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Ethical and Sustainable Manufacturing in the Footwear Industry

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Ethical and Sustainable Manufacturing in the Footwear Industry

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"Ethical and Sustainable Manufacturing in the Footwear Industry" - Presentation of Yves Morin, CEO of CTC Groupe and President of UITIC (International Union of Shoe Industry Technicians) for the 5th World Footwear Congress of the CEC (European Confederation of the Footwear Industry) in Leon, Mexico, November 25th, 2014.

"Ethical and Sustainable Manufacturing in the Footwear Industry" - Presentation of Yves Morin, CEO of CTC Groupe and President of UITIC (International Union of Shoe Industry Technicians) for the 5th World Footwear Congress of the CEC (European Confederation of the Footwear Industry) in Leon, Mexico, November 25th, 2014.

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Ethical and Sustainable Manufacturing in the Footwear Industry

  1. 1. Consumer’s Need for More Assurance on Ethical and Sustainable Manufacturing in the Footwear Industry 2014 November 28th Yves MORIN CTC ‐ CEO UITIC (International Union of Shoe Industry Technicians) ‐ President 1
  2. 2. Part 1 Where do we Start from ? 2
  3. 3. Hourly Costs in Textile Industry Source : Werner International 2014  Germany : 30,03 $ / hour  USA : 17,71 $ / h  Poland : 5,70 $ / h  Bangladesh : 3,49 $ / h  Tunisia : 3,18 $ / h  Mexico : 3,06 $ / h  China : 2,65 $ / h  Bulgaria : 2,33 $ / h  India : 1,12 $ / h  Pakistan : 0,62 $ / h 3
  4. 4. Development of Globalization Different labor costs from Northern Countries to Southern Countries Consumption in Wealthy Countries & Production in Developing Countries 4
  5. 5. World Footwear Exportations Source :World Footwear Yearbook 2013 5 CENTRAL & NORTH AMERICA 2% SOUTH AMERICA 1% EUROPA 11% AFRICA 1% SOUTH PACIFIC 1% ASIA & MIDDLE EAST 85% TOTAL EXPORT 2012 : 13.500 MIO PAIRS
  6. 6. Social Issues : Identified Problems in Factories Source : Social Audits  Difficulties to apply labor laws,  Minimum wages very low or not applied,  Working days of 7 days a week,  Working hours over 16 hours a day,  Unpaid overtime,  No labor contracts,  Disadvantaged female labor force,  … 6
  7. 7. Social Issue : Child Labor Source : U.S. Department of Labor’s Bureau of International Labor Affairs (Oct 2014) • 168 million children worldwide between the ages of 5 and 17 worked as laborers in 2013, • 85 million child laborers are engaged in hazardous work around the world. 7
  8. 8. 8 Environmental Issues : Waste Water
  9. 9. Health & Consumer Issues Alert system such as RAPEX : European rapid alert system for non‐food dangerous products  Regulations such as Restricted Substance List  California Proposition 65  Alert system such as SIAR / IARAS : New ! SIAR : Sistema Interamericano de Alertas Rapidas, IARAS : Inter‐American Rapid Alert System, 9  Regulations such as REACh : Registration, Evaluation, Authorisation and Restriction of Chemicals Europa Americas
  10. 10. Building Collapse ‐ Rana Plazza April 2013 10
  11. 11. 11 Part 2 Stakeholders : Consumers and NGO’s
  12. 12. Stakeholders : Examples 12 COMPANY Suppliers Sub contracters Employees Government NGO’s & Associations Importers Retailers B to B B to C Consumers Media Customers Unions Competitors « A person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization’s actions, objectives, and policies »
  13. 13. Consumers « Havas Survey Findings : Likely, Desired and Future Behavior » Ref : Havas PR “ BeCause IT Matters ‐ 2014”
  14. 14. Brand Credentials will not be overlooked in the Future  DISAGREE……………………..  NEITHER AGREE OR DISAGREE….  AGREE………………………... Italy 7 30 63 Ref : Havas PR “ BeCause IT Matters ‐ 2014” US 16 39 45 China 2 21 77 Mexico 8 15 77 % « In the next year, I will consider the contribution to well‐being and sustainability of the brands I buy, more »
  15. 15. Would Like to Support Responsible Brands  DISAGREE………………………  NEITHER AGREE OR DISAGREE….  AGREE………………………… Italy 5 24 71 US 13 33 54 China 2 19 79 Mexico 8 8 84 % « I’d like to buy brands that let me support issues of well‐being and sustainability through my purchase » Ref : Havas PR “ BeCause IT Matters ‐ 2014”
  16. 16. Likely Loyalty to Responsible Brands  DISAGREE……………………..  NEITHER AGREE OR DISAGREE....  AGREE……………………….. Italy 6 27 67 US 12 29 59 China 1 14 85 Mexico 8 12 80 % « I am likely to be more loyal to brands that are responsible, ethical and sustainable » Ref : Havas PR “ BeCause IT Matters ‐ 2014”
  17. 17.  Fair Labor Association ‐ USA  People For The Ethical Treatment of Animals ‐ UK  Clean Clothes Campaign ‐ UK  3 539 « Green NGO’s » in China (Source : Ministry of Commerce People’s Republic of China) And so many others ! … 17 Influence of NGO’S & Associations International Local
  18. 18. Price make‐up of a € 100 Sport Shoe Transport & Tax €5 Labour costs retailer 18 Influence of NGO’S Production costs €1.50 Material €8.50 VAT €17 Publicity Brand Name €8 Research €11 Profit brand name €13 Profit subcontractor €3 Rent/stocks retailer €12 Publicity retailer €2.50 €18 Labour costs workers €0.50
  19. 19. 19 Influence of NGO’S
  20. 20. 20 Influence of NGO’S
  21. 21. Part 3 Corporate Social Responsibility : The Toolbox ? 21
  22. 22. International Labor Organization 8 Fundamentals Conventions  Forced Labor Convention ‐ 1930  Freedom of Association and Protection of the rights to organize ‐ 1948  Rights to Organize and Collective Bargaining Convention ‐ 1949  Equal Remuneration ‐ 1951  Discrimination (Employment and Occupation) ‐ 1958  Abolition of Forced Labor Convention ‐ 1957  Minimum Age Convention ‐ 1973  Worst Forms of Child Labor ‐ 1999 22
  23. 23. Social Accountabilty International The SA 8000 Standard is the central document. It is one of the world’s first auditable social certification standards for decent workplaces. Code of Conduct includes 9 categories :  Child labour,  Forced or compulsory labour,  Health and safety,  Freedom of association/ rights to collective bargaining,  Discrimination regarding religion,race, sex,  Disciplinairy practices,  Limited working hours,  Remuneration Decent Salary  Management systems. 23
  24. 24. Worldwide Responsible Accredited Production Dedicated to the certification of lawful, ethical and humane manufacturing. Code of Conduct includes 12 categories:  Compliance with local laws,  Prohibition of forced labour,  Prohibition of child labour,  Prohibition of harrasment or abuse,  Compensation, decent salary and benefits,  Hours of work and Limited working times,  Prohibition & discrimination,  Health and safety standards,  Freedom of association / rights to organize,  Environnemental issues,  Customs compliance,  Security and safety shipping. 24
  25. 25. The Global Compact Established by the United Nations’s General Secretary Koffi Annan during the Davos Forum Mission : To gather companies, NGO’s, Unions, to agree on 10 sustainable principles within 4 categories :  Human Rights  Labour Standards  Environment  Anti‐corruption policy 25
  26. 26. Zero Discharge of Hazardous Chemicals 26 RØADMAP TO ZERO DISCHARGE OF HAZARDOUS CHEMICALS 18 Major Fashion and Footwear brands Mission The Joint Roadmap is highly ambitious; it is a plan that sets a new standard of environmental performance for the global apparel and footwear industry. It includes specific commitments and timelines to realize this shared goal. Benefits to participation “Positions your organization at the forefront of this cross‐industrial movement Allows your organization to contribute to setting the agenda for integrated chemicals management, impacting all environmental aspects in our industries”
  27. 27. Sustainable Apparel Coalition About 100 Major Fashion and Footwear brands Mission The Sustainable Apparel Coalition was founded by a group of sustainability leaders from global apparel and footwear companies who recognize that addressing the industry’s current social and environmental challenges are both a business imperative and an opportunity. Through multi‐stakeholder engagement, the Coalition seeks to lead the industry toward a shared vision of sustainability built upon a common approach for measuring and evaluating apparel and footwear product sustainability performance that will spotlight priorities for action and opportunities for technological innovation. Current Focus Development, piloting and broad adoption of the Higg Index, a tool for measuring the environmental and social performance of apparel products. 27
  28. 28. ISO 26000 ‐ Corporate Social Responsibility ISO 26000 : Provides guidance rather than requirements, so it cannot be certified to unlike some other well known ISO standards. Instead, it helps clarify what social responsibility is, helps businesses, and organizations translate principles into effective actions and shares best practices relating to social responsibility, globally. 28
  29. 29. Part 4 Corporate Social Responsibility : In Practice ! 29
  30. 30. H&M & ILO “Issues in the garment industry are systemic and require action that helps develop effective industrial relations and promote respect of international labour standards. There is therefore an urgent need to establish strategic and comprehensive collaborations with companies that have experience in these fields, such as H&M,” ILO Director‐General Guy Ryder “We see the cooperation as a great opportunity to further strengthen our work towards the establishment of well‐functioning industrial relations on all our strategic production markets. ILO, with its unique tripartite composition, is the perfect partner for addressing issues such as wages and training and skills development in the textile industry,” Karl‐Johan Persson, CEO at H&M 30 H&M  900 suppliers  80% in Asia
  31. 31. Nike & Sustainable Apparel Coalition Source : The Guardian “A team of employees at Nike was given a special project: Cataloging the 75,000 items found in the company’s materials library and giving each a score based on their environmental impact and long‐term sustainability. The outcome: Materials Sustainability Index, or MSI, a “cradle‐to‐gate index” of everything and anything that could go into making a windbreaker or a pair of shoes. Nike has been pushing sustainability within its own product lines for years, introducing waste‐reducing technologies like Flyknit and working towards a “closed‐loop” business model in which all of its offerings are made with 100 percent recyclable materials. The company’s also been exploring how it might affect change throughout the industry, with projects like the MSI, which Nike submitted to the Sustainable Apparel Coalition, an international group of apparel and footwear companies, for industry‐wide use.” 33
  32. 32. Esprit & Peta “With the demand for cruelty‐free clothing, shoes and accessories, international retailer Esprit is ramping up its animal ‐ and eco ‐ friendly credentials by launching a new collection of leather‐free trainers for women! The new line carries a “PETA‐Approved Vegan” hanging tag, making it easy for shoppers to make sure that their purchases are animal‐ free” 32
  33. 33. VF Corporation & Code of Business Conduct “At VF, we conduct business based on our values. First and foremost, we believe in treating our associates, our customers and everyone we encounter with the highest levels of honesty, integrity and respect. The Code of Business Conduct sets forth business policies and principles for all directors, officers and associates of VF. It is based on principles we have followed throughout the years, and is designed to help us continue to do business with the highest standards. Our Board of Directors and senior management are wholly committed to the ethical and lawful policies that guide our business, which is why we are communicating this Code to all VF associates worldwide.” Eric C. Wiseman Chairman, President and Chief Executive 33 Officer
  34. 34. Patagonia & Corporate Social Responsibility “ We can’t pose Patagonia as the model of a responsible company. We don’t do everything a responsible company can do, nor does anyone else we know. But we can tell you how we came to realize our environmental and social responsibilities, and then began to act on them. Like other things in human life, it began with one step that led to another” 34
  35. 35. 35 « Maybe a company won’t sell more products if it’s ethical … but it might sell less if it’s not !… » Yves Morin Food For Thought
  36. 36. Thank you for your Attention ! 2014 November 28th Yves MORIN CTC ‐ CEO UITIC (International Union of Shoe Industry Technicians) ‐ President 36 Sustainability for The Footwear Industries

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