1. The Transparency Act
The Openness Act entered into force on 1 July 2022 and aims to reduce the risk of human rights violations and ensure decent working conditions in our own business, in the value chain and with partners. Furthermore, the law must ensure access to information. All businesses covered by the law are required to carry out due diligence assessments, and to report on these annually.
2. Devold Textile Group
Devold Textile Group is a Norwegian group with operations in Norway, Germany, Lithuania, Latvia, and New Zealand. The company currently has around 90 employees in Norway with its head office in Langevåg. The total number of employees is 460.
Devold Textile Group is part of the Flakk Group. The story behind Devold began as early as 1853. Flakk Gruppen took over ownership of the business in 2006 after being a part owner in the business for a period. Devold Textile Group includes the following companies:
The companies conduct activities related to product development, design, production, sale and distribution of textile goods. Devold Textile Group's main production takes place in Devold UAB in Lithuania, and it is in this company that the bulk of purchases related to the production of goods are made. An important part of the due diligence assessment and follow- up of suppliers is therefore carried out through this company. Furthermore, Devold Textile Group has its own company in Latvia, Devold SIA, which performs seam for Devold UAB. Raw material purchases of wool are mainly from New Zealand, and a separate company, Devold New Zealand, has been established here, which, among other things, provides quality follow-up for farmers.
In the following, we will explain in more detail our approach to the due diligence assessments, briefly about our supply chain, which activities take place in our business, description of mapping and risk assessment that has been carried out, assessment of our own business and that we will conclude by giving an account of Devold Textile Group's further work with the Transparency Act.
3. Our approach to due diligence
Devold Textile Group has recently worked actively with a focus on both human rights and decent working conditions that are in accordance with OECD principles, and this is anchored, among other things, through our procedures and guidelines. In connection with the integration of requirements according to the Transparency Act, we have:
Prepared a separate routine related to the onboarding of new suppliers.
Updated ethical guidelines for our suppliers.
Prepared self-reporting for our suppliers.
Prepared a separate action plan related to follow-up of risks uncovered through our due diligence assessments.
Began work on surveying and risk assessment of all our suppliers and business partners.
Due diligence assessments have been introduced as an ongoing process throughout our operations. Through the process, we try to identify, avoid/prevent, reduce, and account for negative effects on human rights and decent working conditions that occur in our supply chain or with our partners.
4. Our supply chain
Our supply chain can be illustrated as follows;
Our raw material, wool, is bought from farmers in New Zealand through our company which is established there. Preparation of the raw material, washing, spinning and drying is carried out by subcontractors in Europe. Production and sales mainly take place through own operations, but where weaving of fabric and other products are input factors for production. These suppliers are closely monitored by Devold UAB, and of which long-term relationships have been established with most of the suppliers.
Based on an overall assessment of our supply chain, we see that, in relation to the industry, there may be risks in our supply chain in particular related to:
Preparation of the raw material
- Weaving and other input factors for own production
The risk here will mainly be linked to the risk of potential violations of basic labor rights, decent working conditions, matters related to HSE and equality in the workplace.
In relation to the countries where we operate, we see from an overall survey that there may be a particular risk with subcontractors located in:
China
Turkey
Sri Lanka
India
Thailand
Romania
Bulgaria
Slovenia
Uruguay
- The Czech Republic
In several of these countries, general indices show an increased risk of both violations of human rights and violations of decent working conditions.
Devold Textile Group has worked for a long time to reduce the general risk of violations of human rights and decent working conditions and has introduced several measures to be able to have better control over its own supply chain. As mentioned, a separate company has been established in New Zealand which has close contact with suppliers of raw materials and undertakes quality follow-up of these. Furthermore, processes related to the preparation of wool have been moved from China to Europe, and the company's production is mainly carried out in-house. For other sub-suppliers for our production, regular visits are made and a good familiarity with these suppliers has been built up through long-term relationships.
5. Mapping and risk assessment
Devold Textile Group is in the process of mapping our supply chain and our collaboration partners. We carry out assessments of human rights and decent working conditions in accordance with OECD guidelines.
We have classified our business relationships according to who are our suppliers and who are our business partners. Our business partners have been assessed and do not pose a risk in accordance with the assessments to be carried out under the Transparency Act. For our suppliers, a closer assessment of risk further down the supply chain has been carried out and we have initiated work to obtain information from our first-tier suppliers where we have assessed that there may be risk further down the supply chain. Those of our suppliers who do not respond to our inquiries will be followed up further by a specific person responsible internally at us.
Mapping and risk assessment of our business relationships is carried out through a classification of these where each supplier is given a score from 1-10, of which ten constitute high risk. The overall risk assessments that have been carried out have been based on:
- Industry
- service/delivery/products
- geography
- type of business
Based on the points score, the suppliers are classified as follows:
7-10 suppliers and business partners where there is considered to be a high risk.
4-6 suppliers and business partners where there is considered to be medium risk.
1-3 suppliers and business partners where there is considered to be a low risk.
We are now actively working on the preparation and implementation of various measures towards suppliers in the various risk categories.
In general, we believe that dialogue and close follow-up with our suppliers and business partners is an important part of this process in order to get everyone classified as correctly as possible, as well as to help raise awareness and raise the level of understanding at all stages in this area.
The Devold Textile Group has so far in its work with the Transparency Act not uncovered actual violations of human rights or decent working conditions.
6. Own business
We carry out our operations in accordance with Norwegian regulations, including the Norwegian Working Environment Act. We focus on ensuring that all our employees have equal opportunities and a good working environment. Working environment surveys are carried out regularly and the results from these are followed up closely and measures are taken where necessary. The same applies to our daughter companies abroad where we are following the current regulations in the countries, we operate in. Working environment surveys are also carried out and followed up in the same way as in Norway.
We have not had any cases in our business related to a negative working environment or violations of human rights.
7. Further work
The work of mapping and risk assessment of our suppliers is a continuous task in our business. In addition to following up on existing suppliers, we have introduced routines related to mapping and risk assessment of all new suppliers.
Going forward, we will particularly have close follow-up and dialogue with those of our suppliers where we consider that there is a risk of a violation of human rights and/or decent working conditions.
The measures taken against our suppliers where violations of human rights and decent working conditions have been discovered, or where a risk of such violations has been discovered, are seen in the context of the extent to which Devold Textile Group has contributed to such negative impact. In our follow-up of, and measures towards, our suppliers, we distinguish between negative impacts that are caused by our operations, negative impacts that our operations have contributed to and negative impacts that are directly connected to our operations. Our aim is that our measures and our follow-up should be in relation to the extent to which we have contributed to negative impact.
All our suppliers in the "low risk" category will be asked to sign our Code of Conduct, as well as answer our standard self-reporting form for suppliers. Failure to sign these documents will result in further follow-up. A specific person responsible for follow-up of each individual supplier is determined.
For those of our suppliers who pose a higher degree of risk, or where we consider that there may be risk further down the supply chain, additional information will be obtained via a customized self-reporting form. Failure to answer will result in further follow-up. A specific person responsible for follow-up of each individual supplier is determined.
If a supplier poses a medium level of risk, or implemented measures mentioned above indicate that there is a need for further investigations, we will initiate thorough risk-based background investigations. If necessary, such assessments will be carried out by a third party.
For those of our suppliers where we consider that there is a high degree of risk, priority will be given to carrying out visits to relevant suppliers. Based on the information that emerges during the visit, further follow-up will be concretely assessed.
In some cases, we may decide to terminate our contractual relationship. It is emphasized that this is considered a "last resort".
A separate action plan has been drawn up for the company which can be illustrated as follows:
We will continuously assess the need to introduce other measures towards our suppliers.
8. Information
If you would like further information about how Devold Textile Group handles actual and potential negative consequences for violations of basic human rights or decent working conditions in accordance with Section 6 of the Openness Act, you are welcome to do so via e-mail csr@devold.no.