Company profile: New Balance
Headquarters: Boston
Country: United States
Founded in: 1906
Total points of sale in Europe: n.a.
Owned by: Jim Davis
Name of CEO: Robert DeMartini, CEO
Product description: New Balance owns the following brands: Dunham (men's footwear for work and casual wear), PF-Flyers (footwear), Aravon (casual women's footwear), Warrior (lacrosse and hockey products) and Brine (lacrosse, soccer, hockey and volleyball products). New Balance licensed products include: The Franco Apparel Group (kids apparel), Fitness Quest Inc. (cardio home exercise equipment), Eyewear Designs Ltd. (sunwear and eyewear), Moretz Sports (socks), The Levy Group, Inc. (outerwear), Hickory Brands (shoelaces), and Packworks (bags). Highgear –sports monitors
Countries of production: United States of America, China, Philippines, Taiwan, Vietnam, United Kingdom
General remark: n.a.
New Balance
Brighton Landing, 20 Guest St.,
Boston, MA 02135-2088
Comments CCC and proposals for action
New Balance responds to the CCC on issues of labour rights in its supply chain. It has taken the first steps towards code implementation, and is willing to work with labour rights organizations and global unions.
However, the company still has a long way to go to make its supply chain, including its purchasing practices, fair and transparent. New Balance falls short on transparency about the working conditions in its supplier factories. The CCC therefore calls upon New Balance to disclose its list of suppliers and the results of factory audits, including the corrective actions taken to resolve detected labour rights’ violations. To ensure a credible implementation of its code of conduct, New Balance is furthermore encouraged to join a multi-stakeholder initiative. This should include the establishment of confidential and accessible means for workers to report exploitation and abuse, and independent training to workers concerning their rights at work.
The CCC calls upon New Balance to guarantee a living wage for all workers producing its goods. As in general the case in the sportswear industry, workers are often severely restricted in their right to freedom of association. New Balance should therefore not increase its sourcing in countries and free trade zones where the right to freedom of association does not have legal force. In this respect, the CCC welcomes New Balance’s recent commitment to participate in follow-up plans to explore amongst other issues how to promote trade unionism and collective bargaining as well as improving wages across the sector. To guarantee that all workers are entitled to the full package of labour rights, New Balance should ban, or severely restrict, the use of short-term contracts. Finally the CCC expects New Balance to make sure its purchasing practices allow suppliers to respect labour standards, which includes stable business relationships, and reasonable prices and delivery times.
The following evaluation of the company’s performance in terms of transparency, code implementation and monitoring of labour standards is based on the company’s response to the questionnaire from the CCC and on an additional desk study conducted by the CCC in 2007. In the section “Recent developments” you can find additional information gathered after 2007.
Transparency
New Balance has responded to the CCC-questionnaire and has provided some additional documents. The company is transparent with regard to: turnover, and corporate structure. The company lacks transparency with regard toprofits and sales. The amount of salaries of the top management is not known. Some information is given about producer countries and the structure of the supply chain. There is no comprehensive sustainability report available. New Balance provides neither the results of factory audits nor information about verification activities.
Formal commitment to labour standards
New Balance has adopted a code of conduct that requires compliance with all relevant local labour laws, but does not indicate that where local and international standards are at variance the higher standard should prevail. The code does not include a reference to the Universal Declaration of Human Rights. The company is formally committed to respecting minimum labour standards in accordance with ILO Core Conventions. These include the right to organise and bargain collectively and prohibit child labour, discrimination, and forced labour.
New Balance’s code of conduct does apply to all workplaces where its products are made. The code of conduct includes measures to implement the code and monitor labour conditions in the facilities used. Beyond the ILO Core Conventions, the company is only committed to paying the legal minimum wage or industry standard, i.e. not a living wage .There are some limits to overtime. The company’s code calls for a safe and hygienic environment for the workers who produce its garments and/or sportswear. The company does not explicitly require that all workers receive a regular employment contract.
Beyond the labour standards mentioned above, the company code is not precise enough on some specific issues. It does not state its commitment in relation to*:
- the provision of transitional measures that will be in the interest of the child and of her/his family where child labour is found;
- special provisions for workers under 18 years of age (e.g. education, no night work);
- prohibiting the retention by employers of security deposits or identity papers;
- guaranteeing a living wage during regular working hours without overtime;
- ending the worst forms of child labour with explicit reference to ILO core-convention 182.
Code implementation and purchasing practices
Although a few steps have been taken, New Balance does not have sufficient instruments to effectively implement minimum labour standards in its supply chain. The code of conduct is translated into most of the languages of the countries the company is sourcing from; every buying contract states the obligation for the supplier to comply with the code. According to the information given New Balance has no intention to implement the payment of living wages to workers. According to the information available, some of the production sites are in countries or zones where freedom of association is not guaranteed by law. New Balance takes, to some extent, the impact of its own purchasing practices into account. It has established some procedures which show how to improve planning and prevent excessive overtime. There are no provisions to give buyers positive incentives to reward better working conditions.
Monitoring and Verification
There is nothing known to CCC about monitoring results. The company is not involved in independent verification by a multi-stakeholder approach.
Violations of labour rights and public conflicts
Workers of a factory in China were imprisoned after their public protests against bad working conditions in the factories. The factory produced for many sportswear brands, including New Balance.
The key violations were related to wages, hours of work, working conditions, and other issues. The company reacted positively and immediately to the CCC after being informed about the violation. The violations have been corrected and there are no outstanding issues.
Recent developments
At a three day conference in July 2008, organised by the Play Fair 2008 Campaign (led by the International Trade Union Confederation, the International Textile, Garment and Leather Workers Federation and the Clean Clothes Campaign), New Balance committed to participate in follow-up plans to explore amongst other issues how to promote trade unionism and collective bargaining as well as improving wages across the sector.