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Issue 2004 - Freedom of Association
Issue 2004 - Freedom of Association
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Company ProfileCompliance ProgramFactory Data
Patagonia - Labor Compliance Program in Year Two1

Overview of the Program
Program Features

  1. Compliance Systems Developed in Year Two
  2. Improvements in Implementing the FLA Requirements

Overview of the Program

In Year Two, Patagonia completed the first year of its three-year initial implementation period of the FLA program. Patagonia's Social Audit Program was responsible for ensuring adherence to the labor standards defined in Patagonia's Code of Conduct, which corresponds to the FLA Code of Conduct. In this first year, the position Social Audit Coordinator was created in order to manage Patagonia's labor compliance efforts, including the implementation of FLA requirements. The Coordinator reports to the Executive Vice President of Legal and Human Resources, who oversees the program, and in turn reports to Patagonia's CEO.

At the factory level, Patagonia's production team members are the company personnel involved in communicating the Code standards to contractors and monitoring progress on remediation. Patagonia estimates that for production staff, 10% of their position is devoted to compliance-related activities. With a view to full labor compliance audits, as required by the FLA, the company relies on third-party monitors. In 2003, Patagonia contracted Cal Safety Compliance Corporation (CSCC) to conduct full monitoring visits in 20% of its active facilities.


Features of Patagonia's Labor Compliance Program in Year Two1

A. Compliance Systems Developed in Year Two

In the first year of its initial implementation period of the FLA program, the focus of Patagonia's Social Audit Program was on building the program and improving capacity at the operations level. This included reorganization within the company to create a specialized compliance department, investigation of the best approaches to staff training, and regular consultations with the FLA staff. Patagonia noted that while its approach to compliance has historically been reactive, the company is in the process of transitioning towards a more proactive program to ensure compliance with the Code.
  • The company took initial steps to improve management commitment to FLA requirements. The compliance team asked all suppliers to post the Code of Conduct in production facilities, and considered ways to create systems for workers to report noncompliance directly to Patagonia, should managers fail to comply with the Code. Factories were also required to submit to unannounced visits by FLA-accredited monitors.
  • The company viewed this first year of participating in FLA independent external monitoring and the ensuing remediation in three facilities as a good learning experience for staff as they initiate the company's new program. Two of the three monitored facilities were shared with other companies, providing opportunities for learning about different approaches to remediation.
  • The company continued to implement the policy of pre-sourcing audits, which requires all new facilities to undergo a full monitoring visit before receiving orders from Patagonia. All new facilities were accepted as sourcing facilities in Year Two.
  • Over the course of the next year, Patagonia has committed to ensuring programmatic developments in the area of training. In Year Three, the Social Audit Coordinator and Executive VP of Legal and Human Resources will receive more training to enable better selection of monitoring firms, improved data collection and analysis, and more robust remediation and prevention efforts. Patagonia is also committed to improving its engagement with local groups in coming years (such as NGOs, trade unions and other civil society organizations).

B. Improvements in Implementing the FLA Requirements

As Year Two represented the first year of FLA implementation for Patagonia, progress in the development of its program will be reported on next year.


1 Please note that this section in no way seeks to capture all of the compliance activities reported to the FLA by companies. Instead, the FLA considers it an overview of company activities that will provide the reader with a better understanding of each company's approach and focus in Year Two.
Copyright 2004 by the Fair Labor Association