Supplier and worker engagement Working together to build a better supply chain

Although we have a rigorous auditing process and maintain a zero-tolerance approach to serious issues at our suppliers’ production units, more needs to be done to normalise good practice across the entire industry. That's why we are moving beyond auditing and compliance. To achieve our vision of safe and fair workplaces for all, we must employ a two-pronged approach: building our suppliers’ capacity, helping them to assess and strengthen their performance, and empowering their workers to act. In other words, audits won’t help us to improve working conditions altogether – but there is still a way to go to gather the important information we need to create change.

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In many places, workers are simply not used to being able to influence decision making. The right to freedom of association or acknowledgement of worker’s rights can be unknown. We are changing that through supporting fair contracts and social dialogue.  

Supplier ownership programme

Each supplier faces their own unique set of challenges, so a one-size-fits-all approach to solving them will not work. Instead, we must partner with our suppliers to enable ownership of the issues and challenges they face in safe and fair labour.

Our Supplier Ownership Programme (SOP) rolled out to 14 key suppliers in 2015 and was expanded to 24 in 2016.  As a result, management staff from PUs that employ over 60,000 workers are involved in the programme. The managers involved in the programme report into senior factory management and lead the social and environmental compliance or sustainability programmes in the factories.

The programme contains seven key interactive modules – from an overview on management systems, to worker communication and the environment. Each module includes a one or two-day workshop, home assignments and a joint on-site visit by the C&A Development Officer and the responsible supplier representative. Once the first batch of suppliers has graduated from the programme, we will expand the programme in 2018.

 

Supplier Ownership Programme module topics and engagement approach

Building capacity beyond the supplier ownership programme

Although the SOP is the main way we build capacity, it doesn’t end there. UniEthos is a Brazilian NGO which supports businesses to integrate sustainability practices into their supply chains. C&A, Instituto C&A, Instituto Cyrela and UniEthos have partnered to deliver the Value Chain (Valor em Cadeia) project, connecting large organisations with small sewing or construction-related entrepreneurs to build capacity.

Both sectors contain many small businesses with insufficient resources, often resulting in poor working conditions. The programme teaches small enterprises how to implement and maintain a sustainable business model.

Suppliers and subcontractors from C&A Brazil’s supply chain joined C&A Brazil's the Value Chain Programme in the second half of 2016. The course, supported by Instituto C&A and one of its local partners, UniEthos, consists of 10 modules run over 18 months, teaching participants about management, leadership, finance and sustainability. Besides the classes, the entrepreneurs receive 20 hours of consultancy on topics such as workers’ rights, health and safety and pricing a business plan focused on sustainability. The initiative is also supported by ABVTEX (Brazilian Association of Textile Retail), the Social Service of Building (SeconCiSP) and Inter American Development Bank (IDB).

Case study

Piloting the Dialogue for Change programme

In 2015, three out of the four industrial dispute cases at our suppliers’ production units occurred in Cambodia.  Unlike the rest of the production base, all of our production units in Cambodia are invested in or managed by Chinese or Korean owners. We identified that cultural differences and language barriers were causing misunderstandings between workers and management, leading to tension. Strikes and other uprisings can often be avoided through effective communication between management, unions and worker representatives. We have a duty to enable our suppliers to actively avoid the escalation of conflict and to proactively address issues that can lead to conflict.

In December 2016 and May 2017, C&A piloted the Dialogue for Change programme with five of our key suppliers’ production units. Each PU took part in three days of on-site training lasting for four months. The programme opens up opportunities for dialogue between management and workers ranging from improving information exchanges to providing a positive environment for consultation and negotiation. 

Impact

The three PUs which participated in the programme lowered the cultural barriers between management and workers, resulting in better product quality. From our assessment of the results we found that the factories where top and middle management were included demonstrated the most impactful outcomes.

As a representative from one of the programme suppliers, SUSA Sustainability Agents, says:

“One essential sign for management commitment is when the key decision maker of the factory is interested in the training and actively participates in the training. Another positive sign of good management commitment is their openness to continue with further dialogue trainings.”

Employees from the associated factories have also stated:

I can now apply for annual leave easily. My foreman no longer asks me all sorts of questions to stop me from taking leave.” A worker in Cambodia

 “I can now explain to a worker why I need to move her to a different sewing line because she is slower than her peers and I need to maintain a line balance. Before the training I did not dare to move her because I thought workers would have complained to the union that my decision reduces her salary.” A supervisor in Cambodia

The programme was developed by the German Development Organization, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), and implemented by dialogue specialists, SUSA Sustainability Agents.

We are continually investigating other ways to promote social dialogue in our sourcing countries globally.  Currently we are seeking additional partnership opportunities in Cambodia, Myanmar and Bangladesh.

Listening to workers

We are also piloting new approaches to build awareness and transparency from the ground up. Supply chain analytics company LaborVoices surveys factory workers by phone, asking questions about topics like working conditions, fire safety and satisfaction. It has run in Turkey since 2015, gathering more than 12,000 responses across 30 suppliers and 63 factories.  

The results - which are publicly available - have been insightful, highlighting some issues with cleanliness, verbal abuse, and purported underage workers. We have investigated the results of the phone survey through follow-up audits at the factories involved and continually evaluate what we hear from these interactions.

Learn more about the results from LabourVoices in Turkey here and download the full report here

Where next?

We will continue to build capacity amongst our suppliers, while ensuring workers are aware of their rights, their responsibilities and that their freedom of association is respected. With the Supplier Ownership Programme, the first 14 suppliers will graduate in 2017. These suppliers are expected to gradually run more of their production units through the programme. The second group of 10 suppliers will complete the training modules, conduct workshops and development visits and begin implementation in 2017.

Case study

Supplier Ownership Programme: Mr. Mamoon’s story

Mr. Reaz Uddin Al-Mamoon is the Managing Director of Epyllion, a C&A supplier that employs 16,000 people in Bangladesh. Epyllion has been participating in the C&A Supplier Ownership Programme since 2015, but we’ve been working together for over 20 years. C&A was Eypillion’s first international customer. The nature of the relationship built up over the years is based on mutual trust and understanding:

We see C&A as a partner, the business between us is based on trust.”

This type of strong relationship is key to the success of our Supplier Ownership Programme, which works by empowering everyone to be proactive in the pursuit of improved safety and better production.

However, creating this proactive culture is not always easy:

The distance between factory workers and management is something we need to reduce in order to be proactive. Otherwise, it can create problems with communication and misunderstanding. ”

 

Creating ownership

At Epyllion, staff are counselled so the company understands their needs, and they keep up to date on HR management issues, health and safety, their security and rights, and working practice. By sharing information as a two-way process, everyone is empowered to take ownership of monitoring and improving the way they work.

As Mamoon notes, the approach: “Not only helps our workers to be more proactive about their health and safety, it has helped management to be more proactive in addressing workers’ concerns.”

Even before joining the programme, the company set up helpdesks on their factory floors so they can be more responsive to their employees’ needs. Problems can be raised at the helpdesk and either escalated to an appropriate level or dealt with immediately.

Mamoon says this approach helps his employees feel supported as they make new, and often tough, decisions: This gives people confidence, they know our organisation is behind them.

Workers and management have the resources to address issues proactively and safe production can continue uninterrupted on a more regular basis. Having happy, safe employees has also meant better retention: “People stay with us, so the production floor stays stable. Because we look after our workers, we keep our workers.

Epyllion's philosophy is not just about profit, but about the human spirit we trust to deliver results. I see those things in my organisation. When my people feel happy, I feel joy inside me. As a leader, I need to make sure my people work in a safe place. That is my responsibility. I enjoy it.”

Ownership, efficiency and growth

Better working practice has driven not only efficiency and worker morale but also business growth: “All of the customers want good suppliers. It’s not only about price, they need to be confident that we are fully compliant, and that we are reliable. So, this programme has given us an advantage.”

The benefits of the Supplier Ownership Programme go beyond C&A, it has helped Mamoon to think long term in a way that benefits his business and all his customers.

“Epyllion is proactive and tries to anticipate what will come in future… We understand that business is about creating culture and investing in future.”

This forward-thinking outlook is paying dividends. In 2016 Epyllion was named the best company in Bangladesh with respect to CSR and is currently a B-rated supplier.

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