Updated on June 20, 2018: The Lucky Brand Supplier Code of Conduct is founded on the ‘ILO eight fundamental conventions’ and the ‘U.N. Universal Declaration of Human Rights.’ The U.N. Human Rights Council is an inter-governmental body responsible for the promotion and protection of all human rights around the globe. Despite the United States withdraw from the U.N. Human Rights Council, Lucky Brand stands by its company commitment to ensure the fundamental human rights and dignity of factory workers in our supply chain.
Lucky Brand’s internal policies ensure supplier awareness that slavery, human trafficking, forced labor, and child labor in our supply chains will not be tolerated. These policies also outline Lucky’s standards for a safe and healthy working environment in the factories where we source product.
These policies are outlined in the Lucky Brand Supplier Code of Conduct and the Supplier Social Compliance Manual. The Supplier Code of Conduct is based on United Nations Universal Declaration of Human Rights (“UDHR”), the International Labour Organization (ILO) Fundamental Conventions, and benchmarked to industry standards. Lucky Brand suppliers are expected to implement the Lucky Brand Supplier Code of Conduct, using the guidance provided in the Social Compliance Manual, in their facilities and to comply with all relevant and applicable laws and regulations of the country in which workers are employed.
CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT OF 2010 (SB 657)
The California Transparency in Supply Chains Act of 2010 (SB 657) went into effect January 1, 2012. This law requires large retailers and manufacturers that do business in the state of California, with gross worldwide sales of over $100 million dollars, to be transparent about the efforts they have undertaken to eradicate Slavery and Human Trafficking in their supply chain.
(SB 657) takes me here https://www.state.gov/documents/organization/164934.pdf
- Forced labor is "all work or service which is exacted from any person under the menace of any penalty and for which said person has not offered himself voluntarily" (Forced Labour Convention, 1930).
- Child Labor is often defined as work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development (International Labor Organization).
- Slavery, currently referred to as modern-day slavery, includes debt bondage, serfdom, forced marriage and the delivery of a child for the exploitation of that child (1956 UN supplementary convention).
1. SUPPLY CHAIN DUE DILIGENCE AND VERIFICATION
The Lucky Brand Supplier Code of Conduct is communicated to all finished goods suppliers and prohibits any form of forced labor in our supply chain, including human trafficking, slavery, and child labor. Suppliers sign off on their receipt of and compliance with the Lucky Brand Supplier Code of Conduct. By signing off on the Code of Conduct, the supplier agrees to Lucky making both announced and unannounced audits by third-parties. The Code resides within the Lucky Brand Supplier Social Compliance Manual, which is the process document that guides factories to implement the Code of Conduct on the work floor.
The Lucky Brand Supplier Social Compliance Manual includes details on Lucky’s procedure to audit, identify, and correct violations of our Code. It also explains the screening process for potential suppliers, ensuring Lucky does not embark on business relationships with suppliers that have substandard human rights practices. We conduct or collect audits for all of our finished goods suppliers to ensure compliance with our Code of Conduct. Audits are performed by an approved list of reputable third-party monitors. As per the Code, suppliers agree to announced and unannounced audits. Because Lucky strives for collaborative compliance relationships with its suppliers, unannounced audits are only scheduled when deemed necessary.
After an audit, suppliers are given guidance on how to create corrective action plans for audit findings. Audits and corrective action plans are reviewed for compliance with the Lucky Code. Audit reports always include detailed sections on child and forced labor, migrant, imported, contract and temporary/seasonal workers, and third-party labor brokers and temporary agencies. Should a supplier fail to meet Lucky Brand’s standards, appropriate and timely corrective action is expected. Failure to do so could result in the cancellation of purchase orders and/or termination of the business relationship.
Lucky Brand’s Mutual Recognition Program
Audit fatigue is a common struggle in the process of monitoring and evaluating suppliers. The resources and time it takes to host an audit distracts the factory from making actual policy and procedural changes. Since an audit is simply a snapshot in time, Lucky Brand believes healthy work environments are ensured by a strong internal health and safety program. A supplier’s energies should be focused on developing and implementing this program. In such, Lucky Brand has a Mutual Recognition Program, also known as Equivalence, where international industry standard audits are accepted even if they were conducted on behalf of another brand or retailer. We believe this allows the supplier to focus energies on long-term preventive actions instead of audit preparation.
Lucky Brand is supportive of the Social Labor and Convergence Project, which would create a single verification accepted by all Brands and Retailers. We are waiting for the Five-Year Strategy in Q4 2018 to be announced before making a public commitment.
Lucky Brand suppliers are prohibited from utilizing unauthorized subcontractors to produce Lucky Brand products or components without prior approval. Lucky approval requires an audit of the subcontractor prior to work beginning to ensure compliance with our Code of Conduct.
4. EVALUATING RISK AND ACCOUNTABILITY
Lucky Brand’s social compliance program is reviewed annually or more frequently if internal company changes deem it necessary. Lucky’s social compliance program has recently undergone the following revisions due to internal changes:
- In Q4 2014 and Q1 2015, Lucky’s social compliance program was reviewed and the Code of Conduct and Supplier Social Compliance Manual were revised after a divestment from Kate Spade & Company to ensure synergy with new internal processes. At the same time, the former program was reviewed for gaps and strengthened where required.
- In Q4 2015 and Q1 2016, the utilization of a new audit tool was reviewed and implemented, along with procedures to avoid audit duplication (or audit fatigue), enhanced systems to manage corrective action plans, and improved supplier trainings.
- In 2017 a new Supplier Scorecard was launched and suppliers were notified by in-person trainings. The Supplier Scorecard is a tool that supports the Mutual Recognition Program and allows Lucky to track progress over time and evaluate risk regardless of the audit provided.
- In 2018, the new Supplier Scorecard has enabled us to focus on factories and allocated resources to more in-depth capacity building programs or trainings based on the historical trends of their audit reports.
Communication with Lucky Global Sourcing about a supplier’s social compliance level is fluid, ongoing, and based on a supplier’s current needs. Global Sourcing is always notified of severe changes to a supplier’s compliance level.
Any form of forced labor, including slavery and human trafficking is a zero-tolerance issue for Lucky Brand. If this were found in our supply chain, the supplier would be subject to disciplinary actions including immediate remediation and possible termination of business. Aside from zero-tolerance issues, Lucky strives to form long-term relationships and work with our supplies in an effort of continuous improvement.
Due to their frequent factory visits, Lucky Brand sees our Global Sourcing and Design Teams as the eyes and ears of the Social Compliance Program. These Teams are trained in Social Auditor 101 to be familiar with the following:
- Definition of slavery, human trafficking, debt bondage, forced labor, and child labor;
- Methods or red flags to recognize the signs of human trafficking in the supply chain and how to respond appropriately;
- Health & Safety Walkthrough to identify issues in Fire, Electrical, and Chemical safety and proper use of personal protective equipment.
Your interest in our program is important to us. If you have questions or would like more information, please reach out to Lucky Brand CSR.