Audits are important; they benchmark a factory's human rights performance against our Supplier Code of Conduct. We use a three-layered approach involving preliminary audits by MEC merchandisers, independent STEP audits, and non-governmental verification.
New suppliers are screened for risk before they are given an order. First, we review the country of the factory. MEC will not take on suppliers from countries that the United Nations or Canada sanctions because of their human rights record. Nor will we work with countries that are high-risk in terms of offending worker rights. We have ranked countries on a human rights index based on our analysis of reports from NGOs (Amnesty International, Oxfam, and Human Rights Watch) and governments (Canada, United States, and the United Nations).
If a factory is not from a high-risk country, MEC conducts a preliminary Supplier Investigation Audit. MEC merchandisers (buyers, designers, production and QA specialists) look for visible evidence of compliance. During their factory visits they integrate monitoring with other merchandising functions. The purpose of this audit is to pre-screen factories before a full audit, or to verify improvements of existing factories. Preliminary audits and our risk-management approach have already prevented several suppliers with low compliance scores from entering our supply chain.
A layered auditing system provides objective and independent assessment that's critical to the program's integrity.
External third parties conduct audits as part of the Supplier Team Evaluation Program (STEP) and report to MEC's Ethical Sourcing Department. They monitor the factory and verify the preliminary audit through a 30-page assessment. This includes extensive worker and manager interviews in the factory worker's language. STEP benchmarks performance in terms of our Supplier Code, and provides a road map and timeline for improvements required.
Finally, a Non Governmental Organization auditing process is necessary for truly objective analysis. In 2004, MEC joined the Fair Labor Association, adopting their audit program as an additional measure. FLA auditors conduct random audits of our supply chain to assess the validity and accuracy of our audit program. It's a form of checking the checker.
This layered auditing system provides objective and independent assessment that is critical to the program's integrity. A negative audit has a lot of power. Orders can be delayed or cancelled altogether when human rights are breached.
Our Supplier Code is the standard our vendors must adhere to. All suppliers are briefed about these standards and their obligation to meet them. Afterward, they must sign a Vendor Agreement which formalizes their commitment.
In return for their dedication, we will work with factories to improve instead of walking away and leaving the problem for another customer. Factories must have a willingness to improve accompanied by measurable results. Those that don't have either are phased out.