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 OUR BUSINESS PRACTICES > OUR COMPLIANCE PROGRAM > HOW REEBOK'S PROGRAM WORKS > NONCOMPLIANCE
 
FOLLOW UP ON NONCOMPLIANCE
Whenever areas of noncompliance are found, we provide the factory with a Plan of Action (POA) and require the factory to correct the problem in a timely manner using a Corrective Action Plan (CAP):

  
REEBOK PLAN OF ACTION (POA):
Defines Expectations & Recommendations

Outlines expectations and recommendations for factories to reach compliance on all issues discovered during an audit.

  • Provided to a factory within 10 days of an audit
  • Specific and actionable
  • Details both a short - and long-term strategy
  • Includes deadlines and verification requirements
FACTORY CORRECTIVE ACTION PLAN (CAP):
Details Implementation Strategy

Developed by the factory or agent, a CAP responds to a Reebok POA.

  • Detailing specific actions the factory will take
  • Address compliance violations in the short- and long-term
  • Reports their CAP directly into Reebok’s database
  • Submit any requested documentation to human rights staff
 


Left to their own devices, factories will often remediate noncompliances with “band-aid” solutions. Other factories want to comply, but do not know how to do so. We educate factories to make sustainable solutions using policies, procedures, communication and documentation. To see lasting improvements, we often need to help factory management develop internal systems and better supervisory skills.

MONITORING PROGRESS AND VERIFYING REMEDIATION
Field staff follow up with factories to verify the actions taken. Documentation demonstrating corrective actions is also reviewed. Our field staff decide the form of verification required, based on the type of issue and risk of reoccurrence. Where possible we prefer a visual inspection to verify remediation prior to closing out an issue.

As a result, issues are often listed as “open” in our database after corrective actions have been taken. While this leads to an overestimate of “open” issues it gives us better confidence that when we report an issue has been “closed” it has been dealt with effectively.

  
 
  SAMPLE PLAN OF ACTION provided to a factory having inaccurate time records and underpayment of overtime wages.

1 - Factory to investigate, by [INSERT DATE], whether workers are owed any wages for any and all overtime hours worked. All workers must be repaid for underpayment during any periods when the factory produced for Reebok ([INSERT DATE] to present. Back wages for any underpayments are to be made on or before the next paydate.

2 - (a) Factory to develop a wage & working hours policy, that includes: (i) definitions for wage rates (regular, overtime, rest, holiday) to be paid to workers, (ii) requirements for paying workers for all hours worked at wage rates required by law, (iii) requirements for workers recording their own hours, and recording all hours worked, (iv) provisions to ensure all time and wage payments are to be recorded and reported within the factory time-recording and payroll systems, (v) disciplinary measures for failing to record, or enforce the recording of hours; (b) Factory to also implement procedures for its implementation and enforcement. This is to be completed by [INSERT DATE]. Please note: factory management must maintain at least three months of accurate time and payroll records in the factory at all times, before re-approval is considered.

3 - (a) Factory to install systems to be able to completely, accurately and reliably record and report on all hours worked, including overtime, and to record and report wages paid to workers. (b) As part of this system, factory to provide workers with individual pay slips that separate regular work hours, the various levels of overtime/holiday hours, and clearly indicate the number of hours the individual worked in each category, as well as the total payment for each category. This is to be implemented by [INSERT DATE].

 

4 - By [INSERT DATE], workers must be informed verbally and in writing about the following matters: (i) the minimum wage and overtime rates applicable to the factory, (ii) the requirement that all working hours be recorded, explanation that workers may confirm their working hours through daily postings and monthly pay slips, (iii) explanation of a grievance procedure to follow if working hours are not recorded and paid according to law, including the option of reporting to Reebok.

5 - Factory must submit to [INSERT NAME OF FIELD STAFF], the following documents, for three successive months, once production has started: (i) a copy of corrected factory payroll, (ii) corresponding copies of payslips. The veracity of these documents will be subjected to additional verification.

CLOSING OUT OPEN ISSUES
Remediation takes time to achieve. The chart “Compliance Violations by Code Provision” shows the number of closed (resolved) issues for each Code provision.  In 2005. We have closed a total of 4281 noncompliance issues, from this year and previous years, but 4288 issues are recorded as open. Many of these issues may have been remediated by the factory, but not yet recorded in our data, since we do not regard an issue as “closed” until we have verified it for ourselves. Nevertheless, the large number of open issues demonstrates the difficulties factories face in correcting instances of noncompliance in a sustainable way, the challenges we face in getting factories to comply and the size of the task of verifying factory actions in a timely manner.