River Island is a family business, and we have a steadfast commitment to protecting the human rights and the dignity of all persons within our global supply chain. Furthermore, we have an underlying and long-standing commitment to ethical trading based upon the firm belief that business can be both profitable and responsible. We take the elimination of modern slavery very seriously and we have incorporated this objective into our ethical trade policy and program. We are committed to working collaboratively with key stakeholders such as the ETI and its members, government bodies, NGOs, local authorities and other partners, in order to tackle this global challenge. In 2017, River Island's main (Tier 1) factories employed 330,000 workers of which 180,000 were women.
The following statement has been published in accordance with the Modern Slavery Act (2015) and outlines the steps River Island has taken during the financial year ending 31 December 2017 to identify and prevent modern slavery and human trafficking from taking place within our business and supply chains.
(A) About River Island
River Island is a leading multi-channel fashion brand based in the UK, selling women's wear, menswear, and kids' wear. River Island was established in 1988 and is part of the Lewis Trust Group, which is a privately owned business. The Group was started in 1948 by Bernard Lewis, and he and his family are still actively involved in running River Island today.
We have over 330 stores in 16 countries on 4 continents, and we sell to over 120 countries online. River Island's annual turnover in 2017 was £1bn.
Our Head Office in West London is home to the Design and Development, Buying and Merchandising, Marketing, Technical, Ethical, Sourcing, Logistics, Legal and Finance teams. Our DC in Milton Keynes receives, holds and distributes our products to stores, wholesale partners and online customers. Our IT teams are based at both our Head Office and our Tech-Hub in East London.
Total Number of Employees in 2017:
Head Office 1306
Distribution Centre 686
Our product is almost 100% "own label" and includes clothing, footwear, bags and accessories. In 2017, we sourced from 29 countries, but the "Top-5" countries – China, Turkey, Romania, India and Bangladesh – accounted for 75% of our range. The Top 12 countries supplied 93% of our range.
We work closely with our suppliers and aim to build long-term sustainable business relationships. In 2017, we worked with 285 product suppliers (574 factories). Seventy-five per cent of River Island products came from the "Top-50" suppliers (the "Top-20" are 55%).
We also source a wide range of goods and services such as shop-fitting, packaging, cleaning, catering, logistics, security, IT, marketing, ecommerce, advisory and so forth (collectively referred to as "goods not for re-sale" or "GNFR") from 267 third party suppliers, the vast majority of which are UK based.
(B) RIVER ISLAND POLICIES – relating to slavery and human trafficking
Supplier Manual – River Island Suppliers are contractually bound by the terms and conditions in our Supplier Manual which include adherence to the following policies, for the protection and promotion of human rights:
River Island Ethical Policy (based on the ETI base Code)
This Policy defines the shared ethical responsibilities between suppliers and River Island buyers.
River Island Anti-Slavery and Human Trafficking Policy (incorporated into our Contracts in 2016)
Employee Contracts – all River Island employment contracts directly incorporate a suite of policies designed to protect worker rights and promote a safe and fair supply chain. These include the River Island Ethical Policy referred to above, the River Island Anti-Slavery and Human Trafficking Policy referred to above, the Anti-bribery and Corruption Policy, and the Whistleblowing Policy.
GNFR Contracts – all require compliance with the Modern Slavery Act, and those relationships deemed to be operating in "higher-risk" areas, according to the criteria set out below, specifically require adherence to our River Island Anti-Slavery and Human Trafficking Policy.
(C) DUE DILIGENCE and assessment of Modern Slavery risk in 2017
River Island has been a member of the ETI since 2008 and we adopted the ETI base code as the minimum standards against which our product suppliers and factories are consistently measured. Since 2016 this has included an ongoing assessment of Modern Slavery risk. While our ethical approach continues to be based on building trust and transparency with our suppliers and factories (in order to fully understand the conditions, risks, and challenges that exist), we now realise that the potentially deep-rooted and systemic practices associated with Modern Slavery may not be identified through pre-arranged visits.
Since 2017 we have conducted 90% of our Ethical Audit visits on an unannounced basis, and this will increase in 2018. We aim to collaborate with suppliers and factories to make improvements as required, but we will discontinue business with any supplier or factory who persistently fails to do any of the following:be open and honest; take responsibility for meeting our ethical standards; and make required improvements to rectify serious non-compliances within an agreed time frame. Our focus to date has been on the "First-Tier" suppliers, factories and sub-contractors who directly manufacture our products.
During 2017, and ongoing, our due diligence covers the following key areas:
New supplier/factory set up process: Orders cannot be placed with any supplier/ factory until it has completed pre-assessment and approval by the River Island Ethical team (as well as Technical and Commercial). This includes all First Tier sub-contractors. We review independent 3rd-party audits (SMETA) and corrective action plans, and we may also conduct River Island validation audits according to risk.
Visibility of production location: Suppliers are contractually obliged to manufacture River Island products at the factory named on the Purchase Order (PO). Only pre-approved sites may be used, and written approval is required in the event that the location needs to change. This allows us to report, measure and risk assess our product supply base according to location and business levels. Ethical audits and resources are prioritised and managed accordingly.
Unannounced/illegal sub-contracting: Our Ethical Policy dictates that only audited, approved factories and sub-contractors are used. However, we recognize that we cannot be complacent to the risk of illegal sub-contracting to units with ethical failings (including potential for Modern Slavery conditions and practices).
Early in 2017 we found a UK factory had sub-contracted work to a second site without the knowledge of the brand. The factory and supplier refused to accept that either was at fault for the situation and were not willing to engage to ensure that the situation would not occur again and we subsequently de-listed both from our approved supply base. Despite all the work we have carried out with our suppliers and factories in recent years, including our collaboration with the Fast Forward program since 2015, this incidence of unauthorized sub-contracting highlighted the extent of the challenge.
Since then, we have increased our focus on identifying and preventing First Tier sub-contracting. In 2017, over 90% of the ethical team factory visits were unannounced and now include extra processes to spot check that individual products are in production at the agreed location and date, and to highlight any missing products. Records are investigated to identify any undeclared production units, which are then visited in order to assess working conditions. We consider the circumstances and underlying causes of each issue found before taking the appropriate remediation and corrective actions with the Supplier/factory.
For example, the unit completes the "New Factory Set Up" assessment and approval process and we implement a continuous monitoring program with the supplier/factory. As a result of our increased efforts, in 2017 we uncovered 16 instances of unapproved sub-contracting which led to remediation with 15 suppliers (29 production sites).
(a)Our auditor in Turkey visited a factory and found no River Island production on site shown on the PO. The supplier claimed to be unaware of the situation, but collaborated with us and the factory to ensure that all orders were produced in the approved sites going forward. We now receive a monthly report from this supplier to ensure that when we carry out unannounced visits we can quickly check that the correct orders are in the site.
(b)We also visited a factory in China and found no evidence of our orders in the approved site but, after working with the factory and the UK supplier we approved a second linked factory as this helped both to better meet our production needs. The second site was setup after being visited and approved by our in-country team
We also updated our Supplier Manual to clarify and re-emphasise the Supplier's responsibility to implement and conduct specific processes to prevent unauthorized sub-contracting. We are aware that buying practices can also have an impact on sub-contracting and have implemented tools to improve visibility of production capacity, versus River Island order volumes, at factory level. This will continue to be rolled out in high-risk areas in 2018.
Serious and repeated breaches of our Ethical Policy, and repeated lack of openness and co-operation, can lead to the supplier or factory being removed from our approved list. (This applied to one Supplier in 2017).
Supply base risk assessment: We are aware that some production locations carry a higher potential risk of Modern Slavery and Trafficking. Key risk factors include: migrant labor (within a country or between countries), a high presence of refugees, young workers (risk of child labor), contract and agency workers, outsourced HR functions and female workers. In addition, the security situation and increasing threat of terrorism in some countries makes it more difficult to travel safely in order to conduct visits.
We assessed Turkey, China, India, UK and Mauritius as the highest risk areas for modern slavery risk.
River Island ethical audits and visits: We have Ethical Teams based in five key manufacturing countries who travel regionally to conduct regular audit/visits to factories. They follow-up on 3rd-Party audits, monitor corrective action plans and support with issue resolution. Since 2017 these visits have been unannounced to uncover real ethical conditions and validate that products are being manufactured in the agreed factory. We aim to work pro-actively when issues are found, and we ask that suppliers and factories work with us based on a continual improvement program methodology to correct issues and improve transparency.
During 2017, our Ethical Team assessed 442 factory audits and conducted 174 audit visits, including 43 in Turkey, 38 in China, 24 in India, 34 in UK and 25 in Romania.
Supplier Performance Review: Compliance with River Island Ethical Policy is a contractual responsibility for suppliers. River Island Buying Teams review "end-to-end" supplier performance at least twice a year. The Ethical Team provide an ethical score/summary for each supplier to ensure that the Buying Teams are aware of and consider ethical performance and risk when compiling their sourcing plan. Buyers review the plan with their Divisional Director and the Head of Sourcing and Ethical, prior to each new buying season, and this includes a discussion of any ethical risks and required actions. During 2017, we strategically reduced the business levels with three key suppliers (pending corrective/improvement programs) and suspended business with one supplier following ongoing ethical issues.
ETI working Groups and Collaboration: In order to address significant and widespread ethical challenges, we are collaborating with other brands, industry experts, NGO's and other stakeholders in the following areas:
UK Fast Forward Program: We continue to be a member of the UK Fast Forward ImprovementProgramme, working with other brands under the guidance of David Camp. Download leaflet. David was the founder of an initiative known as ‘Stronger Together,' created specifically to tackle the issue of modern slavery in the agricultural and food industry. He adapted the same robust audit methodology and approach to apply to all UK-manufacturing factories.
During 2017 we completed Fast Forward factory training, including initial audits and unannounced validation audits, on all River Island UK factories (including First Tier sub-contractors). We have now consolidated our UK business into factories that can clearly demonstrate compliance and ongoing improvements. During 2017 we conducted 38 UK Fast Forward visits, including all Tier 1 factories; as well as 15 2nd-Tier units (printers/Laundries and Packing Units); and 8 warehousing units. We will extend the Warehousing audits further in 2018.
ETI Turkey Working Group (Syrian Refugee Crisis): In 2017 we conducted unannounced audits and published guidance/training to suppliers to help ensure that Syrian workers can be employed ethically, safely, and are paid no less than the legal minimum wage.
Migrant Labor Model: The risk of Modern Slavery is increased in all countries where migrant labor is relied upon. In 2017, we collaborated with other brands in targeting countries to visit, assessing and monitoring our shared key factories, and in recruitment practices, in order to ensure that migrant workers are employed legally and ethically. Of our 330,000 tier 1 workers, 20,000 workers were reported to be migrant workers.
Business wide operational due diligence: We continue to carry out due diligence and risk assessments across the rest of the business in respect of Goods Not For Resale (GNFR). Every GNFR relationship has also been assessed and graded according to risk. Any supplier of GNFR rated as medium or high risk for the purposes of modern slavery now has our Anti-Slavery and Human Trafficking Policy incorporated into their contract, including an express commitment to comply.
(A) MODERN SLAVERY GOVERNANCE
Sourcing, Ethical and Supply chain Steering Group: Held quarterly and chaired by our CEO. Also in attendance are our COO, our FD, the Buying Directors and the Supply Chain Director. We review the current supply base and sourcing strategy, as well as highlight any key risks and actions which may be required to comply with River Island's Ethical Policy and Anti-Slavery and Human Trafficking Policy.
Modern Slavery Working Group: Reporting to the Chief Counsel, and with input and guidance from the Ethical Sourcing Manager, this cross-functional group of senior managers from all River Island operations (DC, stores, HR, GNFR procurement and UK Facilities) focuses on the supply of non-branded products, as well as River Island operations and services.
(B) MODERN SLAVERY AWARENESS AND TRAINING
Ethical Sourcing induction: All River Island Buying Teams and new joiners attend mandatory Ethical Sourcing induction sessions which give a detailed introduction to the ETI base code. In 2017 we also launched an online Modern Slavery training module. Completion of this interactive module is now mandatory for all Head Office functions, and shall ultimately be extended to all River Island UK sites. We monitor completion rates and scores to ensure awareness and understanding of Modern Slavery in all relevant areas of the business. So far, we have trained 95% of our Head Office team.
Industry training and participation: As an active member of the ETI we regularly participate in briefing meetings, Working Group meetings and the Medium Sized Companies' Roundtable, providing valuable opportunities to raise awareness, share experiences/learnings and collaborate on resolution of key issues including modern slavery.
In 2017 we also participated in joint meetings between Fast Forward Members and government bodies, including HMRC and the Director of Labor Market Enforcement, Sir David Metcalf, to discuss reporting and enforcement of UK modern-slavery issues.
(C) NEXT YEAR
We are only at the beginning of a long journey towards the eradication of modern slavery on a global scale. We need to stay aware of the ever-changing trends and risks caused by political, environmental as well as economic factors, such as wars, migration, labor shortages and rising costs.
Our suppliers are our partners, and we stand a much better chance of successfully tackling modern slavery if we have a shared understanding and a shared accountability for the outcome. In 2018, we will continue to focus our work in our product supply chain. We will increase audits of factories, and we will continue to educate our suppliers (e.g. by extending our Interactive Modern Slavery Training Module to suppliers).
Our in-country teams are building greater awareness and experience of modern slavery, and the use of agents and trafficking, and we will continue to collaborate and share experiences and information with NGO's, other ETI brands, suppliers and local agents to build effective solutions (including worker remediation, detection and prevention).
We are investigating UK Fast Forward audit methodology for other high-risk areas. We are collaborating with suppliers in Southern China to raise awareness and mitigate modern slavery and trafficking risk due to the growing trend for migrant Burmese labor provided by agents.
We will also continue to add Tier 1 processors (printers and laundries) to our audit and risk assessment process. We will also build reporting and visibility of our key fabric mills (prioritised according to River Island business level and leverage) as a first step to enabling "Tier 2" visibility and risk assessment at a future stage.
In 2018 we will also continue to further map the GNFR supply chain and expand our risk assessment exercise. We will be exploring initiatives within each department to further reduce the risk of modern slavery subsisting, and we will carry out audits where necessary.
We will be looking at ways of measuring the performance of actions we take to combat modern slavery and human trafficking, to help us monitor how effective our practices have been.
BEN LEWIS, CEO