Carter’s Compliance with California’s Transparency in Supply Chains Act of 2010

    Carter’s Compliance with California’s Transparency in Supply Chains Act of 2010

    Last updated: Dec 30, 2011

    Our Commitment

    In 2010, the state of California passed the Transparency in Supply Chains Act (the “Statute”). The Statute requires companies doing business in California to disclose their efforts to ensure slavery and human trafficking are not part of their supply chains. More specifically, the Statute requires companies disclose to what extent, if any, they address each of the five points below.

    1) Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery. The disclosure shall specify if the verification was not conducted by a third party.

    Carter’s strictly prohibits the use of slavery and human trafficking in our product supply chain. Our Supplier Code of Conduct (the “Code”) specifically prohibits the use of “forced or involuntary labor of any kind in the supply chain, including any labor obtained though slavery or human trafficking.” Prior to engagement, a Carter’s employee or third-party agent evaluates each potential supplier on such supplier’s ability to meet Carter’s requirements, including compliance with the Code.

    2) Conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains. The disclosure shall specify if the verification was not an independent, unannounced audit.

    To ensure compliance with our Code, each audit of a Carter’s supplier is conducted by an independent third-party firm. The third-party auditor employs experts in local laws who speak the local languages. The frequency of audit for each facility varies based on various factors, including prior audit results and a risk assessment profile. Our goal, however, is to have each facility audited at least once per year. In 2011, our third-party auditor conducted more than 450 audits on Carter’s behalf.

    The third-party auditor conducts both announced and unannounced audits. We have found that providing a short notice period helps ensure that all required personnel and documentation can be made available. Unannounced audits, however, are conducted when previous audit results include serious or multiple violations of our Code.

    3) Requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.

    Carter’s requires each of its suppliers to annually certify that it complies with Carter’s Code. In addition, each time a vendor enters into a purchase order with Carter’s, the vendor certifies compliance not only with our Code but also with all applicable laws regarding slavery and human trafficking.

    4) Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.

    Carter’s considers forced labor, slavery and human trafficking to be zero-tolerance violations to our Code. If any supplier is found to be non-compliant in these areas, immediate corrective action must be taken by the supplier. Regardless of corrective action taken, Carter’s reserves the right to terminate our business relationship with any supplier that does not comply with our Code.

    5) Provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chain of products.

    Carter’s, our agents and our independent, third-party auditors work directly with suppliers to train them on compliance with our Code. Internally, we are in the process of implementing a formal training process for our employees who have direct responsibility for the management of our supply chain. This training will educate them on the risks of human trafficking and slavery in the supply chain and what actions can be taken to mitigate these risks