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.

Inditex is committed to implementing responsible purchasing practices, which guide the way our buyers and product teams interact and negotiate with suppliers. These practices cover strategic planning, sourcing, development, purchasing and the underlying values and principles that affect workers, thus facilitating living wages and better working conditions as well as sustainable development in the garment, textile and footwear sector.

Regarding your specific questions, please kindly see our answers below:

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.
   1. 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.

Inditex has directed our sourcing teams to extend delivery timelines following supply chain disruptions that have resulted from the events in Bangladesh in recent weeks. As a result, suppliers are not subject to any order penalties related to these events.

1. 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.

- Inditex is maintaining its normal sourcing strategy in Bangladesh regardless of recent events. In this sense, no price concessions were asked to suppliers due this situation.

1. 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?

a.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.

- We summarise our actions regarding the questions above here. Despite some initial difficulties communicating with suppliers (due to internet and phone restrictions and security on the ground), we have reinforced our lines of communication with suppliers to understand their situation, proactively engage with them in terms of sourcing and monitor the payment of worker wages.

Specifically, we maintained regular contact with suppliers through all available means in each specific moment (including physical factory visits by Inditex's permanent team on the ground as well as by our audit teams, as well as through email and virtual communications)

1. 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.
   1. Have you committed to receiving and paying for all orders placed with suppliers before and during the crises the industry has faced since May2024. Please share details.
   2. 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.

Inditex maintains its regular payments and sourcing policy which is supported by our responsible Purchasing Practices. In this sense, our buying teams have been regularly informed on the current context and the need to continue supporting the business in the untry along with the importance of honoring orders terms as per our regular policy. Hence, there was no movement of orders to other markets as consequence of this situation.

This approach was reflected also through the last update from the ACT initiative (constituted of 19 International Brands and IndustriALL Global Union) where "ACT member brands reiterate their commitment in the ACT Global Purchasing Practices Commitments, and continue to take active measures to support their suppliers and workers. ACT member brands recognise responsible purchasing practices are essential for maintaining stability and to limit negative consequences for the well-being of workers who are particularly vulnerable during this period of uncertainty".

1. 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?

- Inditex has reinforced its lines of communication with suppliers while simultaneously continuing our regular contact with other stakeholders through our existing involvement in relevant initiatives, such as RSC (RMG Sustainability Council) and ACT (which includes IndustriALL Global Union and other international Brand as well as the tripartite initiative Ethical Trading Initiative (ETI).

In this sense, we are closely following the evolution of the situation, paying particular attention to the potential impacts on factory activity and their workers to ensure the continued compliance with Inditex's stringent Code of Conduct for Manufacturers and Suppliers. We would like to highlight the last update made by the ACT initiative that "ACT member brands and IndustriALL Global Union emphasise the importance of responsible purchasing practices, freedom of association, and close collaboration between brands and their suppliers to safeguard the livelihoods of millions of workers in Bangladesh.?"

Our engagemely with these stakeholders is part of our Workers at the Centre 2023-2025 strategy. This strategy is the basis of our efforts to continue transforming the industry with a focus on supporting our suppliers and promoting worker wellbeing. In particular, social dialogue is one of the strategy's Priority Impact areas, within which Inditex highlights the importance of the engagement with workers and their legitimate representatives.

We remain at your disposal should you require any further information.

Kind regards,