We believe that safe and fair working conditions should be the norm for all garment 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 to 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.
Events this year have underlined how important it is to continue to seek out and eradicate practices such as excessive overtime, undisclosed subcontracting, low wages or restrictions to freedom of association. We have defined the top four challenges faced by our suppliers and created long-term engagement strategies for each challenge. We work in partnership with other leading organisations and NGOs to drive change across the industry.
C&A partnerships working on safe and fair labour
|Collaboration or partnership||Since||Role|
|Action, Collaboration, Transformation||2015||Founding member|
|Bangladesh Accord for Fire and Building Safety||2013||Steering committee member|
|Sustainable Apparel Coalition||2010||Founding member/Chair of the Board|
|Human Rights Watch Transparency Pledge||2017||Signatory|
|UN Global Compact||2015||Signatory|
|SAC Social & Labour Convergence Project||2016||Member|
|Partnership for Sustainable Textiles (Textilbündnis)||2015||Member|
|Ethical Trading Initiative (ETI)||2012||Member|
|Forum for the Future||2012||Member|
|Global Social Compliance Programme||2008||Member|
Four complex issues requiring long-term engagement
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. We have also started to look more closely into our own buying practices to analyse the best approaches for the best eventual outcomes. These challenges are not in any specific order of importance.
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 in the last 10 years. 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, which we have learned from our work with the Bangladesh Accord on Fire and Building Safety. Although we have shown leadership by maintaining a leading brand status in remediation of fire and building safety issues in Bangladesh, we apply the same level of rigour in all factories and in all sourcing countries globally.
Significant education gaps
Fire and building safety are complex topics with engineering and technical aspects that are beyond the internal knowledge of an apparel factory. Bringing many of our suppliers up to standard has required partnership, leading to significant actions at the factory level. For instance, educating and upskilling the workforce and refitting locations with fire resistant features. Often, these upgrades are costly or require significant time and resource commitments to achieve.
Availability of fire and safety components
Many of the Corrective Action Plans require special fire and safety components to be fitted such as certified fire doors. In many cases there are limitations to the availability of approved equipment in sourcing countries and the availability of technically competent installers and retrofitters. This challenge can often lead to delays in the implementation of corrective actions.
Levels of expertise
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.
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 and building safety programmes and management systems. We also assess their capability of implementing the changes from a capital or resource standpoint. When the need arises for financing support we create the necessary connections.
Our Supplier Code of Conduct was updated in 2015 to include additional extensive requirements for fire and building safety throughout our supply chain. 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. As one of the first brands to apply standards learned from our experience in Bangladesh, we take the responsibility of supporting our suppliers through these improvements seriously. Legal documentation is checked and buildings undergo regular safety inspections to ensure improvements are implemented to the highest standard.
C&A suppliers are also 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, temporary, and part-time workers.
Enabling worker organisation and collective bargaining
Worker organisation 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 to advance the performance of our suppliers' factories overall.
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 a zero-tolerance issue.
In 2016, we detected three cases where freedom of association was not respected in our supply chain. Of the three cases, two were found in Cambodia and one in Turkey. To remediate these incidents, our local teams, with support from Global Sustainability and Sustainable Supply Chain (SSC) sourcing hubs, have worked closely with our suppliers, the workers’ representatives and international trade unions to address each of the issues individually. Two of the cases were resolved with mutual satisfaction of workers, management and the labour unions. One case remains in the process of remediation at the time of this report.
How we’re responding
When freedom of association issues are discovered through auditing, union allegations, strikes or via our Fairness Channel compliance hotline, 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, or 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 2015, three of our suppliers' factories in Cambodia piloted the Dialogue for Change programme. The programme aims to improve dialogue between managers and workers and to provide workers with a means to raise concerns and grievances to management.
In addition, we are participating in the ACT Initiative, which we believe will play a key role in assuring living wages in the supplier countries through the creation of national industry-wide collective bargaining processes.
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. For 10 years, our compliance hotline, the Fairness Channel, has helped us identify issues that arise in our offices, stores, or supply chain. We aim to support fairness and transparency in our way of working with our employees and suppliers.
Round tables on freedom of association in Cambodia
In 2016, C&A held four round table discussions on the issues of freedom of association, focusing on building healthy labour/management issues, involving key stakeholders and one third of our Cambodian suppliers. Through these round table discussions, we have already seen changes start to happen, including the following outcomes:
Going forward, we plan to expand these supplier round tables to other sourcing countries and to incorporate other best practices.
Preventing unauthorised production
Although not often detected, for C&A unauthorised production is when we identify a production unit that has not been previously approved for production. As we cannot verify that the factory is in alignment with our Code of Conduct and our environmental and social requirements, it constitutes a serious violation. We require that each new PU is audited and meets the requirements of our 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 our first and second tier factories. By being transparent on where our products are produced, we can create accountability for us and our suppliers when undisclosed production is used.
In 2016, we detected 13 cases of undisclosed subcontracting and one case of unauthorised home working in our supply chain. Because we consider these violations to be serious, in several situations sanctions were placed against the supplier or factory. In all cases, a thorough investigation was conducted and a corrective action plan was put in place with the supplier and our internal teams.
How are we responding?
Clear expectations and serious consequences
If unauthorised production is identified, the SSC and quality teams assess the situation and the production unit. Because the circumstances behind the cases are sometimes complex, the team thoroughly investigates the situation, the intentions, and utilises a systematic process to determine the consequences.
In 2016 we rolled out a new 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. Simply, if undisclosed production is detected and the PU meets the requirements of our 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 create 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.
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 all workers work a maximum of 60 hours per week or less. Our Supplier Code of Conduct stipulates that working hours may not exceed 60 hours in any seven-day period, except in truly exceptional, unforeseeable circumstances. Moreover, workers need to be fairly compensated for the hard work they do.
Through supplier training and regular auditing, our supplier partners are aware of the requirement to comply with national laws, collective bargaining agreements, and the elements of the ETI base code around 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 suppliers regularly assess, mitigate, and monitor workplace hazards to minimise injury risks that are specifically related to long hours.
Through our experience, we recognise that our buying and sourcing practices may affect how our suppliers plan for production and can have significant impacts on 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 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. 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 not uncommon to find that the overtime premium is not paid. In some cases, workers are being compensated by productivity – by 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 to balance this loss in hours. Therefore, we embarked on a journey to identify and overcome the barriers to these tensions through a multi-stakeholder approach with other brands and the ACT Foundation for 'Action, Collaboration and Transformation'. The ACT initiative seeks to increase wages for workers across the apparel industry by promoting industry-wide collective bargaining agreements in all of the most important sourcing countries. Going forward, we will work through the ACT process with factories to increase their efficiency and productivity, leading to the partial compensation for reduced working hours.
Accurate tracking and adequate remuneration
Transparency on working practices is of utmost importance; it allows 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. Suppliers must use reliable time recording systems, where all regular hours, overtime hours and breaks are accurately tracked. Our SSC development officers help factory management understand these requirements and work with them to ensure the accuracy of these records.
Ensuring appropriate payment and training
Whenever a piece-rate wage is used, suppliers must demonstrate that these payments are at least equivalent to the minimum wage or a 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. They must also provide training to all workers and subcontractors. These measures increase transparency and empower workers, while helping us to more easily identify the issues.
Better planning to eliminate excessive working hours
In December 2016, we approved a pilot programme to work on solving the root causes of excessive working hours with six key suppliers in China and Bangladesh. Because we recognise that excessive working hours are exacerbated by production efficiency, purchasing practices and worker voices, we are incorporating elements of ACT into our approach.
The ultimate goal of this programme is to create goals and action plans in partnership with our suppliers to eliminate excessive working hours and low wages, while increasing workers’ participation in labour/management dialogue and increasing production efficiency.