If you’re like many importers, you probably can’t answer any of these questions. And you might not know why these questions are important to the success of your business. But a lack of care in investigating your supplier and answering these questions surrounding social compliance can cause you to lose major distributors for your product.
How might overlooking social compliance hurt your manufacturing business?
If your supplier in Fujian, China is not paying social insurance to its workers, they would be in violation of Article 72 of China’s labor law governing benefits. In turn, this supplier would be violating the compliance requirements set by Walmart and many other major retailers.If Walmart decides to carry out an audit of your supplier for social compliance, they might discover the violation and refuse to sell your product in their stores. And many name brands like Walmart, Target, Disney and others share similar standards for supplier compliance. So a violation of one retailer’s standards likely means exposure to violations of those of other brands as well.
How can you protect yourself from social compliance violations when you are importing from suppliers abroad? You may not be able to personally monitor labor practices in your supplier’s factory. But you can investigate your suppliers with a standardized audit for social compliance.
Investigate and prevent violations with an SA8000 audit
One of the best ways to safeguard against social compliance violations that could hurt your business is to audit your suppliers.This isn’t always easy. You may be working with a complicated product like mobile phones, which has many component
s sourced from many different suppliers. Apple is one such example of a manufacturer that has made headlines for failing to protect workers that manufacture their products.The more suppliers you have in your supply chain, the less transparency you have with greater risk of violations. Auditing your suppliers individually offers insight as to which are compliant and which need to improve. And one of the most common frameworks for auditing suppliers is the internationally recognized Social Accountability 8000 standard, or SA8000.
The SA8000 standard is based on the UN Declaration of Human Rights,
national labor laws and international human rights norms. SA8000 is a
voluntary standard for social compliance used by many third-party
auditors. An audit of your supplier using the SA8000 standard will
verify the following nine requirements:
1. Child labor
An audit using the SA8000 standard will look for violations involving
child labor. Adherence to local and national laws will generally mean
that a supplier is compliant with this section. Besides age
restrictions, the standard requires that:
- Young workers meet compulsory education laws and do not work doing school hours
- Young workers do not work more than eight hours per day; and
- Children or young workers are not subject to unsafe working conditions
2. Forced labor
This requirement ensures that a supplier is not employing forced or
slave labor and not withholding personal documents, salary or benefits
from workers. It also requires that staff have the right to leave the
workplace at the end of each workday.
Forced labor is an important aspect of social compliance that has
made its way into some specific legislature outside of voluntary
standards. California addressed the issue of forced labor statewide with
the Transparency in Supply Chains Act, which took effect in 2012.
3. Health and safety
Health and safety is a broader requirement of the SA8000 standard
concerning minimizing or eliminating hazards in the workplace. This
section has many areas in common with the Occupational Safety & Health Act of 1970 in the United States. There are some specific requirements, such as:
- Organizations must assess health risks for new, expectant and nursing mothers
- Staff must be provided with appropriate protective equipment (e.g. hardhats, gloves, respirators); and
- Staff must have free access to clean toilet facilities, potable water and sanitary facilities for food storage
4. Freedom of association and collective bargaining
The point of freedom of association and collective bargaining is one
that can be somewhat contended by local or national law. The requirement
allows workers the right to organize trade unions of their choosing.
But then there are countries like China, which restricts membership
to those trade unions that fall under the All-China Federation of Trade
Unions (see trade unions in China).
SA8000 has a provision to address this, requiring organizations to
allow workers to freely elect their own representatives. It also
protects workers belonging to unions from discrimination, harassment or
intimidation.
5. Discrimination
The SA8000 standard protects workers from discrimination on the basis
of race, origin, caste, gender, religion, political affiliation and
many other attributes.
Suppliers that meet this requirement cannot interfere with exercises
of worker’s rights to certain practices related to religion, such as
prayer. Suppliers cannot allow abusive, threatening or coercive behavior
in the workplace. And suppliers cannot force staff to take pregnancy or
virginity tests.
6. Disciplinary practices
This standard requires that suppliers treat staff with “dignity and
respect”. This forbids inhumane treatment, corporal punishment, coercion
or verbal abuse.
7. Working hours
Similar to the standard’s section addressing collective bargaining,
local or national laws can also grant suppliers more leniency with
regard to working hours. Suppliers are required to allow at least one
day of rest following six consecutive days of working. But an exception
is made for national laws that allow for more work time and agreements
reached by collective bargaining.
Aside from standard working hours, SA8000 touches on overtime as
well. Suppliers must make overtime voluntary, and overtime hours cannot
exceed 12 hours per week.
8. Remuneration
An audit of your supplier using the SA8000 standard will investigate
whether or not your supplier is paying a living wage to workers. Wages
paid by your supplier need to be enough to cover basic needs of the
staff and allow for discretionary income.
The standard dictates that the supplier cannot withhold or deduct
wages for disciplinary reasons, unless permitted by national law or
collective bargaining agreement. Suppliers must also reimburse workers
for overtime at a premium rate defined by national law or collective
bargaining agreement.
9. Management system
In order for one of your suppliers to become SA8000 compliant, there
are several steps management must take regarding corrective actions,
preventative measures, policies and documentation. This is a lengthy
section outside the scope of this article, but some of the main points
are as follows:
- Senior management must inform staff of their intention to comply with SA8000 with a written policy statement
- Your supplier must appropriately document conformance and implementation of the standard
- Your supplier must set up a Social Performance Team (SPT) to oversee implementation of the SA8000 standard, as well as identify and assess risks
- Your supplier must develop a written grievance procedure that is confidential and non-retaliatory; and
- Your supplier must train staff to implement the SA8000 standard
Conclusion
SA8000 serves as a standard for holding your suppliers accountable.
It shares many of the common requirements you’d find in a brand
compliance standard. And a social compliance audit using the standard
can help you to get a clear picture of what’s happening in your
supplier’s factory and any potential problems with compliance.
Besides satisfying retailer requirements, an SA8000 audit can help
you prevent a sudden halt in production caused by a strike. In September
2017, 6,000 workers at a garment factory in Vietnam went on strike for inhumane treatment and unreasonable rules.
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