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 OUR BUSINESS PRACTICES > OUR COMPLIANCE PROGRAM > COVERAGE & FINDINGS > OUR FINDINGS & RESPONSE
     

 
 

BY ISSUE TYPE
Our field staff reported 5, 366 noncompliance issues from audits. The distribution of noncompliance by issue type is shown here.

Most of the instances of noncompliance (39%) correspond to the Health and Safety code element, followed by Fair Wages (15%), Hours of Work and Overtime (13%), Non-Discrimination (11%), and smaller shares for other code provisions.

One explanation for the pattern of noncompliance is the ease of detection of different code violations. Safety and Health issues are readily detectable by physical inspection of the factory whereas issues such as Freedom of Association, Harassment or Abuse may be hidden. Nonetheless, the findings clearly indicate that Safety and Health issues are pervasive around the globe. Incidents of Safety and Health noncompliance were found in 100% of the 475 active factories audited. Nearly 33% of these non-compliances corresponded to Fire Safety. The main causes of Fire Safety noncompliance were problems with emergency exits (35%), fire drills (30%) and fire safety equipment (27%).

Fair Wages was the second most prevalent noncompliance accounting for 15% of all noncompliance cases. Incidents of Fair Wages noncompliance were found in 58% of the 475 active factories audited.

  

The main issues were workers not receiving proper payroll documentation (33%), failure to provide full legally mandated benefits (24%), payments below legal minimum or industry wage (13%), and unfair wage deductions (12%).

Hours of Work and Overtime were the third most prevalent element of noncompliance. Incidents of working hours & overtime noncompliance were found in 57% of the 438 active factories audited. The main issues were working weeks exceeding 60 hours or legal limits (42%), nonpayment of overtime (17%) and failure to plan solutions for patterns of excessive working hours (12%).

Non-discrimination had the next highest rate of reported noncompliance in 2005. One or more incidents related to discrimination was found in 28 percent of those factories audited. Nearly 50% of these noncompliances corresponded to lack of sustainable solutions to discrimination, including no proper non-discrimination policy, with the remaining related to discriminatory practices.

For a breakdown of findings by each code provision and benchmark, see the pull-out table inserted here: COMPLIANCE VIOLATION BY CODE PROVISION, 2005 (PDF) .

       
 

BY TYPE OF FACTORY
The graph compares 2005 compliance violations for existing factories, newly approved factories this year, and factories that were audited but not approved for Reebok production.

The data shows that we still face many challenges with our approved factories. However, it also shows how issues in new factories compare to issues in existing suppliers. This tells us that our approval process does have a measurable impact on factory compliance levels, as factories are not eligible for Reebok production until they have achieved compliance with threshold issues.

  
 

 

 

  
 

LIMITS TO OUR DATA:
AN INSIGHT INTO THE PROCESS
Factory assessments are not an exact science and the data from them should not be taken as highly accurate. Field staff approach their work differently depending on their experience and the local context in which they work. They also need flexibility to accommodate local needs and make their work as effective as possible.

Some compliance violations are easier to find than others. Issues that are particularly difficult to uncover include blacklisting union members during hiring and sexual harassment. We believe that violations on Freedom of Association, Harassment and Abuse, and Non-discrimination, are more widespread than our data suggests.

We uncovered only 94 infringements of Freedom of Association issues in North East Asia, including our 151 factories audited in China. We suspect that we either need to look harder or perhaps too much license is being given to the local context. What is possible in Freedom of Association in China is different than in some other regions, and field staff may adapt their judgments to reach regionally or locally relevant conclusions. Our priority is not to achieve universal global interpretations, but to work towards best practice and continuous improvement in each region.

Characterizing a factory by standard is not perfect. Positive aspects do not register. There can be overlap between code provisions so that a single problem (eg excessive hours) can be reported as one incident (overtime) or two incidents (overtime and insufficient days off). We are working to reduce such ambiguities

  
 
REMEDIATION
Sustainable compliance is not achieved just by identifying problems. We work with factories to drive timely remediation (corrective action) and improvements of workplace conditions.

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.