CODE OF CONDUCT COMPLIANCE RATING SYSTEM

行為守則合規性評級系統

Depending on its type and severity, all violations receive a score which is included on the CAP Scoring Matrix.

Suppliers are rated based on the number and score of the violations identified during an assessment. The following

represents the grading scale:

?  Satisfactory: Score of 0 to 7 points on the CAP Scoring Matrix, meaning no violations found, minimum

violations or WRAP, SA8000, ICTI or BSCI Certified (e.g. Machine maintenance required that does not

pose an immediate threat; Accidental miscalculation of benefits; Etc.)

?  Needs Improvement: Score of 8 to 29 points on the CAP Scoring Matrix, meaning medium risk violations

(e.g. missing age documents, Excessive hours, etc.) Findings must be corrected, verified, and closed out in

the CAPA process (see below)

?  Unsatisfactory: Score of 30 to 799 points on the CAP scoring matrix, meaning unacceptable practices that

represent significant risk (e.g. Minimum Wages not guaranteed Deficient Overtime payment, etc.)

? Zero Tolerance: Score of 800 or more points on the CAP scoring matrix, meaning extremely severe

violations and the facility will not be allowed for production (e.g. Forced labor, Child labor, Unpaid wages,

No fire safety equipment, etc.)

? Denied: The Third Party Monitoring Company was not allowed access to the Manufacturing or Material

Supplier to conduct the Assessment. This is interpreted as a Manufacturing or Material Supplier with

potential social compliance issues therefore production is not permitted. Denied access receives a score of

800 points on the CAP scoring matrix

A new Manufacturing or Material Supplier must receive a SATISFACTORY or NEEDS IMPROVEMENT rating

after a pre-production Assessment in order to be approved for production.

CORECTIVE ACTION PLAN (CAP) PROCESS

糾正行動方案（CAP）程序

Upon completion of the Assessment, if Code of Conduct violations are identified, the factory will receive a

Corrective Action Plan (CAP) Scoring Matrix listing all violations and recommended remediation plan.

The third party auditor will complete the following information on the CAP:

a) Description of the violation including legal and Code of Conduct requirements

b) Suggested remediation: What should the factory do to remediate the violation

c) The time required for the facility to present and implement a preventive action plan

The factory will be responsible for completing the following information on the CAP:

d) Root cause analysis: What problems caused the violation

e) Preventive Action Plan: What management systems will be implemented to prevent the issue to happen

again

f)  Name of project leader: The name of the factory’s employee responsible for ensuring execution of the

preventive action plan.

The key objectives of the Corrective Action Plan Process are 1) to help facilities identify what gave origin

to the Code of Conduct violation and 2) the measures and management systems that must be implemented to

guarantee that the violation will not occur again in the future; in other words that the violation is

remediated in a  sustainable way.

For factories ranked as “Unsatisfactory” a follow-up assessment will be required in order to verify implementation

of all preventive actions.