Odlo’s sustainability report shows ‘no areas of improvement’ in its Vietnam factories

by Apparel Resources

16-April-2019  |  7 mins read

Odlo

With over 70 years’ experience in producing functional sportswear and being pioneers in innovation, Odlo is one brand that every supplier takes pride in associating with. The brand, which is known for offering exquisite innovative collections in sports underwear, baselayers and activewear, also has the distinction of being the inventors of functional sports underwear and three-layer principle dressing. Therefore, when a bigwig like Odlo came out with its sustainability report recently, Apparel Resources was keen to know the brand’s growing ascendancy in Vietnam amidst many other things.

The Switzerland-based brand has been the undisputed European market leader for several decades in their unique product category, but it is their increasing focus on Asian markets that is worth every analysis and review. The brand works with a total of 34 factories across the globe, including 9 external factories in Europe, 2 in Middle East and 21 in Asia. Besides, it has its own factory in Romania and Portugal. Out of the 21 suppliers from Asia who have been working for Odlo, Vietnam continues to remain the largest. Odlo works with 6 suppliers all across Vietnam, some of the prominent ones being Delta Galil Industries Ltd., SEES Global Inc., Shin Textile Solutions Co. Ltd., Yehpattana Tayeh among others.

It is imperative to note that among all the Asian suppliers of the brand, Vietnam constitutes an imposing value share of 28.3 per cent. What actually makes the number noteworthy is the glaring gap between Vietnam and other Asian countries. Sri Lanka – which is the second largest Asian supplier for the international brand – has a value share of mere 9.8 per cent; the stark difference clearly highlighting Vietnam’s impeccable authority. Thailand is at a distant third with a value share of 4.1 per cent.

Vietnam’s volume share too is nothing short of being impressive. Among all the Asian suppliers of the brand, Vietnam’s volume share stands at a striking 17.8 per cent, whereas Sri Lanka and China, the next two in line, are way behind with only 9.3 per cent and 4.2 per cent, respectively.

Sustainability and compliance standards are two major aspects that have impressed Odlo in Vietnam and this was distinctly underlined in the brand’s recently released sustainability report. The audit conducted in one of the supplier factories in Vietnam showed ‘no areas of improvement’ in 7 out of the 8 labour standards; not many Asian factories can claim of such an excellent record. Even the concerns like the lack of personal protection equipment, as a part of safe working conditions, were resolved immediately after the audit was completed.

Another supplier factory of Odlo in Vietnam performed exceptionally well in the audit especially in integral areas like ‘no child labour’, ‘no excessive working hours’ or for that matter ‘legally binding employment contracts’. It cannot get better than this. During the last audit done by the local fire brigade in this particular factory, three requirements were set. As the finding requires revamping of actions in the factory, it is still in progress.

One of the common problems which Odlo noticed and highlighted in its factories in Vietnam was regarding the ‘freedom of association’ wherein managers are elected as union members or chairmen. The audit report gave recommendations for the next election process of union representatives for which the procedures to empower worker representatives are still under definition.

In one of the supplier factories in Vietnam, Odlo found out while auditing that worker representation consists of factory management and democratically elected chairman of the union, who is also the Chief Executive Officer. This puts the freedom of the union at risk and that is one area where Odlo feels this particular factory has to work – and work harder. Discussions are still under way about how to go ahead for the next elections. However, in other areas like ‘no child labour’, ‘no discrimination’ and ‘employment is freely chosen’, this factory too excelled.

Odlo is also enthralled with training programmes like the Worker Education Programme (WEP) and also with the terrific response received. In one of its supplier factories in Vietnam that produce base- and mid-layers, WEP was given to 80 per cent of the management and 19 per cent of the total staff. As a part of training, the workers were trained about a decent and more productive workplace, the Code of Labour Practise, internal grievance mechanism and also Fair Wear Foundation (FWF) complaint system.

The response from the management and the staff has been extraordinary. It was only through these consistent training programmes and processes that the performances of high overtime hours were detected. These were not reported in the latest audit done in 2016 and are now being followed up for improvement. One of the biggest takeaways from these sessions was that the workers felt free to discuss their working conditions without any fear of retribution. The training also showed that workers liked talking more about possibilities of salary increase, working hours and workers’ representation.

There couldn’t have been a more valuable feedback than this and it supported further follow-ups between the factory and Odlo to find ways in which to fulfil the wishes of workers. Odlo has been closely following the principles of FWF and Sustainable Apparel Coalition (SAC). Substantiating further on the same, Knut Are Høgberg, CEO, Odlo, believes: “Thanks to exchanges and a great deal of teamwork, the networks like those of FWF and SAC help us to share and deepen sustainable knowledge.”

In the business year 2016-17, a total of four complaints were filed with FWF by workers of different factories supplying for Odlo. What is interesting is that all the complaints in Vietnam have been resolved, giving Vietnam an edge over several Asian countries. Together with its continual commitment to giving quality and sustainable products has made the country the first choice of an international brand like Odlo.

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