Child Labor Report 2005|
F. Implementation of Apparel Industry Codes of Conduct
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Implementation of Apparel Industry Codes of Conduct
ii. Active Monitoring
Active monitoring may be done through regular site checks,
formal audits or evaluations, or special visits by corporate staff. The
frequency and intensity of visits vary greatly from company to company. In
addition, some companies may use different systems of monitoring for
different types of facilities. For example, they may focus their site visits
on their larger or more publicized suppliers, or may only monitor those
facilities from which they directly import or which manufacture their
Several respondents indicated that they are currently
stepping up their monitoring of overseas and domestic production facilities.
Some, such as Jones Apparel Group ('Jones') and Kellwood, indicated that
they are in the process of expanding their extensive domestic monitoring
systems to cover international activities.
Respondents had very different views on which type of
monitoring is more desirable:
Some companies feel very strongly that they can do the
best job of monitoring themselves, and have the greatest incentive to do
so. They also believe that monitoring internally is the most efficient
way, since problems are reported directly to management and can be dealt
with more quickly.
Other companies expressed the view that independent,
outside monitors may be able to get a more accurate picture of labor
conditions or may be more credible than internal monitoring.
Internal monitoring, which employs companies' own staff to
monitor for compliance, is the most widely utilized form of active
monitoring among respondents.83 Internal monitoring is most commonly done by
quality control, merchandising or internal auditing staff; country, regional
or contract managers; or senior management. Monitoring of labor policies is
usually combined with monitoring for quality and other standards. While the
personnel conducting the visits are usually specifically trained to monitor
for quality control, it is not always clear that they are trained to monitor
compliance with labor policies.
Some respondents, particularly manufacturers, indicated that
they have a strong in-country or regional presence in many of the countries
where they manufacture, making it easier to conduct frequent inspections of
contractors' production facilities:
Fruit of the Loom, for example, said that contract
managers and field personnel visit foreign facilities on at least a weekly
basis to check on a number of production issues. These personnel are also
trained to look for code of conduct violations and have forms to red-flag
problems for senior management, from which further scrutiny and a warning
may follow. In-country personnel also make suggestions and recommendations
to contractors on how to improve their operations.
Nike stated that it has extensive personnel located in the
countries where it produces, and that each contractor has specific Nike
"in-house" personnel assigned to it. They visit apparel contractors every
two to three days and report back to headquarters with their findings.
The Gap reported that, once it places an order with a
contractor, its in-country staff is constantly monitoring for quality and
compliance with its code, sometimes three to four times a week. These
visits are both announced and unannounced. The Gap also indicated that its
senior field representatives also conduct formal compliance evaluations
every 18 months.
Levi Strauss noted that it has a global infrastructure of
people in the communities where it does business. It stressed that its
employees have the authority - and the responsibility - to take any steps
necessary to ensure compliance, and it has found that in many cases its
employees can work with partners and address issues before they become a
Sara Lee reported that most of its contractors are located
in the same areas as the plants it owns and are constantly being monitored
by Sara Lee personnel. Sara Lee noted that since its contracts are
typically large enough to use entire plants (rather than partial runs),
its personnel have freedom of access to contracting facilities and often
make unannounced visits.
Liz Claiborne staff does scheduled and unscheduled spot
inspections of facilities, and requires all country managers and Liz
Claiborne representatives to complete an annual, 11-page human rights
questionnaire for every supplier.
Tultex Corporation ('Tultex') reported that it charges
regional managers with the responsibility of following up with vendors,
and that these managers make frequent visits to their factories.
VF Corporation has its quality control people check on the
manufacturing process weekly.
Some companies send U.S.-based corporate
staff or special auditing staff to monitor production facilities for
compliance with their policies. Again, in most cases it appears that
monitoring is part of a larger process that includes elements such as
Levi Strauss has a team of 50 full-time auditors who are
based in the regions where they work. These auditors and other in-country
employees visit contractors on a regular basis to review quality,
production processes and Terms of Engagement issues. Levi Strauss said
that all contractors and subcontractors are audited at least once a year,
unless problems are found, in which case they are done more frequently -
sometimes three and four times a year. Audits often include interviews
with employees, both at the factory and away from the factory.
Jones, for example, reported that its U.S.-based quality
control staff, which visit overseas facilities, have been instructed to
make sure Jones' policies are implemented. Jones also indicated that in
1997 its domestic in-house auditing staff will be sent to visit all of
Jones' larger suppliers. Jones anticipated that while the visits are to be
unannounced, Jones' buying agents will probably be advised of the auditing
teams' presence in their country.
JCPenney Company ('JCPenney') reported that it has
instructed its associates and buyers to watch for and report any legal
violations or questionable conduct to management for follow-up and, when
necessary, corrective action.
Fruit of the Loom reported that senior management and/or
corporate counsel conduct on-site contractor audits to confirm compliance
with the company's code and other agreements. These audits include a
review of employment and labor practices, including an on-site
confirmation that workers are of legal working age.
Kmart stated that it is increasing its regular and
surprise on-site inspections of manufacturing facilities. Last year, Kmart
conducted 45,000 visits worldwide through its Quality Assurance
Department. Kmart investigators have a checklist of what to look for
Land's End's quality assurance team and agents visit
existing vendors to monitor standards and assure quality of products.
The Limited reported that its quality assurance and
internal audit teams make regular and unannounced on-site inspections of
Liz Claiborne is requiring non-sourcing senior managers
and employees who visit factories to evaluate working conditions and fill
out a "report card."
In addition to auditing by quality control personnel,
Phillips-Van Heusen recently organized an Employment Practices/Workers'
Rights Task Force, made up of employees who are not directly involved with
production sourcing. These employees, on a part-time basis, periodically
visit contractors worldwide, inspect facilities, and compare their
findings to evaluations done by sourcing personnel. According to PVH, the
task force does not attempt to reach all factories, but tries to reach
representative vendors in all regions. The task force does not reveal
which vendors will be visited. Inspections include a review of facility
documents, and contractors are asked to provide proof of age.
Warnaco indicated that its personnel occasionally make
unannounced visits of foreign contractors to monitor for compliance with
its Business Partner Terms of Engagement.
Some retailers indicated that they concentrate internal
monitoring efforts on those facilities that produce private-label
merchandise or brands sold exclusively at their stores:
Federated stated that it routinely
inspects all facilities that produce private-label products for Federated
for compliance with laws on child labor, as well as safety and health
Nordstrom reported that it conducts random inspections of
contractor facilities in cases where it contracts directly with a
manufacturer for the production of private-label merchandise. These
visits, both announced and unannounced, monitor for compliance with all
applicable laws and confirm that no child or forced labor is used.
Wal-Mart indicated it is increasing its inspections of
domestic and overseas factories, focusing on those factories that produce
lines sold exclusively at Wal-Mart, such as the Kathie Lee line.
Implementation of child labor policies may differ, depending
on whether goods are produced at wholly owned facilities or contractor
facilities, or purchased through buying agents:
Oxford stated that it is quite confident of its own
facilities' adherence to all laws, and made a distinction between
implementation in wholly owned facilities versus contractor facilities.
Oxford Industries utilizes its internal audit staff to periodically check
compliance with applicable laws and Oxford policy in all of its
wholly-owned facilities. For contractors, Oxford reports that it is the
responsibility of the Oxford contract manager or employee who hires the
contractor to take reasonable steps to ascertain that the contractor is in
compliance and to document those steps. Oxford also indicated that
quality-control staff and higher-level managers visit contractor
facilities during production runs a couple of times a year. Oxford stated
that while quality control staff is in plants more frequently, it does not
have the same clout as managers to exact immediate change.
Sara Lee stated that through its direct control and
management of its wholly-owned facilities, it is able to ensure that its
Operating Principles are being implemented and followed at those
facilities. When Sara Lee purchases apparel from a domestic supplier that
has secured the products from a subcontractor, it expects the supplier to
meet the requirements of those principles.
External monitoring, or monitoring of suppliers' production
facilities by buying agents, is used by at least nineteen respondents.84
While some of these respondents rely on buying agents for most of their
imports, others only use buying agents in certain cases.
Dillard Department Stores ('Dillard') charges its buying
agents with the responsibility of periodically monitoring production, to
ensure that quality goals and Dillard's policies are realized, including
that on child labor. These inspections are done three to four times a
year, and agents are required to return a form indicating their findings.
Dress Barn requires its buying agents to monitor
production facilities during the manufacturing process for goods
specifically ordered by Dress Barn. The agents are required to examine a
range of labor and employment practices, and use an extensive audit form
during the visit. This audit form includes questions specifically
addressing child labor.
Mercantile Stores Company ('Mercantile') reported that its
buying agent is responsible for implementation of its child labor policy
and is instructed to be vigilant regarding child labor. Mercantile
believes that its vendors are aware of its child labor policy because they
are required to sign it.
Stage Stores, which currently uses AMC's code (but is
developing its own code), did not specify its monitoring system. However,
AMC - a buyer's cooperative which orders imported merchandise on behalf of
its retail shareholders - indicated that AMC vendors are "aware" of its
code, which contains provisions prohibiting child labor. Vendors go
through an annual certification process, which includes a variety of
quality assurance issues and meeting AMC's code. AMC said that it has
employees in most countries from which it orders apparel.85
In a few countries where AMC orders are small it relies on
"commissionaires," who act as buyer agents.
Venture Stores ('Venture') purchases essentially all
imported apparel through a buying agent. The agent is aware of Venture's
policy not to purchase merchandise from foreign vendors who use child
labor and is required to comply with this policy. While Venture requires
its buying agent to certify that child labor was not used in the
manufacture of any merchandise, it does not indicate how it ensures
compliance, other than through visits by Venture personnel when feasible.
VF Corporation and Sara Lee, when using buying agents,
have them inspect production facilities. VF Corporation's buying agents go
to plants two to three times during the course of production - for an
initial audit, a final audit, and often one in-between.
Kellwood, Nike, Price/Costco, Inc. and Wal-Mart all
indicated that they currently use or have in the past hired outside
auditing, accounting or consulting firms to monitor compliance with their
codes of conduct:
Nike stated that every Nike contractor is subject to
unannounced spot checks by the consulting firm Ernst & Young. Nike
reported that Ernst & Young has been doing audits for several years, and
indicated that while all of its footwear facilities have been audited by
Ernst & Young, not all apparel contractors, particularly those where Nike
has very little production, have been audited. Ernst & Young reviews the
contractors' books and interviews employees, according to Nike. On child
labor, the auditors look at birth certificates or other evidence, if
available. Nike says the auditors conduct interviews with employees away
from their managers. When violations are found, Nike asks the factory
manager to set up a timetable for remedying the problem.
Kellwood said that it recently began using Ernst & Young
and Contractor Services Compliance Corporation to conduct outside
monitoring overseas.86 Kellwood indicated that the initial visits are
scheduled, but once the system is in place the outside monitors will also
do unannounced visits on a regular basis. The monitors do a random
sampling of interviews with workers, according to Kellwood. Kellwood
stated that it deals with the finest retailers, and wants them to feel
confident that they are getting a product of value, made in accordance
with national laws and moral and ethical standards.
It believes outside monitoring is part of the "cost of doing
Costco, Inc. ('Price/Costco') reported that as part of its
quality-assurance program, which has been in place since 1995, it uses an
outside auditor to inspect vendors' facilities. These outside audits are
only done where Price/Costco buys through a U.S. wholesaler - not where
Price/Costco is the importer of record, in which case it does its own
monitoring. The outside auditors look at labor conditions and labor force
make-up, in addition to a variety of quality-assurance issues.
Price/Costco indicated that the outside audits are paid for by the
Wal-Mart hires a third-party agency to
conduct routine visits of overseas factories with which Wal-Mart contracts
The Gap and Liz Claiborne are currently experimenting with
NGO monitoring at some of the contractor facilities from which they import:
The Gap, in cooperation with a number of NGOs, has
worked to develop an NGO monitoring mechanism at Mandarin International,
an independent contractor in El Salvador.
The developments that led up to this third-party
monitoring pilot began with alleged violations at Mandarin, including the
use of child labor, forced overtime, unsafe working conditions,
intimidation of workers to prevent union organizing and firing of union
When The Gap's own investigation of the allegations
regarding Mandarin did not come up with any evidence to corroborate the
complaints, NGOs and human rights groups called for the use of
"independent" monitors. After considering canceling its contracts with
Mandarin and pulling out of El Salvador, The Gap instead signed an
agreement in which it consented to explore the viability of an independent
monitoring program in El Salvador and agreed to re-approve the Mandarin
plant as a Gap contractor once it felt confident that the plant could
effectively implement its code.88
In January 1996, The Gap and some NGOs formed an
Independent Monitoring Working Group (IMWG). Members of the IMWG traveled
to El Salvador to visit the Mandarin plant, met with various parties, and
solicited input from more than 75 U.S. and international human rights,
labor, religious, academic and business groups to develop a working model
for independent monitoring.
The IMWG developed the following definition of independent
monitoring: "An effective process of direct observation and
information-gathering by credible and respected institutions and
individuals to ensure compliance with corporate codes of conduct and
applicable laws to prevent violations, process grievances, and promote
humane, harmonious, and productive workplace conditions."89
In March 1996, Mandarin managers, workers, and current and
former union leaders signed a resolution that included, among other
elements, the formation of an independent monitoring team in El Salvador -
the Independent Monitoring Group of El Salvador (IMGES). With these
developments, The Gap re-approved Mandarin for the production of its
goods. The team of monitors, made up of volunteers of local human rights
organizations, is based near the plant, has regular access to it, and can
receive and investigate complaints from workers without fear of reprisal.90
Liz Claiborne is currently developing its own NGO
monitoring pilot program with the expectation that such a monitoring
capacity will improve reporting on compliance with its Standards of
Liz Claiborne reported that monitors will listen to the
concerns of workers and management, review compliance with local laws,
compare factory practices with its standards, and create mechanisms for
workers to report grievances in privacy, including telephone numbers to
call or locked drop-off boxes for written complaints.
According to Liz Claiborne's survey response, "key
elements for the program will be independence and an understanding of
local issues." Liz Claiborne also noted that it expects to adapt and
improve the program based on data and input from the pilot effort, the
monitors, and involved NGOs and governments.
iii. Contractual Monitoring
Many respondents require their suppliers, buying agents or
contractors to abide by their policy on child labor through contractual
agreements or some form of certification process. These contractual
obligations are an expression by manufacturers and retailers of their
expectation that the contractors' or suppliers' business relationship with
them is based on full compliance with their policy or code. The
incorporation of child labor policies into contractual obligations in many
cases shifts at least part of the burden of responsibility for ensuring
compliance onto the contractor, supplier or buying agent. In addition, such
contractual obligations provide a legal avenue for terminating agreements on
the basis of violations.
Some companies, particularly retailers, may have general
language in their purchase order or vendor contracts requiring vendors to
comply with applicable laws but have no mechanisms for monitoring
compliance. In certain cases, respondents indicated that they have no
knowledge of how or where imported goods they purchase are produced.
A number of respondents indicated that compliance with
their corporate code of conduct or policy is part of their purchase orders
or other contracts.
Other respondents (Dollar General, Venture and Woolworth
Corporation) also indicated that their letters of credit contain
provisions on child labor.
Woolworth Corporation ('Woolworth') reported that its
manufacturers must complete a Certificate of Product Manufacture and
Inspection - certifying that a said factory was truly used to produce the
garments and that no child labor was used in their production - before
letters of credit can be drawn down.
Price/Costco's Import Vendor Agreement states that the
vendor must secure a written and signed confirmation from the owner of the
"prime factory" that the factory and all subcontractor facilities used are
in compliance with its child labor policy.
Several companies require written acknowledgment by their
contractors, suppliers or buying agents that they have read and understood
their policies on child labor. This is usually done through requiring
contractors to review and sign a code of conduct or a special certification
Federated indicated that it requires its "core vendors" to
acknowledge annually in writing their understanding of Federated's
policies requiring full compliance with applicable laws, including those
relating to child labor. It reported that relationships are immediately
terminated with manufacturers and suppliers who fail to do so.
The Limited also requires every supplier to periodically
certify their compliance and that of their subcontractors with its'
policy, which includes provisions on child labor.
Mercantile indicated that it decided to put its child
labor policy in a stand-alone certification form that suppliers must sign
because it did not want that policy to be lost within a larger contract.
Oxford reported that it is implementing a computerized
tracking system to ensure that each contractor has read and understood
Oxford's sourcing policy and acknowledged that it will be terminated in
the case of violations of that policy, which includes provisions on child
Talbots, as part of a new program (effective September
1996), requires all of its international suppliers to furnish a signed,
notarized statement confirming adherence to its policies on child labor
and other standards. Talbots stated that it will require suppliers to
re-certify their adherence annually and will not place new orders with any
companies that fail to complete the certification.
Some respondents require certification on shipping
JCPenney, requires that foreign and U.S. suppliers of
imported merchandise obtain a manufacturer's certificate for each shipment
certifying that the merchandise was manufactured at a specific factory
(identified by name, country and location) and that no illegal child labor
was employed in its manufacture.
Talbots requires all international manufacturers to
include a statement on their shipping documents accompanying imported
merchandise confirming their adherence to the company's policy.
Some respondents require contractors to take on certain
responsibilities or actions themselves to ensure that the policy is not
Fruit of the Loom indicated that in signing its code of
conduct, contractors agree to require all their employees who are
responsible for implementing the code to review and familiarize themselves
JCPenney's purchase contracts require suppliers to impose
the same standards on their contractors as the company places on them
(including certification that no forced, indentured or illegal child labor
was employed in the manufacture of the merchandise).
Kmart's purchase order requires suppliers to contractually
agree that they have "ascertained and financially warranted" that no child
labor was utilized in the manufacture of merchandise, and obligates them
to be responsible for and inspect their subcontractors. Vendors also must
sign Kmart's Certificate of Compliance (introduced in June 1996),
certifying that they will increase their factory inspections and take
vigilant action to prevent problems. Vendors' signature of this
Certificate also binds them to make a payment, equivalent of 50 percent of
Kmart's order, to a local human rights or children's organization in case
of failure to comply.
Talbots requires its vendors to certify in their shipping
documents that they have a program in effect for monitoring their
Some respondents who utilize buying agents contractually
obligate these agents to implement their policies on child labor:
Dollar General requires buying agents to warrant that
merchandised purchased for the company is not manufactured in violation of
any human rights resolutions.
Spiegel requires its buying agents to implement its code.
Some companies require documentary proof of compliance or
reserve the right to carry out on-site inspections:
Phillips-Van Heusen's contracts require facilities to have
on-site such documents as proof of age or wages paid.
Fruit of the Loom requires contractors to provide proof of
compliance, including proof that all employees meet the minimum age.
For some companies (e.g., Fruit of the Loom and Jones),
endorsement of a code or policy is also an authorization to allow the
contracting company free access to contractors' facilities and any
information requested in order to monitor for compliance.91
Vendors who sign Russell Corporation's ('Russell') Vendor
Policy give Russell the right to conduct on-site inspections.
Some companies, although they have specific language
prohibiting child labor or general contract language requiring adherence to
applicable laws, do not appear to have any mechanism for compliance. The
contractual language, in these cases, is the only visible means by which
these companies implement their policies with regard to imported apparel.
Ames' purchase order requires vendors to comply with all
applicable labor laws and states that failure to comply would result in
cancellation. Ames' buyers are instructed to stay alert to any indication
that goods are being made under unacceptable conditions, and states that
if any such problems exist, it would take action. However, Ames said that
it uses agents for the purchase of its imports and it generally has no
knowledge or control over where the goods are manufactured.
BJ's Wholesale Club, a division of Waban, indicated that
any imported apparel it sells is purchased domestically, and it has no
control over which countries or facilities that apparel comes from.
Furthermore, it stated that it has no knowledge of the workforce in those
In its purchase order, Burlington Coat Factory requires
that vendors comply with all applicable laws, but no further compliance
action is taken.
Family Dollar indicated that its purchase orders have
always required vendors to comply with all applicable labor laws. However,
Family Dollar gave no indication of any compliance process.
Home Shopping Network includes specific language
prohibiting the use of child labor in its purchase order terms and
conditions as well as a vendor-practices agreement. However, it gave no
indication of how it implements those provisions.
Ross Stores' purchase order requires its vendors to comply
with all applicable laws and regulations. The company stated that it would
not knowingly purchase goods that are made by children or exploited
workers, but does not visit any manufacturing sites or have any other
system for monitoring compliance. However, Ross Stores indicated that it
is reviewing its purchasing process regarding foreign suppliers.
b. Evaluation of Prospective
While technically not a monitoring activity, evaluation of
prospective contractors with regard to labor standards is becoming an
important aspect of code implementation. At least seventeen of the companies
that responded to the survey stated that they have a process in place to
evaluate overseas facilities before they establish a business relationship
with them.92 Such on-site evaluations or
inspections have long been made primarily to verify whether the facilities
have the physical capacity to meet quality and quantity specifications.
Increasingly, the working conditions and employment practices of prospective
contractors are also being evaluated, screening out companies that are
violators or have the potential for being so in the future.
Several of the companies that conduct such evaluations
indicated that compliance with their policies on working conditions is an
important factor in the decision to place a production program with a
contractor. These evaluations, according to many, enable them to screen
out contractors who do not comply with applicable legal standards or who
do not meet a company's own standards.
A few respondents indicated that such pre-contract
inspections had enabled them to avoid doing business with a facility that
appeared to employ under-age children, but most reported that when
facilities are rejected, it is usually for other reasons.
The evaluations typically involve an inspection of the
physical plant and include other elements such as reviewing company records
(including employment records), evaluating the workforce, and explaining
company policies and expectations.
Some companies use a standard checklist or questionnaire
that includes specific questions or criteria related to working conditions
and employment practices, including questions on the age of workers.
Other companies, such as Land's End, indicated that they
have an intricate process to qualify vendors, but did not disclose what
the process entails.
Levi Strauss' initial evaluation of potential business
partners is done by a team of employees representing different divisions
of the company and includes one of its 50 specially trained auditors.93
Levi Strauss indicated that the evaluations take at least two full days to
complete, and auditors use a 20-page form to evaluate the policies,
practices, and conditions of the contractors. They also review payroll,
personnel and other records and check health and safety conditions. To get
a "full picture of a potential contractor's adherence to the Terms of
Engagement standards," the team also relies on unannounced visits, advice
from outside organizations and community leaders, and interviews with
workers both on-site and away from the facility.
Fruit of the Loom reviews potential contractors'
management experience and financial condition to ascertain whether they
can deliver quality products in compliance with Fruit of the Loom's
standards and all applicable laws.
Salant reported that it looks for workers who appear
underage or malnourished during evaluations, and utilizes a checklist that
includes a question on whether contractors keep age records of all
Two of the retailers who conduct pre-contract inspections of
potential contractors use an external organization to do them:
When Wal-Mart contracts directly with an overseas
manufacturer to produce goods, it hires an outside agency to inspect
factory conditions before work begins. Wal-Mart indicated that this
process has identified more than 105 factories that failed to comply with
Wal-Mart's standards - and therefore are not eligible for contracts with
Price/Costco has an outside audit done of every new
foreign facility in cases where it uses a U.S. wholesaler who sells
imported goods. These audits include a site visit and evaluation of
quality and volume capabilities, as well as working conditions and labor
force composition. Price/Costco indicated that the vendor pays for the
Some companies, such as VF Corporation, re-inspect
facilities that they have not used for few a seasons to ensure that they
still comply with its standards.
Enforcement of corporate codes of conduct refers to how U.S.
companies respond to violations of their codes. Enforcement is essential to
the success of a corporate code. As a report on codes of conduct has stated,
"without adequate enforcement, codes can be mere public-relations ploys,
misleading consumers that workers' rights are actually respected in
Information from those respondents who outlined their
policies on enforcement indicates that there are various levels of response
to violations of child labor policies. Most companies stated that they would
first investigate all allegations to confirm the use of child labor.95
Most also indicated that they use graduated responses to confirmed
violations, which include: a) monetary fines or penalties; b) probationary
status; c) demand of corrective action; d) support of educational projects
(particularly where child labor violations are involved); e) cancellation of
an individual contract; and f) severance of the relationship. Positive
reinforcement includes: a) retention of current contracts; and b) awarding
of additional contracts.
While termination of a contractual relationship may send the
strongest signal regarding intolerance of child labor, a zero-tolerance
policy has immediate effects for the factory management and for the workers
who would lose their jobs when factory orders are canceled.
Resolution of the problem of child labor means different
things for different companies. In most cases, it simply means dismissal of
the child workers. For others, resolution occurs when the supplier puts
satisfactory monitoring systems in place. To a very few companies, such as
Levi Strauss, resolving the problem might mean contributing resources, if
necessary, to achieve sustained change. Some companies indicated that they
believe their ability to modify contractors' behavior depends greatly on the
amount of leverage they can exercise on those contractors. Companies have
far less leverage with contractors where they only have small production
The vast majority of companies that responded to the survey
reported that they have never found any violations of the child labor
provisions of their code or policy. Some companies attributed this to their
efforts to evaluate and carefully select suppliers before entering into
contracts with them. Others indicated that child labor violations of their
codes are less common than other types of violations, such as health and
Of the companies that responded to the survey, only four -
The Gap, Levi Strauss, Phillips-Van Heusen, and Sears - have confirmed
instances of child labor in overseas production facilities that were
producing garments for their account.96 In all
of these instances, the plant employing underage workers was an independent
The Gap reported that, when it has discovered child labor
in a facility producing its merchandise, it took immediate action to
either correct the problem or terminate the business relationship with the
Levi Strauss reported that when it first began
implementing its Terms of Engagement, about five percent of its
contractors were terminated due to a variety of conditions, including the
use of child labor. However, during initial Terms of Engagement
evaluations in Bangladesh, it found several underage girls working in two
contractor facilities. Levi Strauss stated that, rather than having the
underage workers discharged, it persuaded the contractors to stop
employing underage children, but to continue paying the girls even though
they no longer worked. Levi Strauss paid for the former underage workers'
tuition, books and uniforms to attend school, and the contractors agreed
to employ the girls once they had finished school.
Phillips-Van Heusen reported that it has found child labor
in several off-shore facilities.97 The company
said that in such instances, it has discussed the problem with the
contractor and allowed 30 to 90 days to discharge the underage workers. In
three instances, the contractors complied. In the one instance that the
contractor did not comply, Phillips-Van Heusen discontinued its
relationship with the contractor. In one case, where it had a large
concentration of production with multiple contractors and sewing shops in
one area, Phillips-Van Heusen observed children in manufacturing areas who
were not in school. The company determined that educational opportunities
were lacking, and made a commitment to a multi-year project to improve the
educational system. Phillips-Van Heusen has built classrooms, provided for
a well, electricity and additional teachers, and purchased desks and
Sears reported that in late 1994, the BBC brought to its
attention that it had found children working in a manufacturing facility
in India that produced garments for Sears. Sears subsequently contacted
the U.S. importer that was procuring the garments, and that importer
denied that child labor was being used. Sears demanded that child labor
not be used, and asked that documentation of age be required. The importer
provided Sears with such documentation, which contained a Government of
India certification stamp. When Sears received a videotape of a BBC
broadcast, which clearly showed children working at the facility, Sears
demanded that its garments no longer be made there. Sears later terminated
the importer when it was found to still be using the facility (although
Sears pointed out that no goods from the facility were supplied to Sears).
Other companies have received allegations of violations of
their policies on child labor:
JCPenney stated that it had received allegations of
underage workers by its associates but determined after its own
investigation that there had been no violation.
Liz Claiborne reported that after recently uncovering an
alleged breach in a Middle Eastern country, it is investigating the
allegation in cooperation with a U.S.-based human-rights organization.
Only a few companies - Kmart, Montgomery Ward, Salant and
Venture - reported that they would respond to violations of their child
labor policy with immediate terminations of the business relationship. Many
others, including Fruit of the Loom, The Limited, Nordstrom, Oxford and Ross
Stores, indicated that violations could be punished with terminations, but
not unconditionally or before other approaches were tried. Most companies
outlined an incremental response to violators.
Following are some examples of stated enforcement policies:
Federated stated that if it is notified by a governmental
authority or determines on its own a serious violation of its policy, it
will immediately suspend all shipments from the subject factory and
discontinue further business until that factory institutes the monitoring
programs necessary to ensure compliance. If notified of a violation by
another party, Federated will immediately suspend further shipments,
pending the supplier's explanation and commitment to take satisfactory
remedial action. Federated stated that it may also take legal action.
JCPenney reported that if, after full investigation, it
determines that misconduct has occurred, it would take appropriate
corrective actions, which could include canceling the affected order,
prohibiting the supplier's future use of the factory where the violation
took place, or terminating JCPenney's relationship with the supplier. If
informed by a government of violation of labor laws, it will immediately
suspend shipments from the factory, with any resumed shipments conditioned
on verification that the supplier has put the monitoring programs in place
to ensure compliance.
Jones indicated that it will generally first try to get
remediation of the problem before withdrawing. But it will take
appropriate actions as warranted, ranging from canceling the affected
purchase contract or terminating its relationship with the supplier.
Kmart stated that if a supplier is found to be in
violation, it will cancel the order, with the supplier bearing the burden
of any loss and responsible for other damages. Furthermore, Kmart stated
that it will sever its relationship with the vendor, who will be assessed
a payment, worth 50 percent of the contract, to be donated to a human
rights or children's organization in the community where a violation
Liz Claiborne stated that it will first investigate
reported violations to find out the scope and nature of the problem, and
the status of the workers involved. It requests contractors to address the
situation in a humane manner, while ensuring that the facility be brought
up to standards.
Nike indicated that when a problem on an issue other than
child labor has been found, Nike has asked the factory manager to set up a
timetable for remedying the problem.
VF Corporation reported that it would first do its own
investigation of allegations. If a violation were confirmed, it would try
to first work with contractors to correct deficiencies. If that does not
work, VF Corporation stated that it would terminate the relationship.
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Implementation of Apparel Industry Codes of Conduct
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