KJUS Social Report 2015
kjus.com
KJUS Social Report 2015
Contents 1.
Foreword by Sven Serena 3
2.
About KJUS 5
3.
Summary: Goals and Achievements 2015 6
4.
Sourcing Strategy and Pricing 7
4.1
Sourcing Strategy
7
4.2
Sourcing Pricing
8
4.3
Organization of the Sourcing Department
9
4.4
Production Cycle
9
4.5
Supplier Relations
10
4.6
Integration Monitoring Activities and Sourcing Decisions
10
5.
Coherent System for Monitoring and Remediation 11
5.1
Supplier Overview
12–13
5.2
Audits 2015 and Findings of Labour Standards
14–15
5.3
FWF Code of Labour Practices
16–17
5.4
Supplier of the Year
6.
Complaints Procedure 19
6.1
Complaint 2015
7.
Training and Capacity Building 20
7.1
Activities to Inform Staff Members
20
7.2
Activities to Inform Agents
21
7.3
Activities to Inform Manufacturers and Workers
21
8.
Transparency & Communication 22
9.
Stakeholder Engagement 22
10.
Corporate Social Responsibility 23
18
19
KJUS Social Report 2015
1. Foreword by Sven Serena As a common saying goes it’s tough to reach the top, but it’s even more difficult to remain there. We have achieved our goal to become a leading brand among the Fair Wear Foundation affiliates. Today, we fight every day and constantly to keep up the level of transparancy and even go beyond existing achievements. There is still so much we can do to improve the working conditions at manufacturing sights. Brands in general should look at this fact as a motivation to achieve even more for the people that work very hard for our industry. Of course, there are many set backs and obstacles along the way, but we should always remember that we deal with human lives in this labour intensive industry and that it is partly in our hands to change them to the better. As a brand we try to focus more and more on educating the factory management about how important social responsibility is for their longterm survival as a company. Labour, especially in certain Far Eastern countries, has become sparser and only the manufacturers offering fair and solid working conditions will be able to keep their skillful employees. This process, of course, only expands our traditional auditing, but thanks to the help of Fair Wear Foundation, we progress with this workplace education program faster than expected. As we proceed as a leading member of the Fair Wear Foundation, it becomes more and more obvious that the biggest challenge lays still ahead of us. Paying living wages to the factory employees and limit the working hours to an acceptable level for the people on the production floors is by far the most difficult issue in our industry to overcome. Yet we should remember that both are closely linked together. Which means if we can solve the living wage challenge we have layed the foundation to overcome the working hours issue. In many factories employees prefer to work overtime in order to earn additional salary. However, if they receive a living wage without spending additional working time in the evenings and
on weekends they will refuse to work such long hours. Once this situation is achieved, we as an industry stakeholder are forced to cope with this new reality. Unfortunately, these problems are not only linked to each other, they are also linked to every brand in the industry. Only when all brands (or at least the majority of brands) accept to pay living wages, this scenario will take its course automatically. Therefore, we should unite with other brands and fix real living wage levels in manufacturing countries together, so we all can stand behind the decisions. Fortunately, we can see more and more commitment into this direction, so we remain hopeful that a solution to these two core challenges will be found in the near future. This social report looks back onto what we reached in 2015. We continue to build on our past achievements and try to even intensify the relationships to our manufacturing partners. This means we still reduce the amount of supplying partners in our supply chain and with those remaining, we aim to have a close relationship. Only if we have a trustworthy partership we can reach our goals ahead of us. Textile production is a very labour-intensive Industry. Social responsibility in the supply chain is an important goal
3
KJUS Social Report 2015
for KJUS. KJUS not only wants to be a fair and attractive employer to his own employees, but we also feel obligated to guarantee fair working conditions to the people who produce our products around the world. It is a must for KJUS to know its producers and only work with partners who share our approach and respect modern and fair working conditions. What is the Fair Wear Foundation? The FWF is an independent non-profit organization dedicated to improving working conditions in the textile industry. The independence of this initiative is guaranteed by a multi-stakeholder board composed of business and textile associations, unions and non-government organizations (NGOs).
Independent verification and evaluation of KJUS production As an independent monitoring body, the FWF verifies the progress of member companies in the implementation of the Code of Labour Practices. This is done through factory audits, interviews with factory workers and management, and assessments of KJUS’ internal processes and workflows on which the monitoring is based. Why the Fair Wear Foundation? There are many initiatives regarding a fair production chain. What convinced KJUS to join the Fair Wear Foundation was the credibility, independency and the comprehensive approach of this initiative. From process approach to transparency and multi-level verifica-
tion, this system is based on a pragmatic management system that allows optimization in various fields. Another very important factor for KJUS joining the FWF was the high number of other sports brands being members of the FWF. Synergies in terms of joint audits and know-how transfer are very valuable for KJUS. And last but not least, it is only through cooperation that industry wide improvement for fair working conditions can be realized. Sven Serena Head of Production & Quality Control
4
KJUS Social Report 2015
2. About KJUS KJUS stands for sportswear made of innovative, high-performance material with a distinctive, clean design. The award-winning ski-, golf- and active-collections are developed by passionate sports experts and tested by professional athletes. The company revolutionized the market with its extremely stretchable and functional fabrics. Our mission is to design the best, uncompromising apparel for ski, golf and an active lifestyle. Product Divisions KJUS is an all-year brand offering three technical collections: Skiwear Collection The best high-tech skiwear, defining the standards of performance, superior comfort and a modern style. Golfwear Collection The best high-tech golfwear. Finest workmanship, low-noise stretch fabrics fusing superior comfort with modern styling.
Active Lifestyle Collection Technical apparel for an active life aside the slopes and greens, incorporating the know-how of the KJUS ski collection and offering lightweight weather protection as well as superior comfort fused with modern styling.
Facts & Figures Brand established in 2000 Headquarters LK International AG Rothusstrasse 24 6331 HĂźnenberg Switzerland
Employees Total 116 employees 79 Headquarter 4 LK Germany 7 LK Austria 15 North America 11 Shenzen China Distribution Worldwide via selected retailers in 32 Countries. In Switzerland, Austria, Germany and USA we have our own subsidiaries.
5
3. Summary: Goals and Achievements 2015 It has been 4 years now since we joined the Fair Wear Foundation in 2012. Last year, we completed our 3 years plan to become a leader among the Fair Wear Foundation members. We continue to monitor well beyond 90% of our manufacturers. Our focus in 2015 was to enhance the workplace education program. However, of course we didn’t neglect the auditing and we launched into the second cycle of monitoring audits with some key suppliers. Our key achievement over the past couple of years is that we have reduced the amount of suppliers dramatically, so we can keep better and easier track of the remaining manufacturing sites. Achievements WEP Training In 2015, three out of three of our Vietnamese suppliers participated in a WEP (Workplace Education Training/Workplace Awareness). The project was initiated by FWF and financially supported by the Federal Foreign Office of the Netherlands and UN Women. The training successfully enabled employees to become aware of problems in their work environment and to address them to the management in open and effective ways. Shared Audit In 2015, four audits took place, of which 3 were shared audits with other brands from the outdoor industry. This is an enormous benefit for all participants, as the cumulated influence helps tremen-
dously to implement social standards. For each shared audit, one brand takes over the lead and responsibility for the communications, tracking and evaluation of the Corrective Actions Plans (CAP). Brand Performance Check During the annual Brand Performance Check (BPC), the FWF evaluates our management system’s support and dedication to the CoLP. Internal interviews and a review of documentations, purchasing practices as well as monitoring actions, complaints handling, training and capacity building form the basis for the FWF’s estimation and valuation. We rank as a leader member among Fair Wear Foundation affiliates currently. We are working and preparing to improve the ranking even further
through reaching more points during the brand performance check. Challenges The biggest challenge remains to win the suppliers over for the living wage as well as reduced working hours discussion. There remains a fair share of uncertainty how this will be implemented since in most factories the Fair Wear Foundation affiliates only make up less than 10% leverage combined. This means we need to reach out to nonFair Wear Foundation affiliates and cooperate with them to implement a living wage standard and reduce working hours. This however definitely remains by far the biggest challenge for our social responsibility effort.
6
KJUS Social Report 2015
4. Sourcing Strategy and Pricing 4.1 Sourcing Strategy KJUS has been focusing on a sustainable supply chain since the beginning. Being a premium brand, KJUS highly depends on top quality rather than the most competitive price. A healthy giveand- take relationship with suppliers has been developed from the very start of
our company, as we highly depend on trustful, long-term partnerships. Having a stable and premium production quality is key to success. Therefore, we try to collaborate with the same suppliers and focus on a few partners only.
7
KJUS Social Report 2015
4.2 Sourcing Pricing KJUS is a premium brand. Hence, price is secondary to quality and performance. Nonetheless, KJUS feels an increasing price pressure, as soaring manufacturing costs in Asia have been decreasing the margins for several years now. There is a fierce price battle, especially in the outdoor products sector. If KJUS misses its target prices, we usually try to find solutions together
with our manufacturers by adjusting the workmanship and by negotiating the FOB price. In fact, we have continuously gathered information on living costs in every production country and the resulting labour wages. For that reason, KJUS works closely with its manufacturing partners on the efficiency of the styles, which will ease the price pressure again. We fix a realistic target FOB
price according our experience and know-how. However, we remain flexible to adjust the target FOB price or target retail price throughout the development phase. This will allow our manufactures to justify certain price levels which we try to incorporate in our price strategy for the collection.
Production location based on FOB 2015 volume in % 18 % Indonesia
4 % Thailand 47 %
Vietnam 4 % Lithuania
0 %
Philippines
0 %
Italy
27 % China
8
KJUS Social Report 2015
4.3 Organisation of the Sourcing Department Our sourcing department works together with the production department and has a total of seven employees in Switzerland and China.
Responsibilities The Head of Production, as member of the management board, is responsible for the sourcing strategy. President/CEO
CFO/COO
Product and Marketing
Production and Quality Assurance
Sales
Production Planning
Quality Assurance and Production Support
China Office Manager
Production Coordination
Quality / GSR
Quality
Sourcing
CSR and Production Analysis (60%)
4.4 Production Cycle • KJUS launches one fall/winter and one spring/summer collection per year. Of the combined turnover, 76.8% is generated by the winter collection and 23.2% by the summer collection. In the coming years, a potential growth for the summer collection is expected. • According to business and collection plans, KJUS starts with the factory allocation and informs suppliers about the styles and foreseen quantities for
the upcoming production season. The suppliers then block production capacities between March and July for the winter production and between November and January for the summer production. Based on internal forecasts, we order the needed raw materials. Once the first official forecasts have been received from distributors and sales agencies, KJUS will pass these numbers on to the suppliers to enable them to review their planning and capacity res-
ervations. On the other hand, this is a security tool for KJUS to recheck the orders for materials. • When KJUS places the official garment orders (winter and summer 2 purchases each) with suppliers, they receive all materials within two months. Once all materials have arrived in the factory, the supplier needs an average production time of two months which also includes quality control and packaging.
9
KJUS Social Report 2015
4.5 Supplier Relations Factories are evaluated by their ability to produce high quality products and are asked to complete a standard evaluation form from KJUS. We also monitor the brands for which the manufacturer is currently producing garments. Next will be a high level management meeting and a factory visit in order to reach an agreement and commitment to work closely together in the future. During the evaluation process we will gather information about the Code of Conduct of the factory and screen them whether sufficient effort is being made for corporate social responsibilities. We will check existing audit reports and if the factory will handle orders above 2% of our purchasing volume, a FWF audit will be scheduled within 12 months after starting the relationship. If a company meets all our requirements and the management meeting was successful, we will make a counter sample to evaluate its price level. Additionally, KJUS monitors the lead time history as well as the past delivery performance. KJUS fosters long-term relationships with our partners. KJUS has only been on the
market for since 2000, but has been collaborating with some of the suppliers for 9 or 10 years already. Over time, more suppliers have entered the supply chain. The current manufacturers have been working with KJUS for an average of 6 years. Agents / Intermediaries KJUS prefers to work directly with the factories. In some cases it’s inefficient to work with factories directly (for example accessories business). In any case, all agents and intermediaries are required to disclose their production sites so we can monitor them as normal production sites. In 2015, we terminated several supplier relationships due to the above mentioned sourcing efficiency restructuring program. On the one hand, we have stopped sourcing in Slovakia and Portugal completely and moved our focus to existing partners in the Far East. Given our worldwide distribution model, this is more suitable for our company and increases our leverage in existing partner
companies. Additionally, we stopped sourcing for a long term partner in China also in order to consolidate all our cut & sew knit production in South East Asia. This again will increase leverage in existing suppliers. At the same time, we have opened two new accounts in 2015. The first new partner in our supply chain is an Italian belt factory and the second is a specialized supplier in China where we started a new innovation project. Both suppliers have been visited prior to the cooperation start and went through our standard evaluation process. Since both suppliers fall well below 1% of our total purchasing cost in 2015 we will postpone an audit until we see the cooperation picking up. Furthermore, the Italian supplier falls into a low risk country which means we do not plan to audit them, but of course follow the Fair Wear Foundation rules that apply to “low risk countries”.
4.6 Integrating Monitoring Activities and Sourcing Decisions We are dedicated to the strategy of longterm partnerships and strictly refuse a sourcing policy based on bidding invitations in order to select the lowest cost manufacturer for one production season only. With our exceptionally high quality requirements, we depend on lasting, trustful partnerships. This is the only way to enable the growth of both parties and benefit from one another. We put much effort into keeping our supply chain as tightly organized as possible. This results in more efficiency
and also more influence when it comes to improving social standards for employees at the production sites. We managed to downsize our supply chain and focus on a few suppliers only, even though the company has grown over the years. In 2015, no monitoring activity has lead us to adjust our sourcing strategy. Due to the strong partnerships, we can work actively on findings and evaluated that our supplying partners support “The Fair Wear Foundation” project KJUS
embarked on 4 years ago. Major issues are addressed on top management level and most findings can be solved over time with this process. However, with supplying partners where we source only small quantities this procedure is more challenging. Nevertheless, we focus on dialogue with the management instead of adapting our sourcing strategy.
10
KJUS Social Report 2015
5. Coherent system for monitoring and remediation The following tables provide an overview of the audits conducted on suppliers active in 2015.
11
2011
Collaboration starts
on going
Collaboration ends
5.1 Supplier Overview Factory
CHINA A
Supplier informed about FWF
yes
CoLP posted
yes
Low Risk origin
no
Findings of audit outcome
Last factor visit
Date of FWF audits
2015
Complaints 2015
detail in paragraph 5.2
Volume in % 2015
2014 / 2015 verification
Audits from other Organisatos, accetp. from FWF
0.27 % Yes
2015
2008
on going
on going
on going
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
no
no
no
no
no
no
0.31 % No
0.98 % No
0.30 % No
5.12 % No
17.37 % No
1.96 % No
no
2014
no
2013
2014
no
2015
-
2015
-
2015
2015
2015
0.68 % No
2007
on going
yes
no
no
C
2009
on going
0.01 % No
yes
D
2011
on going
no
2014
yes
E
2013
yes
4.81 % No
2015
on going
F
2013 yes
no
12.99 % No
2013
G
on going
yes
no
LITHUANIA
2015
H 2015
yes yes
4.35 % No
B
detail in paragraph 5.2
I
on going yes
yes
INDONESIA 2014 on going
yes
2015
2015
2015
A 2011
yes
detail in paragraph 5.2
B
on going
no need
2006
A
12
no
1.07 % No
0.02 % No
2013
2015
2013
2012
-
2015
2015
2015
-
Last factor visit
no
2.40 % No
2014
CoLP posted
5.1 Supplier Overview (continued) Factory
yes
no
33.12 % No
No
Findings of audit outcome
yes
no
0.17 % No
6.71 % Yes
Date of FWF audits
yes
yes
no
Complaints 2015
yes
yes
no
Volume in % 2015
on going
yes
yes
Low Risk origin
on going
yes
yes
Supplier informed about FWF
2013
on going
yes
2015
Collaboration ends
2012
on going
yes
2013
2015
Collaboration starts
2011
on going
7.51 % No
no need
Audits from other Organisatos, accetp. from FWF
A
2007
on going
no
0.12 % No
PHILLIPINES
B
2014
yes
yes
A
A
2007 yes
yes
ITALY
VIETNAM
THAILAND
B
on going
yes
2015
C 2009
on going
detail in paragraph 5.2
C
2015
A
13
KJUS Social Report 2015
5.2 Audits 2015 and findings of Labour Standards
China Factory B This accessories manufacturer has been producing for us since 2013. We have a good relationship with the American management of the factory in China. This despite our leverage is small. We shared the audit together with two other FWF members. The biggest challenge in this factory is the seasonal business. This has an impact on the excessive overtime in peak seasons and low wages during off-season. Given the nature of this business it’s very difficult to overcome this challenge. However, as the orders increase in this factory, we as a brand will try to spread our order more even over the months. However, at the moment our purchase volume is low and we don’t have the possibility to split orders. Nonetheless, the supplier is engaging all their customers in order to tackle the peak season challenge and they expect some ease in coming years. We will keep monitoring this supplier and their achievements in reducing the overtime and pay living wages to their employees.
China Factory A This factory has already been audited by KJUS and other FWF affiliates in 2014. Since we found big issues regarding excessive overtime and in early 2015 received a worker complain, Fair Wear Foundation decided to run a verification audit at this supplier. A lot of progress has been achieved since the 2014 audit. To name a few but not limited to: – Air-conditioning was installed in the ironing department to control the temperature in summer. – Catering company was changed after complaints about canteen food quality. – A worker training was carried out in order to educate the employees about their labour rights. – Steps towards electing a labour committee have been taken. In 2016, a new committee will be elected. We will continue to monitor this supplier and work on a corrective action plan. In addition, we started to visit this supplier also on a management level in order to get better access to their decision making body.
14
KJUS Social Report 2015
Thailand Factory B We partner with this supplier since 2013. The audit was shared with another brand, and it was a follow-up on the 2012 Fair Wear Foundation audit. Among other findings, it was noticed that not much progress has been achieved since the 2012 audit. Also, the awareness of the labour rights among their workers still remains fairly low. Additionally, the factory needs to improve documentation in local language for migrant workers from Myanmar. We will follow up on the new correction action plan actively and visit the supplier regularly in order to check the improvements, so the next audit can proof a solid progress.
Indonesia Factory B Since Fair Wear Foundation doesn’t have an audit team available in Indonesia we carried out this audit through a third party organisation. We have been using this organisation before and the quality of work is in line with the Fair Wear Foundation standard. The audit result was far more negative than expected. A 2012 “Better Work� audit showed positive conditions in the factory, therefore did the new audit take us by surprise. Since the audit took place in autumn 2015, we are still discussing with the supplier how to tackle the corrective action plan. Our focus will be on health and safety first and then on worker trainings. Only once we solved these most urgent findings, we will look into challenges regarding overtime and wages. We remain positive to solve all findings swiftly, because this partner is very cooperative and we have a strong relationship to the ownership as well as management.
15
KJUS Social Report 2015
5.3 FWF Code of Labour Practices The Code of Labour Practices is based on the conventions of the International Labour Organisation (ILO) and the Universal Declaration on Human Rights. Members of FWF work towards improving the labour conditions in factories and workshops where the «cut-make-trim» stage takes place, all over the world. The basis of the collaboration between FWF and a member is the Code of Labour Practices (CoLP). Eight labour standards form the core of the Code of Labour Practices.
KJUS clearly communicates and is dedicated to the policies of the FWF Code of Labor Practices. The Code is provided in English and in the local language to all manufacturers. They are obliged to sign and post it at a prominent and accessible place, so everybody can read it. By signing the Code of Labor Practices the supplying partner commits to educate their workers on their rights and provides the complain hotline for workers to contact FWF directly. KJUS supports the internal factory training of the CoLP to ensure that all employees of every factory are familiar with the policies. Employment is freely chosen There shall be no use of forced, including bonded or prison, labour. (ILO Conventions 29 and 105). There is no discrimination in employment Recruitment, wage policy, admittance to training programmes, employee promotion policy, policies of employment termination, retirement, and any other aspects of the employment relationship shall be based on the principle of equal opportunities, regardless of race, colour, sex, religion, political affiliation, union membership, nationality, social origin, deficiencies or handicaps (ILO Conventions 100 and 111). No exploitation of child labour There shall be no use of child labour. The age for admission to employment shall not be less than the age of completion of compulsory schooling and, in any case, not less than 15 years. (ILO Convention 138) “There shall be no forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour. [...] Children [in the age of 15-18] shall not perform work which, by its nature or the circumstances in which it is carried out, is likely to harm their health, safety or morals.” (ILO Convention 182). Freedom of association and the right to collective bargaining The right of all workers to form and join trade unions and bargain collectively shall be recognised. (ILO Conventions 87 and 98) The company shall, in those situations in which the right to freedom of association and collective bargaining are restricted under law, facilitate parallel means of independent and free association and bargaining for all workers. Workers’ representatives shall not be the subject of discrimination and shall have access to all workplaces necessary to carry out their representation functions. (ILO Convention 135 and Recommendation 143). 16
KJUS Social Report 2015
Payment of a living wage Wages and benefits paid for a standard working week shall meet at least legal or industry minimum standards and always be sufficient to meet basic needs of workers and their families and to provide some discretionary income. (ILO Conventions 26 and 131). Deductions from wages for disciplinary measures shall not be permitted nor shall any deductions from Fair Wear Foundation – Code of Labour Practices 2 / 2 wages not provided for by national law be permitted. Deductions shall never constitute an amount that will lead the employee to receive less than the minimum wage. Employees shall be adequately and clearly informed about the specifications of their wages including wage rates and pay period. No excessive working hours Hours of work shall comply with applicable laws and industry standards. In any event, workers shall not on a regular basis be required to work in excess of 48 hours per week and shall be provided with at least one day off for every seven-day period. Overtime shall be voluntary, shall not exceed 12 hours per week, shall not be demanded on a regular basis and shall always be compensated at a premium rate. (ILO Convention 1) Safe and healthy working conditions A safe and hygienic working environment shall be provided, and best occupational health and safety practice shall be promoted, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Appropriate attention shall be paid to occupational hazards specific to this branch of the industry and assure that a safe and hygienic work environment is provided for. Effective regulations shall be implemented to prevent accidents and minimise health risks as much as possible (following ILO Convention 155). Physical abuse, threats of physical abuse, unusual punishments or discipline, sexual and other harassment, and intimidation by the employer is strictly prohibited. Legally-binding employment relationship 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 arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment. Younger workers shall be given the opportunity to participate in education and training programmes.
17
KJUS Social Report 2015
4.5 Supplier of the Year We evaluate all active manufacturers on a yearly basis. Each department working with our suppliers needs to fill in a questionnaire which is then analysed and rated. The results are discussed with each individual supplier in a face to face meeting. The supplier with the best performance throughout the year in terms of workmanship, quality, social responsibility standard, lead times, delivery dates, communication, innovation, and proactivity is awarded the title KJUS Supplier of the Year and receives the KJUS Vendor of the Year trophy.
This is our vendor of the year 2015
18
KJUS Social Report 2015
6. Complaints Procedure The complaints procedure is an important element of the CoLP. To ensure that the employees are familiar with this procedure, KJUS has asked its suppliers to explain it in conjunction with the CoLP and provide the local telephone number. In addition, several factories have participated in the WEP trainings, which also focus on this issue. Not all manufacturers embrace this step with the same amount of dedication. For example, there are some that only provide minimal instructions to the workers and merely post the CoLP. However, most manufacturers explain the CoLP in
teams. KJUS will make use of the FWF’s offer and try to arrange trainings with the factories and the FWF in some cases. KJUS believes that this will result in an increased sensitivity to social and safety-relevant aspects. In 2015 we had
two complaints which was challenging to us. However, it also showed that our organisation and preparation helped us to respond quickly and professionally to these issues.
Complaints procedure:
Problem
Plaintiff calls FWF
Problem If a person is unsure if she/ he can file a complaint about something, then the person should call the local service number mentioned below each CoLP. Complaint communication to the FWF The worker is asked to explain the problem to the contact person as detailed as possible. The person will also be asked to forward or provide more information or documentation.
FWF handling and first investigation
Brand responsibility and action
FWF handling The FWF in turn tries to consolidate as many requests as possible. The FWF decides whether a complaint needs further investigation, whether the complaint is justified or whether a claim cannot be handled. In this case, the FWF will explain the reason. Brand responsibility Once all necessary details are available, the FWF forwards the claim to the responsible person at the brand. KJUS is asked to contact the supplier’s person in charge or management of claim procedure. KJUS will explain the event and
Proof of success
advise the supplier on the CoLP policies as well as the law. KJUS will ask them to seek a fair resolution to the problem with the person involved. Proof of success After a few days, the FWF will contact the person to see if the problem has resulted in a successful outcome. If it has been solved, the complaint is completed; otherwise the FWF will review the details again with the FWF brand member to clarify with the management and reiterate the urgency of solving the problem. Complaints:
6.1 Complaints 2015 We registered two complaints in 2015. Claim Factory A China Excessive overtime was claimed. Since our leverage in this factory was extremely low we joined forces with 5 other FWF affiliates. Together, we could raise the awareness in the factory management and conditions have improved since the claim. Additionally, a verification audit took place in order to monitor the improvements. It definitely remains a problem for this supplier to reduce
working hours in their peak production season, although we could improve the situation significantly. Claim Factory B Vietnam Excessive over time and salaries below the living wage was complained. As for the wage it was difficult to solve the claim since the factory paid above legal minimum, however, below local living wage. Since the living wage is not legally binding it will be a long process to increase the wages paid in the fac-
tory. On the other side, we did achieve improvement in excessive overtime as the factory now compensates weekend work strictly within the same month. Also confusion about whether overtime is freely chosen was addressed during a worker training program. We additionally arranged a work place education program event in 2015 in order to raise awareness in the management and among workers.
19
KJUS Social Report 2015
7. Training and capacity building 7.1 Activities to inform staff members All KJUS employees are well informed about the FWF and its cause as well as about our membership. New staff gets an extended training session by the person in charge of CSR. In addi-
tion, we train and inform our staff about the latest develops in all CSR respects and also about our efforts, projects and aims within the FWF membership.
20
KJUS Social Report 2015
7.2 Activities to inform agents The communication with agents follows the same process as communication with the producers. KJUS knows each individual producer working for an agent and is also in a position to discuss potential problems during an on-site visit. However, we instruct the agents to ensure that every partner has signed and posted the CoLP. We inspect compliance with this from time to time when we visit the factories.
7.3 Activities to inform manufacturers and workers The FWF is always an important point on the agenda for all supplier visits. Since KJUS regularly meets all suppliers onsite, we can ensure to have an ongoing constructive dialogue about current projects, improvements and claims. We also evaluate opportunities to provide trainings to management and workers. All training activities we will try to enhance going forward.
21
KJUS Social Report 2015
8. Transparency and Communication Transparency is crucial for our credibility and accountability regarding the production process. In 2015, KJUS used the following tools for external communications:
Since we are ranked as a leader FWF affiliate we will also communicate our membership through product hangtags.
– KJUS website, Brand Performance Check and Annual Report – KJUS E-newsletter B2B & B2C – KJUS B2B & B2C catalogue – Press releases
9. Stakeholder engagement There are no key topics or concerns regarding the compliance raised through any of our stakeholders.
22
KJUS Social Report 2015
10. Corporate Social Responsibility We strive for passion and freedom every day and create high-quality products for those who share these important values with us. While doing so, we are fully aware that this kind of freedom is not available to everyone – especially not to many children. Therefore, KJUS is committed to supporting charitable activities granting children access to sports activities. KJUS – and Lasse Kjus personally – support organizations, such as “Right to Play” (www.righttoplay.com and http://www. righttoplay.ch/moreinfo/newsevents/ Pages/newsitem.aspx?articleID=56).
KJUS is also a member of the “Helfetia” organization, a foundation dedicated to skiing and winter sports, giving kids and teens the opportunity to learn skiing and enjoy a great time outdoors.
We strongly believe that through the power of sports and fair play it is possible to create a healthier and safer environment for children.
23
Contact Sandro Zimmermann Production Coordinator sandro.zimmermann@kjus.com +41 41 748 08 49 LK International AG Rothusstrasse 24 6331 Hünenberg / Switzerland
kjus.com