Updated: July 2022
- ABERCROMBIE’S STRUCTURE, BUSINESS, AND SUPPLY CHAIN
- ABERCROMBIE’S POLICIES IN RELATION TO SLAVERY AND HUMAN TRAFFICKING
- Policies
- Ensure Appropriate Policies Exist and Human Rights Policies are Updated
- Suspicious Behavior and Reporting
- DUE DILIGENCE PROCESSES IN RELATION TO SLAVERY AND HUMAN TRAFFICKING IN ABERCROMBIE’S BUSINESS AND SUPPLY CHAINS
- High Risk Areas
- How We Minimize Risk Using Internal and External Resources
- RISK ASSESSMENT – THE PARTS OF ABERCROMBIE’S BUSINESS/SUPPLY CHAIN WHERE THERE IS A RISK OF SLAVERY AND/OR HUMAN TRAFFICKING AND THE STEPS WE TAKE TO ADDRESS THOSE RISKS
- Country Risks
- Sector Risks
- Transaction Risks
- Business Partnership Risks
- MEASUREMENT OF EFFECTIVENESS AGAINST OUR KEY PERFORMANCE INDICATORS
- ABERCROMBIE’S TRAINING ABOUT SLAVERY AND HUMAN TRAFFICKING
I. Abercrombie’s Structure, Business & Supply Chain
Abercrombie & Fitch (“Abercrombie” or the “Company”) is an international retailer specializing in men’s and women’s apparel, personal care, and accessories. In the UK, Abercrombie stores (which includes the Hollister brand), are operated by AFH Stores UK, a subsidiary of Abercrombie & Fitch Holding SAGL.
Abercrombie designs merchandise and relies on third-party manufacturers to assemble goods commensurate with the Company’s quality standards. Our third-party manufacturers are located world-wide.
II. Abercrombie’s Policies in Relation to Slavery & Human Trafficking
Policies
Any form of forced servitude is contrary to Company values. Abercrombie will not tolerate forced labor, slavery, or human trafficking. This is reflected in policies including our Human Rights Policy, Code of Business Conduct and Ethics, and Vendor Code of Conduct. These policies reflect our commitment to acting ethically and with integrity in all our business relationships and implementing and enforcing effective systems and controls to reduce the risk of any slavery and human trafficking taking place any where in our business or supply chains.
As stated in our Human Rights Policy, “Abercrombie & Fitch is proud of our commitment to international human and labor rights, and to ensure that our products are only made in safe and responsible facilities. We partner with suppliers who respect local laws and share our dedication to utilizing the best practices in human rights, labor rights and workplace safety. A&F believes that business should only be conducted with honesty and respect for the dignity and rights of all people.” Additionally, in 2018 A&F Co. signed the new AAFA and FLA Commitment to Responsible Recruitment and resigned their updated commitment in early 2023, This states that we commit to work with our global supply chain partners to create conditions so that: no worker pays for their job, workers retain control of their travel documents and have full freedom of movement, and all workers are informed of the basic terms of their employment before leaving home and workers receive a timely refund of fees and costs paid to obtain or maintain their job.”
Further, our Code of Business Conduct and Ethics binds all employees to the following: “We also believe in respecting and protecting human rights wherever we operate. Ensuring that our products are only made in safe and responsible facilities is important to us. We only partner with third parties who respect local laws and share our dedication to upholding human and labor rights, as well as workplace safety. We never allow the use of child or forced labor in any of our operations or facilities or by our vendors or their subcontractors. We never participate in or condone human trafficking or slavery of any kind. We will never permit exploitation of children; physical, verbal, or emotional abuse; or involuntary servitude.”
Finally, our Vendor Code of Conduct specifically communicates to our vendors: “Abercrombie will not tolerate the use of convict, indentured, slave, bonded, or other forced involuntary labor, including human trafficking, either directly or indirectly, by its vendors, or by any subcontractors utilized by its vendors.” Each vendor that receives Abercrombie business must acknowledge this.
Ensure Appropriate Policies Exist and Human Rights Policies are Updated
Our policies are reviewed and updated regularly to confirm content remains relevant and consistent with the Company’s strong commitment to human rights and ethical labor practices in particular. Our Vendor Code of Conduct was last updated in 2019 and is currently being distributed and agreed to by our vendors. The Code of Business Conduct and Ethics was last updated in December of 2015. Our Sustainability Policy was updated in 2022 and renamed Human Rights Policy.
Suspicious Behavior and Reporting
As part of our initiative to identify and mitigate risk, employees who witness suspicious behavior within the business, or in our supply chains, are trained to reach out to their manager, Human Resources representative, or the Company’s Chief Ethics and Compliance Officer or Legal department. Employees are also encouraged to raise issues and concerns about suspected violations of the company’s Code of Business Conduct and Ethics through the use of the Company’s ethics hotline. This is a confidential hotline that allows associates to report their concerns anonymously, either by phone or online. The hotline is available to all associates in our stores and corporate offices world-wide. Abercrombie & Fitch does not tolerate retaliation against anyone who makes a report in good faith.
Our partner vendors are required to follow our Vendor Code of Conduct, which requires conformity with local laws and carries certain additional standards. Specifically prohibited actions include:
- Holding Documents (e.g., Passport, work permit, etc.)
- Forced overtime without pay or penalty
- Physical abuse of employees
- Verbal abuse of employees
- Unauthorized deductions from pay
- Not paying required benefits
- Hourly rates (regular or overtime) below legal limit
Vendors are also encouraged to contact members of the Sustainability team at Abercrombie with any questions. The Abercrombie Sustainability team has employees in the US and APAC region who have responsibility for assisting on such inquiries.
Finally, Abercrombie uses third-party auditors to inspect factories (see section on How We Minimize Risk Using Internal and External Resources, below). Auditors are trained to recognize “hard” and “soft” indicators of forced labor or servitude. This includes not only checking worker identification to verify age, but also identifying the suspicious behaviors described above.
III. Due Diligence Processes in Relation to Preventing Slavery and Human Trafficking in Abercrombie’s Business and Supply Chains
High Risk Areas
Those areas we have identified as highest risk for human trafficking or forced labor are the factories in our international supply chain. Often, we source materials or production in countries which seek economic development through foreign trade or investment in manufacturing (for example China, Vietnam, India, Cambodia, Bangladesh, and Guatemala). We take proactive steps to ensure that we are working with the most responsible vendors, factories, and mills, in order to combat forced labor and human trafficking.
Although human trafficking and forced labor could arguably occur at other stages of the retail process – for example, in store or Home Office environments – we feel that certain characteristics inherent in these environments, together with Abercrombie’s policies and approach, reduce that risk compared to earlier stages in the supply chain. In particular, our stores and Home Office benefit from strong relationships with Human Resources, systemic work verification measures, and a well-trained employee population. These forces give us confidence that these environments are lower-risk for forced labor and human trafficking than other stages, such as our partner factories abroad, and allow us to focus our efforts on these higher-risk areas.
How We Minimize Risk Using Internal and External Resources
In terms of internal resources, our Company leadership is committed to industry best practices in labor and human rights. Our Sustainability department supports that commitment, and has since its inception in 1999. Our Sustainability department operates with a dual charter of protecting environmental and social imperatives in our supply chain and product lifecycle. This department disseminates and updates our policies, solicits employee engagement with social and environmental initiatives, and generally advances the agenda of ESG, Environmental, Social and Governancein the United States and abroad.
Externally, we leverage independent third-party auditing firms to ensure our partner factories adhere to their promises in the Vendor Code of Conduct. These monitoring firms employ and provide experts who are knowledgeable in local law, attuned to factory risks, and speak local language(s) to perform audits. Using auditors with this level of expertise helps us to minimize risk in our factories abroad.
When we engage a new third party monitoring firm, the Sustainability team will continuously accompany auditors to ensure they fully understand and follow our Vendor Code of Conduct.
Auditors visit our partner factories annually or biennially and administer a full audit with every visit. For complete definition and insight of A&F’s third party auditing process, please visit our Corporate site. Certain high risk factories or new facilities may receive more frequent audits or unannounced audit. Each audit consists of a factory walk-through, confidential interviews with workers, and a review of relative documentation (e.g. payroll, time records, employee age verification, etc.). To maintain the integrity of the audit, the Company does not provide the audit date to the factories ahead of time. However, to ensure the necessary personnel is available and the documentation can be gathered in time, we do offer a two-week window during which the audit will occur.
If any labor issues are uncovered during an audit, the factory must take immediate steps to correct the problem. This begins with creating and submitting a corrective action plan within 14-30 days. The vendor then comes under Company conservatorship to ensure there are no recurrences, which requires the factory to be prepared with photographic evidence and regular updates on the corrective measures taken.
IV. Risk Assessment- the Parts of Abercrombie’s Business/Supply Chain Where There is a Risk of Slavery and/or Human Trafficking and the Steps we Take to Address Those Risks
Country Risks
The Company aims to not source from countries with known histories of forced labor or human trafficking. For example, the Company has a policy against using Uzbek and Turkmen cotton. We prohibit the use of cotton sourced from Uzbekistan and Turkmenistan and textiles produced using Uzbek or Turkmen cotton. We also exclude sourcing any products from Uzbekistan and Turkmenistan.
Further, the Company does not source conflict minerals. Conflict minerals are those mined or sourced in furtherance of armed conflict, specifically from conflict areas in the Democratic Republic of Congo (“DRC”). Conflict minerals may include tantalum, tin, gold and tungsten. To verify that the raw materials used in our product do not fuel conflict, we require suppliers to disclose the origin of the smelter of these minerals. As a member of the Conflict-Free Smelter Program, Abercrombie is aligned with other industry leaders on this important issue.
In 2022, A&F utilized the forensic science services of Oritain to verify the country of origin of cotton used in our products. We tested product samples from 20 of our top mills, accounting for over 80% of our fabrics containing cotton, and found the cotton used in our products was not affiliated with areas with potentially widespread use of forced labor.
Even beyond these specific cases, the Company uses a “trust but verify” approach with respect to its vendors, mills, and factories (described in detail above in How We Minimize Risk Using Internal and External Resources). Therefore, regardless of the country in which sourcing or manufacturing occurs, the Company’s partners and their downstream partners are held to an independent standard in labor practices which exceeds legal compliance.
Sector Risks
As a member of the apparel, personal care, and accessories sectors, Abercrombie has taken special care to monitor human rights risks associated with our product lifecycle. For our company and others in our sector(s), that risk is greatest at the international factory stage. We offset risks here by employing third-party auditors who are experts in our policies, local laws and regulations, country-specific risks in the retail manufacturing sector, and warning signs of forced labor or human trafficking. As leading worldwide experts in the auditing field, we trust our partners to effectively reinforce our standards and relay to us any issues identified at the factory level.
Transaction Risks
Transactional risks at Abercrombie are distinct from vendor risks. Transactional risks are risks that originate from the infrastructural supports to the Company’s business operations. Although transactional risk in our industry is comparatively less than in other industries with higher transactional profiles (banking, for example), our contractual process requires every service provider to agree that all of their business dealings will be in alignment with our Code of Business Conduct and Ethics. Service providers are explicitly prohibited from inducing any Abercrombie employee to violate the Code of Business Conduct and Ethics, and commit to same as part of their contractual arrangement with the Company. Finally, service providers are required to observe specific and general labor and employment laws. These measures ensure that our service providers support our Company commitment to social responsibility.
Business Partnership Risks
We vet partnership risk before committing to a partner and monitor risk throughout the life of the partnership.
Vendors:
Before we begin production with any new factory, it must first go through a rigorous Quality Assurance inspection to make sure its operations meet Company standards. A factory also must complete an initial social audit and commit to our Vendor Code of Conduct before the partnership can be approved. As described above, our Vendor Code of Conduct binds factories to specific standards of operation, and requires vendors to address any signs of forced labor or human trafficking. During the life of the partnership, the factory not only receives audits as described above, but product is inspected for compliance with our regulatory and quality standards. If any factory should fail on any of these indicators and/or refuse to make improvements, the relationship could be terminated.
Auditors:
We only contract with third-party monitoring firms who employ true experts as auditors. We require that auditors be experts in the local laws of the country and possess local language skills. As a Company, we continually monitor auditor performance.
V. Measurement of Effectiveness Against Our Key Performance Indicators
Since 2016-17, we added a Key Performance Indicator (KPI) of training all employees Company-wide on the Code of Business Conduct and Ethics, which includes training on social sustainability, forced labor, and human trafficking. All new corporate associates are required to take the full Code of Conduct training at the start of their employment with the Company. On an annual basis, all existing corporate associates are required to take the Code of Conduct Acknowledgment and Certification.
Our social audit program assesses for forced labor findings and tracks any necessary remediation processes in our factories. We also ensure factory workers in Vietnam and relevant Abercrombie & Fitch associates are trained on anti-human trafficking protocols.
VI. Abercrombie’s Training About Slavery and Human Trafficking
Abercrombie aims for every employee to be familiar with the Company’s commitment to social sustainability and opposition to forced labor and human trafficking. Whilst as mentioned above, we endeavor to train all employees on the Code of Business Conduct and Ethics, we ensure that all Home Office associates are trained on the Code of Business Conduct and Ethics as a priority.
Further training is administered to those who interact directly with our supply chain. All Home Office or remote team members and managers directly involved in Supply Chain Management are required to take a training course on human trafficking and slavery that discusses the risks of human trafficking for business, and actions that can be taken to mitigate those risks.
Finally, in our Vendor Code of Conduct all of our vendors agree to take measures against involuntary (forced) labor and human trafficking. To ensure the efficacy of these promises, we make sure vendors are familiar with and aware of the different acts, means, and purposes of human trafficking.
This statement is made pursuant to section 54(1) of the Modern Slavery Act 2015 and constitutes the Company’s slavery and human trafficking statement for the financial year ending January 28, 2023.