This Code of Conduct applies to our manufacturers, their subcontractors and suppliers of inputs and raw materials. These minimum standards are referenced in all supplier contracts and based on international measures and regulations, including the International Labour Organization's fundamental Conventions, and the Base Code of the Ethical Trading Initiative (ETI). We are committed to maintaining a strong human rights due diligence system and preventing any exploitation of workers, including children, in the production of our products. This commitment is clearly stated in our Supplier Code of Conduct.
Our own brands — AERE, Atmos&Here, Commune, Dazie, Double Oak Mills, Endless, Everloom, Locale, Mika Muse, Spurr, Staple Superior, and St Swim — are produced in 52 independent supplying factories in China (38), India (10), Bangladesh (3) and Australia (1). Over 9,000 people are employed in those locations, 50% of which are female. A list of all THE ICONIC's final-stage factories is updated on a monthly basis and can be found here. Subcontracting from these facilities is not permitted without prior approval as a part of the Purchase Order Terms stated in THE ICONIC’s contract with the supplier, who must commit to ensuring production takes place in the nominated approved factory. THE ICONIC has regular checks in place to identify unapproved subcontractors and, whenever identified, they are also audited. Suppliers who are found to be undertaking unapproved subcontracting are issued with contract breach notices, and repeated violations can result in contract termination. Further to this, tier 2 supplier traceability information is collected for all private label products and we are assessing the feasibility of extending to subsequent tiers.
We hold regular third-party audits covering areas of our Code of Conduct with our first-tier supplying factories, which all involve interviews with production workers. At least 60% of audits are conducted on a semi-announced basis. These audits enable us to track the use of migrant, temporary, and agency workers, and to gain visibility of the worker training programs and grievance mechanisms that exist in these factories. Once onboarded, all factories must undergo a full audit every 24 months after an initial annual audit, with follow-up third-party audits in between to verify that any issues uncovered have been rectified, ensuring all factories working with THE ICONIC show continuous commitment to meeting our standards.
We recognise that there can be times where our standards are not being met by our factory partners and we are committed to working with our supply chain to support continuous improvement. Currently 36% of all audit issues have been remediated as of quarter three (Q3) 2020 (compared to 48% in 2019) which is partly explained by a number of factories changing in recent months and factories who had closed older issues having been re-audited. This will remain an ongoing focus for us and in the interest of reducing audit fatigue we have continued to accept third-party audits that our factories have completed for other customers where they meet our requirements. Since 2018, we have exited four factories as a result of a failure to address critical issues identified through our audit process despite our remediation efforts. This was not our preferred outcome as we always aim to resolve issues and maintain long-term supplier relationships, but we are committed to the ethical trading standards we have set and will not work with factories who will not meet these expectations.
Should THE ICONIC ever identify incidences of forced or child labour in our supply chain, we would seek to use our leverage to influence positive change and we would work with the appropriate local organisations to support the factory in implementing a remediation plan designed to achieve positive outcomes for the people concerned. However, we reserve the right to immediately terminate the relationship with the factory or vendor if they do not comply with the remediation plan in place.