SA 8000 Heinrich A. Bieler

2 Public Trends and Expectations General distrust of business and industry practices fuelled by media Expectation that business uphold similar values to individuals in the community Increasingly discriminating purchasing decisions  Thirst for more public information  Internet & other media providing information

3 Social / Ethical Management Positions Public  Believes in fundamental human values  Has increasing awareness of business practices & their impact –Beyond what is produced »quality & price –To how it is produced »Social & ethical issues »Environmental issues »Health & safety issues Public  Believes in fundamental human values  Has increasing awareness of business practices & their impact –Beyond what is produced »quality & price –To how it is produced »Social & ethical issues »Environmental issues »Health & safety issues Business Sector  Supports human values  Subject to increasing competitive pressures  Wishes to employ (and be seen to employ) good “corporate citizenship” –Conduct business »Responsibly »Honestly »Fairly »Considerately Business Sector  Supports human values  Subject to increasing competitive pressures  Wishes to employ (and be seen to employ) good “corporate citizenship” –Conduct business »Responsibly »Honestly »Fairly »Considerately

4 The new „Paradigm“ for Business Business takes responsibility for those impacts it can control or influence Aims for a “win - win” situation for all stakeholders:  Investors  Customers  Employees  Subcontractors  Communities Leaders in business..  Recognise the strategic importance of the interrelationship between their products, activities and services and their stakeholders.  Manage their resources and risks accordingly

5 The „New Paradigm“ Challenge 1. Do nothing 2. Fire-fight burning issues 3. Produce esoteric management policies / codes / mission & vision statements  Hope everyone does their bit  Call PR firm for help with “Dateline” interview OR Take a leadership role  Apply proven principles to control & manage risks

6 The Informed Consumer Consumer Retailer Suppliers India, China, Kenya, Brazil, Indonesia, Turkey, etc. Consumer informed of supplier details becomes aware of supply chain issues Media

7 The uninformed Consumer Consumer Retailer Suppliers India, China, Kenya, Brazil, Indonesia, Turkey, etc. Consumer view of the supply chain stops at retailer

8 Knowledge of Supply Chain Retailer Supplier

9 Second Party Audit: Retailer Side Retailer Code of Practice Supplier A Supplier B Supplier C Supplier D Audit A Audit B Audit C Audit D Team to:. plan audits. perform audits. write audit reports. give opinion (OK/not OK) Example: In ‘97, SGS-ICS has performed for Disney over 350 independent audits of suppliers to ensure that they were in compliance with Disney’s code of practice: CN, PH, ID, PK, IN, US, MX Does not respect Code of Practice

10 Second Party Audit: Supplier Perspective Retailer A Supplier Retailer B Retailer C Retailer D Code of Practice ACode of Practice B Code of Practice CCode of Practice D Audit AAudit B Audit CAudit D - Disturbance of production during the audits - Several Code of Practice imposing several systems Does not respect Code of Practice C

11 Why use a Standard To provide a basis for audit and improvement that represents the interests of stakeholders, whilst being biased to none in particular. Is widely understood, accepted and is verifiable by both internal and external means. A baseline against which acceptable practices may be measured.

12 SA 8000  The first global standard for ethical sourcing  Designed for independent verification  A global standard, designed for use by any company, anywhere in the world  Has been developed with stakeholders  Is designed to take local laws and requirements into account “SA 8000 is definitely a move in the right direction and complements efforts such as the Ethical Trading Initiative in Europe, to put these issues onto the global agenda” Dr Geoff Spriegel - Sainsbury’s Supermarkets Ltd..

13 SA 8000 A common standard seeking to guarantee the basic rights of workers A set of universal requirements in line with the ILO Conventions The first auditable global social standard Provides the framework for the independent verification of the ethical production of goods and services Has been developed by CEPAA, now SAI (Social Accountability International) More information:

14 Social Accountability International (SAI) A charitable human rights organization Dedicated to improving workplaces and communities by developing and implementing socially responsible standads SAI convenes key multi-sectoral stakeholders to develop consensus-based voluntary standards SAI accredits qualified organizations to verify compliance SAI promotes understanding and implementation of such standard worldwide

15 The Standard SA 8000 (download: Discrimination Management Communicatio n Working Hours Remuneration Health & Safety Supply Chain Disziplinary Practices Child Labour Forced Labour Freedom of Association & Right to Collective Bargaining

16 Unacceptable Level SA8000 Certification Basic Code of Practice Improvement Process

17 Completeness of Coverage per Supplier Stepped Approach Monitoring Supply Chain Verification Reduced Requirements Supply Chain Verification SA 8000 Supplier Verification (full or reduced) SA 8000 Certification

18 Implementation  Learn about the requirements  Commitment of the Top Management  Projectplanning  Training, Information, Contacts to NGOs  Process / evidence definition  Process implementation / providing evidence  Monitoring / Management Review  (Pre-Audit) Certificition  Continual Improvement

19 Stakeholder Map Organisation GovermentParties Management Owner Employees Workers Insurance Capital Shareholder Banks Laws Taxes Competitors Families Hobbies Church Religion Clients NGOs Accidents Social Security Suppliers Unions Media Press TV/Radio Internet

20 Certification Process Local/ International norms Code of Practice SA 8000 standard requirements Interpretation of SA 8000 for audit, with certification objective Audit Conformity to SA 8000 standard ? ’Audit Report Local Staff NGOs Local legislation Suppliers Client Basic requirement s Surveil- lances Enterprise XYZ Accredited Certificate United Nations, EU Elements of the implementation decision Audit and Certification Implementation

21 Certification Audit: Documentation Documentation  Contract of Employment  Human Resource Manual / Procedures  Published Policy  PR Material  Quality Manual / Procedures  Health and Safety Manual / Procedures

22 Certification Audit: Records Records  Pay Stubs  Payroll  Fire, Health and Safety Certificate  Job Application  Test Results (e.g. Potable Water)  Production Schedules  Identity Documents

23 Certification Audit: Interviews and Focus Groups Worker Interview  Anonymity  Simple, clear questions  Language  Gender  Notes  Ev. Off-site interviews Focus Groups  Group of workers selected randomly  Two / three Subjects  Group Briefed at Start / summary given at end of Session

24 Certification Audit: Questionnaire, Observations Questionnaire / Survey  Larger sample  Anonymous  Use to cross check  Brief, clear (10 – 15 Questions) Observations  Use and common sense

25 Data Collection Matrix

26 Auditors Ethics Audit team selection (gender) Language Knowledge of customs and laws Understanding of the culture Do no harm Information is about people When auditors leave, people remain If you cannot do the work – do not try Do not deceive Do not misrepresent

27 Integrated Systems → Integrated Audits

28 Worker Benefits Fewer accidents Enhanced opportunities to be organized A way to address and improve the conditions where people work Increased worker awareness about core labor rights Enhanced communication to the management Evidence that labor rights are good for society and business Improved business practices lead to economic growth and new job opportunities

29 Employer benefits A credible and effective way to put social responsability into action Enhanced company and brand reputation Improved employee recruitment, retention and performance Gains in quality and productivity Savings from fewer workdays lost and lower insurance bills Less expensive than an internal compliance program Better relationships among workers, trade unions, companies, customers, NGOs and government

30 Consumer benefits Clear, credible information for those who want to make ethical purchasng decisions Useful data for socially responsible investors Identification of products made under humane conditions Identification of companies making progress toward humane conditions Broad coverage of product categories and production geography

31 Additional Information ? SGS Société Generale de Surveillance SA 1, place des Alpes P.O. Box 2152 CH-1211 Geneva 1 SGS Switzerland SA Systems &Services Certification Technoparkstrasse 1 CH-8005 Zurich