California's Transparency in Supply Chains Law

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. 

I. Policy

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 Code of Vendor 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. We have retained an independent consultant who currently is  advising us regarding the development and implementation of a comprehensive evaluation of our supplier base related to forced labor.  This  evaluation will be designed to review a number of factors relevant to determining the risks for forced labor, including:

• the categories of products that we purchase (apparel, jewelry, cosmetics, electronics, cookware, etc.) and the degree of manual labor used in the production of such products
• the characteristics of the various suppliers of these products (distributors of third-party products, small manufacturers, large manufacturers, manufacturers of QVC’s proprietary brands, etc.)
• the countries in which such products are manufactured
• the number of units from such suppliers that QVC sources

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. 

In addition, based on the results of our consultant’s work we are in the process of enhancing and improving our internal processes for ensuring that forced labor is not used in the manufacture of any products that we offer.

IV. Enforcement

We have engaged third-party auditors to conduct a review of approximately 100  factories that supply products bearing QVC’s proprietary brands.  In addition, we are in the process of developing a supplier enforcement program for a broader base of our suppliers.  This program will require certain of QVC’s suppliers to obtain factory inspections at periodic intervals (ranging from every year to every three years) by a third-party certification company.  Such inspections, which will be scheduled in advance by the supplier with the inspection company, will include a review relating to child, involuntary, and forced labor, as well as the other aspects of the Code.  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.

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.  Further, it is QVC’s intent to have an ethical sourcing office in place in 2012 to provide oversight and compliance of supplier verification, as well as to provide training regarding forced labor to all relevant QVC personnel.

VI. Employee Training and Accountability

Beginning in 2012, we will be conducting internal training on the Code with 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.  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.