Federated Department Stores Statement of Corporate Policy
Federated Department Stores, Inc. and its subsidiaries are firm in their resolve to do business only with those manufacturers and suppliers that share the company's com mitment to fair labor practices, including adherence to laws that protect workers and their salaries, both in the United States and abroad.
As a condition of doing business with Federated, it is required that manufacturers comply with all laws applicable to the country in which the merchandise is manufac tured, including but not limited to laws against child or forced labor and unsafe working conditions. This condition is reiterated on every purchase order issued by the company; the purchase order contractually commits product manufacturers to adhere to applicable laws in the fulfillment of the order, providing Federated with an avenue of legal recourse should the contract be violated.
To further the objective of ensuring the protection of workers, Federated requires its core vendors annually to acknowledge in writing their understanding of the company's policies requiring full compliance with all applicable laws in the manufacture of products to be carried to Federated stores. Relationships with manufacturers and suppliers who do not sign this agreement are immediately terminated by Federated. In the manufacture of private label products being made exclusively for Federated, the company routinely inspects factories for contractual compliance, as well as com pliance with laws and regulations dealing with child or forced labor and unsafe working conditions.
Upon learning of a potential or actual violation of law by either a supplier of merchandise to Federated or a subcontractor hired by such a supplier, Federated will take the following actions:
Through the establishment of these policies, Federated believes it is most effectively exercising its economic leverage with manufacturers to encourage their full compli ance with laws designed to protect their workers; manufacturers who violate these laws know the consequences of their actions. In addition to its commitment to fully enforce its policies with manufacturers, Federated is committed to cooperating with state and federal agencies who ultimately are responsible for enforcing these laws.
The following summarizes Federated Product Development's business principles as they relate to our international sourcing strategy and vendor compliance program.
We are committed to the above principles wherever we have our private brands & labels manufactured worldwide. While foreign labor laws may differ from country to country, we first and foremost follow the local law of the country in regard to sup porting the minimum age and minimum wage requirements. We follow our policy in regard to strictly forbidding the use of forced labor and/or ozone depleting sub stances in the manufacturing of our product. When in our vendor's facilities, we will check for common-sense employee safety issues such as fire hazards, clearly marked and unblocked exits, cleanliness, and poor lighting.
The most important part of our compliance program is the identification of those vendors that share in our commitment before any business is transacted. Therefore, it is our policy that all suppliers and their manufacturing facilities must go through a formal evaluation and approval process prior to the placement of any orders. Fur thermore, these vendors must agree to authorize, in advance, unrestricted access to their facilities - including the ability to conduct unannounced inspections.
New vendors can only be approved by senior executive for that Region booking the order. If the merchandise is to be inspected by another region, then senior executive for that inspecting Region must also approve the manufacturing facility.
The standard procedures is as follows. Specific examples of the FPD forms and documentation are included in the Appendices attached.
Assuring vendor compliance includes the following key components and formal documentation of these activities:
FPD personnel look for violations of our policies which would include compliance with Federal, state and local law. Safety, wage and under-age worker violations are essential elements of our monitoring process. All documented violations must be reported to the Corporate Legal Counsel and the President/COO of FM/FPD for action.
Clearly defined levels of authorization have been established and audited for compliance.
Internal training by FPD Corporate Counsel, Corporate Quality Control & Overseas Offices managerial staff.
State and local government educational seminars and training materials available.
National Retail Federation sponsored seminars & conferences.
Independent Labor & Wage Experts (as available).
1 North/South America Region requires letter to be signed by an Officer of the Company and returned.
2 Only managerial level or pre-designated Quality Assurance staff are authorized to evaluate factories.
3 US vendors are in an on-line database.
4 Worldwide roll-out and training completed by October, 1996
5 Example: New York State Apparel Industry Task Force
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