Supply Chain Transparency
2022 Statement on Modern Slavery and Human Trafficking
The California Transparency in Supply Chains Act of 2010, the UK Modern Slavery Act of 2015, and the Australia Modern Slavery Act of 2018 require certain commercial organizations to be transparent about efforts undertaken to identify and eradicate modern slavery and human trafficking from their supply chains and operations.
Gildan is fully committed to respecting human rights and to maintaining high ethical standards in all of its operations, and to incorporate such beliefs into its business practices worldwide. As such, Gildan does not tolerate modern slavery or human trafficking in any form. Gildan adheres to its publicly-available Code of Conduct, which is based on the eight (8) core conventions established by the International Labour Organization (“ILO”), as well as the codes set forth by the Fair Labor Association (“FLA”), the Worldwide Responsible Accredited Production (“WRAP”), and the Supplier Ethical Data Exchange (“SEDEX”), all of which include strict provisions with regards to forced labour, child labour, human trafficking and other forms of slavery.
Gildan’s commitment to eradicate modern slavery and human trafficking from its supply chains and operations is not new. In 2007, Gildan was the first vertically-integrated apparel manufacturer to have its Social Compliance Program accredited by the FLA. Beginning in 2013, Gildan has been included each year in the Dow Jones Sustainability Index (“DJSI”). The DJSI is based on a thorough review process which covers, amongst other items, supply chain standards, human rights and labour practices. In 2018, Gildan pledged to join the Industry Commitment to Responsible Recruitment (the “ICRR”) which was developed in conjunction with the American Apparel & Footwear Association and the FLA. The ICRR is a proactive industry effort to address potential forced labour risks for migrant workers in the global supply chain. Signatories of the IRCC must ensure that workers (i) do not have to pay for their job, (ii) retain control of their travel documents, and (iii) have full freedom of movement. In addition, all workers must be informed of the basic terms of their employment prior to being re-located to their new place of employment. Furthermore, in 2019, Gildan’s Social Compliance Program was re-accredited after the Company demonstrated that it maintained fair labour practices and policies in its global supply chain. For more information on the measures implemented by Gildan to protect migrant and temporary workers, please refer to page 24 of Gildan’s Social and Sustainable Compliance Guidebook.
This 2022 Statement on Modern Slavery and Human Trafficking is issued on behalf of Gildan Activewear Inc., a publicly traded Canadian corporation (NYSE: GIL; TSX: GIL), and all of its worldwide subsidiaries for the financial year ended January 2, 2022.
Gildan’s Global Business and Supply Chain
Gildan owns and operates vertically-integrated, large-scale manufacturing facilities which are primarily located in Central America, the Caribbean, North America, and Bangladesh. These facilities are strategically located to efficiently service the quick replenishment needs of Gildan’s customers. With approximately 51,000 employees worldwide, Gildan operates with a strong commitment to industry-leading labour and environmental practices throughout its supply chain in accordance with its comprehensive Environment, Social and Governance (“ESG”) program embedded in the Company’s long-term business strategy. While the vast majority of Gildan’s products are manufactured in its owned facilities, Gildan also sources certain products from third parties which represent approximately 10% of total sales.
For more information on where Gildan’s owned facilities and selected contractors are located, please refer to: https://gildancorp.com/en/company/our-factories/
Gildan’s Policies Addressing Slavery and Human Trafficking
Gildan’s Code of Ethics, which is applicable to all Gildan directors, officers and employees in all of Gildan’s worldwide subsidiaries, sets out Gildan’s standards of integrity and expectations for ethical behaviour. The Code of Ethics serves as an affirmation of Gildan’s strong commitment to fair labour practices in the workplace, as well as a framework in guiding the company’s operations and business practices throughout the world. It also serves as a guide to help employees make decisions that are consistent with Gildan’s core values and principles.
In addition to the Code of Ethics, Gildan maintains a Code of Conduct, which addresses its core principles in the following subject areas: (i) Employment Relationship; (ii) Child Labor; (iii) Forced Labour; (iv) Compensation; (v) Hours of Work/Overtime; (vi) Health and Safety; (vii) Environment; (viii) Freedom of Association and Collective Bargaining; (ix) Harassment or Abuse; (x) Grievance Procedure; (xi) Discrimination; and (xii) Documentation and Inspection. All Gildan employees and business partners are required to adhere to principles set forth in the Code of Conduct. Furthermore, the labour standards set forth in Gildan’s Code of Conduct are complemented by specific procedures and practical requirements explained in Gildan’s Social and Sustainable Compliance Guidebook, which must be implemented in all owned and contracted facilities. This Guidebook classifies forced labour, child labor, and human trafficking as a zero-tolerance issue.
Gildan’s Whistleblowing Policy encourages its employees and external stakeholders, including employees of third-party manufacturing contractors, to report any real or suspected misconduct, including any human rights violations. As required under the Whistleblowing Hotline, Gildan maintains a 24/7 Ethics and Compliance Hotline in all jurisdictions in which it operates. Information regarding the Ethics and Compliance Hotline is made readily available to all employees and external stakeholders, and submissions are completely confidential. All submissions are fully investigated, and appropriate remedial actions are taken when necessary.
Processes and Steps Taken by Gildan to Monitor for Risks and Address Issues
Gildan monitors for human rights-related risks as recommended in the Organisation for Economic Co-operation and Development’s (“OECD”) Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. Through its Social Compliance Program, Gildan takes steps to ensure it sources products from suppliers that only engage in responsible practices. The company identifies and assesses potential risks in its supply chain by conducting a due diligence review of potential business partners prior to entering into sourcing or major supply agreements. Such due diligence review includes a thorough background check inherent business, political, reputational and geographic risks, and, as appropriate, additional questionnaires and on-site verifications. In certain instances, Gildan will mandate a third-party audit service provider to conduct these verifications on its behalf.
Gildan’s due diligence process helps to guide business decisions and ensure compliance with its Code of Conduct, as well as local and international laws. For more information on responsible production, please refer to Gildan’s Responsible Production and Sourcing Policy.
Gildan’s Auditing Processes
Gildan performs, or arranges through a third party, audits of working conditions at each owned and contracted manufacturing facility which produces products for Gildan. The majority of audits are conducted by trained internal auditors, while third party auditors are employed in certain instances. Gildan’s owned and contracted manufacturing facilities are also independently audited by the FLA, SEDEX, WRAP, in addition to audits performed by certain of Gildan’s larger customers. All Gildan-owned and contracted facilities are further subject to a complete internal audit based on a risk assessment process which evaluates country risk, order volume, external ratings and prior audit performance at least once every two (2) years. Furthermore, several of Gildan’s manufacturing contractors participate in the ILO’s Better Work Programme.
Written Requirements and Certifications
To ensure that manufacturing contractors and suppliers respect and adhere to Gildan’s commitment against slavery and human trafficking, Gildan requires written agreement and certification from each manufacturer or supplier that it adheres to Gildan’s Code of Conduct, as well as all applicable laws. Such requirements and certifications are explicitly included in the contracts signed by the manufacturing contractors and suppliers, and, if applicable, re-certified as part of their annual certification process. Furthermore, when a manufacturer or supplier has its own subcontractors or suppliers, Gildan also require such manufacturer or supplier to provide written certification that forced labour is not present in its supply chain.
Gildan does not tolerate non-compliances of its prohibition against slavery and human trafficking policies. If such a non-compliance occurs, Gildan will take immediate remedial action to mitigate, address and resolve within the shortest possible timeframe. If such non-compliance is not promptly and satisfactorily remediated, with assurance of non-recurrence, Gildan reserves the right to take any further action, including, but not limited to, termination of employment, contractual relationship and/or notification to law enforcement agencies.
For more information on the actions Gildan has taken to prevent and mitigate forced and child labor in Gildan’s owned and contracted facilities, please refer to Gildan’s 2021 ESG Report.
On an annual basis, Gildan requires all of employees to certify compliance with Gildan’s Code of Ethics and Code of Conduct. Employees receive Code of Ethics and Code of Conduct training as part of the onboarding process and, from time-to-time, through Gildan’s online training portal or through in-person training sessions. At times, Gildan also offers regular specific training to its internal monitoring teams who work closely with the management teams of third-party contractors, to ensure they are knowledgeable on Gildan’s requirements and understand the issues related to human rights.
Gildan’s policies and practices described in this statement are fundamental parts of Gildan’s everyday efforts to ensure that slavery and human trafficking do not take place in its supply chain and operations. Gildan understand that the risks associated with slavery and human trafficking are not static, and endeavors to continually mitigate these risks in the years ahead. These efforts, as well as this statement, are reviewed and approved by Gildan’s Board of Directors, and updated annually.
This statement was approved by the Board of Directors of Gildan Activewear Inc., and signed by the Chair of the Corporate Governance and Social Responsibility Committee, on August 3, 2022.