"Ethical and Sustainable Manufacturing in the Footwear Industry" - Presentation of Yves Morin, CEO of CTC Groupe and President of UITIC (International Union of Shoe Industry Technicians) for the 5th World Footwear Congress of the CEC (European Confederation of the Footwear Industry) in Leon, Mexico, November 25th, 2014.

1. Consumer’s Need for More Assurance on
Ethical and Sustainable Manufacturing
in the Footwear Industry
2014 November 28th
Yves MORIN
CTC ‐ CEO
UITIC (International Union of Shoe
Industry Technicians) ‐ President 1

2. Part 1
Where do we
Start from ?
2

3. Hourly Costs in Textile Industry
Source : Werner International 2014
 Germany : 30,03 $ / hour
 USA : 17,71 $ / h
 Poland : 5,70 $ / h
 Bangladesh : 3,49 $ / h
 Tunisia : 3,18 $ / h
 Mexico : 3,06 $ / h
 China : 2,65 $ / h
 Bulgaria : 2,33 $ / h
 India : 1,12 $ / h
 Pakistan : 0,62 $ / h
3

4. Development of Globalization
Different labor costs from Northern Countries
to Southern Countries
Consumption in Wealthy Countries &
Production in Developing Countries
4

5. World Footwear Exportations
Source :World Footwear Yearbook 2013
5
CENTRAL & NORTH AMERICA
2%
SOUTH AMERICA
1%
EUROPA
11%
AFRICA
1%
SOUTH PACIFIC
1%
ASIA & MIDDLE EAST
85%
TOTAL EXPORT 2012 : 13.500 MIO PAIRS

6. Social Issues : Identified
Problems in Factories
Source : Social Audits
 Difficulties to apply labor laws,
 Minimum wages very low or not applied,
 Working days of 7 days a week,
 Working hours over 16 hours a day,
 Unpaid overtime,
 No labor contracts,
 Disadvantaged female labor force,
 …
6

7. Social Issue : Child Labor
Source : U.S. Department of Labor’s Bureau of
International Labor Affairs (Oct 2014)
• 168 million children worldwide between the ages of 5 and 17 worked as
laborers in 2013,
• 85 million child laborers are engaged in hazardous work around the
world.
7

8. 8
Environmental Issues :
Waste Water

9. Health & Consumer Issues
Alert system such as RAPEX :
European rapid alert system for non‐food
dangerous products
 Regulations such as Restricted Substance List
 California Proposition 65
 Alert system such as SIAR / IARAS : New !
SIAR : Sistema Interamericano de Alertas Rapidas,
IARAS : Inter‐American Rapid Alert System,
9
 Regulations such as REACh : Registration,
Evaluation, Authorisation and Restriction of
Chemicals
Europa
Americas

10. Building Collapse ‐ Rana Plazza
April 2013
10

11. 11
Part 2
Stakeholders :
Consumers and NGO’s

12. Stakeholders : Examples
12
COMPANY Suppliers
Sub
contracters
Employees
Government
NGO’s &
Associations
Importers
Retailers
B to B B to C
Consumers
Media
Customers
Unions
Competitors
« A person, group, or organization that has direct or indirect stake in an organization
because it can affect or be affected by the organization’s actions, objectives, and policies »

13. Consumers
« Havas Survey Findings :
Likely, Desired
and Future Behavior »
Ref : Havas PR “ BeCause IT Matters ‐ 2014”

14. Brand Credentials will not be
overlooked in the Future
 DISAGREE……………………..
 NEITHER AGREE OR DISAGREE….
 AGREE………………………...
Italy
7
30
63
Ref : Havas PR “ BeCause IT Matters ‐ 2014”
US
16
39
45
China
2
21
77
Mexico
8
15
77
%
« In the next year, I will
consider the contribution to
well‐being and sustainability
of the brands I buy, more »

15. Would Like to Support
Responsible Brands
 DISAGREE………………………
 NEITHER AGREE OR DISAGREE….
 AGREE…………………………
Italy
5
24
71
US
13
33
54
China
2
19
79
Mexico
8
8
84
%
« I’d like to buy brands that let
me support issues of
well‐being and sustainability
through my purchase »
Ref : Havas PR “ BeCause IT Matters ‐ 2014”

16. Likely Loyalty to
Responsible Brands
 DISAGREE……………………..
 NEITHER AGREE OR DISAGREE....
 AGREE………………………..
Italy
6
27
67
US
12
29
59
China
1
14
85
Mexico
8
12
80
%
« I am likely to be more
loyal to brands that are
responsible, ethical and
sustainable »
Ref : Havas PR “ BeCause IT Matters ‐ 2014”

17.  Fair Labor Association ‐ USA
 People For The Ethical Treatment of Animals ‐ UK
 Clean Clothes Campaign ‐ UK
 3 539 « Green NGO’s » in China
(Source : Ministry of Commerce People’s Republic of China)
And so many others ! …
17
Influence of NGO’S & Associations
International
Local

18. Price make‐up of a € 100 Sport Shoe
Transport & Tax
€5
Labour costs retailer
18
Influence of NGO’S
Production costs
€1.50
Material
€8.50
VAT
€17
Publicity Brand Name
€8
Research
€11
Profit brand name
€13
Profit subcontractor
€3
Rent/stocks retailer
€12
Publicity retailer
€2.50
€18
Labour costs workers
€0.50

19. 19
Influence of NGO’S

20. 20
Influence of NGO’S

21. Part 3
Corporate Social
Responsibility :
The Toolbox ?
21

22. International Labor Organization
8 Fundamentals Conventions
 Forced Labor Convention ‐ 1930
 Freedom of Association and Protection of
the rights to organize ‐ 1948
 Rights to Organize and Collective Bargaining
Convention ‐ 1949
 Equal Remuneration ‐ 1951
 Discrimination (Employment and
Occupation) ‐ 1958
 Abolition of Forced Labor Convention ‐
1957
 Minimum Age Convention ‐ 1973
 Worst Forms of Child Labor ‐ 1999
22

23. Social Accountabilty International
The SA 8000 Standard is the central document. It
is one of the world’s first auditable social
certification standards for decent workplaces.
Code of Conduct includes 9 categories :
 Child labour,
 Forced or compulsory labour,
 Health and safety,
 Freedom of association/ rights to collective
bargaining,
 Discrimination regarding religion,race, sex,
 Disciplinairy practices,
 Limited working hours,
 Remuneration Decent Salary
 Management systems.
23

24. Worldwide Responsible
Accredited Production
Dedicated to the certification of lawful, ethical and
humane manufacturing.
Code of Conduct includes 12 categories:
 Compliance with local laws,
 Prohibition of forced labour,
 Prohibition of child labour,
 Prohibition of harrasment or abuse,
 Compensation, decent salary and benefits,
 Hours of work and Limited working times,
 Prohibition & discrimination,
 Health and safety standards,
 Freedom of association / rights to organize,
 Environnemental issues,
 Customs compliance,
 Security and safety shipping.
24

25. The Global Compact
Established by the United Nations’s
General Secretary Koffi Annan during the
Davos Forum
Mission :
To gather companies, NGO’s, Unions, to
agree on 10 sustainable principles within
4 categories :
 Human Rights
 Labour Standards
 Environment
 Anti‐corruption policy
25

26. Zero Discharge of
Hazardous Chemicals
26
RØADMAP TO
ZERO
DISCHARGE OF
HAZARDOUS
CHEMICALS
18 Major Fashion and Footwear brands
Mission
The Joint Roadmap is highly ambitious; it is a plan
that sets a new standard of environmental
performance for the global apparel and footwear
industry. It includes specific commitments and
timelines to realize this shared goal.
Benefits to participation
“Positions your organization at the forefront of
this cross‐industrial movement
Allows your organization to contribute to setting
the agenda for integrated chemicals management,
impacting all environmental aspects in our
industries”

27. Sustainable Apparel Coalition
About 100 Major Fashion and Footwear brands
Mission
The Sustainable Apparel Coalition was founded by a group of
sustainability leaders from global apparel and footwear
companies who recognize that addressing the industry’s current
social and environmental challenges are both a business
imperative and an opportunity.
Through multi‐stakeholder engagement, the Coalition seeks to
lead the industry toward a shared vision of sustainability built
upon a common approach for measuring and evaluating apparel
and footwear product sustainability performance that will
spotlight priorities for action and opportunities for technological
innovation.
Current Focus
Development, piloting and broad adoption of the Higg Index, a
tool for measuring the environmental and social performance of
apparel products.
27

28. ISO 26000 ‐ Corporate
Social Responsibility
ISO 26000 :
Provides guidance rather
than requirements, so it
cannot be certified to
unlike some other well
known ISO standards.
Instead, it helps clarify
what social responsibility
is, helps businesses, and
organizations translate
principles into effective
actions and shares best
practices relating to social
responsibility, globally.
28

29. Part 4
Corporate Social
Responsibility :
In Practice !
29

30. H&M & ILO
“Issues in the garment industry are systemic and
require action that helps develop effective
industrial relations and promote respect of
international labour standards. There is therefore
an urgent need to establish strategic and
comprehensive collaborations with companies
that have experience in these fields, such as
H&M,” ILO Director‐General Guy Ryder
“We see the cooperation as a great opportunity to
further strengthen our work towards the
establishment of well‐functioning industrial
relations on all our strategic production markets.
ILO, with its unique tripartite composition, is the
perfect partner for addressing issues such as
wages and training and skills development in the
textile industry,” Karl‐Johan Persson, CEO at H&M
30
H&M
 900 suppliers
 80% in Asia

31. Nike & Sustainable Apparel Coalition
Source : The Guardian
“A team of employees at Nike was given a special project:
Cataloging the 75,000 items found in the company’s materials
library and giving each a score based on their environmental
impact and long‐term sustainability.
The outcome:
Materials Sustainability Index, or MSI, a “cradle‐to‐gate index”
of everything and anything that could go into making a
windbreaker or a pair of shoes.
Nike has been pushing sustainability within its own product lines
for years, introducing waste‐reducing technologies like Flyknit
and working towards a “closed‐loop” business model in which all
of its offerings are made with 100 percent recyclable materials.
The company’s also been exploring how it might affect change
throughout the industry, with projects like the MSI, which Nike
submitted to the Sustainable Apparel Coalition, an international
group of apparel and footwear companies, for industry‐wide use.”
33

32. Esprit & Peta
“With the demand for cruelty‐free clothing,
shoes and accessories, international retailer
Esprit is ramping up its animal ‐ and eco ‐
friendly credentials by launching a new
collection of leather‐free trainers for
women!
The new line carries a “PETA‐Approved
Vegan” hanging tag, making it easy for
shoppers to make sure that their purchases
are animal‐ free”
32

33. VF Corporation & Code
of Business Conduct
“At VF, we conduct business based on our values.
First and foremost, we believe in treating our
associates, our customers and everyone we
encounter with the highest levels of honesty,
integrity and respect. The Code of Business
Conduct sets forth business policies and principles
for all directors, officers and associates of VF.
It is based on principles we have followed
throughout the years, and is designed to help us
continue to do business with the highest
standards. Our Board of Directors and senior
management are wholly committed to the ethical
and lawful policies that guide our business, which
is why we are communicating this Code to all VF
associates worldwide.”
Eric C. Wiseman Chairman, President and Chief Executive
33
Officer

34. Patagonia & Corporate
Social Responsibility
“ We can’t pose Patagonia as the model of a
responsible company. We don’t do everything
a responsible company can do, nor does
anyone else we know.
But we can tell you how we came to realize our
environmental and social responsibilities, and
then began to act on them.
Like other things in human life, it began with
one step that led to another”
34

35. 35
« Maybe a company won’t sell more
products if it’s ethical …
but it might sell less if it’s not !… »
Yves Morin
Food For Thought

36. Thank you
for your Attention !
2014 November 28th
Yves MORIN
CTC ‐ CEO
UITIC (International Union of Shoe
Industry Technicians) ‐ President
36
Sustainability for The Footwear Industries