Modern slavery

Our Board comprises of the Group Chair, CEO, CFO and Non-Executive Directors (‘NEDs’) and are central for the Groups risk operations.

The ESG Committee holds the overall responsibility for communicating risk management oversight including the analysis of risk in the global supply chain of our Private Label manufacturing alongside that of our branded suppliers.

BI-monthly meetings enable the Board to retain oversight of key risks and opportunities, through the below approaches, including the identification of emerging regulatory requirements in all countries in which we operate.

In-country risk

Strategic actions to mitigate risk.

Whilst we are mindful of the potential limitation of audits relating to modern slavery, it is a critical enabler in the discovery and management of Issues relating to the fundamental principles in our Code of Conduct, with relevance to modern slavery practices throughout our supply chain. Audits identify risk at factory level against that Code of Conduct and local laws, enabling us to mitigate risk across our supply chain whilst identifying and addressing potential factors that may exist in the background.

In certain countries sub-contracting, cut make trim(CMT) is an accepted part of the manufacturing process, Turkey is an example of this with a large percentage of factories using outside sewing units. However, all sewing units must complete a risk assessment.

As an organisation committed to promoting safe and inclusive workplaces, we recognize the importance of implementing robust remedial actions to ensure the well-being and dignity of all employees, both direct and indirect.

The Group compliance team categories all non–compliances within the manufacturing supply chain using our internal “Identify Act & Resolve (IAR)” methodology. It is important to Identify the root cause of the issues highlighted so that appropriate Action can be taken with the factory. Understanding the cause and effect of the issues results in the Resolution of these issues.

Identify

It is important to understand the problems and challenges. By analysing data and talking to stakeholders we can begin to understand the root cause of the non-compliances.

We look to identify trends and habitual patterns of behaviour, which can occur within country and culture. There are common non-compliances that may be a contributor to ‘forced labour’. The management may not realise the cause and effect on workers certain actions may incur.

Grouping non-compliances into issue type categories and classifying them according to severity, allows us to understand the cause. This provides clarity for all parties to work together and implement solutions that work for both business and workers.

Act

This stage involves developing action plans with those who are responsible for the implementation, in a clear and manageable format. Collaboration is vital to continued success. Through continuous learning by stakeholders, this creates an environment of shared goals, peer learnings and best practice, whilst building better relationships resulting in improved behaviours. To agree a detailed workable plan for implementing actions. It is important to be clear and unambiguous, defining clear responsibilities and timelines, whilst understanding the resource required which may be financial.

Resolve

It is important to continuously monitor the implementation process to ensure it is progressing as planned. Be prepared to adjust plans, if necessary, to address any unforeseen issues. After implementation, it is important to evaluate the results and determine that the solution effectively resolved the problem. Taking these learnings may require adaption in different countries where laws and root causes may differ.

Non- compliances Split into Issue Type

Non-compliances Split into Root Causes

Living Wages

The group recognises that garment workers represent a predominantly low wage sector. To support supply chain workers, the Group has assessed supplier factory workers across our private label Tier 1 supply chain.

Transitioning to a living wage is challenging in many sourcing countries. Recognising the requirement to align purchasing practices to support living wages is important.

• Price negotiation must consider labour costs alongside manufacturing costs
• It is important that all stages of the buying process from design to actual order placement align with a structured critical path to ensure time in the manufacturing chain for all stages of production and avoid unrealistic lead times
• Recognise the impact of changes to orders after placement which effectively ‘stop the clock’
• Commitment to long-term relationships with suppliers allows better planning for factories

To enable factories and their workers to work cohesively together and to support this transition, JD Group adopt an internal methodology based on the Anker linking wage methodology to promote worker benefits inclusion into the overall calculation.

Both Freedom of association and the right to collective bargaining are the fundamental human rights. These rights allow workers to enter in a constructive dialogue with employers. Unfortunately, in many countries worker face all kinds of obstacles when trying to organise themselves to take part in social dialogue.

Allowing workers to collectively express concerns, negotiate better wages, improve working conditions, and protect themselves from exploitation. This is especially vital in the garment sector, where workers—often women from marginalized communities—may otherwise lack the power to advocate for their rights.

Defining the level of advancement of Freedom of Association ranging from low end, where workers are not free to organise or collectively bargain, to the high end, where these rights are recognised. By grouping the countries into 3 categories, we can devise a tailored approach to each group such as working committees in Group 1 which has little or no structure to Group 2 which has structure but it is not actively progressing social dialogue.

Implementation of barcode scanning at each location, from raw material to packing and shipping to final receipt, provides real time visibility and full traceability, ensuring due diligence throughout the manufacturing process.

This immediately ‘red flags’ any unauthorised site and prevents potential subcontracting giving better protection to workers.

It is important that our supply chain partners understand the key indicators of modern slavery and labour exploitation. The below policies specifically identify such practices that may not recognise as existing within their own operations.