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					FLA Audit Profile
Country                                                                    Viet Nam
Name of Factory                                                            650084719F
Independent External Monitoring Organization                               Global Standards
Date(s) in Facility                                                        November 20-21, 2007
FLA Affiliated Compan(ies)                                                 Sanmar
Number of Workers                                                          3400
Product(s)                                                                 Garment
Production Processes                                                       Cutting--> preparation-->sewing -->finishing-->inspection

FLA Code/Benchmark                                                         Compliance Status Describe noncompliance, risk of               List sources/documentation used     Cite and describe local and/or   Describe notable
                                                                                             noncompliance or uncorroborated               for reference and corroborating     country laws used for additional features implemented by
                                                                                             evidence of noncompliance                     evidence (e.g. worker interviews,   reference                        factory management or
                                                                                                                                           factory walkthrough, records                                         Company
                                                                                                                                           review, etc.)

1. Code Awareness
GEN 3: Develop a secure communications channel, in a manner                Noncompliance       The Company Code of Conduct is posted Visual inspection
appropriate to the culture and situation, to enable Company                                    in workers' language, however contacts record review
employees and employees of contractors and suppliers to report to                              provided by the Company are not posted
the Company on noncompliance with the workplace standards, with                                for workers.
security that they shall not be punished or prejudiced for doing so.

2. Forced Labor
There will not be any use of forced labor, whether in the form of prison
labor, indentured labor, bonded labor or otherwise.
3. Child Labor
No person will be employed at an age younger than 15 (or 14 where
the law of the country of manufacture allows) or younger than the age
for completing compulsory education in the country of manufacture
where such age is higher than 15.
4. Harassment or Abuse
Every employee will be treated with respect and dignity. No employee
will be subject to any physical, sexual, psychological or verbal
harassment of abuse.
H&A.8 Discipline/Monetary Fines and Penalties                            Noncompliance         Factory employs monetary fines for          Visual inspection                   Article 60 of the Labor Code: An
                                                                                               discipline of workers in case of smoking.                                       employer is prohibited from
                                                                                               These fines are collected by security,                                          imposing fines and penalties by
                                                                                               who have been given permission in                                               way of deductions from wages
                                                                                               writing to enforce this policy.                                                 of employees.

Other                                                                      Noncompliance       In some cases, discipline system does       Visual inspection
                                                                                               not follow proper procedures written in the Worker interview
                                                                                               labor regulations, i.e. public warning,
                                                                                               posting of disciplinary decisions and fine.

5. Non-Discrimination
No person will be subject to any discrimination in employment,
including hiring, salary, benefits, advancement, discipline, termination
or retirement, on the basis of gender, race, religion, age, disability,
sexual orientation, nationality, political opinion, or social or ethnic
origin.

6. Health and Safety
Employers will provide a safe and healthy working environment to
prevent accidents and injury to health arising out of, linked with, or
occurring in the course of work or as a result of the operation of
employer facilities.




                                                                                                                                                                                                                            1
FLA Code/Benchmark                                                        Compliance Status Describe noncompliance, risk of              List sources/documentation used     Cite and describe local and/or   Describe notable
                                                                                            noncompliance or uncorroborated              for reference and corroborating     country laws used for additional features implemented by
                                                                                            evidence of noncompliance                    evidence (e.g. worker interviews,   reference                        factory management or
                                                                                                                                         factory walkthrough, records                                         Company
                                                                                                                                         review, etc.)

H&S.1 General Compliance Health and Safety                                Noncompliance     Work accident reports and investigations record review
                                                                                            do not follow the form or procedures as
                                                                                            regulated by law in Joint Circular
                                                                                            14/2005/TTLT-BLDTBXH-BYT-TLDLDVN

H&S.9 Evacuation Requirements and Procedure                               Noncompliance     Some aisles are too narrow (less than        visual inspection
                                                                                            0.8m Vietnamese standard) and are
                                                                                            effectively blocked and impassible.
H&S.13 Chemical Management and Training                                   Noncompliance     Factory has no policies, procedures,     Visual inspection                       Decree No. 68/2005/ND-CP
                                                                                            training or system to manage chemicals                                           dated 20 May 2005
                                                                                            for spot cleaning. Management claims
                                                                                            that workers bring cleaning
                                                                                            solvents/chemicals from outside, without
                                                                                            the control, oversight or approval of
                                                                                            management. No proper ventilation, PPE,
                                                                                            MSDS or other elements of safe chemical
                                                                                            handling and management present.
                                                                                            Chemical list and MSDS available for
                                                                                            laundry chemicals ONLY.

H&S.21 Medical Facilities                                                 Noncompliance     First aid boxes are sometimes locked and visual inspection                       Article 103 of the Labor Code:
                                                                                            no adequate system for keeping keys for                                          Enterprises shall be responsible
                                                                                            access exists. Some boxes were not fully                                         for organizing health care for
                                                                                            stocked and contained expired materials,                                         employees and for
                                                                                            e.g. Alcohol.                                                                    implementation of first aid and
                                                                                                                                                                             emergency actions when
                                                                                                                                                                             required.
H&S.22 Sanitation in Factory Facilities                                   Noncompliance     Toilet hygiene is poor, some doors are       visual inspection                                                      Factory is clean, orderly
                                                                                            broken and do not lock, toilet paper and                                                                            and well maintained.
                                                                                            soap are not supplied and replaced
                                                                                            regularly;
H&S.24 Toilets/Restrictions                                               Noncompliance     Toilets are locked and the keys are kept     visual inspection
                                                                                            by supervisor, limiting workers' access to
                                                                                            the toilets.

Other                                                                     Noncompliance     Orientation training was conducted only      record review
                                                                                            up to the 1st quarter of 2007. Health and
                                                                                            safety training has not been conducted in
                                                                                            workshop No. 8 since 31 March 2007 for
                                                                                            new or existing workers.
7. Freedom of Association and Collective Bargaining
Employers will recognize and respect the right of employees to
freedom of association and collective bargaining.
8. Hours of Work
Except in extraordinary business circumstances, employees will (i) not
be required to work more than the lesser of (a) 48 hours per week and
12 hours overtime or (b) the limits on regular and overtime hours
allowed by the law of the country of manufacture or, where the laws of
such country will not limit the hours of work, the regular work week in
such country plus 12 hours overtime; and (ii) be entitled to at least
one day off in every seven day period.




                                                                                                                                                                                                                              2
FLA Code/Benchmark                                                        Compliance Status Describe noncompliance, risk of             List sources/documentation used     Cite and describe local and/or   Describe notable
                                                                                            noncompliance or uncorroborated             for reference and corroborating     country laws used for additional features implemented by
                                                                                            evidence of noncompliance                   evidence (e.g. worker interviews,   reference                        factory management or
                                                                                                                                        factory walkthrough, records                                         Company
                                                                                                                                        review, etc.)

HOW.2 Rest Day                                                            Noncompliance     Workers worked at least 1 Sunday a          record review                       Article 72 of the Labor Code:
                                                                                            month from April to July 2007 but                                               1. In every week, each
                                                                                            compensating days were all taken in                                             employee shall be entitled to a
                                                                                            September, not within the month as per                                          break of at least one day
                                                                                            labor code.                                                                     (twenty four consecutive hours).
                                                                                                                                                                            2. An employer may arrange for
                                                                                                                                                                            the weekly day off to fall on a
                                                                                                                                                                            Sunday or another specified day
                                                                                                                                                                            of the week.
                                                                                                                                                                            3. Where, due to the nature of
                                                                                                                                                                            the work, it is impossible for the
                                                                                                                                                                            employees to have a weekly
                                                                                                                                                                            day off, the employer must
                                                                                                                                                                            ensure that the employees on
                                                                                                                                                                            average have at least four days
                                                                                                                                                                            off in a month.

HOW.3 Meal and Rest Breaks                                                Noncompliance     Workers reported to have 1 hour 30          worker interview                    Article 71 of the Labor Code:
                                                                                            minutes for lunch. In fact, workers break   management interview                1. An employee who works for
                                                                                            for only 1 hour and work extra half-hour,   visual inspection                   eight hours consecutively shall
                                                                                            apparently without pay. Monitors were                                           be entitled to a break of at least
                                                                                            denied access to the workshops during                                           half an hour which shall be
                                                                                            this 1 hour 30 minute period for reasons                                        included in the number of hours
                                                                                            of "security", however even from outside                                        worked.
                                                                                            Monitors could see that majority of                                             2. An employee who works
                                                                                            workers were working at 1:15pm.                                                 nightshift shall be entitled to a
                                                                                                                                                                            break of at least forty five (45)
                                                                                                                                                                            minutes which shall be included
                                                                                                                                                                            in the number of hours worked.
                                                                                                                                                                            3. An employee who works in
                                                                                                                                                                            shifts shall be entitled to a
                                                                                                                                                                            break of at least twelve hours
                                                                                                                                                                            between each shift.

HOW.6 Time Recording System                                               Noncompliance     Workers in Embroidery Department do         record review
                                                                                            not have swipe card system to use, but      worker interviews
                                                                                            their work hours are recorded manually
                                                                                            by the line supervisors.
WAGES AND BENEFITS: Employers recognize that wages are
essential to meeting employees’ basic needs. Employers will pay
employees, as a base, at least the minimum wage required by local
law or the prevailing industry wage, whichever is higher, and will
provide legally mandated benefits.
OVERTIME COMPENSATION: In addition to their compensation for
regular hours of work, employees will be compensated for overtime
hours at such premium rate as is legally required in the country of
manufacture or, in those countries where such laws will not exist, at a
rate at least equal to their regular hourly compensation rate.

WBOT.5 Holidays, Leave, Legal Benefits and Bonuses                        Noncompliance     Balance annual leave is sometimes           record review
                                                                                            deducted from workers who resign.           worker interviews
WBOT.7 Payment for All Hours Worked                                       Noncompliance     Factory conducts trainings during           record review
                                                                                            overtime and pays in cash, so proper
                                                                                            hours and pay premium cannot be
                                                                                            verified.
                                                                                                                                                                                                                         3
FLA Code/Benchmark                                               Compliance Status Describe noncompliance, risk of              List sources/documentation used     Cite and describe local and/or   Describe notable
                                                                                   noncompliance or uncorroborated              for reference and corroborating     country laws used for additional features implemented by
                                                                                   evidence of noncompliance                    evidence (e.g. worker interviews,   reference                        factory management or
                                                                                                                                factory walkthrough, records                                         Company
                                                                                                                                review, etc.)

WBOT.10 Premium/Overtime Compensation                            Noncompliance     Workers worked on holiday (e.g. King      record review
                                                                                   Hung's death anniversary, April 26, 2007)
                                                                                   and were paid at 100% piece rate plus
                                                                                   200% of hourly rate in violation of law
                                                                                   (which stipulates 300% of piece rate).

Other                                                            Risk of           In some cases, workers have received a       record review
                                                                 noncompliance     wage increase, but this has not been         worker interviews
                                                                                   updated, amended or appended to their
                                                                                   contract as legally required. (Factory has
                                                                                   a list for the whole department and posts
                                                                                   for worker).
10. Miscellaneous
Subcontracting, homework and other issues not covered by above
benchmarks and code requirements.




                                                                                                                                                                                                                 4
FLA Audit Profile
Country                                                 Viet Nam
Name of Factory                                         650084719F
Independent External Monitoring Organization            Global Standards
Date(s) in Facility                                     November 20-21, 2007
FLA Affiliated Compan(ies)                              Sanmar
Number of Workers                                       3400
Product(s)                                              Garment
Production Processes                                    Cutting--> preparation-->sewing -->finishing-->inspection

FLA Code/Benchmark                                      Compliance                                                                             Remediation                                                                                                                                Status
                                                        Status             Description of noncompliance, risk of      Company Internal Audit   Company Remediation Plan              Target       Factory Response (optional)             Company Follow-Up (cite date of follow- Docume Completed,
                                                                           noncompliance or uncorroborated            Findings (optional)                                            Completion                                           up)                                     ntation Pending, On-
                                                                           evidence of noncompliance                                                                                 Date                                                                                                 going



GEN 3: Develop a secure communications channel, in a Noncompliance         The Company Code of Conduct is                                      Factory is requested to ensure that   Dec-07                                               Company conducted a follow-up visit to         Completed
manner appropriate to the culture and situation, to                        posted in workers' language, however                                Company contact information is                                                             confirm compliance on September 15,
enable Company employees and employees of                                  contacts provided by the Company are                                posted for workers on all copies of                                                        2008.
contractors and suppliers to report to the Company on                      not posted for workers                                              Company's Code of Conduct.
noncompliance with the workplace standards, with                                                                                                                                                                                          The Company contact hotline and email
security that they shall not be punished or prejudiced for                                                                                                                                                                                address in local language are included
doing so.                                                                                                                                                                                                                                 in Code of Conduct.
H&A.8 Discipline/Monetary Fines and Penalties              Noncompliance   Factory employs monetary fines for                                  Factory is requested to cancel the    Jul-08       The factory has revised the             Company conducted a follow-up visit to         Completed
                                                                           discipline of workers in case of                                    monetary fines and implemented a                   disciplinary system and                 confirm compliance on September 15,
                                                                           smoking. These fines are collected by                               disciplinary system.                               implemented the following: the          2008.
                                                                           security, who have been given                                                                                          employees will be given 3 times
                                                                           permission in writing to enforce this                                                                                  verbal warnings in case of violation    A written announcement was posted on
                                                                           policy.                                                                                                                of the factory regulations. If the      notice board that monetary fines were
                                                                                                                                                                                                  employees offend the factory            no longer applied for discipline of
                                                                                                                                                                                                  regulations continually, the factory    workers in case of smoking. The revised
                                                                                                                                                                                                  will issue a warning letter and then    disciplinary system was mentioned in
                                                                                                                                                                                                  terminate the labor contract finally.   factory regulation. Through employee
                                                                                                                                                                                                                                          interview, the interviewees confirmed
                                                                                                                                                                                                                                          steps by factory arrangement.

Other                                                   Noncompliance      In some cases, discipline system does                               Factory is requested to follow proper Jul-08       The factory has revised the             Company conducted a follow-up visit to         Completed
                                                                           not follow proper procedures written in                             procedure written in the labor                     disciplinary system and                 confirm compliance on September 15,
                                                                           the labor regulations, i.e. public                                  regulations.                                       implemented the following: the          2008.
                                                                           warning, posting of disciplinary                                                                                       employees will be given 3 times
                                                                           decisions and fine.                                                                                                    verbal warnings in case of violation    Factory issued a written announcement
                                                                                                                                                                                                  of the factory regulations. If the      for discipline procedure to ensure that
                                                                                                                                                                                                  employee offends the factory            discipline follows proper procedures
                                                                                                                                                                                                  regulations continually, the factory    written in the factory regulation.
                                                                                                                                                                                                  will issue a warning letter and then
                                                                                                                                                                                                  terminate the labor contract finally.
                                                                                                                                                                                                  Personal Department Chief is
                                                                                                                                                                                                  responsible for disciplinary action.

H&S.1 General Compliance Health and Safety              Noncompliance      Work accident reports and                                           Factory is requested to follow work   Jan-08       The factory has implemented as          Company conducted a follow-up visit to         Completed
                                                                           investigations do not follow the form or                            accident reports and investigations                required. Factory management did        confirm compliance on September 15,
                                                                           procedures as regulated by law in Joint                             procedures stipulated by law.                      not know the regulation clearly. So,    2008.
                                                                           Circular 14/2005/TTLT-BLDTBXH-BYT-                                                                                     work accident reports and
                                                                           TLDLDVN                                                                                                                investigations to be done by factory    Factory is now aware of the applicable
                                                                                                                                                                                                  did not follow the form or              law and has applied the form or
                                                                                                                                                                                                  procedures as regulated by law in       procedures as regulated by law to work
                                                                                                                                                                                                  Joint Circular 14/2005.                 accident reports and investigations.

                                                                                                                                                                                                                                          Factory has amended its documentation
                                                                                                                                                                                                                                          procedures to clearly indicate
                                                                                                                                                                                                                                          compliance with regulations and this
                                                                                                                                                                                                                                          revised work has been verified during
                                                                                                                                                                                                                                          our follow-up visit to factory.


H&S.9 Evacuation Requirements and Procedure             Noncompliance      Some aisles are too narrow (less than                               Factory is requested to rearrange     Dec-07       The factory has re-arranged the         Company conducted a follow-up visit to         Ongoing
                                                                           0.8m Vietnamese standard) and are                                   the layout to ensure the width of                  tables and chairs to assure width of    confirm compliance on September 15,
                                                                           effectively blocked and impassible.                                 aisles are in compliance with legal                aisles as required.                     2008.
                                                                                                                                               standards.
                                                                                                                                                                                                                                          All exit aisles were kept clear without
                                                                                                                                                                                                                                          any obstruction. However, the exit
                                                                                                                                                                                                                                          aisles between the sewing lines in all
                                                                                                                                                                                                                                          workshops were narrow by around
                                                                                                                                                                                                                                          40cm. Factory will adjust the secondary
                                                                                                                                                                                                                                          aisles by end of December 2008 when
                                                                                                                                                                                                                                          the new factory capacity is available.




                                                                                                                                                                                                                                                                                            5
FLA Code/Benchmark                        Compliance                                                                           Remediation                                                                                                                                    Status
                                          Status           Description of noncompliance, risk of      Company Internal Audit   Company Remediation Plan                  Target       Factory Response (optional)             Company Follow-Up (cite date of follow- Docume Completed,
                                                           noncompliance or uncorroborated            Findings (optional)                                                Completion                                           up)                                     ntation Pending, On-
                                                           evidence of noncompliance                                                                                     Date                                                                                                 going



H&S.13 Chemical Management and Training   Noncompliance    Factory has no policies, procedures,                                Factory is requested to update       Aug-08                                                    Company conducted a follow-up visit to         Completed
                                                           training or system to manage chemicals                              policies, procedures and training of                                                           confirm compliance on September 15,
                                                           for spot cleaning. Management claims                                systems covering the management                                                                2008.
                                                           that workers bring cleaning                                         of chemicals for spot cleaning.
                                                           solvents/chemicals from outside,                                    Whenever chemicals are used,                                                                   A written announcement was posted on
                                                           without the control, oversight or                                   MSDS shall be available in local                                                               notice board that chemicals were no
                                                           approval of management. No proper                                   language for reference and workers                                                             longer used for spot cleaning or other
                                                           ventilation, PPE, MSDS or other                                     should not be able to bring                                                                    purpose in production. Only water is to
                                                           elements of safe chemical handling and                              solvents/chemicals from ouside                                                                 be used.
                                                           management present. Chemical list and                               without the approval of management.
                                                           MSDS available for laundry chemicals                                                                                                                               It was noted through interviews that the
                                                           ONLY.                                                                                                                                                              workers are aware of the revised policy.

H&S.21 Medical Facilities                 Noncompliance    First aid boxes are sometimes locked                                Factory is requested to unlock the        Dec-07       The factory has checked all first aid   Company conducted a follow-up visit to         Completed
                                                           and no adequate system for keeping                                  first aid boxes at all times. The first                boxes and replaced the expired          confirm compliance on September 15,
                                                           keys for access exists. Some boxes                                  aid supplies are checked every                         materials. In front of boxes, the       2008.
                                                           were not fully stocked and contained                                week by factory management and                         factory pasted a list of personnel
                                                           expired materials, e.g. Alcohol.                                    replenished whenever necessary.                        who keep the key.                       All first aid boxes were well stocked with
                                                                                                                                                                                                                              necessary first aid supplies without
                                                                                                                                                                                                                              expiration and unlocked during working
                                                                                                                                                                                                                              hours. Factory has set up a procedure
                                                                                                                                                                                                                              that management staff conducted the
                                                                                                                                                                                                                              checking of the content of first aid
                                                                                                                                                                                                                              boxes weekly.




H&S.22 Sanitation in Factory Facilities   Noncompliance    Toilet hygiene is poor, some doors are                              Factory is requested to clean the        Dec-07        The factory has implemented as          Company conducted a follow-up visit to         Completed
                                                           broken and do not lock, toilet paper and                            toilets, repair the broken toilet doors,               requested.                              confirm compliance on September 15,
                                                           soap are not supplied and replaced                                  supply and replenish the toilet paper                                                          2008.
                                                           regularly;                                                          and soap regularly. Management
                                                                                                                               staff is assigned for regular checking.                                                   The toilet hygiene was good. All toilet
                                                                                                                                                                                                                         doors have the latch. All toilets were
                                                                                                                                                                                                                         provided with toilet paper and soap. The
                                                                                                                                                                                                                         factory management is assigned for
                                                                                                                                                                                                                         checking the toilet hygiene, paper and
                                                                                                                                                                                                                         soap supplies.
H&S.24 Toilets/Restrictions               Noncompliance    Toilets are locked and the keys are kept                            Factory is requested to unlock the        Dec-07       All toilet doors were always open  Company conducted a follow-up visit to              Completed
                                                           by supervisor, limiting workers' access                             toilets at all times and ensure all                    and unlocked. All employees access confirm compliance on September 15,
                                                           to the toilets.                                                     employees are free to access the                       free to the toilets.               2008.
                                                                                                                               toilets without limitation.
                                                                                                                                                                                                                              All toilets were unlocked during working
                                                                                                                                                                                                                              hours. During the employee interview,
                                                                                                                                                                                                                              the interviewees confirmed this new
                                                                                                                                                                                                                              practice.


Other                                     Noncompliance    Orientation training was conducted only                             Factory is requested to conduct the Dec-07             The factory has since conducted         Company conducted a follow-up visit to         Completed
                                                           up to the 1st quarter of 2007. Health                               health and safety training for new or                  orientation trainings every month in    confirm compliance on September 15,
                                                           and safety training has not been                                    existing employees at least annually.                  all workshops.                          2008.
                                                           conducted in workshop No. 8 since 31
                                                           March 2007 for new or existing workers.                                                                                                                            Factory had conducted orientation
                                                                                                                                                                                                                              training for new recruited workers and
                                                                                                                                                                                                                              health & safety training was provided for
                                                                                                                                                                                                                              the workers in the workshop. All
                                                                                                                                                                                                                              required trainings were noted to be
                                                                                                                                                                                                                              done.
HOW.1 General Compliance Hours of Work    Uncorroborated   Monitors found numerous                                             Factory is requested to review the   Sep-07            The factory has ceased practice of      Company conducted a follow-up visit to         Completed
                                          noncompliance    discrepancies between worker                                        HR and accounting systems,                             Sunday work to comply with labor        confirm compliance on September 15,
                                                           interview, time records and discipline                              especially those relating to working                   regulations and is working to           2008.
                                                           records, security records and were                                  hours, wages and benefits to ensure                    improve maintenance of records.
                                                           unable to verify accuracy of Sunday                                 that all information or data is                                                                Randomly checked payrolls, time
                                                           work, hours or overtime pay.                                        verifiable and accurate.                                                                       records and other documents, all
                                                                                                                                                                                                                              records were found consistent.
                                                                                                                                                                                                                              Compensation and working hours were
                                                                                                                                                                                                                              in compliance with the legal
                                                                                                                                                                                                                              requirements.




                                                                                                                                                                                                                                                                                6
FLA Code/Benchmark                                   Compliance                                                                         Remediation                                                                                                                                Status
                                                     Status          Description of noncompliance, risk of     Company Internal Audit   Company Remediation Plan               Target       Factory Response (optional)            Company Follow-Up (cite date of follow- Docume Completed,
                                                                     noncompliance or uncorroborated           Findings (optional)                                             Completion                                          up)                                     ntation Pending, On-
                                                                     evidence of noncompliance                                                                                 Date                                                                                                going



HOW.2 Rest Day                                       Noncompliance   workers worked at least 1 Sunday a                                 Factory is requested to review the    Sep-07        The factory has ceased practice of     Company conducted a follow-up visit to         Completed
                                                                     month from April to July 2007 but                                  local labor code and working hour                   Sunday work to comply with labor       confirm compliance on September 15,
                                                                     compensating days of were all taken in                             system to ensure that the alternative               regulations.                           2008.
                                                                     September, not within the month as per                             day off is compensated within the
                                                                     labor code                                                         same month of work.                                                                        During record review, it was noted that
                                                                                                                                                                                                                                   workers had worked 1 Sunday on
                                                                                                                                                                                                                                   August 31, 2008 but the factory had
                                                                                                                                                                                                                                   provided an alternative day-off on
                                                                                                                                                                                                                                   September 1, 2008.
HOW.3 Meal and Rest Breaks                           Noncompliance   Workers reported to have 1 hour 30                                 Factory is requested to ensure all     Dec-07       The workers wanted to earn more        Company conducted a follow-up visit to         Completed
                                                                     minutes for lunch. In fact, workers                                employees have 1.5 hour meal                        money so they worked during the        confirm compliance on September 15,
                                                                     break for only 1 hour and work extra                               break and no work is done during                    meal break. The factory requires       2008.
                                                                     half-hour, apparently without pay.                                 the meal break.                                     employees to have the meal break
                                                                     Monitors were denied access to the                                                                                     as per factory requirement.            During the lunch break, the factory cut
                                                                     workshops during this 1 hour 30 minute                                                                                                                        off the power of the production
                                                                     period for reasons of "security",                                                                                                                             machines and no one can be worked in
                                                                     however even from outside Monitors                                                                                                                            lunch time. During employee interview,
                                                                     could see that majority of workers were                                                                                                                       the interviewees confirmed this change
                                                                     working at 1:15pm.                                                                                                                                            in policy.
HOW.6 Time Recording System                          Noncompliance   Workers in Embroidery Department do                                Factory is requested to record the     Jun-08       The factory has installed a swipe      Company conducted a follow-up visit to         Ongoing
                                                                     not have swipe card system to use, but                             working hour in a reliable way such                 card system in the embroidery          confirm compliance on September 15,
                                                                     their work hours are recorded manually                             as electronic record system.                        department.                            2008.
                                                                     by the line supervisors.
                                                                                                                                                                                                                                   Manual attendance sheets were being
                                                                                                                                                                                                                                   used to record the working hours in
                                                                                                                                                                                                                                   finishing and embroidery workshops. It
                                                                                                                                                                                                                                   was noted that the factory had
                                                                                                                                                                                                                                   implemented a swipe card system since
                                                                                                                                                                                                                                   September 1, 2008 in trial period but still
                                                                                                                                                                                                                                   keep the manual attendance sheets.
                                                                                                                                                                                                                                   Once the system is stable, it will be
                                                                                                                                                                                                                                   implemented officially. Factory advised
                                                                                                                                                                                                                                   the time card system will be applied by
                                                                                                                                                                                                                                   end of October 2008.

WBOT.5 Holidays, Leave, Legal Benefits and Bonuses   Noncompliance   Balance annual leave is sometimes                                  Factory is requested to pay the        Apr-08       The factory pays the balance annual Company conducted a follow-up visit to            Completed
                                                                     deducted from workers who resign.                                  balance annual leave when the                       leave to employees who resign as    confirm compliance on September 15,
                                                                                                                                        employees resign or the workers                     required.                           2008.
                                                                                                                                        would take their balance days of
                                                                                                                                        annual leave before resignation in                                                         Through record review, the resigned
                                                                                                                                        accordance with the local labor law.                                                       workers were found to have taken the
                                                                                                                                                                                                                                   balance annual leave before resignation
                                                                                                                                                                                                                                   currently.
WBOT.7 Payment for All Hours Worked                  Noncompliance   Factory conducts trainings during                                  Factory is requested to record all the Dec-07       The factory has recorded the           Company conducted a follow-up visit to         Completed
                                                                     overtime and pays in cash, so proper                               training hours beyond regular hours                 training payment.                      confirm compliance on September 15,
                                                                     hours ad pay premium cannot be                                     and pay the overtime premium                                                               2008.
                                                                     verified.                                                          accordingly. A pay slip for training
                                                                                                                                        with employees' signature shall be                                                         The factory paid overtime premium in
                                                                                                                                        provided to employees for                                                                  cash for the training beyond regular
                                                                                                                                        acknowledgement.                                                                           hours.
WBOT.10 Premium/Overtime Compensation                Noncompliance   Workers worked on holiday (e.g. King                               Factory is requested to review the     Apr-08       The factory acknowledges that          Company conducted a follow-up visit to         Completed
                                                                     Hung's death anniversary, April 26,                                labor laws and internal wage system                 correct calculation is 300% of piece   confirm compliance on September 15,
                                                                     2007) and were paid at 100% piece                                  to ensure any holiday work is paid                  rate for the employees who work in     2008.
                                                                     rate plus 200% of hourly rate in                                   accuately.                                          holidays, including King Hung's
                                                                     violation of law (300% of piece rate).                                                                                 death anniversary. In 2008, no work    The factory arranged a day off on the
                                                                                                                                                                                            was performed on this holiday.         King Hung Death Anniversary in 2008
                                                                                                                                                                                                                                   for all employees and paid 100% of
                                                                                                                                                                                                                                   basic salary which complies with legal
                                                                                                                                                                                                                                   requirements.

                                                                                                                                                                                                                                   Through reviewed payroll and time
                                                                                                                                                                                                                                   cards from April 2008 to August 2008,
                                                                                                                                                                                                                                   there were 2 holidays in this period
                                                                                                                                                                                                                                   (April 30 – Victory Day and May 1 –
                                                                                                                                                                                                                                   Labor Day). The workers had not been
                                                                                                                                                                                                                                   arranged to work on these holidays.
                                                                                                                                                                                                                                   Factory management and workers
                                                                                                                                                                                                                                   confirmed during the interview, no
                                                                                                                                                                                                                                   holiday work was assigned since
                                                                                                                                                                                                                                   January 2008.




                                                                                                                                                                                                                                                                                     7
FLA Code/Benchmark   Compliance                                                                         Remediation                                                                                                                          Status
                     Status          Description of noncompliance, risk of     Company Internal Audit   Company Remediation Plan            Target       Factory Response (optional)         Company Follow-Up (cite date of follow- Docume Completed,
                                     noncompliance or uncorroborated           Findings (optional)                                          Completion                                       up)                                     ntation Pending, On-
                                     evidence of noncompliance                                                                              Date                                                                                             going



Other                Risk of         In some cases, workers have received                               Factory is requested to update       Jan-08      The factory has updated as required. Company conducted a follow-up visit to        Completed
                     noncompliance   a wage increase, but this has not been                             employment contacts once                                                              confirm compliance on September 15,
                                     updated, amended or appended to their                              significant terms, such as wages are                                                  2008.
                                     contract as legally required. (Factory                             modified.
                                     has a list for the whole department and                                                                                                                 Through personal profile review, an
                                     posts for worker).                                                                                                                                      annex was found to be included to show
                                                                                                                                                                                             the updated wage increment.




                                                                                                                                                                                                                                               8
FLA Audit Profile
Country                                                  Viet Nam
Name of Factory                                          650084719F
Independent External Monitoring Organization             Global Standards
Date(s) in Facility                                      November 20-21, 2007
FLA Affiliated Compan(ies)                               Sanmar
Number of Workers                                        3400
Product(s)                                               Garment
Production Processes                                     Cutting--> preparation-->sewing -->finishing-->inspection

FLA Code/Benchmark                                       Compliance         [Status]     Description of                    Updates (Cite Date Third-Party           Company Verification Follow-Up
                                                         Status             Completed,   noncompliance, risk of            Company Docume External         Document Company Follow-Up         Documentati
                                                                            Pending,     noncompliance or                  Follow-Up ntation  Verification ation    (cite date of planned or on
                                                                            On-going     uncorroborated evidence of                           (Date)                follow-up visit, if
                                                                                         noncompliance                                                              appropriate)
GEN 3: Develop a secure communications channel, in a        Noncompliance   Completed    The Company Code of
manner appropriate to the culture and situation, to enable                               Conduct is posted in workers'
Company employees and employees of contractors and                                       language, however contacts
suppliers to report to the Company on noncompliance                                      provided by the Company
with the workplace standards, with security that they shall                              are not posted for workers.
not be punished or prejudiced for doing so.

H&A.8 Discipline/Monetary Fines and Penalties            Noncompliance      Completed    Factory employs monetary
                                                                                         fines for discipline of workers
                                                                                         in case of smoking. These
                                                                                         fines are collected by
                                                                                         security, who have been
                                                                                         given permission in writing to
                                                                                         enforce this policy.
Other                                                    Noncompliance      Completed    In some cases, discipline
                                                                                         system does not follow
                                                                                         proper procedures written in
                                                                                         the labor regulations, i.e.
                                                                                         public warning, posting of
                                                                                         disciplinary decisions and
                                                                                         fine.
H&S.1 General Compliance Health and Safety               Noncompliance      Completed    Work accident reports and
                                                                                         investigations do not follow
                                                                                         the form or procedures as
                                                                                         regulated by law in Joint
                                                                                         Circular 14/2005/TTLT-
                                                                                         BLDTBXH-BYT-TLDLDVN
H&S.9 Evacuation Requirements and Procedure              Noncompliance      Ongoing      Some aisles are too narrow
                                                                                         (less than 0.8m Vietnamese
                                                                                         standard) and are effectively
                                                                                         blocked and impassible.




                                                                                                                                                                                                9
FLA Code/Benchmark                        Compliance       [Status]     Description of                  Updates (Cite Date Third-Party           Company Verification Follow-Up
                                          Status           Completed,   noncompliance, risk of          Company Docume External         Document Company Follow-Up         Documentati
                                                           Pending,     noncompliance or                Follow-Up ntation  Verification ation    (cite date of planned or on
                                                           On-going     uncorroborated evidence of                         (Date)                follow-up visit, if
                                                                        noncompliance                                                            appropriate)
H&S.13 Chemical Management and Training   Noncompliance    Completed    Factory has no policies,
                                                                        procedures, training or
                                                                        system to manage chemicals
                                                                        for spot cleaning.
                                                                        Management claims that
                                                                        workers bring cleaning
                                                                        solvents/chemicals from
                                                                        outside, without the control,
                                                                        oversight or approval of
                                                                        management. No proper
                                                                        ventilation, PPE, MSDS or
                                                                        other elements of safe
                                                                        chemical handling and
                                                                        management present.
                                                                        Chemical list and MSDS
                                                                        available for laundry
                                                                        chemicals ONLY.
H&S.21 Medical Facilities                 Noncompliance    Completed    First aid boxes are
                                                                        sometimes locked and no
                                                                        adequate system for keeping
                                                                        keys for access exists. Some
                                                                        boxes were not fully stocked
                                                                        and contained expired
                                                                        materials, e. g. Alcohol.

H&S.22 Sanitation in Factory Facilities   Noncompliance    Completed    Toilet hygiene is poor, some
                                                                        doors are broken and do not
                                                                        lock, toilet paper and soap
                                                                        are not supplied and
                                                                        replaced regularly;
H&S.24 Toilets/Restrictions               Noncompliance    Completed    Toilets are locked and the
                                                                        keys are kept by supervisor,
                                                                        limiting workers' access to
                                                                        the toilets.
Other                                     Noncompliance    Completed    Orientation training was
                                                                        conducted only up to the 1st
                                                                        quarter of 2007. Health and
                                                                        safety training has not been
                                                                        conducted in workshop No. 8
                                                                        since 31 March 2007 for new
                                                                        or existing workers.

HOW.1 General Compliance Hours of Work    Uncorroborated   Completed    Monitors found numerous
                                          noncompliance                 discrepancies between
                                                                        worker interview, time
                                                                        records and discipline
                                                                        records, security records and
                                                                        were unable to verify
                                                                        accuracy of Sunday work,
                                                                        hours or overtime pay.

                                                                                                                                                                           10
FLA Code/Benchmark                                   Compliance      [Status]     Description of                   Updates (Cite Date Third-Party           Company Verification Follow-Up
                                                     Status          Completed,   noncompliance, risk of           Company Docume External         Document Company Follow-Up         Documentati
                                                                     Pending,     noncompliance or                 Follow-Up ntation  Verification ation    (cite date of planned or on
                                                                     On-going     uncorroborated evidence of                          (Date)                follow-up visit, if
                                                                                  noncompliance                                                             appropriate)
HOW.2 Rest Day                                       Noncompliance   Completed    Workers worked at least 1
                                                                                  Sunday a month from April to
                                                                                  July 2007 but compensating
                                                                                  days of were all taken in
                                                                                  September, not within the
                                                                                  month as per labor code

HOW.3 Meal and Rest Breaks                           Noncompliance   Completed    Workers reported to have 1
                                                                                  hour 30 minutes for lunch. In
                                                                                  fact, workers break for only 1
                                                                                  hour and work extra half-
                                                                                  hour, apparently without pay.
                                                                                  Monitors were denied access
                                                                                  to the workshops during this
                                                                                  1 hour 30 minute period for
                                                                                  reasons of "security",
                                                                                  however even from outside
                                                                                  Monitors could see that
                                                                                  majority of workers were
                                                                                  working at 1:15pm.
HOW.6 Time Recording System                          Noncompliance   Ongoing      Workers in Embroidery
                                                                                  Department do not have
                                                                                  swipe card system to use,
                                                                                  but their work hours are
                                                                                  recorded manually by the line
                                                                                  supervisors.
WBOT.5 Holidays, Leave, Legal Benefits and Bonuses   Noncompliance   Completed    Balance annual leave is
                                                                                  sometimes deducted from
                                                                                  workers who resign.
WBOT.7 Payment for All Hours Worked                  Noncompliance   Completed    Factory conducts trainings
                                                                                  during overtime and pays in
                                                                                  cash, so proper hours and
                                                                                  pay premium cannot be
                                                                                  verified.
WBOT.10 Premium/Overtime Compensation                Noncompliance   Completed    Workers worked on holiday
                                                                                  (e.g. King Hung's death
                                                                                  anniversary, April 26, 2007)
                                                                                  and were paid at 100% piece
                                                                                  rate plus 200% of hourly rate
                                                                                  in violation of law (300% of
                                                                                  piece rate).
Other                                                Risk of         Completed    In some cases, workers have
                                                     noncompliance                received a wage increase,
                                                                                  but this has not been
                                                                                  updated, amended or
                                                                                  appended to their contract as
                                                                                  legally required. (Factory has
                                                                                  a list for the whole
                                                                                  department and posts for
                                                                                  worker).

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