3. Optimisation of the supply chain

Improvement of auditing	Training and awarenessn	Worker health and safety
OPTIMISATION (highlights in 2013)

Inditex understands that it must help its suppliers to improve their production conditions and support them in this process throughout their commercial relationship.

In this sense, in 2013 different projects were carried out in order to provide suppliers with tools and specific knowledge to ensure that they meet the standards and principles of labour rights set out in the Code of Conduct for Manufacturers and Suppliers.

Continual improvement of the auditing processes

In 2013, the teams of internal CSR auditors continued to train in the performance of social audits and also intensified their work on training external social auditors working with Inditex.

In particular, three projects were developed to perfect audits so that they can continue to be adapted to Inditex’s own methodology:

- Audit quality management

The CSR teams accompanied external auditors on 58 audits to assess their work and share good practices (“shadow audit”). Another quality management initiative involved the performance of 23 visits to factories in order to compare the quality of audits previously carried out by external staff.

- Standardisation

All social audit reports are carefully checked by Inditex’s CSR teams in order to guarantee their quality and adaptation to the Tested to Wear methodology in the countries where Inditex produces.

Training in pre-assessment processes

In 2013, a total of 90 internal and external auditors received specific training on pre-assessment audits in order to standardise their practices and achieve more reliable and accurate results.

Training and awareness-raising of suppliers and manufacturers

In addition to the training sessions organised around the manufacturer management system, in 2013 awareness-raising meetings were held on fundamental labour rights and good practices, which were attended by more than 360 suppliers and manufacturers.

The CSR teams in the different countries where Inditex produces are in constant contact with the suppliers to inform them about the application of the Inditex standards and to help them comply with these standards. Individual sessions dealing with specific themes are often held in order to reinforce these messages. More than 500 sessions took place in 2013.

Health and safety of workers in the supply chain

One of Inditex’s priorities is to guarantee that all workers in its supply chain perform their work safely and without risk to their physical integrity.

The company has created specific initiatives aimed at and adapted to specific geographic areas to complement the work of the Code of Conduct Compliance Programme.

Of particular note is the project started in January 2013 in Bangladesh which aims to ensure that all manufacturers producing for Inditex in the country guarantee the safety of their workers.

EThe project, which has been developed jointly with a prestigious engineering firm, has made it possible to visit 244 factories and assess the structure of 111 buildings. The methodology specifically designed for the project is divided into two phases:

- Phase 1: Assessment and identification of the potential aspects for improvement in the area of fire and structural safety of buildings.

- Phase 2: Creation of evacuation plans and actions to implement improvements in factories on the basis of the visits and studies performed.

Furthermore, Inditex is a member of and works actively on the textile industry Accord on Fire and Building Safety in Bangladesh.

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

Another example of a specific health and safety project can be found in Morocco, where 53 specific visits were made to manufacturers and suppliers in order to assess their health and safety compliance, principally in fire prevention (including fire prevention measures, safety in electrical systems and evacuation plans, etc.).

In India, in collaboration with the National Institute of Fashion Technology (NIFT) of New Delhi, a pilot project has been created to allow a working area to be designed for pregnant women and to develop safer and more suitable personal protective equipment.

Accord on Fire and Building Safety in Bangladesh

On 24 April 2013, the Rena Plaza building (Dhaka, Bangladesh) collapsed leaving more than a thousand dead. Although Inditex had no commercial relationship with any of the factories in Rana Plaza, the company took part from the outset in the initiatives which emerged from the tragedy to palliate the consequences of the collapse.

Since the accident, the IndustriALL union, with the support of Inditex, has become the coordinator of the stakeholders that had already begun to work together to agree on forms of action required to guarantee the sustainability of the textile sector in Bangladesh. In addition to the IndustriALL union itself, these groups also include international brands, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), multisector organisations and NGOs.

In May 2013, the Accord on Fire and Building Safety in Bangladesh was established. This is a pioneering agreement between international brands and distributors, local and international unions and NGOs in order to ensure better and lasting improvements to working conditions in the textile industry in Bangladesh. Designed as a joint effort between all parties, and with the direct involvement of the International Labour Organization (ILO), it is a credible and effective programme to achieve sustainable changes in the long-term in this country’s textile industry.

Inditex played an active role in drafting the Accord in 2013 and became one of the first brands to sign it. Inditex was also chosen as a member of the application team dedicated to implementing the Accord. Later, Inditex was elected as a member of the Accord Steering Committee, which includes three union representatives, three representatives of international brands and one representative of NGOs acting as witness under the presidency of the ILO.

The Accord, which is valid for a period of five years, has already been endorsed by more than 150 companies and works on assessing over 1,800 factories, on the development of remediation plans and the creation of workers’ committees receiving training both in fire prevention and workers’ rights.

Further information at http://www.bangladeshaccord.org/