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  • Costco Disclosure Regarding Human Trafficking and Anti-Slavery

    In 1999 Costco adopted a supplier Code of Conduct and revised the Code as recently as 2010. The Code prohibits certain human rights abuses. Practices such as human trafficking, physical abuse of workers, restricting workers' freedom of movement, confiscation of passports and worker documentation, failure to pay minimum wage, forced or mandatory overtime, illegal child labor, and many other aspects of worker welfare are addressed by the Code. The Code also requires our suppliers to comply with local laws regarding workers' minimum age, rest days and overtime wages. Our suppliers contractually agree to follow the Code and to ensure that their sub-suppliers also comply. There are instances when we acknowledge and accept a supplier's code as equivalent to our Code.

    To evaluate compliance, we audit the manufacturing facilities of suppliers of private label merchandise and/or when Costco Wholesale is the importer. These audits allow Costco to confirm compliance with the Code. We also conduct strategic audits of established supplier relationships.

    All Code of Conduct audits are performed by independent third-party auditors who specialize in social responsibility audits. While we retain the right to conduct unannounced audits, as a practical matter, some minimum amount of notice is preferable to allow the supplier to collect records that are reviewed during the audit.

    If we discover a violation of our Code of Conduct, we respond in a manner commensurate with the nature and extent of the violation. "Critical violations" are considered serious enough to require immediate and decisive remedial action and may result in the termination of the business relationship. For less serious violations, we allow the supplier reasonable time to develop and implement a plan for remediation. In those instances we conduct follow-up audits to monitor progress.

    In general, we prefer working with the supplier to correct Code violations rather than immediately terminating the relationship. Such abrupt action is unlikely to correct the underlying issue and may cause further hardship to workers and their families who depend upon the employment. However, if the supplier fails to make satisfactory progress toward improvement, we will cease our business relationship with that supplier.

    By the time a member of the Costco buying team is in a position to manage a supplier relationship, he or she has had years of on-the-job training regarding the Code of Conduct and its importance to our business and to the workers who contribute to the production of the merchandise we sell. We encourage anyone who is aware of violations of the law or our Code to notify their management or our Code of Conduct Compliance team.