We aim to provide great products at the lowest prices for our customers while respecting human rights. We are on a journey to continuously improve our ethical sourcing standards and processes and we are working in close partnership with our suppliers, non-government organisations, trade unions and government representatives to ensure better working conditions in the countries and communities where we source.
We are committed to conducting business in accordance with our international obligations and in compliance with all applicable laws and we work with suppliers who share and follow our high standards of conduct in whichever country they operate.
Ethical Sourcing Program
We have joined Target Australia, our sister company, to establish a combined Ethical Sourcing Program. The program has a comprehensive compliance framework designed to ensure our suppliers meet the ethical sourcing standards as outlined in our Ethical Sourcing Code.
English version
Chinese version
The Ethical Sourcing Program includes requirements relating to:
Communication of the Code
Grievance mechanism/worker hotline
Factory onboarding
Factory audits
Audit gradings
ILO Better Work Program
Critical non-compliances
Supplier transparency
High Risk designations
Our ethical sourcing audits are conducted by third party auditors. In FY 22, 10.7% of audits were announced, 85.1% semi-announced and 4.2% unannounced.
To obtain a complete overview of the program, please see our Ethical Sourcing Program Supplier Manual.
Kmart has established a scorecard system to assess supplier performance on quality, delivery, value and sustainability. Kmart forms strategic partnerships with the best performing suppliers for long term business growth
Kmart is a member of the Better Work program in Bangladesh, Cambodia, Indonesia and Vietnam. Our approach to audits and remediation is aligned with the Better Work methodology in these countries, including the active involvement of workers via independent worker-management committees and other mechanisms. 24% of our apparel factories are covered in the Better Work program, and 100% of these factories include trade union or worker committee representatives during assessment.
Ethical Sourcing Code
Our Ethical Sourcing Code (ESC) includes minimum requirements and expectations that all suppliers must meet as a condition of doing business with us.
The ESC is based on our commitment to respecting the core labour standards established by the International Labour Organization (ILO), protecting and respecting human rights as set out in the United Nations Universal Declaration of Human Rights and promoting environmental sustainability.
The ESC forms part of the contract with our suppliers and is supported by a rigorous audit program. We expect our suppliers to be honest and transparent in their dealings with us and to commit to making continuous improvements in their operations.
The commitments outlined in the ESC are communicated to all employees via the Kmart Code of Conduct and form part of mandatory compliance training.
Read our Ethical Sourcing Code here:
Ethical Sourcing Code - EnglishEnvironmental Requirements
As part of our Code, our suppliers must meet all relevant local and national environmental protection laws, and strive to comply with international environment protection standards including emission, waste, pollution, water, and forest protection. As part of our ethical sourcing audits, the following elements are assessed to ensure compliance:
an environmental policy and management system are in place
a person is designated with responsibility for environmental management issues
environmental permits have been obtained and are current
hazardous materials and chemicals are separated and disposed according to the law
wastewater is treated to meet legally required discharge standards and limits
training is provided to workers
remedial actions have been actioned, as required, to rectify any breaches identified.
Reporting
We report on our ethical sourcing performance in the Wesfarmers Group Sustainability Report. This includes the number of suppliers audited in the financial year and the number of critical breaches identified or reported. For more information, see our most recent ethical sourcing data.
Modern Slavery
Kmart Australia together with Target Australia opposes slavery in all its forms and reports on its modern slavery risks and mitigation approach as part of the Wesfarmers Group Modern Slavery Statement.
Gender Equality
Our suppliers must provide a working environment where workers are treated fairly and without discrimination. All conditions of employment must be based on an individual’s ability to do the job, and not on the basis of personal characteristics, such as age, race, ethnicity, colour, nationality, gender, religion, marital or maternity status, sexual orientation, disability, union membership or political beliefs. In FY22, there was no gender-based labour violation identified in the third-party assessment in our supply chain.
We believe women deserve the opportunity to have a voice and reach their full potential, both in their work-life and home-life. That’s why we have committed to support health, education or professional skills training to at least 100,000 women in our supply chain by 2025. For further details, please refer to the Women Empowerment page here.
Memberships
Kmart Australia is a signatory of the following professional associations and industry partnerships in support of our human rights commitments. Progress updates and selected audit findings and reports linked to our supplier facilities (final factories processing facilities and raw materials) can be found on these websites:
- International Accord for Health and Safety in the Garment and Textile Industry
- Better Work
- ACT
- COVID-19: Action in the Global Garment Industry
- BSR HER Project
Whistle blower/grievance mechanism
Kmart has established a whistle blower/grievance mechanism that any person may use to report violations of our ethical sourcing code. Each of our factories is required to display a poster communicating details of the mechanism in a location that can be seen by all factory workers. Checks on poster compliance are part of the Kmart Audit checklist.
In FY22, Kmart received five reports through the grievance mechanism. Each report is investigated and followed up in accordance with an investigation procedure designed to ensure a speedy and adequate response (objective 30 days), as well as procedural fairness to the parties involved. Where the complainant’s identity is disclosed, they are notified of the investigation outcome. All reports are escalated to the relevant General Manager and other leadership members as required.
