Detox Campaign

Kony 2012

Dirty Laundry

CPSIA

Uzbek Cotton

Subcontracting

Wool Mulesing

Goose Down

Brazil Leather

Angora Fur

REACH

Washington State

California Safer Chemicals

Prop 65

Human Trafficking

Why Are We Here?

Uzbek Cotton – Lessons Learned: Cross Industry Perspectives Panel Ethical Sourcing Forum

Nate Herman Vice President, International Trade

American Apparel & Footwear Association (AAFA)

March 27, 2014

AAFA Snapshot

The American Apparel & Footwear Association (AAFA) is the national trade association representing apparel, footwear and other sewn products companies, and their suppliers which compete in the global market. AAFA's mission is to promote and enhance its members' competitiveness, productivity and profitability in the global market by minimizing regulatory, legal, commercial, political, and trade restraints. Learn more about how AAFA wears our mission at wewear.org >

Why Uzbekistan?

Why Uzbekistan? • Bright Line on Uzbek Cotton Production

• Forced Labor / Forced Child Labor

• Government: – Sanctioned – Controlled

• Over ½ of Uzbek Cotton from 2013 Harvest Sold to China and Bangladesh

• China and Bangladesh #1 and #2 Manufacturers of Apparel

What’s the Problem? • Cotton is Fungible Commodity

– Cotton Traders Mix Cotton from Various Sources

– No Effective Way to Tag or Track

• Lack of Visibility Up the Supply Chain to the Cotton Fields

• No Easy “Choke Point” – Yarn-Spinners?

• Thousands of Yarn-Spinners Worldwide

• Unprecedented Stakeholder Coalition

• RSN Cotton Pledge

• Learn from Other Industries / Issues

• Annual AAFA Traceability Conference – Address Traceability Up the Supply Chain – Next Conference – July 9, 2014, Portland, OR

• Share/Support RSN/Cotton Campaign Research – Users of Uzbek Cotton Farther Up the Supply

Chain • Daewoo/Indorama • RSN Bangladesh Mills Project

Tackling the Problem

MONIQUE OXENDER

Senior Director, Sustainability

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March 27, 2014

9

10

11

12

The Conflict-Free Sourcing Initiative www.conflictfreesourcinginitiative.org | @EICCoalition | @GeSIConnect

Mike Loch,

Director Supply Chain Corporate Responsibility

Motorola Solutions, Inc.

Conflict-Free

Sourcing Overview

Ethical Sourcing Forum March 27th,2014

In-Region Schemes

Conflict-Free Smelter Program (CFSP)

Company Assurance

Finished Product

MINE SMELTER/REFINERY OEMS

(pinch point)

Conflict Free Sourcing Initiative (CFSI) 14

CFSI Approach to Conflict-Free Sourcing

Conflict Minerals Reporting Template Flow

15

Smelter Smelter

Smelters

Sub-Suppliers

Sub- Suppliers

Sub-Suppliers

Template User

Direct Suppliers

Direct Suppliers

Direct Suppliers

1. Sends request to direct suppliers

2. Sends request to sub-suppliers

3. Cascades through supply chain until smelters identified. Sub-suppliers return template to suppliers.

Direct Suppliers

Direct Suppliers

Direct Suppliers

Original User

Customer

4. Direct suppliers return aggregated roll up template

5. User returns final aggregated roll up template

Solutions for Hope Platform

NEGOTIANT

NEGOTIANT

COMPTOIR

NEGOTIANT

COMPTOIR

INT TR

AD

ERS

SMELTER

S

MA

UN

FAC

TUR

ES

OEM

Typical Artisanal Mining Supply Chain

Creuseur

Creuseur

Creuseur

Creuseur

Creuseur

preneurs

preneurs

preneurs

Creuseur

Creuseur

MMR** AVX/SMELTER AVX Motorola Solutions

MINE*

MINING IS CONDUCTED UNDER

CONCESSION FROM MMR.

CUSTOMER HAS A TRANSPARENT

TRACEABLE SUPPLY CHAIN

AVX TAKE OWNERSHIP OF MATERIAL

DIRECTLY FROM MMR

The Solutions For Hope “Closed Pipe model in the DRC provides a Secure Chain of Custody that Meets OECD DD Guidance

* The diggers sell through their cooperative CDMC ** Mining Mineral Resources

AVX buys the ore at world market prices – • Secure chain of custody, traceability, monitoring, independent audit • More value remaining in region, governmental taxes paid • Reinvestment – safety, mining equipment & technology, facilities • Social benefits program built in by partner contract • Building technical capacity on the ground • Engagement by the end consumers from the start

Solutions for Hope Platform

Ethical Sourcing Forum

New York | March 27-28, 2014

Didier BERGERET

Social / Environmental compliance

Benefits of cross-industry cooperation | Traceability?

= Define what’s « Core » for production sites

+

Focus on what’s « Core »

Focus on what’s « Core » applied to compliance systems

Environmental Stewardship

› For 11 performance areas

› 3 levels: › Awareness & compliance › Proactive Management › Leading Practice

› Site-specific requirements

Environmental Reference Code

› Complement the requirements › Support improvement › Guidance on how to reach the required level

Implementation Guidelines

› Full environmental audit protocol › Mirroring social tools

Audit Process & Methodology

verification

Auditing Competence

≠ Sectors

Environmental Commitment

Benefits of the « core-sectorality »

Ready-made tools to take, tailor and use

Benefits of cross-industry cooperation | Traceability?

Showcase business commitment to global sustainability

› 9 sectors covered › 22 member companies › global turnover/sales:

+675 bn. € | 870 bn. USD

Capacity Building toolkit for Suppliers

Full Environmental System + Pilots

South African Environmental

compliance scheme

Sectoral framework for sustainable management of

chemicals

Toy Industry Environmental

scheme

Conduct change with partners & suppliers

Framework for Environmental Stewardship

Benefits of cross-industry cooperation

+ independent experts

Benefits of cross-industry cooperation

GSCP members

Special consultees

[SLMS]

PON

Advisory Board

…

suppliers

project partners