Vendor Compliance Strategy. Mondial Gifts NV is committed to conducting business in an ethical, legal and socially responsible manner. 1.


Vendor Compliance Strategy





1. Mondial Gifts NV is committed to conducting business in an ethical, legal and socially responsible manner. We have established our Vendor Code of Conduct (VCOC) and we expect all vendors who are producing products or providing services to Mondial Gifts will agree and abide by these policies. Mondial Gifts NV will only do business with those vendors who share our principles in corporate social responsibility.

This VCOC does not only apply to the vendors whom we contract with but it also applies to the vendor’s factories, subcontractors, or any third party used by the vendors in producing goods or services for Mondial Gifts.


This VCOC is continually evolving and will be constantly updated and refined in order to improve our efforts of protecting workers and the environment. This will ensure workers’ human dignity is respected and that they are working conditions under safe and healthy conditions.


2. Mondial Gifts is committed to minimizing our adverse impact on the environment, as well as protecting the health and safety of employees and of the communities in which we operate.


As part of this commitment, we will require all vendors to follow environmental laws and regulations applicable to their factory operations, and using the ISO14001 standard as reference, establish a management system to manage key environmental issues relevant to their factory operations (e.g. water, air pollution, etc.). This will help provide a safe, incident-free workplace and promote environmentally-friendly practices.




Ethical Business Practices

Vendors shall conduct their business in accordance with the highest standards of ethical behavior. We wish to state our company’s policy that no money, assets, gifts, fees, or compensation of any kind may be given to our employees or affiliates to any of our employees. Should such an incidence arise, an official claim will be filed with the competent authorities, while the staff concerned will be dismissed for cause and we will discontinue doing business with the vendors concerned.


Laws and Regulations

All Mondial Gifts vendors and subcontractors shall operate in full compliance with the applicable laws and regulations in the countries in which they operate. The applicable laws and regulations include, but are not limited to, those pertaining to human rights, workers rights, social responsibility and environmental protection.


Child Labor

Child labor is not tolerated in any form. Vendors shall comply with local minimum working age laws and requirements and not employ child labor.


Forced Labor

Forced or involuntary labor is not tolerated in any form. Vendors shall not use any forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise.


Minimum Wages

Vendors shall provide wages and benefits for regular and overtime work that meet at least the level required by applicable laws.


Working Hours

Vendors shall not require workers to work more than the maximum hours of daily labor set by the applicable laws.


Health & Safety

Vendors shall provide their employees with a safe and healthy working environment and when applicable, safe and healthy residential facilities. Vendors shall take appropriate actions to prevent workplace accidents.


Non discrimination

Vendors shall treat all of their employees strictly according to his or her abilities and qualifications and shall not discriminate its employment practices on the basis of race, color, religion, sex, age, physical disability, origin or any other basis prohibited by law.


Harassment and Abuse

Vendors shall treat their employees with dignity and respect. In no event shall vendors’ workers be subject to threats of violence, physical punishment, confinement or other form of physical, sexual, psychological or verbal harassment or abuse.


Freedom of Association

Unless restricted by local laws and regulations, vendors shall allow its employees the freedom of association and the right to collective bargaining.




While the development of our VCOC is essential to Mondial Gifts’ success, enforcement of the VCOC is equally important in sustaining our growth and keeping our leading position in the industry. Hence, an extensive auditing program has been initiated to inspect our key vendors. This program follows a 4-step process outlined below.


VCOC Compliance Audit Process


  1. 1.      Submission of Pre-Audit Questionnaire (PAQ) and Factory’s Compliance Declaration (FCD)

The initial step for the auditing of new vendors is the submission of a Pre-Audit Questionnaire (PAQ) and Factory’s Compliance Declaration (FCD). These documents are prepared by the Vendor’s factory management and provide data on the factory’s compliance with VCOC standards. Vendor’s factory managers are encouraged to be candid about their challenges in fully complying with VCOC standards. The Vendor’s Factory Manager signs the PAQ and FCD certifying accuracy of the data.


  1. 2.      Initial Audit

An initial audit of the FCD to the VCOC is conducted by internal Mondial Gifts audit staff. Mondial Gifts’ auditors will be fully trained on applicable laws and auditing techniques.


  1. 3.      Review of Audit Findings

Factories are graded with a multilevel internal scoring system based on the results of the VCOC audit. The most serious findings and grades are on Zero Tolerance Findings (Z grade) and Highly Critical Findings (H grade).


  1. 4.      Corrective Action

The audit process requires a corrective action plan from vendors to ensure that audit findings are corrected and VCOC compliance is achieved and completed in a timely manner. In cases where corrective actions are not made in a timely manner, Mondial Gifts identifies alternative vendors. Mondial Gifts is prepared to terminate any vendor where compliance is not achieved within the time-frame agreed upon.




  1. 1.      Social Accountability Compliance


  1. a.      Zero Tolerance Issues


Mondial Gifts considers child labor and forced labor to be Zero Tolerance issues.

When systematic Zero Tolerance issues are discovered and not immediately (within 2 weeks) and permanently corrected after 2 successive re-audits (total 3 strikes), the vendor is given a BLACK code and Mondial Gifts will terminate the relationship with this vendor.


  1. b.       Major Issues


These include non-compliance to the following requirements:


  1. Employees are paid correctly for hours worked
  2. Wages are paid in legal tender and at least monthly
  3. All deductions from gross wages are allowed under the labor law regulations
  4. All overtime is voluntary
  5. Employees are provided with the appropriate holidays and days off
  6. Time records correctly reflect the hours worked by the employees
  7. Dormitory buildings are separated from production buildings and all emergency exit doors are kept unlocked when the building is occupied.


Factories are given 30 days to implement corrective action/s and report correction to Mondial Gifts, after which a follow-up audit is conducted to verify implementation and validate the effectiveness.

Depending on severity and number of major issues and the effectiveness of implemented of corrective action, the vendor can be given the following codes:

ORANGE code – major issues remain unresolved within 3-6 months. Certain conditions and order limits to be considered on new orders as disincentive for continuing non-compliance.

RED code – same major issues remain unresolved more than 6 months. More stringent conditions and order limits to be applied.


  1. c.      Minor Issues


Other findings of less relative seriousness are considered minor issues and are tracked and improved through a separate corrective action procedure. Vendor is given GREEN code which means no pre-conditions will be imposed on new orders.




If a vendor’s factory is fully-certified to ISO 14001 requirements, the vendor is automatically considered qualified for a GREEN code.


In a vendor’s factory has already started work towards getting ISO 14001 certification, they will be requested to provide their road-map to certification. Mondial Gifts will conduct a ‘Desk Study’ and, depending where they are in that road-map, Mondial Gifts will choose whether to allow the factory to proceed with their pre-certification activities without further onsite auditing or conduct a full-scale audit outlined below:


EMS Compliance Audit Process


  1. 1.      Submission of EMS Pre-Audit Questionnaire (PAQ)


Vendor is requested to submit an EMS Pre-Audit Questionnaire (EMS-PAQ). Vendor’s factory manager should provide all available information regarding related activities and what they’re doing to minimize damage to the environment, both inside and outside the factory.


  1. 2.      Initial EMS Audit


An initial EMS audit of the factory’s operations is conducted by internal Mondial Gifts audit staff, based on criteria specified in ISO 14001 standard.


  1. 3.      Review of Audit Findings


Base on the results of the EMS audit, the factory is given a score on 5 major areas per the following table.







Environmental Policy






Implementation and Operation






Management Review


Total Score




4. Follow-up Actions

Based on the scores given on various requirements (breakdown provided in the detailed EMS report) the factory will be requested to address the deficiencies identified and provide corresponding implementation timelines.

Over time and as this initiative matures, Mondial Gifts will establish specific target scores to classify ORANGE and RED vendor factories, for which certain conditions and order limits will be assigned accordingly.




























No or

 only minor issues


Newly Audited with major Issues


Major issues within 3-6 months


Major issues more than 6 months


Zero Tolerance Violation OR   persistent Red code




Fully certified to ISO14001



Certification in-progress


Certification not started but ‘spirit’   of current system follows ISO14001 Score>50



Major Issues Score<50




(TBC on 2nd/3rd year of   program)