Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance

Transcription

1 Sedex Members Ethica Trade Audit (SMETA) Best Practice Guidance Version 4.0 May 2012 (Repaces V Sept 2010 ). This BPG covers both a 2-Piar SMETA audit and a 4-Piar SMETA audit which incudes the 2 optiona piars of Environment and Business Practices. This Best Practice Guidance for conducting SMETA audits has been deveoped by the current members of the Sedex Associate Auditor Group ( AAG). The guidance covers the mandatory 2 piars of Labour Standards and Heath and Safety as we as the additiona options of Environment and Business Practices. This document is intended to suppement the knowedge of experienced, trained auditors. It is not intended as a stand-aone compete set of instructions.

2 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) CONTENTS 1-3: INTRODUCTION 1. Background Sedex and SMETA SMETA and the Ethica Trading Initiative (ETI) Base Code SMETA 2-Piar and 4-Piar Audits 5 2. Smeta BPG Appication 6 3. Supporting Documents 7 4-5: AUDIT PLANNING 4. Risk Assessment Sedex Sef-Assessment Questionnaire (SAQ) Pre Audit Site Profie 9 5. Types of Audit Category of Auditor Notification of Audit Sequence of Audits Labour Codes Piar SMETA Audits : AUDIT EXECUTION 6. Overview of the Audit Process Audit Request Preparation for an Audit (for auditors) Audit Execution Opening Meeting 20 2

3 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 7.2 Tour of the Empoyment Site Management and Worker Interviews Document Review Pre-cosing Meeting Cosing Meeting and Summary of Findings : AUDIT REPORTS, OUTPUTS AND FOLLOW-UP 8. Audit Report and Outputs Audit Report Competion Sedex and Upoading the Audit Information Management Audit Records Audit Foow-up Foow-up audits Appeas and Disputes 44 APPENDICES A1: Guidance by Cause 45 A2: Announced, Semi-Announced and Unannounced Audits 78 A3: Preparation for Audit (Site of Empoyment) 80 A4: Seecting an Auditor 82 A5: Audit Length, Sampe Size and Timetabe 84 A6: Suppementary Reports & Aert Notifications 87 A7: Describing Non-Compiances, Observations and Good Exampes 88 3

4 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 1-3: INTRODUCTION 1. GROUND 1.1. Sedex and SMETA The Suppier Ethica Data Exchange (Sedex) is a not-for-profit, membership organisation for businesses committed to the continuous improvement of ethica performance within their suppy chains. Sedex was founded in 2001 by a group of UK retaiers to drive convergence in socia audit standards and monitoring practices. The aims of Sedex are to ease the auditing burden on suppiers through the sharing of reports and to drive improvements in suppy chain Labour Standards. This Sedex Members Ethica Trade Audit (SMETA) has been deveoped by the Sedex Associate Auditor Group (AAG), through muti- stakehoder consutation, to provide a best practice reference framework for socia auditing and reporting. It draws from practices defined by Sedex members and by the Goba Socia Compiance Programme (GSCP) SMETA and the Ethica Trading Initiative (ETI) Base Code SMETA Best Practice Guidance (SMETA BPG) describes the key steps of panning, executing and documenting a "SMETA audit" against the foowing four auditing piars: A 2 SMETA 2-Piar audit comprises: Labour Standards. Heath & Safety. Additiona eements of Entitement to work; Subcontracting and homeworking; Environment (shortened). A SMETA 4-Piar audit contains in addition: Environment (extended) this repaces the environment (shortened version) detaied above. Business Practices. SMETA BPG (this document) has been produced to give a consistent goba auditing procedure that Sedex members can share with confidence with fu transparency on the standards and protocos used. Many types of socia audit are performed such as BSCI, WRAP, SA 8000, ICTI and a socia audits can be upoaded onto Sedex. It ies with the individua member to decide what audit is acceptabe to them however Sedex hopes that by providing SMETA BPG pubicy, companies wi increasingy converge on one internationa audit protoco. 4

5 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) SMETA 2-Piar audit has been deveoped for auditing against the Ethica Trading Initiative (ETI), Base Code pus the additiona eements isted above. The guidance can be adopted and taiored to carry out audits against a range of other standards with certain conditions (See Section 5.4: Labour Codes ). SMETA BPG undergoes an annua review to ensure that it refects changes in socia auditing. This process incudes feedback from stakehoders. The atest version wi be avaiabe on the Sedex website. In order to ca it a SMETA audit the standard used for audit upoad must be the ETI Code and the protoco must be in ine with this Best Practice Guidance. Detais of the ETI Code and the items to be investigated during a SMETA audit are found in: Appendix A1: Guidance by Cause using the ETI base code. Note: The ETI is an aiance of companies, trade unions and vountary organisations who work in partnership to improve the ives of workers across the gobe. More information can be found at SMETA 2-Piar Audits and 4-Piar Audits A SMETA 2-Piar audit comprises the 2 auditing piar of Labour Standards and Heath & Safety, and these are mandatory modues for any SMETA audit. It aso contains the additiona eements of Entitement to work, Subcontracting and Homeworking, and a shortened Environment assessment. A SMETA 4-Piar audit incudes a the above pus the additiona piars of Environment ( extended assessment repaces shortened assessment ) and Business Practices These additiona piars may not be required for a Sedex members and it is important that sites of empoyment and auditors are cear when these extra modues are required. For more information on 4-Piar SMETA audits, see section 5. 5: 4-Piar SMETA Audits. The basic 2-Piars of a SMETA audit are governed by the standards contained in the ETI base code. The additiona piars of Environment (extended version) and Business Practices in a 4-Piar audit are governed by standards arrived at by a process of membership and muti-stakehoder consutation. 5

6 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 2. SMETA BPG APPLICATION SMETA Best Practice Guidance (SMETA BPG) is a compiation of socia audit best practices to hep auditors achieve the consistency needed for socia audits to be widey accepted by retaiers and brands. It aso heps organisations who are commissioning audits to specify the auditing methodoogy required. SMETA BPG is not intended as a stand-aone description of how to conduct an audit. Instead, it sets out to estabish a common set of criteria to suppement auditors own systems. SMETA BPG may be used by any auditor or audit company, incuding those who are not Sedex members. It is aso appicabe to a sizes and types of empoyment site, incuding manufacturing sites, agricutura sites and service providers. The reference to a SMETA BPG audit sha ony be used when a the criteria outined in this document have been used during the audit process. SMETA BPG does not certify auditors or auditing bodies and reies on the contros and accreditations that aready exist. It is recommended that companies commissioning audits shoud assure themseves of the quaifications and competency of the auditors and their abiity to meet SMETA BPG requirements, as set out in the SMETA document on Auditor Competencies. This is avaiabe on the member resources of Sedex. Guidance can aso be found for non-members at GSCP Auditor Competencies. 6

7 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 3. SUPPORTING DOCUMENTS SMETA BPG is used in conjunction with the SMETA Audit Report form and accompanying Corrective Action Pan Report (CAPR). A are avaiabe on the pubic section of the Sedex website. Detais are: SMETA Best Practice Guidance; this document. SMETA Report; provides a tempate for recording audit findings in a standardised format that can be upoaded into Sedex. SMETA Corrective Action Pan Report (CAPR); a tempate for recording a summary of audit findings, aong with corresponding corrective actions. Guide to Pre Audit information, which contains information to be sent to a suppier site before a SMETA audit. Additiona documents which support the audit process can be found on the member resources of Sedex. These incude: Guide to Socia Systems Auditor Competencies: - competency requirements for auditors who practice socia audits. Non-Compiance Guidance: recommended issue severities and verification methods. Corrective Action Guidance: suggested ways in which manufacturing sites may make improvements. Suppementary Guidance for Auditing Service Providers. SMETA 4-Piar audits; Environment and Business Practices Assessments: Assessment checks for Auditors. SMETA 4-Piar audits: Environment and Business Practices Assessments: Guide for Suppier Sites. 7

8 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 4-5: AUDIT PLANNING 4. RISK ASSESSMENT A buying company wi usuay impement a process to identify risk in its suppy chain. This enabes it to focus attention on key areas of potentia risk and direct its audit resources accordingy. It may aso infuence the type of audit needed. Risk assessments for suppiers and empoyment sites consider various criteria. Exampes incude: geographica area, empoyment site function, product / service category, type of purchase, empoyment patterns (migrant, casua workers etc.), eve and nature of any subcontracting. Aso of importance may be; eve of suppier commitment and / or previous audit resuts, research carried out by NGOs as we as issues raised by the media. Within the Sedex system there is an onine Sef-Assessment Questionnaire (SAQ) for sites of empoyment, which when competed, aows A and AB members to use the Sedex Risk Assessment too, to create a risk score. 4.1 Sedex Sef-Assessment Questionnaire (SAQ) Best practice is for sites of empoyment to compete the Sef Assessment Questionnaire (SAQ) and make it avaiabe to customers before they decide whether to commission an audit. The SAQ, which incudes site profie information, shoud aso be made avaiabe to the audit company to hep pan the audit. The purpose buit Sedex SAQ, created in consutation with Sedex members is avaiabe to members via the Sedex website. The Sedex SAQ consists of 4 key piars - Labour Standards, Heath & Safety, Environment, and Business Practices. A four piars, take into account ega requirements, internationa standards and good practice. The Sedex system uses the information given by the site of empoyment, within its SAQ, to feed into the Sedex Risk Assessment Too. An overa risk score is created by combining inherent risk with the SAQ risk. The inteigence behind the too is provided by goba risk experts, Mapecroft. For more Information pease see: Note for sites: Faiure to compete the Sedex SAQ may resut in a defaut to high risk. Competion of the SAQ before an audit wi give empoyment sites detaied information on the issues auditors wi be covering during a SMETA audit. By competing and reviewing their own SAQ, an empoyment site wi be abe to sef-diagnose probem areas and to correct issues prior to an audit. In addition, the SAQ (which contains site profie information) enabes a buying company, suppier or agent to obtain information about an empoyment site, how it manages socia compiance and its performance against oca and internationa Labour Standards. The site of empoyment is asked to compete the SAQ within a given timescae and provide supporting documentation. The buying company uses this information as part of its risk assessment. The auditor uses the information to pan the audit and to focus on high-risk areas. 8

9 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 4.2. Pre Audit Site Profie The Sedex SAQ contains Site Profie information essentia for the auditor to cost, pan and arrange for the audit. It is therefore essentia that the site of empoyment competes the SAQ and gives access to the auditor ahead of the audit. Customers (Sedex A or AB members) usuay request the site of empoyment to compete the SAQ and they shoud communicate the foowing: The importance of accuracy in competing the SAQ. Timeframe for competion of the SAQ. How to make the SAQ visibe to the auditor. How the risk assessment and SAQ fit in with the audit process. If the site of empoyment does not give access to the SAQ, the auditor may obtain the necessary site profie information by other means e.g. the use of a pre-audit empoyment site profie tempate produced by the auditor. This is competed by the empoyment site and returned to the auditor. If the pre-audit information requested from the site is not provided, the audit shoud not normay take pace. The auditor shoud make it cear to the site that this information is necessary for the audit to take pace and ceary estabish a deadine for submission. Notes: The Pre-audit information sent to a site shoud request the site to give auditor access to their competed SAQ. The Sedex SAQ aso contains the site profie information necessary for the auditor to pan the audit. To assist in panning and preparing for an Audit the AAG have produced Guide to Pre-Audit Information This shoud normay be sent by the auditor to the site to be audited and ahead of a SMETA audit. The Guide to Pre Audit Information contains suggestions ony. The auditor shoud ensure that the materias are appropriate to the size of site and type of production. 9

10 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 5. TYPES OF AUDIT There are a range of different types of audits and assessments that may be undertaken to evauate an empoyment site. The use of these wi vary depending on factors such as the outcome of risk assessments, a buying company s reationship with its suppiers, audit cost and the history of a site s performance. A buying company may depoy a number of different methodoogies across its suppy chain. SMETA BPG ony covers forma socia audits. However, buying companies may engage with empoyment sites in a variety of other ways to promote improvement, which may incude site visits, foow-up assessments, improvement programmes, workshops, muti-stakehoder projects etc. Sites of empoyment register audits on Sedex, thus encouraging them to take ownership of their socia compiance performance. The AAG have created a number of documents to assist this process of ownership incuding the Corrective Action Guidance avaiabe for members on the member resources of Sedex. The foowing criteria can be used to define the nature / type of SMETA audit. Individua suppy chains wi decide which type(s) meet their needs. 5.1 Category of Auditor A socia audit types can be upoaded on Sedex. First Party: a company that sef-audits their own empoyment site using their own audit resource. Second Party: an audit or assessment undertaken by a body with a trading reationship with the site such as a retaier, brand, vendor or agent. Third Party: an audit or assessment undertaken by an independent party e.g. an independent commercia audit company, NGO or trade union. Audits may aso be undertaken coectivey by a group of these stakehoders (mutistakehoder). Note: A mutistakehoder audit is an audit carried out by a group of stakehoders incuding NGO s and / or unions where the NGO and / or union have been invoved in a shared decision making process on inspection methods. 5.2 Notification of an Audit Depending on the outcome of risk assessments and / or audit panning, prior notice of the audit may or may not be given. This resuts in three possibe audit types: 1. Announced: audit date is agreed with or discosed to the audited site. 2. Semi-announced: audit date is agreed within a time window. 3. Unannounced: no prior notice is given. The use or combination of these audit types wi depend upon the particuar circumstances within each suppy chain. No firm guidance is given on their seection, however some exampes of when they are used are contained in: See Appendix A2: Announced, Semi-announced, and Unannounced Audits. 10

11 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 5.3 Sequence of Audits A site of empoyment may be assessed via a combination of the foowing methods: Fu Initia audit: Means the first time a site of empoyment is audited. Periodic Audit: Usuay a fu audit used to monitor suppier sites on an on-going basis. The intervas between periodic audits may vary depending on the individua member. Foow-up audit: Depending on the outcome of the initia audit, a foow-up audit may be required. Foow-up audits are normay used to check progress against issues found in the initia audit, and so may be of shorter duration than an initia or fu audit. Fu Foow-up Audit: This term is used to describe a site visit when the extent of the nonconformances found at a previous audit was so broad that a fu audit woud be required to verify corrective action. In this case the methods and scope resembe an initia audit, but take into account previous audit findings. Partia foow-up audit: The term used to describe an audit where the auditor visits a site but ony checks progress against issues found during a previous audit. This shoud then be recorded in Sedex as a partia foow-up audit. Desktop foow-up: Can be used for certain corrective actions where a site visit is not required and which are abe to be verified remotey e.g. through photographic evidence or documents provided via e-mai. Note: Where an auditor re-visits a site to check a items of the abour code then this shoud be recorded as a fu foow-up, and noted on the audit report. 5.4 Labour Codes SMETA BPG has been deveoped to provide guidance for auditing against the Ethica Trading Initiative (ETI) Base Code and oca aw. In addition, the guidance can be adopted and taiored to carry out audits against a range of other abour codes based on the conventions of the Internationa Labour Organisation (ILO). However, in order to ca it a SMETA audit the standard used must incude the ETI Code / aws and the protoco must be in ine with this BPG. Note: Since Sedex aows sharing of audit data, any company upoading a SMETA audit must exacty foow this SMETA Best Practice Guidance (BPG), especiay ensuring that non-compiances upoaded on the system have been measured against at east the ETI Code and the aw. Companies may use this methodoogy for a variety of codes, but it must not be caed a SMETA audit uness it foows the BPG. Detais of the ETI Code and the items to be investigated during a SMETA audit are found In Appendix A1: Guidance by Cause. 11

12 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) Piar SMETA Audits Background Refecting the widening nature of Corporate Responsibiity, Sedex members have created a 4-Piar SMETA audit, incuding the extra modues of Environment (extended assessment) and Business Practices. This Best Practice Guidance and the associated reports have been designed so that users can incude one or both of these extra modues and together they are intended to take a tota of 0.5 auditor days, when added to a 2-Piar SMETA procedure. For a 2-Piar audit covering Labour Standards and Heath & Safety, pus additiona eements see sections 1-10B2 in Appendix A1 Guideines by cause gives detais on appicabe standards. For the additiona 2-Piars of Environment (extended assessment) and Business Practices, see section 10B4 and 10C within, 10 Other Issues in Appendix A1 Guideines by Cause for detais of appicabe standards. Note: In view of the time aocation the additiona 2-Piars cannot be considered as substitute for a fu Environment and Business Practices audit, but they may assist suppy chains in deciding whether fu audits are required Usage When an auditor is carrying out an assessment of environmenta performance, they wi assess whether site of empoyment is meeting appicabe oca aws. In the case of Business Practices, the aws are ess cear. Therefore the assessment process wi be one of gathering information with a findings recorded as observations ony. The data generated wi enabe the Sedex membership to agree acceptabe standards over time. It is essentia that Sedex members are cear when a 4-Piar audit is required, as the extra time taken is ikey to incur extra cost. The assessment process invoved in the Environment (extended version) and Business Practices piars incudes a verification of the competed SAQ, and shoud give the reader the option to: Take no further action foowing the assessment Decide that a fu Environment and Business Practices audit is required Identify risks and decide on appropriate other action. Note: For environmenta assessments non-compiances wi ony be raised where a site of empoyment is not meeting the oca / nationa aw. A other environmenta findings wi be recorded as observations. For Business Practice assessments any findings wi be recorded as observations, with a target of defining standards over time by a process of member consutation Appication As the time aocated is 0. 5 auditor days for both modues together it is ikey that the number of interviews wi be restricted and the document review is ikey to be an assisted sef assessment rather than a fu investigation. However members may find the process usefu in areas where they are not aready conducting fu environmenta and / or Business Practices audits. 12

13 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) Execution of Environment and Business Practices Assessments Document review: The auditor shoud have reviewed the competed Sedex SAQ prior to the audit and shoud use the assessment process to check that the site s poicies and procedures agree with the SAQ. Any discrepancies shoud be noted on the Audit report Permits and icenses: These shoud be checked against the ega requirements and detais shoud be noted on the report. This shoud aso incude a review of any reevant prosecutions or ega actions against the site for environmenta issues Natura Resources Usage: Where possibe usage and disposa of natura resources shoud be quantified in the audit report, some exampes are voumes of water used, recyced, discharged - See section 10B4 in Appendix A1 Guidance by Cause for detais and the SMETA audit report Management interview: The auditor checks documentary evidence and actua practices by interviewing reevant personne. As a minimum this shoud incude the individua (s) identified by the site as the person (s) responsibe for Environmenta and Business Practices performance Worker Interview The auditor seeks to verify practices in areas of ega compiance such as for Environment, contents of waste water discharge. Discussion with empoyees responsibe for checking these contents can be evidence of procedures correcty impemented. For Business Practices interviews shoud be with departments where Business Practices poicies are most appropriate e.g. saes, purchasing, service contro, and ogistics departments As a minimum the auditor shoud interview at east one worker from each of the areas of Environment and Business Practices. Note: Where poicies do not exist an auditor shoud use the assessment process as an opportunity to raise awareness, especiay on Business Practices issues, and to assist the AAG have a suggested framework for content, (See section: 10C of Appendix A1 Guidance by Cause). 13

14 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 6-7: AUDIT EXECUTION 6. OVERVIEW OF THE AUDIT PROCESS A socia audit is usuay carried out within the context of a wider evauation and remediation programme which incudes a preiminary risk assessment (see Section 4) to gauge the need for the audit, and progresses through the audit itsef to a programme of improvement and monitoring. The foowing stages are covered by SMETA BPG: 1. Audit request. 2. Preparation. 3. Audit execution. 4. Audit outputs and foow-up. Note: Sites of empoyment shoud be invoved as much as possibe in the audit process. This can be done by e.g. Sharing a pre audit pack which detais the preparation required of a site for audit. Sharing other resources found on the member resources section of Sedex, which incudes e.g. detais of common non-compiances and possibe corrective actions. 6.1 Audit Request Any company / organisation / site requesting an audit is termed an audit requestor. An audit may be commissioned, and paid for by a buying company, by a suppier, by the site of empoyment or by any other party with a egitimate interest in the socia performance of the site. The audit requestor shoud be cear whether the audit is a 2-Piar SMETA comprising Labour Standards and Heath & Safety, or an audit which contains the extra piars of Environment and / or Business Practices. Audits are usuay paid for by the Audit Requestor, uness other contractua arrangements are in pace. Where the audit is paid for by the suppier or site, it is good practice for the auditor to obtain fu payment in advance of the audit, to maintain fu independence of the audit outcome. The payment structure may decide the ownership and circuation of the audit report. Generay the audit body wi send the report to the organisation paying for the audit. These aspects are agreed at the audit request stage between the audit company, the empoyment site and the audit requestor. Whichever party requests the audit, the auditor shoud be cear about the report owner and the report reviewers and ensure they conduct the audit in the best interests of a reevant stakehoders. Auditors must be cear who shoud receive audit findings as we as who is upoading the audit onto Sedex. In a case where the auditor is required to send a copy to parties other than the party paying for the audit, the auditor must first obtain approva. 14

15 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) Note: Sedex recommends that the audit is upoaded by the audit company as this provides greater independence. Note that within Sedex, the site of empoyment approves the report, and contros its visibiity. If the audit is to proceed, the audit body sends the site of empoyment any appropriate information to assist them in preparing for an audit. This must incude a copy of the auditor s / audit company s Business Practices Poicy incuding their position on corruption. Empoyment sites shoud aso be directed to the additiona guidance avaiabe on Sedex. This wi assist them in preparing for the audit. Audits shoud ideay take pace during a period when the empoyment site is in fu operation (such as peak production or harvest). Notes: To provide a consistent approach to pre audit information the AAG has produced a Guide to Pre Audit Information. Some Sedex Purchaser members (A and AB members) require that their suppiers ony use auditors from an approved ist. A suppier site is recommended to check with its customers before engaging an auditor / audit company. Exampe of process: Audit Request Initiation The audit requestor contacts the audit body to request an audit Since one of the missions of Sedex is to encourage audit sharing, the audit body shoud ask the site if they aready have a previous audit, oaded on Sedex and, if yes, encourage them to ask their cient if they wi accept that audit, or whether a new audit is required The audit body obtains sufficient detais of the empoyment site to pan and execute the audit. For Sedex members, the Site Profie section of the Sedex SAQ can be used to obtain this information (if the site gives access to the auditor). The minimum information needed is: Site ocation and contact detais. Number and composition of workforce, incuding anguages spoken. Location and avaiabiity of documentation covering audit topics. Sedex members suppied by the site (to estabish whether other requirements appy e.g. semi announced audits). Any requests concerning the date of audit. 15

16 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) Quote Generation and Audit Information The audit body suppies the audit requestor with a quotation and contract detais, incuding: Audit fees (incuding any subsequent activity costs such as desktop verification). Expenses (incuding transator fees). Any fees reating to upoad of the report to Sedex, if appicabe. Proposed date of audit if announced, or an agreed period window in the case of a semi-announced audit. Audit ength. Report receivers. Third-party report reease approva. A copy of the audit company s Business Practices poicy. 6.2 Preparation for an Audit (for Auditors) See Appendix A3: Preparation for an Audit. Once the audit has been agreed certain preparations are required of the auditor. These incude but shoud not be imited to: Background and Context Review The auditor must be aware of the prevaiing conditions, chaenges and issues affecting the empoyment site being audited. This shoud ideay incude contact with oca civi society organisations that are knowedgeabe about the issues which affect workers ocay. In addition the auditor shoud be aware of the current issues in the purchaser member s markets. The auditing organisation or auditor shoud aso reguary gather information on broader socia, economic and poitica issues affecting workers and the oca community from a broad range of sources. This shoud incude reevant egisation covering empoyment, Heath & Safety, empoyment agencies and data protection. It shoud aso incude an understanding of the iving wage or iving costs in the region. The auditor s knowedge of specific working conditions and egisation shoud be reviewed at east annuay Seecting the Auditor / Audit Team See Appendix A4: Seecting an Auditor. The quaifications and experience of the auditor are vita to an effective audit. Sedex does not prescribe what type of auditor can undertake an audit. Auditors may be sef-empoyed or be empoyed by a commercia organisation, NGO, trade union or industry body. 16

17 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) The audit body ensures that the auditor assigned to an audit is aware of the background and context, and that they meet the basic eve of competencies outined for members in the SMETA guide to Socia Systems Auditor Competencies on the member resources of Sedex. Additiona information on auditor competencies is pubicy avaiabe at GSCP: GSCP Reference Toos for Auditing Competence. The most appropriate auditor, in terms of skis, experience, gender, ethnicity, anguage abiity etc., shoud be carefuy considered at the audit panning stage, against the information provided in the SAQ and other sources. For arger audits, an audit team may be needed. This shoud meet the foowing criteria: The audit team is ed by a quaified team eader. The team incudes at east one auditor who meets the criteria of the SMETA BPG Auditor Competencies. The team possesses or has access to knowedge of oca working conditions i.e. by using an experienced auditor or through the use of guidance notes. The team can communicate in the main anguages spoken by both management and workers at the empoyment site. When this is not possibe, transators shoud be used. The team has at east one member that has knowedge of the appicabe industry. A team members sha be quaified under the audit body s quaity system, incuding the use of speciaists. The worker gender baance and cutura norms wi be taken into account when seecting the audit team. If this is not possibe it shoud be noted on the SMETA decaration at the beginning of the report. If a transator or other externa expert is to be used the team eader must ensure that they have satisfied themseves that no confict of interest arises Communication with the site When an audit request is made, the auditor shoud obtain a competed Site Profie / SAQ (for Sedex both are together in the SAQ), from the empoyment site, either directy or via Sedex. Where possibe, the auditor shoud aso review copies of recent audit reports, incuding a corrective actions and outstanding non-compiances. This information aows auditors to pan the audit, taking into account important aspects such as working hours, shift patters, the use of agency abour and the possibe need for interpreters. Once an audit is booked on a site, the auditor shoud forward, at east the foowing information to the main contact at the empoyment site: The Standard or Code that the site wi be audited against. The agreed scope of the audit in terms of companies / sites / buidings. Documentation that needs to be avaiabe during the audit (see Guide to Pre-audit information ) Key peope to be avaiabe on the day of the audit. Arrangements for empoyee interviews. Confidentiaity / data protection. 17

18 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) Audit agenda and the process for raising issues. Report circuation and arrangements for upoading to Sedex. Communication materias to enabe the empoyment site to communicate the abour code to its empoyees. Note: The AAG has created a Guide to Pre Audit Information which can be used in whoe or in part, to inform the site to be audited, about the SMETA audit process, and to assist them in preparing for an audit. This shoud normay be sent by the auditor to the site ahead of the audit Information for Workers Cear information about the audit shoud be communicated by the empoyment site to workers expaining the purpose of the visit and the process. Such information is usuay provided by the audit body for the empoyment site to distribute ahead of the audit. It may aso be provided by a buying company or other audit requestor. The information shoud be avaiabe in the principa anguages spoken by workers and shoud incude: Purpose and scope of the audit. Introduction to auditors and their roe (emphasising that they are independent and externa). The audit process incuding confidentiaity of worker interviews. Worker education materias (eafet or DVD). Contact detais for the auditor / audit company and for any whiste-bowing faciity supported by the audit requestor. Note: For an exampe of the type of information which shoud be given to workers see Guide to Pre-Audit Information Panning the audit Once the auditor has received a required pre-audit information, they shoud carefuy pan the audit. For arger sites this may incude seecting a suitabe team and appointing a ead auditor. The audit pan shoud take account of the risks aready identified from the pre-audit information received. Particuar care shoud be taken to ensure that worker interviews can be carried out using the protoco outined in Section 7.3 Management and Worker Interviews which may incude the need for one or more transators. 18

19 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 7. AUDIT EXECUTION See Appendix A5: Audit Length, Sampe size and Timetabe. The aim of the on-site audit is to evauate the performance of an empoyment site against a abour code or standard, oca aw and / or additiona requirements. This shoud incude: Management interview to ascertain company practice. A tour of the premises. A detaied review of documents. Empoyee interviews. The overa aim of the audit is to provide an accurate and cear account of the eve of performance of the empoyment site compared with the reevant standards. This wi be described via a ist of non-compiances, observations and good exampes (good practices). A non-compiance is recorded where the practices of the site of empoyment do not meet the requirements of either the aw or the appicabe code. An observation may be recorded where there is a site practice which does not contravene the aw or standard, but if not corrected, coud ead to non-compiance. It may be an opportunity for improvement. A good practice exampe wi be recorded where the site practice exceeds the requirements and the site is encouraged to bring those to the attention of the auditor. Note: Exampes of non-compiances can be found in SMETA Guide to Non-compiances in the members section of the Sedex website. The audit shoud incude the foowing: 1. Opening meeting. 2. Tour of the empoyment site. 3. Management and worker interviews. 4. Document review. 5. Pre-cosing meeting. 6. Cosing meeting and summary of findings. See Appendix A1: Guidance by Cause. 19

20 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 7.1 Opening Meeting The opening meeting shoud be hed in a anguage understood by the management and is to ensure that the empoyment site management understand the purpose of the Code. It shoud cover the requirements against which their empoyment site is being assessed and it shoud aso incude the audit process, timescaes, and activities of the site as we as re-confirm the requests for information. It shoud be attended by: Senior management. Managers who are responsibe for key functions e.g. HR and production. Trade union or worker representatives (if present at the site). CHECKLIST - OPENING MEETING A suggested agenda for the opening meeting is outined beow: Introduction: Introduce the audit team to the empoyment site s management and expain the purpose and scope of the audit, incuding potentia benefits to the empoyment site. Carify that the purpose of an audit is to evauate the performance of the site against pre-agreed standards and to encourage continuous improvement. The standard or code against which the audit wi be conducted. The need for openness and transparency. Agree the process for communicating issues during the audit. It is best practice to communicate issues as they arise to buid agreement around findings and corrective actions and to aow management to: provide additiona evidence where necessary. address issues immediatey. raise questions and address concerns. Confirm the confidentiaity of the audit and any other recipients of the audit report. Review the information provided in the pre-audit empoyment site profie, incuding previous noncompiances and foow-up actions. Expain the Sedex process incuding site registration and upoad process (see Section 8.2: Sedex and Upoading the Audit ) Confirm permission to take photographs. Check that a staff are aware of the audit and estabish that the reevant Code has been communicated to them. Re-confirm the auditor / audit company s own Business Practices Poicy. 20

21 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) Panning: Discuss and agree the audit schedue. Request a ist of workers who are schedued to work that day together with any detais that may be required to ensure that a representative sampe can be chosen for interview e.g. gender, nationaity, contract type, ength of service. Expain that the seection of empoyees for interview wi be done by the auditors. Confirm the structure of the worker interviews and the avaiabiity of an appropriate space. Confirm empoyees working hours and shift patterns. Agree tentative time of cosing meeting and invite attendees. Ensure that enough time is aowed to reinvestigate non-compiances if further evidence is made avaiabe. Agree who wi support the audit and accompany the site tour. Confirm the empoyment site s peak production periods and expain the need to sampe working hours from this period. Confirm any specia arrangements / precautions required for the empoyment site tour and whether a routine fire dri is expected. Review foor pan of the empoyment site, incuding dormitory(ies). Review ist of chemicas avaiabe on site. Ask the management if they have any questions. If empoyment site management do not agree to the participation of worker representatives in the opening meeting or audit process, auditors shoud note this in the report and arrange a separate meeting with worker representatives if possibe. 7.2 Tour of the Empoyment Site The purpose of the empoyment site tour is for the audit team to observe physica conditions and current practices in a areas of the empoyment site and to form a view of how they compare with the appicabe standards and codes. At the same time, the auditor shoud be checking how the site performs against its own poicies and procedures. It is aso an opportunity to hod unstructured conversations with management and workers, seek site-based evidence to support findings and to view site-based records. The findings from the tour are ater checked against evidence from management, document review and worker interviews. As a genera principe, the auditor shoud be abe to visit a the areas of the empoyment site and shoud set the pace of the tour. In some cases, empoyment sites may prohibit visitors from waking through some areas or forbid photography for reasons of safety or commercia confidentiaity. The auditor shoud note restrictions on access or photography in the audit report, and if restrictions seem unreasonabe shoud escaate according to the audit requestor s poicy. The abiity of management to continue production at the site during a visit is crucia to gaining an accurate idea of working conditions and to securing management co-operation for the remainder of the visit. Auditors shoud make every effort to ensure production is not disrupted during the empoyment site tour, whist ensuring that they are abe to view the production area during busy production periods. It shoud be possibe to move around the site without deaying or hating production. 21

22 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) During the site tour, the auditor shoud meet a range of managers / supervisors / workers across a site operations, The auditor shoud not be purey guided by management on areas to visit and shoud freey investigate a areas that they fee are needed to perform the audit. The auditor shoud raise issues as they arise, giving managers the opportunity to seek carification, respond, and provide expanations or further evidence. Note: Auditors shoud ensure that workers cannot be identified from any photos taken, especiay those interviewed. CHECKLIST - SITE TOUR The auditor shoud wak around a areas of the empoyment site in order to: Understand the types of work. Evauate Heath & Safety. Identify potentiay vunerabe groups of workers. Assess whether some operations may be sub-contracted to other units. Observe management systems and practices, incuding interaction between management and workers. During the site tour, the auditor shoud incude the foowing areas of focus: Working environment, Heath & Safety: Working environment e.g. ayout, temperature, tidiness. Work stations. Evacuation pans and evacuation routes. Signs in oca anguage as appropriate. Fire equipment and emergency equipment. Buiding construction, maintenance and certificates. Machine safety, guarding and maintenance. Emergency procedures. Persona protective equipment. First aid equipment and quaified staff. Hazardous substances storage, handing and disposa. Warnings and abes and whether in oca anguage if appropriate. Waste management. Toiets and sanitation. Potabe water. Canteen hygiene and safety, when appicabe. Dormitory hygiene and safety, when appicabe. 22

23 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) Empoyment and abour practices: Young-ooking workers. Workers who coud be at risk e.g. pregnant workers or those working with potentiay hazardous equipment or chemicas. Indications of restrictions of workers freedom of movement. Indications of infringements of workers dignity. Seection of individua workers for interviews during the site tour, or for subsequent interviews. Any indications of the ack of protection of workers rights. Any indication of inequaity, discrimination, harassment or intimidation. Locate documents and records: Quaity records. Production records. Time records. Dispay of codes of conduct or abour aw. Dispay of information reating to trade union or workers committee meetings. Any egay required postings. Perimeter survey An optiona perimeter survey can be usefu to provide additiona information about the empoyment site and its oca context and to identify specific risk issues e.g. fire risks associated with waste storage etc. Note that this shoud ony be undertaken if sufficient time is avaiabe. It shoud not detract from the time spent inside the empoyment site. The perimeter survey focuses on: The immediate surrounding environment. Neighbouring faciities e.g. hospitas, cinics, restaurants, shops, recreation, fire protection, poice, waste disposa, etc. Loca perceptions of the empoyment site e.g. work hours, abour issues, support for oca community, waste discharge, etc. Other faciities ocated on the empoyment site e.g. dormitories, canteen, cinic, water treatment vs. externa water discharge. The physica construction and ayout of the empoyment site e.g. buiding structure, access, worker transport etc. Other production units or faciities on the empoyment site which are not part of the scope of the audit. 23

24 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) 7.3 Management and Worker Interviews Management Interviews The audit team shoud work through the reevant code and aws, taking to managers on each issue area. Open questions and discussion techniques shoud be used. It is important not ony to tak to the senior managers, but aso to ess senior managers who may have a different perspective. Affirmation of poicies and procedures by managers wi aow the site to review its own practices during the audit. The audit team shoud work with administration staff combining interviews with document review Worker Interviews Interview principes It is essentia that workers are interviewed to hear directy what they think of working conditions at the empoyment site. Individua or group interviews may raise new issues, confirm compiance or confirm suspected non-compiance. This is when the persona skis and experience of an auditor are invauabe in creating the trust needed for workers to fee comfortabe discosing detais about the workpace. Note: Workers identities shoud not be discosed to the management or be written on the audit report. See Section 7.3.8: Protection of Interviewees for more detais. Workers shoud be interviewed individuay and in groups without management present and preferaby in their own anguage. Where necessary, an independent, professionay quaified transator shoud be used (hired). Management or their representatives must not act as transators. Audit team members carrying out worker interviews must have the skis to make workers fee at ease. It is best practice to use informa, open interviewing techniques to encourage interviewees to identify the issues of most importance to them. It is important to uncover any hidden issues such as discrimination and intimidation which are not easiy found through other stages of the audit process. Worker interviews shoud be conducted in a pace where the workers fee comfortabe and a reaxed and an informa setting can be created. This shoud be away from management offices with no representatives of management present and where the interview cannot be watched or overheard. Informa interviews may aso take pace during the physica tour of the empoyment site, at unch time or during breaks. Offsite ocations for interviews may be more appropriate, especiay if the auditor fees that workers may be coached or intimidated in the empoyment site. Possibe ocations may incude workers homes or oca shops or faciities used by workers. Workers shoud be interviewed individuay or in groups, preferaby using a combination of both. 24

25 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) Panning Interviews Workers shoud be seected ony by the auditor. Ideay worker seection shoud be baanced, taking account of any underying issues e.g. shift, pay rates, worker category, job roe. Wherever possibe, the identities of interviewees shoud be kept confidentia. Where this is not possibe, a sufficient number of empoyees must be seected for interview to enabe confidentiaity of feedback to be maintained. Identities of workers, e.g. names or ID numbers shoud never be incuded in the audit report. Detais of the number of workers that shoud be interviewed and the methods of seecting them are covered in Appendix A5: Audit Length, Sampe Size and Timetabe. Note: The first seection of interviewees is made during the site tour as seection from documentation assumes that a workers on site are documented. If interviews are carried out prior to document review, any issues raised can then be checked against empoyees records to gain supporting evidence. CHECKLIST - INTERVIEW DESIGN The foowing best practices shoud be considered when seecting workers and panning interviews: Workers interviewed are representative of worker type and departments within the empoyment site. The worker interview sampes incudes different contract types of worker i.e. permanent, temporary and agency workers and incude different shifts and types of work where possibe. Interviewees shoud be seected by the audit team and never by management; In making the seection, the auditor considers: The gender baance of the workforce. The spectrum of ethnic, nationa, inguistic, migrant or reigious groups. Youngest and odest workers. Different departments, incuding security and canteen workers as we as production workers. Different eves / grades of workers and supervisors. Worker representatives. Heath & Safety committee representative(s). New empoyees / trainees (to evauate training quaity). Workers in a pay grades (i.e. owest pay grades, highest pay grades) in order to evauate wages and working hours. Pregnant women. Workers in potentiay hazardous jobs e.g. with machines or chemicas. Empoyees from different shifts. Workers not wearing uniform. Workers who have taken eave recenty. Workers whose records show specific issues such as discipinary action. 25

26 SMETA Best Practice Guidance (4-Piar Version 4.0, May 2012) The seection of workers shoud be done as ate as possibe i.e. just before the interview, in order to minimise the risk of workers being coached. The interviewer shoud aim to tak to a wide range of workers incuding potentiay vunerabe workers and those in ess skied positions Conducting Interviews Worker interviews must be managed with discretion and empathy. The audit team shoud introduce themseves and communicate the purpose of the audit. They shoud assure interviewees that a information shared during the interview wi remain unattributed. No manager or representative of the empoyment site, apart from the workers concerned, shoud be present during any worker interview. Exampes of good technique incude: The auditor must emphasise the confidentia nature of the interviews and must never mention an individua worker s identity to management. The auditor must conduct the interview using an informa conversationa technique using open questions that encourage diaogue. A comfortabe reaxed atmosphere is the target. Auditors must aim to make the interviewee comfortabe i.e. in the way they dress, approach the interviewees and arrange the interview room. Where two auditors are conducting interviews together it may hep communication if one auditor takes notes whie the other concentrates on estabishing a rapport with the interviewee(s). Where necessary worker interviewers can work through a transator. Transators must be independent of empoyment site management and must speak the anguage concerned. Where a transator is being used, they must be fuy briefed on the need for interviewee protection and confidentiaity. The auditor shoud provide interviewees with a suitabe confidentia contact in the event that a worker wishes to add information outside the interview or whie not at work Individua and Group Interviews The auditor must make a judgement on the most appropriate interview methods, considering individua and group interviews, the sampe of interviewees and the possibiity of off-site interview ocations. The method chosen shoud provide the most effective method for gathering detais about the work environment and for discussing issues such as pay rates, management stye, discrimination, harassment, etc. The foowing points are guidance ony and may be modified depending on circumstances. However, the tota number of interviewees given in Appendix A5: Audit Length, Sampe Size and Timetabe shoud be adhered to. Where interview numbers differ from this guidance this must be stated in the SMETA decaration with reasons why Individua interviews typicay ast between 15 and 30 minutes. Longer interviews wi be required in some circumstances. Auditors shoud respond to any signas (verba and non-verba) from workers and may choose to convert an individua interview to a group interview or vice versa Group interviews enabe more rapid consutation with a arger number of peope. Group interviews can be usefu at the beginning of an audit to gather information quicky to inform the audit process. 26