California Transparency in Supply Chains Act Disclosure Statement

California Transparency in Supply Chains Act Disclosure Statement

As of January 1, 2012, California’s Civil Code section 1714.43 (California Transparency in Supply Chains Act of 2010) requires manufacturers and retailers to provide website information concerning their efforts to address the issues of forced labor, slavery, and human trafficking within the supply chain. The purpose is to allow consumers to make better and more informed decisions about the products they buy and the companies they support. To this end, the law directs Gear For Sports to inform the public as to how we have addressed the following issues:

(1) Verification of product supply chains to evaluate and address risks of human trafficking and slavery. The disclosure shall specify if the verification was not conducted by a third party.

(2) Audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains. The disclosure shall specify if the verification was not an independent, unannounced audit.

(3) Certification by direct suppliers that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.

(4) Internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.

(5) Training to company employees and management who have direct responsibility for supply chain management on issues of human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.

This webpage is intended to fulfill these requirements through a full description of our processes set forth below.

Background: Gear For Sports Approach to Social Compliance and Labor Standards:

Gear For Sports is proud to have implemented a rigorous set of supplier standards for well over a decade. Our Code of Conduct is based heavily on international labor and human rights standards. We believe that all workers at our owned and supplier factories have the right to freely choose employment and to freely associate and collectively bargain. Our Code of Conduct specifically prohibits “involuntary or forced labor including forced prison labor, indentured labor or bonded labor of any type.”

We are also a fully accredited member of the Fair Labor Association (FLA), an internationally recognized non-governmental organization ("NGO") whose goal is to advance labor rights globally and to help industry appropriately address a range of complex issues - including the eradication of forced and slave labor across the supply chain. Work with the FLA, and other global NGO's and organizations, has proven valuable in our efforts to ensure that all of our suppliers are compliant with our own Code of Conduct and relevant international norms.

Gear For Sports realizes that forced labor and human trafficking can occur in many forms - such as child labor, workplace harassment, workplace abuse, and workplace discrimination. Therefore, our processes (described below) were created in an effort to eradicate such unethical practices in all its variants.

CA Transparency in Supply Chains Act Statements

(1) Verification of product supply chains to evaluate and address risks of human trafficking and slavery.

Gear For Sports regularly performs geographic evaluations of its supply chain to evaluate the risk of non-compliance in slavery, human trafficking and other human rights and labor issues. This analysis is not conducted by a third-party. Our further verification efforts are described in detail below.

(2) Audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains.

Gear For Sports has worked aggressively for many years to audit suppliers to exclude these types of labor and human rights abuses from our supply chain. The intensity and frequency of these audits vary based on our geographical risk evaluations and also on the historical performance of a given factory in our internal and external audits.

Our auditing process calls for all of our owned facilities outside of the United States and our significant finished goods contractors to be certified by the Worldwide Responsible Accredited Production program ("WRAP"). The WRAP process is extremely rigorous and is described fully at http://www.wrapcompliance.org/ The WRAP certification includes both announced and unannounced independent audits.

For those finished goods contractors that are not WRAP-certified, an independent third-party audit team from an internationally recognized audit firm conducts a comprehensive factory assessment. Thereafter, the audit process is repeated annually. These independent, third-party audits include an initial management interview; facility and dormitory (if applicable) tours; payroll analysis; confidential employee interviews that cover such issues as working hours, payment practices, freedom of association, forced labor, child labor and disciplinary practices; and a closing meeting with management.

Our finished-goods suppliers are required to sign a lengthy and comprehensive agreement which, among other things, requires them to comply with all applicable laws (which include those regarding slavery and human trafficking) and our Code of Conduct (described above).

(4) Internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.

Gear For Sports does maintain internal accountability standards and procedures applicable to both employees and contractors who may fail to meet company standards.

With regard to any issues identified in compliance audits of foreign manufacturers, a formal corrective action plan is developed with specific timeframes in which to correct the problems. Our internal audit teams around the globe then visit these factories on an unannounced basis to confirm adherence to the corrective action requirements. While we will typically provide 30-90 days for factories to correct minor issues, we generally consider things such as forced/prison labor, slavery, human trafficking, child labor, physical/sexual abuse, and bribery of an auditor to be zero-tolerance issues requiring immediate remediation or withdrawal from the facility - depending on the circumstances.

Those facilities that are “disapproved” for zero tolerance or other violations not remediated in a timely manner are noted on a company-wide “Disapproved List” that is routed to members of our senior management and sourcing teams. Such facilities remain “disapproved” for a minimum of one year. We also closely track facilities on our internal “Alarm List” that are not progressing adequately in the corrective action process. The “Alarm List” is also routed to appropriate members of our management team, so they can exert the appropriate influence needed to spur timely corrective action.

We regularly conduct training on our Code of Conduct with our compliance and sourcing staffs, as well as with our factory base. We also continually train all of our employees on the requirements of our internal Global Code of Conduct. We believe that a thorough understanding by all relevant individuals of the requirements of these standards is critical to mitigating risks associated with such critical issues as forced labor, slavery, human trafficking and child labor.