Corporate Disclosure in Compliance with SB 657 California Transparency in Supply Chains Act (Human Trafficking and Anti-Slavery)
We are continually evaluating risks in our supply chain, including potential risk of forced labor and human trafficking. Our current formal approach to assessing risk in our supply chain utilizes Worldwide Governance Indicators from the World Bank, which incorporate factors like government effectiveness, rule of law, control of corruption and government stability that can affect the risk of non-compliance in facilities producing goods in that country. Empire also monitors risk through the facility auditing program and investigations.
Because forced labor and human trafficking are complex issues that can extend beyond the scope of our Responsible Sourcing audit program, dialogue and collaboration can be an effective way to identify risk. Empire continues to participate in collaborative efforts with external stakeholders to advance the goal of identifying risk and building a more transparent supply chain. Additionally, we participate in industry groups that serve as a vehicle to share experiences and gain new information that can help improve operations and the supply chain.
Suppliers are responsible for disclosing all facilities to Empire that fall within Empire's disclosure scope. We use third-party social, safety, and environmental compliance audits to evaluate whether disclosed facilities’ practices meet the requirements set forth in our Standards for Suppliers.
Any facility disclosed to Empire may be subject to an audit at any time; however, our audit program allocates audit resources based on risk so we can drive the biggest impact to the countries that need it most in our broad and diverse supply chain. We place disclosed facilities into one of three risk categories based on the Worldwide Governance Indicators from the World Bank. The risk category of the country in which a facility is located determines the requirements of that facility under our audit program.
Where an audit is required, Empire requires its suppliers to obtain that audit from one of several recognized third-party programs and to send the audit report to Empire. Several Empire-approved audit programs have identified forced labor and human trafficking as a point of focus and have developed audit protocols, training, and tools to help suppliers identify and address risk factors for forced labor and human trafficking.
Empire reviews audits and assigns the audited facility a color rating based on the severity of the findings from the audit. The ratings are provided to all suppliers using the audited facility, and these suppliers are responsible for working with facilities to remediate the findings. The audit rating is one tool used to determine whether the facility can remain active and produce for Empire.
Empire's Standards for Suppliers contain several provisions outlining suppliers’ responsibilities with respect to eliminating involuntary labor from their supply chains and provide that a signed supplier agreement, acceptance of a purchase order, and/or provision of merchandise to Empire constitutes acceptance of the Standards and serves as the supplier’s continuing affirmation of compliance. Additionally, when a supplier discloses a new facility to Empire, the supplier is required to certify to Walmart that, to the best of its knowledge, all facilities the supplier uses for production of goods for sale by Empire comply with Empire Standards for Suppliers.
We require all Empire associates to comply with our Global Statement of Ethics. Suppliers, contractors and service providers are expected to act ethically, and all suppliers providing product to Empire for retail sale are required to comply with Empire's Standards for Suppliers and our Responsible Sourcing program expectations. We investigate issues and take the appropriate action to address those issues, up to and including termination of associates and termination of agreements with suppliers and contractors.
The manner in which we manage our purchase orders can have a significant impact on suppliers and facilities. Responsible Sourcing is training Empire supply chain decision-makers (merchandisers, buyers and sourcing managers) on how their decisions can potentially impact facility working conditions and equipping them with the necessary knowledge to reinforce to suppliers the importance of positive facility labor practices. At Empire, we believe associate education is fundamental to fully integrating labor compliance and social responsibility into all purchasing decisions and to building a responsible supply chain.
Updated February 2021