Supplier compliance

Supplier Compliance Levels in Detail
 

We are committed to transparent reporting. And we dedicate major resources to monitor our suppliers' sustainability performance and support them in making improvements. That's why we disclose the compliance level of our entire supplier base in detail, down to every single question from our Sustainable Impact Partnership Programme (SIPP), which we started to implementing in 2015. SIPP replaces our previous Full Audit Programme (FAP), we expect the transition to continue throughout 2017.

Audit question EMEA Far East South  Asia Total
CHILD LABOUR
Are all workers above or the same age as the minimum age required by the national law, and H&M's Code of Conduct?* 100% 100% 100% 100%
Total compliance 100% 100% 100% 100%
YOUNG WORKERS' REQUIREMENTS
Are workers younger than 18 working under legal conditions? 28% 82% 100% 65%
Total compliance 28% 82% 100% 65%
WORKERS' BASIC RIGHTS
Is absence of forced labour confirmed? 100% 100% 100% 100%
Can all workers enter and terminate their employment freely? 100% 94% 100% 97%
Are all overtime hours above legal limit voluntary? 98% 75% 99% 88%
Do foreign and migrant workers have equal employment terms as local workers? 98% 99% 100% 99%
Do foreign and migrant workers have a residential permit/working permit? 75% 89% 100% 89%
Are all workers protected from any forms of abusive behaviour in the factory? 98%
98% 96% 97%
Are all workers protected from any form of physical abuse or sexual harassment? 100% 100% 100% 100%
Are workers in the factory free to join or form a union? 100% 100% 100% 100%
Is there a trade union represented in the factory? 17% 
60% 6% 18%
Does the factory have legally required worker committees? 85% 
59% 78% 73%
Is the factory covered by a collective agreement? 33%           
75% 3% 22%
Are all workers, regardless of gender, ethnicity, religion or geographical background treated equally? 99% 99% 99%
99%
Do all workers have employment contracts? 89% 87% 84%
87%
Are all relevant areas covered in their contracts? 75%    
93% 86% 87%
Total compliance 80% 90%
77% 84%
WORKERS' RIGHTS
Are the regular working hours within legal limits? (Excl. overtime) 99%     
82% 95% 91%
Are monthly overtime hours within legal limits? 56% 10% 17% 25%
Does the basic salary corresponds to at least the legal minimum wage for regular working hours (including pcs rate workers)? 99% 100% 99% 100%
Is overtime paid according to the law for workers with monthly salary? 95%     
78% 96% 89%
Is overtime paid according to the law for piece rate workers? 92% 63% 88% 70%
Are  wages paid regularly and on time? 98% 95% 95% 96%
Are deductions fair and reasonable? 96% 
95% 98% 96%
Are wages paid correctly? 96%
84% 85% 88%
Does the factory pay social security? 82%          
35% 80% 59%
If there is no social security system in place, are the workers covered by alternative insurance? 60% 80% 91% 85%
Is sick leave duly granted? 100%           
96% 91% 95%
Is sick leave compensated by the factory according to law? 100% 
50%
90% 64%
Is annual leave granted and paid for according to law? 76%  64% 90% 75%
Are all additional types of leave, stipulated by law, granted to all workers? 98% 
84% 89% 88%
Is maternity leave given and paid for according to law? 100% 74% 98% 87%
Does the factory fulfil the legal requirement concerning day care? 38%
65% 84% 77%
Total compliance 90% 
73% 87% 81%
HEALTH AND SAFETY
Are all basic safety requirements met? 96% 100%
100% 99%
Are all additional safety requirement met? 79%  
58% 37% 58%
Are regular evacuation drills performed? 80%   

86%
92% 86%
Are hazardous machines equipped with necessary protection equipment? 56% 80% 96% 79%
Is personal protection equipment provided and used where necessary? 85%           
75% 79% 78%
Is adequate first aid equipment available, and first aid training provided? 76%
75% 89% 80%
Does the company meet legal medical clinic requirements? 92%   
69% 95% 87%
Can workers drink water without health risks? 91% 94% 92% 92%
Does the factory provide a canteen/dining area available for all workers? 98% 
94% 89% 93%
Is the factory clean and free from dirt and dust? 95%     
44% 91% 73%
Is the temperature in the factory tolerable to work in? 94%   
91% 97% 94%
Is the spot removal content in accordance with H&M's chemical restriction list, performed in well ventilated area, using adequate personal protection equipment?    78%
84% 82% 82%
Is there a sufficient number of toilets? 96%           
98% 100% 98%
Are toilets clean and maintained? 94%   
81% 89% 86%
Do the workers have unlimited access to the toilets? 98% 100% 100% 100%
Total compliance 87% 82% 89% 86%
ENVIRONMENT
Does the factory have all legally required environmental permits/licenses? 91%
83% 84% 85%
Are the chemical containers properly labelled? 78%          
51%
55% 57%
Are the solvent-based chemicals in compliance with H&M´s chemical restriction list?   97%           
99% 100% 99%
Are all used chemicals in compliance with H&M`s chemical restriction list for APEO/AP? 98%  
79% 64% 76%
Does the factory have safety data sheets for all chemical products both in in storage and workplace areas? 78%
64% 61% 65%
Have the workers who regularly handle chemicals been trained in safe chemical handling?   70%
66% 53% 62%
Is safety data sheets on storage and personal protection equipment in place? 63% 51%
62% 57%
Is the outgoing waste water treated? 96%
98% 99% 98%
If outgoing waste water is not treated, the supplier signed Waste Water Treatment Agreement? 100%
100% 100% 100%
Are there clear signs that the waste water treatment system is in use? 100% 100% 100% 100%
Does the waste water quality local  legislation and/or BSR guidelines whichever is strictest? 78% 76% 86% 83%
Does the waste water treatment capacity exceed the waste water going to the treatment plant? 96%
97% 77% 85%
Is sludge from the waste water treatment disposed in a legal manner? 85%
71% 91% 83%
Is hazardous waste disposed of in a legal manner? 86%
73% 88% 80%
Total compliance 84% 75% 77% 77%
HOUSING CONDITIONS
Is the dormitory separated from the factory building?   100% 100% 100%
Can the workers enter and exit the dormitory at any time?   100% 100% 100%
Does everyone living in the dormitory have an individual bed?   100% 100% 100%
Are workers granted  personal privacy?   74%  79% 75%
Does the dormitory meet basic safety requirements?   99% 100% 100%
Are there a sufficient number of clean toilets?   99% 91% 98%
Are private hygine facilities provided?       
99% 91% 98%
Is the dormitory generally clean and hygienic?   94% 90% 93%
If there is a staffed kitchen in the dormitory, is it clean and hygienic?        
99% 89% 97%
Is the temperature in the dormitory tolerable?   99% 100% 100%
Are regular evacuation drills performed?   86%       
85% 86%
Are all additional safety requirements met?   93%       
94% 93%
Total compliance   95% 94% 95%
HOME WORKERS
Is the work performed in home or workplace chosen by the workers themselves and not owned by the employer? 100%
100% 100% 100%
Are all workers, involved in home work, percieved to be above or the same age as the minimum age required by the national law and HM's Code of Conduct? 100%     100%
Are young workers, involved in home work also attending school? 100%
  100% 100%
Are all home workers performing their work voluntary at all times? 100%
97% 89% 95%
Do foreign and migrant workers have a residential permit? 100%
0% 100% 50%
Are home workers free to organise a union or cooperative? 100% - 100% 100%
Is collective bargaining respected? - 100% 100% 100%
Is there a grievance system in place? 100%    
3% 78% 23%
Do all home workers have an agreement? 0%     
0% 33% 10%
Can the amount of work be produced, by one person, within a reasonable number of hours? 100%
100% 100% 100%
Does the hourly rate equals at least the legal minimum hourly wage? 100% 0% 100% 24%
Total compliance 90% 51%      
 89% 63%
CHEMICAL HANDLING (IN PREVIOUS YEARS THIS CHAPTER ALSO INCLUDED REQUIREMENTS FOR SANDBLASTING. PLEASE NOTE THAT SANDBLASTING IS NO LONGER PERMITTED IN ANY FACTORY SUPPLYING THE H&M GROUP SINCE
2012)
Are legally required air quality measurements done? 79%           
92% 58% 73%
Is ventilation sufficient? 100% 100% 100% 100%
Are the legally required health checks in place in the factory? 86%
69% 76% 77%
Does workers receive education on safe handling and risks? 71%           
85% 68% 72%
Is there a wash station in direct connection with the workshop in case dust or chemicals get in workers´ eyes? 80%           
93% 97% 92%
Is hearing protection worn in noisy environments? 67%   
83% 85% 80%
Are the workers handling potassium permanganate in storage and mixing using the personal protection equipment needed? 75%           
73% 89% 81%
Are the workers spraying chemicals using the personal protection equipment needed? 29%           
78% 83% 71%
Are the workers spongeing chemicals wearing imprevious gloves? 33%
89% 93% 82%
Is the potassium permanganate stored safely? 100%           
96% 100% 99%
Total compliance 74%     
85% 86% 83%
METAL PLATING
Is there a responsible person with chemical education? 100%           
74% 85% 79%
Are the workers educated on safe handling and risks? 100%
47% 62% 56%
Is ventilation adopted for metal plating? 100% 100% 100% 100%
Does the factory have a chemical inventory list? 100%
79% 92% 85%
Is compulsory personal protective equipment used? 100%
32% 77% 53%
Is there a wash station in direct connection with the  workshop in case chemicals get into workers' eyes? 100%
84% 85% 85%
Are the legally required health checks in place in the factory? 100%
74% 85% 79%
Are the non-compatible chemicals separated in storage and in the workshop? 100%
100% 100% 100%
If used at all, is HF hydroflouric acid  handeled safely? - 100% 100% 100%
Total compliance 100% 75% 86% 80%
TRANSPARENCY & MONITORING
Is the management transparent? 99% 100% 100% 100%
Is the management cooperative? 98%
96% 96% 97%
Has auditor had unrestricted access to all areas in the premises? 100% 100% 100% 100%
Total compliance 99% 99% 99% 99%

1.       ABOUT THE DATA

The above data provides a detailed overview of the compliance level amongst all audited and approved H&M Group first tier supplier factories by 31 May 2015. First tier factories are either owned (commonly performing the final manufacturing) or subcontracted (normally performing specific tasks such as washing our dyeing) by our suppliers. All first tier factories are covered by our Sustainability Commitment, which replaced our previous Code of Conduct on 1 February 2016, and our Sustainable Impact Partnership Programme (SIPP), which we started implementing in 2015 to replace our Full Audit Programme (FAP). We expect the transition to continue throughout 2017. The above figures represent the latest audit result according to FAP from each factory.  By disclosing the compliance data, we aim to give the most accurate status of our supplier’s compliance performance.  

Some of the audit questions are minimum requirements. H&M does not accept any non-compliance for minimum requirements. In case we detect non-compliance, we thoroughly follow up and carry out in-depth analyses of each individual case. At the end of the reporting period a number of factories were subject to investigations or in a phase out transition. As a result, the total compliance data on some minimum requirements shows less than 100% (96-99%) in some case.

Not all questions from our audit questionnaire apply to every factory. Questions are therefore only applied when relevant and consequently data is available for these factories only. Thus the percentage figures do not necessarily relate to the total number of audits conducted in each region. Compliance levels provided in italic in the table above are based on audit results from less than 10 factories. As a result, it is not likely to be representative for the whole of H&M´s supplier base.

2.       HOW WE USE THE DATA INTERNALLY

The data is the foundation for our ongoing work with our suppliers towards lasting improvements. Individual results from each factory are clearly communicated to the supplier and discussed in an open dialogue. The data also plays an important role in our purchasing decisions and we systematically reward better performing suppliers.

We also use it to constantly improve our methods, analysis, raise our expectations, add and update our audit questionnaire to make it easier to detect violations. For this reason, the data should not be compared year on year. 

When non-compliance occurs, we conduct thorough investigations and set up strategies and projects aiming to improve compliance for the specific issue, both on individual factory level as well as from a holistic perspective. If important areas indicate unacceptable compliance levels, we can decide to turn it into one of our focus area, set dedicated strategies and follow-up accordingly. When analysing compliance we also pay great attention to geographical differences for nuanced analysis and remediation.  If we identify a region or country with low compliance on a certain issue, we pay extra attention and target customised projects to improve this issue.

For some questions that address complex issues – for example freedom to join or form a union – non-compliance can be difficult to detect through audits alone. We are aware that although no violations could be detected during our audits, these issues require our constant attention. So we constantly improve our audit methods to improve our ability to detect any issues and contribute to systemic change in the concerned communities.

Production countries per region 2015:

Far East: Cambodia, China, Indonesia, Myanmar, South Korea, Taiwan, Thailand, Vietnam

South Asia: Bangladesh, India, Pakistan, Sri Lanka

EMEA: Bulgaria, Czech Republic,  Denmark, Egypt, Estonia, Ethiopia,  France, Germany, Great Britain, Greece, Italy, Kenya, Latvia, Luxembourg, Netherlands, Poland, Portugal, Romania, Spain, Sweden, Tunisia, Turkey, USA

 

 

*Some of the audit questions are minimum requirements. H&M does not accept any non-compliance for minimum requirements (marked in bold above). In case we detect non-compliance, we thoroughly follow up and carry out in-depth analyses of each individual case. At the end of the reporting period a number of factories were subject to investigations or in a phase out transition. As a result, the total compliance data on some minimum requirements shows less than 100% (96-99%) in some case. As soon as a case is re-solved we set the status back to compliance. This means that even though the compliance level shows 100%, there may have been cases handled and resolved during the year. For example, we investigated 3 cases of underaged workers in China, India and Turkey. These cases have been re-solved immediately and in the best interest of the involved individuals and their families following our child labour policy. The Business & Human Rights Resource Centre investigated different brand’s efforts in order to address specific risks in Turkey as a consequence from the civil war in Syria. As part of that we provided them with details about a case handled in Turkey and the organisation praised particularly H&M’s and Next’s approach in addressing this situation and child labour risks in general.

 

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