The Compliance Programme ensures that all suppliers of the Inditex Group observe the Code of Conduct for Manufacturers and Suppliers. The Programme has different assessment tools that allow full analyses to be made of the supply chain, identifying its strengths and needs.

Social audits

Each and every supplier in the Inditex supply chain is subject to periodic social audits. The aim is to verify their compliance with the Code of Conduct and to establish Corrective Action Plans (CAPs) intended to ensure that fundamental labour rights are respected.

Further information at http://www.inditex.com/en/sustainability/suppliers/csr_audits

In 2013, the number of audits increased by 24% compared with the previous year, mainly due to an increase in special audits which consisted of visits and inspections related to specific issues such as the health and safety of workers, and competence visits to ensure compliance with the Corrective Action Plans. These audits include, for instance, the inspection of laundry processes to ensure that the sandblasting process, which is prohibited by Inditex, is not in use.

The audits are performed on all levels of production and are carried out both by internal auditors and certified external auditors, without prior notification of the date the visit is to be performed.

Further information at http://www.inditex.com/en/sustainability/suppliers/compliance_programme

Audits performed on manufacturers in 2013 by geographic area and type

(*) Special audits include competence visits, Health and Safety verification, among others.

Supplier classification

The social audits assess the suppliers’ compliance with each and every section of the Code of Conduct. According to the results obtained, specific areas are identified for improvement in order to ensure the fundamental labour rights of workers and guarantee product compliance with environmental and health and safety standards.

(*) Suppliers subject to a Corrective Action Plan.
(**) Suppliers under audit.

The high percentage of compliance with the Code of Conduct on the part of manufacturers with a relationship with Inditex reflects the efforts of the CSR teams and other members of the clusters to strengthen the supply chain.

The first phase of the implementation of the new methodology for checking workshops was carried out in 2013. This involved the application of more and better controls.

Corrective action plans (CAP)

After every audit, Inditex establishes Corrective Action Plans and supports and advises each factory on their application. These Corrective Plans are particularly strict in the case of factories that have committed certain breaches of the Code of Conduct. In such cases, plans are established for up to six months and are supervised by Inditex teams on the ground with the participation of institutions such as trade unions and NGOs where necessary.

In 2013, a total of 249 of the factories on a Corrective Action Plan successfully performed the necessary measures and continued to produce for Inditex.

Corrective Action Plans 2013 (Project D)

Inditex promotes the continuity of the suppliers in any case, helping them to guarantee workers’ fundamental labour rights, but has zero tolerance with manufacturers or suppliers who fail to show progress in improving critical aspects of the Code of Conduct.

If, after the application of one of these plans no improvements are observed, the Inditex purchasing and CSR teams will suggest the suspension of commercial relations with the supplier.

Table of active suppliers at 31/01/2014

Production audits

The production audit is one of the tools available to Inditex to guarantee the traceability of its supply chain, reinforced during 2013. Production auditing verifies the following aspects:

In 2013 more than 800 production audits were carried out.

Inditex employs a verification system that allows it to identify discrepancies in production audits. If any breach of the Code of Conduct is detected, a Corrective Action Plan would be implemented, aiming at rectifying these. Those suppliers who do not commit themselves to carrying out a Corrective Action Plan or who, after application of one of these plans, do not reach any improvement, would be excluded from Inditex’s supply chain.