workplace conditions assessment reporterp.hansae.com/sharefile/compliance/survey/carters_2019/mango...

Report No : F_IAR_53220 City : Not applicableAudit Date : Jul 10, 2018 Country : VietnamLast Audit : Jun 21, 2017 (90%) Auditors : Primary: Phuong BuiAssessment Stage : Follow up Secondary: None

Overall Facility Score : 92%

Service Provider: IntertekSchedule Type : Un-Announced

MANGO FASHION COMPANY LIMITEDGENERAL INFORMATION

85-100%High Performance71-84%Medium Performance51-70%Low Performance0-50%Very low Performance

Assessmentarea Score results Number of non-compliances by rating

Zero Tolerance Major Moder

ate Minor Notscored

Overall 92% - - 3 2 -

Labor 100% - - - - -Wages & Hours 63% - - 3 - -Health & Safety 100% - - - - -Management Systems 93% - - - 2 -Environment 100% - - - - -

WORKPLACE PERFORMANCE INDEX AND SUMMARY Participating facilities: 28481

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Workplace Conditions Assessment ReportMeasured Results —Improved Performance

Facility Legal Name: Mango Fashion Company LimitedAudit Location: 9B Tan Thoi Nhat 25 Street, Tan Thoi Nhat Ward, District 12, HCMCity: Not applicableCountry: VietnamContact Name: Mr. TH KIMContact Title: PresidentIndustry: Apparel

Facility Name: MANGO FASHION COMPANY LIMITEDA. FACILITY PROFILEA1. FACILITY INFORMATION

Security systems inplace:

Yes 6 guards are in charge of security in the facility 24 hours per day and seven (7) days per week. In order to register with the security guards, visitors are required to identify themselves by providing the purpose of the visit and the name of the contact person and the identity of visitor/ vehicle. Visitors are only allowed to access to the facility when authorization is obtained.

Building Description: The facility consists of one 1-storey building (about 3000 square meters) which is used for production, material, finished goods and accessory warehouse and office. one flat building (500 square meters) for stock warehouse, one flat building (500 square meters) for canteen. The walls have been made by bricks; ceilings and doors have been made by iron and steel. There is no dormitory in the facility.Special building type: NA

Facility Legal Status: Privately ownedYear facility began operations:

2013Located in special economic zone:

YesPerson responsible for overall social compliance issues:

Ms. Nguyen Thi Hong Diem- Compliance OfficerValid certificatefor social compliance certification program:

NoneVendor Name: Hansae Co. Ltd.


Workplace Conditions Assessment ReportNr. F_IAR_53220MANGO FASHION COMPANY LIMITED

Subcontractor# : 1SubContractor Name: Address: Long Binh IP, Street 15 A, Bien Hoa City, Dong Nai ProvinceContact Name: Mr. HieuTelephone: 061 3991965Email Address: [email protected] Type: Subcontractor provides components or embellishments that contain a private label or proprietary brand logoProcess subcontracted: WashingSocial Audits performed: Yes Type of Social Audits: WCAPrivate label items: Yes

A4. SUBCONTRACTOR INFORMATIONLanguages spoken in the facility:

Vietnamese and EnglishManagement and employees speak same language :

No

Female Employees: 720 Male Employees: 200 Mgmt Employees: 20 Production (Non-Management) Employees: 900 Local Employees: 917 Foreign/Migrant Employees: 3

A3. EMPLOYEE INFORMATIONRange of total number of employees at the facility:

501-1000 employeesUnion name: Labor Union of Mango FashionEmploys juvenileworkers:

None Employee nationalities/provinces:

Korean and VietnameseHires throughemployment agent:

No Facility did not hire employees through an employment agent.

A2. PRODUCTION INFORMATIONChemicals or hazardous materialson-site:

Yes Acetone and Rust Go

Time recordsystem(s) used:

Finger-printing reading system

Current production/Services for client:

Yes

Products manufactured/Services provided:

Garment products (dress, skirt, pants)Production process/Service elements:

Raw incoming material, Cutting, Sewing, Buttoning, Ironing, Inspection and PackingProduction capacity a week: 71,250 piecesTotal number of machines: 566Main machine types: Sewing, cutting, Ironing, mental detectorShifts andOperating hours:

The official working time is from 7:30am to 4:30pm including 60 minutes of break from 12:00nn to 1:00pm without pay. Employees work 8 hours per day and 6 days per weeks. The Sunday is designated as weekly rest day.



Subcontractor# : 2SubContractor Name: SJ Vina Address: 677/77 Quarter 4, Nguyen Anh Thu Street, Hiep Thanh Ward, District 12Contact Name: Mr. CuongTelephone: 0918 210685Email Address: [email protected] Type: Subcontractor provides components or embellishments that contain a private label or proprietary brand logoProcess subcontracted: EmbroiderySocial Audits performed: Yes Type of Social Audits: WCAPrivate label items: Yes

Subcontractor# : 3SubContractor Name: Nhat Phuong Screen Printing Address: 18/26A Ma Lo Street - Binh Hung Hoa A Ward, Binh Tan District, Ho Chi Minh City.Contact Name: Mr. KimTelephone: 846137503117Email Address: [email protected] Type: Subcontractor provides components or embellishments that contain a private label or proprietary brand logoProcess subcontracted: PrintingSocial Audits performed: Yes Type of Social Audits: WCAPrivate label items: Yes

Subcontractor# : 4SubContractor Name: Eun Sun Vina Embroidery Co. ,Ltd Address: 59/132 Tien Lan 1, Ba Diem Commune, Hoc Mon District, Ho Chi Minh City.Contact Name: Mr. An Ju EonTelephone: 84 83425026Email Address: [email protected] Type: Subcontractor provides components or embellishments that contain a private label or proprietary brand logoProcess subcontracted: EmbroiderySocial Audits performed: Yes Type of Social Audits: WCAPrivate label items: Yes

Subcontractor# : 5SubContractor Name: Stitch Plus Corporation Address: Binh Phuoc A Hamlet, Binh Chuan Village, Thuan An District, Binh Duong ProvinceContact Name: Mr Shin Kwang HyunTelephone: 06503788443Email Address: [email protected] Type: Subcontractor provides components or embellishments that contain a private label or



proprietary brand logoProcess subcontracted: EmbroiderySocial Audits performed: Yes Type of Social Audits: WCAPrivate label items: Yes

Subcontractor# : 6SubContractor Name: Peace Vina Co., ltd Address: Lot A2-6, Tay bac Cu Chi Industrial Park, HCMContact Name: Mr. Jung Il TaeTelephone: 84 0650 3718678Email Address: [email protected] Type: Subcontractor provides components or embellishments that contain a private label or proprietary brand logoProcess subcontracted: PrintingSocial Audits performed: Yes Type of Social Audits: WCAPrivate label items: Yes A5. GENERAL INFORMATIONMango Fashion Company Limited is a private company which is located at 9B, Tan Thoi Nhat 25 Street, Quarter 5, Tan Thoi Nhat Ward, District 12, Vietnam. The total land area by the facility is 5,000 square meters. They have started its operation at the exiting location since September 2011 with business license No. 0311169841 which issued by the authorized department on 22 April 2011. The main products manufactured by the facility is garment (skirt, dress, pants) products. There is no peak season in the facility. One auditor arrived at the facility at 8:20am on July 10, 2018 and explained to the facility representative about the CSR audit for Client would be performed in the facility during opening meeting. The audit result was explained to and was acknowledged by the facility representative. The facility is cooperative with auditor during audit. Employees (workers) showed their satisfactory behavior to their management and no negative information is expressed during interview. There are 3 Foreigners working in the facility as management, all production employees are local employees. The facility has 6 sub-contractors for printing, Embroidery and washing as mention above. The facility is using 6 subcontractors for printing, embroidery and washing as described in the table. As per confirm from factory management, these subcontractors have got approval from Client. The subcontractor is producing client’s production.Emergency Preparedness SummaryThere are at least 8 fire exit doors for building. The exit lights & emergency lights are sufficiently equipped at the exit doors. The fire alarm system, fire alarm points, smoke alarms are equipped in the whole workshop buildings. The fire hose and fire hydrant were also equipped. The fire extinguishers were properly equipped and inspected with validity label by authorized agency. 2 fire water pumps presented as well. There is one nurse working in the facility to take care worker's heath and at least 11 first aid kits provide for employees in production areas.



A6. AUDIT PROCESS

Payroll and attendance records sampling

Period From To Peak Season Records ReviewedCurrent Period 1-6-2018 30-6-2018 No 10 Period 1 1-5-2018 31-5-2018 No 5 Period 2 NA Not Provided Not Provided Not Provided Total 15

Employee interview samplingIndividual 10Group Not applicableTotal interviewed 10Audit pay period provided for review

Records From To2 Months Payroll 01-05-2018 30-06-20182 Months Attendance 01-05-2018 30-06-2018Special Comments This is follow up audit. The previous audit by UL was conducted on 24 May 2018

Personnel records Machine maintenance recordsSecurity log book Production recordsNon-Production records Employment contractsLegal Permits Social insurance documentationEmployee leave register Infirmary logsHealth examination records

Other records reviewed

Other : Environment record



B. KEY PERFORMANCE METRICSB1. COMPARISON BENCHMARKCurrent performance —Global average, Vietnam average, Apparel average

Labor Wages & Hours Health & Safety Management Systems Environment

Advancers DeclinerConstant

Section NameCurrent

(10-Jul-2018)

Last (21-Jun-2017)

First (01-Jul-2015)

Change(Current-Last)

Change(Current-First)Labor 100 100 100 0 % 0 %Wages & Hours 63 85 81 -25 % -22 %Health & Safety 100 90 95 11 % 5 %Management Systems 93 93 85 0 % 9 %Environment 100 72 72 38 % 38 %

Overall Score 92 90 90 2 % 2 %

B2. PERFORMANCE TREND ANALYSIS

(10-Jul-2018) (21-Jun-2017) (01-Jul-2015)


PERFORMANCE RATING

Very Low (0% –50%) Low (51% –70%) High (85% –100%)Medium (71% –84%)


International Standard: 60 Vietnam average: 55 Highest hours this facility: 61 Last Audit average: 55

Normal Work Hours Overtime Work Hours B3. WORKING HOURS AND WAGES

61

Average total hours worked weekly

Average wages paid in local currency (VND)

Special wage circumstances: There is no any special circumstances related to minimum wage.



Wages and hours summary: Remarks: A. Working Hours: 1. The finger-printing reading system is being used to record working hours of employees. 2. It was noted from reviewed payroll and time records a. It was noted from reviewed time records that 7 out of 10 selected employees worked overtime from 39.25 to 79.5 hours per month in June 2018, 4 out of 5 selected employees worked overtime from 32.5 to 59.5 hours per month in May 2018.b. It was noted from reviewed time records that 6 out of 10 selected employees worked overtime 4.5 hours per day in 2-13 days in June 2018, 1 out of 5 selected employees worked overtime 4.5 hours per day in 1 day in May 2018.It was noted from reviewed time records that 6 out of 10 selected employees worked from 60.75 to 69.5 hours per week in 2-4 weeks in June 2018, 2out of 5 selected employees worked from 60.25 to 69.5 hours per week in 2-3 weeks in May 2018.B. Wages: 1. Minimum wage for employee in this facility is VND 4,185,000 / month for non skill and VND 4,472,000 month for skill employees effective from January 2018 which is in compliance with local requirement. While the minimum wage in the location is VND 3,980,000. The salary paid on 10th of the month.2. Employees were paid at 150% of wage for regular overtime hours which is complied with local law. 3. 14 days of annual leave and 10 days of holiday were provided correctly to employees. 4. The compulsory insurance is provided for only 603 out of 920 employees up to May 2018.



100%C1. LaborC. PERFORMANCE DETAILSCurrent (10-Jul-2018) Last (21-Jun-2017)


PERFORMANCE RATING



63%C2. Wages & Hours

Sub Section: Working HoursStatus Findings % Global freq of

compliance

Moderate 122.00 : Total overtime hours exceeds allowable limits under applicable law or agreement.Auditor's comment Previous audit by UL on 24 May 2018 Excessive monthly overtime was found in Sep 2017 and Apr 2018 for 16 out of 30 samples. They were working up to 69.75 overtime hours per month instead of maximum 30 hours per month. They were working at all sections. In addition, excessive daily overtime hours were found for 12 out of 30 samples in Sep 2017, Feb 2018 and Apr 2018. They worked up to 4.5 overtime hours per day instead of maximum 4 overtime hours per day. They were working at all sections. Follow up audit on 10 July 2018 Not corrected: a. It was noted from reviewed time records that 7 out of 10 selected employees in sewing, cutting, inspecting, Ironing and packing section worked overtime from 39.25 to 79.5 hours per month in June 2018, 4 out of 5 selected employees worked overtime from 32.5 to 59.5 hours per month in May 2018. b. It was noted from reviewed time records that 6 out of 10 selected employees in sewing, cutting, inspecting, Ironing and packing section worked overtime 4.5 hours per day in 2-13 days in June 2018, 1 out of 5 selected employees worked overtime 4.5 hours per day in 1 day in May 2018.Article 106 Point 2 Vietnam Labor Code (10/2012/QH13) (10/2012/QH13)To ensure that the overtime hours of the employee shall not exceed 50% of the normal working hours in 01 days, in case of application of working regulation on weekly basis, , the total normal working hours and the overtime hours shall not exceed 12 hours in a day, and less than 30 hours in 01 months and the total of not more than 200 hours in 01 year, except for some special cases stipulated by the Government for the overtime working but shall not be more than 300 hours in 01 years

48%

Moderate 123.00 : The total weekly working hours (normal & overtime) are over 60 but less than 72 hours.Auditor's comment Previous audit by UL on 24 May 2018 Excessive weekly working hours were found in Sep 2017, Feb 2018 and Apr 2018 for 20 out of 30 samples. They worked up to 66.75 hours per week. They were working at all sections. Follow up audit on 10 July 2018 Not corrected: It was noted from reviewed time records that 6 out of 10 selected employees in sewing, cutting, inspecting, Ironing and packing section worked from 60.75 to 69.5 hours per week in 2-4 weeks in June 2018, 2 out of 5 selected employees worked in sewing and inspecting section worked from 60.25 to 69.5 hours per week in 2-3 weeks in May 2018.

73%


PERFORMANCE RATING



Sub Section: Wages and BenefitsStatus Findings % Global freq of

compliance

Moderate 150.00 : The facility does not provide social security, pensions, healthcare and/ or other insurance to employees as per legal requirement.Auditor's comment Previous audit by UL on 24 May 2018 1/ The monthly salary paid for compulsory social insurance for the employees was not covered responsible allowance and seniority allowance into monthly basic wage for employees. 2/ The facility still owes the insurance authority at VND 265,102,603. The deadline was May 18, 2018. However, they have not paid to the insurance authority yet. In addition, only 582 out of 903 employees participated social insurance. Follow up audit on 10 July 2018 Not corrected: 1/The monthly salary paid for compulsory social insurance for the employees was not covered responsible allowance and seniority allowance into monthly basic wage for employees in May 2018. They improved this finding from June 2018. 2/ Facility had only contributed insurance for 603 out of 920 permanent workers until May 2018. At least 250 workers signed labor contract with 1 year, but facility did not contribute compulsory insurance for these workers. 50 remained workers are in the probation period.Article 92, Clause 2 of Law on Compulsory Social InsuranceMonthly, employers shall make payments calculated on the funds of social insurance salaries and remuneration of laborers.

57%

Additional FindingsPrevious audit by UL on 24 May 2018The factory has not established wage level increment policy as registered wage scale in 2017 and 2018. Decree No. 49/2013/ND-CP on Detailing the Implementation of a Number of Articles of the Labor Code on Wages (2013), Art. 7 (4)Follow up audit on 10 July 2018Corrected:The factory has established wage level increment policy on 1 June 2018.


PERFORMANCE RATING



100%C3. Health & Safety

Sub Section: Machine SafetyStatus Findings % Global freq of

compliance

Corrected 223.00 : Previous Non-Compliance : Points of operation and other potentially dangerous parts are not operated with proper machine safeguardsAuditor's comment Facility provided needle guard for all sewing machine and eye guard for overlock machine.

84%


PERFORMANCE RATING



Sub Section: Safety HazardsStatus Findings % Global freq of

compliance

Corrected 232.00 : Previous Non-Compliance : Special appliances such as boilers, unfired pressure vessels, and furnaces have not been registered and affixed with a registration certificationAuditor's comment All boilers and Air compressors has been inspected and certified by authority agency.

84%Additional FindingsPrevious audit by UL on 24 May 2018Finding: The 2 out of 10 warning signs were posted in English instead of in local language in packing section.Law: Labor Code No. 10/2012/QH13 (2013), Art. 138Follow up audit on 10 July 2018Corrected: Based on factory tour, it was noted that all 2 out of 2 warning sign for mental detector was posted in local language.Previous audit by UL on 24 May 2018One ladder with the height around 5 meters was not provided with safety equipment near water tank. The facility explained that they did not use this ladder.Labor Code No. 10/2012/QH13 (2013), Art. 138Follow up audit on 10 July 2018Not corrected: Based on factory tour, it was noted that facility did not provide safety equipment for one ladder (5meter) near water tank. As confirmed with management, they did not use this ladder.Previous audit by UL on 24 May 2018Cooking water testing in 2017 was not available for review each 6 month. The factory only provided testing in March 2018. Circular No. 15/2012/TT-BYT on Regulation on General Conditions to Ensure Food Safety for Manufacturing Facilities, Food Business (2012), Art. 1(6)(c)Follow up audit on 10 July 201Corrected: Facility has planning for testing cooking water every 6 months. The last one was conducted in March 2018, the second time will be conducted in September 2018.Previous audit by UL on 24 May 20182 air compressor’s operators and 1 boiler’s operator were not been trained occupational health and safety course. Decree No. 44/2016/ND-CP Details Some Articles of the Law on Occupational Safety and Sanitation, Technical Inspection of Occupational Safety, Training ofOccupational Safety and Sanitation and Monitoring of Occupational Environment (2016), Art. 17Follow up audit on 10 July 2018Corrected: 2 air compressor’s operators and 2 boiler’s operators has been trained on occupational health and safety and got certification on 19 May 2018.


PERFORMANCE RATING



93%C4. Management Systems

Sub Section: Management SystemsStatus Findings % Global freq of

compliance

Minor 296.04 : The facility has comprehensive working hour and wages management processes and procedures in a written manual that support adherence to social compliance requirements but they are not all being properly implementedAuditor's comment Previous audit by UL on 24 May 2018 The facility has policy, however, some findings relating to working hours and wages were detected Follow up audit on 10 July 2018 Not corrected: The facility established policies and procedures, the monitoring system may not be effective or policies are incomplete thus resulting to lapses of implementation with finding.

50%

Minor 296.07 : The facility has comprehensive employee safety processes and procedures in a written manual that support adherence to social compliance requirements but they are not all being properly implementedAuditor's comment Previous audit by UL on 24 May 2018 The facility has policy, however, some findings relating to health and safety were detected. Follow up audit on 10 July 2018 Not corrected: The facility established policies and procedures, the monitoring system may not be effective or policies are incomplete thus resulting to lapses of implementation with finding.

53%


PERFORMANCE RATING



100%C5. Environment

Sub Section: EnvironmentStatus Findings % Global freq of

compliance

Corrected 324.00 : Previous Non-Compliance : The facility does not have all required environmental permits, licensees and / or registrationsAuditor's comment Previous audit by UL on 24 May 2018 1/ The factory has no waste water discharging permit. They explained that they were on progressing to get it. 2/ The factory has no underground water exploitation permit. They explained that the factory is waiting for water suppling source from government in the future. At closing meeting, the factory commented directly on CIR “The factory has nearly installed a waste water treatment system and now waiting for license”.Follow up audit on 10 July 2018 Corrected: 1/ Based on document review, it was noted that waste water discharging permit was issued by authority agency from May 10, 2018 to May 10 2021. 2/ Based on document review, it was noted that underground water exploitation permit was issued by authority agency from 15 June 208 to 15 June 2019.

74%

Additional FindingsPrevious audit by UL on 24 May 2018There was 1 instead of 7 hazardous waste containers as hazardous register lists from local authority. In the current assessment day, there was one container for used neon tube.Follow up audit on 10 July 2018Corrected: Based on factory tour, it was noted that there are 7 hazardous waste boxes separated with label at waste storage area.% Global Frequency of Compliance: Represents the implementation percentage performance of all suppliers participating in the WCA Community globally for each issueIdentification numbers: Represents the finding ID associated with each checklist question

RECOMMENDATION FOR IMPROVEMENT PLAN TIMELINEMinor Take action within 0 ~ 6 months to make necessary improvements. Major : Take action within 0 ~ 1 month to make necessary improvements.Moderate: Take action within 0 ~ 3 months to make necessary improvements. Zero Tolerance: Take immediate action to make necessary improvements.


PERFORMANCE RATING



This report is for the exclusive use of the client of Intertek named in this report (“Client”)and is provided pursuant to an agreement for services between Intertek and Client (“Client agreement”).No other person may rely on the terms of this report. This report provides a summary of the findings and other applicable information found/gathered during the audit conducted at the specified facilities on the specified date only. Therefore, this report does not cover, and Intertek accepts no responsibility for, other locations that may be used in the supply chain of the relevant product or service. Further, as the audit process used by Intertek is a sampling exercise only, Intertek accepts no responsibility for any non-compliant issues that may be revealed relating to the operations of the identified facility at any other date. Intertek's responsibility and liability are also limited in accordance to the terms and conditions of the Client Agreement. Intertek assumes no liability to any party, for any loss, expense or damage occasioned by the use of this information other than to the Client and in accordance with the Client Agreement and these disclaimers. In case there is any conflict between the disclaimers stated herein and the applicable terms and conditions of Intertek incorporated into the Client Agreement, then these disclaimers shall prevail.

DISCLAIMER

D. STRENGTHS AND CHALLENGES

Challenges: Facility performance ranks in the bottom percentile of the population Rating Global Freq. of Compliance%The total weekly working hours (normal & overtime) are over 60 but less than 72 hours. Moderate 73%

Facility Strengths: Facility performance ranks in the top percentile of the population and/or has implemented a best practice process

tiRatingng

Global Freq. of Compliance%



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