VF’s policy is to monitor every facility involved in the creation of VF-branded and licensed products.
VF is committed to ensuring all workers are treated with dignity and respect.
VF audits all cutting facilities, sewing plants, screen printers, embroiderers, laundries and packaging locations. In addition, we also monitor raw material suppliers for knit and woven fabrics. Factories producing for the U.S. collegiate market are also subject to unannounced audits by the Fair Labor Association.
No production of VF branded or licensed products may take place in a facility until a factory inspection is completed and VF Terms of Engagement have been signed. Violation of this policy can result in the termination of any existing contracts or licensing agreements.
New suppliers must be identified at least six weeks prior to the anticipated start of production, and an initial factory inspection requires three to four weeks to schedule. After the initial audit, our policy is to inspect every factory a minimum of once per year for the duration of the relationship.
THE AUDITING PROCESS
Factory audits are conducted by a VF-authorized compliance auditor, or by an accredited third-party audit company and the inspections can be unannounced.
All VF factory auditors are trained and certified to the standards of the International Register of Certificated Auditors (IRCA). In 2013, auditors in the U.S. received 16 hours of training, while auditors in Asia received 48 hours. As residents of the regions they audit, our inspectors are dedicated to working with factories to make improvements. Often, an improvement to a local facility can mean a better working environment for a nearby community.
A typical inspection lasts between six hours to two days, including employee interviews. Each audit includes a thorough facility inspection for health and safety, environmental issues, social compliance and presence of forced labor or human trafficking. Factory records involving payroll, operating licenses, employee personnel records and other vital information are also reviewed for compliance with local laws. Auditors conduct a random sampling of employee interviews that provide added insight into the facility’s working conditions, including hiring practices, wages and hours, worker-management communications, worker treatment and environmental issues.
Once complete, each facility receives one of the following ratings:
Accepted — The factory has no critical safety, health or labor issues and is certified to produce VF or related licensed products. Accepted factories are subsequently subject to an anniversary audit, which is necessary to maintain an ‘Accepted’ rating.
Developmental — Upon initial inspection, the factory has some major safety, health or labor issues identified and is designated ‘Developmental’. While the factory is authorized to produce VF or related licensed products, VF requires that the issues will be corrected in a timely manner, and a follow-up inspection will be scheduled within six to nine months to determine if the factory can be ‘Upgraded’. If the issues are corrected to VF’s satisfaction, then the status of the factory will be elevated to ‘Accepted’. If the factory has not remediated the major safety, health and labor issues at the time of the second follow-up inspection, the factory will be downgraded to ‘Pending Rejection’ and have 180 days to remedy the issues, receive a favorable inspection, and be upgraded to ‘Accepted’. Otherwise, the factory will be ‘Rejected’ at the 180 day cut-off.
Rejected — The factory has persistent critical safety, health or labor issues (such as excessive working hours, incorrect overtime compensation or locked emergency exits). In this situation, the factory is not authorized to produce VF or related licensed products. If, at a later date, the factory feels that they have corrected these problems, a VF auditor may re-inspect the facility.
After completing an inspection, our auditor verbally provides factory managers with the facilities’ compliance designation and a written list of action items. The factory compliance audit team follows up within 10 working days with a detailed factory evaluation report. This report includes a Corrective Action Plan (CAP) to address problems noted during the audit and offers additional training and consultation from our team on how to improve the factory. We give the factory 180-270 days to implement the CAP. Depending on the severity of the problems, a follow-up audit is scheduled 180-270 days from the day of the initial audit to ensure compliance.
In 2013, 13 percent of factories, which includes both proposed factories and those factories not able to meet their initial corrective action plan, were rejected because they were not able to meet our basic requirements. More than 1,800 suppliers were accepted or classified as developmental.
We do not tolerate falsified records, mistreatment of employees or a lack of effort to correct a known issue. We will cancel any outstanding contracts or licensing agreements if a rejected factory is used for VF or related licensed production. We also terminate outstanding engagements if a factory fails to follow through on agreed facility upgrades as outlined in their CAP.
Due to political, environmental and human rights issues, certain countries are deemed unacceptable for the manufacture of VF products. Current information is available via our compliance offices in the U.S. or Hong Kong.