C. Continuous improvement
The Guiding Principles developed by the UN Framework to Protect, Respect and Remedy state that “addressing adverse impacts (…) requires taking adequate measures for their prevention, mitigation and, where appropriate, remediation."
Therefore, Inditex's commitment to continuous improvement places the priority on remediation plans within the company's CSR strategy.
Thus, the remediation plans drawn up by Inditex have a dual function: on the one hand, to establish measures directed at mitigating and/or remedying any breaches of the Code of Conduct for Manufacturers and Suppliers detected when conducting social audits and, on the other hand, to prevent these from reoccurring in the future.
In particular, during the 2012 financial year, the evolution of its Corrective Action Plans and Plan for the Prevention and Remediation of Work by Minors are both worth special mention.
Corrective Action Plans
All social audits set up a Corrective Action Plan in an attempt to address any breaches of the Code of Conduct for Manufacturers and Suppliers that were identified. During the 2012 financial year, Inditex strengthened its commitment to zero tolerance for those manufacturers that show no signs of improving critical aspects of the Code of Conduct, based on the premise of accompanying them throughout the improvement of their conditions.
The Corrective Action Plans, which can last anywhere from 6 to 24 months depending on the severity of the breaches identified during the social audits, are put into action once the supplier has undertaken to improve the social and labour conditions so that they are more in keeping with the standards included in Inditex's Code of Conduct for Manufacturers and Suppliers. During this time the supplier, manufacturer and Inditex's CSR team work together to set up systems and processes to carry out the necessary improvements. If the corrective plan is shown to have positive results, a follow-up audit will be carried out to certify these improvements. In the event of a critical breach of the Code, immediate corrective measures will be imposed.
Those suppliers that decide not to undertake a Corrective Action Plan or those who do not manage to rectify the most serious breaches of the Code of Conduct once this has been carried out, will not be authorised to manufacture for any of the Inditex brands and are, therefore, dismissed from Inditex’s supply chain.
Table of active suppliers on 31/01/2013
| Geographical area | Suppliers with purchases in the 2012 financial year | Suppliers ruled out in 2012* | Active suppliers |
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| Africa | 112 | 2 | 110 |
| America | 68 | 1 | 67 |
| Asia. | 672 | 55 | 617 |
| Non-EU Europe | 136 | 5 | 131 |
| European Union | 446 | 23 | 423 |
| Total | 1,434 | 86 | 1,348 |
Corrective Action Plan
Percentage of compliance with the Code of Conduct in the factories and workshops associated with active suppliers in 2012
| Africa | America | Asia | Non-EU Europe | European Union | ||||||
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2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Prohibition of forced labour |
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| Prohibition of work by minors* |
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| Prohibition of discrimination |
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| Respect for freedom of association and collective bargaining |
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| Prohibition of abuse or inhumane treatment |
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| Hygiene at work |
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| Compliance in the matter of salary** |
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| Working hours** |
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| Environmental commitment |
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| Regular work |
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| Implementation of the Code |
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+90% compliance
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+70%
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+50%
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-50%
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Project “D”
As mentioned earlier, in the 2012 Annual Report Inditex has replaced the former “D” rating with the new “CAP” (Corrective Action Plan) in a process that goes far beyond a mere change in terminology. Based on the continuous work carried out with the Corrective Action Plans, during 2012 Inditex set up an ambitious plan to improve the factories that received a “D” rating, regardless of whether they had produced that year or not. Inditex believes that the best way to improve a factory is to support it during the process at all times, leaving the possibility of suspending the relationship as a last resort.
The programme consists of the following phases:
a) Identifying the factories
Inditex's CSR team identified 471 factories around the world with important aspects that needed improvement. Although all of these had received orders at some stage from Inditex, only some of them had worked for the Group in 2012.
b) Continuity assessment
The suppliers, Inditex purchasing teams and both local and corporate CSR teams assessed the continuity of production within the factories identified, taking into account at all times their degree of dependence as well as their and attitude to improve.
c) Drafting an improvement plan
Local CSR teams drew up specific improvement plans in each country in an attempt to resolve the incidents detected. These plans were accompanied by visits to the manufacturers' facilities where both the suppliers and the local CSR teams collaborated in carrying out the work.
d) Assessing the result
The improvement plans carried out were validated through an assessment that identified those factories that had adopted the plans and those that had not. The former were once again made available to the purchasing teams to be assigned new orders in the future whereas the latter were suspended from Inditex´s purchase order management systems. Thus, 70% of the factories that began the process improved and were considered suitable for continuing their relationship with Inditex.
Programme for improving factories (Project “D”)
| Geographical area | Factories that initiated the improvement process | Factories that showed improvements | Success rate |
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| Africa | 38 | 27 | 71% |
| America | 3 | 3 | 100% |
| Asia | 257 | 193 | 75% |
| Non-EU Europe | 133 | 77 | 58% |
| European Union | 40 | 32 | 80% |
| Total | 471 | 332 | 70% |
Plan for the Prevention and Remediation of Work by Minors
Inditex is firmly committed to protecting the Fundamental Labour Rights included in the Code of Conduct for Manufacturers and Suppliers. Thus, it pays special attention to guaranteeing and protecting the rights of minors in all the communities in which it works and is especially dedicated to promoting their right to education.
The Code of Conduct stipulates that: “Manufacturers and suppliers shall not employ minors. Inditex defines minors as those persons who have not yet reached their 16th birthday. In cases where local legislation stipulates a higher minimum age, the higher limit shall apply”
Inditex has zero tolerance for work by minors and has undertaken not to enter into a commercial relationship with suppliers that use any type of young workers in circumstances that may be harmful to them. At the same time, Inditex supports the implementation of remediation plans that guarantee the fundamental rights of minors.
Inditex´s policy for the prevention and remediation of work by minors is in keeping with the following pertinent international standards:
- The Base Code of the Ethical Trading Initiative
- The Global Compact Principles
- The Framework Agreement between IndustriALL and Inditex
- Conventions (138,182,190) of the International Labour Organisation (ILO)
- The Guiding Principles for Business and Human Rights of the UN Framework to Protect, Respect and Remedy
The policy, and plan behind it, seek to protect and guarantee the rights of minors, above all their right to education, without jeopardising the family's financial situation. Therefore, in the event a case of minors labour is detected, the supplier is responsible for guaranteeing the minor’s education and must undertake to pay the costs of this until the minor reaches the legal age of employment. At this point, the worker will be offered the opportunity to return to their previous position of employment should they so desire. During the time the minor is covered by the Remediation Plan, the supplier is obliged to pay the minor's salary to their family or hire another family member of legal age. Furthermore, the factory and the supplier must implement measures to prevent further cases of work by minors in an effort to eradicate these practices.
This entire process, handled and adapted on a case-by-case basis, is carried out under the supervision of local CSR teams and, where appropriate, local non-governmental organisations and other specialised bodies. To this end, during the 2012 financial year, Inditex collaborated with organisations such as the Association for the Support of Contemporary Living (CYDD for its acronym in Turkish) in Turkey and the Awaj Foundation in Bangladesh.
Effective Fire-Prevention Programme for suppliers' installations
Throughout 2012, Inditex, along with a number of stakeholders, worked to create a practical worldwide fire-prevention programme for the textile industry. This is undoubtedly the reality that the industry as a whole must address if it is to achieve tangible changes and reduce the numbers of accidents caused by factory fires in the textile sector.
Inditex believes the main players present in the industry, such as international brands, IndustriALL (the federation of international unions), national governments, multi-sectoral organisations and NGOs, must work together on this issue to achieve effective results.
Bangladesh has already seen some encouraging steps in this regard, for example, the signing of the National Tripartite Plan of Action on Fire Safety promoted by the Government of the country itself, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) and local trade unions organisations. On an international level, IndustriALL, with the support of Inditex, is acting as a catalyst for change in this respect. It has coordinated and organised the vast majority of international brand names to move forward during 2013 in order to reach an agreement that will bring about significant changes to the safety conditions in factories and workshops.
What's more, the Ethical Trading Initiative (ETI), of which Inditex is an active member, enabled several meetings with IndustriALL and a large number of brands as part of its efforts to promote coordinated commitments in this regard.
Likewise, in January 2012 Inditex, along with another 23 large companies in the textile sector, signed a letter addressed to the Prime Minister of Bangladesh calling attention to the individual efforts made by the brands in this regard and stressing the need to combine these with a robust political commitment that would make it possible to transform the reality of the factories in this country.
Finally, in 2013, more than 30 international companies along with IndustriALL and other organisations involved in fair development in Bangladesh, such as the Clean Clothes Campaign, signed a protocol for action known as the Accord on Fire and Building Safety in Bangladesh that, based on the National Tripartite Agreement, seeks to involve and bind international brands in the attempt to truly and effectively create safety conditions in the factories of this country.
