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Inditex implements pioneering procedures in Brazil for controlling the supply chain in collaboration with unions, NGOs, academic institutions and business associations

14.09.2011

• The new measures are designed to ensure collective responsibility for the various stakeholders involved in the textile supply chain

• The priority application in Brazil of an agreement reached recently between Zara and the International Textile, Garment & Leather Workers’ Federation (ITGLWF) will seek the direct engagement of the Brazilian textile manufacturing unions in controlling the supply chain

• Overall, the measures are designed to foster appropriate working conditions in the textile production chain in order to guarantee its sustainable development and job creation

Today, Zara Brazil presented a series of measures before the Brazilian Congress’ Human Rights and Diversity Committee with the overriding goal of reinforcing the mechanisms for monitoring compliance with its Code of Conduct for Manufacturers based on the principle of collective responsibility.

The company, present in Brazil since 1999, has signed agreements with a range of stakeholders – unions, non-government organisations, academic institutions, international organisms and trade and industry associations – for the development of initiatives to support the audit and control of garment makers.

The idea is to join forces and foster a broad commitment to ensuring optimal working conditions throughout the entire production chain. As part of its commitment to Brazil, Zara has unveiled a series of new internal and external initiatives to reinforce control over the production chain. The highlights are:

- Reinforcement of the audit system in cooperation with the Brazilian Textile, Garment, Leather and Footwear Workers’ Federation, which will participate directly in monitoring Zara’s entire supply chain in Brazil. This initiative falls under the umbrella of the agreement reached between Inditex, Zara’s parent company, and the ITGLWF on a global level.

- Introduction of a detailed procedure for verifying that any supplier wishing to work with Zara meets the corporate social responsibility criteria applied by ABVTex (initials in Portuguese for the Brazilian Textile Industry Association), which Zara has recently joined.

- The drafting of a Best Practice Guide, in collaboration with the Ethos Institute for the manufacturing sector. This manual will be offered to the Brazilian Textile and Dressmaking Industry Association as reference material for use in the nation’s textile sector.

- Establishment of ongoing dialogue with the ABIT, an association of textile makers, with the idea of promoting measures that contribute to the sustainable development of the sector. The aim is to contribute to raising sector competitiveness and its ability to create new jobs.

- Agreement with the National Association of Foreign Immigrants in Brazil to identify potential sources of instability among immigrant communities and to develop training and skills programs within the textile industry in order to facilitate their integration in the workforce.

- Launch of a dedicated toll-free number (0800 7709242) for reporting alleged irregularities, supervised by the Ethos Institute and operative from today. The main purpose of this line is to create a channel for citizen cooperation through which the company can become aware of and resolve possible irregularities within the shortest possible timeframe.

In addition, Zara Brazil informed the Brazilian administration’s Human Rights Committee of the measures it had taken as soon as it learned that the Inditex Code of Conduct had been breached by one of its suppliers. Zara immediately suspended new orders and ordered the supplier at fault to bear the cost of the legally payable compensation for the affected workers and the measures required to remedy all the shortcomings detected at the work centres.

"We would like to thank all the parties involved in this process for their efforts to safeguard appropriate working conditions. The commitment of all parties and their collective responsibility is the best way to achieve this objective”, said the president of Zara Brazil, Enrique Huerta.

Social responsibility policy at Zara

All of these measures fall under the umbrella of the social responsibility strategy deployed by Zara throughout its global supply chain. As evidence of its CSR pledge, Zara communicated to the Human Rights Committee how the initiatives undertaken in several countries where it cooperates with entities such as the ITGLWF, with which it has a global agreement, have enabled the firm to contribute to upholding workers’ rights.

The presentation also drew attention to Inditex’s membership of international platforms such as the UN’s Global Compact, which dates back to 2001, making it the first Spanish company to have joined the Compact. Inditex has also been a member of the Ethical Trading Initiative since 2005. This organisation brings together unions, NGOs and international companies from all over the world and its Code, the most stringent in the sector, was incorporated into Inditex’s Code of Conduct in July 2007.

Further proof of the solidity of its social responsibility policy is Inditex’s inclusion in the Dow Jones Sustainability Index for the first time in 2001 and in the FTSE4Good Index two years later. The company’s shares have been included in both indexes every year since then during which time Inditex’ scores on labour practices and supplier relationships have been increasing.

Lastly, Zara informed the Committee of Inditex’s participation in the ILO’s Better Work Program for the implementation of minimum labour standards in developing nations, and in the Better Cotton Initiative, designed to promote decent working conditions in cotton growing regions.

Zara Brazil

Zara’s presence in Brazil dates back to 1999, when it opened its first store in São Paulo in the Morumbi shopping centre. Since then, the company has been steadily increasing its presence in the country and today has 31 stores in shopping centres across a number of states (São Paulo, Rio de Janeiro, Paraná, Minas Gerais, Rio Grande do Sul, Pernambuco, Bahia, Santa Catarina, Espírito Santo, Goiás and in the Federal District). Zara employs close to 2,000 workers in Brazil. In addition to its store network, Zara has a warehouse in Brazil from which it serves its stores in Brazil, other countries in the Americas and, since this year, Australia and South Africa.

Today, Brazil is Inditex’s third most important market in the Americas, after Mexico and the US.

Last year, Zara bought nearly five million garments made in Brazil, equivalent to 40% of Brazilian store sales volumes. In all, Zara’s Brazilian supplier base provides work for over 7,000 people.

Inditex Group

Inditex, which owns Zara as well as seven other fashion concepts, is one of the world’s largest fashion distribution groups with over 5,200 stores in 78 countries.