Social compliance manual

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So you do not need to waste the time on rewritings. Ellen Long. Views Total views. Actions Shares. No notes for slide. Social compliance manual 1. All domestic and import vendors supplying national, private, captive or vendor label merchandise are required to disclose their facilities and participate in factory audits.

Please refer to the chart below. Our goal is to ensure products are manufactured by suppliers who manage and operate their factories according to local laws, as well as operating in a socially responsible manner. This includes managing human resources, employing environmental business practices, and complying with legal expectations. Suppliers will benefit from this program by having minimal risk of civil and criminal liabilities within the local countries where they operate.

Participation in the program will also drive the amount of future business. Suppliers and factories that participate in the program have the potential to become long- term business partners. Those who do not meet our standards are phased-out.

Our goal is to ensure all suppliers and their factories are successful. This manual advises suppliers i. Educate suppliers and their manufacturing factories to ensure compliance with these standards and safeguarding the workforce. Support continuous improvement with respect to compliance within our supplier base. These standards are given in this section. Additional requirements can be found in the specification sheet for each style. Please ensure you have carefully reviewed all information in this manual.

It is important to understand our social compliance requirements and the timing of factory approvals. Social Compliance is the first step in our product development process. The Social Compliance team will review the self audit questionnaire to determine the next steps to be taken by each factory to complete their full participation in our Social Compliance program.

It is however important to note that the questions must be answered with honesty and due diligence. A corrective action plan will be issued and suppliers will be required to implement the corrective action plan in a timely manner.

Once the audit request form has been submitted, the Social Compliance department will forward it to the nominated auditing agency to process. The auditing agency will contact the vendor directly to issue an invoice and notify the factory of the two week window of the audit based on the audit request form as all HBC Suppliers are to pay for the social compliance audits and are to ensure compliance of their factory.

Please note a fee is also applied when auditors are denied entry and a subsequent visit is required. To avoid paying this fee, vendors are strongly advised to communicate with their factories and advise them to prepare for the audit.

If notice of cancellation or rescheduling of a monitoring visit is requested within 48 hours two business days notice or less of the scheduled date, the full audit fee is charged in addition to any non-refundable and already incurred travel expenses. If an access denied occurs during the day of the audit, there will be a full audit fee charge in addition to any non-refundable and already incurred travel expenses. For all other regions please contact social.

Factory may proceed with production. Production may be postponed or not accepted. Production may not commence until an audit is conducted. It is the responsibility of the supplier to review the report and CAPAR and discuss the findings with the factory.

Should a re-audit be required, the factory should receive clear information regarding violations cited and expected timeframe of implementing changes to demonstrate compliance. Corrective actions must be completed before the next audit.

A follow-up audit will be scheduled to verify these corrective actions and that the factory meets all the requirements. Suppliers must also comply with all laws and regulations mandated by the country in which the merchandise is manufactured. All domestic and direct suppliers manufacturing private, captive or vendor label merchandise, regardless of the order size, are required to fully disclose their factories and participate in the factory audits.

Suppliers using factories that breach this code will be given two to six months to correct their shortcomings. Failure to correct these violations may lead to a suspension of business until the vendor is fully compliant. The vendor should ensure that their factories understand the Code and display the Code in an area accessible to employees. Zero Tolerance Violations Child labor, forced labor, and transshipment will not be tolerated.

It does not matter if the merchandise is being manufactured, in transit or on the retail floor. Goods from factories found with zero tolerance violations will be rejected or recalled at the expense of the supplier.

The subcontracting factory will be required to complete a self-audit and will participate in a full audit if an acceptable alternate audit report is not available. Locations will be selected by the auditor. Be Honest Factory managers must provide required documentation to auditors for review - i. Any inconsistencies found during the review will be considered false documentation and must write something here.

Suppliers and factories that receive favorable audit results will be exempted from annual audits for up to two years. Factory managers must adhere to all applicable environmental laws and regulations regarding protection and preservation of the environment in their country. Next Steps… Congratulations! This can be quite legitimate and is fairly common, but it can also be a method used to disguise intent, as is the case with illegal logging, smuggling, or grey market goods.

Audit Grades: Zero Tolerance The factory will be re-audited as early as two months. Production will be postponed or not accepted. Approved for Production subject to improvement The factory will be re-audited within six months. Production may continue but there may also be a delay or cancellation depending on the results of the audit.

Approved for Production The factory will undergo an annual audit within one to two years and may proceed with production.

Denied Entry The factory will be audited immediately. Production may not commence until a full audit is conducted. Completed forms and inquiries should be sent to social. If delinquent payment persists, it could result in the eventual termination of work orders. Have factory managerial personnel available at all times to provide the necessary information to conduct the audits.

The auditors visit will take days. Ensure factory manager understands required documentation will be required by auditors for review - required i. Ensure they understand all the questions and answers expected. Prepare the factory based on the Self-Audit Questionnaire i. Explain to the factory that interviews with randomly selected employees will be conducted and that employees should be allowed to meet privately with the auditor.

We are determined to build our business together with our suppliers based on the highest ethical principles of trust, teamwork, honesty, and respect for the rights and dignity of others. We seek suppliers who demonstrate a commitment to contribute to the improvement of community working conditions and who strive to meet our requirements as stated in this code.

Suppliers are also expected to ensure that their suppliers and subcontractors are aware of and comply with the code. Compliance with legal requirements and industry standards Suppliers must comply with all legal requirements as well as the standards of their industry, in the countries in which they do business. Where industry standards are more rigorous than legal requirements, there must be compliance with the higher standard.

Toronto time. Employment Standards No Forced Labor Employment must be voluntary, and respect the right of employees to decide to work or not. Suppliers must not use forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise. No Child Labor Child labor is not permissible. Workers must be at least 15 or 14 where the law of the country of manufacture allows , or the age at which compulsory schooling has ended, whichever is greater.

In jobs with hazardous working conditions, workers must be at least We support the development of legitimate workplace apprenticeship programs for the educational benefit of younger people as long as they are not being exploited or given jobs that are dangerous to their health or safety.

Children may not be employed during school hours; and the combined time at school and work including transportation cannot exceed 10 hours a day. No Harassment or Abuse Every employee must be treated with respect and dignity. No employee may be subject to any physical, sexual, psychological or verbal harassment or abuse including the use of physical punishment. Freedom of Association and Collective Bargaining Management practices must respect the right of employees to free association and collective bargaining where allowed by law.

No Discrimination Employees must not be subject to discrimination in employment, including with respect to hiring, salary, benefits, advancement, discipline, termination or retirement, on the basis of gender, race, religious or personal beliefs, age other than normal and legally allowed hiring or retirement limitations , disability, sexual orientation, maternity or marital status, nationality, political opinion, union participation, social or ethnic origin or membership in any legal organization.

Employment decisions must be made solely on the basis of knowledge, skill, efficiency and ability to do the job and meet its requirements.

Worker housing and dining facilities, where provided by the supplier, must meet a reasonable standard of health and safety. Suppliers must pay the higher of, the prevailing industry wage, the minimum wage, or a wage that results in a decent living.

Suppliers must provide all legally mandated benefits. Suppliers must compensate for overtime at the greater of the regular hourly rate and such higher rate as required by law, regardless of whether workers are compensated hourly or by piece rate.

Resolution of Disputes There must be a dispute resolution process to allow employees to voice workplace grievances without the fear of reprisal.

Familiarization with, and display of this Supplier Code of Conduct Suppliers will familiarize their workers with this Code, and will display this Code, translated in the local language, at each of its facilities in a place readily visible and accessible to workers. For purposes of this Agreement, the term "Products" means completed products bearing the Trademarks, including the components of such completed products, whether or not such components themselves bear the Trademarks, and their packaging, as required by the Company.

In theory, within the context of corporate social responsibility, companies and brands who do good works for others receive rewards in the form of customer support and trade.

Although we sometimes use the terms social responsibility and social ethics interchangeably, they mean different things. Ethics may provide the motivation to pursue corporate social responsibility, which concerns following law or policy.

Some specialists believe that formal notions of corporate social responsibility have roots in the quality movement. In fact, two of W.

Starr says that social compliance auditing dates back to the s, when certain high-profile controversies over footwear and apparel sourcing occurred. Companies drew up supplier codes of conduct and spread them to suppliers during the first waves of what became known as corporate social responsibility. Starr talks about a colleague who was one of the first auditors to train with the U. Twenty years later, he now says that his grandchildren will still be working in the social compliance industry.

And, as much as we continue to try, ultimately, the problem is not going away. Likewise, showing concern for sustainability down the supply chain can raise your corporate reputation and polish your brand. In the best-case scenario, profits rise as consumers prefer to deal with socially responsible companies. Some brands that have begun with a sustainable outlook have done consistently well.

Other legacy companies have assumed a social compliance mentality and even produced sustainable consumer products, which the public buys but which leaves investors less impressed. Expecting consumer returns for sustainability can be a sticky wicket. She cites a study that involved offering two pairs of the same sock to people, one of which was labelled as sustainably made.

Most people chose the non-sustainably made socks based on cost. In other studies, even those who declared their support for sustainable causes still chose the cheaper, non-sustainably made product. A social compliance audit, also called a social audit or an ethical audit, is a way to gain clarity into a business to verify that it is complying with socially responsible principles.

Audits are usually conducted by an independent auditor. Auditors usually conduct these audits on external facilities, such as production houses, factories, and farms or packing houses.

However, some sources refer to a social audit as the internal audit or self-analysis undertaken by a company to understand how the organization itself affects the society in which it operates. When a company undertakes an internal audit, it may review its charitable giving, volunteering efforts, energy use, and green initiatives, such as recycling and composting, in addition to the more conventional considerations, such as its pay structure, benefits, and work culture.

Some companies share the results of its analysis with the public, whether the results are positive or not. Publishing a plan to become a more socially conscious corporate citizen can boost the public impression of a company. A facility audit serves to verify and document that a facility is complying with prescribed standards of employee safety, health, freedom of movement, and correct pay along with local regulations and laws.

As part of a long-term auditing program, audits verify that facilities are on a path to continuous improvement in working conditions. Audits may identify opportunities for improvement in the following areas:. And, my argument back to them is, how much does it cost to hire new employees?

How much does it cost you for a quality issue if you have to rework the product or if people are returning the product. When conducting an audit, an auditor may be an employee of a purchasing company, or they may be on hire from a third-party firm. The latter option is often necessary to overcome language and cultural barriers. The auditor collects data and evidence that they report to the facility and the client, i.

Rather than considering non-compliance as problems or issues, the auditor may consider these realities as opportunities. However, it becomes obvious that deliveries happen on Saturday.

If the workplace is closed on the weekend, who receives these deliveries? Strong communication and people skills are essential. The knowledge required for the job is wide ranging, including anything from understanding payroll and working hours to knowing labor law.

Auditors who display this flexibility and comprehensive knowledge of the workplace come from backgrounds as varied as human resources, accounting, legal, investigative journalism, as well as other auditing-related fields. In addition, the work of an auditor can be arduous. Just the travel requirements alone can be taxing, necessitating quick turnarounds between sites in different cities or even different countries.

After auditing during the day, auditors must then write reports at night, also often with a limited window for turnaround. The Association of Professional Social Compliance Auditors APSCA was formed in and aims to establish professional competency guidelines and a code of conduct for social compliance auditors worldwide.

Part of this effort seeks to limit the scope of audits that brands request to questions of working conditions and employee treatment rather than to structural engineering and environmental science. Audits may provide a way to gauge how well suppliers and retailers adhere to codes of conduct and local laws. But, before your business begins a social compliance initiative to review other organizations, you need to understand what you expect of them and what you expect of your own organization.

Self-auditing provides a way to understand where your company stands with regard to social compliance. Here are the steps for conducting an internal audit:. Although the specific checklists and methodologies may vary slightly, audits usually follow the same pattern. As for internal audits, auditors familiar with social compliance issues bring discernment to viewing concerns and opportunities. Facility audits begin like this:. Although no facility is perfect and minor code and regulations violations are not uncommon, some infractions are too egregious to accept.

Examples of critical and unacceptable offenses include using underage labor and forced labor, engaging in physical abuse, or permitting extreme safety violations. Moreover, obstructing an audit or attempting to bribe an auditor to secure a positive report will also result in audit failure.

For external audits in particular, a variety of formats exists. Some brands pay for audits, but the logic behind making a facility pay for their audit is that, ideally, the facility in question takes ownership of the resulting report.

Audits may be announced, unannounced, or a mixture of the two, wherein the auditor notifies the facility that an audit will take place within a certain timeframe. The following steps outline the audit process:. Walkthroughs reveal working conditions and should encompass the entire facility, including not just the production area, but also the washrooms, the cafeteria, the kitchen, the offices, and the dormitories, if applicable. Often, companies meet basic criteria.

For example, workers will probably have adequate room to move while working and hygienic toilet and cooking facilities. Common facility problems may appear primarily in the areas of production infrastructure and equipment or a lack thereof. These problems may include the following:.

Starr says that violations may not always appear in the production facility but may appear in accommodations for workers. She has seen workers housed in what appeared to be the structurally sound part of an unstable building until management realized the implications of doing so. Her worst case was a one-bedroom house that had no beds in sight but had 12 phone chargers and household electrical wire passing through the shower.

Payroll and attendance records may reveal subtle and not-so-subtle inequities in a company. The longer the range that an auditor can view, the better. These records can indicate if employees are receiving minimum wage and proper overtime wages and if they are working legal hours.

If the company is keeping hand-written records rather than using electronic or punch-card methods, maximum hours can be difficult to determine. While it may seem that enforcing limits on work weeks would be desirable to employees, this is not always the case. In some circumstances, employees value long work hours and want more hours to earn more pay. Documentation on hiring practices and conditions of employment reveal discriminatory practices, disciplinary measures, what violations result in termination, how one should perform termination, and whether companies retain employee ID as a condition of employment.

Auditors can unearth common problems during the employee interview process. After gaining an understanding of the company through a facility walkthrough and a review of documentation, auditors conduct random interviews with employees.

Interviews may reveal complaints and a lack of understanding about employee rights regarding working hours, wages, or safety options. There are several key terms regarding audit results. Auditors categorize violations as non-critical, critical, or severe.

They categorize audits as acceptable, needs improvement, at risk, or non-compliant. There are basically two categories of non-compliant results:. Regular communication between the auditors and the facility ensures that the company understands the issue and can help determine the root cause of violations.

For example, factory managers may think that yelling at employees is okay because the culture itself is expressive and loud. In other cases, the issue to be modified is all too human. For all the problems that inaugurated social compliance audits 20 years ago, auditing can bring forth positive outcomes, often when facility management has unintentionally violated guidelines. The Business Social Compliance Initiative BSCI is not a certification but provides an improvement methodology for factories and farms that aim to be certified.

Governing workplace quality, the SA certification standard was published in by Social Accountability International, a non-profit social welfare group. A voluntary program, SA is considered the first global standard, scalable to any size of organization in any country.

An SA certification indicates that a company has maintained SA standards for three years. It encourages self-management in social accountability areas but provides for third- party audits to ensure that companies are compliant. Based on the provisions of the International Labour Organization and the Universal Declaration of Human Rights, the standard centers on eight measurable areas, plus management:. It is based on ETI principles and local law and focuses on health, safety, and labor law and optionally on business ethics and the environment.

Although slight differences may arise with audits, the requirements are generally the same. This checklist , developed from the BSCI audit format, indicates the many types of documentation, equipment, and infrastructure an auditor might look for. Another version of a checklist is specific to the furniture industry. Despite the many frameworks and organizations created to manage social compliance auditing and the rise in companies who require it from suppliers, the system is not perfect.

Problems with the auditing system do exist. In some instances, work can be dangerous for auditors.