higher standards or more
stringent processes.
In compiling these standards we have drawn from the UN Universal Declaration of Human Rights, the ILO
Declaration on Fundamental Principles and Rights at Work, the UN Guiding Principles on Business and
Human Rights, the UN Women’s Empowerment Principles, the UN Human Right to Water and Sanitation,
the Children’s Rights and Business Principles and the UN Global Compact as well as a number of
internationally recognised collaborative codes, including the Ethical Trading Initiative Base Code and the
Global Social Compliance Programme Reference Code. In doing so, we aim to align our requirements with
international standards and to promote comparability between the standards of different buying
companies, thus reducing excessive compliance burden on suppliers.
Management systems and processes
Compliance with national law
In addition to these principles, suppliers must comply with all relevant local and national laws and regulations. Unless there is conflict between national law and any supplier obligation in these Principles, the supplier must adhere to the standard that promotes the higher level of protection for workers, communities and other rights holders.
Human resource policies
Suppliers must adopt and implement human resources policies and procedures appropriate to their size and workforce, which are consistent with the requirements of national law and these principles.
Information about employment & employee relationship
Work performed must be on the basis of a recognised employment relationship established in compliance with national legislation and practice and international labour standards.
Suppliers must ensure all workers on their sites are provided with written and understandable information about their employment conditions, including wages, hours, and holidays, before they enter into employment; and about details of their wages for the pay period concerned each time that they are paid.
Temporary workers rights
Temporary labour arrangements must not be used to avoid obligations to workers under labour or social security laws and regulations arising from the regular employment relationship. For example: excessive use of fixed- term contracts, labour-only contracting, sub-contracting, home-working or apprenticeship schemes.
Worker consultation Suppliers must develop processes for communicating and consulting with workers and their democratically elected representatives to share information on the business and to gather feedback. Where relevant a gender committee should be considered to ensure women’s health and rights are considered and their voice heard by management.
Marks and Spencer Global Sourcing Principles 6 Updated November 2016
Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively, without prior authorisation from suppliers’ management, according to national law. Suppliers must not interfere with, obstruct or prevent such legitimate activities.
Where the right to freedom of association and collective bargaining is restricted or prohibited under law, suppliers must not hinder workers from developing alternative mechanisms to express their grievances and protect their rights regarding working conditions and terms of employment. Suppliers must not seek to influence or control these mechanisms.
Suppliers must adopt an open attitude towards worker representation and the activities of trade unions.
Suppliers must not discriminate against or otherwise penalise worker representatives or trade union members because of their membership of, or affiliation with, a trade union, or their legitimate trade union activity, in accordance with international labour standards.
Suppliers must give worker representatives access to the workplace in order to carry out their representative functions, in accordance with national law and international labour standards.
Forced labour All work must be conducted on a voluntary basis, and not under threat of any penalty or sanctions.
Suppliers must ensure that workers are not required to make deposits/financial guarantees/payments to employers, labour providers or agencies to obtain work, and must not retain original copies of identity documents (such as passports, identity cards, etc.)
Bonded/indentured labour is prohibited. Suppliers must respect the right of workers to terminate their employment after reasonable notice and to receive all owed salary. Suppliers must respect the right of workers to leave the workplace after their shift.
There must be no forced, bonded or involuntary prison labour.
Child labour Suppliers must not employ workers who are younger than:
i) the legal minimum age for employment applicable to the supplier; or
ii) the age of completion of compulsory education;
In any event, a supplier must not employ a person under the age of 15 in any circumstances and must implement robust age verification checks at all times to ensure this policy is upheld.
Suppliers must not recruit child labour nor exploit children in any way. If children are found working directly or indirectly for the supplier, the supplier must implement a remediation plan, develop or participate in and contribute to policies and programmes that put the best interests of the child first, and enables the child to access appropriate education until no longer a child.
Marks and Spencer Global Sourcing Principles 7 Updated November 2016
Young workers under 18 years of age must not be employed to work at night, or in conditions which compromise their health, their safety or their moral integrity, and/or which harm their physical, mental, spiritual, moral or social development.
All work of persons under the age of 18 must be subject to an appropriate risk assessment and regular monitoring of health, working conditions, and hours of work.
Discrimination and Equal Opportunities
Suppliers must treat all workers with respect and dignity.
Suppliers must base the employment relationship on the principle of equal opportunity and fair treatment. They must not engage in, support or tolerate discrimination in any area of employment.
Suppliers must not discriminate against any worker based on race, color, age, gender, sexual orientation, ethnicity, disability, religion, political affiliation, union membership, national origin, or marital status in hiring and employment practices such as applications for employment, promotions, rewards, access to training, job assignments, wages, benefits, discipline, and termination.
Suppliers must not require a pregnancy test or discriminate against pregnant workers except where required by applicable laws or regulations or prudent for workplace safety. In addition, suppliers must not require workers or potential workers to undergo medical tests that could be used in a discriminatory way except where required by applicable laws or regulations or prudent for workplace or food safety.
Suppliers should have an equal opportunity employment policy that promotes gender equity in employment practices, and states maternity leave provision and support for child care where appropriate.
Harassment and abuse Suppliers must commit to a workplace free of harassment. Suppliers must prohibit and must not tolerate all forms of physical abuse or discipline, the threat of physical abuse, sexual or other harassment and verbal abuse, corporal punishment, mental coercion, physical coercion or other forms of intimidation. Suppliers must not place unreasonable restrictions on entering or exiting the company facilities.
Suppliers must prohibit harassment and unlawful discrimination in the workplace.
Suppliers should provide training on non-discrimination and harassment where possible.
Disciplinary procedures
Suppliers must establish written disciplinary procedures and must explain them in clear and understandable terms to their workers. All disciplinary actions and performance management actions must be recorded and explained to workers. Workers must have the right to trade union or other appropriate representation at disciplinary action which may lead to significant disciplinary penalties or dismissal.
Workplace grievances Suppliers must provide a grievance mechanism for workers (and their organisations, where they exist) to raise workplace concerns. This grievance mechanism must involve an appropriate level of management and address concerns promptly, using an understandable and transparent process that
Marks and Spencer Global Sourcing Principles 8 Updated November 2016
provides timely feedback to those concerned, without any retribution. The mechanism must also allow for anonymous complaints to be raised and addressed. The existence and scope of this mechanism must be clearly communicated to all workers and their representatives, and all workers must have equal access.
Healthy and safe working conditions
Suppliers must provide safe and clean conditions for all workers on site in all work and residential facilities and must establish and must follow a clear set of procedures regulating occupational health and safety.
Suppliers must take adequate steps to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimising the causes of hazards inherent in the working environment.
Appropriate and effective personal protective equipment must be provided as needed.
Suppliers must provide all workers with access to clean toilet facilities which respect worker dignity and to safe and clean drinking water and, if applicable, sanitary facilities for food preparation and storage.
Suppliers must provide regular and recorded health and safety training to workers and management, and such training must be repeated for all new or reassigned workers and management.
Suppliers must assign the responsibility for health and safety to a senior management representative and must carry out regular risk assessments.
Suppliers must provide adequate safeguards against fire, and must ensure the strength, stability and safety of buildings and equipment, including residential facilities where provided.
All sites must have an effective fire safety management system in place. This must include but not limited to:
- Responsibility of general manager for overall fire safety
- Ongoing risk assessments
- Training for fire safety personnel
- Appropriate and reliable equipment
- Clear and safe evacuation systems
- Regular fire drills for all shifts and all types of workers (site must keep a list of trained personnel)
All systems must be reviewed on a frequent basis.
Suppliers must provide access to adequate medical assistance and facilities.
Worker accommodation
Suppliers must ensure that residential facilities for workers, where provided, are clean and safe and meet the needs of workers. Workers’ accommodation arrangements must not restrict workers’ freedom of movement or of association.
Marks and Spencer Global Sourcing Principles 9 Updated November 2016
Suppliers must provide accommodation in a manner consistent with the principles of non-discrimination and equal opportunity.
Wages and benefits Suppliers must pay workers a fair wage and benefits and have a transparent process to ensure that workers fully understand the wages that they receive. Suppliers must compensate all their workers by providing wages, overtime pay, all legally required benefits and paid leave which respectively meet or exceed the national legal minimum wage, and all applicable laws and regulations. (If industry benchmark standards and/or collective agreements are in place, provided they are higher than the minimum wage, these must be followed). Wages should be paid regularly and on-time. Suppliers should work towards paying workers a fair living wage.
Suppliers must not make any deduction from wages as a disciplinary measure. Suppliers must not make any deductions from wages which are unauthorised and not provided for by national law. Workers must be fully informed of any deductions made to their pay. All deductions must be recorded.
Suppliers must ensure that men and women receive equal pay and conditions for the same jobs.
Working hours Suppliers must ensure that working hours comply with national laws or benchmark industry standards or relevant international standards, whichever affords greater protection to ensure the health, safety and welfare of workers. Working hours, excluding overtime, must not exceed 48 hours per week. The total hours worked (including overtime) in any week must not regularly exceed 60 hours in a single week.
Working hours may exceed 60 hours in a single week only in exceptional circumstances where any of the following are met: this is allowed by national law; this is allowed by a collective agreement freely negotiated with a workers’ organisation representing a significant portion of the workforce; appropriate safeguards are taken to protect the workers’ health and safety; and the employer can demonstrate that exceptional circumstances apply such as seasonal work, accidents or emergencies.
All overtime must be voluntary and must not be requested on a regular basis.
Suppliers must ensure that all workers receive on average two days off in fourteen, as well as annual holidays.
Agency/ Indirectly Employed Workers
Suppliers should have due diligence processes in place to ensure that workers on their site do not pay any form of recruitment fees to any agents to gain employment.
Suppliers are responsible for the rights of all workers on their site whether they are directly employed or employed or engaged through a labour provider, agent or a contractor.
Suppliers must have a process to ensure that they have a record of all workers working at their site including those engaged through an agency, labour provider or contractor within three days of beginning employment or being on site.
Marks and Spencer Global Sourcing Principles 10 Updated November 2016
Suppliers must meet any local laws relating to the use of agency / labour provider workers including to workers at their own suppliers and sub- contractors, and to workers supplied by agencies, for example by including these standards in contractual or procedural agreements with third party employers.
Suppliers must have a clear written agreement with their labour provider to ensure that the welfare of workers is safeguarded (including their health and safety, payment and benefits terms, accommodation, non- discrimination), and must monitor adherence to this agreement.
Right to work Suppliers must have a process that enables them to ensure that all workers working on their premises are documented and have a right to work legally.
Factory Closure/ Reorganisation/ Restructuring
Prior to implementing any restructuring / reorganisation or closure involving dismissal of workers, suppliers must implement a process involving reviewing viable alternatives and setting out a retrenchment plan to reduce the adverse impacts of retrenchment on workers. The retrenchment plan will be based on the principle of non-discrimination and will reflect consultation with workers and their organisations. The suppliers will comply with all legal and contractual requirements. Workers must be paid all owed salary and paid for their notice period.
Sub contracting Sub-contracting to other suppliers, sites, or units is not permitted without pre-authorised permission from M&S.
Bribery and corruption Suppliers must not offer/ give to, or receive from, Marks & Spencer staff or agents or contractors working on our behalf, any gift or other benefit that could be considered a bribe. Marks & Spencer employees are, in turn, required to refuse to accept, and not offer, any gift or service that could be construed as a bribe.
Suppliers must uphold fair business standards in advertising, sales, and competition.
Engagement Suppliers must accurately record and disclose information regarding their business activities, structure, financial situation, and performance in accordance with applicable laws and regulations and prevailing industry practices.
Suppliers are expected to engage with the M&S ethical trading programme and be open to audits, visits and training programmes, including worker interviews.
Environment At the very least, suppliers must comply with all local and national environmental regulations and completed a supply chain risk assessment to understand their impact on the environment. In addition, they must meet all relevant Marks & Spencer standards relating to the environment.
Land rights We expect all suppliers to adhere to the practice of Free and Prior informed consent for land rights and suppliers must conform to local, national and international standards of land tenure when working in communities. Where applicable this may include evidence of a due diligence process within communities to understand where established rights to property and land lie.
Marks and Spencer Global Sourcing Principles 11 Updated November 2016
Supply chain monitoring
It is our supplier’s responsibility to enforce these standards with their own supply chain. As part of their supply chain risk assessment they must be aware of more vulnerable groups like women, migrant workers, indigenous peoples, smallholders and homeworkers, and subcontracting and have adequate measures in place to ensure the rights of these groups are upheld.
Our commitments to suppliers
Setting expectations
We work with suppliers to set standards and expectations appropriate to their industry, country and business.
Due diligence We undertake due diligence assessments of human rights and sustainability impacts of our business and set ambitious targets to mitigate our negative impacts and improve performance.
Guidance We will provide guidance to suppliers to help them understand our requirements and to implement policies and procedures to enable them to comply with our standards.
Support We provide suppliers with practical support, advice and assistance so that they develop their own policies and processes to enable them to implement high standards.
Dialogue We will provide agreed dialogue mechanisms to maintain open communication with suppliers and to receive feedback about our own standards and behavior where appropriate.
Grievances and complaints
We will provide a process so that all complaints from suppliers about our standards and behavior are dealt with fairly and transparently.
Purchasing practices
We will keep our buying practices under review and ensure that our behavior supports suppliers in complying with our standards.
Allegations M&S will investigate all allegations about suppliers in a thorough and diligent manner with clear communications to all parties involved.
Assessment We ensure that all production sites are visited and assessed regularly and that we provide advice and feedback on improvements. We will facilitate assessment methods that focus on underlying issues. We may commission third parties to audit and inspect production sites.
Termination Should suppliers consistently fail to live up to these standards, and be unwilling to institute improvements or prepared to make appropriate changes, we will take action, which may involve cancelling contracts and ceasing to trade.
Stakeholder engagement
We will regularly consult stakeholders to understand their perspectives on the impacts of our supply chain, and we will, where appropriate, involve stakeholders in our programmes and projects to improve working conditions and respect for human rights.
CSR??ҵ2/sweatshop seminar 2015 (1).doc
Sweatshops: group activity.
Background:
Disney is a fantastic brand popular on a global scale with children and adults alike. Many families feel an emotional connection to Disney characters and get real pleasure buying Disney garments that they subsequently wear with pride. In the last few years Disney has been targeted in North America by anti-sweatshop activists. Prominent among them is the National Labour Committee .
A great deal of negative publicity was created by the Bangladeshi Workers’ Tour of the USA in 2002: it was revealed that one Disney supplier that made Winnie-the-Pooh garments had appalling sweatshop conditions at their factory (Shah Makhdum):
· 14-15 hour shifts
· 7 days a week
· beatings
· forced and unpaid overtime
· wages from 8c to 19c an hour [19c is 10pence!]
· it works out as workers getting 5c for each garment retailing at $17
· hot,crowded, poorly ventilated conditions and some workers alleging verbal and physical abuse (Los Angeles Times 24 sept 2002)
Interestingly, soon after the publicity Disney “pulled the contract” with the factory, a direct result of which was 200 workers losing their jobs in a country with no welfare or unemployment benefits and few meaningful alternatives in terms of work.
Following bad publicity and media coverage of the working conditions at the Shan Makhdum factory in Bangladesh (which made Winnie-the-Pooh garments for Disney) Disney “pulled the contract” with the factory resulting in all 200 workers losing their jobs. Critics called this “Disney cut and run”- in other words Disney turned its back on the factory and the women lost their jobs.
In your group brainstorm the following questions:
1. If it was a sweatshop then why does it matter that the women lost their jobs?
2. What could Disney have done instead of “cut and run”?
3. What would you include in a Code of Supplier Compliance? (this might overlap in part with Q2)
4. How would you monitor that Code?
5. How would you help employees and their communities (for example health and education).
6. Would your solution be good for business? Why?
CSR??ҵ2/Sweatshops and slavery 2014.doc
Sweatshops, Slavery, and the amoral manager.
Adam Smith as 18th century critic of slavery
Emerging from a discussion of how great proprietors (owners of large landed estates such as sugar plantations ) fail to improve agriculture, focusing rather on ornamentation, Adam Smith state –
“But if great improvements are seldom to be expected from great proprietors, they are least of all to be expected when they employ slaves as workmen. The experience of all ages and nations, I believe, demonstrates that work done by slaves, though it appears to cost only their maintenance, is in the end the dearest of any” (Smith, 1978, p. 488)
Smith as critic of slavery
· with no payment or property, Smith suggests, a worker has no other interest than to eat as much and do as little as possible
· beyond this, the worker might only be motivated by violence threatened or actualised by their master
In respect of managerial motive, Smith sounds a rather pessimistic note –
“The pride of man makes him love to domineer, and nothing mortifies him so much as to be obliged to condescend to persuade his inferiors. Wherever the law allows it, and the nature of the work can afford it, therefore, he will generally prefer the services of slaves to freemen”. (Smith, 1776/1978, p. 489)
Q1 Why would an amoral manager opt for paid sweatshop labour over slave-labour?
Imagine an amoral manager (i.e. one who makes managerial decisions without reference to moral considerations or concepts) in a world that allowed slavery (in fact while slavery is illegal worldwide it continues to illicitly exist: Bales estimates there are at least 28 million slaves, many of them involved in making products we enjoy in the West- ie slaves in Brazil making charcoal for steel production that ultimately goes into Western products such as cars).
Given the opportunity to maximise production and reduce costs why would they likely choose paid sweatshop labour over the master/slave form as the optimum organisational relationship?
And how well would this help them achieve managerial and organisational ends?
While watching the documentary on sweatshops make notes on the benefits of sweatshops compared with “Old Slavery”. I have taken the columns below from Bales and added the word “sweatshop” because sweatshop labour has similar benefits as Bales “New Slavery” (new slavery is typically bondage: a very poor person borrows money, the lender becomes their “master” and they work to pay off the loan and interest- BUT the pay is so low and loan’s interest so steep they are “bonded” for many years).
Claim to "New Slavery" in the Global Economy (Bales, 2000)
Old Slavery New Slavery/sweatshops
Legal ownership Legal ownership avoided asserted
High purchase Very low purchase
cost cost
Low profits Very high profits
Shortage of Surplus of
potential slaves potential slaves/employees
Long-term Short-term
relationship relationship
Slaves maintained Slaves/employees disposable
(Bales, 2000, p. 15)
Bibliography:
Bales, K. (2000) Disposable People. New Slavery in the Global Economy, Berkley, University of California Press
Marx, K. (1985) Wage, Labour and Capital, Moscow, Progress Publishers
Smith, A (1978) The Wealth of Nations, London: Pelican Classics (1st Pub. 1776)
Evidence from videos
Q2: While there are similar benefits between “New Slavery” and Sweatshop labour what do you think gives sweatshops the edge in terms of getting people to work hard?
CSR??ҵ2/Watch video about sweatshops.docx
Watch video about sweatshops
Search on YouTube
Third World Slaves Making OUR Bargains to Buy - Walmart et al
Hidden Face of Globalization
Undercover: The Refugees Who Make Our Clothes (Panorama) - BBC News
http://www.bbc.co.uk/programmes/b0813kpq
Hidden Face of Globalization
