Hempfortex - Fair Wear Foundation

Fair Wear Foundation – Social report 2011
Social report
Hemp Fortex Industries Limited
www.hempfortex.com
started FWF membership on 06.01.2011
04.2012
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Fair Wear Foundation – Social report 2011
Contents
1. Summary: achievements of 2011............................................................................. 3
2. Production planning ................................................................................................. 3
3. Coherent system for monitoring and remediation................................................. 4
4. Grievance procedure ................................................................................................ 9
5. Training and capacity building ................................................................................ 9
6. Transparency ............................................................................................................. 9
7. Other activities on Corporate Social Responsibility ........................................... 10
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Fair Wear Foundation – Social report 2011
1. Summary: achievements of 2011
Describe what you have achieved in 2011 in terms of implementing the FWF Code of
Labour Practices in your factory/factories.
Re-established Workers Representative Committee. The members are selected by
workshops instead of nominating representatives. The previous chairman was
dismissed as he takes the position of office manager at the same time and it will
lead to conflict interest at some points.
The Workers representative Committee held 3 times of meeting successfully with
the owner’s attending. The issues raised by the committee were followed up by the
management group and the results and solutions were posted on the workshop
whiteboards.
Separate the length of service fees to 3groups by different serving years at Hemp
Fortex so that the veterans receive more money. Enlarged the differences between
new workers and old workers.
Added the foam layers to the ceiling in the 3 rd floor of stitching building so that the
temperature in winter won’t be too low, and it can also prevent the absorption of
heat in summer.
Set up 5 th and 10 th service award policy. The workers who are at 5 th and 10 th year of
service are offered presents.
Company trip to Stone Island in March,2012. All workers at Rushan joined the trip.
Except company trip, added the budget of 10000RMB as workers activity funds so
that workers can have team building activities inside the factory.
Increased the transportation allowances based on workers requirement, as the cost
of petro increased.
Increased the salary of the workers at knitting workshop in 2011
2. Production planning
Production planning
Describe how the factory executes production planning together with customers to
ensure production planning contributes to better working conditions.
- We tried to negotiate with customers about the prebuild plan but the result is not
satisfactory. Most of the customers place orders at same period of time and the
delivery is concentrated in certain months. We will focus on internal prebuild plan
by producing stock, reduce the confirmation time of the samples, and improve
accessories purchase plan.
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Fair Wear Foundation – Social report 2011
Production cycle
Provide a summary of the production cycle and state how it has influenced the working
conditions in the factory.
-The cycle time of a garment order is around 3-4months. The preparation of raw
materials and accessories have direct influence on the working hours of the workers.
Use and selection of subcontracts
Describe how many subcontractors you have used and how you selected. In addition,
describe how you monitored the working conditions with subcontractors.
- We used one subcontractor for sewing. We selected subcontractors according to
their quality level, product categories, delivery time and labor conditions. If the
labor condition is too far from the basic labor practices we will not choose them as
subcontractors. We visited the subcontractor on irregular basis to check for their
most updated status, and tried to ask them to make improvements.
Integration compliance policy and production
decisions
Describe the way in which the outcomes of your compliance policy influenced your
production decisions.
1. the choose of subcontractors: since the processing of the garment production is very
complicated, to ask all subcontractors to follow FWF code of practices is still a big
problem, and it limits the options when we choose a subcontractor. At the mean time,
because of the small quantity of our orders, we don’t have much authority to ask our
subcontractors to improve in terms of labor rights and benefits.
2. Working hours: the peak delivery time of orders also leads to overtime.
3. Coherent system for monitoring and remediation
Coherent system
Describe the system you have established or are establishing to continuously improve
working conditions in your factory.
- we’ve set up the true workers representative committee to listen to the workers’
voice and improve according to their concerns. Meanwhile, we’ve established a
Social Compliance Committee as well among management team so that any
decisions from the production side will take the workers’ benefit and FWF code of
practices into consideration. The Social Compliance Committee will hold
meetings every 3 months to discuss the current production situation that leads to
any impacts on the workers’ working condition and find out ways to improve.
Describe external monitoring activities by customers and governments and how the
factory follows up to meet both your customers’ requirements as well as the legal
requirements.
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Fair Wear Foundation – Social report 2011
- Like some other factories, we request comprehensive overtime usage from local
government, so that we can use the OT in peak season. We’ve been doing this way,
as we can’t set up 2 OT system for our customers and government legal requirement.
In terms of overtime, the overall situation needs to be monitored by government to
eliminate unhealthy competition which results in working extra time.
Announcing the FWF Code of Labour Practices
Describe how and by whom your stakeholders such as workers, subcontractors and
your customers were informed about the Code of Labour Practices.
- We posted the code of practices and letters to workers in the workshop. The team
leaders and upper management are trained with the code of practices.
- Subcontractors are requested to post the Letters to Workers in the workshop.
- We inform our customers through separate emails. Some customers asked for the
contract between FWF and HFX.
Implementation of the FWF Code of Labour
Practices
Describe what you have done in the past year to realise improvements related to the
implementation of the eight labour standards of the Code of Labour Practices in your
factory. Briefly describe the recruitment and exit policy. More importantly please
describe the activities and issues dealt within the past year to implement that policy.
1. Employment is freely chosen
Explain how the factory makes sure workers are not forced to work beyond legal
stipulations.
-Factory didn't allow for any behaviour to happen, like taking way the workers’ ID, or
cash deposit when they are employed. Any decision leading to overtime will be
discussed with workers in advance.
2. No discrimination in employment
Describe practices and issues dealt with to prevent discrimination among workers.
- When we employ the workers, we provide same opportunities to all the applicants,
regardless of their religion, gender, ages or social background. Employees are
promoted based on their experiences and capabilities, not based on their
relationships to any of the management teams. Pregnant female workers are
protected from heavy workload and offered maternity leave based on law
requirements.
3. No exploitation of child labour
Describe the activities that took place to prevent child labour and how you dealt with
child labour when it was found in the facility.
- We check the ID card at the time of employment. We once employed a worker who
was 17year and 6month. He had physical examination and was arranged to work at
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Fair Wear Foundation – Social report 2011
the office to take charge of the paper work. At the other time we haven’t had child
labour. The average age of the workers is around 37-year-old.
4. Freedom of association and the right to collective bargaining
Describe how the factory ensured the right of organising is respected.
In case there is(are) workers representative organisation(s) in the factory, describe the
formulation of the organisation and negotiations or dialogues that took place between
the management and workers representatives.
- The Workers Representative Committee was established in year 2011. The
representatives were selected from different workshop based on the workers
quantity. There are 1 committee chairman, 8 committee members. The meeting
with the top management is scheduled to take place every 2 months. The topics
covered wages, transportation fees, uniforms, benefits, etc. Some improvements
are made based on these feedbacks. We will continue our effort in this area.
If there is(are) no workers organisation(s), please describe the efforts made by the
factory to inform workers about their labour rights.
5. Payment of a living wage
Describe how wages are calculated, paid and documented (including workers in all
departments and all benefits or payments in kind).
- The wages are listed with basic wage, skill allowances, OT wage, insurance
number, tax amount and performance allowances. The wage paper are signed on
salary day.
In addition, describe the system to update minimum wage requirements and estimate
living wages, and how workers are informed about issues regarding wage.
- The minimum wage increase is usually published on newspaper and internet by
government, and factory will also receive the official paper from the local
government. The wage increase will be shared to workers by posting the notice in
workshop.
Please also describe your position, efforts made to discuss this issue with your
customers and limitations of implementing payment of living wage.
- Price is a sensitive factor as it decides how many orders you will receive. Currently
there is no many customers whom we can negotiate the price with, thus, we hope
our European customers can join FWF so that they know what the expectation on the
living wage from a factory. To be true, paying all workers at a living wage level cost a
lot, and it needs different parties work on that together. In coming year we will try to
introduce FWF to our customers.
In the table below, please include data on wages. Add more rows if necessary. If you
prefer not to specify per department, at least include monthly average basic wage,
overtime compensation and if the factory meets local regulations regarding wage and
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Fair Wear Foundation – Social report 2011
overtime. Data on estimated living wage is voluntary. FWF encourages members to be
as transparent as possible.
Department Basic
wage
Overtime
compensation
6. Reasonable hours of work
Total wage Legal
minimum
Male Female wage
Describe how overtime work is decided, announced, carried out and documented.
- The overtime working is arranged usually in peak seasons, when customers
want to ship their products to catch spring or fall sales. This can’t be avoided for
the time being as there is no better way to catch the delivery time if no overtime.
The decision is announced to workers before overtime and they can choose if
they want OT or not. The workshop manager will keep the names and OT hours
on records and calculate for OT wages accordingly.
Describe how the factory ensured overtime did not exceed the requirement of the Code
of Labour Practices and local labour law.
- We apply for comprehensive OT from the local government, so that we can use
OT hours in peak season. In low season we don't work OT.
Please also describe the efforts made to reduce overtime.
- We tried to communicate with customers to let them place order in advance so
that in the peak season the overtime hours will be reduced. We also did internal
standardization to reduce searching time and improve efficiency. More Kaizen
activities will come in year 2012.
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Estimated living wage
(please indicate the
source of information)
= voluntary
Cutting 1300 478 1778 1778 1240 2500 based on FWF
investigation of China
living status.
Sewing 1300 478 1778 1778 1240 2500
Ironing 1300 478 1778 1778 1240 2500
Packaging 1300 478 1778 1778 1240 2500
Quality
control
1300 478 1778 1778 1240 2500
Remarks: The numbers are average wages. Overtime compensation is paid for 8hours on
Saturday. The wage will also include expertise allowance, especially for experienced stitching
workers.

Fair Wear Foundation – Social report 2011
In the table below include estimated average weekly overtime. Add more rows if
necessary. When it is not possible to specify per department, include average weekly
overtime for the complete workforce.
Department Average overtime in
low season (hrs)
Average overtime in
peak season (hrs)
Cutting No overtime 16.5hrs/week 9hrs/week
Sewing No overtime 16.5hrs/week 9hrs/week
Ironing No overtime 16.5hrs/week 9hrs/week
Packaging No overtime 16.5hrs/week 9hrs/week
Quality control No overtime 16.5hrs/week 9hrs/week
7. Safe and healthy working conditions
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Local requirement (hrs)
Describe what measures the factory has taken to ensure health and safety regarding fire
safety, chemical safety, electrical safety, machine safety, noise, dust and ergonomic.
- We held twice fire drills in 2011 and one time 1 st aid training to workers and
supervisors. 1 st aid boxes are added in every work shops.
- Cafeteria was re-organized and made cleaner.
- Gloves, masks, hats, antiskid shoes and uniforms are offered to workers. 2
sets of new uniforms were provided to workers.
- 10minutes broadcasting exercise in the morning and afternoon workers can
relax their arms and legs.
8. A legally binding employment relationship
Describe when and how the factory signs employment contracts with workers. Describe
the percentage of the workforce covered by social insurance and commercial insurance.
- The contracts are signed once a worker is employed. Workers’ personal information
are filed together with the contracts. Around 70% workers are covered by social
insurance and the other 30% are covered with commercial insurance.
Execution of Corrective Action Plans
Describe how you executed corrective action plans (CAPs) 1 and what kind of support
you have gained from your customers.
1 CAPs (Corrective Action Plans) contain the findings, requirements and recommendations of monitoring
activities. It could result from your own monitoring activities; it could also be the result of external audits. In
case of FWF audits, the audit team and/or the customer (brand/company) discuss findings and make timebounded
plans for factories to follow up.

Fair Wear Foundation – Social report 2011
- the necessary actions are taken to correct the non-compliance items and reports are
made to the related parties. One of our customers, Hemp Age, which is also a FWF
member, confirmed that they can accept late delivery if Rushan is too much
occupied.
Involvement of workers
Describe how workers were informed, consulted about and involved in the process of
improving working conditions.
- The factory decisions regarding the working conditions and benefits are written on the
papers and posted on the whiteboard in the workshops. The workers’ representative
committee now plays an important role. They bring concerns to upper management.
Actions towards these concerns are taken and informed to workers in the same way by
posting the solutions on the whiteboard.
Role of agents
In case you work with agents, describe how you communicated with the agent and/or
the customer (brand/company) on improving working conditions.
- N/A
4. Grievance procedure
Describe the grievance procedure in your factory, how many grievances you received
last year and specify how you dealt with these grievances.
- We use suggestion box and published telephone numbers. But in most cases
workers go to team leaders and office managers to talk about their concerns. They also
pass their concerns to Workers Representative Committee. The resolutions from the
management were posted in the workshop. In 2011 we received 11pcs of grievances.
5. Training and capacity building
Describe in what way and by what means workers have been informed about FWF
membership. Describe what training is provided to staff members who are involved in
human resource management and/or other activities to improve working conditions.
- We’ve posted the FWF code of labour practices to workers in workshop. Code of
labour practices were trained again with managers at factory floor. We have a
Social Compliance Committee which has regular meetings every 3 months, to talk
about the issues raised from the audits and Workers Representative Committee
meetings.
6. Transparency
Describe how the general public has been informed about your FWF membership and
the outcomes of the activities in the work plan.
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Fair Wear Foundation – Social report 2011
- We have sent emails to all our customers stating that we are now a member of FWF.
Currently we are rebuilding our company website and the social compliance part
swere added. We will update the progress on the website as well.
7. Other activities on Corporate Social
Responsibility
If applicable, describe your other activities in the field of corporate social responsibility.
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