Code of Conduct
Contractors & Suppliers
When a decision is made to outsource production to a new contractor, we apply a comprehensive selection process to assess the contractor’s ability to comply with our cost structures and quality standards, as well as with our labour and environmental standards. This selection process includes a thorough analysis of the contractor’s social responsibility practices through the completion of a self-assessment questionnaire on critical issues outlined by Gildan. In addition, Gildan performs a preliminary audit assessment prior to engaging with any contractor.
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Contractual Requirements
To ensure that Gildan’s major contractors and suppliers respect the Gildan Code of Conduct, a clause is included in any new commercial agreement governing our contractual relationship which stipulates that contractors must abide by our Code. This practice encompasses the following agreements:
- Manufacturing contractors’ agreement (including sewing agreements or any third party manufacturing agreement);
- Raw material suppliers’ agreement
- Agreements for major equipment purchases.
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Profile of Gildan’s manufacturing contractor facilities
In addition to Gildan’s owned vertically-integrated manufacturing sites (for more details, please refer to our map of operations) where we manufacture the large majority of our global production, Gildan outsourced production at 47 manufacturing third party contractor facilities worldwide in 2012, representing 26% of our global production.
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Sourcing facility due diligence process
It is Gildan’s policy to audit each potential new third party contractor facility selected for manufacturing Gildan or licensee products in order to verify social compliance prior to entering into any production contract.
These audits are conducted by independent internal monitors that are thoroughly trained on Gildan’s monitoring guidelines and social compliance program or by third party auditors on our behalf.
The results of these audits help our internal teams assess the level of compliance of new potential facilities. Once the facility is inspected and audited for compliance against Gildan’s Code of Conduct and the benchmarks outlined in our Vendor Guidebook, the contractor facilities producing for Gildan are assigned a rating based on the number of findings and their severity. If a facility receives a weak rating, we first seek to work with the facility management to correct major issues found and improve their overall performance by establishing an action plan and follow-up on progress achieved in resolving the issue raised during the audit. If no progress is shown during a pre-determined period of time, Gildan can decide to end the business relationship with this contractor. If the compliance level of a facility is determined insufficient to Gildan standards during the due diligence process, orders can be cancelled prior to starting production. In 2012, Gildan turned down two contractor facilities due to insufficient compliance levels.
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Contractor training
At each of our long-term Haitian sewing contractors, we have been providing training on our Code of Conduct to all new employees on an ongoing basis.
Also, as part of the Better Work Haiti program, our Haitian contractors’ employees received training on various labour issues. In 2011, managers from our four Haitian contractor facilities attended the following sessions:
- Human Resources planning
- Mastering recruitment for key positions
- Securing employee loyalty
- Organizing successful training sessions
- Establishing a remuneration and motivation system
In 2012, our CSR Coordinator in Haiti supported contractors in developing Human Resources, Environment, Health and Safety (EHS) as well as compensation policies. Additionally, basic EHS training, related to fire extinguisher use was provided to employees. During 2013, we will provide refresher training sessions for the Code of Conduct to all contractors in Haiti, as well as a more in-depth EHS training.
In 2012, Code of Conduct training sessions for supervisors, managers and compliance staff took place at two major contractors in China as well as at two sourcing agents in Korea. The presentation included information about the Code of Conduct provisions and examples of non-compliances to the Code and recommendations for how they can be remediated. Similar training sessions are planned during the course of 2013 at other contractors in Asia.
In addition, Gildan provided training on the Code of conduct to two contractors in Mexico.
In addition to Code of Conduct training, security personnel in Central America and in the Dominican Republic (all of whom are employed by sub-contractors) also received training on labour and human rights as part of their induction training (as per our commercial agreement with contractors) in 2010-2011. Designed specifically for security employees hired by third party contractors, this new training program focuses on situations these particular employees might face while performing their duties on behalf of Gildan. All new security personnel are trained on the Gildan Code of Conduct, as well as on our Anti-Harassment and Abuse policies. Refresher training will be provided to personnel during 2013.
