social compliance audit process

Registration
All vendors and factories who produce Target-brand products must participate in the social compliance program. They must register all applicable facilities with our social compliance team, indicating the locations of facilities and where Target-brand production will take place, as well as authorize unannounced compliance audits for every facility they register. If Target has previously audited a facility, we ensure that any previous violations have been corrected.

 

Facility Audit Selection Process
Target audits factories where Target-brand products are manufactured. We have developed a model that stratifies social compliance risk by country. We also have created a system that forecasts our monthly audit plan to mitigate risk. The forecast system automatically identifies facilities to audit, considering factors like risk, registration status and date of last audit, and allocates eligible facilities to our audit resources.

 

Unannounced Audit Process
Our audit process includes 100 percent unannounced audits. We use our own audit forms and tools and, for most audits, our own auditors, who complete robust training in our standards and audit processes. In countries where we use a third-party auditor, we train and require them to use our processes and tools. In the countries where Better Works provides advanced monitoring and advisory services to factories, Target uses the results of this program in place of our own audits.

An unannounced visit consists of a meeting with facility management to explain the purpose of the visit and collect documentation, a robust tour of the facility, and interviews with management and a selection of employees to determine working conditions, treatment of workers and the hiring process. The auditor also reviews personnel, wage and time records to verify that the facility meets local labor law requirements. At the end of the visit, the auditor explains any violations and discusses corrective actions and next steps.

A facility is allowed up to 20 minutes after the auditor arrives to begin the audit. If the audit does not begin within this timeframe, the auditor will leave, and Target will consider it a denied audit.

 

Audit Results
Target’s social compliance team reviews every audit and determines the final result based on the violations identified. We use an internal rating scale that categorizes violations as Non-Critical, Critical and Severe. Audit results are categorized as Acceptable, Needs Improvement, At-Risk and Non-Compliant. An audit is “Acceptable” if no violations or very few Non-Critical violations are identified. “Needs Improvement” or “At- Risk” audits result from a combination of Non-Critical and Critical violations such as health and safety, payment of wages, excessive working hours and record-keeping violations. Non-Compliant audits are detailed below.

 

Non-Compliant Facilities
Target recognizes two types of Non-Compliant facilities: One-Year Non-Compliant and Zero Tolerance.

 

One-Year Non-Compliant
During an audit round, a facility is allowed three opportunities to be found Acceptable. If it does not meet our standards after a maximum of three audits, we will deactivate the facility from producing Target product for at least one year. We also will deactivate a facility for at least one year when we identify more than 40 compliance violations during an audit or if the facility denies us access to an audit twice.

 

Zero Tolerance
Target has a zero-tolerance policy on Severe violations. If we identify a Severe violation, we will terminate the business relationship immediately, will not accept product, and will not allow the facility to produce for Target for up to three years. Our process for identifying Severe violations includes in-depth tours, worker interviews and a detailed review of facility records, including personnel records, financial deposits and pay schedules. We also conduct interviews with workers and management to check for consistency between statements. Severe violations include child labor, forced labor, corporal punishment and conflict of interest, which we define as follows:

  • Underage Labor: A worker below the local minimum age, or the age of 15, whichever is greater. We do not allow any exceptions for permanent workers, contract workers, piece-rate workers, migrant workers, casual workers or temporary workers.
  • Forced Labor: Prison workers or workers forced to work or bound to employment in order to fulfill a debt to a facility or a third party.
  • Corporal Punishment: Condoning, creating or contributing to an intimidating, hostile or offensive work environment including physical or mental punishment against workers.
  • Conflict of Interest: A facility’s attempt to offer anything of value to Target team members or our representatives to influence the results of any audit or inspection.

Target will allow a vendor to use a previously Non-Compliant facility only after the deactivation period has passed if the vendor is able to demonstrate compliance with local laws and Target’s standards and a formal reinstatement process is completed. This reinstatement process involves a review of the corrective actions that were applied at the factory and a subsequent audit of the factory to validate that the issues have been addressed. The factory must be found acceptable before the factory can be reinstated.

 

Corrective Action Plan Management
We communicate the results of an audit to our vendors and require a detailed corrective action plan for Needs Improvement or At-Risk results. Our headquarters team has ongoing dialogue with the vendor on the status of the plan, including steps being taken, proposed timelines, accountability at the facility for ongoing monitoring, long-term stability plans, and evidence that the corrections have been implemented. An important part of this process is helping the vendor identify the root causes of violations so they don’t recur. The collaboration we have with the vendors helps to ensure that we allow an appropriate remediation period before returning for a follow-up audit.