Kmart works with stakeholders on ethical sourcing

The manufacturing industry provides a critical pathway out of poverty and unemployment for many people in developing countries. Retailers also have a responsibility to work with stakeholders to continuously improve working conditions and safety in those countries.

In December, Kmart Australia announced a number of new measures aimed at enhancing working conditions and improving safety and security at factories owned and operated by Kmart suppliers in developing countries.

These measures included:

  • publication of the addresses of Kmart’s supplier factories in Bangladesh, India, Indonesia and Cambodia to enhance transparency and monitoring of performance;
  • participation in the Impact Benefits for Business and workers program to help enhance factory workers’ livelihoods through improvements in induction systems, skills training and professional development; and
  • a strengthened Ethical Sourcing Code that binds Kmart suppliers and their factories to even higher workplace safety and security standards.

The new measures were developed following extensive dialogue with Kmart’s stakeholders, including consultations with individual suppliers, factory owners, and workers; supplier forums held in China, India, and Bangladesh; and meetings with specialist NGOs, labour unions, academics, government representatives and multi-stakeholder ethical trading forums.

Kmart’s Managing Director and General Manager Corporate Affairs, have also spoken at a number of public forums on Kmart’s ethical sourcing commitments and responded directly to customers that have contacted Kmart regarding sourcing concerns. Kmart team members have been provided with regular ethical sourcing updates to enable them to respond effectively to customer queries.

Since the announcement of the new measures, Kmart has been working to integrate the changes throughout its operations, including:

  • the implementation of new contractual arrangements with suppliers, with binding obligations in relation to the Ethical Sourcing Code, site access and location disclosure; a strengthened program of audits of supplier factories to ensure compliance with the new standard;
  • continued roll-out of the Benefits for Business program in Bangladesh; and
  • ongoing collaboration with stakeholders to ensure compliance with the Bangladesh Accord on Fire and Building Safety.