Validating our Manufacturer’s Code of Conduct within our Supply Chain

At Fossil, we are committed to manufacturing our product in a legal and ethical manner, and we expect our suppliers to share in these responsibilities. We execute on this goal by holding ourselves and our suppliers accountable, monitoring and fixing issues, and educating our partners to continually improve conditions within our supply chain.

The anchors of our Social Compliance Program are our Manufacturer’s Code of Conduct, our factory audit program, ongoing training, and our worker hotline. 

Manufacturer’s Code of Conduct

All Tier 1 finished good and Tier 2 component factories are required to sign a Manufacturer’s Agreement before doing business with us, which includes adherence to our Manufacturer’s Code of Conduct (“Code”). As part of our approval process, factories are also asked to complete a self assessment form, which reflects our Manufacturer’s Code of Conduct.

The Fossil Group Manufacturer’s Code of Conduct is based upon international labor and human rights standards. We expect this Code to be followed by all finished good manufacturers and component suppliers who make products for Fossil Group and it’s license brand partners. The Code outlines the guiding principles that are important to Fossil including the following topics: Child Labor, Involuntary Labor, Coercion and Harassment, Nondiscrimination, Association, Health and Safety, Compensation, Hours of Work, Protection of the Environment and other applicable laws.

In 2019, Fossil Group updated its Manufacturer’s Code of Conduct with increased focus on gender issues. Fossil fine tuned its Code language in four areas – Coercion and Harassment, Nondiscrimination, Health and Safety and Compensation – with respect to improving the rights of women within our supply chain. Factory management was trained on this new language and communication in local language was placed in each finished good factory. Fossil continues to evaluate its Code internally and with 3rd parties for continual improvement.

In 2021, Fossil joined the UN Global Compact and launched the Fossil Group Human Rights Policy. This further supports Fossil’s commitment to human rights within our entire supply chain.

Fossil maintains strong partnerships with it’s suppliers and they are committed to the same principles and standards of ethics as Fossil Group.

Factory Audits

Fossil performs annual audits of our Tier 1 finished good factories through use of our own internal audit team as well as 3rd party auditors as needed. These audits verify the obligations set forth in the Manufacturer’s Code of Conduct. An audit is required of a new supplier prior to any production purchase orders being placed.

A typical audit inspection consists of several parts:

• Kickoff meeting- with factory manager and human resource personnel
• Factory tour – auditors visually inspect the factory including work areas, canteen, toilets, warehouses, dormitories, environmental protection facilities
• Worker interviews – auditors randomly select workers to ask questions including those regarding working conditions, working hours, wages, benefits and grievance procedures
• Document inspection – auditors review documents including payroll, personnel files, permits/certificates and policies
• Closing meeting – auditors present corrective action plan (CAP) to factory management and develop solutions

All information gathered contributes to the final risk ranking that the factory is assigned. Each section of the audit is assigned points and an overall risk rating is determined – low, low-moderate, moderate, moderate-high, high. To be approved as a new Fossil supplier, the initial audit risk rating should be medium or below and all critical issues have been corrected. Existing suppliers who receive an annual audit with a rating of high or moderate-high risk must attend additional supplier compliance training. Critical issues are elevated to senior management.

Each factory is also provided a corrective action plan and partners with our team to develop a timing and remediation action plan within two weeks. If the initial audit risk rating of a new supplier is moderate high or above, Fossil will arrange a follow-up audit within one month according to the supplier’s remediation progress. For existing factories, depending on the risk rating, reaudit timing is targeted at 3-12 months after review.

Our goal is always to partner with our factories to support and resolve all non compliance issues. However, if a factory partner is unwilling to meet our requirements, despite our partnership efforts, Fossil does reserve the right to terminate the relationship with these suppliers.

Training

We believe in setting our partners up for success in their operations. Launched in 2013, Fossil’s training program includes onboarding for new suppliers and ongoing annual training on key topics and industry updates. New suppliers must go through an orientation training program that outlines Fossil expectations and standards including topics such as safety, best hiring practices and audit methodology.

For any questions related to our social compliance, please contact [email protected].

Worker Hotline

Fossil partners with a non profit organization to offer a 3rd party worker hotline that can be used to confidentially and anonymously  report any health and safety concerns in the factories. Reports received through the hotline are reviewed and investigated, as appropriate, and remedial actions are taken as necessary.