Responsible Sourcing

& Sustainability
Program Manual
I | INTRODUCTION

INTRODUCTION

Thriving people and planet – this is the way we do business. Target is

committed to conducting ethical and sustainable business. The Responsible
Sourcing
& Sustainability Program (RS&S) is a critical component to this mission,
focused on achieving outstanding quality and ethical manufacturing of the
following brands:

 Target Owned Brand

 Limited Time Offer (LTO)
 Target Brand – No Brand
 Target Brand Non-Retail
 Vendor Brand Exclusive
 Non-branded product that is Vendor Brand Exclusive
 Nationally branded product for which Target is the importer of record

The Responsible Sourcing & Sustainability Program Manual (Program

Manual) provides guidance for business partners to ensure their practices
meet and exceed the expectations in accordance with applicable law, and
our policies and standards outlined in Target’s Business Partner Code of
Conduct and the Standards of Vendor Engagement.

As a business partner of Target, you are responsible for ensuring the above
listed brands are produced in compliance with the Responsible Sourcing &
Sustainability Program. The Program Manual outlines requirements
for business partners and includes reference materials to help you meet your
obligations.

However, the Program Manual is not an exhaustive resource for all

components of the RS&S Program, such as the Just and Equitable Supply
Chain policy. Be sure to review all RS&S Program content on Partners Online
and contact [email protected] with questions.

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III | OUR COMMITMENTS AND EXPECTATIONS

OVERVIEW OF THE RS&S PROGRAM

What is Responsible Sourcing & Sustainability and Why is it

Important?

Responsible sourcing refers to the procurement of goods that are compliant

with local laws and international standards, and in accordance with brand
standards. Sustainability considers the social and environmental impacts of
production.

Target takes a holistic view of sustainability with efforts focused on

our business driving positive impact for both people and planet. We see
sustainability efforts as part of an interconnected system, where our actions
to help address climate, restore natural systems, and drive opportunity and
equity for our teams, communities and partners, impact and reinforce
one another to create change that is good for all. Together, we can have a
positive impact.

What is the Responsible Sourcing & Sustainability Program?

The Responsible Sourcing & Sustainability Program was designed to elevate

sustainable brands, minimize waste, promote human rights, mitigate adverse
human rights impacts, and accelerate opportunity and equity.

Through this program, Target seeks to protect our brand by ensuring our
products are produced ethically and in accordance with applicable laws and
the principles and standards detailed in our guiding documents – Business
Partner Code of Conduct and Standards of Vendor Engagement
(SOVE). Additionally, our program supports the Target Forward Sustainability
Strategy, by utilizing ethical suppliers with commitment to put the needs of
people, communities, and the planet at the center of everything we do, to
help create a better tomorrow.

We hold ourselves and our supply chain accountable to high standards, go

beyond compliance, and continue to elevate performance. Our
program helps us ensure that our business partners utilize efficient, safe,
and ethical factory environments where they can produce safe, reliable,
high-quality products.

The key features of the Responsible Sourcing & Sustainability program are
as follows:

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III | OUR COMMITMENTS AND EXPECTATIONS

 Manufacturing Location Disclosure

 Higg FEM Self-Assessment and Verification
 Approved Scheme Audits & Unannounced Audits
 Corrective and Preventative Action Plans (CAPAs)
 Business Partner Performance Analysis
 Business Partner Education
 Stakeholder Engagement

Who needs to participate in the Responsible Sourcing &

Sustainability Program?

All business partners who produce the following brands are required to
participate in the Responsible Sourcing & Sustainability Program.

 Target Owned Brand

 Limited Time Offer (LTO)
 Target Brand – No Brand
 Target Brand Non-Retail
 Vendor Brand Exclusive
 Non-branded product that is Vendor Brand Exclusive
 Nationally branded product for which Target is the importer of record

As detailed in our Location Disclosure Scope Guide, our program requires

disclosure of Tier 1 factories and Tier 2 factories/locations.

All primary factories (Tier 1) should be disclosed and registered if they

produce the above-listed brands.

All in-scope Tier 2 factories/locations for specified areas should be disclosed

and receive authorization including: Secondary Factories,
Raw Material Processing Factories, Trim/Component Factories,
Packaging Factories, and Homework Locations.

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III | OUR COMMITMENTS AND EXPECTATIONS

Factory Locations

Non-Factory Locations

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III | OUR COMMITMENTS AND EXPECTATIONS

All production factories/locations that fall within the scope of Target’s RS&S
programmatic requirements must be disclosed to Target and with a
registered or authorized status at least 90 days (about 3 months) before
production begins.

 Please email [email protected] with questions

regarding Tier 1 factory registration managed in Vendor Management
& Maintenance (VMM)

 Please visit Supplier Management Contacts with questions regarding

Tier 1 factory registration in Supplier Management (SM).

 Please vis the Tier 2 Oversight Contacts page regarding Tier 2 factory
authorization questions.

OUR COMMITMENTS AND EXPECTATIONS

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III | OUR COMMITMENTS AND EXPECTATIONS

Business Partner Code of Conduct

As a purpose-driven company, Target seeks and prioritizes partnerships with

those who share and uphold our values. We expect our business partners to
uphold the highest standards of conduct and to be aligned with Target’s
values. We require all business partners to read, understand and comply
with all expectations outlined in the Business Partner Code of Conduct.

Standards of Vendor Engagement

Target is committed to responsible business conduct. Respect for human

rights and environmental stewardship are fundamental principles of our
business practices and standards. We expect our suppliers to share those
principles and uphold our standards throughout their entire supply chain.
Suppliers must conduct their business with a high level of integrity and
maintain transparent and accurate records.

We require all vendors, suppliers, third-party sellers, manufacturers,

contractors, subcontractors, and their agents (collectively, “suppliers”) to
abide by the standards outlined in the Standards of Vendor Engagement
(SOVE) on the following issues:

 Ethical Business Practices

 Unauthorized Subcontracting
 Grievance Mechanisms
 No Forced Labor or Human Trafficking
 No Underage Labor
 Health and Safety
 No Discrimination
 No Harassment
 Working Hours and Overtime
 Wages
 Freedom of Association
 Licenses and Permitting
 Environmental Management and Monitoring Systems
 No Illegal Wastewater Discharge
 Waste Reduction and Disposal
 Energy Use and Water Use
 Emissions to Air

For additional information on the Standards of Vendor Engagement

(SOVE), please refer to the Applying the Standards of Vendor
Engagement document. This document provides detailed standards. This can
be used as a reference tool when working with factories and subcontractors
to achieve compliance. It is available in the following
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III | OUR COMMITMENTS AND EXPECTATIONS

languages: Bengali, Chinese (simplified), Chinese (traditional), English,

French, Hindi, Indonesian, Khmer, Korean, Spanish, and Vietnamese.

The Standards of Vendor Engagement (SOVE) poster is available in multiple

languages. All registered Tier 1 and authorized Tier 2 factory locations in-
scope of the RS&S Program must display the poster in a freely accessible
and highly visible location in all relevant languages.

Review the Standards of Vendor Engagement page for additional

information.

Labor and Human Rights Policies

Target is strongly committed to respecting human rights throughout our

operations and supply chain. For more information on specific policies,
please refer to our supply chain labor & human rights policies.

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VI | CONCLUSION

PROGRAM REQUIREMENTS
Target’s mission is to ensure that everything we source is manufactured
ethically and in accordance with applicable laws, international standards,
and our policies. To ensure compliance, the Responsible Sourcing &
Sustainability Program includes social and environmental audits.

The RS&S Audit Program evolved Target’s oversight function into an industry
compatible format that enables business partners to focus on validating
compliance and driving continuous improvement across all factory locations
in scope of our program.

This program is designed to enable the following:

 Reduce audit fatigue, allowing business partners to leverage

certifications and assessments that have been completed for other
brands and retailers;
 Provide greater detail on performance and actions needed to improve
through the Responsible Sourcing & Sustainability audit rating and
scoring framework; and
 Enable utilization of the Inspectorio platform to modernize the process
of submitting and managing results in one system to reduce the need
for manual tracking.

Business partners will complete the RS&S Learning Plan and training
webinars on POL. It is critical business partners take a proactive approach
completing all requirements timely to prevent unnecessary delays. There are
many key milestones to complete before production begins, thus it is
important to build the requirements into your timing and action calendar.

The Responsible Sourcing & Sustainability Audit

Program Process Flow

Target’s audit program lifecycle includes key milestones completed by the

business partner (i.e., vendor) and factory. The lifecycle repeats when the
next annual audit and Higg FEM self-assessment are due or if a follow-up
audit is due in six months.

Assessment disclosure (i.e., audit disclosure) is the process by which

business partners and factories disclose required information to Target via
Inspectorio. The third-party scheme audit and Higg FEM self-assessment
information is disclosed to Target via Inspectorio in addition to other required
information. Suppliers cannot move forward with this process without a
completed scheme audit and an active Higg ID.

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VI | CONCLUSION

1. Business partners and factory contact an approved scheme program

and third-party audit firm to schedule the onsite audit.
a. Scheduling may need to occur several weeks or months in
advance to meet Target’s assessment disclosure deadline. This
includes scheduling the initial audit, annual audit, and follow-up
audit.
b. The audit must be current and completed within the past 12
months from the last audit date. BSCI audit reports with an A or
B rating within the past 24 months are accepted.
2. Factory completes, posts, and shares the most recent Higg FEM self-
assessment module. FDA and/or USDA regulated factories are exempt
from this requirement.
3. Business partners must set up their profile in and request registration
or authorization of in-scope factory locations in Vendor Management
and Maintenance (VMM) or Supplier Management (SM). This must be
completed at least 90 days (about 3 months) before production is
scheduled to begin.
4. Immediately following location disclosure, business partners will
complete the Inspectorio Onboarding Form to initiate the vendor and
factory account set-up process with Inspectorio.
a. The account set-up process takes approximately two weeks to
complete. Vendors and factories must each have their own
Inspectorio subscription.
i. Only one vendor will initiate the assessment disclosure
process in Inspectorio RISE for a given factory. When
multiple business partners utilize the same factory, they
will need to determine which one of the business partners
will take on the responsibility of assessment disclosure.
b. Inspectorio will send an email notification to the vendor & factory
to complete this process.
c. Supplier is enrolled in the self-guided Inspectorio Academy.
d. Leverage the Chat function on Inspectorio homepage for instant
support, or email [email protected].
5. After the accounts are set up, then the business partner and factory
advance to assessment (i.e., audit) disclosure in RISE.
a. Your deadline to complete this process is 60 days from the date
of registration in VMM or SM for the initial audit.
b. The deadline for annual or follow-up audits is available in
Inspectorio RISE, as well as the notification email from
[email protected].
6. The business partner initiate assessment disclosure in RISE. This is
done in the vendor account.
7. The factory receives notification from Inspectorio to complete
assessment disclosure in RISE. This is done in the factory’s account.

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VI | CONCLUSION

8. After the factory completes and submits assessment disclosure in RISE,

then Target’s RS&S team will review the scheme audit report and map
the issue findings back to Target’s Standards.
a. An assessment case is declined if something is incomplete, or
the provided information is inaccurate. Required actions are
detailed in the email notification sent from Inspectorio. Supplier
is to make the necessary corrections timely.
9. Business partners and factories will receive a Target issued audit rating
and corrective action plan with the issues found in the audit. This is
available in Inspectorio.
10. The factory is to complete the initial CAPA within 14 days in
Inspectorio unless the audit rating is Acceptable or Outstanding.
11. Factories may be randomly selected for the unannounced Spot
Check Audit conducted by the Target team or designated third-party
firm.

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VI | CONCLUSION

Coordinate Scheme Audit and Conduct Higg FEM Self-

Assessment

As a business partner, you are required to schedule, undergo, and disclose

a scheme audit, prior production. A Target-approved scheme and third-party
audit firm must conduct the scheme audit. RS&S will accept the below
programs:

 amfori Business Social Compliance Initiative (BSCI)

 Better Work
o Required for garment, handbag, and footwear factories in select
regions
 Fair Trade USA
 Equitable Food Initiative (EFI)
 ICTI Ethical Toy Program
 Responsible Business Alliance (RBA)
 Sedex Members Ethical Trade Audit (SMETA)
 Social & Labor Convergence Program
o Required for:
 Tier 1: Apparel, Handbags, and Footwear
 Tier 2: Fabric Textile (soft home & apparel)
 Tier 2: Vendor Sourced Branded Trim / Components
 Tier 2: Trim branded & non-branded as designated by the
Trim Sourcing team (e.g., zippers)
 Higg FEM (Facilities Environmental Module)
o Factories must complete this self-assessment annually in
addition to one of the above social schemes.
o The self-assessment must be completed, posted, and shared
with Higg prior to production.
o FDA and/or USDA regulated factories are exempt.

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VI | CONCLUSION

All factory locations in scope of the RS&S Program must have a valid audit
from one of Target’s approved audit scheme programs. Apparel, accessories,
and footwear factories (including in scope Tier 2) must provide
valid SLCP or BetterWork reports. Additionally, nominated Tier 2 factories are
in scope of the Higg FEM verification requirement. Factories producing other
product categories can choose from RBA, SMETA, BSCI, IETP, EFI, or SLCP
and the reports must be done by a Target and scheme approved third-party
audit firm. RS&S reserves the right to conduct unannounced audits at
factories in scope of the program at any time.

Next, factories must complete a Higg FEM Self-Assessment. This annual

assessment is required for all categories, excluding FDA and/or USDA
regulated factories. This tool measures environmental impacts of a
manufacturing facility including energy use, water use, air emissions, waste,
wastewater, chemical management, and environmental management
systems. Factories are required to complete, post, and share the most
current module with Target in addition to disclosing it in Inspectorio.

Failure to schedule an audit in time to meet the assessment disclosure

deadline may result in a chargeback of $5,000 to the business partner.
Additional delays will result in a six-month factory deactivation for non-
compliance. A non-compliant factory may not produce for Target and
business may be disrupted.

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VI | CONCLUSION

For more information on Target-approved schemes and the Higg FEM Self-
Assessment, please refer to the Responsible Sourcing Schemes Overview
Training resource.
After completing these actions, business partners are eligible to disclose and
request registration or authorization of factory locations in-scope for the
Responsible Sourcing & Sustainability Program.

For more information, please refer to the following resources:

 RS&S Audit Overview

 RS&S Audit Requirements
 RS&S Audit Training
 RS&S Audit Documents
 RS&S Audit FAQs

Location Disclosure in VMM or SM

Manufacturing supply chain visibility is a key part of business partner

onboarding and location disclosure. Business partners must disclose
locations to Target that are in scope of the Responsible Sourcing &
Sustainability Program based on how Target defines each
factory/manufacturing location.

Ensure your company and factories/locations utilized for Target production

adhere to Target’s policies regarding location disclosure. Factories must
maintain a list of all production locations that provide materials or services
that are incorporated into the manufacturing, processing, harvesting, or
production of products sold for Target.

Failure to disclose required locations conflicts with Target’s Unauthorized

Subcontracting Policy.

Key tools utilized in Target’s Audit Program are the Vendor Management and
Maintenance (VMM) and Supplier Management (SM) systems. VMM and SM
are designed to streamline and consolidate the collection of information
about your company.

Target utilizes the information in these systems to understand where your

company does business and who to contact. VMM and SM are the source of
truth for business partner and factory information. Information in these
systems flow to downstream systems; therefore, it is especially important to
keep the information accurate and up to date.

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VI | CONCLUSION

Prior to Location Disclosure in VMM or SM:

Review the following resources.

Resource Description
Location Disclosure Scope Guide Determine if factory registration or
authorization is a required action.
Locations Registration Flow Understand the digitized vetting
process for existing Owned Brand
business partners in Apparel &
Accessories (A&A), Home &
Hardlines (H&H), and Essentials &
Beauty (E&B).
RS&S Pre-Work Helps business partners to gather
and assess the information needed
to complete factory registration.
Tier 2 Oversight Understand the tier 2 oversight
component of the RS&S Program.
Supplier Management Overview Understand location disclosure in
Supplier Management Training Supplier Management (SM).
Supplier Management Documents
Supplier Management Contacts
GTS Questionnaire Determine if your factory warehouse
meets the minimum security
requirements.
Higg FEM self-assessment module Understand who is required to
complete the Higg FEM self-
assessment module and how to
initiate this process at factory
locations.
Approved Scheme Programs Partner with your factory to
schedule an audit several weeks or
months in advance of production to
meet Target’s deadlines.

Factories must have a registered or authorized status before:

 A Product Safety Quality and Regulations (PSQR) Factory Assessment

(FA) is conducted, if applicable.
 Production begins at your factory.
 Initiating vendor and factory account setup in Inspectorio.
 Initiating the assessment disclosure process in Inspectorio.

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VI | CONCLUSION

Business partners are required to complete a business partner

profile in VMM with the following information:

 General information about your company (i.e., Headquarters’ info,

Supplier Diversity, and Business Operations)
 Contact Information (i.e., social compliance and factory contacts)
 Factory & Warehouse locations
 All attributes pertaining to your vendor number(s)

Following the completion of the vendor profile, business partners must

disclose and register or authorize all factories where you intend to produce
the below listed brands. Factory registration and authorization grants Target
the appropriate visibility and oversight of our production process from the
Responsible Sourcing & Sustainability perspective. Location registration or
authorization must be completed 90 days (about 3 months) before
production is scheduled to begin. Please do not create duplicate entries
of the same factory location.

 Target Owned Brand

 Limited Time Offer (LTO)
 Target Brand – No Brand
 Target Brand Non-Retail
 Vendor Brand Exclusive
 Non-branded product that is Vendor Brand Exclusive
 Nationally branded product for which Target is the importer of record

Any registered factory in Bangladesh must be participating in and be in good

standing with Nirapon.

Target requires all registered Tier 1 apparel, accessories, and soft home
factories in scope of the RS&S Program and located in Vietnam, India,
Cambodia, and Indonesia to enroll and participate in the Life and Building
Safety (LABS) program. Enrollment begins after the Tier 1 factory location is
registered in Target’s systems and is based on LABS capacity and factory
priority.

Multiple business partners may register or authorize the same factory and
each business partner is responsible for requesting registration or
authorization of the location on their own matrix in Target’s systems.
Business partners may not utilize a factory location unless it is registered or
authorized on their own location matrix.

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VI | CONCLUSION

Following location disclosure in VMM or SM, business partners can

immediately complete and submit the Inspectorio Onboarding Form to
initiate the vendor and factory Inspectorio RISE account set-up process.

Business partners are to inform [email protected] if a

factory location stops all production due to construction, renovation, moving,
idle times, holiday(s) outside official national holidays, or any other
reasonable circumstances for production cessation and/or moves.

For more information on the location registration and authorization statuses,

please reference the VMM Definitions resource.

When should business partners unregister a factory location in

VMM?

Business partners must unregister factories once production of in-scope

brands is complete, the last order has left the factory, and no new production
is scheduled within the next three months (90 days).

 Target production is complete

 The last Target order has left the factory
 No new Target production is scheduled to begin within the next three
months

All factory locations with a "registered" status are required to participate in

Target's RS&S Audit Program. Business partners are responsible for the audit
results of their registered factories, whether the factory location is currently
producing or not.

1. Log-in to Partners Online

2. Click "Applications" at the top of the page
3. Click on "Vendor Management and Maintenance"
4. Click on "Locations"
5. Click a location by clicking on "Location Name"
6. Click "Details"
7. Click "Unregister Location"

Remove the Standards of Vendor Engagement (SOVE) poster from the

factory location once it is unregistered or unauthorized.

Email [email protected] if you need to unauthorize a Tier 2

factory location.

Inspectorio RISE Registration

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VI | CONCLUSION

Business partners and factories must contact Inspectorio (Target’s audit

portal) to begin the account set-up process immediately after the factory
location is properly disclosed in VMM or SM. These details include scheme ID,
audit date, audit firm, and the Higg FEM Self-Assessment.

Your deadline is 60 days from the date of registration in VMM or SM for the
initial audit. The deadline for annual or follow-up audits is available in
Inspectorio RISE.

Existing Inspectorio account:

 If your organization already has an account in RISE, you can

immediately log in and begin your activities.
o Tier 1 locations may do this immediately after registration in
VMM or SM.
o Tier 2 locations may do this after receiving nomination from the
RS&S team.

New Inspectorio account:

 If your organization is new, then immediately complete and submit the

Inspectorio Onboarding Form to initiate the vendor and factory account
set-up process.

For further information, please reference the Assessment Disclosure

Guideline available in English, Simplified Chinese, and Spanish.

Audits

Once the scheme information is disclosed, Target’s Responsible Sourcing &

Sustainability team review the scheme’s audit report and maps it back to
Target’s Standards. Business partners will then receive a Target-specific
audit rating and a corrective action plan associated with the issues found in
the audit. The audit rating and corrective action plan are available to
business partners and factories in Inspectorio.

Audit Rating Framework

The Responsible Sourcing & Sustainability team utilizes scheme audits to

evaluate factory compliance with the SOVE.

Our audit rating framework, including numerical scores and associated audit
cadence, allows you to evaluate performance in a systematic way and

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VI | CONCLUSION

incentivizes continuous improvement. Please use this list to ensure that

every factory is meeting fundamental standards.

Twelve months is the standard audit cadence. We will consider the scheme’s
audit cadence and the Target audit result to determine when the next audit
is due.*

For more information, please refer to the Responsible Sourcing Audit

Results resource.

Audit Ratings

Our audit framework consists of five ratings – Outstanding, Acceptable,

Needs Improvement, Auto-Fail and Zero Tolerance.

Outstanding: A numeric score of 91-100. This rating demonstrates support

and understanding of Target's Standards of Vendor Engagement and local
laws. There were either no issues or a few issues identified in the audit. The
next audit will be due within 12 months.

Acceptable: A numeric score of 71-90. This rating demonstrates compliance

with Target's Standards of Vendor Engagement and local laws. There were
major and/or minor issues identified in the audit. The next audit will be due
within 12 months.

Needs Improvement: A numeric score of 51-70. This rating demonstrates

inconsistent compliance with Target's Standards of Vendor Engagement and
local laws. There were several major and/or minor issues identified in the
audit. The next audit will be due within 6 months and must reflect significant
improvements to maintain production.

Auto-Fail: This rating does not demonstrate adequate compliance with

Target's Standards of Vendor Engagement and local laws. An Auto-Fail rating
will result from any one of the following conditions:
 A score between 0-50
 One or more critical issues regardless of the total score
 Factory failed to meet Needs Improvement threshold conditions
 Overdue audit, unable to review a scheme report to understand the
factory's Responsible Sourcing performance
 Failure to complete the Higg FEM self-assessment
 Target or a Target representative was denied access to audit a factory

A factory is deactivated due to non-compliance for six months if any of the

above conditions are present. A non-compliant factory may not produce for
Target.
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VI | CONCLUSION

Please review the Critical Issue list to ensure compliance with minimum
standards.

Zero Tolerance: Factories with zero tolerance violations will be deactivated

for non-compliance for at least three years. Please see Zero Tolerance
Violation list below:

 Underage Labor: Employment of workers below the local minimum

age, or the age of 15 – whichever is greater
 Prison or Forced Labor: Use of imprisoned, jailed, incarcerated or
workers otherwise forced to work against their will
 Corporal Punishment: Physical abuse and/or punishment of workers
 Discrimination: Making any employment and compensation decisions
based on individual characteristics rather than job performance
 Harassment: Use of verbal/mental/physical harassment against or
among workers
 Bribery: An attempt to bribe Target team members, Target
representatives, and/or third-party auditors
 Water Stewardship: Wastewater discharge directly into the
environment without operational treatment
 Sandblasting: Using sandblasting to manufacture product
 Licenses and Permitting: Falsified, misrepresented and/or
the absence of a valid business license and required environmental
permits and licenses
 Unauthorized Subcontracting: All production factories/locations
that fall within scope Target's Responsible Sourcing & Sustainability
program must be disclosed to and approved by Target before
production begins
 Production in a "Non-Compliant" Factory: Production in a factory
deemed non-compliant in VMM

Three Zero Tolerance violations within three years will result in business
partner termination. A zero-tolerance violation will negatively impact
business partner performance in accordance with the 3-Strike Vendor Policy.

Three-Strike Vendor Policy

Target strives to maintain vendor relationships based on trust, alignment

with our values, and proven business results. We hold our business partners
to high standards and hold them accountable when our expectations fail to
be met. When Zero Tolerance violations are identified in our vendor's supply
chain, we have a 3-Strike policy that specifies the first violation is a warning,
the second violation results in business partner probation, and the third
violation requires business partner deactivation. Three Zero
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VI | CONCLUSION

Tolerance violations within three years will result in business partner

termination. A Zero Tolerance violation will negatively impact vendor
performance in accordance with the 3-Strike Vendor Policy.

Policy Details

 Any three strikes within a 3-year period results in business partner

deactivation
 Any two strikes within a 3-year period results in business partner
probation
 Strikes are valid for three years

Strikes

 Bribes (GTS, RS&S, PSQR)

 Circumvention of GTS, RS&S or PSQR Processes
 Contraband Container Contents (GTS)
 Discrimination/Harassment
 Document Alteration/Falsified Records
 Forced Labor
 Production in an Unapproved Country of Production (COP)
 Production in a Non-Compliant Facility
 Unauthorized Subcontracting
 Underage Labor
 Illegal Wastewater Discharge

When egregious Responsible Sourcing & Sustainability issues are identified,

business partners are required to participate in third-party remediation
programs. Business continuation is contingent on participation.

Remediation of Responsible Sourcing & Sustainability Zero Tolerance Issues:

 If RS&S determines that a Zero Tolerance violation can be resolved

through a remediation program, then the business partner must
complete the remediation program as directed by Target. Failure to do
so will result in business partner termination.
 Once the remediation program is successfully completed, the vendor
may resume production at the factory. The vendor strike is still
applied.

For more information, please refer to the 3-Strike Vendor Policy resource.

Factory Deactivation and Business Partner

Probation/Termination

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VI | CONCLUSION

Factory Deactivation
RS&S will deactivate facilities that demonstrate zero tolerance and/or
repeated failure to meet our Standards of Vendor Engagement (SOVE). The
stakeholder deactivation policy and business impact are detailed below:

Factories with an auto-fail audit result, or two consecutive denied audit

attempts are subject to a six-month deactivation. Auto-fail audit
results consist of the following:

 Target RS&S Audit Score of 0-50

 Presence of any critical issue
 Failure to meet improvement threshold
 Overdue scheme audit and/or Higg FEM self-assessment
 Denial of factory access to Target or representative

Factories with any zero tolerance violations are subject to a three-year

deactivation.

Business Partner Probation and Termination

Based on business partner performance and record compliance with the
Standards of Vendor Engagement, RS&S may inhibit and/or prohibit certain
business practices through probation for a minimum of one year.

Business partners that receive two strikes within three years of each other
are placed on probation. Probation is a one-year period in which the business
partner works closely with Target's compliance teams to elevate their
compliance programs and prevent additional violations.

Business partner termination occurs when (but is not limited to) the issuance
of three strikes within three years of each other.
Terminated business partners are prohibited from producing any product for
Target for a minimum of three years.

Factory Reinstatement Process

Factories that fail to comply with Target's Standards of Vendor Engagement

(SOVE) and local laws are deactivated for non-compliance by Target's RS&S
team. Factories that receive an Auto-Fail result are deactivated for
six months and factories with a Zero Tolerance result are deactivated for
three years.

A factory may be reinstated for Target production following the process

outlined below. Business cannot be placed, and production cannot begin until
after successful completion of the reinstatement process. The reinstatement
process may take approximately three months to complete.
23
VI | CONCLUSION

1. Non-compliant deactivation period has expired.

2. Factory has a new audit report from an approved scheme
demonstrating compliance with the SOVE and local laws. The audit
report must be released and available.
3. Factory has completed, posted, and shared the most recent Higg
Facilities Environmental Module (FEM) self-assessment module.
Factories regulated by the United States Food and Drug Administration
(FDA) and/or the United States Department of Agriculture (USDA) are
exempt from this requirement.
4. Business partner and factory review the new audit report to validate no
Critical or Zero Tolerance issues were identified. The RS&S team
does not prescreen the audit report for the business partner or
factory.
5. Business partner emails [email protected] confirming
points 1 - 4 are met. (The factory does not complete this step.)
6. RS&S will update the factory's status from "non-compliant" to
"available", so that the business partner can request factory
registration or authorization in Target's systems. The "available" status
does not mean the factory is approved for production.
7. The business partner completes the factory registration or
authorization process in Target's systems.
a. Registration for existing business partners is done in Vendor
Management & Maintenance (VMM).
b. Registration for new business partners is done in Supplier
Management (SM). The Request for Information (RFI) process is
completed in SM.
c. Authorization is completed in VMM.
8. After the factory is registered or authorized, then the business partner
will ensure they and the factory have an Inspectorio RISE account.
9. If an account needs to be set up, then the business partner will initiate
the process by completing and submitting the Inspectorio Onboarding
Form.
10. Once the vendor and factory accounts are set up in RISE, then
the business partner may initiate the assessment disclosure process.
Next, the factory completes and submits assessment disclosure in
RISE.
11. At that time, the RS&S team will review the audit report and
other disclosed information to determine if the factory does or does not
meet the minimum requirements for production.
12. If the audit is Needs Improvement or better, then the factory can
receive business award and begin production. Business awards and
production cannot begin before this step.
13. If the audit result is Auto-Fail or Zero Tolerance, then the factory
is deactivated again for the appropriate length of time. Another
deactivation negatively impacts business partner performance.

24
VI | CONCLUSION

The business partner must contact PSQR or GTS for factories made non-
compliant by those teams to understand their reinstatement procedures.
RS&S does not approve reinstatement of factories deactivated for non-
compliance by those teams.

Business Partner Performance Analysis

We develop and analyze vendor performance indicators and share them with
our business partners for better sourcing decisions.

Once the issues are identified and the audit rating is determined, the next
step is remediation and corrective and preventative action plan
(CAPA). Target will define the follow-up activities. If there are no or very few
issues, a CAPA may not be necessary. If there are minor issues, they may be
able to be resolved via a desktop review of the CAPA. Other circumstances
may require an onsite review by the scheme or Target. This will be outlined
at the conclusion of the audit report review process. Note, this will be
indicated in the narrative section when you receive the Target issued rating
in Inspectorio.

Corrective Action Preventative Action Plans

A corrective action and preventive action plan in Inspectorio include the

issue findings and allows business partners and factories to communicate
remediation and preventative action plans to Target’s RS&S team.

Corrective Action Preventative Action Process:

A CAPA is required in Inspectorio for all Auto-Fail Exception and Needs

Improvement audit results.

 Target communicates the audit result and issue findings to

the business partner and factory via Inspectorio.
 The business partner collaborates with the factory to develop an
actionable CAPA.
o Factories that use the Better Work program can upload the
completed Better Work remediation plan or fill in the CAPA
template in Inspectorio.
o For all other audit schemes, factories must complete the CAPA
template in Inspectorio RISE, whether they have a scheme CAPA
or not.

25
VI | CONCLUSION

 The factory uploads the initial CAPA to Inspectorio within two weeks of
receiving the audit result from Target. A factory may update the CAPA
up to three times.
 The RS&S team will review the submitted CAPA plan.

A CAPA plan that meets expectations includes root cause analysis, explicit
remediation activities to correct and prevent issue recurrence, key milestone
dates, responsible parties, and demonstrable evidence (e.g., pictures,
documentation, etc.). Root cause analysis is necessary to identify factors
driving issues. Some examples driving non-compliance include:

 Lack of or unqualified staff dedicated to executing a compliance

program
 Inadequate knowledge of or experience with compliance expectations
and local law requirements
 Roles and responsibilities are not clearly defined (e.g., safety manager,
HR, compliance manager, production manager, etc.)
 Missing or inadequate policy and procedures, including monitoring and
improvement activities
 Inefficient production planning
 Production order challenges (e.g., exceeding capacity limits, rush
orders, excessive order changes, etc.)
 Lack of effective grievance mechanisms and management system to
prevent non-compliance issue (e.g., Does the facility have established
grievance handling and dispute resolution procedures?)

Business partners should consider how they will validate the factory's
progress on executing CAPA plans. This may include visiting the factory to
verify corrective actions are being implemented and/or partnering with the
third-party audit firm/scheme to verify factory compliance. Once the CAPA is
completed and shared with Target, the business partner will continuously
work with the factory to ensure sustained compliance.

For more information, please refer to the RS&S CAPA Process resource.

Chargebacks

Business partners will meet Target's Standards of Vendor Engagement

(SOVE), all other applicable standards, laws, and regulations. When business
partners fail to meet RS&S expectations, a chargeback is issued. Chargeback
definitions and their penalty amounts are below:

Late Audit Scheduling ($5,000 USD): Failure to schedule the scheme audit
in a timely manner resulting in a 30+ day overdue assessment disclosure in
Inspectorio RISE. Newly registered tier 1 factories (or nominated tier 2
26
VI | CONCLUSION

factories) must schedule their annual and any follow-up audits far enough in
advance to align with audit firm availability and meet the assessment
disclosure deadline. Audits scheduled on time but later moved by the audit
firm are not in scope for this chargeback. Once the vendor has been notified
of the chargeback, the factory has four weeks to schedule an audit if they
have not done so already, otherwise the factory will be deactivated for six
months due to non-compliance.

Denied Audit ($10,000 USD): An audit assessor or representative is denied

access to conduct a full compliance audit. The Conditions of Contract allows
RS&S unimpeded access to the factory, dormitory, workers, and records at
any time.

Unauthorized Subcontracting: All production factories/locations that fall

within the scope of Target's RS&S Program must be disclosed to Target 90
days before production begins. Unauthorized Subcontracting is a Zero
Tolerance violation, and the following chargebacks will be issued against the
implicated business partner(s) vendor:

 First Offense: $50,000 USD

 Second Offense: $100,000 USD
 Third Offense: Vendor Termination

Production in a "Non-Compliant" Factory ($20,000 USD): Production in a

factory deemed non-compliant in VMM.

For more information, please refer to the Responsible Sourcing &

Sustainability Chargebacks resource.

Unannounced Spot Check Audit Program

Target reserves the right to conduct unannounced audits at factory locations

in scope of the RS&S Audit Program at any time.

Target's RS&S Program includes unannounced Spot Check audits at in-scope

factory locations. The Spot Check visit is to ensure factory locations maintain
compliance while producing for Target. Target's RS&S team selects factories
at random to participate in an unannounced Spot Check audit. The factory's
compliance performance is evaluated against Target's Standards of Vendor
Engagement (SOVE) and the audit is conducted either by a Target team
member or an authorized third-party firm.

 Business partners are expected to ensure their factory locations accept

the unannounced audit and ensure unimpeded access to carry out the
audit.
27
VI | CONCLUSION

 If a factory location denies the Target team member or authorized

third-party firm access to conduct the unannounced audit, then a
chargeback will be issued to the business partner(s) with the factory
registered or authorized in Target's systems at the time of the visit.
 The Spot Check visit is part of Target's RS&S Audit Program, thus the
audit result in Inspectorio RISE is subject to change based on the Spot
Check results.
 If Critical Issues and/or Zero Tolerance Violations are identified during
the Spot Check audit, then the factory location is subject to
deactivation due to non-compliance per our standard policy.
 The RS&S team will determine the issue remediation and CAPA
process based on the issues identified during the Spot Check audit
visit.

CORE PROGRAMS

Chemical Policy

Chemicals used in consumer products are a priority for Target, our guests,
and our suppliers. Target has a strong record of leadership in identifying,
reducing, and eliminating harmful substances in our products, supply chain
and operations when demonstrable known or potential risk to our guests or
team members is present. We are determined to be an industry leader of
this work and show how a proactive stance on chemicals is beneficial to
people, planet, and business. Target's priority is to sell products with a
positive impact on the lives of our guests and communities and to ensure
worker and guest safety throughout our value chain and operations.
To continue our leadership and demonstrate our commitment, we
established a cohesive chemicals management framework across all our
product categories and operations. We believe that this robust approach to
managing chemicals will accelerate similar efforts across the industry.
Together we can further reduce the presence of unwanted chemicals in the
homes and workplaces of millions of people, helping to enhance their health
and well-being.

Policy

Target is committed to transparency, proactive chemical management, and

innovation across all our owned and national brand consumer products and
operations.

28
VI | CONCLUSION

Transparency
Target strives for complete visibility to chemicals contained in and used to
make the products we sell and use in our operations.

 We encourage supply chain partners to disclose the ingredients and

substances used within their products to consumers and we support
those who are actively going beyond current transparency regulations.
 Target will approach transparency in the supply chain as an iterative
process, continually adding more product categories and achieving
increasing levels of transparency.

Chemical Management
Target collaborates with business partners to implement policies, practices
and tools that facilitate the management of chemicals through the supply
chain and across our operations.

 Target utilizes hazard profiles to prioritize substances for restriction in

products and processes, with an emphasis on the impact these
substances could have on workers, guests, and communities.
 Target utilizes Restricted Substances Lists (RSLs) and Manufacturing
Restricted Substances Lists (MRSLs) to minimize and, where possible,
remove these chemicals from our products and processes

Innovation
Target will actively promote and pursue new approaches to chemicals
development and the commercialization of safer alternatives.
 Target defines a safer alternative as less hazardous to humans or the
environment than the existing chemical or chemical process. A safer
alternative to a particular chemical may include a chemical substitute
or a change in materials or design that eliminates the need for a
chemical alternative.
 Target contributes resources and expertise to initiatives working to
develop safer alternatives for chemicals where no viable alternatives
currently exist.
 Target supports innovation that utilizes green chemistry principles in
the development, design, and manufacturing of consumer products.
 Target actively engages with NGOs, associations, and industry partners
to innovate and promote a consistent approach to greener chemistry .

For more information, please refer to the following resources:

 Chemical Policy Overview

 Chemical Policy Requirements
 Chemical Policy Training

Climate Policy
29
VI | CONCLUSION

Target takes a holistic view of sustainability, with efforts focused on business

partners driving positive impact for both people and planet. We see
sustainability efforts as part of an interconnected system, where our actions
to help address climate, restore natural systems, and drive opportunity and
equity for our teams, communities and partners and reinforce one another to
create change that is good for all.

In 2019, we set science-based targets for emissions reductions across

Scopes 1, 2, and 3, becoming a leader in U.S. retail. We have also committed
to join Business Ambition for 1.5°C, ensuring our emissions will contribute to
no more than 1.5° warming. In addition, Target committed that 80% of our
vendors by spend will set science-based reduction targets for Scope 1 and 2
emissions by 2023. Announced in 2021, Target Forward builds on these
efforts by committing us to become a net zero enterprise by 2040, which
expands out to our supply chain.

To reduce our Scope 3 supply chain emissions, we will help support and
encourage our business partners to transition to renewable energy sources
and implement their own energy and emissions reduction initiatives.
Managing Scope 1 and 2 emissions is an important first step, but Target will
also work with business partners to identify emission reduction measures
within their supply chains. Many of our business partners' Scope 3 projects
will also contribute to Target's emissions reduction goal and we are actively
working on ways to collaborate with our business partners to collectively
scale our impact. We will also focus on switching to more sustainable raw
materials, such as our sustainable cotton policy and recycled polyester goals.

For more information, please refer to the following resources:

 Climate Policy Overview

 Climate Policy Requirements
 Climate Policy Training
 Climate Policy Forms
 Climate Policy FAQs

Institute of Public & Environmental Affairs (IPE) Compliance

and Tier 2 Due Diligence Requirements

Target partners with the environmental organization, Institute of Public &

Environmental Affairs to build a green supply chain in China in accordance
with Target's Standards of Vendor Engagement. Tier 2 factories in China in
scope of Target's Responsible Sourcing & Sustainability Program are
expected to be clear of any issue record if published by the local government
and displayed by IPE through the Green Choice Alliance (GCA) Audit hosted
by IPE before they are authorized in Target's systems.
30
VI | CONCLUSION

Preparing for IPE Visibility and Management

When a business partner requests authorization of a Tier 2 factory location in

China the business partner must follow the SOVE to disclose correct factory
information and be accountable for checking the factory's status in the IPE
Blue Map Database first. Then, fill in the latest template provided by your
Raw Material or Sourcing contact at Target for preview and approval. We
expect the factory does not have any Zero Tolerance or critical
environmental or safety issues(s) per RS&S requirements.

The IPE database requires user registration to access the complete checking
function, which is free of charge. Target's RS&S team encourages business
partners and factories to register for their own IPE Enterprise Account for
convenience of tracking changes in factories' IPE status. Procedural guidance
is available from the IPE website and upon request from RS&S.
The IPE database also captures dynamic risk of a factory's environmental
performance. If an existing factory, Tier 2, or Tier 1, in China has a violation
record published in the IPE database, then Target will notify the factory to
work with IPE to remediation the violation. In most cases, the GCA audit
hosted by IPE involves mere desktop checking on document evidence, free of
charge. This will validate sufficient remediation that meets the latest legal
requirements and remove the violation record.

Response Expectations and Managing IPE Performance

Target's RS&S team will send the IPE requirement notice with procedural
guidance to the factory and related business partners based on your contact
information in Target's systems and Target's Raw Material and Sourcing
contacts. If no response is received or there is no visible progress in IPE after
ten business days, then RS&S will send the final warning on exiting the
factory after five more business days. Target's Raw Material and Sourcing
teams will be notified of such.

Every Tier 2 Pollutant Permit holder (i.e., higher-polluting factory in China) is

requested to file the past year's Pollutant Release and Transfer Register
(PRTR) and Carbon Data in the IPE database, preferably before each
September, to ensure compliance in routine environmental management and
awareness of the climate goal. Also, to support the IPE green supply chain
and climate action brand ranking in China, every Tier 2 Pollutant Register
holder (i.e., lower-polluting factory in China) is requested to file a least one
PRTR and Carbon Data within the last three years.

Environmental Compliance – Higg

31
VI | CONCLUSION

Target is committed to environmental stewardship and social responsibility.

As part of that commitment, we recognize that our impact as an organization
span beyond our stores and into our global supply chain.

To evaluate the environmental performance of each vendor/facility on our

matrix and promote continuous improvement within our supply chain, Target
utilizes Cascale’s Higg Index as the foundation of the sustainability
assessment process.

The Higg Index is a suite of sustainability assessment tools used industry

wide to measure and evaluate the environmental and social performance
of factories within their supply chain. The sustainability self-assessment
that factories are required to complete is the Higg FEM (Facilities
Environmental Module).

Who should complete the Higg Index?

 Included: All tier 1 and tier 2 factory locations producing brands in

scope of Target’s RS&S program across all product categories are
required to complete the Higg FEM self-assessment annually.
 Excluded: Factories regulated by the Food and Drug Administration
(FDA) and/or United States Department of Agriculture (USDA).
FDA/USDA equivalent certification for imported food and beverage
categories are accepted and those factories are excluded from the
Higg FEM self-assessment requirement. Please email a copy of that
certification to [email protected].

Process Requirements:

 The self-assessment must be completed annually via the online Higg

Index Web Tool as a Facilities Environmental Module

For more information, please refer to the Higg Facilities Environmental

Module resource.

Required Environmental Permits & Licenses

This is not an exhaustive list of required permits and licenses for all countries
of production with factories in scope of the RS&S Program. It is the
responsibility of the business partner and factory to ensure each factory has
all permits and licenses required per local law and they are maintained.

Countries &
Required Permits & Licenses*
Regions
Bangladesh  Environmental Clearance Certificate

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VI | CONCLUSION

 Bangladesh Energy Regulatory Commission (BERC) license required for

factories with generator capacity more than 1,000 kw, if generators
are used as a backup power supply.
 Boiler License and Boiler Operator Certificate for factories with boilers
in operation
 Other permits and licenses required per local law as applicable
 Environmental Permit for the Environmental Ministry
 Environmental Protection Agreement or Environmental Impact
Assessment Reports (factory may have either)
 Environmental Impact Assessment Approval with stamp from the local
government
Cambodia
 Wastewater Discharge Permit
 Solid Waste Disposal Permit
 Air Emission Permit
 Hazardous Waste Permit of Contractor
 Other permits and licenses required per local law as applicable
 Environmental Impact Assessment
 Wastewater Discharge Assessment Study
Central  Annual Environmental License Payment
America  Municipality Operations license for waste collection
 Air Emission Study
 Other permits and licenses required per local law as applicable
 Environmental Impact Assessment Documents (e.g., report, form,
registration form, or other relevant proof)
 Environmental Impact Assessments Approval
China  Environmental Protection Acceptance Report
 Pollutant Permit for Wastewater Discharge/Air Emissions/Waste
Disposing or Pollutant Registrar, if applicable
 Other permits and licenses required per local law as applicable
 Air and Water Consent from Pollution Control Board
 Ground Water Permit/NOC, if applicable
 Wastewater discharge permit, if applicable
 Hazardous waste handling authorization consent, if applicable
India  Environmental Impact Assessments, if applicable
 Form V (Environmental Statement - improvements undertaken and
consumption patterns)
 Boiler permit or license if the boiler is utilized in the production process
 Other permits and licenses required per local law as applicable
Indonesia  Environmental Permit
 Wastewater Discharge Permit (Based on results of Environmental
Impact Assessment study or Document of Environmental Management
Efforts and Document of Environmental Monitoring Efforts)
 Biannual report on Environmental Management Efforts and
Environmental Monitoring Efforts (UPL & UKL)
 Temporary waste storage permit
 Hazardous waste disposal record conducted by an authorized party.
The hazardous waste manifest report must be obtained by the factory
and include the source name, quantity, and characteristic details.
 Air emissions testing report (applicable for factory locations with

33
VI | CONCLUSION

machines that use fossil fuels or recycled materials). The

factory/employer producing air emissions is required to comply with
the ambient air quality standards, emission quality standards, and the
disturbance level (e.g., noise, smell, and vibration).
 Groundwater exploration permit (applicable for factory locations that
use groundwater and conduct groundwater exploration)
 Domestic and wastewater treatment plant (WWTP) permit
 Other permits and licenses required per local law as applicable
 Initial Environmental Assessment (IEA)
 Environmental Impact Assessment (EIA)
Pakistan  Environmental Approval
 Boiler Inspection Certificate
 Other permits and licenses required per local law as applicable
 Environmental compliance certificate or certificate of non-coverage
 Hazardous waste registration ID number
Philippines  Wastewater discharge permit
 Permit to operate air pollution source control installation (if applicable)
 Other permits and licenses required per local law as applicable
 Factory license and the International Emissions Trading Association
(IETA) license, depending on the location of the factory
 Environmental Impact Assessment (EIA), Environmental Health Impact
Assessment (EHIA), and the Initial Environmental Examination (IEE) as
applicable
 Environmental controller license (wastewater, waste, air emission),
depending on the type of factory
 Environmental operator license (wastewater, waste, air emission),
depending on the type of factory
Thailand  Environmental factory manager, depending on the type of factory
 Waste disposal license
 Permit for waste occupied in the factory longer than 90 days
 Permit of waste manifest out of the factory
 Permit for drilling groundwater wells, if applicable
 Permit for hazardous substance possession for import and/or export, if
applicable
 Registered operator for the location of hazardous substance storage , if
applicable
 Other permits and license required per local law as applicable
Vietnam  Environmental permit, including wastewater treatment permit (if
applicable), air emission, Hazardous Waste Generator register, etc.
This is required effective January 1, 2027 for manufacturing projects
operating before January 1, 2022.
 Environmental Impact Assessment (not applicable if the factory has a
completed Environmental Permit from 2021)
 Environmental Impact Assessment Approval
 Environmental Protection Report and acknowledgement from the local
authority
 Wastewater discharge permit (not applicable if the factory signed a
valid wastewater discharge contract with the Industrial Zone)
 Underground water usage permit (where applicable)

34
VI | CONCLUSION

 Wastewater discharge report into the water source (if applicable)

 Other permits and licenses required per local law as applicable

Required Fire and Building Permits & Licenses

This is not an exhaustive list of required permits and licenses for all countries
of production with factories in scope of the RS&S Program. It is the
responsibility of the business partner and factory to ensure each factory
location have all permits and licenses required per local law and they are
maintained.

Countries &
Required Permits & Licenses*
Regions
 Building Approval Plan approved by local authority
Bangladesh  Floor Layout Plan approved by factory inspector
 Fire License from Fire Service and Civil Defense
 Building Permit
Cambodia
 Building Occupancy Approval
 CONRED (Coodinadora Nacional para la Reduccion de
Desastres) approval (construction/safety approval) including building
Central
construction approval plan.
America
 Health and Safety plan updated every three years, including risk
(Guatemala)
assessment, COVID protocol and plan. Electronic document approved
by Labor Ministry.
 Fire Safety Approval / Registration (Fire Safety Acceptance Report /
Registration) issued by the government 官方签发的消防验收报告/备案登记.
 Construction Safety Approval / Registration (Construction Safety
Acceptance Report / Registration) issued by the government 官方签发的工程竣
工验收报告/ 备案.
 Property Ownership Certificate (If the building was constructed before
1998 and no longer be re-constructed) 标有建筑年份的房产证 (如在 1998 年前竣工并在此之后
无任何改建).
 Approved building plans from the local authority (建筑设计备案) are not in
China
scope for China.
 If the Construction Safety Approval / Registration (Construction Safety
Acceptance Report / Registration) issued by the government is not
available for some buildings in the factory, then a credible third-party
inspection report is accepted.
 If the Fire Safety Approval / Registration (Fire Safety Acceptance
Report / Registration) issued by the government is not available for
some buildings in the factory, then a credible third-party inspection
report conducted within the past 12 months is accepted.
 Approved Building Layout Plan
India  Approved Building Stability Certificate
 Approved Fire Notice Objection Certificate (NOC) / Permit
Indonesia  Building Permit - Persetujuan Bangunan Gedung (PBG) or Izin

35
VI | CONCLUSION

Mendirikan Bangunan (IMB)

 Building Functional Acceptance Certificate - Sertifikat Laik Fungsi (SLF)
 Approval supporting documents, such as:
o Building ownership data
 Details documents of land ownership
 Soil tests
 Surrounding buildings
o Design drawings
 Mechanical
 Electrical
 Plumbing technical
 Etc.
 If the SLF is not available due to no technical regulation in the regency,
then the factory should provide the building structure safety inspection
report issued by the local authority.
 Fire Permit from Civil Defense
 Permit from Jordan Industrial Estate Company
Jordan
 Permit from Environment Department
 License from Health Department
 Provincial Building Approval Plan approved by provincial authority
Pakistan  Factory Layout Plan approved by provincial authority
 Fire Certificate from Provincial Civil Defense
 Approval for the Building Layout Plan
 Approval for Fire Clearance
Sri Lanka
 Approval for Electrical Conformity
 Approval for Building Structure
Vietnam  Land use right and property attached on land – The Pink Book (Giấy
chứng nhận quyền sử dụng đất và tài sản gắn liền với đất – Sổ hồng)
 Fire Safety System Approval (Thẩm duyệt thiết kế hệ thống phòng
cháy chữa cháy) issued by the fire police department
 Fire Safety Certificate (Nghiệm thu hệ thống phòng cháy chữa cháy)
issued by the fire police department
 If the pink book is not available to review or all building structures are
not fully reflected in the pink book, then please ensure the following
documents are available.
 Land use right, which is the red book (Giấy chứng nhận quyền sử dụng
đất – Sổ đỏ) issued by the government.
 Building structure certificate (Biên bản hoàn công xây dựng) issued by
either the government or Industrial Zone Management Board.
 Building structure safety inspection report (Biên bản kiểm định an toàn
kết cấu công trình) issued by a credible third-party (only applicable for
buildings constructed before July 1, 2004, in case the above two
documents are not available).
 In the event the fire safety certificate is available, but does not reflect
all existing equipment, then it is acceptable to have an additional
document which shows an acknowledgement from the fire police
department that states the new equipment is installed as requested.
 In the event the fire safety certificate is available and reflects all
existing equipment, it is not acceptable if there is an additional request

36
VI | CONCLUSION

from the fire police department shown in a different document and the
factory did not follow the request.

Foreign Contract Worker Program

Target does not support the practice of factories or third parties, including
recruitment agencies or labor agents/brokers, requiring an employee to pay
a deposit or other fee to begin employment, regardless of local law. Deposits
or excessive fees that the employee must work to pay off prevent the
employee from freely quitting and result in forced/bonded
labor. Recruitment agency or labor agent/broker fees will therefore be paid
by the factory and shall not be deducted from worker wages.

Target requires all its business partners to follow the “Employer Pays”
recruitment model. This means that no worker should be paying for a job and
that the costs of recruitment should be borne not by the worker, but by the
employer. Below are some examples of recruitment fees:

 Job application and processing fees

 Fees to agents, sub-agents, intermediaries, and employers
 Documentation and permit fees: passports, visas, work permits, police
clearance, birth certification
 Pre-departure fees: skills tests, medical exams/screening, training,
orientation
 Arrival/orientation fees: new-hire training/orientation, medical
exams/screening
 Transportation and lodging fees: transportation from worker's home
country to receiving country workplace, border-crossing fees, return
transportation to worker's home country

Below are a few examples of Target’s expectations for all its business
partners regarding the employment of migrant workers.

 Working conditions, wages, and benefits must be materially equal to

local workers
 Employment contracts must be signed prior to migrating for work
 Passports and other personal documents must not be withheld

Process Requirements:

1. Business partners are required to disclose their factory’s employment

of migrant workers via communication to their Target RS&S contact
and during the factory registration process.

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VI | CONCLUSION

2. Factory will be instructed to complete a Due Diligence Assessment

to screen forced labor risks that may stem from recruitment practices
and recruitment agents.
3. A Due Diligence Report will be generated, and the Target RS&S contact
will work with the business partner on addressing and remediating any
risks called out within the report; this includes, but is not limited to, the
reimbursement of past worker borne recruitment fees and the factory’s
commitment to the “Employer Pays” recruitment model going
forward.

Homework Policy

Target is proud of our relationship with workers producing products or

product components in their homes and/or small workshops. We believe that
homework can benefit consumers by providing them with unique products
while providing social benefits to workers.

Target has adopted The Nest Standards for Homes and Small Workshops to
address the needs of homeworkers and is committed to partnering with
suppliers, Nest, other NGOs, and brands to continuously improve labor
conditions.

Target defines homework as production not completed in a factory; instead,

production is completed in the worker's home or at a small workshop. A
worker receives an order from a factory/contractor to produce a product or
complete a step in the manufacturing process. Equipment, materials, or
other inputs used to complete production can be self-provided or provided by
the factory/labor agent. The items are then collected and sent back to the
contractor or factory.

A small workshop is defined as a facility with less than 20 workers producing

by handwork without the use of machinery or less than 10 workers if using
machinery in the process.

Target implemented a homework policy in February 2022. The policy

requires that merchandise vendors using homework comply with the Nest
Ethical Standards in Homes and Small Workshops (Nest Standards) and
receive approval from Target’s newly formed Homework Council (Council)
before business can be awarded. A merchandise vendor’s use of homework
without prior approval will be considered unauthorized subcontracting.

Target’s Homework Policy applies to all merchandise vendors across all

product categories, including Target distributed, non-retail, Target exclusive,
food and essentials for Tier 1 production.

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VI | CONCLUSION

CONCLUSION

Thank you for reviewing the Responsible Sourcing & Sustainability Program
Manual.

This is a critical first step to learning about the Responsible Sourcing &
Sustainability Program’s values, standards, and expectations. We are excited
to work with you, and share the commitment to lead with people, planet, and
business in mind.

Please leverage Partners Online for additional detailed information on our

programmatic requirements and expectations.

For additional questions, please contact [email protected]

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A1 | GLOSSARY OF TERMS

GLOSSARY OF TERMS
Assessment Disclosure: The process by which business partners (i.e.,
vendors) and factory locations disclose assessment information to Target via
Inspectorio RISE by Target’s deadline.

Assessment Disclosure Guideline: A resource available on POL that

provides business partners and factories with instructions on how to disclose
assessment information to Target’s RS&S team through Inspectorio RISE.
This resource is available in English, Simplified Chinese, and Spanish.

Business Partners include the following partner types:

 Merchandise Vendor makes:
o Target Owned Brand
o Limited Time Offer (LTO)
o Target Brand – No Brand
o Target Brand Non-Retail
o Vendor Brand Exclusive
o Non-branded product that is Vendor Brand Exclusive
o Nationally branded product for which Target is the importer of
record
 Indirect Spend Bidder (Non-Retail Vendor) makes non-retail
Target branded products (e.g., plush dogs, gift cards, shopping bags)
 Fabric Supplier provides/produces fabric for merchandise vendors.
This supplier may work directly with Target or the merchandise vendor
to develop fabric across multiple product categories. These suppliers
may or may not be designated as merchandise vendors to utilize for
specific products.
 Trim Supplier produces trim for merchandise vendors. These vendors
may produce Target branded and non-branded trims. These suppliers
may or may not be designated as merchandise vendors to utilize for
specific products.
 Packaging Supplier provides/produces product packaging for
merchandise vendors. These suppliers may produce Target branded
and non-branded packaging. These suppliers may or may not be
designated as merchandise vendors to utilize for specific products.

Designated Supplier: Target may nominate or designate a business

partner for a specific fabric, material, trim, or packaging to merchandise
vendor for Target product. These suppliers have a direct relationship with
Target teams (i.e., OBS&D and OBPD&M (Owned Brand Product Design and
Management).

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A1 | GLOSSARY OF TERMS

Location Disclosure Scope Guide: An interactive tool available on POL

which allows business partners to assess their location disclosure
requirements based on how Target defines each factory/manufacturing
location.

Factory refers to a centralized production location at which at least one day

in the past twelve months factory management employed:
 Ten or more workers simultaneously involved in a manufacturing
process with the aid of powered machinery
 Twenty or more workers simultaneously involved in manufacturing
process without the aid of powered machinery

Manufacturing Process refers to any process for the making, altering,

constructing, assembling, converting, ornamenting, finishing, packing,
washing, dyeing, printing or otherwise treating or adapting any article or
substance with a view to its use or sale.

Target Brand contains or applies a visual design representation of Target

intellectual property which includes brand names, brand
marks/artwork/colors, Target’s logos, characters, or other proprietary
material owned or controlled by Target

Vendor Brand Exclusive contains or applies a visual design representation

where Target exerts control over production (e.g., Exclusive, Limited Time
Offer, and/or Exclusive Licensed Brands).

Tier I (Primary Factory) refers to a factory that creates or transforms

materials and components into a recognizable product by means of
construction or the combining of parts or substances and/or a factory that
consolidates and/or packs product from another factory prior to shipment.

Tier 1 Factory Locations:

 Secondary Factory refers to a factory which receives a piece or part
of a product to conduct a step of the manufacturing process OR a
factory that receive an order/contract from the primary factory to
make a portion of a product with the aid of power or by hand. The
piece produced in this location is then sent to the primary factory to be
added to the finished product.
 Raw Material Processing Factory refers to a factory which
transforms natural or synthetic resources and/or raw materials to be
supplied to a factory or product manufacturing.
 Trim or Component Factory refers to a factory which produces and
supplies trim and/or components to a primary or secondary factory for
product manufacturing.

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A1 | GLOSSARY OF TERMS

 Packaging Factory refers to a factory which produces and supplies

packaging to a primary or secondary factory for product
manufacturing.

Tier 2 Non-Factory Locations:

 Homework Location refers to a non-factory location where
production is completed (e.g., worker’s home or a small workshop). A
worker receives an order from a factory or contractor to produce a
product or complete a step in the manufacturing process. Equipment,
materials, or other inputs used to complete production can be self-
provided or provided by the factory/contractor. The items are then
collected and sent back to the contractor or factory.
 Natural Resource/Raw Material Origin refers to a location from
which natural resources are grown, harvested, or excavated and/or a
location that processes synthetic materials into fiber feedstock.
 Warehouse refers to a location used for storage of finished goods
prior to shipment.

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A2 | ACRONYMS

ACRONYMS
BSCI: amfori Business Social Compliance Initiative
CAPA: Corrective Action Preventative Action
CoC: (Business Partner) Code of Conduct
DMW: Domestic Migrant Worker
E&B: Essentials and Beauty
F&B: Food and Beverage
EFI: Equitable Food Initiative
FA: Factory Assessment
FCW: Foreign Contract Worker
FDA: United States Food and Drug Administration
GTS: Global Trade & Security
IETP: ICTI Ethical Toy Program
LTO: Limited Time Offer
MRSL: Manufacturing Restricted Substances List
OBSD: Owned Brand Sourcing Development
POL: Partners Online
PSQR: Product Safety Quality & Regulations
QA: Quality Assurance
RBA: Responsible Business Alliance
RSL: Restricted Substances List
RS&S: Responsible Sourcing & Sustainability
SLCP: Social & Labor Convergence Program
SMETA: Sedex Members Ethical Trade Audit
SOVE: Standards of Vendor Engagement
SM: Supplier Management
VMM: Vendor Management and Maintenance
USDA: United States Department of Agriculture
QAFA: Quality Assurance Factory Assessment

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