Suppliers and human rights
2015/2016 Objectives & Achievements
- Monthly audit corrective action reporting to be introduced for high volume Far East suppliers
- Improved corrective action report format introduced to simplify and improve the progress on signing off corrective actions with suppliers.
- Include training on ethical matters in induction for all members of the Buying Team, with annual refresher training
- Ethical Auditing and Modern Day Slavery training for the Product Team, UK Suppliers and Far East Suppliers.
- Increase the proportion of factories with ‘green’, ‘amber’ or ‘branded’ audits against our Ethical Code of Conduct
- Score increased to 72% of product supply base (70% in 2014-15).
- Monitor developments in anti-slavery legislation and practice and adapt our processes accordingly
- Reviewed the business overall to highlight the biggest slavery risks internally and for both stocked and non-stocked products. Investigated the core routes for high risks of slavery depending on country of origin and material sourcing.
What do we do?
Effective management of human rights throughout our supply chain is built into our product procurement procedures. Our in-house technology team has extensive experience of working with factories to improve quality and ethical standards. Monitoring and working to improve human rights is part of the factory management role carried out by our Far East sourcing partners on our behalf.
All suppliers of product for resale have been made aware of the growing risk of modern day slavery and have been reissued with the Dunelm Ethical Code of Conduct, based on the Ethical Trading Initiative (‘ETI’) base code which has a strengthened section on slavery. New ethical audits will be semi-announced, 4 Pillar SMETA audits. This is to gain a more realistic view of the manufacturer and learn more about the ethical stance of the company.
We have assessed the remainder of our supply base for modern slavery risk and have required the major providers to sign our revised Code of Conduct. Our statement made pursuant to Section 54, Part 6 of the Modern Slavery Act 2015, which contains further information, is available at www.dunelm.com.
We work with our suppliers to ensure that our products are produced in clean and safe environments, that workers are treated with respect and earn a reasonable wage and that suppliers work within the relevant local laws and regulations. All manufacturers with whom we trade directly are required to sign up to our Code of Conduct. No new factory source is taken on without a satisfactory audit being in place, and audits are repeated at least every two years.
Where non-compliance is discovered we have a formal procedure for working with a supplier to help them achieve compliance, usually within three months. Critical non-conformances such as use of child labour, working against choice/slavery or absence of valid Building or Fire Certificates are escalated immediately, and supplies cease until the issue has been resolved. Ultimately, if progress is inadequate, we will cease to trade with the supplier.
We aim to treat all of our suppliers fairly and consistently. We ask all of our suppliers to sign our standard terms and conditions in advance of commencing trade.
We have signed up to the Prompt Payment Code which requires companies to pay suppliers in accordance with agreed terms, with a default period of 60 days. The number of days’ purchases outstanding for payment at 2 July 2016 was 38 days (2015: 42 days).
Clearer communication to suppliers about corrective actions and what is expected to make the improvements.
Black audits (critical failures) reduced from 27 in 2015 to 5 in 2016.
Ethical audits standardised to SMETA audit style.
Introduce semi-announced (within a four week period) 4 Pillar SMETA audits for stock products.
Extend audit regime to major coffee shop suppliers and non-stocked product suppliers.
New product development not to be granted to factories with a “red” rating, unless they are new to Dunelm or have shown a marked improvement in their corrective actions.
Include training on ethical and slavery matters in induction for all members of the Buying Team, with annual refresher training.
Introduce Factory Profile Questionnaire for potential vendors.
Roll out Technical Audits to top 30% of factories for stock products.
Obtain clarity on high risk countries of origin and materials for sustainability and slavery issues.
Monitor developments in anti-slavery legislation and practice and adapt our processes accordingly.