Max has a proud history as a leading women’s fashion brand in New Zealand for over 30 years. The fashion industry has changed dramatically over this time, and will continue to evolve. With constant change come opportunities and challenges, and at Max, our company culture centres around having a positive impact on our communities and the environment, both within New Zealand, and China where we produce our clothing.
We’re on a continuous journey to ensure people and surrounding communities are not disadvantaged in the production of our products, to minimise our impact on the environment, and to ensure that we operate our business in a sustainable fashion. Operating with integrity and doing the right thing are ingrained in the way we do business.
OverviewWe continually look to improve the way we operate and believe transparency in our supply chain is the best approach to improving our product sourcing. We have identified that developing long term partnerships and building strong relationships with a small number of factories allows us to work on an ongoing basis to improve working conditions and social compliance.
To enable us to do this better, Max transitioned from third party sourcing to working directly with our suppliers in 2016 and 2017. This transition is complete, and has resulted in a significant reduction in the number of factories manufacturing Max products. We have developed a stable supplier base, who we continue to build trust and strong two-way dialogue with. Working this way enabled us to better understand our suppliers capabilities and work with them to make continuous improvements based on what we find during our factory visits, and to resolve issues identified in our independent audits.
Max has worked with 60% of our factories for 5 years or more and 73% have worked with the BMC / Max group for more than 5 years.
Our apparel is 100% sourced from 15 factories across China, primarily in the Shanghai, Guangdong, Zhejiang and Jiangsu provinces.
We actively avoid working with suppliers on a one-off production basis. This ensures we have good visibility and understanding of working conditions in our factories, and provides the best outcomes in terms of factory environment, compliance, product quality, relationships and control.
We pride ourselves on paying a fair price and consider our factories to be part of our production team. We rely on their dedication and hard work to produce quality garments in an ethical fashion. By developing these strong relationships, we work together to resolve production issues to avoid the factories wearing extra costs and penalties. Penalties or discounts must be signed off by Max management, and will only be enforced if all other avenues or remedies have been exhausted. We believe over penalising has a negative effect on our relationships and loads extra pressure on the factories, which can then be passed on to workers.
Responsible purchasing practicesMax has developed a responsible purchasing strategy to ensure we do not place undue pressure on our suppliers, which can then be passed on to the workers in their factories.
Regular factory visitsMembers of the Max buying and production team regularly visit our factories. Not only does this improve our relationships, it gives us a better understanding of the factories limitations and concerns. For example, some fabric mills have been closed down due to China’s environmental restrictions, resulting in an increased workload for mills who have met environmental requirements. This has put extra pressure on our mills and factories, and Max has assisted factories by increasing product lead times and allowing extra time in delivery dates. This helps prevent factories putting pressure on staff to work excessive overtime or subcontract orders.
Lead timesMax lead-times are 90-125 days depending on the type of product and the delivery week. We work closely with our factories to ensure they have enough time to produce bulk, and in some situations we will have colours and prints approved prior to help them meet delivery dates.
Our critical path is planned a year in advance, and we ensure it is adhered to. Planned volumes are discussed with factories well in advance so they can ensure they have space and staff allocated to manage our orders.
SubcontractingOccasionally a factory may request to subcontract production due to high workloads. There is always a reason subcontracting is required, and we prefer to work with the factory to find a solution to the issue, rather than subcontract the order. A common resolution is to allow the factory additional time to complete the order. This is monitored by our QC Manager and included in our audits. On the rare occasion subcontracting can’t be avoided, it must be signed off by the Max Production Manager and a valid factory audit by an approved auditor (SCG, BSCI, Sedex or Qualspec) needs to be provided. If an audit is not supplied, the request will be declined.
Subcontracted product is subject to random inline inspections by our QC Manager before bulk garments are finalised.
CertificationBefore placing an order with a factory, a member of the Max Head Office team meets with the supplier to ensure they can, and are willing to work to our code of conduct. The factory is then audited to ensure it complies, and if it passes the audit, it becomes an approved supplier.
Code of conduct and auditing
Code of conductLooking after the people who make our products is a top priority for us. Our production team is committed to improving working conditions, worker rights and the environmental impact throughout our supply chain and has established a rigorous code of conduct which our suppliers are required to adhere to.
One of the key tools we use to monitor working conditions and environmental impacts are independent, third party Ethical & Social Audits of our suppliers facilities. All factories producing Max product, are required under our supplier agreements to have a signed copy of our code of conduct on file for our Production Manager and Audit Manager to check. All input suppliers including fabric mills, wash mills, accessory suppliers and subcontractors must sign our code of conduct, return it to Max Fashions and adhere to it. This is monitored by the Production Manager and the Audit Manager. All input suppliers are traced.
Auditing our factoriesAll our factories are subject to social and ethical audits and 100% of our apparel factories are audited by an independent third party auditor every 2 years.
Due to recent supply chain challenges relating to the coronavirus pandemic, we have extended the audit requirement by 6 months for suppliers with audits due between March and August 2020.
Our independent auditors are SGS who audit on our behalf, but we also accept audits from BSCI, Sedex and Qualspec.
100% of audits include offsite worker interviews. Max believes that an auditor is much more likely to find out the true situation in a factory if the worker is interviewed away from the factory. The information gathered from these interviews includes wages, overtime, and general health and safety of workers. The purpose of these interviews is to check that worker conditions are as reported by the factory.
Audits cover a wide range of potential issues around worker rights, working conditions, health and safety, and environmental impact, with more detail provided below.
Max Fashions, and specifically the Production Manager and Audit Manager use the Oxfam assessment tool to assess labour policies and practices. This is reviewed by management and used to assess risk, and review and implement policies.
All Max garment manufacturing takes place in China. We have completed a risk assessment of the China market, and the biggest and most commonly recurring issue we encounter in our factories is excessive overtime.
Working Hours and OvertimeIt’s our responsibility to ensure we manage our production schedule efficiently to ensure we don’t place unrealistic pressure on our manufacturing partners. Our production is planned a year in advance to ensure our factories have the space and staff to manage our orders, and can avoid the use of overtime. Workloads at factories are closely monitored and reasonable lead-times of 90-125 days are given, so use of subcontractors is rare in Max production.
Workers must be provided at least one day off for every 7-day period, and regular working hours must not exceed 48 hours per week. All overtime must be voluntary and cannot total more than 12 hours per week. This is a minimum requirement and doesn’t replace national or local laws if this provides greater protection.
Use of overtime required continued improvement for most of our factories in the past year, due to the nature of the clothing business where there are peak times in peak seasons, and prior to Chinese New Year factory closures. Often workers request to do overtime and prefer to work longer hours so they can take longer breaks to travel home to see family. We take an open view to overtime as long as it’s at a reasonable level, and we only require continued improvement in this area.
If there is an issue with wages or excessive use of overtime, we require the factory to resolve the issue within three months.
Working ConditionsWe have a responsibility to provide a safe and healthy working environment for all workers producing our garments – this is a non-negotiable for Max. This includes fire safety, building safety, working environment, and workers health and welfare.
Our suppliers must provide a safe and hygienic working environment for all staff, with adequate ventilation and light. Safe drinking water is to be provided at no extra charge, along with safe storage for food items. Workers must have access to hygienic toilet facilities, and if accommodation is provided it is vital this is safe, clean and meets basic needs.
Training in health and safety must be provided regularly to all workers, and it’s essential all new workers are given this training before they commence work. A record of this training is to be kept on file, and a senior manager must monitor and control this process. Training includes fire prevention and steps to prevent accidents and injury. Non-compliance in this area can usually be resolved in a reasonably short time. Training and continual monitoring by Max staff is key to making improvements.
We are committed to ensuring that all workers are employed on a voluntary basis, and are free to leave with acceptable notice. The employer is not allowed to hold onto identity papers or accept any deposits from workers.
Our factories are operating in accordance with the Modern Slavery Act 2015 in the UK, and the Slavery Act of 2014 in the USA.
WagesEnsuring wages are enough to meet the basic needs of workers and their families, and provide extra for additional needs is an ethos we all buy into at Max. Wages, at a minimum, must meet the legal requirements of that region or country. Any overtime must be paid at least at a rate that meets minimum requirements for local or national laws.
Workers are to be provided with written confirmation of their remuneration prior to commencement of work, and information on how and when this will be paid. Deductions from wages are not permitted without permission from the worker concerned.
All our factories are required to pay the minimum wage legislated by Chinese Government and local laws, and some chose to pay above minimum wage. This is covered in our audit and we have never required any corrections in this this area.
All Max manufacturing is done in China. The Chinese Government continuously monitors wage rates. Minimum wages in China have increased 33% in the last 5 years (Source Qualspec Oct 18), and average wage rates in Max supplier factories have increased at the same pace over this time period.
Use of Temporary, Contract Workers, Child LabourTemporary, contract and migrant workers are traced through our auditing process. These workers have the same rights as full time employees, and adequate records must be kept so the auditor can assess how much of the work force falls under this category. This is monitored by both the Production and Audit Managers. This is at a very low level in our factories, however if this were to change, the Audit Manager would visit the factory to ascertain why this has increased. We take an open view to using temporary or contract workers, as there are many factors that can influence their use (eg) peak volume times. A factory would not be penalised for using these workers, however Max must feel confident the workers are not being taken advantage of, and this is assessed through audits and regular visits to the factories.
We will not tolerate any use of Child Labour to manufacture our garments, or produce any components of these garments, including fabric and trims. The UN convention (138) outlines the minimum age a child shall be allowed to work and this is broken down into light work, basic minimum age, and hazardous work. We expect all Max suppliers to follow this requirement, however if the national or local laws are more stringent than this, then these must be followed.
If any violation is detected, the supplier must take appropriate action immediately following the Impact Limited guidelines for addressing Child Labour. No child labour has been found in our factories since we commenced auditing.
Discrimiation, Gender InequalityWe are an equal opportunities employer and do not tolerate any discrimination, including based on religion, age, gender, sexual orientation, political views, national origin, race, union membership or disability occurring in our factories.
Physical or verbal abuse, including sexual harassment is not acceptable. All workers must be treated with dignity and respect, and any complaints must be documented by management. If disciplinary action is required, this must comply with international human rights, or national laws, which ever provides the greatest protection to the victim.
If workers have any concerns about their treatment in our factories they can contact Max Support Office directly via a confidential email to highlight concerns about their working conditions. This is communicated to them via notices in their native language placed on noticeboards in the factories. The complaint can be made in their native language, and will be translated by Max. Any concern is investigated by Max Support Office staff, and/or our Hong Kong based Audit Manager, and when applicable, corrective action taken.
The majority of workers in the garment industry are women. Max has developed a strategy to ensure women are not discriminated against in the workplace.
Sexual harassment is not tolerated in Max factories. This includes invitation or coercement to perform sexual acts, or rewarding workers for sexual acts, inappropriate contact or inappropriate use of power. Workers have a confidential helpline to Max Support Office and can report issues directly to us without having to raise it at the factory. This is communicated on noticeboards in the factories in workers local language. Any issue raised will be investigated immediately.
In our factories, an employee cannot be terminated during her pregnancy, maternity leave, or breast feeding period, which is until the baby is 12 months old. From the twelfth week of pregnancy the employee is entitled to paid leave for pre-natal check-ups. These appointments are managed through the local community health centre.
Paid maternity leave is available to all eligible workers and must meet the requirements of local laws. The length of leave differs depending on circumstances and the province the mother is in, but the minimum allowance for paid leave for the mother is 98 days. Male employees are also entitled to paid leave. Employees receive their full salary paid by the company for the period of their maternity leave.
If the employee becomes pregnant while on a fixed-term contract and that contract ends during pregnancy, the contract must be extended to the end of the breast-feeding period. Breast feeding mothers are allowed to have one hour of paid leave during work hours during the breast feeding period. If the mother does not require this time they are entitled to accumulate this extra leave to use as vacation time.
All employees must be given the option to participate in maternity insurance. The benefit results in them receiving additional payment during maternity leave. This is managed by the Social Security Bureau where the women is registered.
OtherCorruption & Bribery
We will not tolerate corruption or bribery in our business under any circumstances. Suppliers are required to identify which departments could be at risk of bribery and corruption, and ensure adequate training and support is provided to staff to ensure this does not occur.
Workers in our factories have the right to representation. They have the right to join trade unions or democratically elected worker representative groups of their choice, and to bargain collectively. Any discrimination to these workers will not be tolerated, and no payment or bonus can be offered to workers who do not belong to a union or worker group.
Worker representatives must be allowed to carry out their functions, and the employer should be supportive of this process.
Workers are trained on their rights to form, join and organise workers collectives of their choice, and to bargain collectively with the company. In situations where unions are restricted by law, workers can freely elect their own representatives. Training is provided to all workers when they join the company. Most companies choose to outsource training to a professional teacher (for example The Shenda Group) so they can be sure the training is conducted in accordance with China and local laws.
Max factories have functioning grievance mechanisms where workers can raise concerns anonymously, in their native language. All workers are trained on their rights and entitlements, and how to use grievance mechanisms. Training is provided by the company, and is managed through trade unions, or in cases where unions are restricted by law, this managed through worker representatives who are elected by workers. Workers can raise grievances through worker representatives, and regular meetings are held between management and unions or representatives. Minutes from these meetings must be kept and be available for review. This is thoroughly checked in our audits.
Traceability of Fabric and Trims
All Max input suppliers are traced. 100% of input suppliers are required to sign the Max Fashions code of conduct and return this to the Production and Audit Managers for sign off. Max uses 97 input suppliers in addition to our 15 factories. Factories who source fabric or trims from third parties are responsible for enforcing the principles of our code of conduct with each source. Adequate records should be kept, showing contract agreements and payments, and a company name and address must be supplied for all third parties to enable us to trace the origin of components used in our supply chain. This includes fabric mills, wash mills and accessory suppliers. Max does not accept the use of Uzbekistani cotton in any of our fabric or trims, and we don’t use sand blasted denim due to its impact on worker health.
Fabric Testing/Chemical Use
We are focused on ensuring the chemicals we use are safe for the people working with them and our customers who wear them. We test for the restricted substances, AZO dyes and formaldehyde, through SGS and reject any fabric that fails testing. All chemicals used for dyeing, finishing and printing fabrics (including linings and trims) comply with New Zealand and Australian standards.
In addition to protecting workers, we are focused on ensuring our factories and supply chain processes have minimal impact on the environment they operate in. This is included in our audits. Our factories must have a copy of valid local laws and regulations and understand these requirements. All approvals, permits and licenses required by local laws need to be complied with. An environmental emergency procedure related to identified risks needs to have been developed, for example regarding chemical use. Training must be provided to all workers to increase environmental awareness for their specific jobs, and for broader factory requirements.
Hazardous waste must be stored and disposed of correctly so there’s no risk to the environment, population or animal life. Some factories require treatment facilities before water, gas or chemicals can be disposed of. Factories are checked to see if they’re monitoring the emission of waste water and gas as legally required. An energy efficiency plan is encouraged to reduce wastage of resources. This requires an energy survey or assessment, and can relate to electricity, heat or water.
All of our factories are actively working towards the 2020 and 2030 targets set by the Chinese government under the Water Pollution Prevention and Control Action Plan (The Water 10 Plan), and are expected to be compliant.
The plan sets out 10 general measures which can be broken down to 38 sub-measures with deadlines and responsible government departments identified for each action. In general, the plan covers the following four broad actions:
- Control pollution discharge, promote economic & industrial transformation and save & recycle resources;
- Promote science & technology progress, use market mechanisms and enforce law & regulations;
- Strengthen management & ensure water environment safety;
- Clarify responsibilities & encourage public participation.
In total, there are 238 specific actions involved. Some key targets and actions are listed below:
- By 2020, China’s water environment quality will gradually improve;
- To greatly reduce the percentage of badly polluted water bodies – over 70% of water in 7 key rivers shall reach Grade III or above
- To improve the quality of drinking water – over 93% of urban drinking water sources shall reach Grade III or above
- To reduce groundwater over extraction and control groundwater pollution – groundwater falling under “very bad” category shall decrease to around 15%
- To improve the environmental quality of coastal areas – up to 70% of coastal water shall reach Grade I or II
- Improve urban water environment in key regions – the amount of Grade V+ water in Beijing-Tianjin-Hebei shall fall by 15%, and Grade V+ water shall be eliminated in Yangtze River Delta and Pearl River Delta
- By 2030, the overall quality of the ecological environment will be improved
- By the middle of 21st century, the quality of the ecological environment should be fully improved and the ecosystem should realise a virtuous cycle
Transparency and audit results
OverviewIt’s very rare for a factory to achieve a perfect audit score, so we take the opportunity to use our audit results to work with our suppliers to resolve any non-compliance issues, and improve the way they operate.
Issues are identified as minor, major or critical. Depending on the issue, a time frame for improvements is set and agreed with the factory. Any issue that poses an immediate threat to worker safety is a critical issue, and must be resolved immediately. If a factory is unwilling to work with us to resolve issues we action an immediate plan to stop working with them. In our experience this is rare, and generally our factories welcome assistance to make positive changes.
To manage the audit follow-up process effectively, Max has a Hong Kong based Audit Manager who can visit our factories to monitor their improvement processes and provide training and education to help with their action plans. She has been auditing in China for over 20 years and has completed the SA8000 Auditor Training Course. We also have a China based Quality Controller who completed an SA8000 Social Systems Audit training course on 14 April 2017. He is regularly in our factories and immediately actions any health and safety issues observed, and advises Max of any concerns highlighted in his visits.
In addition, members of the Max head office team regularly visit our factories. Not only does this improve relationships, it gives us a better understanding of factories limitations and concerns. We have invested in training for the Max Production Manager to check for human rights, and health and safety issues, and request remediation and follow-up if issues are identified when they visit. This training took place in September 2018 and was conducted by Qualspec.
A number of recurring issues have come to light in our audits in the past year, which we have worked with factories to rectify.
Overtime and Overtime payNon-compliance with overtime requirements was an ongoing issue that occurred in a number of factories, and is an area we are focused on working with those factories to improve. To do this we provide support in the following areas:
- Book production capacity at the beginning of each season so factories have clear visibility of demand.
- Agree to lead times, and ensure we keep to our milestones in the agreed critical path.
- Closely monitor the production status of orders to ensure the order is on track at each stage.
- Ensure cost prices are not squeezed to such a level that the factory needs to cut corners when paying workers.
Health and SafteyHealth and safety breaches are non-negotiable and must be resolved with urgency. The non-compliance issues we have discovered have been able to be resolved quickly. Follow up visits, training and monitoring are provided by our QC Manager and Max staff when areas of concern are ongoing. Breaches identified in the past year are:
- Aisles and walkways restricted due to cartons placed in incorrect areas. This is a critical issue, and when discovered must be resolved while the auditor is at the factory.
- Safety guards missing off sewing or knitting machines. These must be purchased and attached.
- First aid personnel not correctly identified. Photos and the name of first aid personnel must be placed on a notice board or next to the first aid box.
- Scissors and screw drivers in the production area must be secured to benches.
See below a link to a detailed list of Max factories including the product they produce, number of years they have worked with Max, wage information and audit results by factory.
Other areas of focus
Animal WelfareWe are committed to ensuring no animals suffer in the production of our garments. Our suppliers are required to adhere to relevant national and international standards for animal welfare, with animals handled to ensure minimum distress. The use of all yarns from animals must be approved by the Production Manager. Animal products approved for Max products are:
- Wool (including merino)
- Mohair (from the angora goat)
- Cashmere (from the cashmere goat)
- Leather – we only use leather that is a by-product from other industries
Max does not use angora from the angora rabbit and does not produce any products containing animal fur or bird feathers or down.
Environmental SustainabilityMinimalising our impact on the environment is a key priority at Max, and we're committed to a process of continuous improvement to ensure we are doing all we can. A simple rule we follow in our operations across our supply chain, including at Support Office is to: Reduce, Reuse and Recycle. Some initiatives covering these areas are detailed below.
PackagingAll our carry bags are recyclable, sustainably produced paper bags. This has resulted in Max removing 230,000 plastic carry bags from our operations annually. The factory producing our paper bags is FSC certified and BSCI audited and the paper comes from renewable sources.
In November 2017 we changed the way we ship our garments to reduce plastic usage in the supply chain. We no longer individually bag each garment. This has resulted in the removal of 660,000 plastic bags from our supply chain each year. In total, Max will use almost 900,000 less plastic bags on an annual basis as a result of these changes.
We encourage our suppliers to use the biggest carton allowed when shipping bulk garments. The size is only restricted by what is a safe size and weight to carry. We allow mixed packing to help make use of carton space. This helps to reduce the number of cartons we use in China and New Zealand.
All cartons and poster tubes used to deliver product or promotional material into our distribution centre and stores are either reused or recycled.
Store Fixtures and FittingsWhere possible for the production of new store fixtures and fittings, we use low formaldehyde E0 rating materials. All Melteca on MDF and Particleboard, as well as Whiteboard, raw MDF and raw Particleboard is independently certified by Environmental Choice NZ and meets the criteria for the Forest Stewardship Council (FSC) certified timber set in the ECNZ Furniture and Fittings standard.
Using this range of low emission products improves indoor air quality. This is recognized as contributing Indoor Environmental Quality (IEQ) points in the Green Star Materials Calculator.
When conducting store refits or upgrades we are focused on reducing the amount of material we send to landfill to minimise our impact on the environment. Where possible, store fixtures and fittings are either repurposed and reused, sold to other businesses or individuals, or sold to scrap metal dealers. In 2017 we donated a number of fixtures and fittings to Hospice West Auckland to set up a new store. We were delighted to see these items be put to good use.
As part of Max continuous store upgrade programme we are changing all lighting to energy efficient LED when works are carried out instore. All new stores are fitted with LED lighting.
Support OfficeMax Support Office is a solar powered building that uses LED lighting to reduce heat and power usage. Secure bicycle parking is provided to encourage cycling to work, and the building has a recycling station for paper and cardboard.
We operate a worm farm for food and plant waste, and compost-approved packaging. Coffee is made in a Nespresso coffee machine, and we use the Nespresso Recycling Programme to recycle the aluminium capsules, and compost the coffee grounds. We don’t use any single use plastic or paper cups.
All printer and photocopier paper is carbon neutral and sustainably produced. Paper and cartons are recycled, and old office furniture and IT equipment is either sold, or uplifted by Junk2Go to be reused and recycled where possible.
Unsold/Returned GarmentsWe strongly believe every garment in the Max system can be used to good effect, so we do not dump any product. Any unused product deemed unsuitable for sale is donated to Dress For Success, Women’s Refuge or Habitat for Humanity. If the product is not wearable, it’s donated to pre-schools and schools in the Auckland region for use in art and craft activities.