Improving Factory Working Conditions

Improving Factory Working Conditions A commitment to safety, fairness, dignity and respect

We partner with all of our suppliers to ensure safe, fair and healthy working conditions for the individuals who create our clothes . Together, we’re building the capacity of our suppliers to manage and improve their practices, designing industry-leading programs to improve worker and manager relations, assessing and improving working conditions to meet legal and international standards and increasing transparency about all of our efforts.

More than a million people work in the facilities that create our clothes, and we want to ensure that they work in safe, fair conditions and are treated with dignity and respect.

Our Approach

Consumer trends and expectations are placing greater demands on production timelines and capabilities—which can ultimately affect the individuals working in the garment industry.

To help manage these broad shifts in the industry, we continue to integrate policies and programs into our core business and form partnerships across the apparel industry to ensure that the people in our supply chain work in safe, fair conditions. 

Since launching our Supplier Sustainability program in 1994, we have transformed our approach to improving facility working conditions by developing innovative programs that go far beyond assessing and remediating issues in our approved facilities.

At a glance working conditions

We continue to integrate policies and programs into our core business and form partnerships across the apparel industry to ensure that the people in our supply chain work in safe, fair conditions. 

In recent years we have taken steps to: 

  • Revamp our policies and tools such as building out our Code of Vendor Conduct (COVC) into a comprehensive manual to be more transparent to our suppliers, so that they understand and meet our expectations related to working conditions and labor standards. 
  • Consolidate our supplier base so that we are working more closely with fewer suppliers. Today, we are working with 25% fewer suppliers than we were five years ago. 
  • Deepen our partnerships with suppliers and NGOs to create a more advisory and collaborative approach grounded in continuous improvement. With our suppliers, we are designing new approaches to worker engagement and are providing training to improve suppliers’ social and environmental capabilities. Examples include our Workforce Engagement Program with Verité and our ongoing work with the Arbitration Council Foundation in Cambodia. 
  • Build a holistic sustainability team, moving from a model with separate employee functions by program to require all of our field staff to help deliver each of our Supplier Sustainability programs. This allows us to evaluate and improve our suppliers' sustainability performance in an efficient manner and provide them with support that is best suited to their needs. 
  • Pioneer new programs in collaboration with a broad set of industry-wide initiatives. This includes supporting the Social and Labor Convergence Project by co-chairing two of its working groups and helping develop the Better Work Academy in partnership with the ILO's Better Work program.
  • Create better data. Data is essential to realizing our vision to create long-term, sustainable improvements in working conditions. We created a Data & Insights team to help us gauge our progress, reveal trends, point to new questions and highlight opportunities to advance our efforts in the future. 

Our Supplier Sustainability efforts thus far have primarily focused on issues at cut-and-sew facilities where we have direct relationships and greater influence to drive improvements. We also monitor, assess, remediate and disclose their supporting facilities, such as laundries, embroideries and screen printers. However, we are evolving our strategy to address issues in other parts of our supply chain, including areas where we have less direct influence but nonetheless see opportunities to improve working conditions . For instance, we are working with our strategic mill suppliers to assess their working conditions and build their capacity to proactively mitigate risks, and we are seeking to improve conditions in the cotton sector through our partnership with the Better Cotton Initiative.

Our Global Supply Chain and Supplier Sustainability teams work in about 30 countries and we often tailor our practices in these places based on a deep understanding of the local context. In addition to our Assessment and Remediation program (described below), which we maintain for every supplier and facility wherever we source our branded clothes, we have created unique programs and specific policies to address local economic, political, business and cultural context where needed. These assessments include social, political and environmental data, along with risk indices and expert analysis. They also draw on the insights we have gathered through ongoing engagement with a variety of external stakeholders and business partners.

Improving working conditions video
Improving factory working conditions

Assessment and Remediation

Since beginning our Supplier Sustainability program, we have refined our approach and introduced a range of innovative measures to more accurately assess facility performance, focus our time on the most critical issues, better understand the experience of the people who make our clothes and make sure their voices are heard. 

We view our suppliers as critical partners in meeting our business and sustainability goals, and we work with them to set shared goals and monitor and improve performance.  Together, we share accountability for sustained improvement of working conditions, which will help us reach our goal of ensuring all our supplying facilities meet performance standards.

Today, our COVC, composed of industry-leading standards and legal requirements, is a living document that defines our standards for working conditions at the facilities that make our products. It is incorporated into our Vendor Compliance Agreement, which is signed by all our branded-product manufacturers.

Our Supplier Sustainability Assessment Manual, which is based on industry best practices, outlines the protocols our team uses to assess and remediate issues related to labor or working conditions. Each fiscal year, our team conducts a full assessment for all active manufacturers of our branded product  to understand working and labor conditions, facilitate greater partnership with our suppliers and improve sustainability performance. Each assessment includes interviews with managers, confidential interviews with workers, visual observations and reviews of documents and records.

When we assess a facility, they receive a rating that is calculated based on clear criteria within five categories: Compliance with Laws, Environment, Labor Standards, Occupational Health and Safety, and Management Systems. Violations are input into a system that categorizes findings by their level of severity: “critical,” “severe,” “key” and “noncompliant.”

A key tenet of our approach to partnering with facilities is that we work to fix what we find. 

We use a color-coded system to rate facilities’ performance based on assessments.  High-performing facilities with no critical or few violations receive a green rating. Average performers are rated yellow, while facilities that need improvement on one or more serious issues are assigned a red rating. Critical, severe and key violations have a greater negative impact on a facilities’ rating than “non-compliance” violations, such as first-aid kits not being fully stocked.

A key tenet of our approach to partnering with facilities is that we work to fix what we find. Together with facility management, we agree on specific, time-bound corrective action plans to address findings, and we provide additional resources to fix the issues that pose higher risks to workers’ rights and well-being, as well as to our business. Based on the severity of issue, we outline a timeline within which we expect the factory to fully remediate. We also collaborate with local stakeholders who have direct access and influence to improve conditions. 

We monitor progress through follow-up assessments. Should there be outstanding or overdue issues, our Supplier Sustainability and Global Supply Chain teams escalate further intervention. However, if key or critical issues remain unresolved, we may halt future order placement or discontinue the supplier relationship.

Results

We closed 88 percent of critical open issues and 84 percent of non-critical open issues at red-rated factories in 2016.

For all rating levels, 72 and 56 percent of issues open at the beginning of fiscal 2015 and 2016 were resolved within six months, respectively. 87 and 82 percent of issues were corrected within one year.

Resolution of Factory Code of Vendor Conduct Issues Open as of 1/31/2015

  2/1/2015 5/1/2015
(3 MONTHS)
8/1/2015 
(6 MONTHS)
2/1/2016 
(1 YEAR)
2/1/2017 
(2 YEARS)
Sourcing Country # of open 
issues
# of open
issues
% resolved # of open
issues
% resolved # of open
issues
% resolved # of open
issues
% resolved
Bangladesh 408 166 59% 64 84% 11 97% 4 99%
Cambodia 68 53 22% 36 47% 7 90% 6 91%
China 910 411 55% 186 80% 71 92% 61 93%
Guatemala 10 4 60% 4 60% 4 60% 4 60%
India 678 412 39% 146 78% 66 90% 30 96%
Indonesia 511 319 38% 180 65% 92 82% 43 92%
Pakistan 74 74 0% 74 0% 44 41% 40 46%
Sri Lanka 277 222 20% 52 81% 32 88% 15 95%
United States 3 3 0% 1 67% 0 100% 0 100%
Vietnam 259 191 26% 123 53% 51 80% 46 82%
Other 342 167 51% 130 62% 79 77% 36 89%
Total 3540 2022 43% 996 72% 457 87% 285 92%

 

Resolution of Factory Code of Vendor Conduct Issues Open as of 1/31/2016

  2/1/2016 5/1/2016
(3 MONTHS)
8/1/2016
(6 MONTHS)
2/1/2017
(1 YEAR)
Sourcing Country # of open 
issues
# of open
issues
% resolved # of open
issues
% resolved # of open
issues
% resolved
Bangladesh 827 665 20% 248 70% 108 87%
Cambodia 229 120 48% 55 76% 36 84%
China 1053 584 45% 303 71% 143 86%
Guatemala 17 6 65% 6 65% 5 71%
India 875 770 12% 614 30% 178 80%
Indonesia 537 328 39% 269 50% 102 81%
Pakistan 115 115 0% 72 37% 45 61%
Sri Lanka 269 224 17% 190 29% 94 65%
United States 13 0 100% 100% 0 100%
Vietnam 696 458 34% 276 60% 114 84%
Other 331 257 22% 190 43% 66 80%
Total 4631 3270 29% 2033 56% 825 82%

In 2015, we introduced revisions to our COVC requirements, through the creation of Gap Inc.’s COVC Manual and a revised Assessment Manual for our Supplier Sustainability team. We have trained all of our tier 1 suppliers on our COVC Manual, which is the primary training resource that helps our suppliers understand how to meet our sustainability requirements and proactively address issues related to labor standards, working conditions, the environment and more.

To help our suppliers take greater ownership of improving working conditions, we added the Management Systems category in 2015. This category measures the degree to which facility managers establish goals, implement plans, train employees, conduct their own assessments and adjust their programs to ensure continuous improvement. Also in 2015, we launched a new data system that includes a portal for our suppliers to easily access information related to their sustainability performance and find tools that can help them manage their risks and opportunities.

In 2017, we will be expanding our minimum requirements for suppliers, with additional guidance on fire, electrical and structural safety based on our learnings in Bangladesh and best practices in the industry.

Detailed data from our COVC assessments are available here

 

Improving factory working conditions