We believe that safe and fair working conditions should be the norm for all apparel workers, not just the ones that work in our suppliers' factories. That’s why we are using our influence to build capacity across our supply chain, striving to normalise good practices and create convergence with other brands and multi stakeholder initiatives. We were one of the first apparel companies to institute a Supplier Code of Conduct in 1995, and have forged long-term relationships with many of our suppliers to build trust.
C&A follows the UN Guiding Principles on Business and Human Rights. We are fully aware of the roles and responsibilities that we have as a company. During the last year, we also embedded the OECD Due Diligence Guidance for Responsible Supply Chains in the garment and footwear sector to properly identify, prioritise, and manage risk throughout our supply chain. This ongoing exercise aligns with C&A’s work with the German Partnership for Sustainable Textiles and the Dutch Covenant for Sustainable Apparel and Textile.
We have defined the top four challenges faced by our suppliers and created long-term engagement strategies for each challenge. We are committed to seeking out solutions to eradicate practices such as excessive overtime and wages, undisclosed subcontracting, fire and building safety, restrictions to freedom of association and labour rights in our key sourcing countries. We will continue to work in partnership with other leading organisations and civil society to drive change across the industry.
Over the past several years we have identified four priority challenges that significantly affect the working conditions in our supply chain. These issues are complex and usually interconnected in the unique contexts of the various countries that we source our products from. Because of this, it takes time, collective action, influence and partnerships to deliver sustainable change.
Over the past year, we’ve focused on building capacity, tackling those issues where our business decisions have the greatest impact and identifying areas of convergence with other industry partners. In addition, we thoroughly analysed our purchasing practices and identified the areas where we can perform better towards our suppliers. The key challenges below are not in any specific order of importance.
Working to live
For garment workers in markets such as Bangladesh, a long working week can be normal. We acknowledge the various factors that can cause this to happen and are working to change practices to ensure that no worker works more than a maximum of 60 hours per week. Our Supplier Code of Conduct stipulates that working hours may not exceed 60 hours in any seven-day period, except in truly exceptional and unforeseeable circumstances. In addition, workers need to be fairly compensated for their hard work.
Through supplier training and regular auditing, our supplier partners are aware of the requirement to comply with national laws, the International Labor Organization’s (ILO) Core Conventions, collective bargaining agreements, and the aspects of the ETI Base Code dealing with maximum working hours, overtime pay and rest days. They are also aware of the need to compensate workers for overtime in a timely manner. To maintain a safe and comfortable workplace, workers must also be allowed to take breaks, have at least one day off in every seven-day period, and be eligible for statutory holidays. To detect and address potential non-conformances with these requirements, our audit teams and Development Officers regularly assess, monitor and help to mitigate unintended consequences.
Through our experiences, we recognise that our buying and sourcing practices may affect how our suppliers plan for production and can have significant impacts on wages and working hours. Last-minute changes in design, production or delivery timings may inadvertently exacerbate this issue. Aside from this, we have also experienced that suppliers may not adequately plan for production, leading, among other things, to challenges in staffing levels to deliver the orders on time. Other factors like workers needing to attain additional compensation to support their families, and situations where factory management may intentionally misrepresent actual working hours to avoid business impacts, make this particular issue very challenging to address. Lastly, there is a general lack of wage law enforcement by local governments, requiring the brands to do most of the checking.
For many years, we have required our suppliers and their factories to compensate workers by paying wages that meet or exceed legal minimum and/or industry benchmark standards, whichever is higher. Even so, it’s still common to find instances of unpaid overtime premium. In some cases, workers are being compensated by productivity (the number of pieces made) instead of hourly at a premium rate.
How are we responding?
Many workers want or need to maximise their pay, so reductions in work hours can only benefit them if wages increase. Therefore, we have embarked on a journey to identify and overcome the barriers to these tensions through a multi-stakeholder approach with other brands, the ACT Foundation, and our own pilot projects.
Accurate tracking and adequate remuneration
Transparency on working practices is of utmost importance in allowing us to monitor performance across our supply chain. Over the past three years, we have emphasised the need for transparency with our suppliers and their production units. For instance, suppliers must use reliable time recording systems, where all regular hours, overtime hours and breaks are accurately tracked. Our Sustainable Supply Chain (SSC) Development Officers help factory management understand these requirements and work with them to ensure the accuracy of their records.
Ensuring appropriate payment and training
Whenever a piece-rate wage is used, suppliers must demonstrate that payments are at least equivalent to the minimum wage or that collective bargaining is in place. This is supported by a written wage and compensation policy that is communicated to workers through employee handbooks, notice boards, letters, regular meetings or other means. Factories must also provide training to all workers and subcontractors. These measures increase transparency and empower workers, while helping us identify the issues more easily.
Reducing excessive working hours
In 2017, we launched a pilot project to understand the steps needed to develop a sustainable and scalable approach to reducing excessive working hours, while maintaining decent salaries for workers. The pilot project was carried out over 12 months in Bangladesh and China with six of C&A’s strategic suppliers.
The project addresses the two main drivers of excessive working hours: the supplier’s HR and production management, and the brand’s purchasing practices. Suppliers were asked to analyse the practices within their factories that could lead to excessive working hours, and C&A used the ACT purchasing practices questionnaire to understand how our purchasing could exacerbate the issue. These points were discussed openly between the supplier and C&A team when analysing the root causes of excessive working hours and the potential ways to address them.
Results to date show that all except one of the pilot factories in Bangladesh saw a significant reduction in working hours, and have maintained this achievement over seven months. In China, the pilot factory took longer to reduce excessive working hours, but has achieved this gradually and maintained the decrease over three months.
A core issue from the supplier side is the mindset of management, who often see excessive working hours as an integral part of doing business. For us, raising awareness internally is key, as many functions – including sourcing, buying and design – can have an impact on working hours and other related challenges.
Building capacity on fire, building and electrical safety
A lack of fire safety precautions in apparel production units has claimed the lives of thousands of people in Bangladesh. It is a fundamental right of all workers to have a safe and healthy work environment. Our Supplier Code of Conduct includes robust requirements for building construction, fire protection and emergency preparedness. We have learned a lot from our work with the Bangladesh Accord on Fire and Building Safety, and led by maintaining a leading brand status in remediation of fire and building safety issues in Bangladesh. We have rigorous requirements of all our factories and in all sourcing countries globally.
Significant gaps in education and expertise
Fire and building safety are complex topics, with engineering and technical aspects that are often beyond the internal knowledge of an apparel factory. To assess these issues at the factory level, advanced vocational training and/or engineering degrees are required. In many of the sourcing countries, there is a lack of a competent talent pool to support the identification and remediation plan development, requiring costly consultant support.
In addition, fire and building safety requires robust processes from the local government that ensures adherence to the national building, fire and electrical legislations. Bringing many of our suppliers up to standard has required partnership, leading to significant actions at the factory level such as educating and upskilling the workforce and refitting locations with fire-resistant features. Often, these upgrades are costly or require significant time and resources to achieve.
How we’re responding
Supporting our suppliers
Normalising a high standard of fire safety requires significant effort from us and our suppliers. We work closely with them to understand the implications of new requirements and support them as they implement improvements. With our input, factories can access the necessary skills and tools to implement fire, building and electrical safety programmes and management systems. We also assess their capability to implement the changes from a capital or resource standpoint.
Our Supplier Code of Conduct was updated in 2015 to include additional extensive requirements for fire and building safety throughout our supply chain. During 2017 and early 2018, we worked with a consultancy to review our fire and building safety requirements again, ensuring compliance with local legislation and industry standards. We inspect all of our factories and require them to have legal documentation in place for each of their buildings, including dormitories, canteens and warehouses. Legal documentation is checked, and buildings undergo regular safety inspections to ensure improvements are implemented according to local legislation. Since this is an ongoing task, we will continue to adjust processes and requirements to ensure all production units are operating as safe working places.
C&A suppliers are required to maintain adequate insurance that covers workers for any injuries, accidents, or death. This applies to all work done on site and should also, when stipulated by law, include contractors and temporary and part-time workers.
The Bangladesh Accord has now been in place for nearly five years. C&A has been recognised as one of the brands that has made a dedicated effort to making this initiative successful, being part of its steering committee since inception. Between February and June 2017, we were one of six organisations selected to help define how the agreement should be extended past its five-year anniversary.
Together, we agreed that the Accord has made great progress in raising awareness on important safety measures, empowering and involving workers, and driving real change in fire and building safety in the Bangladesh garment industry. After fruitful negotiations between the brands’ representatives, IndustriALL Global Union and local stakeholders, it was decided that the Accord will be extended for three more years until May 2021, with some important additions:
The renewed Accord was signed at the OECD Global Forum on Responsible Business in June 2017 with C&A representing the brand community. The new Accord is important for us because it extends independent, expert building safety inspections for three more years, ensuring that safety improvements achieved under the first Accord will be maintained and that any new findings in any factory will be addressed.
Additional support to victims of the Tazreen fire
We remain deeply saddened by the loss of life and injuries caused by the tragic fire in November 2012 at Tazreen Fashion in Bangladesh, a factory that supplied C&A Brazil. In the aftermath, C&A Foundation provided immediate financial support to the families of all 112 people killed and established a fund to provide ongoing support to 49 adult dependents.
Working with Caritas Bangladesh, C&A Foundation also created a rehabilitation programme to help survivors find a new path for themselves. C&A Foundation continues to contribute to the Trust for Injured workers’ Medical Care (TIWMC), which supported 172 workers injured in the Tazreen fire and also ran two medical camps in 2017. Medical treatment continues for 120 workers.
C&A Foundation also supported the Tazreen Claims Administration Trust (TCA) alongside the Clean Clothes Campaign and IndustriALL Global Union in 2015, to help survivors and the families of victims gain access to adequate compensation. The TCA finalised its work in 2016, completing the compensation payments to the victims of the fire. In total, approximately US$2.17 million was paid out to all the impacted families and the workers injured in the fire.
Enabling worker organisation and collective bargaining
Freedom of association and collective bargaining is fundamental to improving labour conditions across the apparel supply chain and in our sourcing countries. Freedom of association remains an important focus of our strategy to amplify workers’ voices, encourage a dialogue with management, and advance the overall performance of our suppliers' factories.
Overcoming legal restrictions
Some countries such as China restrict collective bargaining by law. In these cases, we expect our suppliers to help workers establish alternative forms of worker representation and negotiation. We also expect our suppliers to establish, implement and communicate a grievance mechanism that is accessible, predictable, equitable, transparent, rights-compatible, confidential and based on engagement and dialogue to resolve internal disputes and employee complaints. Freedom of association is tested as part of our auditing process and violations are considered a severe non-compliance with our Supplier Code of Conduct. It is also a key aspect of our Fairness Channel compliance hotlines, implemented with the support of Ethicspoint incident management software.
In 2017, we detected 10 cases where freedom of association was not respected in our supply chain. Of these cases, four were found in Cambodia, two each in Myanmar and Turkey, and one each in Bangladesh and India. To remediate these incidents, our local Sourcing and Sustainable Supply Chain (SSC) teams, with support from the Global Sustainability team and the Sourcing teams, have worked closely with our suppliers, the workers’ representatives and international trade unions to address each of the issues individually. Six of the cases were resolved with mutual satisfaction of workers, management and the labour unions. Four cases remain in the process of remediation at the time of publication (June 2017).
How we’re responding
When freedom of association issues are discovered through auditing, union allegations, strikes or via our Fairness Channel compliance hotlines, we take decisive action to work together with the proper groups to resolve the issue, ensure the fair treatment of workers and implement the necessary safeguards to avoid being repeated in the future. Where necessary, we will support the reinstatement of workers dismissed unfairly and ask for compensation or support.
Championing worker representation
Our Supplier Code of Conduct requires our suppliers to adopt an open and collaborative attitude towards worker representation, allow workers to form or join trade unions of their own choosing, and to bargain collectively. In 2016 and 2017, two of our suppliers’ factories in Bangladesh took part in a pilot social dialogue programme organised by the Joint Ethical Trade Initiatives (ETIs) of Denmark, UK and Norway. The programme aims to develop better industrial relationships within the Bangladeshi garment and textiles sector by promoting free and fair expression of workers’ voices.
Read more about the social dialogue programme in Bangladesh
In addition, we are participating in the ACT Initiative, which plays a key role in assuring living wages in the supplier countries through the creation of national industry-wide collective bargaining processes with freedom of association as a main cornerstone.
When workers and management communicate well, they are more likely to collectively support a healthy work environment. Workers need to know their rights and responsibilities and have channels through which they can raise concerns. C&A is committed to helping our suppliers provide workers with safe and effective ways to raise concerns and grievances. During the last decade, our compliance hotlines have helped us identify issues that arise in our offices, stores or supply chain. We aim to support fairness and transparency in how we work with our employees, suppliers and their workers.
Read more about how we empower workers
Learn more about our values
Round tables on freedom of association in Cambodia
Recent years have seen unrest in the Cambodian garment industry. Protesters have taken to the streets, clashing with security forces and union leaders have been dismissed as they planned to organise strikes. Unions have repeatedly described repression of workers’ rights by company management and anti-union crackdowns.
In 2017, C&A continued its active engagement with the Government of Cambodia, suppliers and key stakeholders to raise our concerns about labour and human rights.
Through the Ethical Trade Initiative (ETI), we have engaged with other brands to voice our concerns directly to the Government. Together, we were clear that stability, predictability and the rule of law are needed for further growth of the garment sector in the region. In particular, we want to see Cambodian laws respecting the International Labor Organization’s (ILO) Core Conventions.
We also held six round table discussions on the issue of freedom of association, focusing on building healthy labour/management relations with senior management representatives of over half our Cambodian suppliers. C&A’s remaining production units were engaged in a second series of roundtables in the first few months of 2018.
During the round tables, we emphasised that C&A aims to work only with production units that fully comply with our Supplier Code of Conduct. We encourage suppliers to enable open communication to solve disputes amicably and are willing to support them with technical knowledge if they have difficulties resolving a dispute.
Due to the rigour of these round table discussions, we have already seen changes start to happen in the region, including the following outcomes:
Preventing undisclosed production
Undisclosed production is when C&A identifies a production unit that has not been previously approved for production. Although it is not often detected, it constitutes a serious violation because we cannot verify that the factory is in alignment with our Supplier Code of Conduct and our environmental and social requirements. We require that each new production unit is audited and meets the requirements of our Supplier Code of Conduct before orders are placed.
The detection of undisclosed production requires ongoing vigilance due to the complexity of the global supply chain. It’s one of the reasons that we disclose a list of our tier-1 and tier-2 suppliers’ factories every year. By being transparent on where our products are produced, we can create accountability for us and our suppliers when undisclosed production is used.
In 2017, we detected 10 cases of undisclosed subcontracting. We did not have cases of undisclosed home working in our supply chain. Because we consider these violations to be serious, sanctions were taken against the supplier or factory in several situations. In all 10 cases, a thorough investigation was conducted, and corrective action plans put in place with the supplier and our internal teams. Three of those cases have also led to the suspension of C&A’s business relationship with the supplier.
How are we responding?
Clear expectations and serious consequences
If undisclosed production is identified, the Sustainable Supply Chain (SSC), Sourcing and Quality teams assess the situation and the production unit. Because the circumstances behind the cases are sometimes complex, the teams thoroughly investigate the situation, the intentions and utilise a systematic process to determine the consequences.
In 2016, we rolled out a three-strike policy to mitigate the risk of undisclosed production units such as home working. Additionally, if a zero-tolerance item is found on inspection, a supplier can be suspended for 12 months or terminated, depending on the results of the investigation. If undisclosed production is detected and the factory meets the other requirements of our Supplier Code of Conduct and quality standards, the supplier will receive a warning on the first instance, leading to suspension for 12 months or termination after the third instance. In all cases, if a zero-tolerance finding is detected at the undisclosed production unit, the supplier will be suspended for 12 months.
To foster accountability and understanding of our requirements around undisclosed subcontracting, we informed our entire supply base and have regular interactions on the subject during our audit process.