SA 8000

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SA 8000
Heinrich A. Bieler
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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

• 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...
• 4. Take a leadership role
• Apply proven principles to control manage risks

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The Informed Consumer
Retailer
Suppliers India, China, Kenya, Brazil,
Indonesia, Turkey, etc.
Retailer
Consumer
Retailer
Retailer
Consumer informed of supplier details becomes
aware of supply chain issues
Media
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The uninformed Consumer
Retailer
Suppliers India, China, Kenya, Brazil,
Indonesia, Turkey, etc.
Retailer
Consumer
Consumer view of the supply chain stops at
retailer
Retailer
Retailer
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Knowledge of Supply Chain
Supplier
Supplier
Supplier
Supplier
Supplier
Retailer
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
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Second Party Audit Retailer Side

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

Retailer A
Retailer B
Code of Practice A
Code of Practice B
- Disturbance of production during the
audits - Several Code of Practice imposing
several systems
Audit A
Audit B
Supplier
Audit C
Audit D
Does not respect Code of Practice C
Code of Practice C
Code of Practice D
Retailer C
Retailer D
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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.

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SA 8000

• The first global standard for ethical sourcing
• Designed for independent verification
• A global standard, designed for use by
  anycompany, anywhere in the world
• Has been developed with stakeholders
• Is designed to take local laws andrequirements
  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 - Sainsburys Supermarkets Ltd..
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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 www.cepaa.org

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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

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The Standard SA 8000 (download www.cepaa.org)
Management
Discrimination
Communication
Working Hours
Supply Chain
Remuneration
Disziplinary Practices
Health Safety
Freedom of Association Right to Collective
Bargaining
Forced Labour
Child Labour
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Improvement Process
SA8000 Certification
Basic Code of Practice
Unacceptable Level
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Stepped Approach Monitoring
SA 8000Certification
SupplierVerification(full or reduced)
Supply ChainVerificationSA 8000
Completeness of Coverage per Supplier
Supply ChainVerificationReduced Requirements
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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

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Stakeholder Map
Taxes
Church
Laws
Shareholder
Goverment
Parties
Religion
NGOs
Unions
Capital
Organisation
Banks
Accidents
Owner
Insurance
Management
Social Security
EmployeesWorkers
Suppliers
Media
Families
Clients
Competitors
Hobbies
TV/Radio
Internet
Press
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Certification Process
United Nations, EU
Local Staff
NGOs
Local/ International norms
Local legislation
Interpretation of SA 8000 for audit, with
certification objective
Conformity to SA 8000 standard ?
Audit Report
Surveil-lances
Suppliers
Code of Practice
Audit
Client
SA 8000 standard requirements
Accredited Certificate
Basic requirements
Enterprise
XYZ
Elements of the implementation decision
Audit and Certification
Implementation
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Certification Audit Documentation

• Documentation
• Contract of Employment
• Human Resource Manual / Procedures
• Published Policy
• PR Material
• Quality Manual / Procedures
• Health and Safety Manual / Procedures

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Certification Audit Records

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

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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

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Certification Audit Questionnaire, Observations

• Questionnaire / Survey
• Larger sample
• Anonymous
• Use to cross check
• Brief, clear (10 15 Questions)
• Observations
• Use and common sense

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Data Collection Matrix
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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

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Integrated Systems ? Integrated Audits
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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

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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

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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

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Additional Information ?
SGS Société Generale de Surveillance SA 1, place
des AlpesP.O. Box 2152CH-1211 Geneva
1 www.sgs.com SGS Switzerland SASystems
Services Certification Technoparkstrasse
1CH-8005 Zurichheinrich_bieler_at_sgs.com