Remediation protocols & grievance mechanisms
Where a factory’s assessment reports show room for improvement, a Corrective Action Plan (CAP) is created, and our local colleagues visit the factories and provide them with guidance and training to make sure the necessary improvements are made and implemented according to the CAP.
In cases where we find that factories are not meeting our minimum requirements, we have a clearly defined escalation protocol. In the rare case that a factory or supplier is not sufficiently committed to remediating critical issues we will – as a last resort – offboard the factory and possibly the supplier. It is worth noting that no factory is onboarded or activated for BESTSELLER production before all concerns rated as Critical or Major have been remediated.
In cases of labour disputes, our strategy is to handle complaints at the factory level by encouraging unions and factory management to negotiate. As per ACT guidance on industrial relations, we should not adjudicate disputes, but instead encourage, support and respect the outcome of fair and transparent grievance mechanisms.
BESTSELLER's escalation protocols apply universally across all markets in our supply chain. Alignment of escalation protocols provides more reliable data on concerns in our supply chain and will help us share these concerns with our stakeholders and develop stronger business practices internally and with our partners in the industry to address and mitigate these issues before they arise.
In 2021, we opened 52 cases into supply chain-related incidents. These cases cover allegations of Code of Conduct non-compliance, as well as escalation procedures for factories that did not meet their CAP timelines. Typically, such cases include wage violations, restrictions of freedom of association, unauthorised subcontracting, environmental or health & safety risks, or poor labour or environmental management.
23 of the 52 cases were uncovered by BESTSELLER's local labour and environmental specialists, 10 were raised by the Bangladesh Accord/RSC, eight were raised by local federations or labour unions, three were raised by a third-party auditing company, one complaint was raised anonymously, one came from a media report, and six came from other sources.
Out of the 52 cases, seven were dismissed after the investigation found no support for the claim of any violations. Of the remaining 45 cases, 24 resulted in a notification of concern, 18 resulted in an official warning letter, and three cases are still in the remediation process. Notifications of Concern are issued for mild violations or concerns that must be highlighted to the supplier, but which are not severe enough to justify an official warning and impact on the supplier rating. Official Warning Letters are issued for critical violations and will impact on the supplier rating. In severe or repeated cases, an Official Warning Letter may come with a financial penalty. Offboarding of the factory is only done as a last resort, in case of severe lack of commitment to improve. No factories were offboarded for Code of Conduct violations in 2021.
Through BESTSELLER's parent company, HEARTLAND, we have a whistle-blower system that is available to all colleagues and cooperation partners. All reports are received by a team consisting of a few persons from HEARTLAND A/S and United Law A/S. The whistle-blower system is not managed by the Global Supply Chain department.