California Supply Chain Act
On 1 January 2012, the California Transparency in Supply Chains Act of 2010 went into effect in the State of California, USA. This law was designed to increase the amount of information made available by manufacturers and retailers regarding their efforts to address the issue of slavery and human trafficking, thereby allowing consumers to make better, more informed choices regarding the products they buy and the companies they choose to support.
Swarovski Crystal Business (Swarovski) is opposed to slavery and human trafficking and defines its basic principles to conduct business in a lawful and ethical manner and to support the right of all individuals to be free from slavery and any kind of forced labor in the workplace.
Swarovski has adopted a Supplier Code of Conduct aligned with the UN Global Compact’s Principles for human rights, labor and the environment, outlining what is expected of our suppliers and contractors. Swarovski expects suppliers to fully obey all national laws and regulations applicable in the country and other governmental authorities of any country in which they do business, and to treat the workforce fairly and with respect. To ensure suppliers respect and enforce our company standards, we include a clause in the commercial agreement governing our contractual relationship with suppliers, which stipulates that our suppliers must abide by our Supplier code of Conduct and with all applicable laws and regulations, including national and international laws prohibiting any kind of forced and bonded labour (such as slavery and human trafficking).
Through our Responsible Sourcing Initiative (RSI) established in 2014, we are requiring our suppliers of finished goods to adhere to the tenets of our Supplier Code of Conduct by asking our suppliers within all our direct spend procurement categories (those providing goods that feed into our end products) to sign and adhere to the Code when entering a business relation with us. In a second step, we identify through a risk assessment select suppliers that should be in the scope of the RSI. Generally, we classify suppliers that produce in low or middle-income countries as more at risk to forced labor and other bad labor practices. Further, we then monitor the selected suppliers’ approach to improving labour conditions by means of a third party audit (such as the Responsible Jewellery Council (‘RJC’), Sedex Members Ethical Trade Audit (‘SMETA’) and Social Accountability International’s SA8000 standards), or our own internal labour assessment (based on the SMETA standard), which our Corporate Social Responsibility (‘CSR’) team conducts. We conduct follow-up audits in dependence of the result between 6 to 18 months after of the initial audit.
Swarovski may audit certain of its approved suppliers to monitor compliance with the Supplier Code of Conduct and reserves the right to terminate the business relationship if violations of the law or basic international principles related to labor standards or ethical business practice become apparent. In particular, Swarovski has initiated third-party audits of select suppliers in recent years through the implementation of the RSI (explained above under verification). Where concerns related to the Supplier Code of Conduct or applicable standard have been identified, Swarovski has held those suppliers accountable through dialogue and follow-up audits.
All our owned factories in Austria, Serbia, Thailand, India and Vietnam, which produce the majority of our products, were audited against the SMETA or an equivalent international recognized standard by third party-party auditors. Swarovski does not disclose the specific results of its audits. The audits may be announced or unannounced and are conducted in dependence of the respective standard’s re-audit cycle.
Swarovski is committed to continuously work to expand and improve its RSI with the goal of bringing all of its suppliers into the scope of RSI audits.
Swarovski, through its involvement in the RJC, also seeks to ensure compliance with the RJC’s standards relating to slavery and human trafficking. The RJC was established in 2005 to promote responsible ethical sourcing, human rights, social and environmental practices in the gold, platinum and diamond supply chains. The RJC’s certification process is rigorous, including independent, third-party audits regarding the member’s compliance with human rights standards. In 2015, both the Swarovski Gemstones Business and our US-based personalized jewellery business unit, Chamilia were audited by an accredited third-party to verify compliance with the RJC’s Code of Practices, thereby obtaining RJC certification for three years. Additional information on the RJC may be obtained here.
Through the Responsible Sourcing Initiative, our program to monitor working conditions among suppliers, we recognize, and encourage, suppliers to seek RJC and/or SA8000 certifications. However, as we strive to minimize duplication of audits and certification in factories, we let our suppliers choose their own approach.
Sustainability within Swarovski is supported at the highest level – by our Executive Board, all of whom are descendants of our founder Daniel Swarovski. The VP of Corporate Sustainability and Social Responsibility manages our global Sustainability team, which is tasked with putting our Sustainability strategy into practice. The team collaborates with colleagues across the business, helping them to integrate sustainability into their activities by providing expertise on relevant issues and delivering projects to complement their aims and implement corrective actions.
Another line of defence and structure in our corporate governance is our Internal Audit function, led by a VP for Internal Audit and Compliance. The VP reports directly to the Audit Committee on a periodic basis and he has an independent view on risks, compliance and integrity topics. The VP leads a global team who support him in this area. Additionally, we also have our Integrity Charter, which defines among others how Swarovski shall interact with its employees, its suppliers and their workers and how to conduct our purchasing efforts with integrity and transparency.
Swarovski has created internal training material to help introduce the RSI to the relevant procurement employees. Our CSR team is constantly working with procurement to advance the RSI, therefore the degree of collaboration is high and anti-slavery risks can be proactively managed. In addition, the CSR team provides also advisory services to its suppliers in order to strengthen our relationships and build more sustainable capacities within the factories of our suppliers.
Our own factories receive regular training and constant advice by various experts in dependence on their needs. For instance, as part of our commitment to the RJC, we have developed or strengthened monitoring solutions and training programs for our Gemstones Business and our US-based personalized jewellery business, Chamilia. Similarly, we train and constantly support our other factories to ensure compliance with their respective requirements.
For more information on Swarovski’s commitment to eradicate and prevent slavery and trafficking in its supply chains, visit the Responsible Supply Chain page of our Sustainability Report.
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