Implementing Codes of Conduct
A C&A case study

Below is a list of Business Case Studies case studies organised alphabetically by company. To view more companies, please choose a letter from the list below.

Page 5: The importance of monitoring

Ca 4 Image 3Effective monitoring and the evaluation of policies and actions is generally carried out by an independent organisation which examines objectively all aspects of the business. C&A uses the services of an organisation called SOCAM (Service Organisation for Compliance Audit
Management) to monitor and evaluate its activities.

SOCAM is a limited liability company, registered in Belgium. The name reflects its objective to oversee and monitor the agreed level of responsible business standards in merchandise buying on behalf of all the C&A European retail companies. In particular, SOCAM has a clear brief to detect and prevent the exploitation of those workers who produce merchandise for C&A, particularly the use of child labour and all forms of illegal labour. It also has a specific interest in areas of environmental standards, health and safety and levels of remuneration.

SOCAM is separate from and is structured to be fully independent of the Buying function. The Director of SOCAM has extensive first-hand knowledge of supplier operations throughout Europe, the Far East and Africa. Many of C&A’s suppliers are in the Far East where SOCAM operates through a subsidiary company, SOCAM Service Pte Ltd, located in
Singapore. SOCAM has full and independent authority to monitor those standards defined by C&A’s ‘Code of Conduct for the Supply of Merchandise’ and by the legally binding requirements contained in every merchandise order.

When SOCAM first started its auditing work, every supplier working for C&A was asked to supply a list of their factories and those of their subcontractors. This was to allow SOCAM inspectors to make unannounced visits to check those factories. Initially, only 60% of suppliers responded. SOCAM’s managers then had to meet individually the other 40% of suppliers to explain what SOCAM was trying to achieve. After nine months, 2,500 supplier files were compiled and the visits started. Eight inspectors carry out over 1,000 visits each year. The audit involves painstaking work. Where inspectors are not sure about the age of a worker they may ask to see a birth certificate. In a small number of cases, suppliers have tried to employ delaying tactics such as when a Chinese factory director ordered that all doors be closed because the SOCAM inspector was taking photographs. The inspector only just escaped.

C&A believes the $3 million a year spent on SOCAM to be money well spent because not only does it add real value to C&A’s brands, it also contributes to the strong ethical image of C&A. Between July 1996 and January 1998, 50 suppliers received written warnings that they were not achieving the standards required by the Code of Conduct. Where SOCAM is sure that unethical practices are taking place, all C&A orders to that supplier are immediately suspended. Over 80 suppliers have been penalised in this way since SOCAM started its audit work for C&A. Business can only be reinstated after a convincing ‘Corrective Plan of Action’ is put in place.

C&A | Implementing Codes of Conduct