PHILLIPS-VAN HEUSEN ASSESSMENT FOR ACCREDITATION · PHILLIPS-VAN HEUSEN: ASSESSMENT FOR...

PHILLIPS-VAN HEUSEN ASSESSMENT FOR ACCREDITATION

May 2005

PHILLIPS-VAN HEUSEN: ASSESSMENT FOR ACCREDITATION

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TABLE OF CONTENTS

Introduction ................................................................................................................................ 3 Phillips-Van Heusen’s Labor Compliance Program ................................................................. 3 Analysis of Phillips-Van Heusen's Labor Compliance Program Using the FLA Obligations of Companies and Evaluation Working Group Benchmarks ....................................................... 6 Conclusion ............................................................................................................................... 16


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INTRODUCTION FLA-accredited Participating Companies have demonstrated that they have the systems and procedures in place to successfully uphold fair labor standards throughout their supply chains. The complexity and ever-evolving nature of global supply chains make it impossible to guarantee that a product is made in conditions free of labor rights violations. For this reason, FLA does not certify brands. Instead, FLA evaluates companies at the headquarter level – in addition to standard factory-level due diligence activities that are conducted annually – to determine whether they have social compliance systems in place to proactively identify and address risks or instances of noncompliance. Accreditation is the highest level of recognition for FLA-affiliated companies, and is reevaluated every three years.

The FLA Board of Directors voted to approve the accreditation of Phillips-Van Heusen’s (PVH) compliance program on May 12, 2005, based on proven adherence to FLA's Workplace Code of Conduct and the Obligations of Companies. Details on FLA's accreditation methodology can be found at www.fairlabor.org/accreditation.

PHILLIPS-VAN HEUSEN’S LABOR COMPLIANCE PROGRAM History with the FLA

Phillips-Van Heusen (PVH) was a founding member of the Apparel Industry Partnership and has been an active participant in the FLA since its inception. PVH representatives have served on the FLA Board of Directors, the Executive Committee and the Audit Committee.

Overview of Program PVH’s standards and Code of Conduct, outlined in “A Shared Commitment,” were developed in 1991. In 1998 A Shared Commitment was revised. It is revised as needed to include changes at the corporate level, i.e. acquisitions and brand names. PVH’s Human Rights Program is led by the Vice President of Global Human Rights and Social Responsibility, who reports to the Executive Vice President of Foreign Offices. PVH’s annual consolidated revenue for the fiscal year 2004 was $1.4 billion.

PVH supplier participating at a training.

PVH staff with the President of Bangladesh.


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Monitoring Team PVH’s global headquarters is in New York City. Most of the PVH compliance team works out of the Hong Kong office. There are four full-time employees there including the Regional Team Leader, two auditors and one administrator. The Regional Team Leader supervises an additional team of three full-time auditors who are located in Southern China. PVH employs one full-time compliance auditor based in South India and one full-time compliance auditor based in Bangladesh. PVH has also recruited additional part-time compliance staff in Hong Kong, China, Central America and the US. Although part-time, the Asia, EMEA and Americas staff can commit up to 60% of their time in remediation efforts and are hired under similar requirements to those of full-time compliance staff. PVH audits are conducted by both internal and external monitors. For the most part, internal auditors, both full-time and part-time, conduct annual and pre-sourcing audits. Third-party monitors are generally used in countries where there is no PVH office, where there is an office with no compliance staff or during peak periods. One monitoring organization conducts all audits in North India, including pre-sourcing and annual audits.

Profile of PVH’s FLA applicable facilities during the implementation period1

PVH APPLICABLE FACILITIES AND IEMS, 2002-2004

COUNTRY 2002 2002 IEM Count 2003 2003 IEM

Count 2004 2004 IEM Count

Argentina 1

Australia 1

Bangladesh 8 2 7 14

Brazil 21 54 2

Cambodia 1 6 8

Canada 4

China 9 1 35 2 93 2

Columbia 1

Costa Rica 1 2 Dominican Republic

7 1 21 1

Egypt 1 2 4

El Salvador 1 2 1

Honduras 7 2 3

Hong Kong 4 5 14

Sewers at a PVH supplier.

A meeting at a PVH supplier.


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PVH APPLICABLE FACILITIES AND IEMS, 2002-2004

COUNTRY 2002 2002 IEM Count 2003 2003 IEM

Count 2004 2004 IEM Count

Hungary

India 14 1 26 1 42 3

Indonesia 3 7 7 1

Israel 1 2 2

Italy 16 9

Jamaica 1 1 1

Japan 2

Jordan 1 2

Korea 5 6 21

Macau 2 3 2

Malaysia 3 4

Mexico 2 14 1

Mongolia 4 4 3

Pakistan 1 2

Peru 1 4

Philippines 1 6 1 10

Romania 4 3

Sri Lanka 4 10

Taiwan 2 6 8

Thailand 1 4 6 2

Tunisia 1

Turkey 4

Ukraine 2 1 3 USA 4 1 1 12 1 Vietnam 2 1 5 Total 73 5 190 6 395 13

1 In Year One of FLA monitoring the IEM quota was 10%. It was reduced to 5% from Year Two onwards. That change, and the general trend towards consolidation in supply chains, explains the reduction in the numbers of IEMs over the course of the implementation period.


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ANALYSIS OF PHILLIPS-VAN HEUSEN’S LABOR COMPLIANCE PROGRAM USING THE FLA OBLIGATIONS OF COMPANIES AND EVALUATION WORKING GROUP BENCHMARKS This section presents a detailed report of the efforts PVH has made to meet FLA commitments as outlined in the FLA Charter and approved by the Board on the recommendation of the Evaluation Working Group. The obligations and corresponding benchmarks are listed below. Each benchmark is followed by examples of the actions PVH has taken to fulfill each obligation and examples of the due diligence the FLA staff and core consultants have undertaken to verify that this commitment has been met.

I. ADOPTS AND COMMUNICATES A CODE 1.1 Formally adopts a code that meets or exceeds FLA standards

Actions Taken: PVH adopted A Shared Commitment, the company’s Code of Conduct, in 1991 and revised it in 1998 to meet the Apparel Industry Partnership’s approved language.

Verification by FLA: PVH formally adopted a Code that meets or exceeds FLA standards.

PVH adopted A Shared Commitment in 1991 and revised it in 1998. The PVH Code of Conduct can be found on the PVH website.

1.2 Informs all suppliers in writing

Actions Taken: PVH informs all of its vendors of the Code obligations by sending the Shared Commitment to each new factory as part of the pre-production audit information packet. PVH also communicates its standards through distribution of the “Guidelines for Vendors: Most Commonly asked Questions on Compliance,” an illustrated guide on PVH compliance standards.

PVH’s Human Rights department publishes a Human Rights newsletter on a quarterly basis. It is distributed to sourcing, agents, licensees and vendors.

PVH requires its vendors to participate in regional conferences and workshops conducted by the Human Rights department.

Verification by FLA: During a factory visit, the FLA confirmed that a copy of the Guidelines for Vendors had been provided to the factory. The FLA noted that issues such as Freedom of Association and Harassment or Abuse are not mentioned in the Guidelines although they are mentioned in the Code of Conduct. PVH informed the FLA that these Code elements are omitted initially given the sensitivity of such issues. The company’s approach is to take them up with facilities in a more strategic manner in separate discussions.

The FLA reviewed copies of the Human Rights newsletter. Samples are on file at FLA headquarters.

FLA reviewed training agendas for Vendor Compliance Workshops in India and Bangladesh and talked to the third-party organizations that conducted the workshops.


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1.3 Posts the code in a prominent place in supplier facilities in the local languages of workers and managers Actions Taken: PVH requires approved facilities to post the Code in prominent locations in the factories and in various local languages.

Verification by FLA: The FLA verified that the Code is posted in multiple languages. In the three internal audits observed, the FLA confirmed one PVH Code posting. The PVH Code was observed posted in the stairwell in a factory in India in a language known by 40% of the workforce. Thirty percent of the factory, however, had a different mother tongue and the rest of the population spoke several other languages. The other two audits observed were pre-production audits and therefore no Code of Conduct was posted in the facilities.

1.4 Ensures that workers are informed orally and educated at regular intervals (to take account of labor turnover)

Actions Taken: PVH staff conducts Code of Conduct awareness training and holds Vendor Compliance Workshops in various regions on topics such as Freedom of Association and other Code elements.

Verification by FLA: Agendas for Vendor Compliance Workshops in India, Bangladesh and the Dominican Republic are on file at FLA headquarters. Photos from a workshop in Honduras are on file at FLA headquarters.

FLA observed PVH compliance auditors discussing the Code and requesting worker training in a factory in China. The FLA confirms seeing training documentation for Code of Conduct workshops in India and Bangladesh.

1.5 Obtain written agreement of suppliers to submit to periodic inspections/audits, including by accredited external monitors, to remediate instances of noncompliance with FLA Workplace Standards that arise, and to inform employees about those standards Actions Taken: PVH includes a human rights requirement clause in its purchase orders and key business agreements related to sourcing. The vendors are required to sign an initial letter where they are informed of PVH’s compliance process. Language in PVH’s purchase orders states that a factory must be authorized by PVH for Human Rights compliance.

Verification by FLA: A copy of the PVH’s initial letter for a potential vendor is on file at FLA headquarters. This letter must be signed and returned to PVH. The FLA also confirms seeing a factory approval letter going to new suppliers requesting them to submit to regular and on-going inspections.

2. TRAINS INTERNAL COMPLIANCE STAFF 2.1 Identifies the staff or service provider responsible for implementing their compliance program

Actions Taken: The PVH Human Rights program consists of 10 full-time and 33 part-time employees.

PVH utilizes third-party monitors when no local resources are available or for specific follow-up needs.

Verification by FLA: A compliance organizational chart for PVH is available at FLA headquarters. The FLA has interacted with PVH Human Rights staff at both the headquarter and field levels.


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FLA confirms meeting PVH third-party monitors in Bangladesh and India.

2.2 Ensures that they had training in all the areas under their responsibility, including, as appropriate, international and national labor standards, local languages, occupational and production risk factors, and techniques for monitoring, interviewing and remediating Actions Taken: PVH provides a hands-on, guided training (including classroom and in-factory training) to new staff. Training programs may last between 4 weeks and 3 months.

PVH also conducts training for sourcing staff and provides them with a Human Rights newsletter on a quarterly basis.

PVH maintains “Country Key” documents, which outline critical issues in each sourcing country, to keep staff informed of compliance issues.

Verification by FLA: The FLA interviewed two auditors in different regions and confirmed that they had received PVH’s training program for new employees.

FLA confirmed with sourcing staff in Asia that they receive training on the PVH Human Rights process. Sourcing staff members also confirmed receiving the Human Rights newsletters regularly.

FLA staff has a copy of the Country Key information for two regions at FLA headquarters.

2.3 Updates that training at regular intervals Actions Taken: PVH has a training subcommittee to identify training needs among staff, vendors and workers. Regional leaders identify areas to develop compliance skills among staff (including language and management skills training).

PVH also sends monitors for external trainings. Recognizing the importance of conflict prevention and resolution skills in bringing factories to compliance, PVH trains both managers and regional Human Rights teams in these skills.

PVH provides up-dated training to compliance staff on various topics including chemical management and safety and health.

Verification by FLA: Interviews with PVH staff confirmed receipt of training and training agendas and material are on file at FLA headquarters.

The FLA verified with the training service provider that conflict resolution seminars were held. Documentation is available at FLA headquarters. Photos were reviewed by FLA.

The FLA confirmed that PVH auditors have received factory specific training on chemical management and safety and health.

3. PROVIDES EMPLOYEES WITH CONFIDENTIAL REPORTING CHANNELS 3.1 Encourages the establishment of grievance procedures at supplier facilities

Actions Taken: PVH auditors work with factory management on establishing or improving internal grievance procedures.


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Verification by FLA: During two factory observations in two separate countries, FLA representatives confirmed that PVH auditors investigated and assessed factory grievance processes during the audits. The auditors also made recommendations on how to improve the effectiveness of grievance channels.

3.2 Provides channels for Company employees and workers at those facilities to contact the Company directly and confidentially if warranted Actions Taken: PVH regional leaders can develop and implement practices they believe are most appropriate for their regions. In some cases, auditors provide their business cards to workers with whom they have discussed sensitive issues during vendor audits. The business cards provide workers with a number for PVH local offices.

Verification by FLA: The FLA found that the practice of distributing business cards and giving out phone numbers is a common, but not consistent, practice. On two separate occasions, in two different countries, the FLA observed that compliance auditors distributed their cards to workers during PVH audits.

During another factory visit, the FLA observed that a PVH auditor did not distribute business cards during worker interviews, and did not discuss how to contact the company (the name of the company was not disclosed to the workers in the interviews observed by FLA staff) in the event of retaliation. The confidentiality of the interview, however, was explained. The auditor in a separate conversation stated that 200-300 business cards had been distributed to factory workers last year. This same auditor reported that PVH received 10 phone calls from Guangdong province in China in 2004.

3.3 Ensures the channel is secure, so workers are not punished or prejudiced for using it Actions Taken: By using contact numbers going directly to PVH, PVH is trying to ensure workers have an anonymous channel in which to lodge complaints.

Verification by FLA: FLA confirmed that the business cards provided are for direct lines to PVH.

4. CONDUCTS INTERNAL MONITORING 4.1 Internally monitors an appropriate sampling of suppliers to assess compliance, which

includes worker interviews, records review, occupational safety and health review, practices of suppliers in relation to the FLA Workplace Standards Actions Taken: PVH reports that factories are audited every 15-18 months. In the 2004 reporting period, PVH audited all applicable facilities.

As part of the regular audit process, PVH auditors conduct worker interviews, documentation review and health and safety review.

Verification by FLA: The FLA confirmed through records review in at least two regions that factories had been visited on a regular basis.

The FLA observed PVH auditors in three countries and two regions and verified that the auditors covered the basic components.


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4.2 Collects, verifies and quantifies compliance with workplace standards Actions Taken: PVH collects and verifies compliance information primarily via its audit instrument entitled the Shared Commitment Evaluation Form.

Verification by FLA: A copy of the Shared Commitment Evaluation form has been reviewed and is on file at FLA headquarters.

4.3 Analyzes the monitoring results and implements remediation plans to address noncompliance issues Actions Taken: PVH analyzes compliance findings and has created a system to rank the noncompliances raised during the audits. These findings, prioritized as terminal, significant or minor flaws, are sent to the factory and are used as a basis to build a remediation plan.

Verification by FLA: The FLA has reviewed sample documentation sent to factories in which the noncompliances are ranked according to this rating system. FLA has confirmed reviewing PVH remediation plans.

4.4 Tracks the progress of remediation Actions Taken: PVH maintains a computerized Human Rights database that is kept current so it can act as a real-time tracking device. The database automatically sends PVH staff a notification if a factory’s approval is within 90 days of expiration. Additional audits are scheduled for a variety of reasons, ranging from factory location in an area where noncompliance issues are recurring frequently to a change in local laws or a red flag noncompliance.

Verification by FLA: FLA review of the database revealed that the database automatically sends an email reminder to the monitor 90 days before a factory requires its 18-month re-evaluation to ensure regular audits and follow-up. Additionally, the FLA observed PVH auditors in different regions tracking and following up on remediation items.

The FLA records review conducted at PVH field offices also confirmed this follow-up.

5. SUBMITS TO INDEPENDENT EXTERNAL MONITORING 5.1 Provides the FLA with an accurate, up-to-date factory list, factory profile, access letters, etc.

Actions Taken: PVH submits factory lists and all other information necessary for the IEM process.

Verification by FLA: The FLA confirms the timely submission of supplier lists, access letters and any other necessary information.

5.2 Ensures that the suppliers selected for IEMs cooperate with the FLA monitors Actions Taken: PVH sends out welcome letters to all vendors informing them of the IEM process and asking for their cooperation with FLA accredited monitors.

Verification by FLA: The FLA confirms PVH’s cooperation in IEM visits.



The FLA confirms that there were no instances of aborted IEMs in which factory management refused to cooperate with FLA accredited monitors.

5.3 Cooperates with FLA requests for information, clarification and follow-up in the IEM process Actions Taken: PVH submits information, clarification and updates to the FLA.

Verification by FLA: PVH has submitted information and clarification to the FLA upon request and has provided updates to some of the IEMs as requested.

6. COLLECTS AND MANAGES COMPLIANCE INFORMATION 6.1 Maintains a database

Actions Taken: PVH has a database that maintains factory information and basic compliance status.

Verification by FLA: The FLA review of PVH’s database at company headquarters indicated that the database is used primarily for tracking factory status and audit dates, but it generally does not include audit findings unless they are identified as terminal issues. The system provides reminders to PVH staff 90 days in advance of a required 18-month re-evaluation.

6.2 Generates up-to-date lists of suppliers when required Actions Taken: PVH supplies the FLA with updates when required.

Verification by FLA: FLA confirms that PVH supplies up-to-date lists when requested. The FLA visited two PVH field offices and reviewed complete, up-to-date and accurate filing and data management.

6.3 Analyzes compliance findings Actions Taken: PVH is able to generate a summary of noncompliance issues identified in each region. Summaries of noncompliances by region and by Code element are provided to the FLA in the PVH annual reports.

Verification by FLA: PVH is able to generate a summary of noncompliance issues in each region. Summaries of noncompliances by region and by Code element are provided to the FLA in the PVH annual reports. Copies of the summaries and PVH annual reports are available at FLA headquarters.

6.4 Reports to the FLA on those activities Actions Taken: PVH provided a summary of noncompliance issues identified in each region in their 2004 annual reports.

Verification by FLA: The FLA confirms receipt of updates, which are on file at FLA headquarters.



7. REMEDIATES IN A TIMELY MANNER 7.1 Upon receiving the internal and independent external monitoring reports, contacts the

supplier concerned (within a reasonable timeframe) to agree to a remediation plan that addresses all compliance issues identified by the monitor Actions Taken: After PVH monitors communicate initial findings to the vendor, the vendor is responsible for developing the corrective action plan (CAP) and timeline for implementation. The compliance auditors advise on remediation and coach the vendor on the development of an effective CAP and timeline. PVH also provides written guidance to the factory on the CAP drafting process and PVH expectations. Additionally, PVH often meets individually with factory management and coaches the factory on root-cause analysis.

Verification by FLA: FLA observed monitors in two regions and confirmed that remediation strategies were discussed by both monitors during closing meetings.

FLA reviewed documentation of PVH feedback to factories on remediation plans. FLA also has copies of the CAP guidance provided to factories and has reviewed email correspondence in which guidance documents on creating a CAP were provided to the factory.

7.2 Implements a remediation plan regarding the noncompliances and the actions taken to prevent the recurrence of such noncompliances. Actions Taken: PVH remediation plans aim to be both corrective and preventative.

PVH highlights critical compliance issues identified during audits and interacts with the FLA for feedback and advice on preventative remediation.

Verification by FLA: FLA representatives sat in on a conference call between PVH Human Rights staff and factory management and confirmed that PVH engages in preventative remedial strategies. The discussion focused on an FLA IEM visit where the issue of verbal harassment had been identified. PVH Human Rights staff and factory management worked together to find a sustainable solution to the issue. The FLA has reviewed corrective and preventative actions on remediation plans for FLA IEM visits.

FLA confirms receiving emails from PVH inquiring about how to remediate specific noncompliances.

7.3 Within sixty (60) days, supplies the FLA with the remediation plan citing all progress made and a timeline for outstanding items Actions Taken: PVH aims to provide the FLA with a CAP within 60 days of finalizing the report.

Verification by FLA: The FLA confirmed the timely submission of CAPs during PVH’s three-year implementation period.

7.4 Confirms the completion of remediation Actions Taken: PVH confirms completion of remediation through the collection of documents, photographs and/or follow-up visits.



Verification by FLA: The FLA observed PVH monitors in multiple regions tracking and following up to verify the completion of remediation items. The records review conducted at PVH field offices confirmed such follow-up.

7.5 Conditions future business with contractors and suppliers upon compliance standards Actions Taken: PVH has a system to rate factories and to condition future business depending on progress of remediation.

The Human Rights Approval Committee receives all complete factory evaluations and qualifies them as either approved, requires a follow-up visit, or not approved. The Committee is comprised of three executives from compliance and sourcing. The Committee reviews factories that are not in their region to a avoid conflict of interest. This Committee makes joint decisions about vendor compliance and the business relationship.

PVH attempts to stay with a factory to work on remediation but will exit if the factory management proves unwilling to move forward on key remediation issues.

The PVH Sourcing department is trained on Human Rights issues and interacts regularly with the Human Rights staff on compliance and remediation issues.

Verification by FLA: The FLA reviewed correspondence between the Approval Committee and a particular factory that was out of compliance. The FLA reviewed the correspondence which stated PVH’s position with regard to the compliance issues and indicated that future business would be contingent upon remediation.

The FLA can confirm an instance when PVH Human Rights staff attempted to work with a factory on the remediation of excessive hours but the factory management proved unwilling to improve. PVH ultimately exited the factory.

The FLA interviewed employees from Sourcing, both at the headquarters and in the field, all of whom confirmed the regular interaction between Human Rights and Sourcing on compliance issues.

8. TAKES ALL STEPS NECESSARY TO PREVENT PERSISTENT FORMS OF NONCOMPLIANCE

8.1 Analyzes compliance information to identify persistent and/or serious forms of noncompliance Actions Taken: PVH Regional Leaders conduct quarterly reviews of all the audit reports in their region and analyze trends. The reviews are sent to PVH headquarters. PVH includes in their annual report to the FLA examples of persistent and/or serious forms of noncompliances it has identified.

Verification by FLA: Copies of the PVH annual reports are on file at FLA headquarters. The FLA did not review the quarterly updates during company headquarter visits.

8.2 Establishes and implements programs designed to prevent the major forms of such noncompliance Actions Taken: PVH seeks to address major forms of noncompliance through participation in FLA projects, through training programs, or other focused initiatives.

PVH is working with a consultant to improve air quality in PVH contracted footwear factories in China.



PVH has initiated a program to reduce excessive hours of work in China. Some of this is done through the Critical Engagement and Impact Program (CEIP).

PVH has initiated a pilot project to work with one of its vendors in China to help establish a functioning Workers’ Committee.

Verification by FLA: FLA confirms PVH’s participation in the Central American, Sustainable Compliance, and Hours of Work Projects.

FLA observed the air quality training with PVH staff.

FLA confirms PVH’s participation in the Hours of Work project. The FLA President has been party to the CEIP initiative from its inception.

The FLA has participated in and observed meetings with PVH, factory management and the elected worker representatives involved in the pilot project.

8.3 Takes steps to prevent recurrence in other applicable facilities where such noncompliances may occur Actions Taken: PVH seeks to prevent the recurrence of noncompliances in other applicable facilities in various ways. One example is demonstrated in Bangladesh, where factory tenements practices (multiple factories in the same building) prompted PVH to develop a special tenant clause. This clause requires an entire building to be owned by the same vendor and not leased out to other factories if the factory is to conduct business with PVH. This helps PVH to have access to all areas of a building and to monitor health and safety and other issues more closely.

Verification by FLA: FLA verified this by reviewing the documents in the Dhaka office and talking to a field auditor, the Regional Director and VP of Human Rights.

9. CONSULTS WITH CIVIL SOCIETY 9.1 Maintains links to organizations of civil society involved in labor rights and utilize, where

companies deem necessary, such local institutions to facilitate communication with Company employees and employees of contractors and suppliers in the reporting of noncompliance with the workplace standards Actions Taken: PVH consults with civil society on a regular basis, particularly in countries with challenging compliance issues. In its annual report to the FLA, PVH has cited consultations with over 20 organizations in 15 countries. The consultations have been with international organizations such as the ILO, local labor unions and local CSOs in the countries of manufacture.

PVH has engaged a local organization based in one of the PVH sourcing countries for various projects, including remediation work, training on harassment, the promotion of Code awareness among workers, and for a study on the impact of flooding on factory compliance.

Verification by FLA: FLA confirms PVH’s consultations with a number of CSOs and, unions and civil society groups.

The FLA confirmed with a local organization that its staff has conducted PVH trainings, assisted in remediation and conducted a flood impact study. FLA reviewed the documentation on remediation maintained in the local organization’s office.



9.2 Consults knowledgeable local sources as part of its monitoring activities Actions Taken: PVH reports a list of the organizations with which it has consulted in its annual reports to the FLA. PVH reported that in the last year of the initial implementation period, the company spent time strengthening its relationships with local stakeholders rather than trying to cultivate new contacts.

Verification by FLA: FLA received confirmation of this relationship building with at least one CSO that verified working with PVH.

9.3 Consults periodically with the legally constituted unions representing employees at the worksite regarding the monitoring process and utilizes the input of such unions where appropriate Actions Taken: PVH reports on-going dialog with two US labor unions, one Hong Kong union federation and meetings with other local unions.

Verification by FLA: FLA can confirm PVH dialogues with some union groups.

9.4 Assures the implementation of monitoring is consistent with applicable collective bargaining agreements Actions Taken: PVH’s audit instrument instructs monitors to investigate whether or not a factory has a collective bargaining agreement. If so, the monitors are asked to retain a copy and inquire whether or not the factory is in compliance with it.

Verification by FLA: The FLA verified that questions on the existence of a collective bargaining agreement are on the audit instrument but did not verify whether PVH systematically checked on this in annual audits.

10. PAYS DUES AND MEETS ITS OTHER PROCEDURAL REQUIREMENTS 10.1 Pays annual dues

Actions Taken: PVH has paid annual dues to the FLA in a timely manner.

Verification by FLA: Records are on file at FLA headquarters.

10.2 Pays IEM administrative and monitoring fees Actions Taken: PVH has paid all appropriate IEM fees to the FLA in a timely manner.

Verification by FLA: Records are on file at FLA headquarters.



10.3 Signs and honors required FLA contracts Actions Taken: PVH signs, submits and honors the Monitoring Services Agreement.

Verification by FLA: The FLA confirms PVH’s cooperation in signing the FLA Monitoring Services Agreement.

10.4 Submits factory lists, a standardized annual report and other information in complete form and on time Actions Taken: PVH submits factory lists and standardized annual report in a complete and timely manner.

Verification by FLA: The FLA confirms PVH submits its factory lists the annual reports and all other information accurately and in a timely manner.

CONCLUSION Accreditation of Phillips Van-Heusen’s compliance program should not be interpreted as a guarantee against issues and risks in the supply chain. Rather, accreditation indicates that the company has the systems in place to proactively identify and remediate those risks. Accreditation is not granted automatically, and is only renewed every three years following a satisfactory FLA evaluation of labor compliance systems and activities during the timeframe. FLA will continue to conduct standard due diligence activities on Phillips Van-Heusen To check an affiliate's accreditation status, visit www.fairlabor.org/accreditation.

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