This article is intended to give practical guidance for achieving certification to Ethical Trade Standards such as SMETA, amfori BSCI, and SA8000. Much of it can also be applied to industry-specific standards (garments, toys, and food standards) as well as customer audit standards, though each of these will have their own specific requirements.
See my LinkedIn article Social Responsibility & Ethical Trade for an overview of these standards.
This is what a company needs to do to get ready for one of these audits:
1. Get Management Commitment: management needs to understand that these audits are not a rubber-stamp on what they’re already doing – they need to be prepared to make changes. They also need to spend money on consulting and training to develop a program, on purchasing and upgrading occupational safety equipment, and increasing employee pay and overtime if needed, so their buy-in crucial from the start.
2. Choose a standard: if it’s a customer audit or the customer has stated a specific single standard then there’s no choice to make. If the customer has given multiple options or if the company is pursuing this of their own volition, they’ll need to do some research and get some quotes to find the best option for them. When doing SMETA they also need to consider if it’s going to be 2-Pillar or 4-Pillar.
3. Conduct a Gap Assessment: either on their won or by hiring a consultant do an internal assessment in reference to that standard to identify any deficiencies. In many cases the company has many required elements already in place for other reasons (such as payroll records or operating licenses – assuming that they’re following the law), and the assessment is useful in identifying where they are and making sure they’re accessible for the audit. It’s also useful for team building, as it identifies anyone whose job functions already overlap aspects of the social responsibility standard and gains their cooperation in further developing the program.
4. Develop and Occupational Safety & Health Program: hopefully this is already at least partially in place since it’s required by law (OSHA compliance) but in either case they need to write policies, procedures, risk assessments, and records for whatever’s not already in place. This is a whole separate huge topic so I’m not going to list the details here.
5. Develop an Ethical Trade Program: this is not required by law (the practices are, but not a written program) so a company is unlikely to have these in place if they haven’t done a social audit previously. So they will need policies and procedures which usually includes:
· Human Rights Policy
· Ethical Trade System & Compliance Procedure
· Freely Chosen Employment Procedure
· Freedom of Association Policy
· Child Labor & Young Workers Policy
· Wages & Benefits Policy
· Working Hours Policy
· Discrimination & Harassment Policy
· Regular Employment Policy
· Harsh or Inhumane Treatment Policy
· Business Ethics Policy
6. Review your environmental compliance – many of these standards have no environmental component and those that do it’s very light, basically just checking that any legal requirements are being met. So for this purpose just make sure you’re aware of what licenses are required and that they are current and accessible.
7. Conduct training for managers and employees on safety and labor practices. You should also inform that there will be an audit and some people will be interviewed (careful here: it’s unethical to coach them about what to say to the auditor – that’s what they do in other countries that have poor labor practices and to do and subverts the audit process. The whole point of interviews is for them to be honest so in order to get them to say the right things you should do the right things. But it’s OK to make sure that they know about all the good things that you do for them.)
8. Make any necessary purchases and improvements to the facility and equipment
9. Inform suppliers, labor agencies, and contract manufacturers of the requirements and verify their compliance
10. Make sure that all the required documentation is in place. Here’s a sample of some documents typically audited during social responsibility audits.
11. Conduct a final review: a good last step is a final pre-assessment is useful to make sure that all the documentation is accessible, the new programs are in place, and everyone is fully informed and ready.
12. Schedule the audit: once a company is confident that they meet the requirements, they can schedule an audit to their chosen standard with a recognized audit company.
What happens during the audit:
1. Document Review: includes going through all applicable policies, procedures, contracts, and records.
2. Facility Inspection: the auditor will go around the facility to see your building, equipment, and operations to look for visual evidence of the company’s compliance. This mostly focuses on occupational safety issues.
3. Employee Interviews include managers, employees, and employee representatives. As employee interviews are to ask employees directly about their working conditions and treatment, these conversations are confidential; management cannot be present and no personal identifiers will be included in the audit report.
During the audit some staff will act as audit guides, being present for the entire audit or parts of it to provide the auditor with information and answer questions about their program; this often includes at minimum the HR Manager and Safety/EHS manager, or anyone else that oversees those functions.
At the conclusion of the audit, the auditor will meet with management to review the results. After the audit, a final audit report will be sent and the facility should implement corrective actions for all deficiencies (though not all audit schemes require corrective actions to be submitted and approved).