SOCIAL RESPONSIBILITY
FAIR WEAR FOUNDATION MEMBERSHIP
ODLO is a member, with leader status, of the Fair Wear Foundation (FWF), which endeavours to improve labour conditions in the textile industry worldwide. FWF verifies that producers abide to their code of conduct and make appropriate improvements. As a multi-stakeholder initiative, FWF’s independence is guaranteed because it is governed by trade unions, NGOs and business associations. Transparency and accountability are key principles of the organisation.
FWF members work towards improving the labour conditions in factories that produce sewn textiles all over the world. The basis of the collaboration between FWF and its members is its code of labour practices. Eight labour standards form the core of this code of conduct. FWF members are contractually obliged to comply with these standards.
FWF verifies whether companies comply with the code of labour practices through factory audits and complaint procedures, through audits of its members’ management systems and through extensive stakeholder consultations in producer countries. FWF shares its knowledge and (local) contacts with its member companies, providing them with access to information on local legislation, labour legislation and culture.
Members are required to set up an effective monitoring system, including factory audits, factory trainings and factory visits. FWF has a complaint procedure that enables factory workers to anonymously report any abuses related to labour conditions. To raise workers‘ awareness of labour rights, FWF also offers Workplace Education Programme.
THE ODLO SUPPLIER CODE OF CONDUCT
As early as the 1990s, ODLO signed a code of conduct with its manufacturers. In 2009 it was revised to get in line with the requirements of the Fair Wear Foundation and was re-signed by each of the manufacturers. This most restrictive code on the market is based on the conventions of the International Labour Organization (ILO) and the Universal Declaration of Human Rights.
WORLD OF MANUFACTURING
MANUFACTURER LIST
ODLO is proud to disclose its contracted manufacturer. The list contains the location of the main contractors and, in case applicable, main production sites of subsidiaries.
SOURCING STRATEGY
ODLO sourcing is based on a dual-principle strategy. This system covers the wide range of products in each ODLO collection.
PRINCIPLE 1: OWN PRODUCTION
When possible, in terms of capacity and competitiveness, new garments or additional production volumes are manufactured in our own production.PRINCIPLE 2: LONG-TERM PARTNERSHIPS
ODLO aims for long-term partnerships with a small number of manufacturers and prefers to keep the portfolio small. Together with an early involvement of the manufacturer in the product development process, the sourcing strategy enables manufacturers to plan for the long-term, which increases their stability and job security.PRODUCTION TRANSPARENCY
ODLO strives for full production transparency and therefore manufacturers are to disclose all production sites. Subcontracting is only allowed by pre-notice and is analysed by the sourcing team case by case. ODLO lists these subcontractor exceptions in its supplier register to include them in the CSR management system step-by-step.PRICING POLICY
ODLO calculates its price using the “open costing” principle. This means that the sales price is calculated individually for every product, listing the material and labour costs, overheads and the profit margin. The prices are negotiated directly with manufacturers.SOCIAL MONITORING
An important component of the implementation of the Supplier Code of Conduct is monitoring. ODLO follows FWF’s verification system, a multi-level approach consisting of three levels; management audits of brand (Brand Performance Check), factory audits & complaints procedures. Those verifications are all held by FWF acting as a third-party organisation.
COVID-19 DUE DILIGENCE
The COVID-19 outbreak has had an enormous impact on our business and our supply chain all over the world; with the shops that sell our products having to close and most of our factories stopping production due to lockdown or working restrictions, and our brand teams working remotely from home. This pandemic affects us all and ODLO recognises the unprecedented impact of the COVID-19 global pandemic on our supply chain and workers. Therefore, especially in these times of crisis, we uphold our responsibility towards the garment workers producing our clothes. The foremost important thing is to maintain a frequent, transparent and open dialogue with our supply chain partners to, on the one hand, being updated on the local situation where the production takes place, but also to update on purchasing practices, sourcing decisions and ODLO’s overall business situation. We fulfil our responsible purchasing practices, all ODLO orders completed or in progress have been paid in full. ODLO did not ask for discounts on orders already delivered or prepared. Collaboratively we worked through this extremely difficult and unsecure period with our partners. Monitoring as we know it became impossible until recently. With lockdowns and travel restrictions, planned audits, trainings and factory visits were cancelled or postponed. To still live up to our due diligence procedure, we worked in close collaboration with our supply chain partners to ensure effective COVID-19 policies are in place and health & safety measures are taken and implemented on the workfloor, always respecting the local requirements. The Fair Wear complaint hotline remained open during lock down, ODLO received three COVID-19 related complaints until now – all details can be found in the Complaint section. Fair Wear also conducted an in-depth survey with all suppliers to get additional insights on the individual situations and problems suppliers were facing. In case of identified high risks, members were informed to remediate. Next to the threat of the virus itself is also the potential financial risks for the workers due to possible wage or job losses due to factory closures where assessed throughout the supply chain. Since March, Fair Wear provides regular calls between member brands to support information exchange and guidance. Country specific information was provided and a series of COVID-19 webinars were offered to support members on purchasing practices, to identify potential job and wage losses, action to redress lost jobs or wages, forecasting, costing and responsible exit strategies. Our journey in this ‘new normal’ continues with the new business year 2020/21 and strong collaboration with our supply chain partners as well as with other member brands to find innovative solutions to ensure fair working condition, because they are needed now more than ever before.
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