Worldwide Responsible Accredited Production (WRAP) Certification Program

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1 1. PURPOSE Standard Textile Co., Inc. (Standard Textile or the Company) is committed to operating manufacturing facilities that treat employees fairly, comply with applicable legal requirements, respect the environment, and make a positive contribution to the communities in which they are located. We also expect textile manufacturers and suppliers who provide textile products or materials to Standard Textile to operate their facilities in a similar manner. Standard Textile requires that suppliers comply with Standard Textile s Supplier Code of Conduct, which requires supplier compliance with applicable employment, health and safety, Customs, and environmental laws. In order to ensure adherence to this standard, Standard Textile requires that Tier I suppliers (as defined below), and any other supplier as determined by Standard Textile or a Standard Textile Group Company, be audited and certified through an approved third-party audit and certification program. Standard Textile s preferred certification program is the Worldwide Responsible Accredited Production (WRAP) Certification Program but Standard Textile will also consider factory certification under other comparable programs that ensure supplier compliance with Standard Textile s Supplier Code of Conduct. Standard Textile recognizes that there are differing legal and cultural settings in which factories operate throughout the world. Nonetheless, third-party certification that a supplier is compliant with the standards set forth in Standard Textile s Supplier Code of Conduct is a basic requirement that factories must meet in order to do business with Standard Textile. 2. SCOPE This program describes the requirements and procedures for new and existing suppliers to obtain and maintain social responsibility certification for factories that manufacture products for Standard Textile. These compliance procedures apply to Tier I suppliers and any other significant supplier that produce goods for Standard Textile and its subsidiaries, business units, or affiliated companies (Standard Textile Group Company). New suppliers must obtain supplier certification within the first six (6) months of doing business with Standard Textile and must maintain the certification for the duration of doing business with the Company. Failure to maintain supplier certification may result in Standard Textile terminating business with the supplier. 3. REFERENCES Standard Textile Supplier Code of Conduct Appendix 1 Worldwide Responsible Accredited Production (WRAP) Certification Program 4. DEFINITIONS Tier I Supplier: A third-party supplier to a Standard Textile Group Company that supplies textile products or materials through a continuing supply program. 5. STC SUPPLIER CODE OF CONDUCT The Standard Textile Supplier Code of Conduct sets forth the Company s expectations for the business practices for all Standard Textile manufacturing facilities and for suppliers to Standard Number: GS100 Revision: 1.3 Page 1 of 6

2 Textile Group Companies. In order to do business with Standard Textile or a Standard Textile Group Company, suppliers are required to commit to meeting the requirements of the Supplier Code of Conduct. Standard Textile s Supplier Code of Conduct is attached as Appendix THIRD PARTY CERTIFICATION PROGRAM To ensure that suppliers comply with Standard Textile s Supplier Code of Conduct, Tier I suppliers and any other supplier as determined by Standard Textile or a Standard Textile Group Company are required to be audited and certified through an approved third party certification program. Standard Textile s preferred certification program is the Worldwide Responsible Accredited Production (WRAP) Program. The WRAP Program is a factory-based certification program. Facilities that participate in the certification program voluntarily agree that an independent monitor will evaluate the facility on an unannounced basis for compliance with the WRAP Principles. The WRAP Principles are consistent with the standards of conduct set forth in Standard Textile s Supplier Code of Conduct. Standard Textile recognizes that its international suppliers may supply products to other customers who may also require compliance with similar codes of conduct. Multiple compliance certification requirements can be duplicative and an unnecessary operating expense for an individual factory. In addition, to satisfy customer requirements, Standard Textile Group Companies may sometimes prefer that suppliers be certified using a third-party certification program other than WRAP. As a result, as a substitute for WRAP certification, Standard Textile will consider accepting factory certification under a comparable certification program, such as SA8000, Fair Labor Association, or an individual commercial company certification company. Credible evidence of the certification and a contact person within the certifying organization must be provided to verify the certification. Standard Textile will not accept an alternative certification without verification from the certifying organization. Standard Textile reserves the right in its sole discretion to reject the use of another program as a substitute for WRAP certification. 7. SUPPLIER CERTIFICATION PROCESS 7.1. Preliminary Approval of a Supplier The Sourcing Group at Standard Textile or a Standard Textile Group Company (Sourcing Group) is responsible for selecting international suppliers that are capable of supplying Standard Textile with specific products. As part of the initial assessment of a factory, the Sourcing Group shall evaluate whether the factory is capable of complying with the Standard Textile Supplier Code of Conduct and obtaining third party certification. The factory shall be evaluated by the Sourcing Group for signs of any of the following conditions: Forced or child labor Unhealthy or unsafe working or living conditions Number: GS100 Revision: 1.3 Page 2 of 6

3 Harassment or abuse of employees Compensation and benefits deficiencies Illegal disposal of waste products Customs compliance and security issues If the Sourcing Group notes any of the aforementioned conditions at a factory, the supplier should not be considered for doing business with Standard Textile Standard Textile Procedures for New International Suppliers When the Sourcing Group gives preliminary approval for the use of a new supplier or factory, the new supplier must agree to comply with the Standard Textile Supplier Code of Conduct. Sourcing shall be responsible for obtaining a signed Code of Conduct from the supplier and shall provide a copy of the signed Code of Conduct to the Legal Department for recordkeeping. The Code of Conduct must be countersigned by a Standard Textile Sourcing Group manager. In the event of a management change at the factory, the new factory manager must sign the Code of Conduct. The Code of Conduct must be displayed at the factory at an appropriate location and must be translated into the country s native language A supplier that has agreed to comply with Standard Textile s Supplier Code of Conduct shall commit to obtain third party certification within six (6) months of signing the Standard Textile Supplier Code of Conduct. Failure to obtain third party certification within this time period shall constitute grounds for termination of a supplier Sourcing, in conjunction with the Legal Department, shall determine with the supplier whether certification will be through the WRAP certification process as set forth in Section 7.3 of this Program or through an alternative third party certification process that has been approved in accordance with Section 7.4 of this Program. 7.3 WRAP Certification Process To initiate the WRAP certification process, Sourcing shall send a WRAP certification package, including a registration form and instructions for obtaining certification, to the supplier s contact. The supplier shall advise Sourcing of receipt of notice from WRAP indicating that the registration form is complete and a control number has been issued to the facility When the supplier has completed the Handbook and successfully implemented all WRAP Principles for at least 45 days, the supplier shall notify Sourcing and Sourcing shall contact WRAP to arrange for evaluation. WRAP audits are conducted on an unannounced basis during a selected time period. Suppliers may only use WRAP auditors that are approved by Standard Textile. The supplier is responsible for payment of all fees associated with the evaluation. Number: GS100 Revision: 1.3 Page 3 of 6

4 7.3.3 When the facility has successfully obtained WRAP certification, the facility shall advise Sourcing and shall provide Sourcing with a copy of the WRAP certification. Sourcing shall provide a copy of the WRAP certification to the Legal Department. If a facility is unable to obtain certification within six (6) months of executing the Standard Textile Supplier Code of Conduct, Sourcing (in conjunction with the Legal Department) shall determine whether Standard Textile should terminate the supplier or grant additional time to obtain WRAP certification. This determination should be based on the progress made by the supplier towards WRAP certification WRAP Certification is granted to a facility for a period of one year. At the end of the certification period, the facility must re-certify by re-registering and undergoing another compliance evaluation. Sourcing shall endeavor to notify the Facility Manager 30 days prior to the expiration date of the current WRAP certification of the need to renew certification. However, it is ultimately the responsibility of the supplier to ensure that its certification is current and the failure to maintain a current certification or file for renewal may constitute grounds for termination of a supplier. 7.4 Use Of Alternative Certification A supplier that has been certified under a different social responsibility certification program may propose to Standard Textile that it accept this certification as a substitute for WRAP certification. In addition, a Standard Textile Group Company may propose using an alternative social responsibility certification for a particular supplier. To be acceptable, the following requirements must be satisfied: 1. The certification must be issued within one year of the date when the supplier executes the Standard Textile Supplier Code of Conduct. 2. Credible evidence of the certification must be provided to Standard Textile. 3. Information on the certification standards must be provided to Standard Textile. 4. A contact person within the certifying organization willing and able to verify the certification and contact information must be provided to Standard Textile. 5. Standard Textile must be able to verify the certification and the certification standards. Upon review of this information, Standard Textile will notify the supplier if the alternative certification is acceptable. Standard Textile reserves the right in its sole discretion to reject the use of another program as a substitute for WRAP certification. Standard Textile may, in its sole discretion, utilize Standard Textile associates to conduct audits of a supplier facility in lieu of third party certification. Number: GS100 Revision: 1.3 Page 4 of 6

5 8. SOURCING GROUP CONTINUAL FACILITY MONITORING Standard Textile s Sourcing associates routinely visit supplier factories for quality control purposes. In the course of these quality control reviews, Sourcing associates shall carefully observe the facility to ensure continued compliance with Standard Textile s Supplier Code of Conduct. Sourcing shall take note of any conduct or conditions that may violate Standard Textile s Supplier Code of Conduct, including the use of forced or child labor, unsafe working or living conditions, or illegal disposal of waste materials. If possible violations are observed, the Sourcing associate shall immediately submit the relevant information in writing to Standard Textile s Vice President/Sourcing. Sourcing, in conjunction with the Legal Department, shall determine an appropriate response. Depending upon the severity of the situation, options may include, but are not limited to, requiring remedial actions by the factory to address the concern, requiring re-inspection and certification by WRAP, or suspending or terminating Standard Textile s use of that factory. Number: GS100 Revision: 1.3 Page 5 of 6

6 APPENDIX 1 SUPPLIER CODE OF CONDUCT Standard Textile is committed to ethical business practices in all of our activities. This Supplier Code of Conduct sets forth our expectations for Standard Textile manufacturing facilities and for suppliers of products and materials to all Standard Textile group companies. All Standard Textile suppliers must comply with this Code of Conduct and must post the Code in all facilities in the language used by employees. Compliance with Laws: Suppliers must comply with all applicable local and national laws. Child Labor: Suppliers shall not employ individuals under the age of 16 or below the local mandatory school age or minimum work age, whichever is greater. Forced Labor: Suppliers shall not use prison or forced labor. Health and Safety: Suppliers shall provide workplaces (and living conditions if applicable) that are safe and healthy and designed to prevent accidents and illnesses. Compensation and Benefits: Suppliers must pay their employees at least the minimum wages and benefits required by local law, including overtime wages if applicable. Work Hours: The hours worked by employees on a daily and weekly basis shall not exceed local legal requirements. Suppliers shall provide at least one day off in every seven-day period. Treatment of Employees: Suppliers shall not engage in harassment, abuse or physical punishment. Freedom of Association and Collective Bargaining: Suppliers shall recognize the rights of employees to organize into unions and engage in collective bargaining. Suppliers shall not discriminate against or punish workers who exercise these rights. Discrimination: Hiring, compensation, promotion and termination decisions shall be based on ability and not on belief or any other personal characteristic. Environment: Suppliers will comply with all applicable environmental requirements, including the proper disposal of waste. Suppliers shall strive for the efficient use of natural resources. Security: Suppliers will maintain security procedures to prevent the introduction of illegal materials into shipments, such as drugs, explosives, or other hazardous materials. Customs Compliance: Supplier will comply with applicable Customs requirements, including prohibitions against illegal transshipment of products. Subcontractors: Suppliers are expected to hold their vendors and subcontractors to the standards set forth in this Code of Conduct. I certify that our factory is, and will continue to be, in compliance with the requirements of the Standard Textile Supplier Code of Conduct. Factory Manager Standard Textile Sourcing Manager Number: GS100 Revision: 1.3 Page 6 of 6