The proper treatment of workers is a key tenet of REI’s business operations. To advance this practice, the Fair Labor Compliance (FLC) team partners with departments across the co-op to implement fair labor strategies for REI Private Brands’ products. In particular, the Sourcing and Fair Labor teams collaborate on process alignment, supplier approvals and audit remediation.
REI’s FLC program benefits from the guidance of five executives who serve as the Fair Labor Oversight Committee (FLOC). The committee monitors program development and is consulted on key strategic decisions. While the FLC team reports directly to REI’s associate general counsel, the FLOC has reporting responsibilities directly to the Audit and Finance Committee of REI’s board of directors.
The FLC program is has four program components:
Each year, REI elects to audit a percentage of the “tier one” factories in our supply chain. “Tier one” factories are those locations where final assembly occurs. In 2012, the supply chain for REI-brand product consisted of 133 factories. Of those, 35 factories were audited, or 27 percent of our supply chain. To reduce the burden on factories of redundant audits, we obtained nine of the 35 audits from other brands that maintain high standards for factory compliance.
Audit data and findings are uploaded to a shared industry database, the Fair Factories Clearinghouse (FFC). REI then asks suppliers to identify the root cause of each finding, develop a corrective action plan, and commit to specific completion dates. REI’s consults regularly with suppliers throughout the process until the factory attains a status rating of “continuous improvement.”
The following Factory Code of Conduct themes were identified from the 2012 audits:
REI is selective about its factories and seeks to work with quality partners. Even with such partners there can be areas identified for improvement. Our goal is to address these issues through our audits and associated remediation plans, and to better understand and address root causes of compliance challenges.
The following chart illustrates the categories of non-compliance with REI’s Factory Code of Conduct. This information is derived from standard audits uploaded to the FFC.
Note: Refer to the REI Factory Code of Conduct Elements (PDF) for definitions of non-compliance categories.
In addition, FLC conducted assessments at six factories through the services of the International Labor Organization for factories in Vietnam, and an individual consultant for those in China. Assessments involve dialogue with factory management to identify the presence or absence of human resource systems. Based on the gaps identified through the assessments, FLC partners with factory management to close those gaps.
Throughout 2012, REI focused on three fundamental procedures:
The 2011 Stewardship Report described the details of the escalation plans created by the FLC and the FLOC. These escalation plans provide a roadmap for consistently remediating difficult situations. In 2011-2012, the plans were put to the test with one supplier. Due to the supplier’s continued lack of transparency and inability to follow through with the requirements of the escalation plan, the Fair Labor and Sourcing teams agreed to exit the factory.
While making an unannounced visit to another factory, factory management could not convincingly articulate their stand on hiring minors, nor were they able to produce or discuss their policies in this area. The Sourcing and Fair Labor teams determined the best course was to source from a more sophisticated supplier.
The FLC hosted educational sessions for new REI Private Brands employees to broaden their awareness of the Fair Labor Compliance Program. In addition, the staff in REI’s Quality Office in Shenzhen, China received training on the REI Factory Code of Conduct and the Visual Observation Checklist (VOC). These trainings provided specific information for the quality team to use while in factory. Their use of the VOC operates as an extension of the FLC team. The checklist includes a description of safety and labor-related issues that REI employees can easily identify while traveling to factories.
The California Transparency in Supply Chains Act (“the Act”) went into effect January 1, 2012. The Act requires brands that meet specific criteria to disclose their policies and actions to eradicate human trafficking and slavery in their supply chains. Human trafficking involves the recruitment, transportation, or sale of people for forced labor.
REI’s detailed disclosure on practices covered by the Act is available on REI.com.
In addition, employees from REI’s CSR, Fair Labor, Sourcing, Quality and Design teams and REI’s Quality Office employees were trained on the topics of human trafficking and sex slavery.
In 2012, REI actively participated with these associations:
In 2012, REI engaged the services of the following third-party consultants for audits and capacity-building events:
The FLC team focused on establishing a stronger program foundation in 2012 both through the actions identified under internal process improvements and through active participation with external companies and initiatives. In particular, the team interacted with the Sustainable Apparel Coalition in developing modules for the HiGG Index, and engaged new factories in the ILO Better Work Program Vietnam.
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