Low-risk factories are approved and enter our Sustainable Compliance Program. Factories identified as a high risk are audited to evaluate compliance with the “threshold” standards before we place any orders. OUR FACTORY COMPLIANCE CYCLE demonstrates this process.  In 2005, approximately 85% of high-risk factories were audited prior to production. This was not possible in cases where the urgency of production deadlines allowed no time for a pre- production audit. When this happens, our business continues to function, but undertakes the threshold audit as quickly as possible.

If a high-risk factory passes the threshold audit, it is approved for production and enters into the Sustainable Compliance Program. Factories where threshold issues are found have the opportunity to enter into a remediation plan. If remediation targets are subsequently achieved, they are approved; if not, the relationship is terminated.

In 2005, up to 40% of factories were not approved after the initial inspection — most often because they have not worked with Reebok before and are not familiar with the high standards we set. While most are approved on subsequent visits, approximately 23% of the new factories audited in 2005 were not approved for production.  For more information on our assessment methodology visit FACTORY ASSESSMENT METHODOLOGY.

In exceptional circumstances, a waiver may be obtained from the Vice President of Human Rights and the relevant business unit. This is a short-term measure to enable priority production needs to be met, provided that factories demonstrate a good faith effort to comply. In order for the waiver to be granted, the factory must demonstrate that it is willing and able to tackle any threshold issues within a defined period of time. In December 2005, approximately 5% of suppliers have a waiver.