Primark’s Ethical Primark’s Ethical Trade ProgrammeTrade Programme

Katharine Kirk,Katharine Kirk,Ethical Trade DirectorEthical Trade Director

January 2010January 2010

• Taking care of our peopleTaking care of our people• Being good neighboursBeing good neighbours• Fostering ethical business relationshipsFostering ethical business relationships

As an international brand with a global supply chain we have a As an international brand with a global supply chain we have a responsibility to act “ethically”. We embrace this responsibility as an responsibility to act “ethically”. We embrace this responsibility as an opportunity to be a force for good. opportunity to be a force for good.

Our Core ValuesOur Core Values

The FactsThe Facts

• We support the livelihood of 2 million We support the livelihood of 2 million people across the developing worldpeople across the developing world

• Investment of £700 million per year in the Investment of £700 million per year in the developing worlddeveloping world

• Products purchased from more than 20 Products purchased from more than 20 countriescountries

• We share 95% of our factories with other We share 95% of our factories with other brandsbrands

• 196 stores across 7 markets: ROI, UK, and 196 stores across 7 markets: ROI, UK, and internationally in Spain, the Netherlands, internationally in Spain, the Netherlands, Portugal, Germany and BelgiumPortugal, Germany and Belgium

The Business Case for Responsible The Business Case for Responsible SourcingSourcing

‘‘Buying SmarterBuying Smarter’ gives us the competitive ’ gives us the competitive edgeedge

• Ethically compliant factories produce better Ethically compliant factories produce better quality products, on timequality products, on time

• Choosing ethically compliant suppliers delivers Choosing ethically compliant suppliers delivers other benefits to the businessother benefits to the business

• Detailed supply chain mapping helps us get to Detailed supply chain mapping helps us get to know our supply base and make better overall know our supply base and make better overall sourcing decisionssourcing decisions

• Knowing your suppliers, supplier selection and Knowing your suppliers, supplier selection and looking at the production schedule are all good looking at the production schedule are all good buying practices commercially buying practices commercially andand ethically ethically

The Business Case for Responsible The Business Case for Responsible SourcingSourcing

Reputational RiskReputational Risk• Greater focus in the customer’s mindGreater focus in the customer’s mind• Sales are good now, but how many Sales are good now, but how many

customers are not walking through the customers are not walking through the door?door?

• Younger generation now educated Younger generation now educated formally on the issuesformally on the issues

• Strong media interestStrong media interest• Investors are assessing new types of riskInvestors are assessing new types of risk• Our staff care - it impacts recruitmentOur staff care - it impacts recruitment

Issues in the supply chainIssues in the supply chain

• Problems are common and sharedProblems are common and shared• More transparency and activity uncovers more More transparency and activity uncovers more

issues!issues!

Our prioritiesOur priorities

1.1. Integrating ethical priorities into core businessIntegrating ethical priorities into core business

2.2. Increasing visibility in the supply chainIncreasing visibility in the supply chain

3.3. Partnering with suppliers and factories to support Partnering with suppliers and factories to support sustainable improvement in working conditionssustainable improvement in working conditions

4.4. Supporting workers to understand their rights and Supporting workers to understand their rights and responsibilitiesresponsibilities

5.5. Further development of our environmental policyFurther development of our environmental policy

20092009

• Train all Primark buyers on ethical trade Train all Primark buyers on ethical trade

• Increase transparency and communications between the Increase transparency and communications between the buying and ethical teamsbuying and ethical teams

• Examine the impact of our purchasing practices on suppliersExamine the impact of our purchasing practices on suppliers

• Implement new supplier/factory approval processImplement new supplier/factory approval process

Lesson: Buyers are very receptive and are Lesson: Buyers are very receptive and are hungry for more information about their hungry for more information about their

supplierssuppliers20102010

• Ongoing ethical training for Primark staffOngoing ethical training for Primark staff

• Initiate project work on purchasing practicesInitiate project work on purchasing practices

• Active participation in the Ethical Trading Initiative (ETI) Active participation in the Ethical Trading Initiative (ETI) Purchasing Practices Group (breakout group)Purchasing Practices Group (breakout group)

Integrate ethical priorities into core Integrate ethical priorities into core business practicesbusiness practices

20092009

• Implement online supplier management databaseImplement online supplier management database

• Work with local partners to do bottom-up supply chain mapping Work with local partners to do bottom-up supply chain mapping

• Conduct 1000 auditsConduct 1000 audits

• Active participation in the ETI Home Working GroupActive participation in the ETI Home Working Group

Lesson: Appropriate technical support is criticalLesson: Appropriate technical support is critical

20102010

• Continue to monitor and remediate factories Continue to monitor and remediate factories

• Continue to map supply chains and start to focus on ‘second Continue to map supply chains and start to focus on ‘second tier’ tier’

• Partner with other brands on auditing and remediation where Partner with other brands on auditing and remediation where possible and ‘beyond auditing’ projectspossible and ‘beyond auditing’ projects

• Active participation in the ETI Home Working GroupActive participation in the ETI Home Working Group

Increase visibility in the supply chainIncrease visibility in the supply chain

20092009

• Expand regional ethical trade team to focus on supplier Expand regional ethical trade team to focus on supplier support rather than auditingsupport rather than auditing

• Conduct supplier training in China, India, and the UKConduct supplier training in China, India, and the UK

• Develop supplier handbook on code implementationDevelop supplier handbook on code implementation

• Develop supplier online feedback surveyDevelop supplier online feedback survey

Lesson: It is worth taking time to find the right Lesson: It is worth taking time to find the right people for your team people for your team

20102010

• MAJOR focus on support, training and remediation for MAJOR focus on support, training and remediation for suppliers from in-country teamssuppliers from in-country teams

• Launch online compliance training modules for suppliersLaunch online compliance training modules for suppliers

• Launch Suppliers’ ExtranetLaunch Suppliers’ Extranet

Partner with suppliers and factories to support Partner with suppliers and factories to support sustainable improvement in working conditionssustainable improvement in working conditions

20092009

• Initiate productivity/wage projects in Bangladesh and ChinaInitiate productivity/wage projects in Bangladesh and China

• Investigate delivery of support services to workersInvestigate delivery of support services to workers

  Lesson: There is not always the in-country capacity to Lesson: There is not always the in-country capacity to provide support services, you may need to help provide support services, you may need to help

develop itdevelop it

20102010

• Establish additional NGO partnerships to support workers in Establish additional NGO partnerships to support workers in main sourcing countriesmain sourcing countries

• Conduct external verification of audit resultsConduct external verification of audit results

• Develop secure worker communication channels – e.g. Develop secure worker communication channels – e.g. worker hotlineworker hotline

• Work with other ETI member on cross brand FOA initiativesWork with other ETI member on cross brand FOA initiatives

Supporting workers to understand their rights Supporting workers to understand their rights and responsibilitiesand responsibilities

20092009

• Initiate project in China with three factoriesInitiate project in China with three factories

  Lesson: We need to think about sustainable suppliers, not just socially Lesson: We need to think about sustainable suppliers, not just socially compliant suppliers compliant suppliers

20102010

• Initiate projects in India and the UKInitiate projects in India and the UK

• Aim to improve efficiency and mitigate future risks associated with environmental and Aim to improve efficiency and mitigate future risks associated with environmental and social pressures through creating a model for sustainable growthsocial pressures through creating a model for sustainable growth

Further development of our environmental Further development of our environmental policypolicy

Lessons learned in 2009Lessons learned in 2009

• Ethical priorities need to be embedded in and Ethical priorities need to be embedded in and wholly supported by the business at every level in wholly supported by the business at every level in order to achieve progress and desired goalsorder to achieve progress and desired goals

• Auditing activities achieve less sustainable Auditing activities achieve less sustainable change, than focused support, training and change, than focused support, training and capacity building with suppliers and factoriescapacity building with suppliers and factories

• Company expectations and processes need to be Company expectations and processes need to be communicated clearly both externally and communicated clearly both externally and internallyinternally

• Cross brand initiatives help speed up learning Cross brand initiatives help speed up learning

• Any supplier training is best carried out locally Any supplier training is best carried out locally and with speakers using the local languageand with speakers using the local language

Improvement requires a Improvement requires a collaborative approachcollaborative approach

The challenges are The challenges are shared shared challengeschallenges

We owe a We owe a responsibilityresponsibility to to workers to find workers to find sustainable sustainable waysways to protect their rights. to protect their rights.

That means working together That means working together with others and seeking to find with others and seeking to find solutions solutions expert, local expert, local knowledge knowledge that are that are appropriateappropriate for workers and for workers and business partnersbusiness partners