BHRRC sent a short survey aimed at understanding in detail the engagement apparel brands have had with their suppliers amidst the continued disruption of the garment industry in Bangladesh caused by the gas crisis and quota reform protests in 2024.

We asked brands to respond to the following questions regarding their suppliers in light of the ongoing gas crisis and protests that began in May 2024.

Puma' response:

1. Have you, as a matter of policy, directed your sourcing team to forgive any delivery delays resulting from the disruption to the garment industry and suspend the imposition of penalties until the region has recovered? If yes, please include details. If no, please explain why this decision was made.

Since early August, factories in Bangladesh have been operating normally. Less than 10% of our orders experienced delays, with a maximum delay of 7 days. We have coordinated with our Retail team to accommodate these delivery dates. We have not reallocated or withdrawn orders or changed our sourcing strategy in Bangladesh for current or new orders.

a. Has your company imposed any penalty on a supplier in the region as a result of delayed delivery? If yes, please share details on any penalties imposed and the circumstances for such penalties.

We do not impose late penalties on our vendors, including chargebacks, discounts, refusals to pay for goods, or other financial penalties, even during crises.

By maintaining long-term relationships with suppliers and avoiding order cancellations, PUMA ensures economic stability for suppliers and their workers. In principle, we do not cancel orders, instead we adjust order placements to address suppliers’ challenges, such as production disruptions. We do not impose late penalties on our vendors, including chargebacks, discounts, refusals to pay for goods, or other financial penalties, even during crises.

2. Have you, as a matter of policy, directed your sourcing team not to seek price concessions from suppliers in the affected region on both new and current orders? Please share details on specific actions and measures taken.

The price paid for products includes reasonable labour costs, such as overtime premiums, social insurance payments, and costs to comply with environmental standards. Our sourcing team does not seek price concessions from suppliers in Bangladesh for either new or current orders.

In reference to the gas crisis in Bangladesh, our core suppliers have reduced dependency from natural gas by investing into renewable energy and using other energy sources. Renewable energy investment has already resulted in savings to lessen the burden from rising gas prices.

a. How has your company monitored the payment of worker wages in supplying factories and ensured that wages have been paid on time and in full during July-August?

To protect factory workers’ income, we instructed our suppliers in Bangladesh to pay all employees for the days factories were closed during the protest. We monitor payment are made.

3. Regarding worker wages, has your company provided any of the following forms of assistance or improved payment terms to suppliers in the region in order to help them continue business operations and ensure workers’ July-August wages are paid in full? Please share any details.

1. Accelerated payment on orders recently delivered, in transit, or in production? Y/N
2. Improved payment terms on new orders? No
3. Provided low-interest or no-interest financing to suppliers? Yes
4. Provided direct financial assistance to suppliers? No
5. Covered the cost of air shipments? No

PUMA has digitized its supply chain to create transparency and operational efficiency, ensuring timely payments to suppliers. Consequently, all payments to vendors are automated and paper-free, ensuring timely payments as per our terms. So, all orders placed at suppliers before and during any crises, are paid fully and on time.

Our FOREVER. BETTER. Vendor Financing Programme, established in 2016, allows suppliers with a good sustainability performance to benefit from PUMA’s high credit rating and preferred interest rates. Suppliers can access financing without affecting their existing bank and credit lines. The programme runs in partnership with IFC, BNP Paribas, HSBC, and Standard Chartered Bank.

4. How are you ensuring order stability at the suppliers you source from, to ensure suppliers can maintain business operations and maintain jobs for workers, including confirming future orders and prices with factories? Please share details.

a. Have you committed to receiving and paying for all orders placed with suppliers before and during the crises the industry has faced since May 2024. Please share details.

By maintaining long-term relationships with suppliers and avoiding order cancellations, PUMA ensures economic stability for suppliers and their workers. In principle, we do not cancel orders, instead we adjust order placements to address suppliers’ challenges, such as production disruptions. We provide visibility to our suppliers through several business forecasts throughout the season, enabling them to plan their workforce needs.

We have not reallocated or withdrawn orders or changed our sourcing strategy in Bangladesh for current or new orders.

b. Have you transferred orders from your suppliers in Bangladesh to suppliers in other apparel-producing countries in response to the crises? Please share further details on why this decision was made.

We have not reallocated or withdrawn orders or changed our sourcing strategy in Bangladesh for current or new orders.

5. What steps are you taking in collaboration with trade union and worker representatives at supplier factories to ensure the physical and mental wellbeing and safety of your workers? How do you plan to support your suppliers and workers long-term?

PUMA conducts training programs on Health and Safety and engages with workers through surveys and feedback mechanisms to address their concerns. PUMA ensures effective and freely elected worker representation at all core T1 suppliers.

PUMA has signed the Bangladesh Fire and Safety Agreement to ensure high standards of social and working conditions, focusing on the safety and health of workers.

In 2023, PUMA created a Civil Society Organization engagement policy, approved by the Fair Labor Association, for information sharing and consultation. This aims to understand concerns, increase transparency, and make informed sourcing decisions that respect people’s rights, potentially leading to collaborations to address challenges or remediate issues. We will implement it in the coming years.