2011 Global Compliance Report
Message from the Chairman, President and CEO
Message from the Director of Factory Compliance
About VF Corporation Values Statement Performance and Growth
The VF Corporation Global Compliance Framework Owned Manufacturing Ideal Plant Model Terms of Engagement Global Compliance Principles VF Operated Factories • The ideal plant model Partnerships • WRAP Principles and Certification • FLA Membership • FFC Database Audit Framework • Process • Timing • Suppliers • Training • Rating Suppliers by Region Audits by Region Audit Defects by Region
Appendix Supplier Audit • Process graphic/visuals • Factory walk through • Sample questionnaire
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Introduction Welcome to VF’s Global Compliance Report. As one of the world’s largest apparel companies, we take our social responsibilities seriously. This report — an update to our last one published in 2005 — provides an overview of VF’s commitments to associates, business partners and communities, and the steadfast principles under which we operate. At VF, conducting business with high standards is a non-negotiable imperative. We embed our values of honesty, integrity, consideration and respect into the work we do on a daily basis. We believe in providing a clean and safe work environment that is free from discrimination and harassment, and in treating everyone fairly and respectfully. These beliefs drive our efforts to continually strengthen our Global Compliance Program so they support the thousands of associates around the world who make our products and contribute to our success. The following pages outline our approach to ensuring that the factories where our products are manufactured follow our values and adhere to the requirements set forth in our Terms of Engagement and Global Compliance Principles. At the publication of this report, VF had recently completed the acquisition of the Timberland® and Smartwool® brands. Because all data compiled is from 2010, figures from these brands are not included. Moving forward, we will continue to report our progress on social compliance initiatives. In addition, in 2014 we plan to issue our first corporate sustainability report, which will communicate our environmental impacts and our short- and long-term sustainability goals.
4 | 2011 Global Compliance Report | Introduction
* Images shown in the following pages feature VF workers and factories across the globe.
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A message from the CEO Throughout the 30 or so years I’ve worked in the apparel industry, I’ve visited hundreds of factories in dozens of countries. I’ve seen great factories — and I’ve seen some pretty bad ones too. As CEO of VF Corporation, the world’s leading supplier of branded apparel and footwear, I recognize that our company’s reputation is on the line every day in every factory in which our products are produced. We strive to be a leader in factory compliance because it helps ensure the quality of our products, provides us with a stable and productive workforce, and mitigates the legal and other risks associated with poor compliance practices. In 2010 VF had revenues in excess of $7 billion. And with our 2011 acquisition of The Timberland Company, we’re well on our way to reaching $10 billion in revenues. We are proud that we accomplished this growth while maintaining a culture of integrity, honesty, respect and consideration that is at the core of VF’s values. We don’t simply create initiatives around our values; rather, they are the foundation upon which everything we do is based. We approach our Global Compliance Principles the same way — and work to make sure they are embedded into every partnership across our expansive supply chain. Our current Global Compliance program stems from 12 Principles first established in 1996 and has since expanded to our current 16 Principles. These Principles represent our commitment to our suppliers and our customers that each piece of apparel and footwear produced in our name will be made consistent with internationally recognized labor standards, such as the U.N. Global Compact principles and the International Labor Organization’s doctrine for human rights. The pursuit of excellence in compliance cannot be accomplished in a silo. We’re proud of our network of partnerships and third-party organizations that help us meet the high standards we’ve set for ourselves. For example, Worldwide Responsible Accredited Production (WRAP) ensures that VF owned and operated facilities comply with their certification standards through stringent auditing procedures. We work closely with the Fair Labor Association (FLA) at a number of our factories, and we have a great working relationship with the Fair Factories Clearinghouse (FFC), on whose Board our Director of Compliance sits. 8 | 2011 Global Compliance Report | Message from the CEO
VF owns some of the best-known brands in the world — including The North Face®, Wrangler®, Lee®, Vans®, Nautica® and Timberland®. Adherence to a disciplined set of common compliance principles is a thread that is woven globally through all our brands’ operations. As the parent company of a portfolio of more than 30 brands, we recognize our responsibility to provide stakeholders with a greater level of engagement and transparency regarding the social and environmental performance of our brands and products. Through our size and scale, we have the opportunity to shape the future of apparel and footwear across multiple touch points, including those related to where and how our products are made. Our company has seen many changes since we last issued a Compliance Report in 2005. We sold our Intimates business in 2007, which resulted in a consolidation of our factories. We acquired a variety of strong and well-known brands, including Timberland®, Smartwool®, 7 For All Mankind®, Lucy®, Kipling®, Eagle Creek®, Majestic®, Splendid® and Ella Moss®. New brands provide us with new opportunities for growth — but also present us with challenges as we consider the goals we set forth in 2005. Since our last report we have improved the process of integrating brand acquisitions into the VF portfolio by incorporating a much more stringent introductory period of audits to help these facilities more rapidly meet our standards. At the end of the day, we don’t just have to answer to our shareholders and our customers; we also hold ourselves accountable to those in the communities in which we operate on a daily basis. Personal responsibility is the key to our success and we will continue to aggressively pursue the highest standards possible — for our customers, investors, employees and partners.
Eric C. Wiseman Chairman, President and Chief Executive Officer
A message from the Director of Factory Compliance This year marks the 15th anniversary of the Factory Compliance program at VF. The program began in 1996 when we published our first Terms of Engagement document for our suppliers. Our first factory compliance audits were held the following year and were conducted by our quality control auditors. We built our first factory database in 1998 and while we have changed our internal reporting platform several times since then, those original factory audit reports are still accessible in our system. In 2000, we had four associates who were dedicated to factory compliance. We now have 35 full-time associates in 12 different countries, and three of the original four are still on the compliance team. In 2010, VFâ€™s factory auditors conducted 1,785 factory inspections in 62 countries. Since our last Global Compliance Report in 2005, we have been building the capacity of our teams and programs through our affiliation with the Fair Factories Clearinghouse (FFC) and the rigorous certification of our audit team through the International Register of Certificated Auditors (IRCA). Through the FFC factory database, which we share with many other apparel and footwear companies, we are able to contribute audit information and collaborate on future factory inspections. Meanwhile, our affiliation with IRCA has afforded us the opportunity to certify our internal audit team against a set of globally accepted factory monitoring standards.
In my time with VF, I have traveled more than 2 million miles, visited 58 countries and more than 400 factories, and I have seen some tremendous progress in the working conditions of the apparel and footwear industry. While VF and its brands still have a ways to go, the Global Compliance Principles VF factories adhere to have helped contribute significantly to the reduction of child labor in the apparel and footwear industry. Also, many more workers now have access to clean drinking water and work in a safe and healthy working environment than when VF began this journey. Many challenges still lie ahead with issues such as freedom of association and factory safety. We will face these challenges with the confidence our past success has provided, and work with others in our industry to continue to raise the bar for success in the future.
Ron Martin Director, Factory Compliance
10 | 2011 Global Compliance Report | Message from the Director of Factory Compliance
About VF Corporation With revenues of $8.5 billion in 2011, VF is a global apparel and footwear company, with a diverse, international portfolio of brands and products that reach consumers wherever they choose to shop. With our expertise in both the art and science of apparel and footwear, we have built a sustainable base for continued long-term success. Our brands are sold in more than 150 countries through 47,000 retailers in all channels of distribution, from mass market and department stores to specialty retailers. In addition, we own and operate more than 1,000 retail stores. Many of our brands also sell products directly to consumers over the Internet.
Sportswear With its strong nautical heritage and classic American design, Nautica® is an iconic brand. In addition to men’s and women’s sportswear, the Nautica® brand is licensed across a variety of categories including fragrance, home accessories and eyewear. Our Sportswear coalition also includes the Kipling® brand’s U.S. business.
Sourcing and manufacturing are managed through our Global Supply Chain organization, which oversees the production of 500 million items annually at more than 1,400 owned or contracted facilities in locations around the world. VF’s world headquarters are located in Greensboro, North Carolina, where our senior management team is based, along with our corporate Strategy, Finance, Global Business Technology, Global Supply Chain, Law, Sustainability, Internal Audit and Human Resources teams. Our portfolio of brands is managed under an organizational structure that supports our diversified
business model. Brands with affinities in terms of consumer lifestyle and merchandise category are
Formed in 2007, Contemporary Brands consists of 7 For All Mankind®, Splendid®, Ella
grouped together within our coalitions, which include Outdoor & Action Sports, Jeanswear, Sportswear,
Moss® and John Varvatos®. Inspired by modern design and a cultivated lifestyle, these
Contemporary Brands and Imagewear.
brands offer contemporary apparel, footwear and accessories to consumers who appreciate sophisticated products and high-quality fabrication.
Outdoor & Action Sports The success of our Outdoor & Action Sports brands is based on our ability to forge strong and
authentic connections with specific consumer lifestyles like hiking, outdoor adventure, skateboarding,
Our Imagewear coalition is comprised of two successful lines of business: Image and
surfing and yoga through brands such as Vans®, The North Face®, Kipling®, Napapijri® and lucy®. In
September, 2011 we completed the acquisition of The Timberland Company, adding the Timberland
and Smartwool® brands to our Outdoor portfolio of brands.
Our Image brands deliver the durability and service excellence that our commercial, government and industrial laundry customers demand. Among our uniform clients, we proudly supply the entire U.S. Transportation Security Administration workforce, outfit over 150,000 FedEx employees and service police departments across the U.S. We also provide workwear and safety apparel and footwear to a wide range of customers in the manufacturing, automotive, hospitality and restaurant industries. Our Licensed Sports Apparel and Footwear business partners with the biggest names
in sports, including Major League Baseball, the National Football League, the National
With a long heritage and approximately $2.5 billion in annual revenues, VF sells more pairs of jeans
Basketball Association, the National Hockey League and most major colleges and
than any other company in the world. We continue to drive success in our core Lee and Wrangler
universities in the U.S.
brands by extending into additional categories, including shirts, shorts, accessories and other casual apparel products.
12 | 2011 Global Compliance Report | About VF Corporation
Our Performance and Growth
Our people are the source of our success. With sales and manufacturing in over 75 countries,
Since our 2005 Compliance Report, our revenues have risen 36%, from $5,654 million
VF associates share a deep commitment to diversity â€” in people and ideas. We seek to
to $7,702 million in 2010. Earnings per share increased from $4.23 in 2005 to $6.46 in
conduct business with the highest levels of honesty and integrity and to foster a positive
2010. In February of 2012 we announced that 2011 revenues had reached a record $9,459
working environment based on creativity, collaboration and congeniality.
million, reflecting strong organic growth across our businesses as well as the Timberland acquisition, which was completed on Sept.13, 2011. Earnings in 2011 rose to an all-time high
Strong values guide everything we
of $7.98 per share.
do â€” particularly our relationships with the associates around the
We take a holistic approach to corporate
VF is a publicly-traded company listed on the New York Stock Exchange trading under the
world who comprise the VF family.
responsibility, and compliance is a component
symbol VFC. For more information on VF, its brands and its financial performance, please
We work hard to provide them with
of our overall sustainability vision. In 2009,
clean, safe work environments,
we created a Sustainability Council, made up
free from discrimination and
of associates from across our coalitions and
harassment. We support the right
functions, to develop our sustainability vision
to fair compensation, the right
and framework. Approved by VFâ€™s Operating
to associate freely and bargain
Committee in 2010, this vision incorporates
our social and environmental compliance
We conduct business with
associates, customers, consumers,
At VF, we seek to conduct our business with the
suppliers and all others on an
highest levels of honesty, integrity and respect.
honest, fair and equitable basis, as
These values are embedded in our approach to
described in detail in our Code of
sustainability, which reflects our commitment
Conduct, which can be found on
to operating our business so future generations
our website, www.vfc.com.
can live with cleaner water and air, healthier
VF Corporation Financial Highlights Revenues (in billions)
Diluted EPS (in dollars)
2005 2006 2007 2008 2009 2010
2005 2006 2007 2008 2009* 2010* *excludes noncash impairment charges for goodwill and intangible assets
forests and oceans and a stable climate. By actively encouraging our associates to lead us
Dividends Per Share (in dollars)
in an environmentally and socially responsible direction, we will innovate to deliver sustainable products and services to people around the world. In this way, we will create value for our business and the communities in which we operate, while continuously reducing our impact on the environment.
14 | 2011 Global Compliance Report | About VF Corporation
Year End Stock Price
2005 2006 2007 2008 2009 2010
2005 2006 2007 2008 2009 2010
16 | 2011 Global Compliance Report | About VF Corporation
Global Compliance Framework
All of our owned manufacturing plants participate in the Worldwide Responsible Accredited Production (WRAP) Certification Program. WRAP certification requires that an independent, accredited monitor perform unannounced audits to determine compliance with twelve Production Principles, and also conduct confidential employee interviews with associates to satisfactorily corroborate the facilities’ responses.
The Global Compliance Framework is a set of guidelines and programs to ensure the individuals who contribute to VF’s success are treated with respect and guaranteed their basic rights to fair compensation; to associate freely and bargain collectively; to
across its supply chain.
The Ideal Plant Model
This framework ensures that VF-owned and operated facilities as well as our suppliers
All of the factories we own and operate are subject to the requirements set forth in
and licensees understand and comply with our standards and includes the following
the VF Corporation Ideal Plant Model (IPM), which since 1993 has defined the safety
standards for our owned and operated facilities. The IPM sets forth criteria that are
work free from discrimination and harassment; and to work in a safe, clean workplace. VF also works diligently to verify and ensure the absence of child and forced labor
used to objectively grade safety performance in certain key areas against best-in-class • The Ideal Plant Model sits at the core of our owned manufacturing compliance program and helps direct our external facing programs.
and/or industry leading safety practices. The IPM was developed to provide safe, clean and comfortable working environments for all of our associates.
• VF’s Terms of Engagement serve as the cornerstone of our relationship with external factories. Every contracted supplier must sign our Terms of Engagement in order to produce VF products. • Our Global Compliance Principles (GCP) are the basic requirements that suppliers must meet in order to produce VF apparel and footwear. These are explained in detail on page 28. • Partnerships and Stakeholders are an integral component to VF’s global work to help us continually improve our standards and processes.
During unannounced audits, facilities are evaluated on the usual safety issues such as:
• Chemical safety • Electrical/mechanical hazards • Personal protective equipment • OSHA standards and other applicable health and safety codes Additional evaluations are undertaken to assess our facility managements’ involvement in safety protocols and their ability to analyze accidents and incidents, enact changes to prevent similar recurrences and respond to recommendations received during previous audits or from outside sources such as insurers’ inspections.
The audit requirements were developed to meet Occupational Safety and Health Administration (OSHA), National Fire Protection Association (NFPA) and other regulations. In many cases, an even stricter requirement has been defined and adopted as a VF best practice. All facilities, regardless of their location inside or outside of
With over 15,000 employees working in our owned manufacturing plants producing
the U.S., must satisfy the IPM requirements or host country regulations, whichever
30% of our products in 2010, we clearly understand the importance of taking
are more stringent. Those facilities found to be in compliance and attaining a score
compliance seriously. Internal manufacturing capabilities give VF control over the
of at least 97%, with no deficiencies in the serious Life Safety category, and which
many areas covered by our Global Compliance Principles. Our internal teams work
have accident rates less than the current industry-specific standards published by the
to provide a positive working atmosphere within our factories, ensuring that our
Bureau of Labor Statistics, are eligible for the coveted VF Safety Excellence Award. In
associates are treated fairly and are given the opportunity to raise concerns, ask
2010, 50% of the audited VF facilities achieved this award. The overall average score
questions and share ideas.
for owned facilities was 96.9%.
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Our owned and operated manufacturing plants are also subject to our Business Code of Conduct, Ethics Helpline reporting, human resources policies and other policies and programs available to our facilities. Facility managers are trained in the requirements of the IPM and occupational safety and health standards.
5. Ergonomics Ergonomics is the study of the man/machine relationship, with the goal of matching the workplace to the worker. VF Risk Management leads the apparel and footwear industry in the development of an ergonomic program designed to prevent repetitive
All of VF’s facilities are monitored annually for compliance with the IPM and most of
motion disorders or cumulative trauma disorders. The expectations in this area are to
those audits are conducted independently and unannounced. After completing the
have all workers trained in ergonomic principles and for engineering to evaluate jobs
annual audit, the auditor assigns a rating to each of 17 evaluation criteria, which are
on an ongoing basis for work design improvements. The performance issues evaluated
include training, medical management, documentation and employee inquiries.
1. General Guidelines
This criterion evaluates the compliance level to the general safety culture of the
Lockout/Tagout is an OSHA mandated safety program that is designed to protect
operation. Rating management involvement or pro-action toward safety activities is
workers against unexpected start-up of equipment and machinery that is being
more subjective than other performance issues but is an extremely important aspect
serviced or repaired. The standard requires that all potential sources of energy, such
to evaluate. The performance issues considered include new hire orientation, safety
as electricity and compressed air, be de-energized and locked out to prevent the
guidelines/safety policy, management involvement and on-site outside contractors.
equipment from starting while it is being repaired or serviced. The performance issues considered include training, procedures, equipment and employee inquiry.
2. Housekeeping The term housekeeping is used in a very broad and comprehensive sense to include:
7. Hazard Communication Hazard Communication — Hazcom or Right-To-Know — is an OSHA mandated safety
• Tidiness and order
program whose purpose is to ensure that information concerning the hazards of
• Waste control
chemicals is transmitted to the employees working with or around those chemicals.
• Storage of goods
This standard requires a high degree of employee training, labeling of hazardous
• Smoking control
chemicals and availability of Material Safety Data Sheets (MSDS) for each hazardous
• Aisle way arrangement|
chemical. The performance issues considered are documentation, training, labeling,
• Exterior maintenance and landscaping
program organization and employee inquiry.
• Equipment and operations arrangement A good housekeeping program has many benefits including reduced operating costs,
8. Occupational Health
material conservation, better use of floor space, reduced fire hazards and improved
Health exposures vary from facility to facility but there are common issues that need
morale. The overall impression of a facility is influenced by the housekeeping more
to be addressed. The intent of this section is to determine if the management of the
than any other single factor. The performance issues considered include trash removal,
facility has evaluated and implemented controls as necessary to deal with health
unblocked aisles, smoking and general appearance.
issues, including bloodborne pathogens, noise and formaldehyde, among others.
3. Safety Committee
9. Facility Safety Hazard Controls
This section evaluates the safety committee activities and how those activities
The intent of this survey is to determine if the management of the facility has
compare with the VF Corporate Safety Guidelines concerning Central Safety and
evaluated and implemented controls as necessary to deal with safety issues, including
Health Committee organization. The performance issues considered include safety
“powered industrial trucks” operation and training, storage of hazardous materials and
committee organization, documentation of the activities and meeting content.
4. Loss Review Accident investigation is a very important aspect of the loss control efforts. The performance issues evaluated include use of guidelines and recommendations, as well as the timely, proper entry and classification of incidents onto the OSHA Log.
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10. Electrical/Mechanical Safety Hazards
15. Personal Protective Equipment
This separate criterion is included to provide the needed emphasis on isolating
The assessment/equipment selection, training and utilization of personal protective
electrical and mechanical hazards presenting a high risk of injury or death that are
equipment (PPE) are evaluated here, in compliance with OSHA’s PPE standard based
present in most facilities. The performance issues considered include electrical training,
on hazard assessment.
electrical service, machine guarding, employee inquiry and maintenance programs.
11. Environmental/Regulatory Concerns
16. Special Emphasis Programs This criterion evaluates the effectiveness of several key programs required by OSHA
Each facility is affected by environmental regulations to differing degrees based upon
Standards that deal with the use of dust masks and respirators, entering confined
the type of operation or process, state or local legislation, past environmental/waste
spaces, welding/hot work permits and fall protection.
practices and physical location. The Ideal Plant Model is not intended to be a guide for compliance with the vast amount of environmental legislation. Rather, this section
17. Business Continuity and Business Recovery Planning
serves as an evaluation tool to measure management’s commitment to complying with
This criterion evaluates the preparation of the facility to recover from specific
regulations and the level of pro-action in these regards.
The major acts concerning environmental legislation are: Resource Conservation and Recovery Act, SARA Title III, Underground Storage Tanks, Clean Water Act, Bloodborne
Health and Safety
Pathogen Medical Waste Disposal, Clean Air Act, Waste Minimization and Storm Water
We emphasize the health of our associates and their communities,
beginning with a facility’s concept phase and continuing through annual internal environmental audits and regular compliance with environmental
12. Emergency Procedures There are numerous emergencies that need to be planned for from a safety Perspective in order to reduce the impact of that emergency to personnel in the organization. Disasters such as fire, flood, tornado and earthquake are potential threats to personnel. The performance issues considered include plans, drills, exits, first-aid and incidents of workplace violence.
agencies’ laws. However, VF’s safety and health programs go far beyond compliance and audits. The Hepatitis B vaccine is offered to associates having a potential occupational exposure free of charge at many of the locations where the risk of contracting Hepatitis B is elevated. Seasonal flu and pandemic (e.g. H1N1) vaccines are also often provided at no cost. Educational posters dealing with the prevention of illnesses and posters reminding associates to use ergonomically correct postures for various
13. Property Conservation
activities are prominently displayed throughout the facilities. Many of
This criterion evaluates the effectiveness of the facility’s fire protection self-inspection
associates in response to contests sponsored by the VF Risk Management
program and responsiveness to fire emergencies by a designated team. Performance
Safety Promotions Committee. Other award programs have recognized
issues include adequacy of fire self-inspections to assure valves remain in the open
a VF Safety Associate of the Year, and many facilities offer an award that
position and fire pumps are maintained operational; use of formal procedures to follow
rewards associates for being anonymously observed going beyond their
in the event that a fire protection system must be taken out of service; the adequacy of
usual responsibilities in the area of safety. Opportunities to obtain training
the site’s fire emergency response team; fire extinguishers; and a fire prevention plan.
in the use of fire extinguishers, fire hoses, AEDs, etc., are made available,
14. Response to Recommendations and Loss Documentation
these posters, as well as safety-themed calendars, have been created by
along with opportunities to learn first aid and CPR. Not only are these skills helpful during an incident within a facility, but this training has often proven
This criterion evaluates facility management’s response to recommendations
valuable outside of the workplace. Committees comprising a Green Team
generated from outside resources. Such outside resources include: OSHA, EPA, the
that deals with sustainability issues, or comprising the facility’s Central
local or state regulators, insurance and engineering service providers, VF Corporate
Safety and Health Committee, encourage participation by associates
Risk Management Department and VF Risk Management Task Force directed audits
regardless of job title, providing opportunities to improve the workplace
or assessments. The responsiveness by the facility management to outside generated
and community and to personally “make a difference.” Specialized
recommendations is a strong indicator of the depth of the safety culture within an
trainings, offered both onsite and offsite and taught either by VF staff or
organization. Additionally, claims management requires proper documentation to
by outside trainers, provide associates with opportunities to grow in their
ensure claims are controlled and administered properly.
current job while preparing for career advancement as opportunities arise.
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The VF Corporation Terms of Engagement The cornerstone of VF’s global compliance framework is the VF Terms of Engagement.
The Terms of Engagement, which include the Global Compliance Principles, ensure
VF will only do business with contractors, suppliers and agents who
that our suppliers adhere to a single set of policies, despite cultural and legal
operate within a set of ethical standards compatible with VF’s Code of
differences among the many countries where VF produces or sources goods.
These Terms also ensure that our apparel and footwear is manufactured in a manner compatible with the high standards that have contributed to the outstanding reputation of our brands and our company.
Legal Requirements VF will only do business with contractors, suppliers and agents that
VF requires all suppliers to submit a signed Terms of Engagement document prior to
comply with the applicable laws and regulations of the jurisdictions in
the placement of any orders for VF products.
which they operate.
By agreeing to the Terms of Engagement, each contractor, supplier and agent agrees to abide by and implement them and to require each VF-approved and authorized subcontractor to do the same. A failure to meet this commitment will compel VF to reevaluate, and possibly terminate, the relationship with the supplier.
Intellectual Property Rights We will not do business with contractors, suppliers and agents who do
Adherence to the VF Terms of Engagement, including the Global Compliance
not respect the intellectual property rights of the company’s brands.
Principles, is enforced through regular audits conducted by auditors employed or contracted by VF.
Product Labeling All VF contractors, suppliers and agents must accurately label the company’s products with the country of origin, in compliance with the laws of the United States and those of the country of manufacture. For products shipped to countries other than the United States, the laws of the importing country will prevail.
Indemnification Every VF contractor will indemnify and hold VF harmless from and against all losses arising out of or resulting from such contractor’s failure to adhere to these Terms of Engagement.
VF Corporation Global Compliance Principles All VF manufacturers will manufacture products in accordance with the VF Global Compliance Principles
26 | 2011 Global Compliance Report | Global Compliance Framework
Global Compliance Principles
Principle 2 – Child Labor
The Global Compliance Principles set forth the basic requirements that suppliers
under 18 years of age, particularly those pertaining to hours of work and working
must meet in order to produce VF apparel and footwear. We encourage suppliers
No person shall be employed at an age younger than 15 (or 14 where consistent with International Labor Organization guidelines) or younger than the age for completing compulsory education in the country of manufacture where such age is higher than 15. All VF Authorized Facilities must observe all legal requirements for work of employees
to promote best practices and continuous improvement in all of their factories. In 1996, we adopted an initial set of 12 principles as VF’s Global Compliance Principles.
Principle 3 – Forced Labor
Since then, these principles have been expanded and modified to keep pace with
VF Authorized Facilities will not use involuntary or forced labor — indentured, bonded
evolving standards and expectations. Principles have been added and modified over
the years, making more explicit our recognition of freedom of association (Principle 6) and to strengthening our affirmation of women’s rights (Principle 10). We also added
Principle 4 – Wages and Benefits
Principle 15 to reflect U.S. Customs guidelines, which require factories to establish
VF recognizes that compensation packages vary by country. All VF Authorized
security procedures for outbound cargo shipments to the United States. Our 16th
Facilities must compensate their employees fairly by providing compensation
Principle reflects our commitment to environmental responsibility.
packages comprised of wages and benefits that, at the very least, comply with legally
The VF Global Compliance Principles are consistent with the core labor standards established by the International Labor Organization in its Declaration on Fundamental Rights and Principles at Work, adopted in 1998. They are also consistent with the codes established by the two principal external independent monitoring and certification frameworks with which we engage - the WRAP and FLA.
mandated minimum standards or the prevailing industry wage, whichever is higher, and shall provide legally mandated benefits. Employees must be fully compensated for overtime according to local law and each employee must be provided with a clear, written accounting for each pay period.
Principle 5 – Hours of Work
These Global Compliance Principles apply to all facilities that produce goods for VF,
VF Authorized Facilities must ensure employees’ hours worked shall not, on a regularly
including all subsidiaries, divisions or affiliates, as well as facilities owned and operated
scheduled basis, exceed the lesser of (a) the legal limitations on regular and overtime
by VF and its contractors, agents and suppliers herein referred to as “VF Authorized
hours in the jurisdiction in which they manufacture or (b) 60 hours per week including
overtime (except in extraordinary business circumstances). Employees must be
While VF recognizes that there are different legal and cultural environments in factories around the world, these Global Compliance Principles set forth the basic requirements all factories must meet in order to do business with VF.
informed at the time of hiring if mandatory overtime is a condition of employment. All employees will be entitled to at least one day off in every seven-day period.
Principle 6 – Freedom of Association and Collective Bargaining
VF strongly encourages contractors, agents and suppliers to exceed these Global
VF Authorized Facilities shall obtain and comply with current information on local
Compliance Principles and to promote best practices and continuous improvement
and national laws and regulations regarding Freedom of Association and Collective
throughout all of their factories. These Global Compliance Principles, or their
Bargaining. No employee shall be subject to harassment, intimidation or retaliation
equivalents, must be posted in all major workplaces and translated into the
in their efforts to freely associate or bargain collectively.
language(s) of the employees.
Principle 1 – Legal and Ethical Business Practices
Principle 7 – Health and Safety VF Authorized Facilities must provide their employees with a clean, safe and healthy
VF Authorized Facilities must fully comply with all applicable laws of the countries in
work environment, designed to prevent accidents and injury to health arising out of
which they are located including all laws, regulations and rules relating to wages, hours,
or occurring during the course of work. All VF Authorized Facilities are required to
employment, labor, health and safety, the environment, immigration and the apparel
comply with all applicable, legally mandated standards for workplace health and safety
and footwear industry. Employers must be ethical in their business practices.
in the countries and communities in which they operate.
28 | 2011 Global Compliance Report | Global Compliance Framework
Principle 8 – Nondiscrimination While VF recognizes and respects cultural differences, employment — including hiring, remuneration, benefits, advancement, termination and retirement — should be based on ability and not on belief or any other personal characteristics. VF Authorized Facilities may not discriminate on the basis of race, age, color, national origin, gender, religion, sexual orientation, disability, political opinion, or social or ethnic origin.
Principle 9 – Harassment VF Authorized Facilities must treat all employees with respect and dignity. VF Authorized Facilities may not subject employees to corporal punishment, physical, sexual, psychological or verbal harassment or abuse. In addition, VF Authorized Facilities may not use monetary fines as a disciplinary practice.
Principle 10 – Women’s Rights VF Authorized Facilities must ensure that women workers will receive equal remuneration, including benefits, equal treatment, equal evaluation of the quality of their work and equal opportunity to fill all positions open to male workers. Pregnancy tests will not be a condition of employment, nor will they be demanded of employees. Workers who take maternity leave (of a duration determined by local and national laws) will not face dismissal nor threat of dismissal, loss of seniority or deduction of wages, and will be able to return to their former employment at the same rate of pay and benefits. Workers will not be forced or pressured to use contraception. Workers will not be exposed to hazards, including glues and solvents, which may endanger their safety, including their reproductive health. Facilities shall provide appropriate services and accommodation to women workers in connection with pregnancy.
Principle 11 – Subcontracting VF Authorized Facilities will not utilize subcontractors in the manufacturing of VF products or components without VF’s written approval and only after the subcontractor has agreed to comply with the Terms of Engagement, including these Global Compliance Principles.
Principle 12 – Monitoring and Compliance VF Authorized Facilities will maintain on site all documentation necessary to demonstrate compliance with these Global Compliance Principles. VF and its subsidiaries will undertake affirmative measures, such as announced and unannounced on-site inspections of production facilities, to monitor compliance with these Global Compliance Principles. VF Authorized Facilities must allow VF representatives full access to production facilities, employee records and employees for confidential interviews in connection with monitoring visits. In addition, VF Authorized Facilities must respond promptly to reasonable inquiries by VF representatives concerning the subjects addressed in the audit.
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Partnerships Principle 13 – Informed Workplace VF Authorized Facilities should inform employees about the workplace standards orally and through the posting of standards in a prominent place and undertake other efforts to educate employees about the standards on a regular basis.
Principle 14 – Worker Residence (Dormitory) Dormitories of VF Authorized Facilities must provide a clean, safe and healthy residence environment. The dormitory design must provide adequate privacy, security and freedom of movement for all occupants. Dormitory facilities must comply with all applicable, legally mandated standards for public domiciles in the countries and communities in which they are located.
As mentioned earlier, we are working with many groups to continuously improve our compliance program, and to apply best practices within the apparel and footwear industry throughout our supply chain. In addition to working with WRAP to certify our owned manufacturing and to supplement our sourced manufacturing factories, we also work with the Business and Social Responsibility (BSR) Mills and Sundries working group, the FLA, and AFFIRM, and we collaborate extensively with the Fair Factories Clearing House (FFC) database. For example, we joined BSR’s Mills and Sundries working group to expand our third-party partnerships for greater stakeholder assurance. In total, we audited approximately 50 fabric mills, 40 of which were done internally and 10 of which were performed by BSR trained third-party auditors.
Principle 15 – Facility Security
We are dedicated to engaging and working with industry peers, working
It is VF policy that all suppliers establish facility security procedures to guard against
groups and Non-Governmental Organizations (NGOs) to foster and
the introduction of non-manifested cargo into outbound shipments. Such items would
promote a healthier and safer work environment. We cannot do this work
include drugs, biological agents, explosives, weapons, radioactive materials, illegal
alone, nor would we want to, so by working together as an industry we can
aliens and other contraband.
expedite better working conditions throughout the entire supply chain.
Principle 16 – Environment
Following are some of the groups we work closely with who have had a positive impact on our compliance programs. We appreciate all the work
VF Authorized Facilities must comply with all laws and regulations relating to
these groups have contributed to not only our programs, but to the entire
environmental protection in the countries in which they operate. Facilities should have
policies and procedures in place to ensure environmental impacts are minimized with respect to energy, air emissions, water, waste, hazardous materials and other significant environmental risks. Facilities are expected to make sustainable improvements in environmental performance and require the same of their suppliers and subcontractors. Violations of these Global Compliance Principles will be appropriately remedied at the cost of the facility. VF reserves the right to take necessary measures to ensure future compliance with these Global Compliance Principles. Failure to comply with these Global Compliance Principles may ultimately result in termination of the relationship between VF and the Authorized Facility. For sample questions from the VF Corporation Facility and Suppliers Acceptance Program questionnaire, please reference the Appendix on page 64.
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WRAP Principles and Certification “VF and Worldwide Responsible Accredited Production (WRAP) have enjoyed a tremendous partnership since its inception in 2000 and the organization’s principles are fully aligned with VF’s commitment to ensuring ethical standards of operation across all VF-owned and licensed factories. WRAP and its extensive membership have been integral to our efforts up and down the
VF was heavily involved in the development of WRAP in the late 1990s and has been a strong supporter since. Candace S. Cummings, VF’s Vice President — Administration, General Counsel and Secretary, has been a member of WRAP’s Board of Directors since its inception. VF accepts WRAP as meeting its factory compliance requirements and encourages all factories it sources from to seek WRAP certification. In addition, VF has been an active partner of WRAP working toward the mutually desired goal of continuously improving social audit quality and standards. By conducting joint audits, independent verification audits at WRAP-certified factories and through regular communications, VF and WRAP have helped each other ensure the high factory compliance standards they uphold are being properly maintained.
supply chain to establish best practices and hold all facilities that VF engages
We use WRAP for our owned and operated facilities, of which 31 out of 32 are
to lawful, humane and ethical production.”
WRAP certified. Our new facility in Egypt has yet to undergo the certification, but in 2012 we plan to implement the Ideal Plant Model and pursue WRAP
Candace S. Cummings,
certification there. We also accept WRAP certification, as well as the Social
Vice President-Administration & General Counsel,
Accountability International 8000 certification, for contracted facilities.
VF Corporation and member of WRAP’s Board of Directors The WRAP certification levels are as follows: In addition to adherence to the IPM requirements, VF-owned and operated facilities
are required to comply with the Worldwide Responsible Accredited Production
Factories that have a clean history and have been WRAP certified for
(WRAP) certification process. WRAP is an independent, non-profit organization
at least three consecutive years. A Platinum rating allows for two years
dedicated to lawful, humane and ethical manufacturing throughout the world. Since
2000, WRAP has grown to become the world’s largest factory-based certification program for the apparel and footwear industry with participation from almost 5,000 factories in over 70 countries. The WRAP program has 12 stated principles that aim to ensure that factories produce goods under lawful, humane and ethical conditions. These principles, which prohibit
• Gold Standard WRAP certification. Facility is audited annually.
forced and child labor and call for the right to associate freely and bargain collectively,
Similar to VF’s “Accepted to be Upgraded” rating, with minor violations
are consistent with those adopted by VF in our Global Compliance Principles
requiring internal follow-up, which occurs every six months until Gold status
(pertaining to suppliers), as well as those set forth by the International Labor
Organization. In order to become WRAP-certified, individual factories must apply to WRAP, and then they are given a self-assessment handbook explaining WRAP’s principles and procedures. After the factories document their adoption of these principles, they notify WRAP that they are ready to be monitored. WRAP then authorizes the factories to hire independent monitors from a pre-approved list. A factory has six months to submit the evaluation report to WRAP with a favorable recommendation. During the one- or two-year certification period, all facilities, especially those that needed a second audit, are subject to unannounced inspections.
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VF Contracted Facilities (WRAP and SA800 Certified) WRAP Platinum 76 WRAP Gold 159 WRAP Silver 14 SA8000 31 For more information on WRAP, please visit www.wrapapparel.org. For more on SA8000, please visit www.saasaccreditation.org/certSA8000.htm
Our compliance process is complemented by our engagement with the Fair Labor
In 2006, we made changes to our contractor database. We replaced our aging
Association (FLA). Many colleges and universities that want assurance that products
Compliance Monitoring System (CMS) with a web-based interactive system called the
bearing their names are produced under fair working conditions are affiliated with the
Fair Factories Clearinghouse (FFC). The CMS database had served us well over the
FLA. These schools require all of their licensees to participate in the FLA program.
years but the technology could not keep pace with the accumulated volume of audit
Three of our brands — JanSport , Lee Sport and Majestic — produce college goods
reports, factory photographs and signed codes of conduct. We took great care to
with college logos, and VF is a “Category B” member of the FLA with respect to
ensure the data from our old system was incorporated into the new FFC database.
The FFC is a non-profit organization that provides an audit sharing platform for global
Every quarter, licensees that are FLA Category B members, such as VF, are required to
brands, with approximately 20 companies sharing a factory database that includes
submit a list of facilities that manufacture products under license from FLA-affiliated
over 30,000 factory names and addresses. Each member company is responsible
schools. In our case, we submit a list of the factories that produce JanSport , Lee
for maintaining its group of contractors, while the audit details and factory history
Sport and Majestic branded products — typically 45 to 50 factories. The FLA then
remain restricted from other members. However, if another member company wishes
audits five percent of the factories on this list.
to engage a factory that is already in the system, it can contact the fellow member
that is already active with a factory and ask them to share audit reports. VF has These facilities are required to comply with the FLA workplace code of conduct
found the other member companies to be receptive to the Sharing Platform, which
and internal company monitoring as well as agree to be inspected by accredited
has the potential to significantly reduce the number of audits and the resulting audit
independent external monitors. The FLA also issues a public report every year on
fatigue of contractors. Another benefit of the FFC database is the ability to store
its members’ implementation of their standards and the remedial steps taken,
virtually unlimited amounts of data which can be used to track trends and support the
reporting of statistical data.
For more information on the FLA, please visit www.fla.org.
So far, FFC members have collaborated with up to eight members in the audit of the same factory. Commonly, in order to become collaboration partners, members establish a “comfort level” with each other; this includes obtaining deeper knowledge about each other’s policies and practices. Typically, members must also agree on a sufficiently inclusive audit scope when collaborating. VF chooses partners that have similarly comprehensive audit principles. VF is the leader in sharing its visits for forthcoming audits in its factories. VF also trains its auditors to share the out-of-compliance issues from audits of factories to the Sharing Platform as a reference for other members. For more information on FFC, please visit www.fairfactories.org.
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The VF Audit Process Oversight of the VF Audit Process The director of factory compliance and his auditing staff report to Scott Moree, VF’s Vice President, Internal Audit, to ensure that the factory audit process is conducted on an objective basis. Each quarter, a report summarizing the results of factory audits is presented by the VP, Internal Audit and to the Audit Committee of VF’s Board of Directors for their review and consideration of risk management matters.
The Contractor Audit Procedure A typical audit can last anywhere from six hours to two days, depending on the size of the factory and the number of workers employed at the location. The auditor begins
At the end of an audit, a closing meeting is held between the factory representative and the VF-authorized auditor, at which time the factory representative is advised of any problems noted during the audit. If problems are noted, the VF-authorized auditor reviews a Corrective Action Plan (CAP) with the factory representative; the factory then has 90-180 days to implement the CAP. Depending on the severity of the problems, a follow-up audit is scheduled 90-180 days from the day of the initial audit to ensure that the CAP has been implemented. The factory has three opportunities to successfully implement the CAP and pass the audit with an “Accepted” rating. Some factories that have improved from an “Accepted to be Upgraded” rating to an “Accepted” rating have gone on to have long-term relationships with VF.
the audit with an opening meeting with the factory manager or his representatives to review the audit process and the Global Compliance Principles. The actual audit includes a thorough review of the facility for Health and Safety, Factory Compliance and Environmental issues. Factory records involving payroll, operating licenses and employee personnel records are examined for legal compliance with local laws. Plus, randomly selected employees are interviewed — in a private and safe environment without the presence of factory managers or supervisors — to evaluate working conditions at the facility. In situations where VF is producing goods under license for another brand, the VF
The development and implementation of a Corrective Action Plan (CAP) is one of the final stages of the audit procedure, if problems are noted within a factory. Plans vary by factory and audit, but each provides a prescriptive approach for addressing a range of issues within a factory so that it remains fully in-line with VF’s Global Compliance Principles. Examples of actions detailed in a CAP could include improving chemical storage procedures, increasing workers’ lunch and dinner breaks, securing appropriate permits from local governments or installing improved or more efficient equipment.
auditor may be required to gather additional information on behalf of the licensor. In certain countries, the licensor may insist that an independent monitor of their choice accompany the VF inspector on the audit. Factories producing college-branded goods may be subject to unannounced audits by the Fair Labor Association (FLA). If the factory denies the auditor access to the building, fails to provide requested
Following the introduction of the official CAP, a factory must provide initial feedback within the first 30 days. Factories have 90-180 days to fully implement the CAP, providing VF auditors with a clear and specific description of the actions taken and supporting documents and/or pictures for further verification.
documents, or refuses to allow employee interviews, the factory is automatically rejected. In addition, VF will not, under any circumstances, tolerate any attempt to influence the outcome of an audit — either through a cash payment, gifts or any other
At VF, we have made a commitment - to ourselves, to our customers and to our
methods. Any such attempt will result in the automatic rejection of the factory. For
suppliers — that every item of apparel and footwear we make, or that we license others
example, throughout Asia the very first thing an auditor presents to a factory is an
to make, will be made in factories that conform to our Global Compliance Framework.
Anti-Bribery Statement that must be signed prior to the audit. This ensures that the factory understands that there is zero tolerance for attempted bribes. In addition, follow-up audits are performed by different auditors to ensure accountability.
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Timing of Audits It is VF policy to monitor every facility that is involved in the manufacture of a VFbranded product and brands for which VF is licensed to produce. This includes all cutting facilities, sewing plants, screen printers, embroiderers, laundries and packaging locations. Audits also encompass raw material suppliers for knit and woven fabrics. No production can be performed in a facility until a factory audit has taken place. Production includes samples that are regularly produced at the same location as well as bulk orders. Violation of this policy can result in the termination of any existing contracts or licensing agreements. New suppliers must be identified to the VF Compliance Office at least six weeks prior to the anticipated start of production. On average it takes three to four weeks to schedule and execute an initial factory audit. Factory audits will be conducted by a VF Compliance Auditor or by an accredited third-party audit company. The facility manager and any associated agent will be notified prior to the audit. Apparel and footwear manufacturing cannot begin until the VF Terms of Engagement have been signed and the facility has successfully passed an initial audit. Violation of the Terms of Engagement can result in the termination of existing contracts, purchase orders and/or apparel licensing agreements. After the initial audit, our policy is to inspect every factory a minimum of once per year for the duration of the relationship with VF.
Exceptions to the Supplier Audit Process In certain limited situations, VF is willing to grant partial exemptions from our supplier audit process. These cases are as follows:
Outside Certification Factories may be exempted from a VF supplier audit if they are currently certified by an internationally known factory certification program, such as SA8000 (sponsored by Social Accountability International) or Worldwide Responsible Accredited Production (WRAP). To qualify for an exemption, the supplier must furnish VF with the letter of certification clearly showing the program name, factory name and address, registration number, and the certification expiration date. We do not accept letters of certification from other manufacturers or retailers. VF may perform random audits to validate the effectiveness of these outside certification programs.
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• Licensees. Each licensee must present a list of its suppliers to VF prior to the
Suppliers, whether involved in direct or licensed production, that have a relationship
placement of any order for the production of VF-licensed apparel or footwear.
with VF as a result of an acquisition by VF must be audited and submit a signed
To be eligible to start production of VF licensed apparel or footwear each facility
Terms of Engagement within 12 months of the acquisition. VF will organize a training
must sign the VF Terms of Engagement and pass a factory audit.
session within 60 days of the acquisition in order to clarify compliance requirements and begin the process of preparing suppliers for the initial audit.
In prior years we did not do a credible job of keeping track of our licensee suppliers. VF’s compliance policy states that all licensee factories must be held to
Due to the challenges of transitioning into the VF compliance program, factories
the same standard as contractors in VF’s supply chain. Each licensee is responsible
that receive a “Rejected” status after the initial audit are given an extra three months
for reporting active factories to its respective VF brand or coalition. In 2010,
to achieve the “Accepted to be Upgraded” level. During this three-month period,
we conducted a webinar to educate all VF licensing managers and compliance
the affected VF brand(s) will be able to continue to place orders with the factory.
personnel with regard to reporting standards for licensee suppliers. Embedded in
However, if the factory fails to be upgraded in the re-audit, no further orders may
the webinar were a new set of guidelines for reporting protocols, frequency and
penalties for non-compliance. Also, our licensing community generally includes non-apparel or footwear items such as furniture, rugs, eye glasses, wrist watches,
In our last report we acknowledged that, from a compliance perspective, we had not
umbrellas, etc. In many cases, we found that factories in these non-apparel
done a good job of rapidly integrating new brand acquisitions into the VF portfolio.
or footwear industries had never been subjected to a compliance audit and
Up to that point we had assumed that new acquisitions would have a fully compliant
consequently failed our inspection. While still enforcing critical issues such as child
supplier base that would be up and running from day one. We have now implemented
labor, forced labor and minimum wage, we have expanded the time parameters
a program whereby each acquisition is followed by a 60-day introductory period.
for non-apparel suppliers to become fully compliant. If a factory has non-critical
During this 60-day period we contact the new brand and explain the VF factory
issues, and is rated as “Accepted to be Upgraded,” we will give them 12 months
compliance program. We provide program literature, access to our factory database
before a follow-up audit is required, instead of the customary three to six months.
and we conduct introductory seminars for suppliers where appropriate, and at the end of the 60-day period we begin to audit each of the new suppliers. Any rejected facility is given three months to reach the level of “Accepted to be Upgraded.”
• Facilities that manufacture promotional items. Promotional items include items given to retailers, customers and employees, such as key chains, coffee mugs, pens, umbrellas and similar products. The manufacturer of such items must
Audit of Supplier Facilities Every supplier facility that manufactures apparel or footwear for VF and every supplier facility that manufactures for our licensees is audited for compliance with the Global Compliance Principles. We recognize four different categories of supplier facilities that are subject to VF’s supplier audit process:
• Cutting, manufacturing, finishing and shipping facilities, embroidery,
screen printing and laundry facilities. All primary suppliers of VF merchandise
and VF-licensed apparel or footwear must sign the VF Corporation Terms of Engagement and pass a factory audit prior to the placement of an order for VF apparel or footwear. A list of all subcontractors engaged in embroidery, screen printing or laundry activities must be presented to VF prior to the placement of any order for production of VF apparel or footwear. Each facility will be required to sign the VF Terms of Engagement and will be audited. Although a
present a list of suppliers to VF and sign the VF Terms of Engagement. Suppliers may be randomly selected and audited at the discretion of VF. • Raw materials. Raw materials are component materials that are commercially purchased with no VF brand identity, such as fabric, thread, and blank tee shirts, and are out of the scope of VF’s factory audit process. An exception to this policy would be a vertical operation where the raw material is manufactured at the same address that the final assembly of VF branded apparel or footwear takes place. Such a facility would require a full audit. As described previously, our new partnership with BSR is expanding our audit process of fabric mills. Facilities that manufacture commercially-purchased products and raw materials are not subject to VF’s factory audit process. These include the following: • Commercially-purchased products. Commercially-purchased products are “off the shelf” products purchased by VF for resale. Such products include industrial
determination to audit the factory will depend upon the country of origin and
work shoes, caps, jackets and similar items sold as part of uniforms. Suppliers of
the volume of production, most such facilities are, in fact, audited.
these products must sign the VF Terms of Engagement, acknowledging that their suppliers are compliant with applicable laws and regulations regarding workers’ rights, health and safety. These factories are not audited by VF.
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Training VF Corporation recognizes that many of our suppliers benefit from training — both in understanding our compliance requirements as well as in developing their own procedures to meet these requirements. We either conduct these training sessions ourselves or hire independent contractors to do so. For example, we used Bureau Veritas, an international social auditing firm, to build employee relationship management skills in facilities in El Salvador. Also, after we acquire a company, we hold training sessions for suppliers to the newly-acquired company. Before we begin working with a supplier, we introduce VF’s Global Compliance Framework and Factory Audit Process to the facility’s management team. Key suppliers that are having problems meeting our compliance requirements are offered the opportunity to receive training and support from VF auditors or independent consultants, provided that they demonstrate a commitment to meeting the goals set forth in our Global Compliance Framework. If they accept the offer, VF works with the supplier to assess working conditions and develop a training program to remediate the identified problems. VF policy dictates that purchase orders can be placed with this supplier only upon notification from the trainer that a program has been established. A final review is conducted by VF auditors at the conclusion of the training to ensure compliance. All VF associates involved in the procurement of VF merchandise are responsible for the distribution of the VF Global Compliance Principles to authorized suppliers, agents, licensees and factories. In addition, VF requires the Global Compliance Principles to be posted in all major workplaces and translated into the native language(s) of the associates. Since our last report we have made significant progress in providing training for our factory auditors, VF associates, and outside contractors. All of VF’s factory auditors are trained and certified to the standards of the International Register of Certificated Auditors (IRCA). This is an organization that was founded in 1984 in the U.K. to establish and monitor British standards. Over the years the organization has expanded to train auditors worldwide in many different areas including the ISO program. To date, IRCA has certified over 35,000 auditors in 150 countries. Each coalition provides regular training sessions for key employees involved in sourcing and compliance, while we periodically set up training sessions for our suppliers in critical areas. In 2010, we conducted nine supplier training sessions: India (2), China (5), Thailand (1) and Vietnam (1), which involved 193 key suppliers. Topics included water treatment, payroll calculations, and health and safety.
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Facility Ratings At the completion of each factory audit a rating is awarded to each facility. If the audit is conducted by a VF-employed auditor, the factory receives a rating of “Accepted,” “Accepted to be Upgraded” or “Rejected.” If an independent audit company conducts the audit, the factory receives only the audit report and CAP from the auditor; a
The VF Audit Process
12 Month Annual Audit
rating is assigned after a certified VF compliance auditor reviews the audit report. All factories will receive a written notification of the results within seven to 10 working
Areas of Non-Compliance
days of the audit.
The Three Ratings:
Accepted A factory is rated “Accepted” when a thorough audit results in no major outstanding safety, health or labor issues. Any factory that receives an “Accepted” rating is certified to produce VF merchandise or related licensed products for a period of 12 months, at which time an annual audit is necessary to maintain an “Accepted” rating.
No Areas of NonCompliance
In certain cases the certification period can be extended to 18 months. A factory can
Accepted to be Upgraded Orders Placed
qualify for this extended certification period if it has a strong history as a compliant facility, has an internal support structure that can sustain a compliant environment or is located in a country where conformity with the local law is closely monitored. Such extensions are granted at the discretion of VF.
Accepted to be Upgraded If the factory has some minor safety, health, or labor issues, it is given a rating of
No Progress Situation Deteriorated
Areas of Improvement
“Accepted to be Upgraded.” While the factory is authorized to produce VF or related licensed products, VF requires that the problems will be corrected in a timely manner and a follow-up audit will be scheduled within three to six months depending upon
Accepted to be Upgraded
the severity of the issues. If the problems are corrected to VF’s satisfaction, then the status of the factory will be elevated to “Accepted.” If the factory has made no attempt to address the problems at the time of the third visit, the factory will be
downgraded to a “Rejected” status. A factory will receive this rating if it is generally in compliance but certain safety, health or labor issues are discovered during the course of the audit. The types of
issues that would result in this rating include but are not limited to: missing exit signs, incomplete personnel files (including age verification and signed work contracts), obstructed fire-fighting equipment or exits, occasional excessive working hours and inconsistent payment of overtime. A factory will only be rated “Accepted to be
Upgraded” if the factory has committed to correct the problems in accordance with the applicable CAP.
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No Progress Situation Deteriorated
A factory is expected to remediate the items on the CAP prior to the follow-up audit.
Due to political, environmental and human rights issues, there are certain countries
Every factory with this rating has three chances to achieve the “Accepted” level. If
that are deemed unacceptable for the manufacture of VF products. This is a
after the third audit the factory has not attained this level, it is dropped to the status
continually changing situation due to legal and political shifts. Currently, U.S. law
of “Rejected” (discussed below). If a factory is rejected, VF policy dictates that open
prevents trade with Cuba and Myanmar (Burma), and U.S. State Department
purchase orders can be finished and shipped, but no further orders can be placed
permission is required for trade with Iran, North Korea and Sudan. In addition, due
with the facility. In select cases, when a factory straddles the line between “Accepted”
to ongoing issues surrounding the use of child labor in cotton fields, VF does not
and “Accepted to be Upgraded,” or when the CAP can be easily completed and
authorize any sourcing from Uzbekistan.
corroborated with the aid of photographs and documents, the follow-up audit period can be extended — at the discretion of VF — to six months. In our 2005 report, we acknowledged that for a variety of reasons we were not fulfilling the obligation to do a return audit within the three to six month timeframes. Since 2005, we have increased our global audit staff, introduced an audit scheduling function to our systems platform and have included audit follow-up as a group objective that is tied to compensation. We now have the ability to track actual verses scheduled audits and for the last quarter of the 2010 reporting year we achieved a follow-up rating of 93% for on-time audits.
Rejected If serious safety, health or labor issues are found at a factory it is rated as “Rejected.” Incidents of child labor, the use of involuntary or forced labor, excessive working hours, incorrect overtime compensation, locked emergency exits, physical or verbal abuse, attempted bribes or falsified records are automatic grounds for rejection. Other reasons for rejection could include an accumulation of certain types of less serious violations, a history of wage violation or non-cooperation of factory management, such as denial of access to auditors. In these instances, the factory is not authorized to produce VF or related licensed products until the issues are fully resolved. If, at a later date, the factory feels that it has taken corrective action to merit another audit, we will reconsider the facility for production and conduct another audit. If a factory receives two consecutive “Rejected” ratings, no further audits can be conducted until a waiting period of 12 months has elapsed. If a rejected factory is used for VF or related licensed production, or if a factory fails to follow through on agreed upon facility upgrades, VF will cancel any outstanding contracts or licensing agreements. At the end of the audit the factory manager will be verbally advised which status his facility has attained. He will also be presented with a written list of action items for any irregularities that have been found during the audit. After seven to 10 working days the factory manager and any associated agent will be mailed a detailed factory evaluation report.
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It is VF’s intent to treat all suppliers in a fair and honest manner, and to build a foundation for a long-term relationship, so we will help suppliers reach VF’s manufacturing standards to the best of our abilities.
VF Manufacturing and Audits by Region
201 factories / 165 audits
77 factories / 93 audits
United States (5)
489 factories / 722 audits
Middle East / North Africa 47 factories / 64 audits
Central America & Caribbean
97 factories / 95 audits
248 factories / 289 audits
160 factories / 197 audits
Nicaragua (2) Sub-Saharan Africa 23 factories / 16 audits
92 factories / 119 audits
Philippines & Australia 23 factories / 25 audits
2010 VF-Owned Manufacturing Chile and Poland facilities were closed at the end of 2010
VF-Sourced Manufacturing Facilities and Audits **Audits do not include outside certification (SA8000, WRAP)
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Audit Defects by Region The majority of our audited facilities receive “Accepted” or “Accepted to be Upgraded” ratings after inspection. As described above, those facilities that do not meet our standards are given a “Rejected” rating, at which time we terminate our relationship with that supplier. Listed below is an overview of the components of the compliance audit:
• Introductory meeting with facility management • Facility walk-through • Auditing the personnel records • Auditing the time records • Auditing the payroll • Reviewing the policies and procedures • Interviewing employees • Audit recap with management • Follow-up As the accompanying chart illustrates, our supplier audits do reveal a variety of violations of our Global Compliance Principles at those facilities that received “Rejected” and “Accepted to be Upgraded” designations. While these violations are distributed across all regions in which we operate, certain violations are more common than others — and certain regions are home to the greatest number of facilities where code violations are detected. The numbers show frequency of violations found, rather than severity of violations, and give an overall sense of the pattern of violations. As we described earlier, we will work with a supplier for a period of time to allow them to improve their compliance if they demonstrate a commitment to improve. However, we will not rate a factory as “Accepted” until it complies with all of our Global Compliance Principles. The following chart provides samples of defects found by region during 2010. The most common overall violation we observed in our supplier audits is a failure to limit work and overtime hours to 60 hours per week, followed by a lack of emergency evacuation drills. In addition, we have seen a failure to comply with legally mandated minimum wage or prevailing wage standards; a tendency among suppliers to ignore the labor, health and safety laws of the countries in which they are located; and to not properly compensate their employees for overtime. However, we also often find factories eager to do business with VF and willing to upgrade their practices and comply with our requirements.
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Audit Defects by Region Aggregate
General Principle Does the facility comply with all applicable laws of the country in which they are located?
Hiring Practices Does the facility obtain and retain proof of age for each employee? Does the facility comply with juvenile / young worker regulations? Does the facility have proper voluntary overtime practices? Is forced labor not allowed? Does the facility utilize any improper employee deposits or withholding payment practices?
Wages and Hours Does the facility comply with legally mandated minimum wage standards or the prevailing wage, whichever is higher? Are all employees receiving at least the minimum wage? Are employees properly compensated for all overtime? Are accurate time records maintained for employees? Does the facility provide an understandable wage statement? Does the facility keep regular working hours and days? Is a day of rest allowed in each seven day work period? Does the facility limit hours worked to 60 hours on a regular basis?
Worker Management Communication Are workers allowed to join or form worker's organizations without penalty? Does the factory have an employee-management communication system?
Working Conditions Are first aid supplies available? Are emergency evacuation plans posted? Can alarms be heard throughout the factory? Are emergency evacuation drills conducted? Are emergency exits adequate? Are exits unlocked and kept clear? Are aisles kept clear of obstructions? Is emergency lighting in place? Are fire detections and firefighting equipment installed? Are fire extinguishers available and clearly marked? Is machinery equipped with safety devices? Do employees use appropriate protective equipment? Is the workplace free from electrical / mechanical hazards? Is potable water provided with individual drinking containers? Is work surface lighting sufficient? Are sanitary toilet areas available in sufficient quantity? Does the dormitory have sanitary and sufficient toilets and showers segregated by gender? Are sanitary canteen facilities provided? Are hazardous and combustible materials stored securely and safely disposed of? Are Material Safety Data Sheets maintained? Are heavy machinery inspections conducted?
Treatment of Workers Does the facility treat employees with respect and dignity? Does the facility respect women's rights? Are employee records securely maintained on-site? Are workers informed of VF's Compliance standards?
Environment Has the facility documented applicable national and local laws and regulation relating to the environment? Does the facility comply with all environmental permit requirements? Is there proper storage and management of solid waste? Is wastewater treated either onsite or offsite? Are air emission sources equipped with pollution control devices?
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The colors indicate the level of defects found in our audits 0 - 10% 10 - 25 % 25 - 50% >50%
Looking Forward We are proud of the work VF has accomplished with our global compliance program and the progress achieved throughout the management of our supply chain. Even though we set forth lofty goals in our last report, most have been met and surpassed, as have been described in various sections throughout this report. As we look to the future, there are many more challenges that we face due to the evolving regulatory landscape, changes in the global economy and the expanded complexities of supply chain management, along with the resource scarcities and environmental challenges developing throughout the world. Moving forward, we are dedicated to continually improving in the following areas. Continue dedicated work with partners, brands and associations to evolve our factory compliance program. No longer can factory compliance be managed by a single brand, as many industry-wide issues require continued collaboration. For this reason, our next report will be a fully integrated Corporate Social Responsibility (CSR) report addressing the environmental, social and financial impacts of our business, expected to be released in 2014. Track, measure and communicate key performance indicators. We intend to use the Global Reporting Index â€” the global standard for sustainability reporting â€” to track key performance indicators. This will require a greater level of stakeholder engagement throughout our entire value chain, including industry peers, wholesale customers, NGOs, regulatory agencies, suppliers, associates and customers. Reporting to this standard will require a deeper level of supply chain oversight and review â€” something we are committed to expanding in light of the extensive complexities in our industry. Adopt consistent and stringent global standards to streamline the audit and compliance process throughout the supply chain. While we have always maintained high standards with our Global Compliance Principles and the Ideal Plant Model, a more complex and globalized supply chain requires greater collaboration with other brands and companies, in order to avoid confusion from suppliers and customers. Therefore, we will continually adopt best practices established through our industry peers, while leveraging the experience and best practices of acquired businesses. More work remains ahead. We take a great deal of pride in what we have accomplished, but we know there will always be more work to be done. We are excited about what the future holds for us and our brands, and we look forward to further expanding our influence to elevate the global responsibility of the entire apparel and footwear industry.
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VF on the Issues The social compliance landscape is complex and ever-changing. With almost 2,000
In September 2010, as a commitment to the health and safety of workers across the
factories used to produce footwear and apparel around the world, it will remain a
apparel industry, Levi Strauss & Co. and Hennes & Mauritz AB (H&M) became the
constant challenge to encourage the introduction and consistent use of industry-
first to implement a global ban on sandblasting in their supply chains. In so doing,
leading best practices. By working with other industry groups and NGOs, our
these companies went beyond the ban which the Turkish Ministry had imposed within
programs have evolved greatly over the years and will continue to evolve as our
Turkey and extended the ban to all operations globally. Since then a number of other
leading brands and retailers — such as Aurora Fashions, Bestseller, C&A, Carrefour,
Every day, we are faced with challenges such as factory safety, freedom of association, sandblasting and animal husbandry. We face these issues with the values we put forth
Esprit, Inditex, Karen Millen, and New Look — have also announced the elimination of sandblasting in their supply chains.
for our company and try to work toward a fair and just solution for all parties. Below
The aim of this Call to Action is to ban sandblasting throughout the global garment
are some of the bigger issues we faced recently and how we are responding. For more
industry. Signatory companies agree to:
information please visit our website, www.vfc.com, where we will continue to update our approach to these and other issues as they arise.
Sandblasting: The sandblasting of jeans has become a concern as improperly protected operators using silica-based sand can develop silicosis (a respiratory disease caused by inhaling silica dust). VF is encouraging its suppliers to ban the sandblasting process from all their production. When this is not possible, the factory must provide all the necessary personal protective equipment to the workers involved in this process and they must be provided with specific health care checks to avoid any damage to their lungs. In 2010, we committed to eliminate all sandblasting from within our entire supply chain in our jeans production by the end of 2011. Our production managers have confirmed that no sandblasting process is used in any of our owned facilities worldwide.
• Ban the practice of sandblasting throughout their supply chains including but not limited to the use of aluminium oxide, aluminium silicate, silicon carbide, copper slag and garnet for abrasive blasting; • Work with their suppliers in a transition towards alternative methods, after having established the risks and their means of control; • Take the necessary measures to ensure that the ban is effectively applied throughout their whole supply chain. This Call to Action is signed and supported by the ITGLWF and the following brands and retailers: • Aurora Fashions • Bestseller • C&A • Carrefour
VF joined the International Textile, Garment and Leather Worker’s Federation
(ITGLWF) and other brands and retailers to issue the following Call to Action
• Hennes & Mauritz AB (H&M)
urging a ban on sandblasting.
• Inditex • Karen Millen
Call For A Global Ban On Apparel Sandblasting
• Levi Strauss & Co
The International Textile, Garment and Leather Workers’ Federation (ITGLWF) and
• New Look
global apparel buyers and manufacturers issue this joint Call to Action urging an
• VF Corporation
industry-wide ban on the practice of sandblasting in the garment industry. Apparel sandblasting involves projecting fine sand with compressed air to create a worn look on denim and other garments. Sandblasting can be extremely damaging to the health of workers if proper safeguards are not followed, and can lead to a disabling and potentially fatal lung disease called silicosis. In July 2010, after the impact of sandblasting on workers’ health had come under scrutiny in Turkey, the ITGLWF called for a ban on this process. The ban is an important step toward ensuring that no worker — in any garment factory — faces the threat associated with exposure to crystalline silica.
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Bangladesh Fire On December 14, 2010 a fire at one of our contractors, That’s It Sports Wear in Bangladesh, tragically resulted in 29 deaths and many injuries. While the final fire investigation report has not yet been made available, it appears that a short circuit in a breaker box on the 9th floor was the cause of the fire. A number of workers taking lunch in a break area on the 10th floor did not, or could not, evacuate as necessary.
To prevent these types of accidents from happening, VF audits include a wide
Since the fire we have been working with the other brands that had production in
variety of questions designed to ensure that our contractors are safe places to
this facility to ensure that all legally required benefits for the deceased and injured
work. Specifically, the audit questions we ask include:
have been administered. The stakeholders have contributed more than $500,000 to
• Have personnel been trained on safety and security issues? • Is there a program for fire protection/prevention? • Does the facility have emergency evacuation diagrams posted in
conspicuous locations in the facility in the native language(s) of the workers?
• Can the emergency / evacuation alarm be heard in all areas of the factory? • Does the facility conduct fire/emergency evacuation drills at least twice a
year? If “Yes,” are there records noting date and details?
• Does the facility have an adequate number of properly located and clearly
marked emergency exits available?
• Are exits easily accessible, kept clear, and kept unlocked during
• Are aisles kept clear from obstructions at all times? • Are emergency lights placed above exits and stairwells? • Is adequate fire-detection and fire-fighting equipment installed in all areas? • Are appropriate fire extinguishers available, accessible and clearly marked? • Are manual fire extinguishers regularly inspected and marked on tags? • Do the employees know how to use fire-fighting equipment? • Is the local fire department acquainted with the facility?
a humanitarian fund for the deceased families and injured workers. In addition, the brands ensured that these families and workers will receive:
1. Full coverage of funeral costs of the deceased workers 2. Full coverage of medical care - provided by private hospitals for the critically injured 3. Full salary for employees under medical care for injuries incurred during the fire 4. Full salary to families of deceased workers through the time of the compensation payment 5. Offers of modified work positions for returning injured workers based upon post-recovery capabilities along with supportive counseling 6. Commitment to payment of education costs for the children of deceased workers 7. Employment opportunities for family members of the deceased workers To further fire safety opportunities in Bangladesh, we have:
1. Expanded our electrical training for our Asia Compliance Auditors 2. Met with our contractors in Bangladesh to assure their commitment to maintaining safe working environments 3. Worked with other brands in producing safety videos for Bangladeshi workers 4. Made plans to expand our training efforts to include our contractors’ plant electricians, plant safety committees and operators as well as conducting electrical reviews of our contractors
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Uzbekistan Cotton: As a large consumer of textiles produced with cotton we are well aware of the child labor issues in the cotton fields of Uzbekistan. As Uzbekistan is one of the worldâ€™s largest exporters of cotton, we have pledged, along with many other brands, the following: We, the undersigned companies are working to ensure that forced child labor does not find its way into our products. We are aware of reports documenting the systemic use of forced child labor in the harvest of cotton in Uzbekistan. We are collaborating with a multi-stakeholder coalition to raise awareness of this very serious concern, and press for its elimination.
As a signatory to this pledge, we are stating our firm opposition to the use of forced child labor in the harvest of Uzbek cotton. We commit to not knowingly source Uzbek cotton for the manufacturing of any of our products until the Government of Uzbekistan ends the practice of forced child labor in its cotton sector. Until the elimination of this practice is independently verified by the International Labor Organization, we will maintain this pledge. (The above was compiled through the cooperation of the Responsible Sourcing Network. More information is available at http://www.sourcingnetwork.org/cotton/) In addition, we have created a policy that has been communicated to our direct fabric suppliers:
VF Corporation: Policy on Cotton Fiber Sourcing from Uzbekistan There have been ongoing concerns regarding the use of government backed forced child labor during the cotton picking season in Uzbekistan. Uzbekistan is the third largest exporter of cotton in the world and responsible for approximately 10% of world cotton trade. As a result, VF has been participating in a coalition with other leading brands and retailers, industry associations, socially responsible investors and non-governmental organizations to raise awareness of this very serious issue and to convince the Uzbekistan government to eliminate this practice. Until this matter is resolved, we are asking all VF vendors and licensees to cease sourcing cotton from Uzbekistan. We understand that the cotton supply chain is complex and that tracing the origin of cotton in finished products is very difficult. However, we are asking our vendors and licensees to make their best efforts to trace their cotton sources and ensure that Uzbek cotton is not used in any VF product. VF and individual brands may take a more concerted effort to request cotton sourcing information from suppliers and/or proof of due diligence of raw material country of origin in order to further pursue this matter. We greatly value your partnership in this endeavor and look forward to communicating with you on this issue and others in the future. Thank you for your cooperation with our efforts.
For more information and updates on these issues, please visit www.vfc.com/corporate-responsibility
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Appendix We interviewed a number of our auditors from around the globe about their experiences auditing VF facilities. The following is a sample of select responses edited for context:
1. What is the value of auditing to the factory? We believe the value in auditing all owned and contracted factories is to assure management is providing employees a good working environment regarding safety, health and security, and that benefits according to contracts and local law are given to employees. Additionally, it helps reduce the risk of turnover in how VF sources and manufactures its products.
2. What are your biggest challenges as an auditor? While there are many challenges we deal with regularly, a major effort is often needed to ensure the accuracy of record keeping as many factories are becoming smarter and better enabled to falsify their records. Additionally, while VF has put significant effort into developing its Global Compliance Principles, Terms of Engagement and factory oversight, challenges sometimes remain in addressing and collaborating with factory management to improve issues revealed in the factory audit. Another common challenge auditors face in factories across the globe is convincing management that they need to have a small budget in place for the Compliance department so programs and training sessions are scheduled and available to all employees.
3. What do operators think about the audit process? In our experience, operators have expressed a range of opinions regarding the factory audit process. In some cases, operators are truthful and forthcoming when acknowledging issues and utilize the audit team to address inadequacies and improve fairness. A majority of operators believe the audit process provides a more safe and healthy working environment that also prevents abuse from supervisors and top management. Meanwhile, there is a smaller segment of operators that struggle to balance their operations with compliance, in which case they often are less truthful and more likely to try and cover up negative aspects of their operations and view auditors more as policeman than partners.
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4. Give an example of a factory that you’ve worked with that made significant progress (a success story). Lee® Japan’s socks supplier in China is a great example of a factory that made significant progress to earn an “Accepted” rating. In visiting this factory for its initial audit in May of 2009, many violations were noted, including underpayment, excessive work hours, no personnel files and a lack of social insurance. Nevertheless, factory management was extremely willing and cooperative to make
Facility and Suppliers Acceptance Program Questionnaire
the necessary improvements and incorporate the actions required as part of the Corrective Action Plan (CAP). Finally, in January of 2011, during the third follow-up
Below is a sample of questions from the VF Facility and Suppliers Acceptance
audit, the factory was successfully upgraded to “Accepted.”
Program questionnaire. For additional information on VF’s factory compliance and audit policies and procedures, please visit www.vfc.com/corporate-responsibility.
5. Where do you see Compliance in the next five years? Since enterprises are continuing to strive for increased profits and production, it becomes even more critical that they continue to take responsibility for their consumers, employees and environment. As such, compliance — and universal standards — must become a greater focus for the apparel and footwear industry, particularly for companies such as VF and the factories it owns and contracts with
Principle 1 – Legal and Ethical Business Practices • Regarding wages and hours, does the facility obtain current information on local and national laws and regulations? • Regarding freedom of association, does the facility obtain current information on local and national laws and regulations? • Regarding minimum age for employment and related restrictions, does the facility obtain current information on local and national laws and regulations?
to ensure legal and ethical business performance to achieve their social value. With universal standards for factory compliance, there should also be a self-
Principle 2 – Child Labor
assessment tool that helps drive and promote improvements, rather than simply
• Does the facility obtain and retain proof of age for each employee?
treating abuses. To promote this improvement, more upfront education and
• Has the facility verified the employees’ stated age through the interview
training is required to bring factories together to collaborate and share best practices. Ideally, over time and through proper implementation, factories will
process? • Does the facility comply with juvenile / young worker regulations?
become more engaged in shaping and developing the compliance program.
Principle 3 – Forced Labor • Does the facility issue payment of wages directly to employees? • Does the facility have service agreements for contract security guards and / or job descriptions for employee guards that limit their task to normal security matters such as protection of facility property or security for facility personnel? • Do employees have freedom of movement that is not impeded except for the protection of facility property and security of facility personnel?
Principle 4 – Wages and Benefits • Does the facility have practices to assure employees are compensated consistent with their terms of employment and in accordance with the local laws and regulations? • Does the facility prominently post legal minimum wage rates, benefit policies and maximum regular and overtime hourly policies in the native language(s) of the facility workforce and management? • Are all employees receiving at least the minimum wage?
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Principle 5 – Hours of Work • Are facility workers, at the time of hiring, made aware of facility policies and procedures and legal limitations on the maximum hours of work per day, week, and month, both regular and overtime, and the maximum number of hours worked by day and the employee’s acknowledgement? • Does the facility have, utilize and retain time records that reflect the day and
Principle 11 – Subcontracting • Does the facility subcontract any VF production now? • Does the facility have a written approval for using subcontractors for VF production? • Provide name and address information for all subcontractors used for production for VF.
date the employee worked, the number of hours worked by day and the employee’s acknowledgement? • Has the facility defined extraordinary business circumstances?
Principle 6 – Freedom of Association and Collective Bargaining • Regarding freedom of association, does the facility obtain current information on local and national laws and regulations?
Principle 12 – Monitoring and Compliance • Are employee records maintained on-site and in a safe and secure location? • Are payroll records maintained on-site and in a safe and secure location? • Does the factory agree to allow VF representatives to conduct either announced or unannounced on-site inspections to monitor compliance with VF’s Global Compliance Standards?
• Does the factory have a recognized union? • If yes, what percent of workers are members of the union?
Principle 7 – Health and Safety • Does the facility have a written and posted safety and security program?
Principle 13 – Informed Workplace • Does the facility comply with the principle as stated? • Does the facility have a program that insures employees are aware of the posted standards?
• Have personnel been trained on safety and security issues? • Does the facility have a Health & Safety Committee including facility workers and management that conducts regular meetings and keeps meeting minutes?
Principle 8 – Nondiscrimination • Does the facility have a written, posted policy that fully complies with the
Principle 14 – Worker Residence (Dormitory) • Are dormitory residents free to come and go? • Are sleeping quarters segregated by sex? • Does the living space per worker in the sleeping quarters meet the minimum legal requirement and the local industry standard?
discrimination principle above? • Has the facility been free of any discrimination charges filed by employees, regulatory agencies or any outside agency, during the past two years? • Does the facility communicate the requirements of the principle to third parties that may recruit and screen applicants on their behalf?
Principle 9 – Harassment • Is there a facility policy relating to harassment and abuse? • Has the harassment and abuse policy been communicated to management, supervision, workers and third party service providers?
Principle 15 – Facility Security • Does the facility have a written security policy? • Is a security awareness and training program (documented) in place? (Including challenging unauthorized persons, the recognition of internal conspiracies, maintaining cargo integrity, and determining and addressing unauthorized access) • Do buildings protect against outside intrusion? (Physical security should include perimeter fences, locking devices on external and internal doors/window/gates, and adequate lighting inside and outside the facility)
• Does the facility encourage employees to report instances of harassment or abuse through effective communication of the policy and timely resolution of matters reported?
Principle 10 – Women’s Rights • Does the facility have a written policy that fully complies with the women’s rights principle? • Has the policy been communicated to all employees? • Are policies in place and benefits provided for maternity leave?
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Principle 16 – Environment • Has the facility documented applicable national and local laws and regulations relating to the environment? • Does the facility comply with all environmental permit requirements (e.g. for waste water, air emissions, solid waste) • Does the facility record its energy use? (Note Kilowatt / Unit)
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