INDITEX Group

Code of conduct

Internal Code of Conduct

Employees

Inditex does not employ anyone who is below the legal age.

No-one who is employed at Inditex is discriminated against because of their race, physical disability, religion, age, nationality or sex.

The employees of Inditex have their right recognised to associate or organise themselves or to bargain collectively.

At Inditex no form of physical, sexual, psychological or verbal harassment or abuse is permitted.

The salary received by Inditex employees is in accordance with the function performed, always respecting the pacts of each sector.

Inditex guarantees that its employees perform their work in safe and healthy workplaces.

Business partners

Inditex makes sure that each and every one of its business partners fulfils the contents of the paragraphs of this Code on customers and employees.

Suppliers

The External Manufacturers and Workshops of Inditex are bound to comply with the contents of the employees and customers paragraphs of this Code. Likewise, they permit any monitoring by Inditex, or authorised third parties, to verify their compliance.

Customers

Inditex undertakes to offer to all its customers a standard of excellence in all its products; at the same time, it guarantees that its products do not entail a risk to their health or safety.

Society

Inditex undertakes to collaborate with the local, national and international communities in which it operates. To guarantee adequate introduction and subsequent mamagement of the Code of Conduct in the chain of production.

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Inditex code of conduct for external manufacturers and suppliers

Introduction.

After the incorporation by Inditex of the Ethical Trading Initiative (ETI) in 2005, Inditex undertook to incorporate its Base Code to the Code of Conduct for External Manufacturers and Workshops. For this purpose, the Board of Directors of Inditex modifi ed the above-mentioned Code in July 2007.

The regulatory framework on which the new Code is articulated is made up of:

  • The agreements of the ILO.
  • The Universal Declaration of Human Rights of the United Nations.
  • The Principles of the Global Compact of the United Nations.
  • The Directives of the OECD for multinational companies.
  • The Base Code of ETI.
  • The locally applicable employment legislation.
  • The local legislation in environmental matters and, in the absence thereof, the international legislation that is in force.

This new Code is expressed in eleven points:

No forced labour.

Inditex shall not allow any form of forced or involuntary labour in the production centres and/or facilities of its external manufacturers, suppliers and their subcontractors.

External manufacturers, suppliers and their subcontractors may not require their employees to make any kind of “deposits”, nor are they entitled to retain their identity papers.

External manufacturers, suppliers and their subcontractors shall acknowledge the right of their employees to leave their employer after reasonable notice.

No child labour.

External manufacturers, suppliers and their subcontractors shall not employ minors. Inditex defines minors as those persons under the age of 16.In the event that local legislation would provide a higher age limit, the company shall respect the local provision.

Persons under 18 shall not be employed in night shifts or in hazardous conditions pursuant to the definition thereof provided under Recommendation 190 of the International Labour Organization.

Where the existence of any form of child labour is detected in the production centres and/or facilities of external manufacturers, suppliers and their subcontractors, protocols designed for the suppression thereof must be applied, and educational programmes ensuring the suppression of any form of exclusion of minors until they attain the minimum labour age required must be developed.

No discrimination.

External manufacturers, suppliers and their subcontractors shall not apply any type of discriminatory practice as regards the recruitment, compensation, access to training, promotion, termination of the employment agreement or retirement, based on race, caste, creed, nationality, religion, age, physical or mental disability, gender, marital status, sexual orientation and/or union membership or political affiliation.

Respect for freedom of association and collective bargaining.

External manufacturers, suppliers and their subcontractors shall ensure that their employees, without distinction, have the right of association, union membership and collective bargaining. No retaliation may arise from the exercise of such right and no remuneration or payment whatsoever may be offered to the employees in order to hinder the exercise of such right.

External manufacturers, suppliers and their subcontractors shall adopt an open and collaborative attitude towards the activities of Trade Unions.

Workers´ representatives shall be protected from discrimination and shall be free to carry out their representative functions in their workplace.

Where the Rights to Freedom of Association and Collective Bargaining are restricted under Law, the appropriate channels to ensure a reasonable and independent exercise of such rights must be designed.

No harsh or inhumane treatment.

External manufacturers, suppliers and their subcontractors shall treat their employees with dignity and respect. Under no circumstances shall physical punishment, sexual or racial harassment, verbal or power abuse or any other form of harassment or intimidation be permitted.

Safe and hygienic working conditions.

External manufacturers, suppliers and their subcontractors shall provide a safe and healthy workplace to their employees, ensuring minimum conditions of light, ventilation, hygiene, fire prevention, safety measures, and access to a drinking water supply.

Workers shall have access to clean toilets facilities and drinking water. Where necessary, facilities for food storage shall be provided.

Accommodation, where provided, shall be clean and safe.

External manufacturers, suppliers and their subcontractors shall take the required steps to prevent accidents and injuries to health of their workers, by minimizing as much as possible, the risks inherent to work.

External manufacturers, suppliers and their subcontractors shall provide their workers with regular training in the matter of health and safety at work. The company shall keep an appropriate record of the training courses done.

External manufacturers, suppliers and their subcontractors shall appoint a person in charge of health and safety within the Management, duly authorised and with the appropriate decision taking power.

Wages are paid.

External manufacturers, suppliers and their subcontractors shall ensure that wages paid for a standard working week shall meet at least the minimum legal or collective bargain agreement, whichever is higher. In any event, wages should always be enough to meet at least the basic needs of workers and their families and any other which might be considered as reasonable additional needs.

External manufacturers, suppliers and their subcontractors shall not proceed to any withholdings and/or deductions from wages for disciplinary purposes, nor for any reasons other than those provided in the applicable regulations, without the express authorisation of workers.

External manufacturers, suppliers and their subcontractors shall provide all workers with: written and understandable information about their wages conditions upon their recruitment, and information about the particulars of their wages every time that these are paid.

External manufacturers, suppliers and their subcontractors shall also ensure that wages and any other allowances or benefits are paid on time and rendered in full compliance with all applicable laws and specifically, that payments are made in the manner that best suits the workers.

Working hours are not excessive.

External manufacturers, suppliers and their subcontractors shall adjust the length of the working day to the provisions of the applicable laws or of the collective bargain agreement for the sector in question, should this latter afford greater protection for the workers.

At no event shall external manufacturers, suppliers and their subcontractors require their employees to work, as a rule of thumb, in excess of 48 hours a week and workers shall be granted at least one day off for every 7 calendar day period on average.

Overtime shall be voluntary, shall not exceed 12 hours per week, shall not be demanded on a regular basis and shall always be compensated at a premium rate, pursuant to the provisions of the prevailing regulations in force.

Environmental awareness.

External manufacturers, suppliers and their subcontractors shall be duly committed at all times to protect the environment and shall comply, at least, with the standards and requirements of the applicable Local and International Laws and Regulations.

Regular employment.

External manufacturers, suppliers and their subcontractors undertake that all the employment formulas they use are part of the ordinary labour practice and the applicable local laws.

External manufacturers, suppliers and their subcontractors shall not impair the rights of workers acknowledged under the labour and social security laws and regulations by using schemes of: subcontracting, homeworking, training and apprenticeship contracts or any other like formula which prevents promotion of regular employment in the framework or regular employment relationships.

Code implementation

  • Subcontracting.- External manufacturers and suppliers shall not subcontract any work without the prior written authorisation of Inditex. External manufacturers and suppliers, which subcontract work for Inditex, shall be responsible for the subcontractors’ compliance with the Code. External manufacturers, suppliers and their subcontractors shall apply the principles of the Code to any homewoker involved in their supply chain, and they shall give transparency to the locations and working conditions of said homeworkers.
  • Management Systems.- External manufacturers, suppliers and their subcontractors shall implement and maintain programmes to set in train this Code. External manufacturers, suppliers and their subcontractors shall appoint a senior member of Management who shall be responsible for the implementation and enforcement of this Code. External manufacturers and suppliers and their subcontractors shall communicate the Code to all employees and to their contractors, subcontractors, suppliers, agents and homeworkers in any way involved in the Inditex Supply Chain.
  • Supervision and Compliance.- External manufacturers, suppliers and their subcontractors shall authorize Inditex and/or any third parties the former might appoint, to carry out inspections and audits in order to verify the appropriate enforcement of the Code. For these purposes, they shall provide the inspectors and/or auditors with the required means and the appropriate access to the facilities and documentation required to ensure this verification.
  • Ethical Commitment.- External manufacturers, suppliers and their subcontractors shall carry out their activities in a honest, upright and transparent way, keeping for these purposes an appropriate accounting records system, as a preventive measure versus any manner of corruption, bribe and extortion that might arise. External manufacturers, suppliers and their subcontractors shall not offer, grant, request or accept any gifts or donations to/from Inditex buyers which might infringe the provisions of the “Internal Guidelines for the Responsible Practices of the Inditex Group Personnel”. External manufacturers, suppliers and their subcontractors shall not manipulate or influence their workers, nor shall they forge any files or records in order to alter the verification process regarding compliance with this Code. External manufacturers, suppliers and their subcontractors shall neither offer nor accept remuneration of any kind which in perception, or in effect, seeks to affect the impartial judgement or the objectivity of such parties appointed by Inditex to carry out inspections and compliance audits in connection with this Code.
  • Health and Safety of products.- External manufacturers, suppliers and their subcontractors undertake to apply Inditex´s health and safety product standards in all manufacturing processes of raw materials, finished products, accessories and footwear that they provide to Inditex.
  • Publication of the Code.- External manufacturers, suppliers and subcontractors’ Management teams shall inform their employees about the contents of this Code. A copy of the same, translated into the local language shall be displayed in accessible locations for all workers.
  • Reference to national legislation and collective agreements.- The provisions of this Code constitute only minimum standards. Should national regulations or any other applicable Law or any other commitments undertaken or applicable, including collective bargaining agreements, govern the same issue that provision which offers greater protection for workers shall apply.

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Internal guidelines for responsible practices

Introduction

In the framework of the recent development of Corporate Social Responsibility, several institutions and initiatives are insisting that companies should lay down internal rules of conduct to encourage the ethical behaviour of their employees and help prevent all forms of corruption.

With these “Internal Guidelines for Responsible Practices of the Inditex's Group Personnel” (hereinafter, the Guidelines), the Inditex Group takes a step forward in the journey that begun in February 2001 with its “Code of Conduct” towards the goal of securing the professional, ethical and responsible behaviour of its employees on developing the various activities of the company anywhere in the world, all of which is the basis of its corporate culture, upon which should be based the training and the personal and professional growth of its employees.

To achieve the foregoing goals, these Guidelines do not set obligations of an enforceable behaviour towards the company as such, but instead, they provide a pattern for the behaviour expected by the company of its employees, thus providing a mechanism of complaints allowing employees to report, in a confidential manner, any potentially relevant irregularities that they might consider to be a breach of these Guidelines.

These Guidelines have been approved by the Board of Directors of Inditex, S.A., in the meeting it held on 13 June 2006, prior favourable report of the Audit and Control Committee.

Definitions

For the purposes of these Guidelines, the following definitions will apply:

  • Inditex.- Industria de Diseño Textil, S.A., shall mean a public company listed on the Stock Exchanges of Madrid, Barcelona, Bilbao and Valencia and on the Automated Quotation System, with registered address at Avda. de la Diputación, Edificio Inditex, 15142 Arteixo, A Coruña (Spain), registered with the Companies Register of the province of A Coruña, on Volume 964 of the File, General Section, Folio 17, Page no. C-3342 and Fiscal Identification Number (ES- C.I.F) A15075062.
  • The Inditex Group.- This definition shall include all companies that are part of the Inditex´s corporate Group worldwide. Unless otherwise provided hereunder, the word “company” shall be deemed to apply to each and every company within the Inditex Group.
  • Personnel or employees.- This definition shall include all directors, officials and other employees of the Inditex Group, regardless of their employment agreement, where they act in such capacity, that is, for and on behalf of the Inditex Group, both if they do so directly and indirectly in person or through any third party, company or controlled entity of any kind.
  • Related person.- This definition shall include any person who is linked to any employee of the Inditex Group as, :
    - Their spouses or any other person with similar relation of affectivity.
    - Their ascendant, descendant or brother or sister.
    - The ascendant, descendant, or brother or sister of the spouse or of any other person with similar relation of affectivity.
  • The Committee of Ethics.- This is the Committee referred to under clause 16 of these Guidelines.
Enforcement of the Code of Conduct

The Code of Conduct was approved by the Board of Directors in February 2001 and is defined as an ethical commitment that includes basic principles and standards for the appropriate development of the relations between the Inditex Group and its main stakeholders (employees, customers, shareholders, business partners and any societies where it develops its business model).

These Guidelines encompass said Code in its basic principles and its wording with regard to the main stakeholders of the Inditex Group. For such reason, it is reworded below:

- All the operations of the Inditex Group shall be developed under an ethical and responsible perspective.
- All persons, whether natural or legal, who maintain, directly or indirectly, any kind of labour, economic, social or industrial relationship with the Inditex Group shall be treated in a fair and honourable manner.
- All the activities of the Inditex Group shall be carried out in the manner that most respects the environment.
  • Employees: The Inditex Group does not employ anyone who is below the legal age. No one who is employed at the Inditex Group is discriminated against because of their race, physical disability, religion, age, nationality or sex. The employees of the Inditex Group have their right recognised to associate or organise themselves or to bargain collectively. At the Inditex Group no form of physical, sexual, psychological or verbal harassment or abuse is permitted. The salary received by the employees of the Inditex Group is in accordance with the function performed, always respecting the pacts of each sector. All the employees of the Inditex Group perform their work in safe and healthy workplaces.
  • Customers: The Inditex Group undertakes to offer to all its customers a high standard of excellence, quality and safety in all its products.
  • Shareholders: The Inditex Group will perform its activity pursuant to the social interest, it being understood as the feasibility and maximization of the company´s value in the long run in the common interest of all the shareholders.
  • Business partners: Each and every one of the business partners of the Inditex Group are bound to comply with the contents of the paragraphs of this Code on customers and employees.
  • Suppliers: The External Manufacturers and Workshops of the Inditex Group and any other supplier of goods and services are bound to comply with the contents of the employees and customers paragraphs of this Code. Likewise, they permit any monitoring by the Inditex Group, or any authorised third parties, to verify their compliance.
  • Society: The Inditex Group undertakes to collaborate with the local, national and international communities in which it operates.
Scope of application

These Guidelines shall apply to all the Companies that comprise the Inditex Group, binding all its staff – specifically, they shall be notified in person to all Directors and Officials, who must undertake in writing to enforce them – and the total or partial application thereof might extend to any person, whether natural or legal in any way related to the Inditex Group where it may be so required to achieve the purpose thereof, and where possible given the nature of the relation.

Release from the obligation to enforce these Guidelines shall be authorised by the Committee of Ethics exclusively, for specific cases duly justified, disclosed by the former to the Audit and Control Committee in the next session held by this latter.

Enforcement of the legislation

In order to enforce these Guidelines, the employees of the Inditex Group need to enforce first the prevailing legislation of each of the countries where the group carries out its manufacturing, distribution and commercialisation activities, and in doing so, they shall comply with the letter and spirit of these Guidelines.

Relationship among employees and with customers

All employees are bound to act, as regards their employment relationships with other employees and with the customers, pursuant to the principles of respect, dignity and justice, taking into account the different cultural sensitivity of each individual and not allowing any manner of violence, harassment or abuse in their work, nor any discrimination against because of their race, religion, age, nationality, sex, or any personal or social traits statutorily forbidden other than their own merit and capacities, in pursuit, especially of the attention and assimilation into working life of disabled or handicapped people.

Relationship with suppliers

The employees of the Inditex Group shall maintain a lawful, ethical and respectful relationship with its suppliers.

The choice of suppliers shall be governed by principles of objectivity and transparency, that combine the interest of the company in achieving the best supplying conditions, with that of maintaining stable relations with ethical and responsible suppliers.

No employee of the Inditex Group may offer, grant, apply for or accept, either directly or indirectly, any gifts, handouts, favours or compensations, whether in cash or in kind, regardless of the nature thereof, that might have an impact in the decision-taking process in connection with the performance of the duties pertaining to their office.

Specifically, no employee of the Inditex Group may offer, grant, apply for, or accept any gifts or handouts from any individuals or body corporate with whom the Inditex Group has any manner of relationship whatsoever for an amount whether on its own or added up within one year higher than 100 euros.

Any gifts or handouts received in breach of these Guidelines shall be forthwith returned and this fact must be reported to the Committee of Ethics. Should this return not be reasonably likely, these gifts or handouts shall be delivered to the Corporate Social Responsibility Department, which, further to the issuance of the pertaining receipt, shall contribute them to a charity.

Relationship with authorities

The employees of the Inditex Group shall maintain lawful, ethical and respectful relationships with the authorities and public institutions wherever they carry out their activities.

In the course of the relationships of the company with any Public Administrations, no employee of the Inditex Group may offer, grant, apply for or accept, either directly or indirectly, any gifts, handouts, favours or compensations, whether in cash or in kind, regardless of the nature thereof, to or from any authorities or civil servants, where such action might seem somehow linked with the taking of decisions regarding the company by the administrations or institutions in question.

Communication of activities

All employees of the Inditex Group shall report to the company, upon their recruitment and during the performance of their duties, any situation that might mean a conflict between their own interest and that of the company.

Specifically, the situations below shall be deemed to be situations of potential conflict, that need to be reported:

  • Where employees or any person related to them carry out, whether directly or indirectly, whether by themselves or through any companies or institutions, any activities of the same, similar or supplemental kind as those carried out by the Inditex Group.
  • Where employees or any person related to them carry out, either directly or indirectly, either by themselves or through any companies or institutions any activities that would involve the exchange of goods or / and services with the Inditex Group, regardless of the remuneration system agreed.
Personal conflicts of interest

The Inditex Group respects the private life of its employees and therefore the private sphere of their decisions.

In the framework of this policy of respect, employees are urged to report to the Committee of Ethics any personal conflicts of interest that might arise and jeopardize the necessary objectivity or professionalism of their duties within the Inditex Group, so that, in the respect of the confidentiality and intimacy of individuals, the relevant measures might be taken for the mutual benefit of the company and of the affected persons.

Exercise of political activities

The Inditex Group develops its business model without having any political interference in those communities where it carries outs its manufacture, distribution and / or commercialisation activities.

Any relationship that the Inditex Group may have with any governments, authorities, institutions and political parties shall be based upon the principles of legality and neutrality.

Contributions, whether in cash and / or in kind that might be made, where applicable, to any political parties, institutions and public authorities, shall always be made in accordance with the current legislation in force and ensuring the transparency thereof; for such a purpose, the previous report of the Legal Department evidencing that any such contributions are lawful, shall be required.

The right of the employees to take part in lawful political activities is hereby acknowledged, provided that said activities would not interfere with the appropriate performance of their work for the company and that they would take place during non working hours and outside any of the facilities of the Inditex Group, so that these activities may not be attributed to the company.

Use of goods and services of the company

The employees of the Inditex Group shall secure an efficient use of the goods and services of the company and shall not use any goods or services of the company for their own profit, nor shall they take advantage of their position within the company to obtain any financial or personal advantages or business opportunities.

Exercise of other activities

The employees of the Inditex Group shall only be able to develop any working or professional activities other than those arising out of their employment relationship with the company, where same shall not diminish the efficiency required in the performance of the duties inherent in the activities they perform for the Inditex Group.

Notwithstanding the duties characteristic of the Human Resources Department, any occupation or professional activity alien to Inditex that might affect the working day in the company shall be previously authorised by the Committee of Ethics.

The Committee of Ethics shall keep the Audit and Control Committee periodically informed on the number of authorisations granted and on the degree of compliance with this issue.

Confidentiality of information

The employees of the Inditex Group shall abstain from using for their own benefit or otherwise disclosing any information or document obtained in the course of their work for the Inditex Group.

The confidentiality obligation shall remain even after termination of the employment with the Inditex Group and it shall include the obligation to return any material connected with the Inditex Group that the employee has in his / her hands when his / her relationship with the Company ends.

Record of transactions

The employees of Inditex shall ensure that any transactions that might have an economic impact they carry out for Inditex appear clearly and precisely on the appropriate records of accounts, as a true representation of the transactions carried out, which shall be available to the internal and external auditors.

Only the Committee of Patronage and Sponsorship, pursuant to the internal regulations of Inditex, may approve any contributions made towards sponsorship or social investment.

Enforcement of the Guidelines and Committee of Ethics

In order to ensure compliance with these Guidelines, a Committee of Ethics shall be set up, comprised of:

  • The General Counsel and Code Compliance Officer.
  • The CSR Director.
  • The General Director of Human Resources.

The Committee of Ethics may act of its own motion, on the behest of any employee duly identified, and, exceptionally, further to an anonymous complaint made by the employees in good faith:

For such purposes, notices given under these Guidelines, whether denouncing breaches of the Guidelines or containing consults regarding the construction or implementation thereof, may be addressed to the Company by ordinary post, e-mail or fax.

The Committee of Ethics shall report to the Board of Directors, through the Nomination and Remuneration Committee, and shall have the duties below:

  1. The internal dissemination of the Guidelines among the personnel of the Inditex Group.
  2. Receiving all manner of written instruments with regard to the enforcement of the Guidelines.
  3. Dealing with any enquiries regarding the enforcement of these Guidelines until the settlement thereof.
  4. The construction of any doubts that might arise with regard to the enforcement of these Guidelines.
  5. Proposing to the Board of Directors, prior report of the Audit and Control Committee, such clarifications and implementing regulations as the enforcement of these Guidelines might require.

In the performance of its duties the Committee of Ethics shall ensure:

  1. The confidentiality of all the information and background and of the acts and deeds performed, unless the disclosure of information is required by law or judicial order.
  2. The thorough review of any information or document that originated its action.
  3. The commencement of such proceedings that adjust to the circumstances, where it shall always act with independence and full respect of the right of the affected person to be heard as well as of the presumption of innocence.
  4. The indemnity of any employee as a result of bringing complaints to the Committee.

The resolutions of the Committee of Ethics shall be binding for the Company and its employees.

Publicity of the guidelines

These Guidelines shall be made available to the employees in their own language; they will be posted on all web sites of the Group and shall be subject to the appropriate disclosure, training and awareness-raising actions to be properly understood and implemented within the whole organisation.

The Ethics Committee shall submit to the Board of Directors, through the Audit and Control Committee, such suggestions as it might think expedient in connection with the enforcement of these Guidelines, and at least an annul report reviewing the enforcement thereof.

The Ethics Committee shall have the necessary resources to ensure the enforcement of these Guidelines.

Inclusion of the guidelines into the internal corporate regulations

These Guidelines are included in the framework of the internal regulations of the Inditex Group. Said internal regulations, comprised of the provisions set out below, shall be construed in the sense most favourable to the effective application of these Guidelines.

  1. By laws
    • Articles of Association, approved by the Annual General Meeting of Shareholders of Inditex on 16 July 2004.
    • By-laws of the Social Board approved by the Board of Directors of Inditex on 12 December 2002.
    • Internal Audit Charter and Internal Audit Regulations approved by the Board of Directors of Inditex on 13 December 2004 and on 12 December 2005, respectively.
  2. Rules and regulations
    • Board of Directors´ Regulations, approved by the Board of Directors of Inditex on 20 July 2000.
    • General Meeting of Shareholders´ Regulations, approved by said body of Inditex in the meeting held on 18 July 2003.
    • Internal Regulations of Conduct of Inditex, S.A., and its corporate group regarding Transactions in Securities, approved by the Board of Directors of the company on 20 July 2000.
  3. Codes of conduct
    • Code of Conduct, approved by the Board of Directors of Inditex on 23 February 2001, in the wording included in these Guidelines.
    • Code of Conduct for External Manufacturers and Workshops, approved by the Board of Directors of Inditex on 23 February 2001.
  4. Other international initiatives and agreements
    • Adherence of Inditex to the Global Compact , in August 2001.

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