SPEARHEADING POSITIVE CHANGES IN OUR SUPPLY CHAIN
Our supply chain is one of our greatest strengths. It combines our skill in sourcing with more than 110 years of engineering expertise. We see supply chain excellence as a competitive advantage to be leveraged — a high performance platform that sets us apart in the competitive global apparel and footwear industry.
Our vast supply chain produces about 1.3 million apparel and footwear products daily in 60 different countries. It benefits from the talents of nearly 30,000 VF associates globally. And we work with over 1,800 factory partners, or others making VF-branded products, on any given day. While our supply chain is a tremendous asset, it is not without its challenges. From tracing the raw materials we purchase to upholding worker rights in our supplier factories, we are fully aware of the complexities in our supply chain.
Operating our supply chain responsibly is more than a priority. It’s an imperative. We know that there is no compromise between basic human rights and making products efficiently or at low cost. We do not make this compromise in our own manufacturing facilities, where nearly one third of our products are produced. We hold our suppliers to the same standards, and we share our best practices with them where and when it’s possible.
More than ever, our consumers want to know where products come from, how they are produced and how the people who manufacture them are treated. We recognize the need for the apparel industry to approach challenges head on. We exert the greatest control over these issues in our owned manufacturing and Third Way manufacturing facilities, which we continue to invest in through our Ideal Plant Model. And we have also begun to invest in our suppliers. Our 50 strategic partner factories that have worked with VF for over five years are very familiar with our programs and currently produce 75 percent of our products.
At VF, we view it as our responsibility to lead positive change and ensure that the factories around the world producing our products – and the people who work there – are safe.
UPHOLDING WORKERS’ RIGHTS
Our supply chain often extends into countries such as Bangladesh and Cambodia that have minimal government regulation and enforcement around human rights. Issues that can arise may include unsafe working conditions, no worker unionization, child and forced labor, human trafficking and minimal wages.
With our expansive scale and reach, we have the influence and opportunity to meaningfully improve workers’ lives and share our best practices with the industry at large. We are fully aware that we are a vital source of employment in countries where human rights are at risk and do not see simply ceasing operations in these areas to be a moral option. Instead, we believe we have a responsibility to understand all of the dimensions of these human rights issues and implement lasting and impactful solutions.
At the heart of our approach is our strong belief that every individual should be treated fairly and with respect. All our significant investment agreements and contracts include human rights clauses or that underwent human rights screening, as defined in our Global Compliance Program. All factories that produce VF branded apparel and footwear must ensure that the people who make our products are guaranteed certain essential rights: the right to fair compensation; the right to associate freely and bargain collectively; the right to work free from discrimination and harassment; and the right to a safe, clean workplace. We regard these rights as non-negotiable imperatives in the workplace regardless of location.
PARTNERING FOR PROGRESS
Beyond compliance, we are beginning to partner with governments and civil society to be part of advancing solutions that create opportunities for our associates and people in the communities where we live and work.
In addition, we are working closely with NGO partners, factory owners and workers to advance living wages and safer, more efficient production practices for long-term success.
We will continue to firmly support efforts throughout our supply chain to advance a culture that empowers workers and improves the lives of those who contribute to the success of our industry.
VF sources 12 percent of our global production from approximately 90 supplier facilities in Bangladesh. Considered one of the world’s leading textile centers, Bangladesh is home to more than 5,000 factories and employs approximately four million people in the apparel and footwear industry. These figures are forecasted to quadruple in size over the next two decades.
Despite its status as a manufacturing hub, working conditions and building safety in Bangladesh too often fall short of meeting global standards. The April 2013 collapse of the Rana Plaza factory complex in Dhaka, which claimed more than 1,000 lives, is a tragic example that served as a wake-up call to the global apparel industry. In response, two working groups comprised of apparel and retail companies were formed: The Alliance for Bangladesh Worker Safety and the Accord on Fire and Building Safety in Bangladesh.
VF is a member of the Alliance for Bangladesh Worker Safety, a five-year, legally binding, results-oriented initiative dedicated to improving safety conditions for those who make their living in Bangladesh’s ready-made garment sector. VF joined the Alliance because the organization shares our steadfast commitment to worker safety.
The following details the actions VF has taken as an individual company and together with the Alliance for Bangladesh Worker Safety – all focused on improving working conditions at the Bangladesh factories where we source our products:
- VF is investing at least $17 million overall to ensure health and safety of Bangladesh workers through factory improvements, guaranteeing of qualified supplier loans and financial support for directly impacted workers;
- We have completed 100 percent of inspections at Bangladeshi factories where VF product is sourced;
- VF is partnering with the International Finance Corporation to provide $10 million in below market loans to factory owners to help cover the cost of needed improvements found during third party inspections;
- We helped develop and implement a common fire and building safety standard to be applied to all Bangladesh factories;
- We are empowering workers through fire safety training, worker representative structures and access to anonymous helplines to report concerns;
- We have completed fire safety and evacuation training of 100 percent of workers who produce VF products in supplier factories;
- The Alliance provides 50 percent of workers’ salaries for up to 4 months to cover lost wages due to factory remediation;
- We are ensuring collaboration, accountability and shared responsibility between the Alliance for Bangladesh Worker Safety, factory owners, trade unions, government and NGOs to create lasting safety improvements; and,
- We have created a scholarship program with the Hinrich Foundation to support internships and scholarships for students in Bangladesh.
We recognize that there is still more that must be done in Bangladesh and we will remain sharply focused on it as a single company, as a member of the Alliance and in collaboration with other like-minded organizations.