As of January 1, 2012, many companies manufacturing or selling products in the State of California are required to disclose their efforts (if any) to address the issue of forced labor and human trafficking, per the California Transparency in Supply Chains Act of 2010 (SB 657). This law was designed to increase the amount of information made available by companies with regard to efforts to eradicate forced labor and human trafficking, thereby allowing consumers to make better, more informed choices regarding the products they buy and the companies they choose to support.
Forced labor and human trafficking can take many forms, including child labor. QVC has a zero-tolerance policy for both forced labor and child labor used in the manufacture of all products that we sell.
We are committed to ensuring that the products we sell are manufactured without the use of child, involuntary or slave labor.
II. Supplier Code of Conduct
All vendors that provide products to QVC are subject to QVC's Supplier Code of Conduct (the Code), which provides, among other things, that QVC's suppliers may not use any form of child, involuntary, or slave labor in the manufacture of the products that we sell. QVC extends this restriction to the manufacturers of finished goods that are produced for QVC's suppliers.
III. Risk Evaluation
We source our products from approximately 2,000 individual suppliers. Because of the range of our retail business, we take a variable, risk-based approach to auditing companies within our supplier base. Our enforcement process, which is described below in more detail, takes into account a number of factors relevant to determining the risks for forced labor and child labor, including:
Our team will be using these and other factors to identify the suppliers whose products we believe present the greatest risk of being produced using forced labor and child labor.
We have recently developed a supplier compliance program which we are in the process of implementing in several stages. This compliance program will require certain of QVC's suppliers to obtain factory inspections at periodic intervals (ranging from every year to every three years) by an independent third-party certification company. Such inspections, which will be scheduled in advance with the supplier by the inspection company, will include a review relating to child, involuntary, and forced labor, as well as the other aspects of the Code. The review will include an on-site visit to view factory conditions and review records. In the event that any supplier is found to have used child, involuntary, or slave labor in the manufacture of products supplied to us, we are prepared to immediately cancel all outstanding orders with such supplier.
In addition, in 2012, we hired individuals in the U.S. and China (the source of most of our imported products) to assist us in our audit efforts on a full-time, dedicated basis.
V. Implementation Timetable
QVC's existing suppliers, and all new suppliers, are required to comply with the Code, which forms a part of the legal terms and conditions of each order that QVC places for products. With regard to verification of compliance, QVC has been conducting third party factory audits of a subset of its suppliers that are responsible for manufacturing or supplying certain items of merchandise that contain QVC's proprietary brands.
QVC's objective is to continue to expand this program to other subsets of its vendors during the next 2-3 years.
VI. Employee Training and Accountability
All of our global sourcing staff who have direct responsibility for supply chain management, as well as certain other groups of employees who are indirectly involved in sourcing, are required to complete a training program with regard to the Code and our enforcement of it. Our internal auditors will conduct periodic reviews to ensure that our employees who are responsible for supply chain management are complying with all of our procedures regarding forced labor. Any employee who fails to abide by QVC's procedures regarding forced labor will be subject to disciplinary action, including potential termination.