Super Retail Group has reported that two of its second-party factories in China have been placed on probation following audits, with the company identifying that one of these factories had a 15-year-old child worker working on premises.
This is according to Super Retail Group’s latest 2024 Sustainability Report, which confirmed that by the end of FY24, it had 535 active factories in 16 countries.
The group manages lifestyle and apparel brand Macpac alongside sporting retailer Rebel, as well as BCF and Supercheap Auto.
According to the report, the company conducted 26 second-party audits in FY24, where two factories in China were pinged for modern slavery issues.
One factory was reportedly found to have a 15-year-old child worker, under the legal working age of 16 in China, as well as three young workers who were aged between 16 and 18.
“The factory did not meet various legal requirements, or the requirements of our Responsible Sourcing Code,” Super Retail reported. “We are working with the factory to address the issues and have engaged external support from LRQA. The child worker has returned to school, and we will provide further updates on progress in our Modern Slavery Statement in December 2024.”
At a second factory in China, Super Retail reported that various critical non-conformances were identified, including issues related to payroll, attendance records and health and safety.
“The factory would not cooperate to implement corrective action plans and will not be used in the future,” Super Retail confirmed.
The retail business also commissioned and funded four independent audits of factories.
Outside of external audits on factories, the company has also identified areas of further improvement as part of its internal processes. This included consistency in data capture and management of non-conformances, data reported on factories and corrective action plan management processes.
“A factory with a recruitment fee-related non-conformance in FY23 was not managed in accordance with our requirements,” the group reported. “Despite efforts to work with the trade partner to address this issue, they were unwilling to make changes. Therefore the trade partner and its factories will not be used by the group any further.”
Super Retail added that in FY23, two other factories were reported as having had audits where they actually only had self-assessments. The issue has since been rectified and audits completed.
Another area of improvement included gaps in onboarding processes, which found that seven factories under one trade partner had not been onboarded in line with Super Retail’s processes.
“Upon further assessment, two of these factories were placed on probation due to the findings in the audit reports,” Super Retail reported.
“One finding included migrant worker recruitment-related fees where the workers were paying the fee for renewal documents, work permits and passports without reimbursement by the factory. The trade partner has been cooperative and since addressed the issues.
“We have initiated additional independent onsite verification which will be completed in FY25.”
Meanwhile, two other factories used by one trade partner were not disclosed to the group, and when Super Retail assessed them, it determined they could not be onboarded.
Super Retail also reported that orders were placed for private brand non-stock and stock products with two factories that had not been onboarded according to its requirements, where process improvement steps have since been initiated.
“As part of our ongoing compliance verification processes, we also identified another factory with recruitment-related fees being paid by migrant workers for passports, identification cards, work permit, visa and other documentation fees,” Super Retail added. “The factory would then reimburse the fees to workers over a 10-month period which did not meet our requirements.
“The trade partner and factory have since addressed this issue. Outstanding fees have been reimbursed and the factory has established a policy to prevent this issue from re-occurring.
“Further onsite independent verification will be conducted in FY25 to check ongoing compliance.”
The group then shared it continued to work with factories to address various audit findings, including potential modern slavery practices, critical health and safety concerns and issues related to working hours, wages and payroll.
“Where required by the circumstances, we have extended deadlines by which factories must demonstrate progress against agreed corrective action plans. We engage external providers, where necessary, to assist us in investigating some of the findings further and checking on progress.
“To better understand our supply chain and enhance our approach to risk and factory segmentation, including the impact of high-risk products, we utilised the LRQA EiQ supply chain intelligence platform. During FY24 we gained better insight into potential risk at Factories.
“We will use this knowledge as part of our overall Responsible Sourcing Program review process in FY25 to enhance our program’s effectiveness and our targeted approach to supply chain risk management.”
Of the group's 535 active factories globally, 92 were onboarded during the FY24 financial year and were screened against Super Retail requirements. The group added that 497 Factories were subject to our compliance verification audit program requirements with 95 per cent of these having had audits in the past two years.