ETHICAL SOURCING REPORT 2021

 
CONTINUE READING
ETHICAL SOURCING REPORT 2021
ETHICAL
SOURCING
REPORT
2021
ETHICAL SOURCING REPORT 2021
2

                                                            CONTENTS
                                                              INTRODUCTION                               APPENDICES

                                                                 04. CEO introduction                       22. 2019 – 2020 KPI table

                                                                 05. Programme at a glance                  23. Factory policy poster

                                                                 06. Top 20 source countries                24. Apparel tier 1 factory list

                                                              2020 SUMMARY                                  26. Apparel tier 2 factory list

                                                                 08. 2020 summary                           36. Apparel brand list

                                                                 10. Her Project updates                    37. Other categories factory list
Getting the most from this report                                12. COVID-19 updates                       49. Country wage & working hour table
A brief overview of our programme and progress in 2020
can be viewed on pages 5 and 8. Our key areas of focus           13. Responding to forced labour risks
and achievements can be found on pages 10 to 20.
                                                              SUSTAINABLE MATERIALS
Finally, the appendices from page 22 reveal performance
trends over the past two years, and feature our factory          16. Better Cotton Initiative
policy poster, brand and factory lists and source country
wage and working hour data.
                                                                 17. Forest Stewardship Council

                                                              OUR POLICY IN PRACTICE

                                                                 19. Policy in practice

                                                                                                                                              ETHICAL SOURCING REPORT 2021
ETHICAL SOURCING REPORT 2021
INTRODUCTION.   ETHICAL SOURCING REPORT 2021
ETHICAL SOURCING REPORT 2021
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                        CEO’S INTRODUCTION.
APPENDICES

                                                                    programme. I believe, given our scale and   challenges and achievements to date,
POLICY IN PRACTICE

                                                                    diversity, this is the leading programme    as well the road ahead. We invite both
                                                                    of its kind within the New Zealand retail   your encouragement and suggestions for     Ethical Sourcing is just one programme
                                                                    sector.                                     improvement.                               within The Warehouse’s suite of
                                                                                                                                                           “Sustainable & affordable” initiatives.
                                                                    Within The Warehouse Group’s 2020           Finally, I want to express my sincere      Sustainable & affordable is The
                                                                    Annual Report, I pledged that COVID-19      gratitude to our ethical sourcing          Warehouse’s guiding statement and
                                                                    will not slow down our commitment           specialists and their colleagues within    branding device representing our
                                                                    to becoming one of New Zealand’s            our 200 person strong sourcing team.       aspiration to become one of New Zealand’s
SUSTAINABLE MATERIALS

                                                                    most sustainable companies while            The results in this report are testament   most sustainable companies while still
                                                                    continuing to deliver great value to our    to their hard work and strong supplier     delivering great value to our customers.
                                                                    customers. Ethical Sourcing is an           collaborations through a unique and
                                                                    indispensable element of this, along with   challenging year.
                                                                    our parallel commitments to climate
                                                                    change action and carbon neutrality,        Kia Kaha.
                                                                    community engagement, waste reduction
                          As l look back on the extraordinary       and sustainable procurement – to name       Nick Grayston
                          disruption and challenges that COVID-19   a few.                                      Group Chief Executive Officer
2020 SUMMARY

                          brought to our business in 2020,                                                      The Warehouse Group
                          I’m really proud to tell you that the     Ethical and sustainable sourcing is
                          momentum of The Warehouse’s Ethical       a complex sector and while we have
                          Sourcing Programme has continued          made considerable progress through
                          unabated.                                 our programme, there is still a long way
                                                                    to go as we look for new ways to drive
                          In fact, as I hope you will see in this   positive change in our supply chain.
INTRODUCTION

                          report, in many ways 2020 was a           The goal of this report is to provide
                          benchmark year for the evolution of our   full transparency about our journey,

                                                                                                                                                                                ETHICAL SOURCING REPORT 2021
ETHICAL SOURCING REPORT 2021
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                        PROGRAMME AT A GLANCE.
APPENDICES

                                                                                                                                                                                                     170
POLICY IN PRACTICE

                          In 2020 The Warehouse’s private label
                          products were sourced from 489 factories                  1
                                                                                          vendor responsibility. The Warehouse’s own
                                                                                          internal ethical sourcing experts delivered                                                        Newly qualified
                                                                                                                                                                                                                                            208                88%
                                                                                                                                                                                                                                           Audits              Audit
                                                                                                                                                                                               factories
                                                                                                                                                   47                                                                                                      transparency
                          primarily located in China, Bangladesh,                         23 supplier responsibility trainings to
                          India, Vietnam, Malaysia, and Pakistan.2                        our largest vendors and trading houses,
                                                                                                                                           Worker feedback and
                                                                                                                                                                                                                                           86%                 98%
                          About 246,000 workers were involved                             enabling them to take greater responsibility
                          in this production. 170 new factories                           for factory standards.                            helpline trainings
                                                                                                                                                                                                                 Au
                          (67% of applicants) qualified to enter our                                                                                                                                               di              Average overall          Production
                                                                                                                                                                              ice                                    ta
                                                                                                                                                                                                                       n             audit score            traceability
                          supply chain via third party Labour and                         Our due diligence and investigative                                                o
                                                                                                                                                 2200                                         uction ba

                                                                                                                                                                        v
                          Environmental Audits.                                           work revealed one case of underage
                                                                                                                                                                                             d

                                                                                                                                                                                                                          d
SUSTAINABLE MATERIALS

                                                                                                                                                                                            o          se

                                                                                                                                                                      er
                                                                                                                                                                                           r

                                                                                                                                                                                                                           du
                                                                                                                                                                    rk
                                                                                          labour and 22 instances of unauthorised
                                                                                                                                                                                          P

                                                                                                                                                                                                                             ed
                                                                                                                                                  Worker

                                                                                                                                                                  Wo
                          Our audit transparency rating – an                              subcontracting.
                                                                                                                                               interviewees

                                                                                                                                                                                                                               ilig
                          important indicator of the reliability of

                                                                                                                                                                                                                                   enc
                          audit disclosures – improved to 88%. 208                        In such zero tolerance instances we always

                                                                                                                                                                                                                                      e
                          audits were completed in the year. Our                          follow a strict protocol to protect the
                          qualification processes and the linkage of
                          order data to production sources means
                                                                                          welfare of any underage worker and apply
                                                                                          commercial disciplines and penalties,
                                                                                                                                                                                           489       Active
                                                                                                                                                                                                     factories
                          that we can currently trace 98% of our                          including business termination.

                                                                                                                                                   1                                                                                                           268

                                                                                                                                                                                                                                  li e r
                                                                                                                                                                                                     246,000
                          product range to a qualified factory. We
                          continue to place strong emphasis on the                        More than 2000 workers were interviewed

                                                                                                                                                                                                                           en upp
                                                                                                                                                                 Ze r
                          execution of any corrective action plans                        by our own staff or third parties to ensure          Underage                                                                                                 Corrective action
2020 SUMMARY

                                                                                                                                             worker findings                                         Production                                          plan oversight

                                                                                                                                                                  ot

                                                                                                                                                                                                                         pm d s
                                                                                                                                                                                                                             t
                          generated by external audits. 268 such                          we were integrating their voices into any
                                                                                                                                                                                                     workers

                                                                                                                                                                    ol

                                                                                                                                                                                                                          an
                          plans were being tracked to completion                          corrective actions we asked factories to                                                                                            n

                                                                                                                                                                        er
                                                                                                                                                                         nc                                                 o
                                                                                                                                                                                                                         t el o
                                                                                                                                                                                                                          i

                                                                                                                                                                        a
                          by our internal team. In support of these                       undertake. Our team presented a new                                                 e fi                                     a
                          improvements, factories completed over
                          2000 e–Learning lessons on topics such
                                                                                          training on worker feedback and helpline
                                                                                          mechanisms to 47 leading vendors and
                                                                                                                                                  22                                 nd
                                                                                                                                                                                          in g
                                                                                                                                                                                                 s         Re m
                                                                                                                                                                                                                     i
                                                                                                                                                                                                                  e d d ev                 2037                 23
                                                                                                                                              Unauthorised                                                                                 Elearning          Supplier
                          as audit preparedness, working hour                             factories.                                         subcontracting                                                                                 lessons        responsibility
                          control, transparency and ethics, and                                                                                 findings                                                                                                     trainings
INTRODUCTION

                          1. Factories with orders >USD 50K in the period. 2. See supply chain map on page 6 and factory lists pages 24.
                                                                                                                                                                                                                                                       ETHICAL SOURCING REPORT 2021
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                        TOP 20 SOURCE
APPENDICES

                        COUNTRIES.                                                                                                                                              0.96%
POLICY IN PRACTICE

                                                                                                                                                                                      UK

                                                                                                                                                                   2.36%                                                                           65.43%
                                                                                                                                                                    USA                                                                              China
                          The Warehouse’s supply chain                                China remains the largest source
                          comprises a network of                                      country by a big margin with its                                                                                       1.91%
                                                                                                                                                                                                             India
                          New Zealand and Australian based                            unparalleled category mix, integrated
                          agents and suppliers, and our own                           raw material and component supply
                          direct sourcing offices in Asia. Our
                          merchandise consists of both national
                                                                                      chain and efficient logistics and
                                                                                      infrastructure. We are developing
                                                                                                                                                                                                                      5.15%
SUSTAINABLE MATERIALS

                                                                                                                                                                                                                     Bangladesh
                          and international brands, and The                           new sources in India, Bangladesh and                                                                                                                                        8.14%
                          Warehouse’s own private label ranges.                       Pakistan especially in apparel and                                                                                                                                          NZ Made
                                                                                      home textiles.
                          In 2020 about 47% of sales were
                          derived from our own branded
                          merchandise. Our ethical sourcing
                                                                                      New Zealand remains an important
                                                                                      source country for food, beverage and
                                                                                                                                                                             Sourcing office staff members                           5.94%
                                                                                                                                                                           Shanghai 120       Dhaka 23                               Australia
                          policy and all relevant New Zealand                         everyday grocery items.                                                              Delhi 12           Auckland 35
                          laws and regulations apply to all
                          suppliers. The assurance mechanisms
                          described in this report are deployed
                          only to our private label suppliers
2020 SUMMARY

                                                                                                                              Source countries           Share of Sales    Source countries       Share of Sales      Source countries           Share of Sales
                          and their Tier 1 (final manufacture)
                          factories.1
                                                                                                                              China                      65.43%            Thailand                1.16%               Italy                      0.44%

                          The accompanying map and table                                                                      New Zealand Made           8.14%             United Kingdom          0.96%               Switzerland                0.38%
                          illustrates the top 20 source countries                                                             Australia                  5.94%             Vietnam                 0.89%               Poland                     0.34%
                          for all products sold in The Warehouse,
                                                                                                                              Bangladesh                 5.15%             Malaysia                0.75%               Indonesia                  0.34%
                          and the location of our direct sourcing
                          teams including quality and ethical                                                                 United States of America   2.36%             Pakistan                0.60%               Belgium                    0.24%
INTRODUCTION

                          sourcing specialists.                                                                               India                      1.91%             Germany                 0.52%               Canada                     0.21%

                                                                                                                              New Zealand Assembled      1.90%             France                  0.47%

                          1. A list of these factories can be found on pages 24-37.
                                                                                                                                                                                                                                                  ETHICAL SOURCING REPORT 2021
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2020
SUMMARY.   ETHICAL SOURCING REPORT 2021
APPENDICES
POLICY IN PRACTICE                                                                                                                                                                                                                              8

                                                                                           Despite COVID-19 disruptions to our               overall at 56% over 54 plans - reflecting for    close is the challenge posed by the very
                                                                                           Chinese supply chain early in 2020, and           most part persistence of high average weekly     small percentage of factories at the tail of
                                                                                           later elsewhere in Asia, activities reached       working hours in Bangladesh.                     our supply chain with low order volumes
                                                                                           an all time high and helped to deliver very       Underpinning these tangible improvements         – usually small factories that have some
                                                                                           promising outcomes for our factories.             is all the supplier training and development     unique capability. The cost of an external
                                                                                                                                             work undertaken by our internal teams in         audit is too high for this kind of supplier -
                                                                                           Our 2020 new factory entrant numbers              China and South Asia. This includes factory      given the low value of their business with us.
                                                                                           were down year-on-year as audit activity          enrollment in our e–Learning curriculum,         For this reason previously they would not
                                                                                           paused due to COVID-19 lockdowns. We              supplier workshops both in person and            have had any kind of formal assessment. For
SUSTAINABLE MATERIALS

                                                                                           took special care to ensure that worker rights    virtually, and factory visits. In some cases,    these cases we have adapted our audit into a
                                                                                           were not comprised by COVID-19 by regular         multiple forms of engagement are needed to       simplified self-assessment which we require
                                                                                           surveys of factories in India and Bangladesh      create the supplier motivation and capability    them to complete along with some e–
                                                                                           on their COVID-19 lockdown status, the            needed to effect change.                         Learning lessons. Our internal team review

                        2020
                                                                                           maintenance of their payroll obligations, and                                                      these self-assessments and randomly select
                                                                                           their adherence to industry COVID-19 safety       An opportunity we had identified in our          some candidates for an onsite assessment by
                                                                                           protocols.                                        training programme was a lack of emphasis        our own team. In
                                                                                                                                                                                              this way we at least have some insight into

                        SUMMARY.
                                                                                                                                             on worker grievance and feedback channels.
                                                                                           We strengthened our emphasis on ensuring          We remedied this by getting 47 of our leading    standards at this level of our supply chain and
                                                                                           any corrective action plans are appropriately     vendors to complete an online course on          can respond to any labor risks identified.
                                                                                           implemented in factories that returned            this topic and an attend a series of face-to-
2020 SUMMARY

                                                                                           negative findings in our audits. These action     face trainings. An adjunct to this was this      Rewarding and impactful as this development
                                                                                           plans are how we leverage the time and            distribution of an updated policy poster         work is, it is also necessary to maintain some
                                                                                           energy that audits involve, into tangible         to all factories, which included for the first   enforcement and disciplinary tension with our
                                                                                           improvements for workers. To ensure the           time an independent contact number and           supply chain. Our commercial terms include
                        Our aim is to ensure customers can have confidence our
                                                                                           plans are making an impact, we track the          QR code workers can use to reach out to us       penalties for breaches of our integrity policy.
                        products have been ethically sourced. We do this by focusing
                                                                                           correction of any negative findings in relation   directly should they choose. We then updated     Our risk-based investigations revealed 22
                        on the qualification of new factories, ongoing monitoring and      to working hours, rest days and pay               our audit protocol, instructing auditors to      instances of unauthorised subcontracting
                        training for factories and vendors, identifying and supporting     entitlements. In China last year we evidenced     validate that workers were indeed aware of       in 2020 with attendant penalties and other
INTRODUCTION

                        joint industry initiatives such as Her Project and the Better      a 91% correction rate of these issues in the      these redress channels.                          consequences.

                        Cotton Initiative, and the provision of transparent reporting to   214 plans we were monitoring. In Bangladesh,
                                                                                           India and Pakistan our success rate was lower     Another gap in our coverage we strove to
                        our teams, leaders and public.

                                                                                                                                                                                                              ETHICAL SOURCING REPORT 2021
APPENDICES                                                                                                                                                                                                                                  9

                        2020 SUMMARY.
POLICY IN PRACTICE
SUSTAINABLE MATERIALS

                                                                                                               now enrolling two new factories in these      primary audit service provider.
                                                                                                               programmes.
                                                                Our membership of Nirapon – successor          Another great initiative we are proud to be   Implicit in all this activity is business-to-
                                                                to the Alliance for Worker Safety in           a member of is the Better Cotton Initiative   business and people-to-people goodwill
                                                                Bangladesh - expired in January 2020. The      - the world’s largest cotton sustainability   across national and cultural boundaries.
                              He aha te mea nui o te ao?
2020 SUMMARY

                                                                Bangladesh Accord for Worker Safety has        programme. We joined in November in
                         What is the most important thing in    transformed into a joint initiative with The   2019 and now over half of our cotton          We are privileged to access the capabilities
                                        the world?              Bangladesh Garment Manufacturers and           procurement has been sourced as Better        of these workforces and the everyday
                               He tangata, he tangata,          Exporters Association (BGMEA) which we         Cotton (BCI).                                 benefits they bring to our customers.
                                       he tangata.              may join as this initiative takes shape.
                          It is the people, it is the people,                                                  Back in New Zealand, we were pleased          Trevor Johnston
                                    it is the people.           Our first two “Her Project” factory            to co-facilitate a sustainability forum       Head of Ethical Sourcing & Sustainable
                                                                partnerships in Bangladesh concluded           with Retail New Zealand in March. The         Merchandise.
INTRODUCTION

                                                                in 2020. We are delighted with their           conversation focused on ethical sourcing      The Warehouse Group.
                                                                contribution to feminine health and            and we were joined by guest speakers from
                                                                hygiene in those workforces and are            Tear Fund, Kathmandu, and ELEVATE – our

                                                                                                                                                                                                             ETHICAL SOURCING REPORT 2021
APPENDICES
POLICY IN PRACTICE                                                                                                                                                                                                                     10

                                                                                     Ensuring that these women have the                 partnership and plan to commence two new        feeding increased. 100% of women reported
                                                                                     information and access to services that            HERproject programmes in Bangladesh in          that women should exclusively breastfeed
                                                                                     they need to prevent and treat disease and         2021.                                           her child for only 6 months, this increased
                                                                                     maintain their health is vital.                                                                    from 69% in the baseline.
                                                                                                                                        After the kick-off meeting with top
                                                                                                                                                                                       • At the end-line, 96% of respondents knew
                                                                                     In 2019 The Warehouse partnered with               managements and middle management
                                                                                                                                                                                        how to self-conduct breast exam, up from

                        HERhealth :
                                                                                     two of its Bangladesh suppliers - Impress-         orientation, the training was preceded
                                                                                                                                                                                        5% at the baseline and the percentage of
SUSTAINABLE MATERIALS

                                                             1                       Newtex Composite and Manami Fashions               by a baseline study capturing the health        women who would seek screening services
                                                                                     - and Business for Social Responsibility’s         knowledge and behaviours of a sample of the     for breast cancer and cervical cancer
                                                                                     HERproject business initiative, to deliver the     workforce and closed with an end line study
                                                                                                                                                                                        increased by about 37%.

                        A PARTNERSHIP
                                                                                     18-month long HERhealth training to female         of the same sample.
                                                                                     workforces in these two factories. The work                                                       • The level of knowledge on the benefits
                                                                                     was closely followed and supported by our          Some examples of the outcomes:                  of ergonomics (workplace posture) has

                                                                                     ethical sourcing specialists based in our          Impress-Newtex Composite (788 female            increased at the end-line. Now, 100% of

                        FOR CHANGE.
                                                                                     Dhaka Sourcing office and jointly funded by        workers)                                        women are aware of the recommended

                                                                                     The Warehouse and the two suppliers.               • The consumption of eggs increased by 47%;    posture of avoiding aches and pain, which

                                                                                                                                         consumption of iron rich vegetables and        was only 36% at the baseline.
                                                                                     HERhealth follows the HERproject                    dark green leafy vegetables increased by      • Gender attitudes to reproductive health and
2020 SUMMARY

                                                                                     methodology, delivering workplace-based             more than 24%; fruit consumption increased     family planning changed at the end-line
                                                                                     interventions with a dual approach:                 by 18% and consumption of vitamin A-rich       study with a much higher weighting towards
                                                                                                                                         fruits and vegetables increased 12%.           shared male and female responsibilities.
                         The Warehouse recognises that women working in              • HERproject provides guidance to managers
                                                                                                                                        • During menstruation, all (100%) women       • Impress – Newtex Management comment:
                         global supply chains, many of whom are young and              on policies and systems improvements
                                                                                                                                         workers now use sanitary napkins instead       “As a result of participating in HERProject,
                                                                                       so that managers can build inclusive
                         undereducated migrants, have limited health knowledge                                                           of fabric scraps from the factory or cloth     (we) observed that a healthy workforce,
                                                                                       workplaces for women.
                         and often lack access to critical health services and                                                           from home. This is compared to 74% at the      especially women workers inspired to fulfil
                                                                                     • Small groups (5%) of women within the            baseline.                                      production target, provide quality work and
                         products. This is especially true in Bangladesh – a vital
INTRODUCTION

                                                                                       factories and farms learn key information.                                                       reduce absenteeism. They are aware of
                         source for our garment manufacture.                                                                            • 80% of the women reported using modern
                                                                                       They then become Peer Educators and                                                              health and hygiene and maintain it in
                                                                                                                                         family planning in the end-line survey
                                                                                       share this information with colleagues.                                                          factory and in their family. There are vast
                                                                                                                                         compared to 59% at baseline.
                                                                                                                                                                                        positive changes observed in the factory
                                                                                     We are really proud of the outcomes of this
                                                                                                                                        • Knowledge levels on the value of breast      and their families."

                                                                                     1. HERhealth™ | Programs | BSR (herproject.org).                                                                   ETHICAL SOURCING REPORT 2021
APPENDICES                                                                                                                                                                                                                                                                                  11

                                    HERhealth:
                                    A PARTNERSHIP
POLICY IN PRACTICE

                                    FOR CHANGE.
                                      80%                                            60%
                                                                                                     80%
                                                                                                      41%                           72%
                                                                                                                                                     60%
                                                                                                                                                     40%                   89%
                                                                                                                                                                                  HERhealth
                                                                                                                                                                                  72%       case study.                  89%
                                                                                                                                                                                  46% Maya has been working at Manami51%Fashions Ltd.
                                                                                                                                                                                  Mrs.
                                       41%                                           40%                                            46%                                    51%    for the last three years. She has two daughters.

                                                                                                                                                                                  She learned about personal hygiene, balanced diet
SUSTAINABLE MATERIALS

                                                                                                                                                                                  and advantages of keeping a family small from the

                                                              EXAMPLES OF HERhealth                                                                                               HERhealth training. Before she would often suffer from
                                                                                                                                                                                  different health issue such as common cold, cough,

                                                                IMPACTS TO DATE:                                                                                                  stomach ache and weakness. Mrs. Maya does not
                                                                                                                                                                                  face these issues anymore, after following the health
                              80%                         60%                      80%              72%                      60%             89%               72%                    89%
                                                                                                                                                                                  messages properly. When she learned the advantages
                              41%                          40%                      41%             46%                      40%             51%               46%                    51% a family small, she decided to keep her
                                                                                                                                                                                  of keeping
                                                                                                                                                                                  family small as well.
                                             80%                                80%        60%                               60%       72%                           72%    89%             89%
                                                              95% increase in number of                                                                                           She shared the story of her sister, Mrs. R---- Her sister
                                                              women believe41%                                                40%              50% increase in number
                                                                                                                                                                  46%                        51%
                                              41%                            that a40%
                                                                                    baby                                               46%     of women using family
                                                                                                                                                                            51%   also has two daughters. Her family is not financially
                                                              should be born in a hospital.
                                                                                                                                               planning products.                 stable. Mrs. R---- does not use any family planning
2020 SUMMARY

                                                                                                                                                                                  methods because she experiences discomfort if she
                                                                                                                                                                                  uses oral pills or injection. Mrs. Maya then discussed
                                                                                                                                                                                                                                              I feel empowered for being
                                                                                                                                                                                  the advantages of keeping families small and the
                                                                                                                                                                                                                                              able to help myself as well
                                                                                                                                                                                  advantages of using family planning methods with her
                                                                                                                                                                                  sister. She advised her sister to use condoms since         as my family members.
 80%                    60%         60%      72%                                 72%       89%                               89%
                                                              56% increase in number                                                           76% increase in number of          other family planning methods did not suit her.
    41%                 40%          40%     46%                              46% 51%
                                                              of women reporting using
                                                                                                                              51%              women that are aware of                                                                                            Maya
                                                              health clinics.                                                                  HIV can be prevented.              Mrs. R----- followed her sister’s advice and began using
INTRODUCTION

                                                                                                                                                                                  condoms. Now her physical condition is better, and she
                                                                                                                                                                                  also feels relaxed because she can maintain her small
                                    Aggregated participant survey data from all programmes showing % change from baseline to end line responses.                                  family well. Mrs. Maya thanked the HERhealth project
                                                                                                                                                                                  and shared that –

                                                                                                                                                                                                                                                             ETHICAL SOURCING REPORT 2021
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                        COVID–19 SUPPLY
APPENDICES

                        CHAIN IMPACTS.
POLICY IN PRACTICE

                          As readers will know in 2020 COVID-19 has had      raised early about the impacts on vulnerable       • Distributed COVID-19 safe resource kits
                          a profound impact on Supply Chains Globally.       workforces in developing countries. At the          prepared by our industry partners – ELEVATE,
                          The first COVID-19 forced factory lockdowns        end of March, the Bangladesh Garment                Her Project, and The Responsible Business
                          began in China in February 2020, followed by       Manufacturers and Exporters Association             Alliance – to supplier factories.
                          a further wave of factory lockdowns in other       (BGMEA) reported that a 1000 of their member
                                                                                                                                • In the case of India, Bangladesh, and Pakistan
                          parts of Asia in the following months. Early in    factories had suffered the rapid cancellation of
SUSTAINABLE MATERIALS

                                                                                                                                 – regions that have been significantly
                          2020 our own stores also suffered lockdowns        USD $2.8 billion worth of orders. The BGMEA
                                                                                                                                 impacted by COVID-19 – we contacted
                          and partial openings until fully reopening under   President put out an international plea to
                                                                                                                                 factories directly to confirm and track their
                          COVID-19 alert level 1 on June 8th.                buyers to honor their commitments and
                                                                                                                                 COVID-19 management practices, confirmed
                                                                             collaborate with their Bangladesh partners in       they were meeting all payment obligations to
                          The rolling pandemic presented multiple supply     order to survive the crisis. Many labour NGOs       their workforces, and operating in accordance
                          chain challenges to manage. With the first wave    and the International Labour organisation made      with any government guidelines.
                          of factory lockdowns in China we were faced        similar calls to action.
                          with delayed availability of future orders and                                                        • Surveyed some supplier groups to assess

                          then as New Zealand lockdowns commenced            In response The Warehouse:                          COVID-19 impacts on their production and

                          we encountered an inverse dilemma – pending        • Ensured we honoured payments due for goods       capacity.

                          inventory we could not trade. Once the New          already produced or where materials had been      • Continued to deliver our Ethical Sourcing
2020 SUMMARY

                          Zealand retail market was fully opened again a      purchased.                                         programme elements of ELearning, vendor
                          surge in consumer spending created another                                                             training, and remotely managing corrective
                                                                             • Provided supplier access to prompt payment
                          challenge, and our sourcing teams raced to                                                             action plans where physical visits or audits
                                                                              facilities through our banking partner.
                          rebuild inventory levels amidst delays in our                                                          were not possible.
                          supply chain, which still persist in early 2021.   • Allowed factories to self-inspect goods and
                                                                                                                                • Reviewed and benchmarked our own actions
                                                                              ship without delay - waiving our usual 3rd
                                                                                                                                 against international calls to supply chain
                          These impacts on retailers and consumers            party inspection requirements.
                                                                                                                                 action such as the Tear Fund COVID-19
                          reverberated back on many suppliers who faced
INTRODUCTION

                                                                             • Restricted our own Asia-based team members       Commitments and the International Labour
                          a wave of order cancellations or deferments         business travel and supported their work from      Organization’s Call to Action.
                          exacerbating productivity losses due to             home needs to ensure their COVID-19 safety.
                          their own local lockdowns. Concerns were

                                                                                                                                                                                   ETHICAL SOURCING REPORT 2021
13

                        RESPONDING TO
APPENDICES

                        FORCED LABOUR
                                                                                                                                                                             The Responsible Business Alliance programme concluded in 2020. The RBA Foundation was
                                                                                                                                                                             able to measure the below overall impacts1 across all program participants through a series
                                                                                                                                                                             of baseline and endline worker surveys.

                        RISKS.
POLICY IN PRACTICE

                                                                                                                                                                                           Workers paid                                     Workers borrowed
                                                                                                                                                                                           recruitment fees                                 money to pay fees

                                                                                                                                                                                               26%                                             43%
                                                                                                                                                                                           Workers received                                 Workers keeping their own
                         Foreign migrant workers play an important role                       Among the countries we source from, Malaysia                                                 full reimbursement                               personal documents

                                                                                                                                                                                               19%                                             9%
                         in many economies, including New Zealand’s.                          has the highest number of foreign migrant
SUSTAINABLE MATERIALS

                         However, they are often vulnerable to unwitting                      workers and we have been working for some
                         or deliberate exploitation, on a spectrum from                       time with our supplier base there to identify
                         unpaid overtime to forced labour or modern-                          risks of forced labour and share insights into
                         day slavery. Recent legislation, such as the                         the recruitment pathways their migrant workers                                                   Recruitment agents participating,
                         Modern Slavery Acts in the UK and Australia,                         follow. Working together with the factory                                                        are more likely to be recommended
                         indicate governments’ increasing interest in                         management and their recruitment agents we
                         doing more to protect these vulnerable workers.                      have been able to significantly improve in these
                                                                                              practices.                                                                     Lower number of workers paid recruitment fees              Fewer workers borrowed money to pay fees
                         • Many of them migrate without information                                                                                                         Overall, the percentage of workers that paid fees          The percentage of workers who borrowed money to
                          and knowledge about their job, employer and                         In addition to carrying our own independent                                    reduced by 26%. In addition, for workers that joined       pay recruitment fees dropped by 43%. This is related
                          country of destination, creating the potential                      due diligence and remediation work, we                                         in the last year and did still pay fees, the average fee   to the reduction in fees, since workers may not need
                          for exploitation by recruitment agencies;                           also invited two of our leading Malaysian                                      payment amount decreased, especially for workers           to borrow money for smaller amounts.
2020 SUMMARY

                                                                                              partners, Muda Paper Converting (school                                        from Indonesia, Nepal and Myanmar.
                         • Workers are often subjected to high                               stationery) and Evergreen Fibreboard (flat-                                                                                               More workers are keeping their own passports
                          recruitment fees which may lead them into                           pack furniture) to join a program for employers                                More workers are reimbursed for fees paid                  The percentage of workers who keep their own
                          debt bondage;                                                       and their recruitment agents working with                                      The percentage of workers who received a                   passports also increased by 9%. Small factories had
                                                                                              foreign migrants. The program was hosted                                       full reimbursement for their recruitment fees              the most significant gains here, up to 22%. This is
                         • Entrenched negative and discriminatory                            and facilitated by the Responsible Business                                    increased from 19% to 38%. However, significant            likely because they had not previously invested in
                          attitudes towards migrant workers reinforce                         Alliance’s Foundation (RBA Foundation)                                         improvement was seen in electronics workplaces             the infrastructure such as lockers to enable workers
                          their vulnerability towards exploitation by                         supported by a grant from the Walmart                                          from 26% to 64%. On the other hand, small                  secure access to their passports.
INTRODUCTION

                          recruitment agencies and employers; and                             Foundation – in addition participating brands                                  workplaces (fewer than 100 workers) and non-
                                                                                              such as The Warehouse and its suppliers also                                   electronics workplaces did not show significant            Recruitment agents participating in the programme
                         • Ineffective provision of grievance mechanism                      made contributions.                                                            improvement on reimbursements,                             were more likely to be recommended by the
                          and remedy exacerbates their condition when                                                                                                        likely because of the financial implications.              workers.
                          they arrive at the country of destination.

                         1. Courtesy Responsible Business Alliance Foundation – Transforming Recruitment of Migrant Workers Practices in Malaysia (Interim Public Report).
                                                                                                                                                                                                                                                                                        ETHICAL SOURCING REPORT 2021
14

                        RESPONDING TO FORCED
APPENDICES

                        LABOUR RISKS.
POLICY IN PRACTICE

                                                               Attention Responsible Business Alliance Foundation                      Attention The Warehouse
                          The programme was well received by
                          our suppliers                        Dear Ms. Lim,                                                           Dear Mr. Trevor,

                                                               Happy to see your email and thank you for sharing the Interim Report    It is great to hear from you. Hope that you are doing well.
                                                               which is very informational.
SUSTAINABLE MATERIALS

                                                                                                                                       As for RRP (Responsible Recruitment Programme), currently we are in the
                                                               Our appreciation goes to our customer The Warehouse in getting us       progress of improving some of our documentation, such as – GAP analysis.
                                                               to join this program. A big thank you to you and your team Ms. Lim in
                                                               taking us through this program where we were able to learn and put      As recruitment agency, we would like to state that we appreciate the fully
                                                               into practice and achieve the desired results.                          supported RRP programme.

                                                               I am confident that with our customers’ support, Evergreen’s journey    Feedback from my staff is that they have gained deep knowledge and their
                                                               to be a responsible workplace will continue.                            understanding improved after attending activities provided. Furthermore, the
                                                                                                                                       foreign workers are very happy and aware of their rights working in Malaysia.
                                                               We shall strive to improve and work towards achieving better
                                                               outcome in this year.                                                   I am looking forward to giving you more updates on the upcoming activities
2020 SUMMARY

                                                                                                                                       by RBA Foundation. We take this opportunity to thank Evergreen and The
                                                               Thank you.                                                              Warehouse for giving us opportunity to participate in this program.

                                                               Kind regards,                                                           Thank you very much. Hope we can meet very soon.

                                                               N.A.Pagan,                                                              Regards,
                                                               HR & Admin Department,
                                                               Evergreen Fibreboard Berhad,                                            Jason Cheong
INTRODUCTION

                                                               PLO 22, Parit Raja Industrial Estate.                                   Agensi Pekerjaan Liew Mee Choo Sdn Bhd
                                                                                                                                       (Recruitment Agent for Evergreen BHD )

                                                                                                                                                                                                     ETHICAL SOURCING REPORT 2021
SUSTAINABLE
MATERIALS.    ETHICAL SOURCING REPORT 2021
APPENDICES                                                                                                                                                                                                                                                                                                   16

                                                                                                                                                      Thanks to the work of the Better Cotton Initiative (BCI), the               minimising environmental harm is a priority for The Warehouse.
                                                                                                                                                      largest cotton sustainability programme in the world, farmers               We are proud to be a member of The Better Cotton Initiative.
                                                                                Cotton is one of the most popular commodities
                                                                                                                                                      in the cotton supply chain can have a voice and can work to
                                                                                in the world. It is a renewable resource, but its                     improve the sustainability of this vital crop.                              When we joined BCI in 2019 we made a public commitment
                                                                                production is vulnerable to poor environmental
POLICY IN PRACTICE

                                                                                                                                                                                                                                  to source 50% of our cotton as Better Cotton by 2024.
                                                                                management and working conditions.                                    Through our membership fees, BCI licensed farmers can                       We are pleased that as at the end of 2020 we nearly achieved
                                                                                                                                                      produce cotton in a way that cares for the environment,                     that goal.
                                                                                                                                                      minimising the negative effects of fertilisers and pesticides
                                                                                                                                                      and caring for water, soil health and natural habitats. BCI                 Better Cotton is sourced via a system of Mass Balance
                                                                                                                                                      farmers also commit to decent work principles – conditions                  and is not physically traceable to end products.
                                                                                                                                                      that support workers’ safety and wellbeing.                                 See bettercotton.org/massbalance for details.

                                                    @Better Cotton Initiative
                                                                                                                                                      Supporting the people who create the products we sell and

                                                                                                                                                      2020 IMPACTS
SUSTAINABLE MATERIALS

                                                                                                                                                      In 2020 The Warehouse sourced Better Cotton Consumption                    3. More than one billion litres of water were saved thanks to
                                                                                                                                                      units equivalent to 2270 tonnes of cotton lint. This represents              our sourcing of Better Cotton.
                                                                                                                                                      about half of the cotton contained in our apparel and home                 4. An estimated 650 kgs of pesticides were avoided thanks to
                                                                                                                                                      textile ranges.                                                              our sourcing of Better Cotton.
                                                                                                                                                      1. More than 3500 farmers reached/trained due to our
                                                                                                                                                                                                                                 5. An estimated 472 thousand euros of additional farmer
                                                                                                                                                      investment.
                                                                                                                                                                                                                                   profitability1 was generated thanks to our sourcing of Better
                                                                                                                                                      2. Almost 6,750 hectares of land cultivated with Better Cotton               Cotton in 2020.
                                                                                                                                                      Initiative due to our investment.

                                                                                                                                                      1 BCI Farmers experience profit increases for a variety of reasons, most commonly due to increased yields and/or optimised use of inputs (such as
                                                                                                                                                      irrigation water, pesticides or synthetic fertiliser).
2020 SUMMARY

                                                      BETTER
                        @Better Cotton Initiative

                                                      COTTON                                                              @Better Cotton Initiative

                                                      INITIATIVE.
INTRODUCTION

                                                       BETTERCOTTON.ORG

                                                                                                                                                                                                                                                                              ETHICAL SOURCING REPORT 2021
17

                        FOREST
APPENDICES

                        STEWARDSHIP
                        COUNCIL.
POLICY IN PRACTICE

                               ®

                                 FSC.ORG
SUSTAINABLE MATERIALS

                                 We know that our customers are                  Environmental protection
                                                                                 FSC® certification requires biodiversity to be
                                 worried about climate change.
                                 They are aware of the link between
                                                                                 maintained, and high conservation value areas -
                                                                                 including old growth forests – to be protected
                                                                                                                                     FSC® PRODUCTS AT
                                 climate change and the
                                 preservation
                                                                                                                                     THE WAREHOUSE
                                                                                 Indigenous peoples’ rights respected
                                 of forests – one of the world’s most            FSC® certification requires forest inhabitants to   You can find Forest Stewardship Council® products
                                                                                                                                     throughout our Stationery, Back to School, Toys, Art
                                 precious resources.                             be consulted and engaged, and cultural rights
                                                                                 to be maintained                                    & Craft, and Outdoor Furniture product ranges.

                                 That’s why The Warehouse is a member of         Fair wage and work environment for workers          In 2020 these exceeded over 700 product lines
                                                                                                                                     selling in excess of 3 million units.
2020 SUMMARY

                                 Forest Stewardship Council (FSC®) and has       FSC® has a strong focus on securing
                                 been specifying (FSC®)certified wood and        workers’ rights by incorporating core
                                 paper products since the early 2000s.           labour requirements into its system. These
                                                                                 requirements include effective abolition of
                                 FSC® is the world’s most trusted sustainable    child labour, elimination of all forms of forced
                                 forest management solution and the original     or compulsory labour, the elimination of
                                 pioneer of forest certification.                discrimination in respect of employment and
                                 Our FSC® and FSC Mix® certified paper and       occupation, respect of freedom of association
INTRODUCTION

                                 wood product ranges provide assurance of :      and the effective recognition of the right to
                                                                                 collective bargaining.
                                 Zero deforestation
                                 Although trees are harvested, there is no net   Learn more:
                                 loss of forest over time                        Forest Stewardship Council® (fsc.org)

                                                                                                                                                                             ETHICAL SOURCING REPORT 2021
OUR POLICY
IN PRACTICE.   ETHICAL SOURCING REPORT 2021
19

                        POLICY IN
APPENDICES

                                                                                                                                                                                                                                           Wages and working hours
                                                                                                                                                                                                                                           In 2020 the average audit score for wages
                                                                                                                                                                                                                                           and working hours was 73%.
                                                                                                                                                                                                                                           Determining workers’ actual pay and its

                        PRACTICE.
                                                                                                                                                                                                                                           relationship to legal entitlements and
                                                                                                                                                                                                                                           working hours is one of the most important
                                                                                                                                                                                                                                           and challenging tasks for our auditors. The
                                                                                                                                                                                                                                           baseline indicator an auditor must be aware
POLICY IN PRACTICE

                                                                                                                                                                                                                                           of is the legal minimum wage for that region
                                                                                                                                                                                                                                           and any entitlements such as workplace
                                                                                                                                                                                                                                           insurance. In many developing countries’
                                                                                                                                                                                                                                           workplaces, workers are paid by pieces
                          This section explains further how the major themes of our                                                                                                                                                        produced rather than an hourly rate. Auditors
                          policy1 are applied in practice.                                                                                                                                                                                 must convert a worker’s total piece rate
                                                                                                                                                                                                                                           payments into an equivalent hourly rate for
                                                                                                                                                                                                                                           regular hours worked and an overtime rate
                                                                                                                                                                                                                                           for overtime hours worked. To make this
                          Management Systems                                         Child Labour                                     Voluntary Labour                                   Health & Safety                                   calculation true auditors must have both
SUSTAINABLE MATERIALS

                          Average audit score for policies and                       We had one underage worker finding               We had no forced labour findings                   Our average health and safety audit score in      accurate payroll data and accurate working
                          management systems in 2020 = 95%.                          in 2020.                                         in 2020.                                           2020 was 90%.                                     hour data and then validate that this amount
                          Within the first section of every audit we                 Child labour is a zero-tolerance issue within    This policy provision addresses risks of forced    A safe workplace is the most basic worker         was paid to the worker either in cash or via
                          undertake, there is a comprehensive series of              our due diligence approach.                      labour abuse. In addition to checking for a        entitlement. Our due diligence assessment         bank account deposits. A random sample
                          twenty-seven checkpoints which examine the                                                                  factory’s policies on these topics our auditors    contains over 57 Health & Safety investigation    of payroll records for individual workers are
                          factories policies and management systems.                 Our auditors carefully review identity records   also closely examine payroll practices for         points. Fortunately, in most cases, because       analysed and averaged over several months,
                          These address wages, benefits and hours,                   for any evidence of underage workers along       evidence of delayed or withheld payments,          of the long-held focus of brands on this          and cross checked with payslips information
                          overtime rates, discipline and termination,                with careful observation of workers during       or deductions associated with disciplinary         area, and the interest of local governments,      from worker interviews.
                          grievance procedures, harassment and abuse                 interviews and the factory tour. Wherever        fines. Where evidence of these practices is        Health & Safety is consistently one of
                          and written contracts. Also included are age               we encounter an underage worker we always        found, an immediate corrective action to the       the highest scoring sectors within our            We have been tracking developing country
                          identification, freedom of association and                 issue the factory a warning along with a         offending practice is raised. Bonded labour        audit reports. In Bangladesh, because of          working hours data for more than ten years.
                          collective bargaining rights, prohibitions on              requirement that they take steps to help         is a concern in countries such as Malaysia         historical deficiencies in the quality of their   Unlike progressive increases in wages, and
2020 SUMMARY

                          child labour, forced or bonded labour, and                 the underage worker leave the workplace          where there are high rates of migrant workers      construction and infrastructure, we have an       significant improvement in health, safety, and
                          non-discrimination on grounds of pregnancy                 while ensuring they are in safe keeping until    coming from other developing countries.            additional requirement that factories must        environmental measures, working hours have
                          or other reasons.                                          the school term recommences or the child         In these environments, our auditors look           be able to evidence that they hold positive       remained persistently high – especially when
                                                                                     reaches the legal working age. The occasional    closely at the recruitment pathways deployed       remediation status within one of the major        viewed from a western perspective.
                                                                                     incident of an underage worker working with      by the factory, their practices around the         historical safety initiatives in Bangladesh.
                                                                                     a relative in the school holidays or entering    safekeeping of identity documents, and             (The Bangladesh Accord and The Alliance for
                                                                                     the workforce a few months prematurely is        worker disclosures about the fees paid to          worker safety).
                                                                                     very different to systemic and abusive child     secure their placements or access to working
                                                                                     labour – which we have never encountered in      visas. The legality of visas is closely examined
INTRODUCTION

                                                                                     the tier of the supply chain we can observe      as undocumented workers or those with
                                                                                     and influence.                                   expired visas are vulnerable to exploitation.

                          1. See page 23 for an abbreviated version of our policy.
                                                                                                                                                                                                                                                         ETHICAL SOURCING REPORT 2021
20

                        POLICY IN PRACTICE.
APPENDICES
POLICY IN PRACTICE

                         A cultural norm of “12 (hours) x 6 (days)”         Freedom of association and collective                                                              Subcontracting                                   Business integrity
                         is tacitly endorsed through many Chinese           bargaining                                                                                         Our risk-based investigations revealed 22        Our overall audit transparency score in 2020
                         workplaces including some white-collar             Each audit we undertake includes an                                                                instances of unauthorised subcontracting         was 88%.
                         environments. Long hours remain despite            evaluation as to whether these worker                                                              in 2020.                                         Every audit we undertake contains the auditor’s
                         the intensive monitoring efforts of numerous       rights are being restricted. However, the                                                          Ensuring that production is occurring in         assessment of the transparency and reliability
                         brands and multi-stakeholder initiatives.          legal sanction for such rights varies by                                                           qualified source factories is a challenge in     of the audit findings. Our auditors function
                         Unless local governments decide to strictly        country. China for example has not ratified                                                        many supply chains - especially in apparel       within a protocol that demands an immediate
                         enforce this element of their labour law,          the International Labour Organization                                                              and footwear. We have developed a way            notification of any integrity breaches such
                         change is unlikely. Production worker earning      conventions related to the rights to organise,                                                     to identify factories that may be at risk of     as bribery attempts. We received two such
                         aspirations, and competitive labour markets        associate, and collectively bargain. Nor has it                                                    these practices by analysing their patterns of   notifications in 2020. By far the most common
SUSTAINABLE MATERIALS

                         continue to dictate working hour norms –           ratified the convention obliging ILO members                                                       production and shipping. Where indicated,        breach of integrity we encounter is an attempt
                         even where wages have grown significantly.         to maintain a system of labour inspection.        Environment                                      we then conduct surprise inspections which       during an audit to misrepresent payroll and
                         Our approach is to place transparency at           Bangladesh by contrast has ratified both          Factories’ environmental audit scores            involved a multifaceted reconciliation           working hour data. This is a zero-tolerance
                         the forefront and seek a reliable account of       these conventions – their garment sector          averaged 87% in 2020.                            of the factories production assets and           issue for us and unless this is resolved
                         working hours in every audit we undertake.         alone has more than 500 registered trade          The suite of environmental check points          documentation against our purchase               promptly we terminate the trading relationship.
                                                                            unions. Notwithstanding China’s position our      within our audit tool seeks to assess first      order history. In the instances where we         Our commercial terms include penalties
                         According to data from our China factory           audits have never revealed any attempts by        whether the factory has achieved any form        uncover unauthorised subcontracting we           for submitting falsified documentation or
                         audits in 2020 average weekly working hours        factory management to restrict these rights.      of external environmental accreditation such     may suspend trading with the responsible         certificates.
                         were 63 hours. In a much wider sample of                                                             as ISO 14001, or Oeko-Tex 100. We then           vendor or factory until we can re-establish
                         audits undertaken for multiple international                                                         examine the factories environmental planning     confidence that they will adhere to our          We maintain suppler scorecards with social
                         brands working hour averages for China                                                               resources such as its policies, environmental    policies. An escalating series of commercial     and environmental measures. High performing
                         and Bangladesh respectively were 65 and                                                              hazard register, and records associated with     penalties are applied which may lead to a        suppliers are rewarded with extra business.
2020 SUMMARY

                         66 hours per week.1 We believe by pursuing                                                           energy and water conservation. Finally,          termination of the business relationship.
                         transparency and accepting reasonable local                                                          we track the practical and legally required                                                       New Zealand is still fortunate enough to
                         working norms we are much more able to                                                               actions being taken to monitor wastewater        Unless a final manufacture site is very large    enjoy the highest ranking in Transparency
                         identify excessive hours and reduce these via                                                        discharge, control air pollutants, dispose of    and vertically integrated some processes         International’s World Corruption Perceptions
                         the corrective actions plan agreed with the                                                          solid waste, enable recycling, and deal with     and most procurement of materials                Index. We are lucky that “doing the right thing“
                         factory. A typical corrective action request                                                         any hazardous wastes.                            and components must be sourced from              is still a core Kiwi value. At the Warehouse, we
                         where excessive hours are identified is to first                                                                                                      subsidiary suppliers or processors. This is      are determined to do our best to uphold this
                         reduce weekly hours to 72 or less with one                                                           We have observed a steady improvement in         a necessary and entirely legitimate form of      value wherever we operate. We know we are
                         rest day per week along with an insistence                                                           environmental practices In the history of our    subcontracting.                                  not perfect - we find challenges everyday –
INTRODUCTION

                         that overtime hours are compensated                                                                  programme. Many factories especially those                                                        but we are continuing to press forward with
                         correctly.                                                                                           in the textile sector now exhibit leading edge                                                    efforts to foster supplier relationships based
                                                                                                                              water, energy, and chemical management                                                            on transparency and integrity.
                          See wage and working hour table page 49
                                                                                                                              policies.

                                                                                                                                                                                                                                               ETHICAL SOURCING REPORT 2021
APPENDICES.
              ETHICAL SOURCING REPORT 2021
22

                        PROGRAMME OUTCOMES &
APPENDICES

                        TRENDS 2019 – 2020.
POLICY IN PRACTICE

                         This table captures the most important activities amd outcomes over the past two years.
                         Some activity was restricted in 2020 due to COVID-19 lockdowns in source countries.

                         Key Measures and Activity Trends                                                           2019   2020   Key Measures and Activity Trends                                                                2019         2020
SUSTAINABLE MATERIALS

                         Active factories (all categories)                                                          593    489    Audit transparency achieved
                                                                                                                                                                                                                                  85%          88%
                                                                                                                                  % Validated verbal and documented audit disclosures
                         Active factories (apparel only)
                                                                                                                    119    102
                         Factories with orders > USD 50K in the period
                                                                                                                                  Traceability of orders to qualified factories                                                   95.30%       98.05%
                         New factories qualified                                                                    240    170
                                                                                                                                  Unauthorised subcontracting findings
                         New factories declined                                                                                                                                                                                   18           22
                                                                                                                    115    84     Discovered via unannounced production audits… subject to financial penalties
                         Pass rate of new applicants - 67% in 2020

                         Audits completed (unannounced)                                                                           Underage worker findings
                                                                                                                    341    208                                                                                                    0            1
                         Labour and Environmental audits by qualified 3rd parties – all semi-announced since 2019                 Incidents always followed by a standardised underage worker remediation protocol

                         Audit waivers (desktop recognition) approved                                                             e–Learning lessons completed
2020 SUMMARY

                                                                                                                    77     68                                                                                                     2443         2037
                         Recognition of an existing audit report from a qualified 3rd party                                       Topics include , assessment preparation, working hours control, transparency and ethics,
                                                                                                                                  corrective action plans, vendor responsibility
                         Average overall audit score                                                                84%    86%
                                                                                                                                  Supplier responsibility trainings
                             • Policies                                                                             93%    95%    Face to Face workshop training with vendors enabling them to maintain their own due diligence   44           23
                                                                                                                                  over their factory base.
                             • Wages and Working Hours                                                              69%    73%
                             • Health & Safety                                                                      90%    90%    Worker feedback and helpline trainings
                                                                                                                                                                                                                                  N/A          47
                                                                                                                                  A new training focused on worker grievance channels
                             • Dormitory                                                                            91%    93%
INTRODUCTION

                             • Environment
                                                                                                                    86%    87%    Corrective action plan progress follow up
                             Average Audit Subsection scores                                                                                                                                                                      204          268
                                                                                                                                  The number of factories under continues improvement monitoring within the calendar year

                                                                                                                                                                                                                                         ETHICAL SOURCING REPORT 2021
23

                        FACTORY POLICY POSTER.
APPENDICES

                                                                                                                                                                                                      1
POLICY IN PRACTICE

                          This policy applies to all suppliers of goods and            Voluntary Labour                                               Wages and Benefits                                         parallel means for independent and free association         Reporting Breach of Policy
                          services to The Warehouse Group, (TWG), which                Our suppliers are prohibited from using any kind               Wages for regular working hours shall meet or exceed       and bargaining. Workers’ representatives should not be      For more information or to anonymously report any
                          includes the subsidiary companies The Warehouse,             of prison or bonded labour. Any kind of obligation             local minimum rates, enable workers to meet their          discriminated against and have access to carry out their    breach of this policy please contact:
                          Noel Leeming Group, Warehouse Stationery, and                associated with recruitment fees, fines, loans, deferred       basic needs, and provide some discretionary income.        representative functions in the workplace.                  ethical.sourcing@thewarehouse.co.nz
                          Torpedo7.                                                    payment is prohibited. Any recruitment through human           Where labour is employed indirectly through a licensed                                                                 All reports will be followed up. The identity of
                                                                                       trafficking is strictly prohibited throughout the supply       agency or broker, wages for regular working hours shall    Subcontracting                                              anyone who makes a report will be kept strictly
                          The policy is a supplement to, not a substitute for, all     chain. Suppliers shall not retain identity documents           meet or exceed local minimum rates, enable workers to      Facilities engaged by the supplier / factory for            confidential.
                          local laws and regulations applying to suppliers in their    (such as passports or identity cards) unless at the            meet their basic needs, and provide some discretionary     subsidiary processing must be disclosed at the time
                          country of origin. Suppliers regardless of their size or     request of workers and with written permission.                income.                                                    of factory registration. Subsidiary processing facilities
                          class of goods and services are expected to be aware                                                                                                                                   may be inspected at any time at the discretion of              Worker Feedback & Helpline
                          of, and strive to adhere to, all laws and regulations        Health & Safety                                                Where workers are paid by piece, the factory’s piece       The Warehouse Group. Purchase orders must be
SUSTAINABLE MATERIALS

                                                                                                                                                                                                                                                                                Workers should first endeavour to
                          governing their operations especially in regard to the       Suppliers must ensure safe and healthy working                 rate schedule should enable workers to achieve at least    manufactured at the factory designated by the
                                                                                                                                                                                                                                                                                present feedback or complaints to the
                          employment of their workforce, health and safety,            conditions for all workers. Hazards must be clearly            the minimum legal payment applicable to all regular and    supplier on the purchase order. Order diversion or
                          environmental protection, and the safety, quality, and       identified and controlled through a working health and         overtime hours worked.                                                                                                    factory’smanagement and human
                                                                                                                                                                                                                 subcontracting of primary manufacture to a factory
                          legality of goods and services sold to companies within      safety plan. Suppliers must appoint a senior manager                                                                                                                                     resources staff. If feedback or complaints
                                                                                                                                                                                                                 other than designated on the purchase order shall
                          The Warehouse Group.                                         to be responsible for health and safety , provide regular      Every worker must have signed contracts that               only occur with the advance knowledge and written              about serious breaches of The
                                                                                       safety training to workers, and ensure appropriate             includes relevant information about their employment       authority of The Warehouse Group.                              Warehouse Group policy are not resolved
                          ETHICAL SOURCING POLICY ELEMENTS                             Personal Protection Equipment is used by workers at            conditions, wages, working hours and benefits.                                                                            with the factory, workers are welcome to
                          The following standards are pre-requisite for                all times. Suppliers must comply with all national laws,                                                                  Business Integrity                                             contact The Warehouse anonymously:
                          all the suppliers in the TWG supply chain.                   regulations and best practices concerning building,            Working Hours                                              Suppliers shall not offer gifts or money to any employee
                                                                                       electrical, and fire safety. Serious violations of local law   Regular working hours, excluding overtime, should not      or service provider engaged by The Warehouse.                  Via email:
                                                                                       pertaining to worker health and safety should always be        exceed legal limits. Overtime must not be excessive. All   Assistance with transportation shall be limited to
                          Management Systems                                                                                                                                                                                                                                    ethical.sourcing@thewarehouse.co.nz
                                                                                       reported to local authorities if not immediately resolved      overtime hours should be voluntary and compensated         local hub connections. Hospitality shall be limited to
                          Suppliers should maintain all necessary policies,
                                                                                       by factory management.                                         correctly.                                                 working lunches or dinners. Where an employee or
                          management and information systems, facilities,
                                                                                                                                                                                                                                                                                In India, Bangladesh and South East Asia
2020 SUMMARY

                          and human resources needed to ensure they comply                                                                                                                                       service provider of The Warehouse Group solicits gifts,
                                                                                       Non-discrimination                                             Workers shall be provided with at least one day off in     money or any other benefit this must be declined and           at: +880173119060
                          with all applicable local laws and regulations and the
                          requirements of this policy.
                                                                                       The suppliers must not discriminate in hiring,                 every seven-day period or two days off in every 14-day     reported to The Warehouse Group at ethical.sourcing@           In China at below QR Code:
                                                                                       compensation, promotion, termination or retirement             period.                                                    thewarehouse.co.nz or to the most senior local
                                                                                       based on race, caste, national origin, religion, age,                                                                     representative of The Warehouse Group.
                          Child Labour
                                                                                       disability, gender, marital status, sexual orientation,        Supplier must record workers’ regular and overtime
                          Suppliers shall not employ workers younger than the
                                                                                       union membership or political affiliation. Women must          hours accurately as the basis for controlling excessive    Suppliers and their employees shall not attempt to
                          national minimum working age. A worker must be at
                                                                                       be able to enter and remain in the workforce without           working hours and providing correct compensation.          fraudulently meet the requirements of this policy, or
                          least 15 years old or over the minimum age required
                                                                                       mandatory pregnancy testing and must have access                                                                          quality standard, or any other business requirement
                          by the local legislation of the country of manufacture.
                                                                                       to all their maternity leave entitlements under local          Freedom of Association and Collective Bargaining           through any kind of intentional misrepresentation or
                          Suppliers must ensure all legal requirements for the
INTRODUCTION

                                                                                       law. A feedback and complaints policy, process, and            Suppliers are required to recognize and respect the        deception whether documentary or verbal in nature.
                          work of authorized juvenile or young workers pertaining
                                                                                       training must be established for workers that ensures          right of their workers to freedom of association and       Suppliers shall participate in any audits or assessment
                          to hours of work, wages, type of work and working
                                                                                       confidentiality, freedom from reprisal, and a pathway to       collective bargaining in accordance with local law.        undertaken with respect to their compliance with this
                          conditions. Children are not permitted in the workshop
                                                                                       resolution.                                                    The employer must not hinder, the development of           policy in a cooperative and transparent manner.
                          areas of the factory during holidays or at any other time.

                          1. Also translated into Hindi, Bangla and Mandarin.

                                                                                                                                                                                                                                                                                             ETHICAL SOURCING REPORT 2021
24

                        TIER 1 APPAREL MANUFACTURING
APPENDICES

                        FACTORIES – ACTIVE IN 2020.
POLICY IN PRACTICE

                         Factory Name                      No. of workers   Street Zone                                                              Town                                  City                   Province            Country
                                                                                                                                                                                                                                                   Disclaimer:

                         Arrival Fashion (Gazipur)         2225             Vill - Colomesshor                                                       P.O. - National University            Gazipur                Dhaka               Bangladesh   This factory list represents all our private
                         Bd Designs Private Limited        2422             Plot: 48-49, Sector:03, Karnaphuli Epz                                   Chittagong                            Chittagong             N/A                 Bangladesh   label apparel factories with orders in excess
                         Birds RNR Fashions                2400             113, Baipail                                                             Ashulia                               Savar                  Dhaka               Bangladesh   of USD 50K in 2020. Equivalent in total to
                         Essential Clothing                770              Akulichala, Sakashor                                                     Maddhapara                            Gazipur                Dhaka               Bangladesh   95% of order value. Our certainty about the
                         Hams Garments                     4850             Dakkhin Vangnahati, Boiragirchala                                        Sreepur                               Gazipur                Gazipur             Bangladesh   completeness of this list and the labour and
SUSTAINABLE MATERIALS

                         Impress-Newtex Composite          4700             Gorai                                                                    Mirzapur                              Tangail                0                   Bangladesh   environmental standards in these factories
                         L Usine Fashion (Mawna Unit)      1000             Ansar Road, Kawya, Chonnapara, Maona.                                    Sreepur                               Gazipur                Kawya               Bangladesh
                                                                                                                                                                                                                                                   is provided in good faith and is based on the
                                                                                                                                                                                                                                                   information accessible to us via the policies
                         M.i.m Fashion                     930              226/1, Tilargati, Shingbari Road                                         Tongi                                 Gazipur                0                   Bangladesh
                                                                                                                                                                                                                                                   and procedures described in this report
                         Manami Fashion                    1410             Kabirpur, Ashulia                                                        Savar                                 Dhaka                  0                   Bangladesh
                                                                                                                                                                                                                                                   and on our website. The publication of this
                         Matrix Styles Ltd                 990              Degerchala, National University,                                         0                                     Gazipur                0                   Bangladesh
                                                                                                                                                                                                                                                   list does not constitute an invitation nor
                         Network Clothing                  1000             228/3,Shahid Rawshan Sarak, Chandana                                     Gazipur                               Gazipur                0                   Bangladesh   permission to visit these factories. These are
                         Nippon Garment Industries         1200             Auchpara, Tongi, Gazipur                                                 0                                     Gazipur                0                   Bangladesh   private businesses - not owned in whole or in
                         Norban Comtex                     3870             Mouza: Sarabo, Kashimpur                                                 Gazipur                               Gazipur                Dhaka               Bangladesh   part by The Warehouse.
                         Opex Garments                     1104             56/1, Block-C, Section-13                                                Mirpur                                Dhaka                  Dhaka               Bangladesh
                         Silver Composite Textile          3055             Bk Bari, Taltoli                                                         Monipur                               Mirzapur               Gazipur             Bangladesh
                         Tm Fashions                       2400             Chandana Chowrasta                                                       Gazipur Sadar                         Gazipur City           Gazipur             Bangladesh
                                                                            Plot # 923 & 928, Aziz Complex, Vogra, National University, Joydevpur,
                         Valmont Fashions                  1805                                                                                      0                                     Gazipur                0                   Bangladesh
                                                                            Gazipur
                         Voyager Apparels                  758              8, Malibag Chowdhury Para, Dhaka-1219                                    0                                     Dhaka                  0                   Bangladesh
                         Anhui Huiyuan Garments            350              107# Danxia Road                                                         Economic Development Zone             Hefei                  Anhui               China
                         Baijia(Fujian) Underwear (FAMA)   1000             Shifeng Industrial Area                                                  Shenhu                                Jinjiang               Fujian              China
2020 SUMMARY

                                                                                                                                                     Yan Qi Industrial Development Zone,
                         Beijing Aikon Textiles            104              No. 11, West First Yanqihe Road,                                                                               Beijing                0                   China
                                                                                                                                                     Huairou
                         Changzhou Gaorui Clothing         180              No.16 Hongshan Road                                                      Jintan                                Changzhou              Jiangsu             China
                         Changzhou Gaozhuo Clothing        160              No.2 North Xinghuo Road                                                  Hutang                                Changzhou              Jiangsu             China
                         Cixi Aoerlan Garment              500              No.142, Datang West, Songjiacao Village, Kuangyan Town                   0                                     Cixi City              Zhejiang            China
                         Dongguan Yongzhi Leather          500              No.16 2nd Lane,Xuetang Village                                           Liaobu                                Dongguan               Guangdong           China
                         Fanchang Huanghu Garment          120              Huanghu                                                                  Fangchang                             Wuhu                   Ahhui               China
                         Fortress Expert                   157              Changhong Road 5, Zhangkeng Industrial Park                              Xicheng Area, Hengli Town             Dongguan               Guangdong           China
                                                                                                                                                                                           Minhou County,
                         Fuzhou Outstar Clothing           35               2nd Floor, 1st Building,Riversuny Building, Zhongyuan Village            Xiangqian                                                    Fujian              China
                                                                                                                                                                                           Fuzhou
                         Gaotang Shangde Garments          121              South Of Hesheng Road                                                    Gaotang County                        Liaocheng City         Shandong Province   China
INTRODUCTION

                         GMT TW                            292              No. 80 Longxing Nan Road                                                 Shaxi                                 Zhongshan              Guangdong           China
                         Guangzhou Bangqi Leather          300              No. 83 Xiangxing Road                                                    Shiling Town                          Guangzhou              Guangdong           China
                                                                                                                                                     Yiqun Village, Shiling Town,Huadu
                         Guangzhou Jingni Leather          500              No. 3, Lane 1, East Economic Society                                                                           Guangzhou              Guangdong           China
                                                                                                                                                     District
                                                                            Building A1, 2 Road No.3 Fangzhong Huangshatou Village Xintang                                                 Zengcheng Dis-
                         Guangzhou Qiqi Garments           139                                                                                       Xintang                                                      Guangdong           China
                                                                            Town                                                                                                           trict,Guangzhou City
                         Haining Weiersi Kintting          300              No. 5, Shuanglian Road                                                   Haining Economic Development Zone Haining City               Zhejing Province    China
                         Haiyang Worldbest Co., Ltd        220              No. 6, Yantai Street, Industrial Park Economic Development Area          Fengcheng                             Haiyang                Shandong            China

                                                                                                                                                                                                                                                                 ETHICAL SOURCING REPORT 2021
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