ETHICAL SOURCING REPORT 2021
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ETHICAL SOURCING REPORT 2021
2
CONTENTS
INTRODUCTION APPENDICES
04. CEO introduction 22. 2019 – 2020 KPI table
05. Programme at a glance 23. Factory policy poster
06. Top 20 source countries 24. Apparel tier 1 factory list
2020 SUMMARY 26. Apparel tier 2 factory list
08. 2020 summary 36. Apparel brand list
10. Her Project updates 37. Other categories factory list
Getting the most from this report 12. COVID-19 updates 49. Country wage & working hour table
A brief overview of our programme and progress in 2020
can be viewed on pages 5 and 8. Our key areas of focus 13. Responding to forced labour risks
and achievements can be found on pages 10 to 20.
SUSTAINABLE MATERIALS
Finally, the appendices from page 22 reveal performance
trends over the past two years, and feature our factory 16. Better Cotton Initiative
policy poster, brand and factory lists and source country
wage and working hour data.
17. Forest Stewardship Council
OUR POLICY IN PRACTICE
19. Policy in practice
ETHICAL SOURCING REPORT 2021
INTRODUCTION. ETHICAL SOURCING REPORT 2021
4
CEO’S INTRODUCTION.
APPENDICES
programme. I believe, given our scale and challenges and achievements to date,
POLICY IN PRACTICE
diversity, this is the leading programme as well the road ahead. We invite both
of its kind within the New Zealand retail your encouragement and suggestions for Ethical Sourcing is just one programme
sector. improvement. within The Warehouse’s suite of
“Sustainable & affordable” initiatives.
Within The Warehouse Group’s 2020 Finally, I want to express my sincere Sustainable & affordable is The
Annual Report, I pledged that COVID-19 gratitude to our ethical sourcing Warehouse’s guiding statement and
will not slow down our commitment specialists and their colleagues within branding device representing our
to becoming one of New Zealand’s our 200 person strong sourcing team. aspiration to become one of New Zealand’s
SUSTAINABLE MATERIALS
most sustainable companies while The results in this report are testament most sustainable companies while still
continuing to deliver great value to our to their hard work and strong supplier delivering great value to our customers.
customers. Ethical Sourcing is an collaborations through a unique and
indispensable element of this, along with challenging year.
our parallel commitments to climate
change action and carbon neutrality, Kia Kaha.
community engagement, waste reduction
As l look back on the extraordinary and sustainable procurement – to name Nick Grayston
disruption and challenges that COVID-19 a few. Group Chief Executive Officer
2020 SUMMARY
brought to our business in 2020, The Warehouse Group
I’m really proud to tell you that the Ethical and sustainable sourcing is
momentum of The Warehouse’s Ethical a complex sector and while we have
Sourcing Programme has continued made considerable progress through
unabated. our programme, there is still a long way
to go as we look for new ways to drive
In fact, as I hope you will see in this positive change in our supply chain.
INTRODUCTION
report, in many ways 2020 was a The goal of this report is to provide
benchmark year for the evolution of our full transparency about our journey,
ETHICAL SOURCING REPORT 2021
5
PROGRAMME AT A GLANCE.
APPENDICES
170
POLICY IN PRACTICE
In 2020 The Warehouse’s private label
products were sourced from 489 factories 1
vendor responsibility. The Warehouse’s own
internal ethical sourcing experts delivered Newly qualified
208 88%
Audits Audit
factories
47 transparency
primarily located in China, Bangladesh, 23 supplier responsibility trainings to
India, Vietnam, Malaysia, and Pakistan.2 our largest vendors and trading houses,
Worker feedback and
86% 98%
About 246,000 workers were involved enabling them to take greater responsibility
in this production. 170 new factories for factory standards. helpline trainings
Au
(67% of applicants) qualified to enter our di Average overall Production
ice ta
n audit score traceability
supply chain via third party Labour and Our due diligence and investigative o
2200 uction ba
v
Environmental Audits. work revealed one case of underage
d
d
SUSTAINABLE MATERIALS
o se
er
r
du
rk
labour and 22 instances of unauthorised
P
ed
Worker
Wo
Our audit transparency rating – an subcontracting.
interviewees
ilig
important indicator of the reliability of
enc
audit disclosures – improved to 88%. 208 In such zero tolerance instances we always
e
audits were completed in the year. Our follow a strict protocol to protect the
qualification processes and the linkage of
order data to production sources means
welfare of any underage worker and apply
commercial disciplines and penalties,
489 Active
factories
that we can currently trace 98% of our including business termination.
1 268
li e r
246,000
product range to a qualified factory. We
continue to place strong emphasis on the More than 2000 workers were interviewed
en upp
Ze r
execution of any corrective action plans by our own staff or third parties to ensure Underage Corrective action
2020 SUMMARY
worker findings Production plan oversight
ot
pm d s
t
generated by external audits. 268 such we were integrating their voices into any
workers
ol
an
plans were being tracked to completion corrective actions we asked factories to n
er
nc o
t el o
i
a
by our internal team. In support of these undertake. Our team presented a new e fi a
improvements, factories completed over
2000 e–Learning lessons on topics such
training on worker feedback and helpline
mechanisms to 47 leading vendors and
22 nd
in g
s Re m
i
e d d ev 2037 23
Unauthorised Elearning Supplier
as audit preparedness, working hour factories. subcontracting lessons responsibility
control, transparency and ethics, and findings trainings
INTRODUCTION
1. Factories with orders >USD 50K in the period. 2. See supply chain map on page 6 and factory lists pages 24.
ETHICAL SOURCING REPORT 20216
TOP 20 SOURCE
APPENDICES
COUNTRIES. 0.96%
POLICY IN PRACTICE
UK
2.36% 65.43%
USA China
The Warehouse’s supply chain China remains the largest source
comprises a network of country by a big margin with its 1.91%
India
New Zealand and Australian based unparalleled category mix, integrated
agents and suppliers, and our own raw material and component supply
direct sourcing offices in Asia. Our
merchandise consists of both national
chain and efficient logistics and
infrastructure. We are developing
5.15%
SUSTAINABLE MATERIALS
Bangladesh
and international brands, and The new sources in India, Bangladesh and 8.14%
Warehouse’s own private label ranges. Pakistan especially in apparel and NZ Made
home textiles.
In 2020 about 47% of sales were
derived from our own branded
merchandise. Our ethical sourcing
New Zealand remains an important
source country for food, beverage and
Sourcing office staff members 5.94%
Shanghai 120 Dhaka 23 Australia
policy and all relevant New Zealand everyday grocery items. Delhi 12 Auckland 35
laws and regulations apply to all
suppliers. The assurance mechanisms
described in this report are deployed
only to our private label suppliers
2020 SUMMARY
Source countries Share of Sales Source countries Share of Sales Source countries Share of Sales
and their Tier 1 (final manufacture)
factories.1
China 65.43% Thailand 1.16% Italy 0.44%
The accompanying map and table New Zealand Made 8.14% United Kingdom 0.96% Switzerland 0.38%
illustrates the top 20 source countries Australia 5.94% Vietnam 0.89% Poland 0.34%
for all products sold in The Warehouse,
Bangladesh 5.15% Malaysia 0.75% Indonesia 0.34%
and the location of our direct sourcing
teams including quality and ethical United States of America 2.36% Pakistan 0.60% Belgium 0.24%
INTRODUCTION
sourcing specialists. India 1.91% Germany 0.52% Canada 0.21%
New Zealand Assembled 1.90% France 0.47%
1. A list of these factories can be found on pages 24-37.
ETHICAL SOURCING REPORT 20217 2020 SUMMARY. ETHICAL SOURCING REPORT 2021
APPENDICES
POLICY IN PRACTICE 8
Despite COVID-19 disruptions to our overall at 56% over 54 plans - reflecting for close is the challenge posed by the very
Chinese supply chain early in 2020, and most part persistence of high average weekly small percentage of factories at the tail of
later elsewhere in Asia, activities reached working hours in Bangladesh. our supply chain with low order volumes
an all time high and helped to deliver very Underpinning these tangible improvements – usually small factories that have some
promising outcomes for our factories. is all the supplier training and development unique capability. The cost of an external
work undertaken by our internal teams in audit is too high for this kind of supplier -
Our 2020 new factory entrant numbers China and South Asia. This includes factory given the low value of their business with us.
were down year-on-year as audit activity enrollment in our e–Learning curriculum, For this reason previously they would not
paused due to COVID-19 lockdowns. We supplier workshops both in person and have had any kind of formal assessment. For
SUSTAINABLE MATERIALS
took special care to ensure that worker rights virtually, and factory visits. In some cases, these cases we have adapted our audit into a
were not comprised by COVID-19 by regular multiple forms of engagement are needed to simplified self-assessment which we require
surveys of factories in India and Bangladesh create the supplier motivation and capability them to complete along with some e–
on their COVID-19 lockdown status, the needed to effect change. Learning lessons. Our internal team review
2020
maintenance of their payroll obligations, and these self-assessments and randomly select
their adherence to industry COVID-19 safety An opportunity we had identified in our some candidates for an onsite assessment by
protocols. training programme was a lack of emphasis our own team. In
this way we at least have some insight into
SUMMARY.
on worker grievance and feedback channels.
We strengthened our emphasis on ensuring We remedied this by getting 47 of our leading standards at this level of our supply chain and
any corrective action plans are appropriately vendors to complete an online course on can respond to any labor risks identified.
implemented in factories that returned this topic and an attend a series of face-to-
2020 SUMMARY
negative findings in our audits. These action face trainings. An adjunct to this was this Rewarding and impactful as this development
plans are how we leverage the time and distribution of an updated policy poster work is, it is also necessary to maintain some
energy that audits involve, into tangible to all factories, which included for the first enforcement and disciplinary tension with our
improvements for workers. To ensure the time an independent contact number and supply chain. Our commercial terms include
Our aim is to ensure customers can have confidence our
plans are making an impact, we track the QR code workers can use to reach out to us penalties for breaches of our integrity policy.
products have been ethically sourced. We do this by focusing
correction of any negative findings in relation directly should they choose. We then updated Our risk-based investigations revealed 22
on the qualification of new factories, ongoing monitoring and to working hours, rest days and pay our audit protocol, instructing auditors to instances of unauthorised subcontracting
training for factories and vendors, identifying and supporting entitlements. In China last year we evidenced validate that workers were indeed aware of in 2020 with attendant penalties and other
INTRODUCTION
joint industry initiatives such as Her Project and the Better a 91% correction rate of these issues in the these redress channels. consequences.
Cotton Initiative, and the provision of transparent reporting to 214 plans we were monitoring. In Bangladesh,
India and Pakistan our success rate was lower Another gap in our coverage we strove to
our teams, leaders and public.
ETHICAL SOURCING REPORT 2021APPENDICES 9
2020 SUMMARY.
POLICY IN PRACTICE
SUSTAINABLE MATERIALS
now enrolling two new factories in these primary audit service provider.
programmes.
Our membership of Nirapon – successor Another great initiative we are proud to be Implicit in all this activity is business-to-
to the Alliance for Worker Safety in a member of is the Better Cotton Initiative business and people-to-people goodwill
Bangladesh - expired in January 2020. The - the world’s largest cotton sustainability across national and cultural boundaries.
He aha te mea nui o te ao?
2020 SUMMARY
Bangladesh Accord for Worker Safety has programme. We joined in November in
What is the most important thing in transformed into a joint initiative with The 2019 and now over half of our cotton We are privileged to access the capabilities
the world? Bangladesh Garment Manufacturers and procurement has been sourced as Better of these workforces and the everyday
He tangata, he tangata, Exporters Association (BGMEA) which we Cotton (BCI). benefits they bring to our customers.
he tangata. may join as this initiative takes shape.
It is the people, it is the people, Back in New Zealand, we were pleased Trevor Johnston
it is the people. Our first two “Her Project” factory to co-facilitate a sustainability forum Head of Ethical Sourcing & Sustainable
partnerships in Bangladesh concluded with Retail New Zealand in March. The Merchandise.
INTRODUCTION
in 2020. We are delighted with their conversation focused on ethical sourcing The Warehouse Group.
contribution to feminine health and and we were joined by guest speakers from
hygiene in those workforces and are Tear Fund, Kathmandu, and ELEVATE – our
ETHICAL SOURCING REPORT 2021APPENDICES
POLICY IN PRACTICE 10
Ensuring that these women have the partnership and plan to commence two new feeding increased. 100% of women reported
information and access to services that HERproject programmes in Bangladesh in that women should exclusively breastfeed
they need to prevent and treat disease and 2021. her child for only 6 months, this increased
maintain their health is vital. from 69% in the baseline.
After the kick-off meeting with top
• At the end-line, 96% of respondents knew
In 2019 The Warehouse partnered with managements and middle management
how to self-conduct breast exam, up from
HERhealth :
two of its Bangladesh suppliers - Impress- orientation, the training was preceded
5% at the baseline and the percentage of
SUSTAINABLE MATERIALS
1 Newtex Composite and Manami Fashions by a baseline study capturing the health women who would seek screening services
- and Business for Social Responsibility’s knowledge and behaviours of a sample of the for breast cancer and cervical cancer
HERproject business initiative, to deliver the workforce and closed with an end line study
increased by about 37%.
A PARTNERSHIP
18-month long HERhealth training to female of the same sample.
workforces in these two factories. The work • The level of knowledge on the benefits
was closely followed and supported by our Some examples of the outcomes: of ergonomics (workplace posture) has
ethical sourcing specialists based in our Impress-Newtex Composite (788 female increased at the end-line. Now, 100% of
FOR CHANGE.
Dhaka Sourcing office and jointly funded by workers) women are aware of the recommended
The Warehouse and the two suppliers. • The consumption of eggs increased by 47%; posture of avoiding aches and pain, which
consumption of iron rich vegetables and was only 36% at the baseline.
HERhealth follows the HERproject dark green leafy vegetables increased by • Gender attitudes to reproductive health and
2020 SUMMARY
methodology, delivering workplace-based more than 24%; fruit consumption increased family planning changed at the end-line
interventions with a dual approach: by 18% and consumption of vitamin A-rich study with a much higher weighting towards
fruits and vegetables increased 12%. shared male and female responsibilities.
The Warehouse recognises that women working in • HERproject provides guidance to managers
• During menstruation, all (100%) women • Impress – Newtex Management comment:
global supply chains, many of whom are young and on policies and systems improvements
workers now use sanitary napkins instead “As a result of participating in HERProject,
so that managers can build inclusive
undereducated migrants, have limited health knowledge of fabric scraps from the factory or cloth (we) observed that a healthy workforce,
workplaces for women.
and often lack access to critical health services and from home. This is compared to 74% at the especially women workers inspired to fulfil
• Small groups (5%) of women within the baseline. production target, provide quality work and
products. This is especially true in Bangladesh – a vital
INTRODUCTION
factories and farms learn key information. reduce absenteeism. They are aware of
source for our garment manufacture. • 80% of the women reported using modern
They then become Peer Educators and health and hygiene and maintain it in
family planning in the end-line survey
share this information with colleagues. factory and in their family. There are vast
compared to 59% at baseline.
positive changes observed in the factory
We are really proud of the outcomes of this
• Knowledge levels on the value of breast and their families."
1. HERhealth™ | Programs | BSR (herproject.org). ETHICAL SOURCING REPORT 2021APPENDICES 11
HERhealth:
A PARTNERSHIP
POLICY IN PRACTICE
FOR CHANGE.
80% 60%
80%
41% 72%
60%
40% 89%
HERhealth
72% case study. 89%
46% Maya has been working at Manami51%Fashions Ltd.
Mrs.
41% 40% 46% 51% for the last three years. She has two daughters.
She learned about personal hygiene, balanced diet
SUSTAINABLE MATERIALS
and advantages of keeping a family small from the
EXAMPLES OF HERhealth HERhealth training. Before she would often suffer from
different health issue such as common cold, cough,
IMPACTS TO DATE: stomach ache and weakness. Mrs. Maya does not
face these issues anymore, after following the health
80% 60% 80% 72% 60% 89% 72% 89%
messages properly. When she learned the advantages
41% 40% 41% 46% 40% 51% 46% 51% a family small, she decided to keep her
of keeping
family small as well.
80% 80% 60% 60% 72% 72% 89% 89%
95% increase in number of She shared the story of her sister, Mrs. R---- Her sister
women believe41% 40% 50% increase in number
46% 51%
41% that a40%
baby 46% of women using family
51% also has two daughters. Her family is not financially
should be born in a hospital.
planning products. stable. Mrs. R---- does not use any family planning
2020 SUMMARY
methods because she experiences discomfort if she
uses oral pills or injection. Mrs. Maya then discussed
I feel empowered for being
the advantages of keeping families small and the
able to help myself as well
advantages of using family planning methods with her
sister. She advised her sister to use condoms since as my family members.
80% 60% 60% 72% 72% 89% 89%
56% increase in number 76% increase in number of other family planning methods did not suit her.
41% 40% 40% 46% 46% 51%
of women reporting using
51% women that are aware of Maya
health clinics. HIV can be prevented. Mrs. R----- followed her sister’s advice and began using
INTRODUCTION
condoms. Now her physical condition is better, and she
also feels relaxed because she can maintain her small
Aggregated participant survey data from all programmes showing % change from baseline to end line responses. family well. Mrs. Maya thanked the HERhealth project
and shared that –
ETHICAL SOURCING REPORT 202112
COVID–19 SUPPLY
APPENDICES
CHAIN IMPACTS.
POLICY IN PRACTICE
As readers will know in 2020 COVID-19 has had raised early about the impacts on vulnerable • Distributed COVID-19 safe resource kits
a profound impact on Supply Chains Globally. workforces in developing countries. At the prepared by our industry partners – ELEVATE,
The first COVID-19 forced factory lockdowns end of March, the Bangladesh Garment Her Project, and The Responsible Business
began in China in February 2020, followed by Manufacturers and Exporters Association Alliance – to supplier factories.
a further wave of factory lockdowns in other (BGMEA) reported that a 1000 of their member
• In the case of India, Bangladesh, and Pakistan
parts of Asia in the following months. Early in factories had suffered the rapid cancellation of
SUSTAINABLE MATERIALS
– regions that have been significantly
2020 our own stores also suffered lockdowns USD $2.8 billion worth of orders. The BGMEA
impacted by COVID-19 – we contacted
and partial openings until fully reopening under President put out an international plea to
factories directly to confirm and track their
COVID-19 alert level 1 on June 8th. buyers to honor their commitments and
COVID-19 management practices, confirmed
collaborate with their Bangladesh partners in they were meeting all payment obligations to
The rolling pandemic presented multiple supply order to survive the crisis. Many labour NGOs their workforces, and operating in accordance
chain challenges to manage. With the first wave and the International Labour organisation made with any government guidelines.
of factory lockdowns in China we were faced similar calls to action.
with delayed availability of future orders and • Surveyed some supplier groups to assess
then as New Zealand lockdowns commenced In response The Warehouse: COVID-19 impacts on their production and
we encountered an inverse dilemma – pending • Ensured we honoured payments due for goods capacity.
inventory we could not trade. Once the New already produced or where materials had been • Continued to deliver our Ethical Sourcing
2020 SUMMARY
Zealand retail market was fully opened again a purchased. programme elements of ELearning, vendor
surge in consumer spending created another training, and remotely managing corrective
• Provided supplier access to prompt payment
challenge, and our sourcing teams raced to action plans where physical visits or audits
facilities through our banking partner.
rebuild inventory levels amidst delays in our were not possible.
supply chain, which still persist in early 2021. • Allowed factories to self-inspect goods and
• Reviewed and benchmarked our own actions
ship without delay - waiving our usual 3rd
against international calls to supply chain
These impacts on retailers and consumers party inspection requirements.
action such as the Tear Fund COVID-19
reverberated back on many suppliers who faced
INTRODUCTION
• Restricted our own Asia-based team members Commitments and the International Labour
a wave of order cancellations or deferments business travel and supported their work from Organization’s Call to Action.
exacerbating productivity losses due to home needs to ensure their COVID-19 safety.
their own local lockdowns. Concerns were
ETHICAL SOURCING REPORT 202113
RESPONDING TO
APPENDICES
FORCED LABOUR
The Responsible Business Alliance programme concluded in 2020. The RBA Foundation was
able to measure the below overall impacts1 across all program participants through a series
of baseline and endline worker surveys.
RISKS.
POLICY IN PRACTICE
Workers paid Workers borrowed
recruitment fees money to pay fees
26% 43%
Workers received Workers keeping their own
Foreign migrant workers play an important role Among the countries we source from, Malaysia full reimbursement personal documents
19% 9%
in many economies, including New Zealand’s. has the highest number of foreign migrant
SUSTAINABLE MATERIALS
However, they are often vulnerable to unwitting workers and we have been working for some
or deliberate exploitation, on a spectrum from time with our supplier base there to identify
unpaid overtime to forced labour or modern- risks of forced labour and share insights into
day slavery. Recent legislation, such as the the recruitment pathways their migrant workers Recruitment agents participating,
Modern Slavery Acts in the UK and Australia, follow. Working together with the factory are more likely to be recommended
indicate governments’ increasing interest in management and their recruitment agents we
doing more to protect these vulnerable workers. have been able to significantly improve in these
practices. Lower number of workers paid recruitment fees Fewer workers borrowed money to pay fees
• Many of them migrate without information Overall, the percentage of workers that paid fees The percentage of workers who borrowed money to
and knowledge about their job, employer and In addition to carrying our own independent reduced by 26%. In addition, for workers that joined pay recruitment fees dropped by 43%. This is related
country of destination, creating the potential due diligence and remediation work, we in the last year and did still pay fees, the average fee to the reduction in fees, since workers may not need
for exploitation by recruitment agencies; also invited two of our leading Malaysian payment amount decreased, especially for workers to borrow money for smaller amounts.
2020 SUMMARY
partners, Muda Paper Converting (school from Indonesia, Nepal and Myanmar.
• Workers are often subjected to high stationery) and Evergreen Fibreboard (flat- More workers are keeping their own passports
recruitment fees which may lead them into pack furniture) to join a program for employers More workers are reimbursed for fees paid The percentage of workers who keep their own
debt bondage; and their recruitment agents working with The percentage of workers who received a passports also increased by 9%. Small factories had
foreign migrants. The program was hosted full reimbursement for their recruitment fees the most significant gains here, up to 22%. This is
• Entrenched negative and discriminatory and facilitated by the Responsible Business increased from 19% to 38%. However, significant likely because they had not previously invested in
attitudes towards migrant workers reinforce Alliance’s Foundation (RBA Foundation) improvement was seen in electronics workplaces the infrastructure such as lockers to enable workers
their vulnerability towards exploitation by supported by a grant from the Walmart from 26% to 64%. On the other hand, small secure access to their passports.
INTRODUCTION
recruitment agencies and employers; and Foundation – in addition participating brands workplaces (fewer than 100 workers) and non-
such as The Warehouse and its suppliers also electronics workplaces did not show significant Recruitment agents participating in the programme
• Ineffective provision of grievance mechanism made contributions. improvement on reimbursements, were more likely to be recommended by the
and remedy exacerbates their condition when likely because of the financial implications. workers.
they arrive at the country of destination.
1. Courtesy Responsible Business Alliance Foundation – Transforming Recruitment of Migrant Workers Practices in Malaysia (Interim Public Report).
ETHICAL SOURCING REPORT 202114
RESPONDING TO FORCED
APPENDICES
LABOUR RISKS.
POLICY IN PRACTICE
Attention Responsible Business Alliance Foundation Attention The Warehouse
The programme was well received by
our suppliers Dear Ms. Lim, Dear Mr. Trevor,
Happy to see your email and thank you for sharing the Interim Report It is great to hear from you. Hope that you are doing well.
which is very informational.
SUSTAINABLE MATERIALS
As for RRP (Responsible Recruitment Programme), currently we are in the
Our appreciation goes to our customer The Warehouse in getting us progress of improving some of our documentation, such as – GAP analysis.
to join this program. A big thank you to you and your team Ms. Lim in
taking us through this program where we were able to learn and put As recruitment agency, we would like to state that we appreciate the fully
into practice and achieve the desired results. supported RRP programme.
I am confident that with our customers’ support, Evergreen’s journey Feedback from my staff is that they have gained deep knowledge and their
to be a responsible workplace will continue. understanding improved after attending activities provided. Furthermore, the
foreign workers are very happy and aware of their rights working in Malaysia.
We shall strive to improve and work towards achieving better
outcome in this year. I am looking forward to giving you more updates on the upcoming activities
2020 SUMMARY
by RBA Foundation. We take this opportunity to thank Evergreen and The
Thank you. Warehouse for giving us opportunity to participate in this program.
Kind regards, Thank you very much. Hope we can meet very soon.
N.A.Pagan, Regards,
HR & Admin Department,
Evergreen Fibreboard Berhad, Jason Cheong
INTRODUCTION
PLO 22, Parit Raja Industrial Estate. Agensi Pekerjaan Liew Mee Choo Sdn Bhd
(Recruitment Agent for Evergreen BHD )
ETHICAL SOURCING REPORT 2021SUSTAINABLE MATERIALS. ETHICAL SOURCING REPORT 2021
APPENDICES 16
Thanks to the work of the Better Cotton Initiative (BCI), the minimising environmental harm is a priority for The Warehouse.
largest cotton sustainability programme in the world, farmers We are proud to be a member of The Better Cotton Initiative.
Cotton is one of the most popular commodities
in the cotton supply chain can have a voice and can work to
in the world. It is a renewable resource, but its improve the sustainability of this vital crop. When we joined BCI in 2019 we made a public commitment
production is vulnerable to poor environmental
POLICY IN PRACTICE
to source 50% of our cotton as Better Cotton by 2024.
management and working conditions. Through our membership fees, BCI licensed farmers can We are pleased that as at the end of 2020 we nearly achieved
produce cotton in a way that cares for the environment, that goal.
minimising the negative effects of fertilisers and pesticides
and caring for water, soil health and natural habitats. BCI Better Cotton is sourced via a system of Mass Balance
farmers also commit to decent work principles – conditions and is not physically traceable to end products.
that support workers’ safety and wellbeing. See bettercotton.org/massbalance for details.
@Better Cotton Initiative
Supporting the people who create the products we sell and
2020 IMPACTS
SUSTAINABLE MATERIALS
In 2020 The Warehouse sourced Better Cotton Consumption 3. More than one billion litres of water were saved thanks to
units equivalent to 2270 tonnes of cotton lint. This represents our sourcing of Better Cotton.
about half of the cotton contained in our apparel and home 4. An estimated 650 kgs of pesticides were avoided thanks to
textile ranges. our sourcing of Better Cotton.
1. More than 3500 farmers reached/trained due to our
5. An estimated 472 thousand euros of additional farmer
investment.
profitability1 was generated thanks to our sourcing of Better
2. Almost 6,750 hectares of land cultivated with Better Cotton Cotton in 2020.
Initiative due to our investment.
1 BCI Farmers experience profit increases for a variety of reasons, most commonly due to increased yields and/or optimised use of inputs (such as
irrigation water, pesticides or synthetic fertiliser).
2020 SUMMARY
BETTER
@Better Cotton Initiative
COTTON @Better Cotton Initiative
INITIATIVE.
INTRODUCTION
BETTERCOTTON.ORG
ETHICAL SOURCING REPORT 202117
FOREST
APPENDICES
STEWARDSHIP
COUNCIL.
POLICY IN PRACTICE
®
FSC.ORG
SUSTAINABLE MATERIALS
We know that our customers are Environmental protection
FSC® certification requires biodiversity to be
worried about climate change.
They are aware of the link between
maintained, and high conservation value areas -
including old growth forests – to be protected
FSC® PRODUCTS AT
climate change and the
preservation
THE WAREHOUSE
Indigenous peoples’ rights respected
of forests – one of the world’s most FSC® certification requires forest inhabitants to You can find Forest Stewardship Council® products
throughout our Stationery, Back to School, Toys, Art
precious resources. be consulted and engaged, and cultural rights
to be maintained & Craft, and Outdoor Furniture product ranges.
That’s why The Warehouse is a member of Fair wage and work environment for workers In 2020 these exceeded over 700 product lines
selling in excess of 3 million units.
2020 SUMMARY
Forest Stewardship Council (FSC®) and has FSC® has a strong focus on securing
been specifying (FSC®)certified wood and workers’ rights by incorporating core
paper products since the early 2000s. labour requirements into its system. These
requirements include effective abolition of
FSC® is the world’s most trusted sustainable child labour, elimination of all forms of forced
forest management solution and the original or compulsory labour, the elimination of
pioneer of forest certification. discrimination in respect of employment and
Our FSC® and FSC Mix® certified paper and occupation, respect of freedom of association
INTRODUCTION
wood product ranges provide assurance of : and the effective recognition of the right to
collective bargaining.
Zero deforestation
Although trees are harvested, there is no net Learn more:
loss of forest over time Forest Stewardship Council® (fsc.org)
ETHICAL SOURCING REPORT 2021OUR POLICY IN PRACTICE. ETHICAL SOURCING REPORT 2021
19
POLICY IN
APPENDICES
Wages and working hours
In 2020 the average audit score for wages
and working hours was 73%.
Determining workers’ actual pay and its
PRACTICE.
relationship to legal entitlements and
working hours is one of the most important
and challenging tasks for our auditors. The
baseline indicator an auditor must be aware
POLICY IN PRACTICE
of is the legal minimum wage for that region
and any entitlements such as workplace
insurance. In many developing countries’
workplaces, workers are paid by pieces
This section explains further how the major themes of our produced rather than an hourly rate. Auditors
policy1 are applied in practice. must convert a worker’s total piece rate
payments into an equivalent hourly rate for
regular hours worked and an overtime rate
for overtime hours worked. To make this
Management Systems Child Labour Voluntary Labour Health & Safety calculation true auditors must have both
SUSTAINABLE MATERIALS
Average audit score for policies and We had one underage worker finding We had no forced labour findings Our average health and safety audit score in accurate payroll data and accurate working
management systems in 2020 = 95%. in 2020. in 2020. 2020 was 90%. hour data and then validate that this amount
Within the first section of every audit we Child labour is a zero-tolerance issue within This policy provision addresses risks of forced A safe workplace is the most basic worker was paid to the worker either in cash or via
undertake, there is a comprehensive series of our due diligence approach. labour abuse. In addition to checking for a entitlement. Our due diligence assessment bank account deposits. A random sample
twenty-seven checkpoints which examine the factory’s policies on these topics our auditors contains over 57 Health & Safety investigation of payroll records for individual workers are
factories policies and management systems. Our auditors carefully review identity records also closely examine payroll practices for points. Fortunately, in most cases, because analysed and averaged over several months,
These address wages, benefits and hours, for any evidence of underage workers along evidence of delayed or withheld payments, of the long-held focus of brands on this and cross checked with payslips information
overtime rates, discipline and termination, with careful observation of workers during or deductions associated with disciplinary area, and the interest of local governments, from worker interviews.
grievance procedures, harassment and abuse interviews and the factory tour. Wherever fines. Where evidence of these practices is Health & Safety is consistently one of
and written contracts. Also included are age we encounter an underage worker we always found, an immediate corrective action to the the highest scoring sectors within our We have been tracking developing country
identification, freedom of association and issue the factory a warning along with a offending practice is raised. Bonded labour audit reports. In Bangladesh, because of working hours data for more than ten years.
collective bargaining rights, prohibitions on requirement that they take steps to help is a concern in countries such as Malaysia historical deficiencies in the quality of their Unlike progressive increases in wages, and
2020 SUMMARY
child labour, forced or bonded labour, and the underage worker leave the workplace where there are high rates of migrant workers construction and infrastructure, we have an significant improvement in health, safety, and
non-discrimination on grounds of pregnancy while ensuring they are in safe keeping until coming from other developing countries. additional requirement that factories must environmental measures, working hours have
or other reasons. the school term recommences or the child In these environments, our auditors look be able to evidence that they hold positive remained persistently high – especially when
reaches the legal working age. The occasional closely at the recruitment pathways deployed remediation status within one of the major viewed from a western perspective.
incident of an underage worker working with by the factory, their practices around the historical safety initiatives in Bangladesh.
a relative in the school holidays or entering safekeeping of identity documents, and (The Bangladesh Accord and The Alliance for
the workforce a few months prematurely is worker disclosures about the fees paid to worker safety).
very different to systemic and abusive child secure their placements or access to working
labour – which we have never encountered in visas. The legality of visas is closely examined
INTRODUCTION
the tier of the supply chain we can observe as undocumented workers or those with
and influence. expired visas are vulnerable to exploitation.
1. See page 23 for an abbreviated version of our policy.
ETHICAL SOURCING REPORT 202120
POLICY IN PRACTICE.
APPENDICES
POLICY IN PRACTICE
A cultural norm of “12 (hours) x 6 (days)” Freedom of association and collective Subcontracting Business integrity
is tacitly endorsed through many Chinese bargaining Our risk-based investigations revealed 22 Our overall audit transparency score in 2020
workplaces including some white-collar Each audit we undertake includes an instances of unauthorised subcontracting was 88%.
environments. Long hours remain despite evaluation as to whether these worker in 2020. Every audit we undertake contains the auditor’s
the intensive monitoring efforts of numerous rights are being restricted. However, the Ensuring that production is occurring in assessment of the transparency and reliability
brands and multi-stakeholder initiatives. legal sanction for such rights varies by qualified source factories is a challenge in of the audit findings. Our auditors function
Unless local governments decide to strictly country. China for example has not ratified many supply chains - especially in apparel within a protocol that demands an immediate
enforce this element of their labour law, the International Labour Organization and footwear. We have developed a way notification of any integrity breaches such
change is unlikely. Production worker earning conventions related to the rights to organise, to identify factories that may be at risk of as bribery attempts. We received two such
aspirations, and competitive labour markets associate, and collectively bargain. Nor has it these practices by analysing their patterns of notifications in 2020. By far the most common
SUSTAINABLE MATERIALS
continue to dictate working hour norms – ratified the convention obliging ILO members production and shipping. Where indicated, breach of integrity we encounter is an attempt
even where wages have grown significantly. to maintain a system of labour inspection. Environment we then conduct surprise inspections which during an audit to misrepresent payroll and
Our approach is to place transparency at Bangladesh by contrast has ratified both Factories’ environmental audit scores involved a multifaceted reconciliation working hour data. This is a zero-tolerance
the forefront and seek a reliable account of these conventions – their garment sector averaged 87% in 2020. of the factories production assets and issue for us and unless this is resolved
working hours in every audit we undertake. alone has more than 500 registered trade The suite of environmental check points documentation against our purchase promptly we terminate the trading relationship.
unions. Notwithstanding China’s position our within our audit tool seeks to assess first order history. In the instances where we Our commercial terms include penalties
According to data from our China factory audits have never revealed any attempts by whether the factory has achieved any form uncover unauthorised subcontracting we for submitting falsified documentation or
audits in 2020 average weekly working hours factory management to restrict these rights. of external environmental accreditation such may suspend trading with the responsible certificates.
were 63 hours. In a much wider sample of as ISO 14001, or Oeko-Tex 100. We then vendor or factory until we can re-establish
audits undertaken for multiple international examine the factories environmental planning confidence that they will adhere to our We maintain suppler scorecards with social
brands working hour averages for China resources such as its policies, environmental policies. An escalating series of commercial and environmental measures. High performing
and Bangladesh respectively were 65 and hazard register, and records associated with penalties are applied which may lead to a suppliers are rewarded with extra business.
2020 SUMMARY
66 hours per week.1 We believe by pursuing energy and water conservation. Finally, termination of the business relationship.
transparency and accepting reasonable local we track the practical and legally required New Zealand is still fortunate enough to
working norms we are much more able to actions being taken to monitor wastewater Unless a final manufacture site is very large enjoy the highest ranking in Transparency
identify excessive hours and reduce these via discharge, control air pollutants, dispose of and vertically integrated some processes International’s World Corruption Perceptions
the corrective actions plan agreed with the solid waste, enable recycling, and deal with and most procurement of materials Index. We are lucky that “doing the right thing“
factory. A typical corrective action request any hazardous wastes. and components must be sourced from is still a core Kiwi value. At the Warehouse, we
where excessive hours are identified is to first subsidiary suppliers or processors. This is are determined to do our best to uphold this
reduce weekly hours to 72 or less with one We have observed a steady improvement in a necessary and entirely legitimate form of value wherever we operate. We know we are
rest day per week along with an insistence environmental practices In the history of our subcontracting. not perfect - we find challenges everyday –
INTRODUCTION
that overtime hours are compensated programme. Many factories especially those but we are continuing to press forward with
correctly. in the textile sector now exhibit leading edge efforts to foster supplier relationships based
water, energy, and chemical management on transparency and integrity.
See wage and working hour table page 49
policies.
ETHICAL SOURCING REPORT 2021APPENDICES.
ETHICAL SOURCING REPORT 202122
PROGRAMME OUTCOMES &
APPENDICES
TRENDS 2019 – 2020.
POLICY IN PRACTICE
This table captures the most important activities amd outcomes over the past two years.
Some activity was restricted in 2020 due to COVID-19 lockdowns in source countries.
Key Measures and Activity Trends 2019 2020 Key Measures and Activity Trends 2019 2020
SUSTAINABLE MATERIALS
Active factories (all categories) 593 489 Audit transparency achieved
85% 88%
% Validated verbal and documented audit disclosures
Active factories (apparel only)
119 102
Factories with orders > USD 50K in the period
Traceability of orders to qualified factories 95.30% 98.05%
New factories qualified 240 170
Unauthorised subcontracting findings
New factories declined 18 22
115 84 Discovered via unannounced production audits… subject to financial penalties
Pass rate of new applicants - 67% in 2020
Audits completed (unannounced) Underage worker findings
341 208 0 1
Labour and Environmental audits by qualified 3rd parties – all semi-announced since 2019 Incidents always followed by a standardised underage worker remediation protocol
Audit waivers (desktop recognition) approved e–Learning lessons completed
2020 SUMMARY
77 68 2443 2037
Recognition of an existing audit report from a qualified 3rd party Topics include , assessment preparation, working hours control, transparency and ethics,
corrective action plans, vendor responsibility
Average overall audit score 84% 86%
Supplier responsibility trainings
• Policies 93% 95% Face to Face workshop training with vendors enabling them to maintain their own due diligence 44 23
over their factory base.
• Wages and Working Hours 69% 73%
• Health & Safety 90% 90% Worker feedback and helpline trainings
N/A 47
A new training focused on worker grievance channels
• Dormitory 91% 93%
INTRODUCTION
• Environment
86% 87% Corrective action plan progress follow up
Average Audit Subsection scores 204 268
The number of factories under continues improvement monitoring within the calendar year
ETHICAL SOURCING REPORT 202123
FACTORY POLICY POSTER.
APPENDICES
1
POLICY IN PRACTICE
This policy applies to all suppliers of goods and Voluntary Labour Wages and Benefits parallel means for independent and free association Reporting Breach of Policy
services to The Warehouse Group, (TWG), which Our suppliers are prohibited from using any kind Wages for regular working hours shall meet or exceed and bargaining. Workers’ representatives should not be For more information or to anonymously report any
includes the subsidiary companies The Warehouse, of prison or bonded labour. Any kind of obligation local minimum rates, enable workers to meet their discriminated against and have access to carry out their breach of this policy please contact:
Noel Leeming Group, Warehouse Stationery, and associated with recruitment fees, fines, loans, deferred basic needs, and provide some discretionary income. representative functions in the workplace. ethical.sourcing@thewarehouse.co.nz
Torpedo7. payment is prohibited. Any recruitment through human Where labour is employed indirectly through a licensed All reports will be followed up. The identity of
trafficking is strictly prohibited throughout the supply agency or broker, wages for regular working hours shall Subcontracting anyone who makes a report will be kept strictly
The policy is a supplement to, not a substitute for, all chain. Suppliers shall not retain identity documents meet or exceed local minimum rates, enable workers to Facilities engaged by the supplier / factory for confidential.
local laws and regulations applying to suppliers in their (such as passports or identity cards) unless at the meet their basic needs, and provide some discretionary subsidiary processing must be disclosed at the time
country of origin. Suppliers regardless of their size or request of workers and with written permission. income. of factory registration. Subsidiary processing facilities
class of goods and services are expected to be aware may be inspected at any time at the discretion of Worker Feedback & Helpline
of, and strive to adhere to, all laws and regulations Health & Safety Where workers are paid by piece, the factory’s piece The Warehouse Group. Purchase orders must be
SUSTAINABLE MATERIALS
Workers should first endeavour to
governing their operations especially in regard to the Suppliers must ensure safe and healthy working rate schedule should enable workers to achieve at least manufactured at the factory designated by the
present feedback or complaints to the
employment of their workforce, health and safety, conditions for all workers. Hazards must be clearly the minimum legal payment applicable to all regular and supplier on the purchase order. Order diversion or
environmental protection, and the safety, quality, and identified and controlled through a working health and overtime hours worked. factory’smanagement and human
subcontracting of primary manufacture to a factory
legality of goods and services sold to companies within safety plan. Suppliers must appoint a senior manager resources staff. If feedback or complaints
other than designated on the purchase order shall
The Warehouse Group. to be responsible for health and safety , provide regular Every worker must have signed contracts that only occur with the advance knowledge and written about serious breaches of The
safety training to workers, and ensure appropriate includes relevant information about their employment authority of The Warehouse Group. Warehouse Group policy are not resolved
ETHICAL SOURCING POLICY ELEMENTS Personal Protection Equipment is used by workers at conditions, wages, working hours and benefits. with the factory, workers are welcome to
The following standards are pre-requisite for all times. Suppliers must comply with all national laws, Business Integrity contact The Warehouse anonymously:
all the suppliers in the TWG supply chain. regulations and best practices concerning building, Working Hours Suppliers shall not offer gifts or money to any employee
electrical, and fire safety. Serious violations of local law Regular working hours, excluding overtime, should not or service provider engaged by The Warehouse. Via email:
pertaining to worker health and safety should always be exceed legal limits. Overtime must not be excessive. All Assistance with transportation shall be limited to
Management Systems ethical.sourcing@thewarehouse.co.nz
reported to local authorities if not immediately resolved overtime hours should be voluntary and compensated local hub connections. Hospitality shall be limited to
Suppliers should maintain all necessary policies,
by factory management. correctly. working lunches or dinners. Where an employee or
management and information systems, facilities,
In India, Bangladesh and South East Asia
2020 SUMMARY
and human resources needed to ensure they comply service provider of The Warehouse Group solicits gifts,
Non-discrimination Workers shall be provided with at least one day off in money or any other benefit this must be declined and at: +880173119060
with all applicable local laws and regulations and the
requirements of this policy.
The suppliers must not discriminate in hiring, every seven-day period or two days off in every 14-day reported to The Warehouse Group at ethical.sourcing@ In China at below QR Code:
compensation, promotion, termination or retirement period. thewarehouse.co.nz or to the most senior local
based on race, caste, national origin, religion, age, representative of The Warehouse Group.
Child Labour
disability, gender, marital status, sexual orientation, Supplier must record workers’ regular and overtime
Suppliers shall not employ workers younger than the
union membership or political affiliation. Women must hours accurately as the basis for controlling excessive Suppliers and their employees shall not attempt to
national minimum working age. A worker must be at
be able to enter and remain in the workforce without working hours and providing correct compensation. fraudulently meet the requirements of this policy, or
least 15 years old or over the minimum age required
mandatory pregnancy testing and must have access quality standard, or any other business requirement
by the local legislation of the country of manufacture.
to all their maternity leave entitlements under local Freedom of Association and Collective Bargaining through any kind of intentional misrepresentation or
Suppliers must ensure all legal requirements for the
INTRODUCTION
law. A feedback and complaints policy, process, and Suppliers are required to recognize and respect the deception whether documentary or verbal in nature.
work of authorized juvenile or young workers pertaining
training must be established for workers that ensures right of their workers to freedom of association and Suppliers shall participate in any audits or assessment
to hours of work, wages, type of work and working
confidentiality, freedom from reprisal, and a pathway to collective bargaining in accordance with local law. undertaken with respect to their compliance with this
conditions. Children are not permitted in the workshop
resolution. The employer must not hinder, the development of policy in a cooperative and transparent manner.
areas of the factory during holidays or at any other time.
1. Also translated into Hindi, Bangla and Mandarin.
ETHICAL SOURCING REPORT 202124
TIER 1 APPAREL MANUFACTURING
APPENDICES
FACTORIES – ACTIVE IN 2020.
POLICY IN PRACTICE
Factory Name No. of workers Street Zone Town City Province Country
Disclaimer:
Arrival Fashion (Gazipur) 2225 Vill - Colomesshor P.O. - National University Gazipur Dhaka Bangladesh This factory list represents all our private
Bd Designs Private Limited 2422 Plot: 48-49, Sector:03, Karnaphuli Epz Chittagong Chittagong N/A Bangladesh label apparel factories with orders in excess
Birds RNR Fashions 2400 113, Baipail Ashulia Savar Dhaka Bangladesh of USD 50K in 2020. Equivalent in total to
Essential Clothing 770 Akulichala, Sakashor Maddhapara Gazipur Dhaka Bangladesh 95% of order value. Our certainty about the
Hams Garments 4850 Dakkhin Vangnahati, Boiragirchala Sreepur Gazipur Gazipur Bangladesh completeness of this list and the labour and
SUSTAINABLE MATERIALS
Impress-Newtex Composite 4700 Gorai Mirzapur Tangail 0 Bangladesh environmental standards in these factories
L Usine Fashion (Mawna Unit) 1000 Ansar Road, Kawya, Chonnapara, Maona. Sreepur Gazipur Kawya Bangladesh
is provided in good faith and is based on the
information accessible to us via the policies
M.i.m Fashion 930 226/1, Tilargati, Shingbari Road Tongi Gazipur 0 Bangladesh
and procedures described in this report
Manami Fashion 1410 Kabirpur, Ashulia Savar Dhaka 0 Bangladesh
and on our website. The publication of this
Matrix Styles Ltd 990 Degerchala, National University, 0 Gazipur 0 Bangladesh
list does not constitute an invitation nor
Network Clothing 1000 228/3,Shahid Rawshan Sarak, Chandana Gazipur Gazipur 0 Bangladesh permission to visit these factories. These are
Nippon Garment Industries 1200 Auchpara, Tongi, Gazipur 0 Gazipur 0 Bangladesh private businesses - not owned in whole or in
Norban Comtex 3870 Mouza: Sarabo, Kashimpur Gazipur Gazipur Dhaka Bangladesh part by The Warehouse.
Opex Garments 1104 56/1, Block-C, Section-13 Mirpur Dhaka Dhaka Bangladesh
Silver Composite Textile 3055 Bk Bari, Taltoli Monipur Mirzapur Gazipur Bangladesh
Tm Fashions 2400 Chandana Chowrasta Gazipur Sadar Gazipur City Gazipur Bangladesh
Plot # 923 & 928, Aziz Complex, Vogra, National University, Joydevpur,
Valmont Fashions 1805 0 Gazipur 0 Bangladesh
Gazipur
Voyager Apparels 758 8, Malibag Chowdhury Para, Dhaka-1219 0 Dhaka 0 Bangladesh
Anhui Huiyuan Garments 350 107# Danxia Road Economic Development Zone Hefei Anhui China
Baijia(Fujian) Underwear (FAMA) 1000 Shifeng Industrial Area Shenhu Jinjiang Fujian China
2020 SUMMARY
Yan Qi Industrial Development Zone,
Beijing Aikon Textiles 104 No. 11, West First Yanqihe Road, Beijing 0 China
Huairou
Changzhou Gaorui Clothing 180 No.16 Hongshan Road Jintan Changzhou Jiangsu China
Changzhou Gaozhuo Clothing 160 No.2 North Xinghuo Road Hutang Changzhou Jiangsu China
Cixi Aoerlan Garment 500 No.142, Datang West, Songjiacao Village, Kuangyan Town 0 Cixi City Zhejiang China
Dongguan Yongzhi Leather 500 No.16 2nd Lane,Xuetang Village Liaobu Dongguan Guangdong China
Fanchang Huanghu Garment 120 Huanghu Fangchang Wuhu Ahhui China
Fortress Expert 157 Changhong Road 5, Zhangkeng Industrial Park Xicheng Area, Hengli Town Dongguan Guangdong China
Minhou County,
Fuzhou Outstar Clothing 35 2nd Floor, 1st Building,Riversuny Building, Zhongyuan Village Xiangqian Fujian China
Fuzhou
Gaotang Shangde Garments 121 South Of Hesheng Road Gaotang County Liaocheng City Shandong Province China
INTRODUCTION
GMT TW 292 No. 80 Longxing Nan Road Shaxi Zhongshan Guangdong China
Guangzhou Bangqi Leather 300 No. 83 Xiangxing Road Shiling Town Guangzhou Guangdong China
Yiqun Village, Shiling Town,Huadu
Guangzhou Jingni Leather 500 No. 3, Lane 1, East Economic Society Guangzhou Guangdong China
District
Building A1, 2 Road No.3 Fangzhong Huangshatou Village Xintang Zengcheng Dis-
Guangzhou Qiqi Garments 139 Xintang Guangdong China
Town trict,Guangzhou City
Haining Weiersi Kintting 300 No. 5, Shuanglian Road Haining Economic Development Zone Haining City Zhejing Province China
Haiyang Worldbest Co., Ltd 220 No. 6, Yantai Street, Industrial Park Economic Development Area Fengcheng Haiyang Shandong China
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