lululemon athletica Factory Audit Report - Hit Promo · PDF filelululemon athletica Factory Audit Report (lululemon athletica Workplace Code of Conduct and EMS Assessment) CLIENT :

lululemon athletica Factory Audit Report

(lululemon athletica Workplace Code of Conduct and EMS Assessment)

CLIENT : lululemon athletica

AUDIT CODE: ZHKM-CN-2012-03

VENDOR : Xiamen Foreverstar Products., Ltd

FACTORY : Xiamen Foreverstar Products., Ltd

Version:V1.0 Page 2 of 38

Report ref: CNSUZ13733616 Date: Apr.17~18, 2012

Audit Information Audit Job Number: CNSUZ13733616

Auditor name SGS Affiliate Role in the team Audit date

Denny Yao SGS-CSTC Leader Auditor Apr.17~18, 2012

Auditee Representative: Name Position Department

Ms. Cao Li HR Manager HR Mr. Li Junfeng H&S Representative Office

Mr. Qiao Lei Office Staff Office



Contents I. Factory Information

II. Auditor Team

III. Auditee Representatives

IV. Assessment Checklist

1) Child Labour / Young Labour

2) Forced Labour

3) Health & Safety

4) Freedom of Association

5) Discrimination

6) Disciplinary Practices

7) Working Hours

8) Compensation

9) Environment

Attachment- Photo Report



I: FACTORY INFORMATION Factory Name

Address

Contact Person

Tel

Fax

E-mail

Factory Operations

Products Manufactured

Production Capacity

Manufacturing Floors

Dormitory Area

Kitchen and Canteen

Production Process Flow

Equipment used

Subcontractor Factory Name(s) if any

Other Brands in Factory

Employees Details

Xiamen Foreverstar Products., Ltd

No.884,Xiahe Road,Siming DistrictXiamen,Fujian,China,361009

Mr. Raymond.Xu

86-592-5660282

86-592-5626838

[email protected]

Bags

50,000,000Qty Per year

30000S.Q. Meters

4300S.Q. Meters

1600S.Q. Meters

Raw material->Cutting->Sewing->Finishing->Inspection & Packing

Cutting machines, Sewing machines, Metal detecting machines etc.

NA

Cocacola, Avon,Disney,

Male Female Sub-total

Supervisors/Managers 11 5 16

Administration Staff 23 23 46

Quality Control Staff 2 16 18

Engineering Staff 10 3 13

Permanent Workers 66 260 326

Temporary/contract 0 0 0 workers

Grand Totals 112 307 419

II.AUDITOR TEAM

Auditor name Auditing company Role in the team Audit date

Denny Yao SGS-CSTC Leader Auditor Apr.17~18, 2012



III.AUDITEE REPRESENTATIVES

Name Position/Department

Ms. Cao Li HR Manager/HR

Mr. Li Junfeng H&S Representative/office

Mr. Qiao Lei Office Staff/office

Overall Assessment: Xiamen Foreverstar Products., Ltd was founded on Oct.14, 1996 based on business license, and it was specialized manufactured bags.

There were mainly 5 buildings as bellow: one 5-storey office building, two 1-storey manufacturing and warehouses buildings, one 1-storey (partial 2-storey) canteen and kitchen building, and one 6-storey dormitory building. There were 419 workers in the factory. The peak seasons were not obvious. Based on workers

interview and confirmation with factory management, the regular working time was 8 hours per day [all worker were arranged one shift (8:00am-18:00pm) with 2 hours meal break in the summer period, (8:00am-17:30pm) with 1.5 hours meal break in the winter period], 5 days per week. For wage and payment, all workers were paid by hourly rate by bank about 20th of each following month without delay. During the audit, total 22 workers (4 groups x 4 workers and 6 individuals) were randomly selected by auditors for workers interview, which was conducted in a private room without factory management’s presence. The factory management showed an active attitude to cooperate with the process and all the workers were positive to interviews, and most workers were satisfied with the factory, including the atmosphere, communications channels, wage and benefits such as free shuttle bus for workers.



IV. Assessment Checklist

1. Child Labour / Young Labour

Item Requirement no 1.1 Does the factory have a copy of valid laws and

regulations on child labour OR understand its requirements?

1.2 What is the legal youngest (minimum) age of workers?

1.3 Does the factory have a copy of valid regulations and laws on young worker protection OR understand its requirements?

1.4 Does the factory have effective procedures to verify the age of worker at the time of recruitment?

1.5 Does the factory keep adequate age documents of workers such as ID copies and personnel records?

1.6 Is a separate register required by law for young workers?

1.7 Is separate register maintained for young workers?

1.8 Is there any evidence identified that child labour is now or has been employed in the past at the factory?

1.9 Does the youngest age of workers at the factory comply with local legal requirements?

Yes/No Comments /NA Yes The factory had a copy of

laws and regulations on child labour, and based on management interview, they understood its requirements.

NA In China, minimum working age is 16 years old. Workers at the age of 16 and above but not 18 yet are regarded as young workers.

Yes Base on the document review and management interview, the factory had the written policy, and the workers knew it well.

Yes Based on management & workers interview and documents review, the factory established effective procedures on HR recruitments; ID copies were verified and kept in the factory during the period of recruitment per documented procedures requirements.

Yes Based on management and documents review, the factory provided all ID copies and personal files for review during the audit

Yes It was required by local law.

NA No young worker was identified in the factory during the audit.

No No such evidence was identified in the factory during the audit.

Yes The youngest worker identified in the factory was born at Jul.18, 1993 and joined the factory at Mar.28, 2012.



Item Requirement no 1.10 Are suspected young worker age records such as

age certificate, local records or certificate from surgeon verified by the factory?

1.11 Are young workers engaged in hazardous work?

1.12 Are or young workers employed at night shift?

1.13 What time is night shift as defined by local law?

1.14 Are above findings confirmed through interview with workers?

Yes/No Comments /NA Yes Confirmed with the

management, the factory would do background investigation for any suspected young workers such as age certificate, etc.



NA No such law requirement.

Yes All the information was confirmed by workers interview

Section Rating :Child Labor

Legal /Code Observations Fully Nonconformance (Need Improvement) Acceptable

Legal/Code Non-conformance : Nil

Observation (Need Improvement) :Nil

Best Practices in Factory (if any): Nil

Additional Comments :Nil

Corrective Actions confirmed by factory / Agent :NA

Responsibility

NA

Dead lines



2.Forced Labour Item Requirement no 2.1 Does the factory have a copy of valid laws and

regulations on forced labour or understand its requirements?

2.2 Are all workers present voluntarily at the factory?

2.3 Are workers free to leave after working hours?

2.4 Is any restriction placed on leaving after working hours?

2.5 Where dormitories are present, are workers required to live in the dormitories without freedom of choice to live outside the factory?

2.6 When workers are in dormitories, is there any restriction placed on workers’ freedom of movement.

2.7 Are workers permitted time-off with doctor’s certificate or note when sick or for maternity?

2.8 Is any evidence of physical or verbal abuse identified?

2.9 Are workers forced to work overtime?

2.10 Are employment contracts required by local law?

2.11 If employment contracts are required by law, does the law require that they be signed by both the factory AND the worker


law document about forced labor, and based on management interview, they understood its requirements.

Yes Based on workers interview, all workers’ employment was voluntary.

Yes Workers confirmed they were free to leave after the work.

No It was confirmed by workers interview.

No Based on worker interview and management interview, workers were free to choice to live outside the factory or live in the dormitory.

No No negative evidence

was identified.

Yes Based on management and workers interview, workers could take sick leave or maternity leave according to local law requirements.

No Based on workers interview, no negative evidence about physical or verbal abuse was identified during the audit.

No Based on workers

interview, workers were

voluntary to work

overtime.

Yes The contracts were required by local law.

Yes Contracts were signed by both the factory and the workers, and it was confirmed by workers interview and contracts review.



Item Requirement no 2.12 Do all workers sign employment contracts with the

factory?

2.13 Are employment contracts unfair or illegal?

2.14 Is any evidence identified that security guards were used to coerce workers ?

2.15 Are workers required to lodge deposits such as illegal withholding of salary, training fee, employment broker fee, fee for tools, fee for uniforms, or original documents such as ID papers?

2.16 Is any physical method used to limit freedom of workers during working hours such as surveillance cameras or locked exit(s)?

2.17 Is any evidence identified on the use of forced labour / prison labour?

Yes/No Comments /NA Yes Based on workers

interview and contracts review, the contracts were conforming to legal requirements.

No Based on workers interview and contracts review, the contracts were conforming to legal requirements.

No Based on onsite observation and workers interview, no negative evidence on security guards coercing was identified in the factory during the audit.

No Based on workers interview and documents review, no lodge deposits were identified in the factory during the audit; the uniforms and tools were provided to employees for free.

No Based on onsite observation and workers interview, no physical methods used to limit freedom of employees were identified in the factory during the audit.

No Based on onsite observation and workers interview, no such negative evidence on the use of forced labor / prison labor / bonded labor was identified.

Section Rating :Forced Labor






Best Practices in Factory (if any) :Nil



Responsibility

NA

Deadli nes



3.Health and Safety Item Requirement no 3.1 Does the factory have a copy of valid laws and

regulation on health and safety or understand its requirements?

3.2 Is written health and safety policy posted and signed by top management?

3.3 Is safety committee established with members representing the various shifts, functions and levels?

3.4 Is a senior management representative for health & safety appointed?

3.5 Does the factory arrange health and safety training for new workers?

3.6 Are training and awareness programs on health and safety arranged regularly for all workers?

3.7 Are accidents reported and recorded?


valid law document about “health and safety”, and based on management interview, they understood its requirements.

Yes It was confirmed by onsite observation and workers interview.

Yes Based on management interview and workers interview, the factory established health and safety committee with members representing the various functions.

Yes Based on management interview, Mr. Li Junfeng and Mr. Xia Yan / factory managements were appointed responsible for health & safety.

Yes Based on workers interview and records review, the factory arranged training of health and safety for new workers. The latest training date was on Mar.14, 2012, and the training records were provided for review during the audit.

Yes Based on document review and management interview, the factory arranged health and safety training for all workers regularly, the latest time was Mar.14, 2012.

Yes Based on documents review, the factory provided accident/ injury / illness records with related illness log, clinic records and report for review during the audit.



Item Requirement no 3.8 Does the factory keep injury / illness records such as

daily injury and illness log, clinic records, injury statistics, illnesses report or any other safety statistics?

3.9 Are corrective actions taken to prevent recurrence of work related accidents?

3.10 Does the factory have valid fire inspection certificates issued by local fire service authority?

3.11 Does the factory have adequate number of fire extinguishers at each factory floor?

3.12 Does the number of fire extinguishers meet local legal requirements?

3.13 Are all fire extinguishers inspected and tested regularly and ready to use at all times?

3.14 Is an effective fire extinguishing system i.e. fire hydrant/fire hose or sprinkler installed at each factory floor and maintained properly?

Yes/No Comments /NA Yes Based on documents

review, the factory provided accident/ injury / illness records with related illness log, clinic records and report for review during the audit.

Yes Based on documents review, the corrective and preventive actions were available for accident reports during the audit.

Yes Based on documents review, the factory obtained Fire Safety Certificates for all the buildings issued by local bureau on Sep.26, 2011,

the No. was 驻公消验

[2011]第 0028 号.

Yes Based on onsite observation and management interview, there were 151 extinguishers and 73 hydrants, in addition, they were properly located and maintained with inspection records available per month, therefore it was acceptable per local law.

Yes Based on onsite observation and management interview, there were 151 extinguishers and 73 hydrants, in addition, they were properly located and maintained with inspection records available per month, therefore it was acceptable per local law.

Yes All fire extinguishers were checked once per month.

Yes Based on onsite observation, the fire extinguishers and fire hydrants were inspected monthly, the inspection records was available.



Item Requirement no 3.15 Are all fire extinguishing systems inspected and

maintained properly?

3.16 Is fire and hazard early warning system such as smoke detector installed and regularly tested?

3.17 Are documented fire drills conducted regularly at least twice a year?

3.18 Are fire exits and escape routes adequate at each factory floor?

3.19 Is any fire exit and escape route blocked or locked?

3.20 Are any slide doors used at the factory?

3.21 Are exits and fire exits identified with sign or indicator lamps?

3.22 Are adequate emergency lights installed at each factory floor?

3.23 Is the factory no more than 5 minutes away by fire engine from nearest fire station?

Yes/No Comments /NA Yes Based on onsite

observation, the fire extinguishers and fire hydrants were inspected monthly, the inspection records was available.

Yes No smoke detector installed. But the factory installed fire alarm system in production buildings as early warning system.

Yes Based on documents review and management interview, the factory conducted fire drill twice per year, the latest one was conducted in Oct.18, 2011 in factory and in Dec.20, 2011 in dormitory.

Yes Based onsite observation, there were at least 2 fire exits unlocked for each workshops, and there were escape routes available for each workshop during the audit.

No Based on onsite observation, fire exits and escape routes were unblocked and unlocked during the audit.

No No slide doors were used in the factory.

Yes Based on onsite observation, fire exit signs were available and easily identified during the audit.

Yes Based on onsite observation, emergency lightings were installed at each workshop during the audit.

Yes Based on management and workers interview, the factory was about 5 minutes away from the fire station.



Item Requirement no 3.24 Did any fire accident take place in the past 12

months at the factory?

3.25 Does the factory have valid inspection certificates for boilers, elevators, pressure vessels and other equipment per local regulation?

3.26 Are the operators of above-mentioned equipment trained and qualified per local regulation?

3.27 Are adequate guarding or devices installed for moving/rotating parts of machine, pulleys and belts or any other dangerous parts of machines?

3.28 Is any instruction emphasized to prohibit loose clothing, jewellery or long hair near moving machinery?

3.29 Are all electricians, welding operators and forklift drivers trained and qualified per local regulations?

3.30 Are electrical safety procedures implemented effectively to ensure safety precautions such as

grounding, discharging, and testing to be taken?

3.31 Are all the electrical wires installed in fully acceptable condition and adequately protected?

3.32 Are electrical installations are checked periodically and repairs carried out by competent electrician?

3.33 Is hot work permit procedure implemented for welding, cutting and open flame operation at the factory?

Yes/No Comments /NA No Based on management

and workers interview, no fire accident happened in the past 12 month at the factory.

NA Based onsite observation, there was no special equipment used in the factory.

NA Based onsite observation, there was no special equipment used in the factory.

No Based on-site review, it was identified that three workers did not use eye safety guards of high- speed sewing machines.

Remark: Sewing machines were equipped with machine guards and finger guards according to onsite observation.

Yes Based on site observation, such instructions emphasized to prohibit

loose clothing, jewellery or long hair near moving machinery were available at the factory.

Yes Based on documents review and management interview, there were two electricians in the factory, and the electricians had been trained and qualified per local law.

E.g. one certificate: T412801196711201139 and valid to Jul.15, 2015.

Yes The factory had electrical safety procedures.

Yes Electricians conducted monthly inspection and ensure safety precautions to be taken.

Yes It was confirmed by onsite observation.

NA It was noted that no hot work conducted in the factory.



Item Requirement no 3.34 Are all site buildings maintained in good condition in

both physical surface and structure?

3.35 Are dangerous/hazardous substances used or stored at the factory?

3.36 Are these substances safely and securely stored?

3.37 Are administration and engineering controls (reduced shift hours, ventilation fans and exhaust fans) introduced to reduce personal exposure?

3.38 Are appropriate personal protective equipment (PPE) such as goggles, glasses, gloves, earplug / muff, boots, or protective clothing provided at factory cost and in fully acceptable condition?

3.39 Is an air quality test done?

3.40 Is air quality test required by law?

3.41 Does the factory have a suitable working environment in respect of ventilation, temperature, lighting, cleanliness, and tidiness?

3.42 Does the factory arrange regular health examination for workers exposed to hazardous environment?

3.43 Are there adequate evidences confirming that the workers’ health is not affected by hazardous factors?

3.44 Does the factory have any occupational health inspection certificate issued by local government authority?


review, the factory obtained Registry Certificate for Acceptance Check for Construction Completion for all the buildings issued by local bureau on Aug.1, 2006.

NA Only machine oil was used in the factory. No dangerous/hazardous chemical material was identified during the audit.


Yes Ventilation fans were used in the factory; in addition, there was only one shift in the factory, administration arranged production according to local law and workers’ health.

Yes Workers wore suitable suits and hats according to onsite observation; and proper PPE were used in the factory, e.g. cutting workers worked with metal gloves.

NA Based on onsite view, no hazardous fumes existed in the factory, and it didn’t need to conduct air quality

testing.

NA No such requirement.

Yes Based on on-site observation, the ventilation, temperature, lighting etc were acceptable.

NA No hazardous working environment was identified in the factory.

NA No hazardous working environment was identified in the factory.

NA No such requirement by local government authority



Item Requirement no 3.45 Are adequate first aid kits located at each factory

floor and marked with signs?

3.46 Are adequate workers trained on first aid?

3.47 How many trained first aiders are at the factory?

3.48 Is an in-house clinic/first aid station established with competent doctor/first aider employed at the factory?

3.49 Is a nearby medical centre/hospital/clinic available to factory?

3.50 Is potable water accessible and adequate at each factory floor?

3.51 Are lavatory facilities accessible, clean and reasonable in number at each factory floor?

3.52 Do lavatory facilities meet or exceed local requirements?

3.53 Are toilets private and segregated for men and women?

3.54 Are washbasins and water taps available AND adequate?

3.55 Are the factory kitchen and canteen clean and hygienic with adequate facilities?

3.56 Are kitchen and canteen subject to local government licensing?

3.57 If yes to 3.56, does the factory have such a permit or license?

3.58 Are adequate evidences identified (such as health examination) that workers working in kitchen are suitable to food service?

Yes/No Comments /NA Yes First aid kits with well

maintained suppliers were available with clear signs at each workshop.

Yes 10 first aiders were trained with certificates available during the audit.

-- 10 first aiders were available in the factory.

No No in-house clinic/first aid station with competent doctor/first aider was available in the factory

Yes 2 minutes away from the factory.

Yes Portable water was provided to workers on each floor free of charge and workers could access at any time.

Yes Confirmed by workers interview and onsite observation.

Yes Meet local law requirement.

Yes Based on on-site observation, the toilets were private and segregated for men and women.

Yes Based on on-site observation, washbasins and water taps were adequate.

Yes Based on on-site observation, the kitchen and canteen area was clean and hygienic.

Yes The kitchen and canteen subject to local government licensing.

Yes The factory provided certificate for the canteen & kitchen in the factory.

豫卫食证字（2009）第

411700-0492 号 and valid

to June.21, 2013.

Yes 9 workers worked in kitchen with valid health certificates issued on Aug. 3, 2011.



Item Requirement no 3.59 Is there any food safety program established to

ensure all the food and stuffs purchased from reliable sources?

3.60 Is any pest control program established and implemented effectively?

3.61 What is the average dormitory space per worker? Does it meet with local norms and standards?

3.62 How many workers per room?

3.63 Does the space per worker meet local laws, or prevailing industry standards IF no local laws apply?

3.64 Is there adequate living space for each worker and meet the requirements of relevant local regulations?

3.65 Are recreation areas available at the dormitory?

3.66 Are kitchen facilities available in dormitory?

3.67 Are laundry facilities available in dormitory?

3.68 Is there an adequate supply of sanitary drinking water available to workers at adequate distance at dormitory?

3.69 Are there adequate toilets with hand basins available to workers at adequate distance at dormitory?

3.70 Are there adequate bathrooms available to workers at dormitory?

3.71 Are sanitary areas clean and hygienic with available washing facilities?

3.72 Are the dormitories clean, safe and well lit?

3.73 Are workers free to exit & re-enter dormitory freely?


review, food safety program had established to ensure all the food and stuffs purchased from reliable sources.

Yes Based on documents review, the pest control program was established and implemented effectively.

Yes Above 5 S.Q. meters per worker It met local law requirement.

- 4~5 workers shared one room (about 25 S.Q. meters)

Yes Acceptable.

Yes Above 5 S.Q. meters per worker It met local law requirement.

Yes The factory established one sports area for workers in the yard.

No No kitchen facilities available in the dormitory.

Yes Base on the onsite observation, it was acceptable.


Yes Base on the onsite observation, toilets with hand basins were available per floor.

Yes There were two bathroom separated by gender available in the dormitory.

Yes Based on on-site observation, the sanitary areas clean and hygienic with available washing facilities.


Yes Confirmed by workers interview.



Item Requirement no 3.74 Are any curfew hours set?

3.75 What are the curfew hours?

3.76 Are adequate security measures provided to protect workers at dormitory?

3.77 Does the dormitory buildings appear structurally sound and in acceptable repair?

3.78 Are dormitory exits unblocked and unlocked for emergency evacuation?

3.79 Are written dormitory rules posted?

3.80 Are the rules written in the language(s) the employees understand?

3.81 Are fire emergency evacuation plans posted at dormitory and understood by all workers?

3.82 Is any workers’ dormitory located in the building of production and/or warehouse?

Yes/No Comments /NA No No curfew hours set in

the dormitory.

NA No curfew hours set in the dormitory.

Yes The security guards were available.

Yes The factory obtained Registry Certificate for Acceptance Check for Construction Completion for the dormitory building issued by local bureau on Aug.1, 2006, and it was acceptable for structure according to onsite observation.

Yes Base on the onsite observation, all dormitory exits were unblocked and unlocked.

Yes Posted on the walls.

Yes Local language.

Yes Base on the onsite observation, fire emergency evacuation plans was posted at dormitory.

No The dormitory building was away from the manufacturing buildings and office building.

Section Rating :Health & Safety




Legal/Code Non-conformance :

Based on-site review, it was identified that three workers did not use eye safety guards of high-speed

sewing machines.

It violated the Article 2.2.1 of Machinery Safety Guard Requirement (GB 8196-87).

The design of safeguards shall be reasonable and prevent any part of body from entering dangerous

area.



Best Practices in Factory (if any) : Nil

Corrective Actions confirmed by factory / Agent : NA

Responsibility

NA

Deadl ines



4. Freedom of Association Item no Requirement

4.1 Does the factory have a copy of valid laws and regulations on trade union and freedom of association or understand its requirements?

4.2 Is workers’ right to form and join free trade unions and workers’ associations acknowledged by the management and workers?

4.3 Is there a trade union formed at the factory?

4.4 If yes to 4.3, is union membership voluntary?

4.5 If yes to 4.3, do workers elect their own representatives / spokesperson(s)?

4.6 If Yes to 4.5, specify name and title.

4.7 Is there a workers’ association formed in the factory?

4.8 If Yes to 4.7 do workers elect their own representatives / spokesperson?

4.9 If Yes to 4.8, specify name and title

4.10 Do worker representatives have access to members at workplace?

4.11 Is any evidence identified on disparate treatment between union/non-union workers?

4.12 Does the factory have a written policy and procedure to protect worker committee members, union supporters and/or Union representatives from retaliation?

Yes/No Comments /NA Yes The factory management

understood the relative requirement and adopted open attitude to the freedom of association.

Yes Based on the management and worker interview, workers had right to form and join free trade unions and workers’ associations.

Yes One trade union was formed in the factory during the audit, and the chairman was Mr Zhao Shengkun.

Yes Based on workers and management interview, they were voluntary to join the union.

Yes One trade union was formed in the facility during the audit, and there were 9 union members freely selected

Yes Such as Mr. Li Junfeng / H&S representative etc.

Yes One employees’ association was formed in the facility during the audit, and there were 9 workers representatives freely selected

Yes One employees’ association was formed in the facility during the audit, and there were 9 workers representatives freely selected

Yes Such as Mr. Wang Jianping, Mr. Xie Xinping and Ms, Cao Li/ workers representatives etc.

Yes Confirmed by interview representative.

No Confirmed by the document review and worker interview.

Yes Confirmed by the document review and worker interview.



Item no Requirement

4.13 If restricted by law or if there is no formal workers union / association, does the factory facilitate parallel means such as worker committee?

4.14 For non-unionised factory, are fair and effective mechanisms to ventilate and resolve grievances of workers in place?

4.15 Does the factory allow/permit workers to choose a

representative from their own group to facilitate communication with senior manager?

4.16 Does the factory encourage workers to formally join and carry out activities like complaints & resolutions of workers’ grievances, health & safety related activities, worker - management activities on productivity, etc.?

4.17 Has the factory experienced a strike, walkout, demonstration, or other significant conflict with employees within the last 12 months?

4.18 Do interviews with workers and representative(s) confirm the above findings?

Yes/No Comments /NA Yes The Chinese constitution

guarantees freedom of association; however, the trade union act prevents the establishment of trade unions independent of the sole official trade union-the all china federation of the trade unions(ACFTU)

In the factory, the management facilitated parallel means such as the director collected the workers’ suggestion.

NA There was a trade union in the factory. Based on workers interview, they could complain to the supervisors and managers directly or by suggestion box.

Yes Confirmed by interview with workers.

Yes Based on worker interviews, workers could talk it directly to their representatives, supervisor or manager without any restriction.

No No negative evidence was identified during audit.

Yes All information was confirmed by workers interview.

Section Rating :Freedom of Association







Best Practices in Factory (if any) :Nil


Responsibility

NA

Deadl ines

5. Discrimination Item Requirement no 5.1 Does the factory have a copy of valid laws and

regulations on non-discrimination or understand its requirements?

5.2 Is any evidence identified on discrimination in employment, promotion, compensation, welfare, dismissal and retirement, etc.?

5.3 Does the worker employment reflect local ethnic/religious breakdown - no domination by one group?

5.4 Do the supervisors in the facility reflect the ethnic/religious breakdown of the worker population?

5.5 Do employment records show any evidence of discrimination - patterns of dismissal?

5.6 Do workers have access to and are familiar with procedures for filing complaints about discrimination?

5.7 Is equal salary for equal work for male and female workers implemented at the factory?

5.8 Is there any evidence of sexual harassment, especially of young female workers?

5.9 Is any evidence identified on discrimination through interview with workers, individual and collective?


understood the requirement of non- discrimination.

No Based on the checking of recruitment, payroll, attendance record etc, no such evidence was identified.




Yes Workers could complain to their supervisors or top manager directly.

Yes Confirmed by the payrolls review.





Section Rating :Discrimination





Best Practices in Factory (if any) :Nil Corrective Actions confirmed by factory / Agent :NA

Responsibility

NA

Deadl ines



6. Disciplinary Practices Item Requirement no 6.1 Does the factory have a copy of valid laws and

regulations on disciplinary practices or understand its requirements?

6.2 Does the factory have documented disciplinary rules?

6.3 Are the disciplinary rules communicated to all workers?

6.4 Are the disciplinary rules fair, reasonable and legal or validated by local government authority?

6.5 Does any evidence exist for mental / physical coercion?

6.6 Is there any evidence of deductions from pay for non- fulfilling production target or sickness with doctor’s certificate or note?

6.7 Are the worker’s disciplinary actions recorded?

6.8 Do workers have access to appeal in case of infractions / breaking of rules.

6.9 Are deductions made from pay for infractions / breaking of rules?

6.10 If deductions are made from pay for infractions / breaking of rules, do they reduce pay to less than minimum wage?

6.11 Are deductions from pay for infractions / breaking of rules legal?

6.12 If deductions from pay for infractions / breaking of rules are made, how is the money used?

6.13 Is the factory free of any citation, penalty from violation of laws and regulations in past 12 month?


had a copy of valid laws and regulations on disciplinary practices and understood the requirement.

Yes Confirmed by documents review.

Yes The disciplinary rules were written in the handbook, and explained to the workers when entered factory.

Yes No negative evidence was identified during audit.


No No deduction for non- fulfilling production target or sickness with doctor’s certificate or note.

Yes Confirmed by records review.

Yes Based on the interview with workers, worker could appeal to supervisor, team leader or top manager directly.

No No deductions made from pay for infractions / breaking of rules.

NA No such deduction was identified during the audit.

No Based on workers interview, no deduction for infractions / breaking of rules legal was identified during the audit.

NA Based on workers interview, no deduction for infractions / breaking of rules legal was identified during the audit.

NA No such information was obtained from the factory.



Item Requirement Yes/No Comments no /NA 6.14 Do interviews with workers confirm above findings? Yes It was confirmed by

workers interview.

Section Rating :Disciplinary Practics





Best Practices in Factory (if any) : Nil


Responsibility

NA

Deadl ines

7. Working Hours Item Requirement Yes/No Comments no /NA

7.1 Does the factory have a copy of valid laws and Yes The factory had a copy regulations on working hours or understand its of valid laws and requirements? regulations on working

hours and understood its

requirements. 7.2 How many regular hours are permitted by local law --- 8 hours per day.

per day? (This does NOT include overtime)



7.3 How many regular hours are permitted by local law per week? (This does NOT include overtime)

7.4 How many regular hours are permitted by local law per month? (This does NOT include overtime)

7.5 How many overtime hours are permitted by local law per day?

7.6 How many overtime hours are permitted by local law per week?

7.7 How many overtime hours are permitted by local law per month?

7.8 Does the factory have a written policy on working hours, rest and vacations?

7.9 Does the factory communicate the policy on working hours, rest and vacations to all workers?

7.10 Does the working hours policy meet local laws and regulations?

7.11 Are the working hours of individual workers recorded by time card or attendance record?

7.12 What are the factory’s official scheduled working hours per week?

7.13 Do the factory’s official scheduled working hours per week meet local legal requirements?

7.14 What is the factory’s official scheduled working hours per month?

7.15 Do the factory’s official scheduled working hours per month meet local legal requirements?

7.16 Do the workers have at least one day (24 consecutive hours) off in seven days?

7.17 What is the maximum number of working hours (including overtime) of individual workers per day?

--- 40 hours per week.

NA No such legal requirement.

--- Not exceed 3 hours overtime per day.


--- Not exceed 36 hours overtime per month.

Yes Written policy on working hours, rest and vacations were established. The employees worked 8 hours per day, 5 days per week as normal working time.

Yes The policy was written in handbook and explained to workers when they entered factory.

Yes The employees worked 8 hours per day, 5 days per week as normal working time.

Yes The workers were recorded by electric card.

--- 8 hours per day and 5 days per week as normal working time.

Yes It met local law requirement.

NA Not defined.


Yes Based on review the attendance records and interview with workers, all workers had one day off per seven days.

--- 10 hours per day.



7.18 Does the daily maximum number of working hours (including overtime) of individual workers meet local legal requirements

7.19 What is the maximum number of working hours (including overtime) of individual workers per week?

7.20 Does the weekly maximum number of working hours (including overtime) of individual workers meet local legal requirements?

7.21 What is the maximum number of working hours (including overtime) of individual workers per month?

7.22 Does the monthly maximum number of working hours (including overtime) of individual workers meet local legal requirements?

7.23 What is the average number of working hours (including overtime) of individual workers per day?

7.24 Does the average number of working hours (including overtime) per day of individual workers meet local legal requirements?

7.25 What is the average number of working hours (including overtime) per week of individual workers?

7.26 Does the average number of working hours of individual workers (including overtime) per week meet local legal requirements?

7.27 What is the average number of working hours (including overtime) per month of individual workers?

7.28 Does the average number of working hours of individual workers (including overtime) per month meet local legal requirements?

7.29 What is the average number of overtime hours worked by individual workers per day?

7.30 What is the maximum number of overtime hours worked by individual workers per day?

7.31 What is the average number of overtime hours worked by individual workers per week?

7.32 What is the maximum number of overtime hours worked by individual workers per week?

7.33 What is the average number of overtime hours worked by individual workers per month?

7.34 What is the maximum number of overtime hours worked by individual workers per month?

NA Not defined by law.



--- 248 hours per month (May, 2011).


--- About 9 hours per day.


--- About 50 hours per week.


--- About 197 hours.


--- About 1 hour per day.

--- 2 hours per day.

--- About 10 hours.


--- About 39 hours per month.

--- 72 hours per month.



7.35 Do workers have time for meal breaks?

7.36 Do workers have time for rest breaks?

7.37 Are there local legal requirements for meal breaks?

7.38 Does the factory provide the legally required meal breaks?

7.39 Are there local legal requirements for rest breaks?

7.40 Does the factory provide the legally required rest breaks?

7.41 Do local legal requirements regarding extra overtime hours require approval or permit?

7.42 Does the factory have any valid written approval or permit on extra overtime hours from local labour authority?

7.43 Do workers work overtime voluntarily?

7.44 Is any disciplinary action taken if workers refuse overtime?

Yes 2 hours meal breaks for summer period and 1.5 hours for winter period.

No No rest break was provided during the scheduled working time.





Yes It was required by local legal requirements from Dec.9, 2010 to Dec.8, 2011.

Yes The factory had obtained consolidate working hours system approval from the local authority, with the valid period from Dec.9, 2010 to Dec.8, 2011, and calculated by one year as a cycle. Based on sample checking the attendance records from Dec. 2010 to the audit day provided by the factory, max. total working hour was 2430 hours records from Dec.9, 2010 to Dec.8, 2011 which were not exceed the approval limit 2432 hours.

Yes Workers overtime voluntarily according to workers interview.

No No disciplinary action if workers refused overtime was identified during the audit.

Section Rating :Working Hours




Legal/Code Non-conformance : Based on the attendance records from Mar, 2011 to the audit day review, it was noted that 2 out 22 workers’ the maximum overtime hours exceeded 36 hours per month only in Mar, 2012 and max. OT hours were 40 hours. Remark: The factory explained that the factory was going to apply for Aggregate Working Hours System Approval.

It violated that Lululemon athletica code of conduct: HOURS OF WORK AND OVERTIME and China Labor

Law, Article 41 Lululemon athletica code of conduct: HOURS OF WORK AND OVERTIME

Workers shall not be required to work more than 60 hours per week, including overtime, except in extraordinary circumstances. Local standards will apply in countries where the maximum workweek is less. Workers shall be entitled to at least one day off in every seven-day period. In accordance with country laws, employees shall be compensated for overtime hours at a premium above their regular hourly rate. Employer must keep complete and accurate employee work and pay records. China Labor Law, Article 41

The employing unit may extend working hours due to the requirements of its production or business after consultation with the trade union and laborers, but the extended working hour for a day shall generally not exceed one hour; if such extension is called for due to special reasons, the extended hours shall not exceed three hours a day under the condition that the health of laborers is guaranteed. However, the total extension in a month shall not exceed thirty six hours.



Best practices in factory : Nil

Corrective Actions confirmed by factory / Agent : Nil

Responsibility

Nil

Deadl ines

8. Compensation Item Requirement Yes/No Comments no /NA 8.1 Does the factory have a copy of valid laws and Yes The factory had a copy

regulations on compensation and benefits or of valid laws and understand its requirements? regulations on

compensation and

benefits and

understood its

requirements.



Item Requirement no 8.2 Does the factory have written policy on

compensation and benefits and communicate to all workers?

8.3 Does the compensation and benefits policy meet local laws and regulations on working hours?

8.4 What are the paid minimum wages at the factory?

8.5 Do all workers’ wages meet local minimum wages?(including trainees / apprentices / workers in probation period)


review and workers interview, the factory had written policy on compensation and benefits and communicated this to all workers.

Yes Based on documents review, it was confirmed that the compensation and benefits policy met local laws and regulations.

-- Based on worker interview and payrolls review, all workers were paid by hourly rate every month, and it was confirmed that the minimum wage in the factory was RMB 4.5 per hour before Oct.1, 2011 and above RMB 6 per hour since Oct.1, 2011

which was no less than the legal local minimum wage standard.

Remark: The legal local minimum wage was RMB 700 per month (RMB 4.02 per hour) before Oct.1, 2011 and RMB 950 per month (RMB 5.46 per hour) since Oct.1, 2011.

Yes The factory provided payroll records from Mar, 2011 to Feb, 2012 for review during the audit. Based on worker interview and payrolls review, all workers were paid by hourly rate every month, and it was confirmed that the minimum wage in the factory was RMB 4.5 per hour before Oct.1, 2011 and above RMB 6 per hour since Oct.1, 2011 which was no less than the legal local minimum wage standard.



Item Requirement Yes/No Comments no /NA 8.6 Is the compensation calculation method Yes Workers knew how to

communicated to all workers and understood by calculate wages based them clearly? on workers’ interview.

8.7 Are the workers paid the legally required overtime Yes Based on sampled

rates and wages? payrolls from Mar, 2011

to Feb, 2012 provided by the factory and confirmed with workers interview and contracts review, the factory provided 150% of regular pay rate for OT hours on normal working days and 200% on rest days which met legal requirements. No overtime was arranged on statutory holidays. It met the legal requirement.

8.8 Is all compensation paid to workers themselves in Yes Based on management cash/cheque/direct to bank or any other method and workers interview, convenient to workers? it was confirmed all

workers were paid by bank transfer.

8.9 Do workers receive correctly calculated wages per Yes Based on sampled

local legal requirements? payrolls from Mar, 2011 to Feb, 2012 provided by the factory and confirmed with workers interview and contracts review, the factory provided 150% of regular pay rate for OT hours on normal working days and 200% on rest days which met legal requirements. No overtime was arranged on statutory

holidays. It met the legal

requirement. In addition, the factory paid workers with annual leave and compensated workers of normal paid on rested holidays.

And it was confirmed by

workers interview. 8.10 Are wage slips given to workers and they Yes Confirmed by workers

understand the wage-break up? interviews.

8.11 Is there a sufficient system to let workers check/ Yes Workers could check verify their wages? their wages with

accountant.



Item Requirement Yes/No Comments no /NA 8.12 Are workers’ wages deducted for any reason other No No such negative

than tax, social security? evidence was identified during the audit.

8.13 Are these deductions fair, reasonable and legal? NA No such negative evidence was identified during the audit.

8.14 Is the payment frequency legal? Yes Workers got wages at the 20th of each following month.

8.15 Does the factory withhold workers’ wages for any No No withholding was reason other than usual government requirements? identified during the

audit.

8.16 Is extra work to fulfill production target demanded No No such evidence was without payment? identified during the

audit.

8.17 Is rework paid? Yes Confirmed by workers Interview.

8.18 Is any evidence identified on payment in kind, e.g. No No such negative food or products? evidence was identified

during the audit.

8.19 Are all workers provided with social insurance per Yes Based on review of local legal requirements? social insurance

payment receipts, it

was noted that the factory provided proper social insurances to all workers.

Section Rating :Compensation





Best practices in factory : Nil




Responsibility

NA

Deadl ines

9. Environment Item Requirement Yes/No/NA Comments No

9.1 Does the factory have all permits and licenses Yes The factory obtained required by local laws or regulations? Environment

Assessment Report on Nov.23, 2005.

9.2 Does the factory generate wastewater? Yes Living wastewater was generated in the factory.

9.3 Where is wastewater discharged? Yes The wastewater was discharged to Industrial Zone wastewater pipe networks per EIA report.

9.4 Is wastewater treated by the factory before NA Pls. refer to 9.3. discharge? No need to take any

treatment before

discharge according to

Environment Assessment Report.

9.5 Is the factory in compliance with local law or Yes The wastewater was regulation regarding wastewater discharge? discharged to Industrial

Zone wastewater pipe networks. And the wastewater discharge met the standards based EIA report.

9.6 Does the factory have a Waste Management Yes The factory Plan? implemented the waste

management plan.

9.7 Does the factory keep records of waste handling Yes The waste handling and and disposal? disposal records were

maintained in the

factory. 9.8 How does the facility dispose of waste? Yes Solid waste in the

factory mainly included household waste and scraps. For household waste and scraps, the factory subcontracted to the administrative

department of sanitation.



9.9 Are dangerous/hazardous substances used or stored at the factory?

9.10 Are these substances safely and securely stored?

9.11 Does the factory maintain a written record of all use and movement of hazardous materials?

9.12 How are hazardous materials disposed of after use?

9.13 Are relevant employees trained in the safe use, handling, and disposal of hazardous materials?

9.14 When did the last training take place?

9.15 Is the factory compliant with local/national law?

9.16 Have there been any notices of deficiencies issued by government agencies in the past year? If, Yes, explain

No No dangerous / hazardous materials were used in the factory. For machine oil, the factory bought them from qualified suppliers.


NA No dangerous/hazardous materials were used in the factory.




Yes The factory obtained Environment Assessment Report and disposed scraps according to EIA report.

No Based on documents review, no such case was happened.

Section Rating : Environment

Legal /Code Observations Fully Non-conformance (Need Improvement) Acceptable




Observation (Need Improvement) : Nil

Additional Comments : Nil

Best practices in factory: Nil


Responsibility Deadlines

NA



Attachment- Photo Report

Description: Factory gate and name Description: Office building

Description: Production buildings Description: Dormitory, kitchen and canteen

building

Description: Raw material warehouse Description: Cutting area

Version:V1.0 Page 38of 38


-- End Of Report--

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