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 OUR BUSINESS PRACTICES > OUR COMPLIANCE PROGRAM > HOW REEBOK'S PROGRAM WORKS > TERMINATION RELATIONSHIPS
  TERMINATING BUSINESS RELATIONSHIPS
Often, we find the same issues appear over and over again in subsequent visits to active suppliers or we find that their level of compliance has fallen and new “threshold” issues are found. We also find agents or suppliers who are neither transparent nor committed to upholding our human rights standards. In these cases, the previously approved factory will have its approval designation removed.		  
 
 

This situation presents us with a challenge. Should we try to work with the factory to raise labor standards or should we take our business elsewhere? Should we stop working with the agent or try to improve their program? If we stay engaged, we face the dilemma of having our product manufactured in substandard conditions, or with working with an agent who is disingenuous about its commitment to labor standards. Although terminating our business might seem like the right thing to do, doing so can have serious consequences. Workers can lose their livelihoods when their employer loses our business—and the very people we seek to protect are harmed.

For example, our inspections uncovered that one of our important apparel trading agents used several unauthorized China subcontractors in order to get products shipped before safeguards (which shut down apparel imports into Europe from China) went into effect. This agent owns a factory in the Americas with a very high level of sustained compliance. The factory does assembly and packing of goods; cutting and sewing must be outsourced to subcontractors in China. In this case, the agent used undisclosed factories to meet their production obligations to get the order out on time.

  

When we audited the subcontractors, we found several serious violations. We therefore had to decide whether we wanted to terminate our agent relationship. In the end we did not, because we represented the majority of their Americas factory’s business and walking away could have meant shutting down a good factory. Instead, we required the agent to hire a consultant to develop a strong management system to prevent a reoccurrence of this problem. This unique solution helped the agent and protected their workforce.

When faced with these dilemmas, we do not take a decision to terminate lightly. If they have the right attitude we attempt to work with them to address human rights challenges. However, in the end, things do not always go as planned. If they are unwilling or unable to meet our expectations, we will terminate the relationship and take the business elsewhere, as we have done in other cases.