Responsible Sourcing Guidelines January 2013
Target Responsible Sourcing Guidelines As a leading retailer Target Australia recognises the importance of sustainability that is, making a meaningful impact on the environment, in our community and with our people. We believe that our products should reflect our high ethical and moral values in how we do business. Target is committed to embracing sustainability and responsible corporate behaviour throughout our business and countries in which we operate and source merchandise. One of Target s objectives is to ensure the products we buy and sell are sourced in an ethical and responsible manner. Negative publicity and campaigns by Non- Government Organisations (NGO) and in the media pose high risks to our brand and these have the potential to affect sales and our reputation as a leading retailer. This in turn can have a cascading effect along the supply chain of our business, potentially impacting our supply arrangements. We aim to avoid or minimise these risks by setting these standards and seeking your compliance to the Target Ethical Sourcing Code (ESC) and business requirements. Ensuring responsible sourcing is one way to reduce any potential risk of bad publicity that could lead to poor brand reputation when sourcing product or materials from volatile regions. Target sources a variety of products from a number of different countries at various times. As with all products in our stores we are guided by our customers. If they like the product and purchase it, then we will continue to supply it for them. If customers are concerned about any product in our stores then we would always encourage them to let us know. The ESC includes minimum requirements and expectations relating to the environment. All vendors and factories must comply with the ESC as a condition of doing business with Target. Factories, as a minimum, must meet all relevant local and international environmental protection laws, and will strive to comply with international environment protection standards. Supplemental information in relation to this section of the ESC is included in the Guidebook to Target Ethical Sourcing Code for Merchandise Vendors and Factories. These guidelines are grouped by core categories and must be considered where sourcing merchandise in particular countries or where the use of certain processes or chemicals may pose a risk to our brand or reputation or when product would benefit from the use of certifications or trademarks. We must take care to protect Target and enhance the reputation of the business - this includes sustainability and community. These guidelines are intended to provide considerations and direction where we are uncertain or feel uncomfortable doing business with a supplier, material sourcing and type, manufacturing processes or in a country that may pose a reputational risk. Target Responsible Sourcing Guidelines January 2013 Page 2
We may amend these guidelines from time to time by adding new guidelines on the sourcing and use of materials, chemicals or processes that are deemed a potential risk to Target. While we systematically review our supplier relationships and monitor the social and economic environments in which they operate, we ask you to remain vigilant in adhering to our philosophy as outlined and ensure that when supplying Target merchandise, it is done in a socially responsible manner. Target Responsible Sourcing Guidelines January 2013 Page 3
1. Country of Manufacture 1.1. High Risk Countries Countries are deemed high risk due to unacceptable human rights history or political situations e.g. Uzbekistan and North Korea are high risk due to forced labour and political issues respectively. 1.2. Medium Risk Countries are deemed medium risk due to questionable human rights or political situations e.g. Myanmar (Burma) 1.3. Low Risk Countries deemed low risk pose no risk of negative publicity Position - Target will not source product or materials used in the manufacturing of merchandise from any country or region deemed as high risk. For any countries deemed as medium risk, Buyers must seek approval from Legal, Corporate Affairs and General Manager Merchandise. Please also refer to DFAT or OECD guidelines or contact the Target Ethical Sourcing Manager. 2. Chemicals Certain materials or chemicals used in the production and or use of merchandise maybe deemed harmful exposing customers to a higher risk of allergic reactions when they come into contact with human skin. Some examples include but are not limited to the following:- 2.1. Formaldehyde is a colourless gas used in solution in water or absorbed into porous materials as antiseptic and disinfectant. 2.2. Dimethyl fumarate (DMF) is a mould prevention chemical commonly found in shoes, jackets and furniture. 2.3. Bisphenol A (BPA) is a chemical used to make a hard plastic called polycarbonate (PC). PC is used in the manufacture of varying consumer products such as baby bottles. Examination of the science and regulator attitudes around the world indicates that there is some concern about certain uses for BPA Position - Target will not source product using materials or chemicals deemed as harmful in the manufacturing or use of the product. The National Industrial Chemicals Notification and Assessment Scheme regulate the use of certain chemicals. From time to time, at the discretion of Target, we will request that vendors and factories cease using chemicals deemed harmful in the manufacturing of product irrespective of Australian standards. Target will communicate and add to this list as reviews continue and standards or guidelines are updated. 3. Materials (fabric claims) 3.1. Organic 3.2. Bamboo 3.3. Fur Free Position - Target requires all claims must be certified by an authorising body or representative by our supply partners and can be verified prior to sourcing Target Responsible Sourcing Guidelines January 2013 Page 4
4. Production Processes 4.1. Sandblasting is an Abrasive Blasting process using Silica Sand or other substances containing Silica which poses a health risk to workers carrying out the task as well as those located in close proximity. The inhalation of Silica dust results in a pulmonary disease referred to as Silicosis, which is fatal. Position - Target will not source product using Sandblasting processes. All Abrasive Blasting techniques are considered prohibited for Target product. 5. Pollution 5.1. Waste generated from the raw materials, manufacturing processes or delivery of product to Target must be disposed of in a responsible manner utilising the hierarchy of reduce, reuse, recycle. 5.2. Water waste or pollution generated from the raw materials, manufacturing processes or delivery of product to Target must be avoided. Position - Target will not source product where supply partners do not act responsibly in the areas of waste and water use. 6. Chain of Custody Timber and paper products originate from forest sources. Product Stewardship or Chain of Custody certifications provide a method of traceability to ensure raw materials are from sources that display responsible considerations in production and in the regions from which they source from. Some examples of recognised and preferred Chain of Custody certifications are - 6.1. Forest Stewardship Certification (FSC) 6.2. Programme for the Endorsement of Forest Certification schemes (PEFC) 6.3. Australian Sustainable Timber Position - Target requires all supply partners to ensure that all products made from or containing timber and paper is made with pulp from certified sources. All claims must be certified by an authorising body or representative by our supply partners and must be verified prior to sourcing. Approval process Before proceeding with any products, packaging or any form of advertising, including catalogues that may be impacted by responsible sourcing you must seek approval from Legal, Corporate Affairs, Ethical Sourcing and the relevant General/Business Manager of the respective Buying group. Please refer to the Target Environmental Compliance Guidelines for further details on making environmental claims on product, packaging or promotional materials including in store signage and catalogues. Target Responsible Sourcing Guidelines January 2013 Page 5