Primarks Ethical Trade Programme Katharine Kirk Ethical Trade

Primark’s Ethical Trade Programme Katharine Kirk, Ethical Trade Director January 2010

Our Core Values • Taking care of our people • Being good neighbours • Fostering ethical business relationships As an international brand with a global supply chain we have a responsibility to act “ethically”. We embrace this responsibility as an opportunity to be a force for good.

The Facts • We support the livelihood of 2 million people • • across the developing world Investment of £ 700 million per year in the developing world Products purchased from more than 20 countries We share 95% of our factories with other brands 196 stores across 7 markets: ROI, UK, and internationally in Spain, the Netherlands, Portugal, Germany and Belgium

The Business Case for Responsible Sourcing ‘Buying Smarter’ gives us the competitive edge • Ethically compliant factories produce better • • • quality products, on time Choosing ethically compliant suppliers delivers other benefits to the business Detailed supply chain mapping helps us get to know our supply base and make better overall sourcing decisions Knowing your suppliers, supplier selection and looking at the production schedule are all good buying practices commercially and ethically

The Business Case for Responsible Sourcing Reputational Risk • Greater focus in the customer’s mind • Sales are good now, but how many customers are not walking through the door? • Younger generation now educated formally on the issues • Strong media interest • Investors are assessing new types of risk • Our staff care - it impacts recruitment

Issues in the supply chain • • Problems are common and shared More transparency and activity uncovers more issues!

Our priorities 1. Integrating ethical priorities into core business 2. Increasing visibility in the supply chain 3. Partnering with suppliers and factories to support sustainable improvement in working conditions 4. Supporting workers to understand their rights and responsibilities 5. Further development of our environmental policy

Integrate ethical priorities into core business practices 2009 • Train all Primark buyers on ethical trade • Increase transparency and communications between the buying and ethical teams • Examine the impact of our purchasing practices on suppliers • Implement new supplier/factory approval process Lesson: Buyers are very receptive and are hungry for more information about their suppliers 2010 • Ongoing ethical training for Primark staff • Initiate project work on purchasing practices • Active participation in the Ethical Trading Initiative (ETI) Purchasing Practices Group (breakout group)

Increase visibility in the supply chain 2009 • Implement online supplier management database • Work with local partners to do bottom-up supply chain mapping • Conduct 1000 audits • Active participation in the ETI Home Working Group Lesson: Appropriate technical support is critical 2010 • Continue to monitor and remediate factories • Continue to map supply chains and start to focus on ‘second tier’ • Partner with other brands on auditing and remediation where possible and ‘beyond auditing’ projects • Active participation in the ETI Home Working Group

Partner with suppliers and factories to support sustainable improvement in working conditions 2009 • Expand regional ethical trade team to focus on supplier support rather than auditing • Conduct supplier training in China, India, and the UK • Develop supplier handbook on code implementation • Develop supplier online feedback survey Lesson: It is worth taking time to find the right people for your team 2010 • MAJOR focus on support, training and remediation for suppliers from in-country teams • Launch online compliance training modules for suppliers • Launch Suppliers’ Extranet

Supporting workers to understand their rights and responsibilities 2009 • Initiate productivity/wage projects in Bangladesh and China • Investigate delivery of support services to workers Lesson: There is not always the in-country capacity to provide support services, you may need to help develop it 2010 • Establish additional NGO partnerships to support workers in main sourcing countries • Conduct external verification of audit results • Develop secure worker communication channels – e. g. worker hotline • Work with other ETI member on cross brand FOA initiatives

Further development of our environmental policy 2009 • Initiate project in China with three factories Lesson: We need to think about sustainable suppliers, not just socially compliant suppliers 2010 • Initiate projects in India and the UK • Aim to improve efficiency and mitigate future risks associated with environmental and social pressures through creating a model for sustainable growth

Lessons learned in 2009 • Ethical priorities need to be embedded in and wholly • • supported by the business at every level in order to achieve progress and desired goals Auditing activities achieve less sustainable change, than focused support, training and capacity building with suppliers and factories Company expectations and processes need to be communicated clearly both externally and internally Cross brand initiatives help speed up learning Any supplier training is best carried out locally and with speakers using the local language

ü Improvement requires a collaborative approach ü The challenges are shared challenges ü We owe a responsibility to workers to find sustainable ways to protect their rights. ü That means working together with others and seeking to find solutions expert, local knowledge that are appropriate for workers and business partners