Kontoor Canada Co. – 2024 Report on Fighting Against Forced Labour and Child Labour in Supply Chains Act
1. Statement of Commitment
Kontoor Canada Co. ("Kontoor," "we," "us," or "our") is dedicated to responsible sourcing and understands the importance of ensuring that forced and child labour is absent from our supply chain. This report outlines our policies, comprehensive approaches, and proactive measures taken to prevent and reduce the risk of forced or child labour and to enforce compliance with international standards and regulations, including the Canadian Fighting Against Forced Labour and Child Labour in Supply Chains Act. Kontoor operates and reports using a 52/53-week fiscal year ending on the Saturday closest to December 31 of each year. For the reporting purposes presented herein, all references pertain to the period from 1 January 2024 to 28 December 2024.
2. Structure, Activities and Supply Chain
Kontoor Canada Co. is a corporation organized under the laws of Nova Scotia in Canada and is a subsidiary of Kontoor Brands, Inc., which is a publicly traded global lifestyle apparel company listed on the New York Stock Exchange in the United States of America. Kontoor’s portfolio includes the Lee®, Wrangler®, and Rock & Republic® brands. We import finished apparel products into Canada and distribute and sell such products to customers in Canada.
Kontoor works with numerous factories and suppliers across the globe in the sourcing of its materials and products. We collaborate with those factories and suppliers to ensure the quality and integrity of our products. We are dedicated to sourcing materials and products from partners who uphold our values of human rights, ethics, and environmental responsibility. All factories, including those owned and operated by Kontoor and thirdparty sub-contractor factories, must adhere to our policies and standards, which we publicly disclose along with our supplier list.
3. Policies and Standards in Relation to Forced and Child Labour
Kontoor has established robust policies and due diligence processes specifically designed to prevent forced and child labour, which are communicated to all Kontoor contractors, agents, and suppliers (“Kontoor Authorized Facilities”). These policies outline Kontoor's prohibition of any form of forced or child labour within its facilities or global supply chain.
3.1 Terms of Engagement and Global Compliance Principles
Kontoor’s Global Compliance Principles contain sixteen baseline requirements that must be met to do business with us; however, we strongly encourage all Kontoor Authorized Facilities to exceed these requirements. In terms of child and forced labour, our Global Compliance Principles are clear:
Principle 2 - Child/Juvenile Labor: No person shall be employed at an age younger than 15 (or 14 where consistent with International Labor Organization guidelines) or younger than the legally allowed working age in the country of manufacture where such age is higher than 15. All Kontoor Authorized Facilities and Suppliers must observe all legal requirements for work of associates under 18 years of age, particularly those pertaining to hours of work and working conditions.
Principle 3 - Forced Labor: Kontoor Authorized Facilities and Suppliers will not use forced labor, whether indentured, bonded, prison, enslaved, trafficked or any other involuntary or compulsory labor. Kontoor is committed to carrying out business mapping to identify parts of our supply chain most at risk for use of forced labor. We expect the same commitment from our suppliers
3.2 Kontoor’s Code of Business Conduct
Kontoor’s Code of Business Conduct (“Code of Conduct”) reflects our core value of treating all people with dignity and respect. We comply with the UN Guiding Principles, ILO standards, and OECD guidelines and we expect the same from our contractors, agents, and suppliers.
The Code of Conduct establishes standards, expectations and business conduct policies for everyone who conducts business on behalf of Kontoor, including associates and members of Kontoor’s Board of Directors, regardless of seniority or location. The Code of Conduct helps ensure we demonstrate leadership and strong values when interacting with each other, our customers, our business partners and our communities. The Code of Conduct also reiterates Kontoor’s commitment to individual rights throughout our operations through our Responsible Sourcing Program, which prohibits both forced and child labour.
3.3 Policy on Cotton Fiber Sourcing
This policy outlines requirements for all cotton used in Kontoor products, including trim. The policy makes it clear that Kontoor will not knowingly engage in any business transaction or commercial relationship (direct or indirect) with any person, entity, country, or territory using forced labour.
3.4 Kontoor Facility Guidelines
To address potential risks of forced or child labour within our operations and supply chain, Kontoor performs due diligence and audit processes that are based on Kontoor’s Facility Guidelines and relevant local laws. Before engaging in any business with Kontoor, each contracted factory must undergo a rigorous Factory Compliance Audit.
4. Due Diligence and Steps Taken to Prevent and Reduce the Risk of Forced and Child Labour
Kontoor closely monitors adherence to our policies and standards through established due diligence processes, including but not limited to, the following preventative steps:
4.1 Material Traceability and Supply Chain Mapping
We have implemented a materials traceability software platform (via a third-party vendor) to enable verifiable monitoring and tracking of materials throughout our supply chain, which improves the traceability of materials at the product level. We are continuously collaborating with our third-party vendor to refine the system for identifying and managing external supply chains. This helps in understanding the complexity of the supply chains and identifying potential risks related to forced and child labour.
4.2 Training Provided on Forced Labour and Child Labour
Kontoor facilitates training programs and capacity-building initiatives for suppliers and employees to raise awareness about forced labour and child labour, their risks, and ways to identify and address these issues effectively.
Kontoor employees receive annual assignments to complete online and/or facilitator-led training on our Code of Conduct. Our associates and management who directly interact with our suppliers also receive periodic updates on new policy and regulatory changes through internal and external training.
In December 2024 we provided training to suppliers on the prohibition of recruitment fees, including why we prohibit them, to ensure workers are not burdened with these costs.
4.3 Social Compliance Audits
During 2024, we conducted 732 social compliance audits spread across 23 countries to verify adherence to our policies and standards. The team conducting these audits consists of both trained internal factory compliance auditors and independent third-party auditors who ensure compliance with our Terms of Engagement and Global Compliance Principles.
Before entering our supply chain, we evaluate potential contracted factories against our standards and require them to agree to our Terms of Engagement and Global Compliance Principles prior to entering our supply chain. This document provides clear guidance on Kontoor's expectations, covering critical topics such as forced and child labour. Additionally, it prohibits contracted factories from engaging subcontractors to produce Kontoor products without first obtaining written permission from Kontoor.
Our on-site audit process includes both scheduled and unannounced audits by our trained factory compliance auditors and independent third-party auditors. These audits evaluate various potential issues including health and safety concerns, wage and social compliance issues, forced labour, child labour, harassment-free workplace policies, and environmental matters. We have established regular audits, assessments, and monitoring mechanisms to ensure ongoing compliance with these guidelines.
4.4 Risk Assessment and Management
Kontoor uses social compliance audit results to ensure compliance standards are met and to implement a risk-based mapping system. By analyzing these audit results, we identify and prioritize supply chain risks, enabling proactive risk mitigation strategies and targeted interventions where needed. The audit results provide data used to determine monitoring frequency, oversight mechanisms, intervention and mitigation steps, corrective actions, and facility termination decisions.
5. Identifying Areas with a Risk of Forced and Child Labour
5.1 Forced labour
Our risk-based mapping for forced labour includes a focus on identifying the practice of charging recruitment fees when assessing a potential factory. In 2024, we identified Thailand as a moderate risk country for such practices. During a social compliance audit, we found migrant workers in a factory in Thailand near the Myanmar border were paying for various documents and fees, including work permits, visas, employer changes, identification cards, and passport renewals. These practices violate Kontoor's Global Compliance Principles and therefore, this factory was not approved.
6. Remediation Measures for Loss of Income to Vulnerable Families
We have taken proactive measures to protect vulnerable families' incomes during the transition from forced and/or child labour practices.
To this effect, and in line with ILO Convention No. 138, Kontoor requires that its suppliers implement a child labour policy and a remediation policy addressing income loss for affected families. Remedial actions include:
- Providing a stipend to the child until the child reaches age 16 or the legal working age.
- Covering the costs of tuition and uniforms for school.
- Offering employment once the child is of legal working age.
- Ensuring health checks and covering transportation and accommodation costs for relatives to safely return the child home.
At times, Kontoor will also collaborate with local organizations and governments to offer resources such as counselling and educational information on the negative effects of child labour.
7. Effectiveness Assessment in Preventing Forced and Child Labour
Kontoor regularly assesses the effectiveness of our efforts to prevent and reduce the risks of forced and child labour in our supply chain. Through ongoing monitoring, evaluation, and feedback mechanisms, we measure the impact of our initiatives, and we identify areas for improvement. We also publish a yearly sustainability progress report, which includes information on our forced and child labour prevention measures.
7.1 Updates to Policies and Standards
Kontoor regularly updates its policies and standards to align with recent developments, legal requirements, best practices, and to continue to improve our practices to achieve maximum effectiveness.
7.2 Tracking Mechanism
We track the performance and progress of each facility over time, which is another key aspect of Kontoor's risk-based approach to supply chain compliance. By monitoring the implementation of corrective actions and evaluating the effectiveness of remediation efforts, Kontoor can track improvements in compliance. This tracking mechanism enables Kontoor to assess the impact of interventions, measure continuous improvement, and ensure sustained compliance with our standards by suppliers.
7.3 Grievance Mechanisms.
Workers can raise concerns through our Ethics Helpline or a dedicated Kontoor email address. The Ethics Helpline, available 24/7/365 and in multiple languages, is listed on our website and on factory noticeboards. Workers can also report issues directly to compliance auditors during regularly scheduled social compliance audits. All reports are taken seriously, investigated, and addressed appropriately.
8. Conclusion
Kontoor is committed to protecting workers' rights throughout our operations. We uphold ethical practices through our existing processes and practices, continuous improvement and stakeholder collaboration. Our standards for supply chain compliance are maintained through effective policies, proactive engagement, and innovative strategies that support workers' rights and their well-being.
9. Attestation
In accordance with the requirements of the Act, and in particular section 11 thereof, I attest that I have reviewed the information contained in the report for the entity listed above. Based on my knowledge, and having exercised reasonable diligence, I attest that the information in the report is true, accurate, and complete in all material respects for the purposes of the Act, for the 2024 reporting year.