This week, Kmart Australia made local history by releasing details of its supplier factories. What else does the company have up its sleeve? Find out here.
How many factories does Kmart use?
At the present time, Kmart uses over 1,500 factories. Kmart does not own any factories and all factories used by Kmart also produce goods for retail organisations throughout the world.
How many factories have you audited as part of your ethical sourcing program?
Kmart has engaged with 100 per cent of all factories used to produce goods for Kmart. At the end of November 2013, Kmart had audited or mutually recognised 99 per cent of factories with the business aiming to audit 100 per cent by the end of the 2013 calendar year. All factories producing goods for Kmart in Bangladesh, Pakistan, India, Vietnam, Indonesia and Cambodia have been audited.
How many factories do you own?
Kmart does not own any factories and all factories used by Kmart also produce goods for retail organisations throughout the world.
When will you publish factory details for the other factories used to make Kmart products?
The details of factories in India will be made public early in the 2014 calendar year. After this we will work on making the details of factories in China public with remaining locations following throughout the 2014 calendar year.
Why can’t you make factory details public now?
Kmart does not own any factories, so we need to seek agreement from suppliers and their factories before we can publish their contact details. This takes time to occur.
Do you plan to make the details of every factory public?
The majority of factories will be published however this is done at a set point in time. There are a number of factories that Kmart is in the process of exiting or who are producing one off orders, and Kmart does not plan to make these public.
How do I arrange a visit to a factory?
Kmart does not own any factories and we are unable to arrange visits or guarantee access. Our publication of factory locations should not be interpreted as approval for any party to gain access or entry unannounced and without prior arrangement. Parties wishing to visit factory sites should contact factories directly and should honour and respect local laws and customs around privacy and site access. Kmart will not authorise anyone to visit a factory and access any records or areas of a factory, this is solely at the discretion of the factory. Visitors will be required to meet safety requirements as these are production facilities – any requirements will be communicated to visitors by the factory. As with any business, factories have the right to refuse entry to any person and this is outside the control of Kmart.
Do you think making this list public puts you at a competitive disadvantage?
Kmart is working to develop longer-term relationships with suppliers. We are moving from short-term supply arrangements to longer-term relationships so there is no disadvantage to making the list of factories public.
Do you plan to stay in Bangladesh?
Creating employment and lifting people out of poverty through sustained economic development is vital, and something Kmart unashamedly supports. The last thing Bangladesh garment workers need is for Australian consumers to give in to demands for bans and product boycotts, especially when available evidence shows Bangladesh factories, for the most part, are committed to making improvements.
How often do you audit factories?
At the end of each audit or after a factory has passed our mutual recognition program, Kmart assigns a rating to each factory. These ratings dictate when the next ethical sourcing audit will be – either within six, 12 or 24 months. On top of this, Kmart representatives are continually visiting factories that produce goods for us as we undertake quality inspections throughout the order fulfilment process. Throughout these visits, Kmart representatives will look for any obvious concerns and report them to the ethical sourcing team for investigation.
What happens if you find breaches of your code?
Kmart aims to work with factories and suppliers over time to improve. However if factories do not share this view and do not make required improvements, Kmart reserves the right to cease doing business with them. In addition, Kmart has the right to classify any breach of its code as a critical breach and cease doing business with the factory and the supplier.
Are audits announced or unannounced?
Kmart mainly conducts announced audits, however we are able to conduct unannounced audits as we see fit.
Do you audit every factory?
All factories that produce goods for Kmart and are sourced through our off-shore sourcing offices are audited or mutually recognised to ensure compliance with our Ethical Sourcing Code. Kmart is now working to get local suppliers signed up to the program, for example those that are based in Australia, supply goods to Kmart directly and produce those goods overseas.
Why do you mutually recognise?
Factories work with many retailers and are audited many times which can be a costly burden on the factory business. If a factory has been audited by a trusted reputable international retailer we review this entire audit report and make our own assessments based on Kmart’s Ethical Sourcing Code which from time to time enables us to ease the financial audit costs for the factory.