UPDATED APRIL 2005
TRADE SECURITY
Customs-Trade Partnership Against Terrorism
CONTRACTOR MEMORANDUM OF UNDERSTANDING
Kellwood Company has been certified as a participant in the Customs-Trade Partnership Against Terrorism (C-TPAT), a program developed by U.S. Bureau of Customs & Border Security (CBP), designed to minimize security risks of international trade through cooperative efforts by governments, importers, agents, carriers and factories.
In September 2002, Kellwood notified its major suppliers of our participation in C-TPAT and our intention to reach through our entire supply chain to include all of our vendors in this program.
Many of our suppliers filled out initial questionnaires, based on the C-TPAT Foreign Manufacturer Security Recommendations, to measure their security procedures compared to the recommendations provided by CBP. In addition, since August 2003, we have had our third party monitors complete C-TPAT evaluations as part of our normal social compliance audits.
Based on the findings of the factory questionnaires and our compliance audits, we have determined that most of our supplier factories have at least some of the Customs recommended security procedures in place, but in most cases there are still some elements missing.
Kellwood Factory Requirements
Beginning in January 2005, Kellwood will begin to grade the security efforts of our contractor factories as part of our regular compliance audits. The third party monitors will be specifically looking at how a factory addresses the items to be covered in the rest of this announcement.
We would expect that Kellwood suppliers would be able to present to the monitors a written document of security procedures that will explain how the factory meets the minimum standards criteria. Between now and January 2005, we are asking each Kellwood supplier to develop, document and implement a plan to address the below-mentioned issues.
U.S. Customs C-TPAT Requirements
As part of our C-TPAT requirements, we must be certain our supplier factories have in place a security program that addresses the following 10 points (the bullet point items come directly from the U.S. Customs website: www-customs-gov):
· The facility will have written security policies and practices to guard against insertion of illegal or unauthorized material into shipments.
The factory should prepare a document that systematically answers how it addresses all of the items that come below. This document will become the written security plan.
All factories must submit a written report or response to the attached security questionnaire regarding current security procedures. This questionnaire will be the document that will be used for security evaluation during future compliance audits.
· The facility will have formally designated a qualified person with responsibility for communicating, deploying, and monitoring these policies and practices.
The factory must designate a member of management to serve as Security Officer. This person will be responsible for overseeing the development of security procedures, documenting procedures, implementing procedures and then following up after implementation to see that procedures stay in place.
· The facility will have a program to train relevant individuals, including all individuals responsible for the supervision of workers, and the production and shipment of product, on the facility’s security policies and procedures.
Factory management and supervision must be trained as to their roles in the ongoing process of security. This training includes such things as not allowing unidentified persons into the factory, challenging unauthorized/unidentified persons, not allowing unauthorized persons into the shipping area, how to report suspicious activities that might indicate a security problem, etc. Factory workers below the level of supervision should be made aware of the factory’s security program and should be instructed as to how to report any suspicious activities they might observe.
· The facility will perform background checks on security/shipping/loading dock personnel before their employment is made permanent.
A major concern in the security process is to have controls in place to prevent the insertion of non-manifested items into cartons or containers. One key control is to know who is working in those factory areas where non-manifested items would most likely be inserted. When employees are hired to work in the packing/loading area or to serve as security guards, their backgrounds should be checked to be certain there are no known issues that would make the person a security risk.
When employees are terminated, for whatever reason, standard procedure should be to remove facility and systems access for these terminated employees.
· The facility is to maintain secure premises to prevent the entry or shipment of illegal or unauthorized cargo. The facility is of secure construction and maintains an alarm system and/or trained security personnel to prevent unauthorized access.
The factory must have security personnel on site to prevent unauthorized entry and an alarm system should be in place to guard against entry from non-guarded areas (doors other than main entrances and main entrances when factory is not working). The issuance and collection of access controls (ID badges, keys, key cards, etc.) should be carefully controlled.
· The facility restricts access to the facility by non-employees.
a) The facility requires identification tags and/or authorized passes.
b) Visitors and employees wear identification tags at all times while on facility premises or have them available on request.
c) The facility escorts visitors while in the facility, and control their movements while in the shipping areas of the facility.
All employees should have some type visible identification that establishes them as legitimate employees of the factory. Visitors should be required to sign in, present photo ID and be given some type of identification (ID badges) that establishes that management knows this person is in the factory. Visitors should be escorted while in factory and should not be allowed access to the packing and shipping area unless necessary. Visitors should be required to sign out when leaving facility and visitor ID badges should be collected.
Arriving packages and mail should be screened. Delivery person should present photo ID.
· The facility must have adequate outside security measures such as fencing, locked gates or other methods of controlled access, including controlled access to keys and key cards.
The factory must guard against unauthorized persons gaining access to the premises. Control methods will differ from facility to facility. Management must carefully control access to the keys that unlock the facility. Best practices include perimeter fencing with a manned gate and adequate locking mechanisms for doors and windows when factory is unoccupied.
The factory must also guard against unauthorized persons gaining access to facility information systems. The factory must have in place Information Technology (IT) security policies and procedures. This includes individually assigned passwords with periodic changes, training for employees in appropriate use of facility IT systems and immediate removal of access to system for terminated employees.
· The facility must control packing areas and loading docks and limit access to authorized personnel. Loading docks and packing areas are well lit and under supervision at all times.
The only people allowed in the Packing/Shipping area should be Packing/Shipping department employees and there should be defined physical separation of the Packing/Shipping department from the rest of the facility. There should be no reason for employees from other departments to go into packing/shipping without supervision. The packing/shipping area should be kept well lit at all times. Whenever there is work activity in the packing/shipping area, supervision should be present. Unrestricted parking of private vehicles should not be allowed in the loading dock area.
Other Best Practices might include perimeter fencing to enclose cargo handling, interior fencing to segregate cargo, gates are manned or monitored, number of gates kept to a minimum, alarm systems and video surveillance to monitor premises.
· The facility will inspect inbound and outbound empty containers. All incoming and outgoing containers are sealed when entering or leaving the facility.
The issue here is to ensure that all “empty” containers are truly just that – empty containers. When an empty container is brought on the premises, it should be inspected and sealed. When an empty container is to be removed from the premises, it should also be inspected and sealed.
Prior to stuffing, a container must go through a 7- point inspection process (front wall, left side, right side, floor, ceiling/roof, inside/outside doors, outside/undercarriage.
Written procedures on seal attachment to loaded containers must indicate how seals are to be controlled and affixed to loaded container. Facility must use high security seal to meet or exceed PAS ISO 17712, which defines a high security seal as follows:
ü Constructed and manufactured of material such as metal or metal cable with the intent to delay intrusion.
ü Generally must be removed with quality bolt cutters or cable cutters. They require inspection to indicate whether tampering has occurred or entry has been attempted.
ü Shall be strong and durable so as to prevent accidental breakage, early deterioration (due to weather conditions, chemical action, etc) or undetectable tampering under normal usage.
ü Shall be identified by unique marks and numbers that are readily legible; marking intended for unique identification of the seal shall be considered permanent. Any modification of markings shall require irreversible physical, chemical, heat or other destruction of the security seal.
ü Shall be designed so as not to permit multiple uses.
ü Seals shall be manufactured under a controlled process, as evidenced by a suitable, externally audited manufacturing and testing processes quality control process, for example by ISO 9000 series certification.
· All appropriate security measures are maintained to secure and track cargo transported from the facility to the consolidator and/or other cargo carriers to prevent introduction of unauthorized cargo.
Despite good security efforts while production is in the factory, the movement of completed orders from factory to carrier presents another situation that must be safeguarded. The factory should apply procedures to be certain that outgoing production goes directly to the carrier.
These represent minimum-security procedures. Factories are encouraged to add to these procedures to make the factory environment as secure as possible relative to the insertion of anything other than manifested cargo into outgoing shipments.
Kellwood Factory Security Best Practices
Kellwood understands there are variations in factory conditions and we recognize that there will be different ways to address each security point. But what will be required is a documented plan that specifically specifies how your factory will:
1. Formally designate a person to be in charge of your security program. The person should be named and his/her position in management stated.
2. Train all the necessary individuals as to your security policies and procedures. There should be training agendas to outline what information was presented and documentation as to who attended such training.
3. Conduct background checks for security and shipping personnel. There should be samples of the information gathered on personnel in these areas.
4. Prevent unauthorized persons from entering the factory. All visitors should be identified, signed in and escorted while in factory.
5. Identify factory employees and visitors while they are in factory (badges, name tags, etc.).
6. Secure the factory during normal operating hours. Security guards should be available to prevent unauthorized persons from entering factory. Doors and windows should be secured.
7. Secure the factory during non-operational periods. If there is exterior fencing, it should be locked. Doors and windows should be locked. Keys to all locks should be controlled. There should be an intrusion alarm system.
8. Control access to the shipping area. Access to the packing and loading areas should be limited to assigned or authorized persons. There should be constant supervision in the packing and loading areas. Security guards should be monitoring the loading area. Employee and visitor parking should be separate from the shipping, loading and cargo areas.
9. Inspect and seal all empty containers. Empty containers brought onto factory property should be inspected and sealed. Empty containers leaving factory property should be inspected and sealed.
10. Control movement of cargo from factory to carrier. The factory should have a procedure to monitor the timely movement of incoming and outgoing freight. Factory should know the round trip time to carrier or consolidator. Trucks moving cargo should be fueled before trip begins.
The Kellwood third party monitors and internal Kellwood employees will review the documented plan and determine if the plan has been implemented. Although recommended improvements may be given at the time of the audit, if the factory has a documented plan that addresses the above issues and has been implemented, a passing grade will be given.
ACTION REQUIRED
Please acknowledge your acceptance and agreement of Kellwood’s C-TPAT requirements by signing the document on the next page and returning only the signed page to:
Wendy Wieland
Vice President, International Trade Services
Kellwood Company Home Office
600 Kellwood Parkway
Chesterfield, MO 63017
USA
KELLWOOD FACTORY C-TPAT AGREEMENT
By executing this document in the signature block provided below, I am acknowledging acceptance of and agreement with the Kellwood C-TPAT factory requirements as outlined in the above Memorandum of Understanding (MOU). I understand that my factory must have in place a written security program and have implemented procedures that meet the areas outlined in this MOU. I also understand that compliance with these security requirements will be verified as part of Kellwood compliance audits.
Accepted and Agreed::
Factory Name: __________________________
By (signature): __________________________
Name (please print): ___________________________________
Title (please print): ___________________________________
Date: _______________________________________
Kellwood是一家在纽约证券交易所上市的服装经销商，曾被《财富》杂志评选为美国五大服装公司之一，公司2003年销售达25亿美元。
此次合作，意义不仅仅是资金引进,更重要的是借助外资的品牌优势、管理机制等优势,积极向"创国际品牌，铸百年企业"的目标迈进。