21 May 2013 - "Everyone at Kmart is truly saddened by the recent tragic events in Bangladesh factories. The safety of team members in Australia as well as in our overseas workplaces is always of critical concern to us," Managing Director Kmart Australia, Mr Guy Russo said today.
While none of the recent tragedies occurred in any Kmart related factories, the business has announced it is reviewing its operations in Bangladesh, satisfying itself that the factories it works with continue to meet Wesfarmers’ and Kmart’s codes of conduct and ethical sourcing policies. This review is intended to ensure that Kmart’s ethical sourcing code is being strictly observed and will also include consideration of joining an international agreement for safety in Bangladesh (the recently released Bangladesh Accord).
"Under our current ethical sourcing code factories in Bangladesh are approved against stringent criteria prior to any orders being placed with factory owners," Mr Russo said. "If a factory does not meet essential ethical, health and safety standards we do not do business with the factory. In fact we have rejected a number of factories in Bangladesh on this basis."
A core philosophy of Kmart's approach includes working with approved factories to continuously improve ethical and health and safety standards over time. Kmart is vigilant in monitoring and reviewing the performance of supplier factories and has ceased placing orders in instances where factory owners have not demonstrated the capacity or intention to improve standards or have breached one of Kmart's zero tolerance criteria. Zero tolerance criteria under the Kmart code applies to bribery, child labour, forced or bonded labour, physical or sexual abuse and, as a result of recent safety audits, unauthorised subcontracting to unapproved factories, inadequate safety standards and unsafe buildings. Kmart ceases placing orders with factories that breach its zero tolerance criteria.
Since the recent incidents in Bangladesh, Kmart has undertaken fire safety audits benchmarked to Australian standards in all Bangladesh supplier factories - in December 2012 and January 2013. Kmart then convened a forum in Dhaka with factory owners and auditors, and visited local workplaces. One of the key outcomes of the audit process was the identification of high risk buildings which are those located above market places and factories located in multi-story buildings with shared ownership. Kmart no longer places orders with factories in these high-risk locations.
"A second round of audits is currently being undertaken by the Kmart team in Bangladesh to ensure action plans for safety improvements have been implemented and maintained, including additional building safety assessments. This second round of audits is being undertaken by a combination of experts internal and external to Kmart," Mr Russo said.
Kmart will convene a further Bangladesh supplier forum in Dhaka next month and meet with factory owners, factory workers, auditors and NGO's to review the outcomes of the second round of audits and will again visit local factories.
Kmart wishes to assure its customers that it is approaching the matter of safety standards in Bangladesh with the urgency and importance the matter deserves.
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