June 13, 1996
Dear Kmart Vendor:
The recent public debate and media attention on "sweatshop"
allegations in the apparel manufacturing industry, prompt me to write to
you today. Certainly, we are appalled by sweatshop conditions at any
level within the manufacturing or retail industry. We also believe that
innuendoes and unsubstantiated claims that brush broadly across the
retail industry in the zeal to catch headlines are deplorable and
counterproductive. Responsible dialogue and appropriate business conduct
must be our commitment.
For decades, we have insisted on strict compliance with all
applicable standards as part of purchase order terms. And, in fact,
Kmart has never been found to be in violation of any human rights or
labor laws in the manufacture of goods sold in our stores, primarily
because we deal only with the most reputable vendors.
As we move forward in realigning our company, none of us can afford
to have our reputations tainted by human rights violations. Therefore,
your role in relation to the sourcing of the merchandise we sell at our
stores is of critical importance. Our policies are clear. Kmart will not
do business with any company that violates applicable human rights and
labor standards in the manufacture of goods sold at our stores.
If Kmart finds that any of our vendors, in the United States or
abroad, falls short of our standards, the following actions will be
- We will cancel the orders and sever our relationship with any
vendors that violate these standards.
- Any vendor found in violation of applicable human rights or labor
standards will bear the burden of any loss incurred.
- Additionally, a payment, equivalent to 50 percent of the order,
will be assessed to the vendor for donation by Kmart to a human rights
or children's organization in the community where the violation
As part of our quality assurance commitment to our customers, we are
increasing our regular and surprise on-site inspections of manufacturing
facilities around the world. We expect the same level of commitment from
I trust that you will join Kmart in doing everything you can to help
eliminate impermissible and inappropriate labor conditions in the global
manufacturing community. Thank you for your personal attention and
commitment to this matter and your prompt return of the following
Certification of Compliance with our policies.
All Kmart Vendors:
Kmart is strongly committed to full compliance with human rights and
labor standards as related to the manufacturing of all merchandise sold
at our stores. As a vendor to Kmart, you must ensure that there is no
misstatement as to the true country of origin of your merchandise, and
that none of your merchandise is made in whole or in part using any
child, forced or prison labor. This obligation applies not only to your
own company, but to any subcontractors you may use in producing goods
If Kmart learns that a factory used by any of our vendors for the
production of merchandise has committed legal violations, or failed to
comply with our standard Kmart order terms, we will:
- Cancel the affected order(s)
- Terminate our relationship with the vendor
- Take legal action or pursue other equitable remedies to recoup any
financial losses incurred by Kmart
- Assess a payment to the vendor, equivalent to 50 percent of the
order(s), that Kmart will donate to a human rights or children's
With our current and planned growth in global sourcing, Kmart is
increasing our quality control staff to ensure compliance with all
applicable human rights and labor standards as well as other critical
elements of quality assurance. Consistent with these actions, we expect
all of our vendors to increase their factory inspections and take
vigilant and immediate action to prevent any problems from occurring.
Please sign and return the following Certification of Compliance to
Director of Vendor Development, 3100 W. Big Beaver, Troy, Mich. 48084 by
July 15, 1996. Thank you for your prompt attention and personal
commitment to this very important matter.
Executive Vice President, President,
General Merchandise Manager, U.S. Kmart Stores
Certification of Compliance
"By my signature below, as chief executive officer, and on behalf of
my company, I acknowledge receipt of the above letter, and do hereby
certify and agree that the company will comply with all applicable labor
laws and the order terms and conditions set forth on the back of this
agreement for any and all goods supplied to Kmart regardless of country
of origin. My company also agrees to make the above assessed payment for
donation by Kmart to a human rights or children's organization in the
event of failure to comply with any of the above requirements.
(Print) Name & Title - Chief Executive Officer Signature Date
Company Name & Address