Social and Ethical Audit Report
Labour practices in our global supply chains
Factory X has a long-held commitment to upholding safe and fair conditions for workers in its global supply chain.
The current ethical sourcing policy was developed in 2008 by an external consultant. It provides a framework for communicating our ethical standards to our manufacturers. using the ethical trading initiative base code as a guide, it references both local laws, the international labour organisation (ILO) conventions and principles of the united nations universal declaration of human rights.
The policy addresses key criteria for the following areas:
- Labour rights/ Freedom of employment
- Freedom of association and the right to collective bargaining
- Safe & hygienic working conditions
- Regular employment
- Child labour
- Fair wages
- Reasonable working hours
- Harsh or inhumane treatment
- Bribery & corruption
- Fair and equitable treatment
- Environmental compliance
Factory X expect our manufacturers to implement and maintain systems for meeting the requirements stated in our Ethical Sourcing Policy.
To monitor compliance, we have designed the following 3-step auditing process.:
Step 1: Factory Self-Assessment
All factories are required to complete a self-assessment annually; this includes the development of a Corrective Action Plan with timeframes for addressing issues.
Step 2: Factory X Audits
Factory X has an in-house bi-lingual team who conduct audits on a regular basis. Any corrective actions are addressed with the local manufacturer and a plan of action is agreed. A randomly scheduled audit follows to ensure that the corrective action takes place.
Step 3: Third-Party Audits
Random audits to ensure the accuracy of internal audits are also conducted by qualified and experienced third-party certification body.
All our auditors use the following scoring system to communicate results:
|1||Meets or exceeds Factory X Ethical Policy Requirements|
|2||Meets the majority of factory x ethical policy requirements, with a corrective action plan developed that includes one or more minor issues|
|3||Meets the majority of factory x ethical policy requirements with a corrective action plan developed that includes one or more major issues|
|4||Failed to meet factory x ethical policy requirements, with major corrective plan required and immediate action agreed|
|5||Failed to meet factory x ethical policy requirements with a critical action plan developed and immediate action required|
|6||Failed to meet factory x ethical policy requirements with a zero-tolerance issue included in the critical action plan and immediate action required|
|7||Failed to respond to respond to corrective plan in a reasonable timeframe resulting in cessation of trading|
|8||Failure to respond to a critical action plan that includes a zero-tolerance issue; immediate cessation of trading due to major contract breach|
Factory X’s results 2016/2017
6 factories have undergone a 3rd party audit by qualspec
7 factories have undergone an audit by a factory x auditor.
Most factories that underwent a Qualspec audit scored 3. All issues relating to health & safety & collective bargaining have been resolved. We are still working with some factories to resolve wage and overtime issues.
1 factory received a rating of 5. issues identified related to safety including fire alarms and safety exit signs not being present. These issues were resolved in a timely manner at one factory.
The charts below provide an overview of the qualspec audit results:
Maintaining consistent relationships
Factory X is committed to maintaining, long-term relationships with our manufacturers.
We have been working with 67% of our factories for more than 5 years and 23% of factories for over 10 years.
Where we manufacture
We currently use 51 factories to produce Factory X products. The factories are in China (44 factories), India (5 factories), Pakistan (1 factory) Taiwan (1 factory)
A list of our factories is available here.
If you have any further questions or concerns, then please contact us at firstname.lastname@example.org.