ASOS : statement on policies and actions to protect vulnerable people in our supply chain Read

24th October 2016 ASOS statement on policies and actions to protect vulnerable people in our supply chain "Caring about what goes on in our supply chain, wherever in the world, is not just an option, it's vital. Turkey is particularly challenging for us right now, with the massive influx of refugees there. We welcome any reporting that draws attention to the challenges our industry is wrestling with if it brings pressure on the local Government, local employers, irresponsible brands … anyone who can improve the plight of vulnerable workers. The issues Panorama raises aren't with our approved factories, who we audit. It's with unapproved outsourcing to factories we don't know about. This will continue to be a problem until we know where every garment is made and however difficult, that's what ultimately we've got to achieve. We could put our work out to another country, but we think that would be irresponsible. By staying in Turkey and working within the system, we are committed to building good ethics into our supply chain and in the meantime, we continue to play our part in supporting vulnerable people".

Nick Beighton, CEO, ASOS plc

ASOS sources products from 28 countries, involving more than 500 factories and involving many thousands of people. We take the whole subject of the human rights and welfare of the often vulnerable workers in our supply chain incredibly seriously. It's a never ending challenge that we and other responsible brands wrestle with every day. It isn't our approved factories that are the issue - we audit them regularly and have worked with many of them for several years. It's the unauthorised outsourcing to unapproved factories that we don't even know that is the biggest issue. Until we know where every one of our garments is worked on, the problem remains. Total transparency is what we and our industry must work towards urgently.

Accordingly, we put a significant and increasing resource into this area: we currently have a team of executives whose sole job is to work with our supply chain. Many of the countries we source from have labour laws that are weakly enforced at best and the scope for factories there to take advantage of vulnerable people is a constant issue. Turkey is a special case with over 3 million Syrian refugees - and rising daily - flooding into the country, needing to work to live. The scope for abuse in the Turkish garment industry is obvious.

As part of the many policies they employ, our ethical trading team have developed a "tiering system" of grading factories and rating them by our ethical benchmarks. They oversee audits of every factory we source from, visiting them on the ground - often unannounced.

We find that a collaborative approach with the factories works over time. We have adopted a partnership programme which means we are active within the system to bring about change. We've been in Turkey for 8 years and some of our suppliers today are the ones we first used when we started. These relationships have allowed us to partner with these factories to build their processes to include our values and we are proud of that.

It should go without saying that ASOS is totally opposed to underage workers in its supply chain anywhere in the world. We have not found child labour in any of our approved Turkish factories. Most importantly, our team oversees remediation programmes for vulnerable people who they discover in the workplace. In the example BBC Panorama showed, that was a factory we didn't know about - unapproved outsourcing. Although we didn't know this factory, we immediately got our team into it, removed the underage workers and have brought them into our remediation programme which includes putting the young people back into full time education and funding them until they are qualified to work. It also includes regular family welfare visits. Inevitably, there are many more factories we won't know, but nonetheless, our objective has got to be to know where every ASOS garment is worked on.

ASOS is a member of a number of groups driving ethical change in the international garment industry supply chain. We work with Governments, NGOs, local unions and other bodies, all striving to improve working conditions for vulnerable people. Whilst we absolutely acknowledge that there is much more to do, we believe that we are at the forefront of our industry in these areas and we remain totally committed to creating a supply chain that reflects our values.

We believe that ethics in fashion - "Fashion with Integrity" is how we say it - is vital. This is not optional. It is central to the future of our business. Our young customers care and they won't deal with companies that don't. We agree. They shouldn't.

Here is how ASOS is working to improve conditions within its supply chain. POLICIES

Codeof Conduct

• ASOS Code of Conduct covers all areas of the human rights base code

• It is translated into 4 languages

• It is shared with our suppliers and factories and they are under obligation to manage our code of conduct through theirsupply chains orwe will cease trading with them

  Child Labour Policy

• ASOS Child Labour Policy strictly prohibits child labourin any form in our supply chain

• It sets out remediation processes foraction should we find child labourin oursupply chain

• It provides guidelines forthe employment of young workers

• It prohibits children entering production areas

• It is translated in 4 languages

MEMBERSHIPS

ETI

• ASOS is a memberof the Ethical Trading Initiative, having joined in 2009

• The Ethical Trading Initiative is a tripartite membership organisation consisting of brands, NGOs and Trade Unions with a particularfocus on workers' rights

• ASOS reports regularly on its supply chain actions to the ETI

  ETI Turkey Programme

  • ASOS has joined ETI's Turkey programme which has been set up to address labour rights issues in Turkey. In line with the UN Guiding Principles on Businessand Human Rights the programme willestablishaplatform to: o allow businesses, employers, suppliers and trade unions to work togetherto build awareness of and

    capacity to promote Business and Human Rights

    • engage local stakeholders in workplacesocial dialogue to promote improved employment conditions, protect workers' rights and resolve conflicts

    • to develop betterpolicies and approaches to grievance redressal

      TURKEY SUPPLY CHAIN STRUCTURE

      Numberof suppliers, factories, workers at September 2016

  • Total numberof suppliers: 23

  • Total numberof factories: 66

  • Total numberof workers: 7,793

    Producttypes and processes

  • Products require different processes in order to complete the full garment and these must be fully declared by our suppliers and factories. We work hard to ensure we map the tier levels of our supply chain foreach of our product areas so that we can visit all factories in this chain.

    Tier levels

    Supply chains are complex in nature, so we assign a tier level to ourfactories.

  • Tier 1: Is the main producer who would typically be the factory which cuts, stitches, finishes and ships the garment to ASOS.

  • Tier 2: Stitching, cutting, finishing

  • Tier 3: Printing, embroidery, garment dying, laundry forwashed processes The full list of processes which may be outsourced must be declared to ASOS :

  • Cutting; stitching; pressing; labelling; finishing; quality checking; packing; or any otherfinishing processes no matterhow small or infrequent;

  • Dying, printing, washing and laundering of cut pieces orfinished items;

  • Manufacture of labels; buttons; tags (where ASOS branding is used);

  • Embellishment; embroidery;

  • Piece assembly (jewellery, accessories, footwear);

  • Brand and care labels; packaging; shoe boxes (where ASOS branding is used);

  • Re-processors and warehousing

    Undeclared subcontracting

  • Any production processes which are listed above and have not been declared to ASOS would be undeclared subcontracting and are strictly prohibited by ASOS

  • On discovering undeclared subcontracting:

    • We immediately visit the site to ensure no major infringement of our policies and that workers are protected: put in place remediation where needed

    • Contact the supplierand factory responsible with next steps and afirst warning

    • Contact buying teams and senior retail staff to advise of the i ssue and place a hold on orders where necessary

    • Review the supplier and/or factory relationship, ultimately if we cannot assure ourselves our standards are being met, terminate the relationship

      Communication

  • ASOS holds regularconferences with suppliersand factories.Ourlast conference in Turkeywas in March 2016 with suppliers and factories

  • We held aconference in the UK during October 2016 forour top suppliers

  • We are in regularcontact with oursuppliers and factories both in the UK and in Turkey

  • Our local team visits all factories on aregularbasis. These visits are both formal audits as well as short checks to follow up on corrective action plans. All visits are unannounced

    HEAD OFFICETEAM

    Role and Responsibilities

    • Development of strategy and implementation of long terms goals in relation to human rights

    • Engagement with and reporting to internal and external stakeholders on programme work

    • Development of project work specific to labour markets and to mitigate risks of harm to workers against our code of conduct

    • Regularcontact with retail teams, suppliers, factories and local teams

    • Development of process and policy in line with changing labour markets and local and international legislation

    • Audit processes and datamanagement

    • Stakeholderengagement and participation in external initiatives

    • Supply chain mapping

    • Control of onboarding suppliers and factories and exit processes

    • Remediation of serious issues

      LOCAL TEAM

      Role and responsibilities

  • Unannounced factory audits

  • Follow up at factory level to manage through corrective actions based on audit visits

  • Regularchecks and communication with factories on individual action plans as well as ASOS code and policy

  • Close contact with ASOS head office team regarding strategy for improvements in the Turkish supply base

  • Development of audit methodology and improvement to processes

  • Regularupdates on ASOS database regarding corrective actions and factory information

  • Critical issue and remediation plans

  • Connecting with local stakeholders and NGOs

  • Subcontracting checks and supply chain mapping

    AUDIT PROCESSES & FINDINGS

    Methodology and structure

  • ASOS audits all factories in ourapproved supply chain

  • ASOS audit methodology is based on experience and best practices and can only be carried out by our own local teams

  • All audits are unannounced, meaning factories have less chance to evade ouraudit processes The structure of a typical audit is:

    • Factory tour - to make observations about the production floor, building and workers

    • Review of key documentation - wage and working hours' records, personnel files, licences and certificates