Ethical Sourcing

Ethical sourcing is a complex and ever-changing process. At Simba we recognise the importance of striving for continuous improvement and working collaboratively with our suppliers to identify improvement opportunities.

Identifying risk in our industry.

As the largest supplier of commercial textiles in Australia and New Zealand, we are well placed to influence industry processes and behaviour by choosing who becomes an approved Simba supplier, and to work with our currently approved suppliers to help them improve their sustainability practices.

We commissioned EY in 2019 to identify the inherent environmental, social and governance risks in each of the countries and suppliers that we source from. We used this data to create an ESG Heat Map which clearly shows where our highest ESG risks are located. Below we have taken our four primary supply countries (India, Pakistan, Bangladesh and China) to show the ranges of inherent risks in sourcing from those countries.

Our Inherent Sourcing Risks (Modern Slavery)

5 - 15%

Modern Slavery Risk* (General aggregate)

15 - 20%

Forced Labour Risk*

3 - 25%

Child Labour Risk*

4 - 10%

Debt Bondage Risk*

3 - 15%

Forced Marriage Risk*

10 - 15%

Human Trafficking Risk*

*Scores provided by EY based on human rights databases, indexes and reports from internationally recognised bodies including the Global Rights Index, International Labour Organisation and World Bank. Risks calculated with Supplier Risk Score = Country Risk Score × Industry Risk Score.

We are working closely with our suppliers to mitigate Ethical Sourcing risks. Our policy outlines the minimum acceptable ethical, labour and environmental standards that we will work to. We will benchmark our current position and document the work that needs to be done by us and our business partners to ensure a sustainable and ethical supply chain.

Ethical sourcing has always been at the heart of our family values.

Taking our first steps toward making real change.

Written by Hiten Somaia, GM of Technical.

It was 1999, and Simba — having been an Australian manufacturer of towels and sheets since 1984, was taking its first tentative steps towards supplementing our range with complementary products from India. During one of our sourcing trips, Kamal and I were at a large factory in the middle of India. We were being presented to in the showroom, and as I needed to use the restroom, I was given directions on how to get there. As I said, it was a large factory, and I got lost. I wondered from office block to office block looking for the restroom when I came across an office that piqued my curiosity and made me pause. In this office, was a person with a stack of what seemed like blank SGS test reports on their left. They picked up each sheet one by one, wrote down some numbers, rubber stamped the sheet, signed the sheet and then moved the sheet to a pile on their right.

It was a brief look, but what struck me was how easy it was for a company to appear to be compliant. We insisted on a test certificate to accompany every single product batch produced, but we left the definition of a product batch, the choice of the sample to test, the choice of the testing lab (and payment to the testing lab) to the supplier. And as I thought through all of that, walking back from the restroom (yes, I did find it!) to the showroom, Simba Sourcing 2.0 was born.

Today, we have our own offices, headed by a GM in every country we source from. We have our own QA inspectors, who conduct not just final inspections, but inspect all PO#s through all the different stages of manufacturing. Our QA team then pick samples at random to be sent to a testing lab that was chosen and accredited by Simba to conduct the testing, and the testing lab send Simba the invoice for payment. Any chance for the supplier to influence — however innocently — the product tested, the method of testing and the subjective nature of the testing assessment was removed.

As a team, we reviewed our responsibilities for Ethical sourcing and the Modern Slavery legislation quietly confident that we were doing everything right. After all, most of our suppliers (supplying 88% of our products by dollar volume) had “acceptable” external 3rd party audits. But as we challenged ourselves, we recognised that just as in 1999 with our QA testing regime, we were passive participants in the process. The 3rd party audit was conducted by an organisation not chosen by Simba, was not conducted on Simba's behalf, was not paid for by Simba, and most egregiously, the attaining of an “acceptable” audit, was the goal and not — like it should have been — the beginning of a conversation between Simba and its supplier.

Following this review a number of key initiatives were agreed to — most of which are outlined in our goals below. Simba would appoint a 3rd party auditor to conduct and pay for audits on Simba’s behalf. Simba would train its procurement team and in-country GMs and QA teams to become inspectors not just of quality, but also auditors for Social Compliance. During each visit to a supplier — be it by a member of the procurement team in Australia, our country GM or one of our QA team members, going through the audit and the non-conformances outlined would become a primary focus of the visit. And we also recognised and acknowledged that we needed to understand our Tier 2 suppliers much better. And because our suppliers and all of their employees are part of the Simba family, all of this would be done not in a punitive way, but in a way that acknowledges and recognises that we are indeed “better together”.

Welcome to Simba Sourcing 3.0.

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What are the industry issues we can directly address?

Cottage Industry Production

88% of our products (based on spend) originate from factories that want to supply to large and reputable customers. They know that as a minimum they have to achieve an acceptable social audit outcome conducted by a reputable 3rd party audit company. Of course they also need to demonstrate an ongoing commitment to treating their workers fairly, and ensuring that health, safety and environmental protections are in place.

So what about the other 12%? Most of this is product that comes from cottage industry (i.e. smaller) factories. A cottage industry is defined as one that is small scale which is often operated out of a home rather than a purpose built factory. The production is more labour than capital intensive, and the machinery used is based on out-dated technology. Third party audits are rarely conducted as business may be fearful of failing. The products they make are inherently harder to justify making in larger factories because demand does not allow for long continuous runs. Short runs on modern industrial machines means constant changing and retooling, which in turn would push pricing above the historical (low) price benchmarks that have been set for these products.

A couple of products that immediately spring to mind when discussing this issue are tea towels and drawsheets. At Simba, we will continue working with our cottage industry suppliers. For many families and even communities, the products made by cottage industries represent businesses and skills handed down through generations, from parents to children. It is often their only source of income. We will pay for 3rd party social compliance audits and will work together with our suppliers to action the nonconformances and improvements suggested. We also commit to paying a fair price for these products, and having this price certified by Fair-trade.

We commit to replacing our entire “cottage industry” product range with a Fair-trade range, bought from the same suppliers within three years.

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Know Your Supplier’s Suppliers

Just as importantly, know where those suppliers are based. Some countries have labour or tax laws that can increase the burden on a company if they employ more than a given number of people. To get around these laws and ensure revenue continues to increase, companies either outsource entire parts of their production line to other companies and other locations, or they source their labour from labour hire companies and keep he production in-house. The modern slavery and labour exploitation risks associated with using labour hire companies is well documented.

At Simba we commit to working closely with our direct suppliers to better understand the risks in our collective supply chains. To date, much of our supply chain has been transparent, but through Simba Sourcing 3.0 we hope to shine a much brighter light on it. By working Better Together, we can address worker exploitation and help end modern slavery.

We know that ethical sourcing requires a continuous improvement that has no end.

Our goals for the future.

    Our goals for

    Twelve Months

  1. Update our Supplier Manual to ensure an increase focus on and assessment of environmental, social and ethical sourcing.

  2. Appoint a third party external auditor to conduct ESG audits on our behalf, ensuring these audits reflect our policies and procedures.

  3. Start mapping our highest priority Tier 2 suppliers.

  4. Identify and publish all products supplied by Simba that are high risk of human rights abuses.

  5. Publish our Modern Slavery Policy and Statement (by August 2020).

    Our goals for

    Three Years

  1. Where possible replace all products identified as high risk with Fair-trade (or equivalent) alternatives.

  2. Provide training for our internal Quality Team to enable us to undertake regular ESG audits of our operations and supply chain. This will ensure we can work directly with our highest risk suppliers to better understand their practices and ethical sourcing commitments and develop practical and timely corrective action plans in consultation with them.

    Our goals for

    Ten Years

  1. Have the entire supply chain (including subsequent tier suppliers) fully audited and compliant to our ESG policy. From cradle to Simba, and from Simba to customer.
Our whole team including supply partners and our overseas offices thrive on making product that makes a difference to our customers and the environment”

Darren Hall - GM Procurement