California Transparency In Supply Chain Act Disclosure
Eastern Mountain Sports (EMS) is committed to ensuring compliance with all laws and maintains high ethical standards in all aspects of its business. Importantly, that commitment extends to lawful, fair and ethical labor practices and workplace policies throughout our supply chains.
We purchase and sell both (i) third-party branded merchandise that is offered by the manufacturers generally to the retail trade and is carried by many retailers and (ii) private label merchandise sold under our exclusive brands ("EMS Brand Products"). Although we do not own or control the factories in which the merchandise we offer our customers is made, we communicate to all our suppliers that it is our policy to purchase only from those suppliers who share our commitment to full legal compliance and high ethical standards, including specifically the lawful, fair and ethical labor practices and workplace policies. In furtherance of that policy, we distribute to all our vendors our Code Of Conduct For Vendors ("the EMS Code of Conduct"), and we require that the vendors strictly adhere to it.
We focus our verification and audit efforts on EMS Brand Products production to assure compliance with our requirements of fair labor practices at the facilities where the merchandise is manufactured. Despite that focus, we reiterate that our requirements as stated in the EMS Code of Conduct apply to all our vendors and that we will not knowingly deal with any vendor that does not adhere to those requirements.
Summary of The EMS Code of Conduct
The EMS Code of Conduct for Vendors states our expectations and requirements that all our suppliers assure that no illegal or exploitative practices or conditions are present in their owned facilities and in the facilities of their contractors and our policy to deal only with those suppliers who share and implement that commitment. We currently require each vendor of EMS Brand Products and of fabric that we purchase for those products to deliver a signed acknowledgement confirming its agreement. Our intention is to extend that requirement to vendors from which we buy other materials that will be incorporated in EMS Brand Products and packaging for those products.
The EMS Code of Conduct addresses fair and ethical workplace practices and policies, and specifically human trafficking and slavery. The Code:
Our Approach to Sourcing
In connection with our EMS Brand Products, we have a long-standing preference for and history of maintaining stable, long-term relationships both within our internal Sourcing staff and within our supply chain. Accordingly, our Sourcing team and the majority of the EMS Brand Products supply chain consists of relationships that have developed and continued over several years.
We have approached and continue to approach each new potential vendor relationship with considerable care and prudent evaluation to assure they will be a suitable fit for the long term prior to engaging in any development or production. Through this approach, we have built a supply chain in which there is a considerable amount of mutual accountability and trust due to the mutual advantage of maintaining successful long-term business relationships.
When we consider addition of a new EMS Brand Products vendor, prior to authorizing any production, our internal Sourcing staff conducts an assessment of each production facility to confirm compliance with the EMS Code of Conduct and the absence of facts suggesting human trafficking or slavery practices. In this process, the Sourcing staff carefully reviews the involved factory profile(s) and the potential vendor's current customers to provide us a first glance at compliance standards based on those customers' reputations for adherence to fair labor standards; performs a facility inspection at each production location; reviews recent third-party assessments and audits that the potential vendor can provide, and conducts regular follow up visits throughout the development and production timeframe. In 2012, we began employing third parties to conduct verifications on a selective basis.
As noted above, we hold our vendors responsible for adhering to the EMS Code of Conduct and for assuring that all their contractors and secondary suppliers meet the same standards. A vendor's noncompliance will result in termination of the direct vendor relationship if remediation efforts do not appear feasible or fail.
EMS staff visits each factory producing EMS Brand Products at least once per year, as we believe our physical presence in each facility is critical to ensuring our fair labor requirements are being met. In addition, we request that our factories share with us the results of all 3rd party audits performed at their facility. We have not employed unannounced, independent third-party auditing services.
The EMS Code of Conduct requirements apply to, not only our manufacturers, but to our raw material suppliers as well to ensure compliance throughout the supply chain. It provides that the vendor selling to us is responsible for ensuring that its subcontractors comply with the EMS Code of Conduct provisions requiring fair labor practices, including the requirement of compliance with all applicable laws and the prohibition of any use of illegal or forced labor.
When we directly purchase fabric to be incorporated into our products, we treat the supplier of the materials as a vendor subject to all the procedures described above. We intend to extend that treatment to all suppliers from whom we directly purchase materials for incorporation in EMS Brand Products and packaging for those products.
Our Sourcing staff and other employee who interact with vendors understand our commitment to ensuring that our supply chain reflects EMS's values and respect for human rights, and always follow an "eyes open" approach intended to identify potential problems when visiting production facilities. A Sourcing staff member's or other individual's failure to honor that commitment and report suspected noncompliance by a vendor would result in disciplinary action up to and including immediate termination.
EMS provides training, including training by an independent company, to our Sourcing staff on fair labor practices, workers rights, slavery, and human trafficking and how to mitigate associated risks within our supply chain. In addition, we encourage our employees to continually educate themselves on these subjects, and we review our related applicable processes within the Sourcing staff on an ongoing basis.