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CONVERSE STATEMENT ON
FORCED LABOR, HUMAN TRAFFICKING AND MODERN SLAVERY FOR FISCAL YEAR 2018
Converse, we believe we have a responsibility to conduct our business in an
ethical way. We expect the same from our suppliers, and, along with our parent
company, NIKE, Inc., focus on working with long-term, strategic partners that
demonstrate a commitment to engaging their workers, safe working conditions and
environmental responsibility. This includes working to combat risks of forced
labor, modern slavery and human trafficking.
following information is to provide information required under the California
Transparency in Supply Chains Act of 2010 as it relates to Converse’s business
practices, and specifically how we address issues of forced labor.
CONVERSE OVERVIEW AND SUPPLY CHAIN STRUCTURE
sells our products through Converse-owned retail stores and through digital
platforms, to retail accounts and through other third parties. Converse’s
commitment to ethical practices in our own operations and our supply chain
begins at the highest level. We are focusing on quality, long-term supply
agreements with fewer factories that are committed to our strict standards of
sustainability and product excellence. Our sourcing strategy prioritizes and
favors these suppliers that show demonstrable leadership in corporate
responsibility and sustainability and who seek to move beyond minimum
standards. As part of our growth strategy, we seek partners who are developing
agile and resilient management systems which enable them to drive sustainable
business growth through minimizing their environmental impacts, fostering a
strong culture of safety and developing an engaged and valued workforce.
interactive map of Converse’s current suppliers including information about the
factory and its workers can be found here: http://manufacturingmap.nikeinc.com/.
The map includes the supplier group, location of the facility, type of products
produced, number of workers, and information on the workforce profile including
percentage employment of women and migrant workers.
CONVERSE’S CODE OF CONDUCT AND STANDARDS TO ADDRESS FORCED LABOR
takes seriously national and international efforts to end all kinds of forced
labor – whether in the form of prison labor, indentured labor, bonded labor,
human trafficking or otherwise.
requirements for suppliers are contained in NIKE’s Code of Conduct and Code
Leadership Standards. The Code
of Conduct lays out the required minimum standards we expect
each supplier factory or facility to meet in producing Converse products and
includes strict requirements around forced and child labor, excessive overtime,
compensation, and freedom of association amongst other requirements. NIKE’s Code
Leadership Standards specify how the Code of Conduct must be
implemented. The document also articulates how we measure factories’ compliance
efforts and progress against our Code of Conduct including specific
requirements on the management of key forced labor risks.
have progressively raised expectations for our factory partners through evolving
standards of our Code of Conduct and Code Leadership Standards. This includes
adding specific requirements to address key risks of forced labor including
prohibiting workers paying fees for employment, requiring worker freedom of
movement, and prohibiting requirements to post bonds or make deposits as a
condition of employment. The Code Leadership Standards also contain specific
provisions related to management of workers with unique vulnerabilities to
risks of forced labor such as foreign workers and interns.
early FY18, we updated our Code of Conduct and Code Leadership Standards to
elevate key expectations around the environment, building and machine safety,
women’s rights, and chemical management, among others. The updates to our Code
Leadership Standards also included changes to further clarify and tighten our
requirements to address risks of forced labor. Examples include a more explicit
prohibition of holding of personal documents by third parties such as labor
agents, and a clear prohibition on posting bonds, deposits or requirements to
participate in mandatory saving programs.
DIRECT SUPPLIERS’ CERTIFICATION OF MATERIALS
requires its finished goods suppliers to verify they are sourcing materials
from vendors that are compliant with NIKE’s Restricted Substances List (RSL)
and NIKE’s Code of Conduct. Converse’s Supply Agreements also explicitly
require suppliers to comply with all local and country-specific labor laws and NIKE’s
Code of Conduct and Code Leadership Standards.
DUE DILIGENCE, RISK ASSESSMENT AND MONITORING
continually evaluates and updates its systems to identify and address risks in
its supply chain, including those related to slavery and human trafficking.
This process includes information from external sources such as risk
assessments for key human rights risks, supplier specific risk profiling based
on location including the employment of vulnerable worker groups and areas of
improvement identified in audits, as well as information on key and emerging
risk areas identified through our engagement with external stakeholders. Converse
is also working towards mapping and understanding impacts further up the supply
chain and to expand its engagement with upstream suppliers of contracted
manufacturers where additional risks of forced labor may occur.
regularly audit contract factories, which are monitored on a schedule based on
their performance. These assessments take the form of audit visits, both
announced and unannounced to measure against the NIKE Code of Conduct, Code
Leadership Standards and local law.
uses both internal and external third-party audits to assess compliance with
our requirements and local law. We also monitor conditions at contract
factories through audits and assessments by independent organizations,
including the Fair Labor Association and the Better Work Programme, a joint
project of the International Labour Organization (ILO) and International
Finance Corporation (IFC).
audits include detailed criteria to look at risks for forced labor or human
trafficking including the employment of vulnerable worker groups such as
foreign migrants, interns and temporary workers and high risk practices such as
payment of recruitment fees or restrictions on freedom of movement.
FY18, following the update to our Code of Conduct and Code Leadership
Standards, we also made improvements to our audit tool. This included adding
new questions and updating existing questions to expand the depth of coverage
of key forced labor risks.
REMEDIATION AND EFFECTIVENESS
works with internal, external, and independent monitors to carry out audits and
help in remediation and capability-building efforts. If we are alerted to an
issue of non-compliance within one of our contract factories, we investigate it
immediately. Where improvements are required, we seek to drive ownership by
factory management to identify and correct issues, and also improve systems to
address root causes in order to prevent future reoccurrences.
also continuously seeks to improve our approach to evaluating working
conditions in our supply chain and working with our suppliers to enhance their
capabilities. In recent years we have made significant changes to improve
monitoring of supplier compliance with our Code of Conduct and Code Leadership
Standards. This included a significant overhaul of our audit program, tools and
processes which included increased auditor rotation, broader use of third party
auditors, and more unannounced audits.
FY18, through our enhanced audit program, we found a few isolated instances of
foreign migrant worker employment practices that were in violation of the Code
of Conduct and Code Leadership Standards. The issues involved workers paying
fees related to their recruitment and employment and one instance where the
facility had penalties for early contract termination. In each case we worked
with the supplier to remediate the identified issues and to strengthen their
systems to prevent future reoccurrence. For the situations where it was found
workers had paid fees for their employment we required suppliers to repay
workers for such fees. In all instances full re-audits are conducted to verify
corrective actions have been completed.
a factory fails to make progress against required remediation, it is subject to
review and sanctions, including potential termination.
TRAINING AND ACCOUNTABILITY
believes suppliers that successfully address the well-being of their workers,
by engaging with them directly to understand their needs, will improve factory
performance. However, we know that our ability to influence our supply chain is
dependent in part on how we build the right incentives and sanctions into our
business relationships. Our Manufacturing Index (MI), introduced in 2012,
scores factories on sustainability – including labor practices – on a par with
traditional metrics of cost, quality and on-time delivery.
more fully integrate our sustainability criteria into sourcing decisions and to
help employees and management who have direct responsibility for supply chain
management, Converse provides training to enhance understanding and compliance
with our sustainability policies and requirements including our Code of
Conduct. That training is required annually for individuals who manage
production relationships with suppliers.
believes addressing critical human rights risks, such as forced labor, often
requires a collective approach. Converse has long partnered with
multi-stakeholder and external organizations such as the Fair Labor
Association, Sustainable Apparel Coalition, the International Labour
Organization’s Better Work Programme, and the Better Cotton Initiative to
address labor risks in our supply chain. Through our partnerships with these
and other organizations we work on a wide range of human rights risks,
including those related to forced labor and human trafficking.
will continue to expand our collaboration with other peers, NGO, organizations
to increase respect for human rights and to accelerate positive impact in the
countries where we and our suppliers operate.