Principles of Fair Labor & Responsible Sourcing Michaela Corr, Licensee Program Manager March 25, 2015 Presentation Overview • Part I – The role of the Principles • Part II – What are the Principles? • Part III – What is the Social Compliance Journey? • Part IV - Questions Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PART I THE ROLE OF THE PRINCIPLES The Role of the Principles Company/HQ Level Commitments • Management systems vital for an effective and sustainable social compliance program Benchmark Key activities associated with successfully applying the Principle Key Performance Indicator (KPI) Demonstrate that the Principle Is being applied Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org The Role of the Principles It takes a change in mindset FLA code Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PART II WHAT ARE THE PRINCIPLES? PRINCIPLE 1 – Workplace Standards Factory Level Commitments • Workplace Code of Conduct – Factory floor standards • Communicating the Code – Translating & Posting the Code • Ensure that all workers & management at all levels are informed – Announcements, Orientation, Training Supervisors/Managers • Inform suppliers and get commitments to audits and remediation Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org POLL QUESTION #1 • Has your company identified staff responsible for social compliance efforts, and have they been trained? – My company has identified social compliance staff and they have received training on regulations, laws, and the monitoring process – My company has identified social compliance staff, but the training opportunities have been limited – My company has identified social compliance staff, but the staff are not clear on their responsibilities – My company has yet to appoint social compliance staff Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PRINCIPLE 2 – Staff Training • Identify staff/service provider responsible for implementing social compliance program – Designate compliance staff – Compliance committee – Agents/intermediaries – Staff/committee responsibilities – Internal auditors • Ensure that training is provided in all areas – Outside workshops – Observing inspections – Recruiting outside assistance Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PRINCIPLE 3 – Committed Suppliers • Written acknowledgement and commitment to standards • Agreement to permit assessment process • Future business conditioned on workplace conditions • Workers to understand standards • Workers/management/ supervisors receive standards training Photo by Arno Gasteiger Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PRINCIPLE 4 – Grievance Mechanisms • Encourage establishment of grievance procedures at supplier facilities • Provide channels for company employees/workers at facilities to contact the company directly/confidentially if warranted • Ensure channel is secure, so workers are not punished/prejudiced for using it • “My door is open” is not enough Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org POLL QUESTION #2 • Do you conduct social compliance monitoring at the factories from which you source your products? Answers are anonymous – Yes, we monitor all facilities and our headquarter level staff are trained on the monitoring process – Yes, we monitoring some facilities each year, but our headquarter level staff doesn’t understand how to assess monitoring reports – We only monitor if it is required by a customer – We do not conduct social compliance monitoring Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PRINCIPLE 5 - Monitoring • Internally monitor an appropriate sampling of factories – Audit key elements: Pre-visit preparation, introductory meeting, visual inspection of the facility, document review (records, personnel files), interviews (general, workers, management), exit meeting with management • Collect, verify, and quantify compliance • Analyze the monitoring results • Track the progress of remediation Photo by The New York Times Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PRINCIPLE 6 –Compliance Information Management • Maintain a database – Compliance database • Generate up to date factory lists • Analyzing audit reports – Identifying trends across supply chain originally siloed within individual documents – Impacts the ability to identify issues and take strategic action Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PRINCIPLE 7 – Timely & Preventative Remediation • Implement a remediation plan – Corrective Action Plan (CAP) • Confirm remediation completion • Conditioning business on compliance standards • Take all necessary steps to prevent persistent forms of noncompliance – Priority issues that call for a broad based approach to remediation Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PRINCIPLE 8 – Responsible Purchasing Practices • Written policies/procedures on production planning address working conditions implications • Alignment of financial terms • Lead time • Annual planning • Training on planning/purchasing impacts • Accountability for purchasing impacts • Engagement with labor compliance team • Development of positive incentives Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org POLL QUESTION #3 • Has your company engaged civil society organizations in the countries from which you source your products? – Yes, our company has a proactive strategy for civil society engagement – Yes, primarily when an issue arises at a supplier and the civil society organization can help – No, we are interested in engaging civil society but don’t know where to begin – No, our only knowledge of civil society organizations is through their campaigning against companies Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PRINCIPLE 9 – Consultation with Civil Society • Maintain links to organization of civil society • Consult knowledgeable local sources as part of monitoring activities • Consult periodically with legally constituted unions • Assure monitoring process is consistent with applicable collective bargaining agreements Quid pro quo relationships must be built Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PART III WHAT IS THE SOCIAL COMPLIANCE JOURNEY? What is the Social Compliance Journey? P1: Define Standards P2: Train Staff P3: Get Commitment P5: Monitor facilities P6: Analyze Compliance Data P7: Remediate NonCompliances P9: Engage Civil Society Orgs Principle 4: Ensure grievance mechanisms Principle 8: Purchase responsibly Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org PART IV QUESTIONS THANK YOU Michaela Corr Licensee Program Manager [email protected] Copyright © 2015 Fair Labor Association. All Rights Reserved. www.fairlabor.org