Social Compliance
Remediation
Remedial actions are verified through follow-up audits and through the use of our Corporate Citizenship database, where facilities can provide details on their remediation actions as well as evidence supporting such actions. We also review the status of all non-conformities on a quarterly basis and report on remediation to the Board of Directors.
Persistent or recurrent findings are given special attention in order to ensure proper remediation is implemented for these concerns as well as assess whether persistent pattern is developing in several facilities. For example, in 2010, a persistent pattern of non-conformity occurred relating to the handling and labelling of chemicals. The issue was brought to the attention of senior management and corrective action was taken to store chemicals in safe containers intended for the handling of chemicals. Employees at all facilities were provided training on the proper handling of chemicals.
In 2011, we improved our root cause tracking system in our database by linking each finding identified during internal audits to a pre-defined root cause that the user can choose from. With this new functionality, we will be able to conduct further analysis on the most recurrent root causes. We will then be able to report on these root cause statistics at the end of each fiscal year.
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An example of the remediation process
For the Americas region, the Company operates two main hubs as part of its manufacturing operations, one in Central America and the other in the Caribbean Basin. The Caribbean Basin manufacturing hub operates a textile facility in the Dominican Republic, and sewing facilities in the Dominican Republic and Haiti (third-party contractors). In the past two years, the tragic earthquake and the difficult political situation in Haiti were extraordinary circumstances that impacted our supply chain.
This situation resulted in a number of work stoppages at our contractor facilities, which in turn resulted in the accumulation of fabric at our Dominican Republic textile facility, while demand for our products continued to be strong in the marketplace. As a response, in order to service the demand in the marketplace, the additional inventory was transferred to sewing facilities in Honduras, Nicaragua and the Dominican Republic, causing a temporary situation involving excessive overtime. This issue was reported in 9 of the 12 audits conducted in Central America and in the Dominican Republic, where some workers exceeded the number of regular and overtime working hours.
Although these were unusual circumstances, the Company performed an evaluation of policies and training relating to working hours. Opportunities for improvement were found, for instance, plant managers met with coordinators and supervisors to explain the situation and create awareness about the prohibition of working more than 60 hours per week. The Human Resources Department established a system to monitor accumulated hours on a weekly basis and developed a communication plan with plant management to advice them on the number of hours worked by each employee at each facility. In September 2011, two independent third-party audits were performed and the issue of overtime did not arise.