Our compliance, our supplier´s training and our responsible purchasing practices are key to optimising our supply chain.
At Inditex we help our suppliers and manufacturers to constantly improve the conditions they offer and we accompany them in that process throughout our entire business relationship, which we strive to make as long-lasting as possible.
In order to continuously improve our supply chain, we audit and assess it routinely, factor sustainability criteria into all our purchase decisions and go to exhaustive lengths to train our suppliers and auditors.
The purpose of the Compliance Programme is to ensure that the labour conditions afforded by all our suppliers and manufacturers are aligned with the firm's Code of Conduct for Manufacturers and Suppliers as well as international labour standards.
Under the Compliance Programme, we carry out the following types of audits:
- Pre-assessment audits: before a supplier is certified to work with us, they are audited, without prior notice, in order to guarantee that they and any facilities they plan to use comply with the requirements laid down in our Code of Conduct. Should the supplier pass this initial filter, our business relationship commences with the supplier ratifying Inditex's Minimum Requirements, which include social, environmental and product health and safety compliance commitments. We also perform pre-assessment audits on any and all new factories which our suppliers want to incorporate into our supply chain.
- Special audits: these consist of visits and assessments of specific issues such as worker health and safety. By way of example, these audits include inspections of laundering processes to check that practices banned by Inditex, such as sand-blasting, are not being used.
- Social audits: these are designed to regularly grade our suppliers and manufacturers' compliance with our Code of Conduct. Performance is categorised into one of four ratings, ranging from A (the highest grade) to CAP, which stands for corrective action plan and means that the auditors have detected worrying breaches of the Code of Conduct which will need to be addressed immediately. If a supplier obtains the highest rating (A), the maximum period of time which is allowed to lapse between one social audit and the next is two years.
Our social audits are performed either by our teams on the ground or certified external auditors and are conducted without prior warning. They have their own methodology, which was developed together with IndustriALL Global Union, the University of Northumbria and the Cambridge Institute for Business and Public Sector Ethics, and that is is regularly reviewed. During each audit we speak to the factory´s manager, employees and their representatives and we review the pertinent documentation as well as visiting the facilities.
All factories must comply with customised improvement plans which are compiled in the course of the auditing process, factoring in unique circumstances on a case by case basis. These plans are designed to remedy any violation of our Code of Conduct and to prevent non-performance in the future.
Our suppliers and manufacturers enjoy the full support of our sustainability teams butif they fail to display willingness to improve or to comply with the remedial measures stipulated within the required deadlines, they will no longer be allowed to produce for Inditex. Other parties such as unions and NGOs may also participate in the process.
After each Corrective Action Plan, we assess the factory once again by performing a new social audit in order to verify that all of the improvements identified have been introduced. If a factory fails to reach the required compliance thresholds following this audit, it will be blacklisted and will not receive any new orders.