Embed Size (px)
Citation preview
AIM-PROGRESS Responsible
Sourcing Forum
Lagos, Nigeria
20 November, 2014
AGENDA 8:30 Registration
9:00 Welcome /Safety & AIM PROGRESS Code of Conduct
9:15 Key Note Address
9:30 Overview of AIM-PROGRESS and Demonstrating Compliance
10:00 Tea Break
10:20 Assessment Overview & Auditor perspectives
11:00 Hours of Work
11:40 Contract Labor Management
12:20 Lunch
13:30 Health & Safety
14:00 Management Systems
14:30 SEDEX
15:00 Break
15:30 Questions & Discussions
16:15 Wrap up
SAFETY AND LOGISTICS NOTICE
www.aim-progress.com
Participants at the forum shall not enter into any
discussion or raise questions that may infringe any
applicable competition law. By way of example,
participants shall not discuss, communicate or
exchange any commercially sensitive information, such
as non-public information relating to prices, marketing
and advertising strategy, costs and revenues, trading
terms and conditions. They shall not disclose any
trading relationships in terms of identifying a particular
manufacturer or supplier or other.
ANTI-TRUST NOTICE
Opening Remarks
AIM-PROGRESS Brand Representatives
Overview of AIM-PROGRESS
and Responsible Sourcing
Arthur Mamvura
WHAT IS AIM-PROGRESS?
►Global forum of consumer goods companies assembled to enable & promote responsible sourcing practices
►Sponsored by the Grocery Manufacturers Association (GMA) and the European Brands Association (AIM)
Our mission: “Positively impacting people’s lives through our combined leadership of robust responsible sourcing practices throughout our supply chains”
www.aim-progress.com
WHO IS INVOLVED?
37 Companies representing > USD$ ½ Trillion annual revenue
OUR OPPORTUNITY
As individual companies, we are all asking our suppliers
for similar assurances, but…
►Using different words in questions,
►Against similar, but different standards,
►On different systems,
►With different audit protocols
►in isolation, without finding synergy with like
efforts
►Leading to confusion and complexity and
unnecessary duplication of audits
►Building member capability within our own organisations All member organisations are competent and executing robust responsible sourcing programs
►Effectively assuring compliance in our supply chains Ensuring increasing supplier compliance as expectations rise through having in place increasingly aligned practices, standards and metrics.
►Going beyond compliance in our supply chains demonstrating activities of responsible sourcing which go beyond simple compliance with local law.
OUR OBJECTIVES:
AIM-PROGRESS OBJECTIVES
To promote responsible sourcing through common, or mutually accepted
Supply Chain Standards:
To increase efficiency by sharing data – “an audit for one is an audit for all”
To seek convergence with other similar initiatives
Labor Standards
Health & Safety
Environment Business Integrity
VALUE PROPOSITION
Meets multiple customer requirements
Builds & protects reputation with:
Consumers
Regulators
Wider society
Investors
Increases employee morale and productivity:
Improves retention rates
Lower overtime
Reduces health and safety incidents
Reduces quality incidents
Is a sustainable foundation for growth
Is “the right thing to do!”
REPUTATIONS: HARD TO BUILD…. EASY TO LOSE!
NECESSITY FOR RESPONSIBLE SOURCING
Most Common audit non-compliances
Source: AIM-PROGRESS member company data 2010 -present
AIM-PROGRESS ACTIVITIES
To maximize synergies
NOT: Create a new set of codes or create new audit standards
• Benchmark company assessment protocols
• Sharing best practice
• Audit data exchange
Mutual Recognition
• Common assessment methods
• Maximize synergies
• Use of the Sedex system
Data Exchange
• Promoting supplier awareness
Engaging others
Mutual Recognition – an audit for one is an audit for all
Results to date:
• Shared list of over 13,500 audited
suppliers
• All participating members
recognise at least one audit
• Some companies avoiding 20-
50% of audits!
MUTUAL RECOGNITION STATEMENT….. Purpose:
• Reduce audit fatigue and
duplicative costs through mutual
recognition of assessments
• Align and improve standards and
share best practices
“We are already seeing greater efficiencies within MWV, thanks to the mutual recognition of our program
by all AIM-PROGRESS members. This recognition leads to fewer audits we have to conduct, and fewer
questionnaires to complete.
Christopher Campolongo, Supply Chain Compliance Director, MeadWestvaco Corporation
SELF-ASSESSMENT & DATA EXCHANGE
SEDEX Members
► Online tool that enables global
suppliers to share assessments and
audits on ethical and responsible
practices with their customers and
avoid duplication
► Common tools to enable companies
to analyse and assess risks: – SAQ – self assessment questionnaire
– SMETA – Sedex Members Ethical Trade
Audit
Non-SEDEX Members
► Company Protocols
► Benchmarked against each other
and SMETA – For Instance, The Coca-Cola Company
uses The Supplier Guiding Principles
(SGP)
Sedex does not… • set policy
• pass, fail, certify, or score suppliers
• conduct social audits
• issue certificates
• promote suppliers
www.sedexglobal.com
Demonstrating Compliance
Common supplier
training events
Responsible Sourcing Cycle –
Commonalities on the supplier assessment journey
Companies agree to recognise audits done on
behalf of other customers. Audits can also be
shared using online platforms.
Common formats
include Sedex and
EcoVadis SAQs
Determined by
individual companies
Sharing of
methodologies for
corrective action
plans.
Synergies towards common
methods & data
Initial Risk Assessment
Supplier Assessment
Further Risk Assessment
Audit
Corrective Action Plan
Building Supplier
Capability
SUPPLIER SELF-ASSESSMENT
● A self-assessment questionnaire is a
useful tool to help suppliers and buyers
assess overall capabilities and ensure
processes are in place to manage.
● Self-assessment are only required by some
companies are NOT always required
● If applicable, the Sedex self-assessment
covers the following:
Site Profile
Labor Policy & Standards
Health & Safety, Hygienic Assessment
Business Integrity (anti-corruption)
Environmental Stewardship
Step 2:
Supplier Self
Assessment
Common Method
among SEDEX members;
not required by all
ASSESSMENT OVERVIEW – 4 PILLARS
Labor Standards
Health & Safety
Environment Business Integrity
3rd PARTY ASSESSMENTS
• Audits are conducted by independent, accredited professionals (examples include Intertek, UL, SGS, BV, Level Works)
Who conducts the audits?
• Auditors are independent and impartial professionals trained to evaluate compliance to laws and responsible sourcing standards.
What is the role of the auditor?
• Suppliers pay for the audits as this allows them to own the data and share the reports with multiple customers through AIM-PROGRESS
Who pays for and owns the audit?
• Process and protocols are in place to ensure no personally identified information leaves the facility.
• Goal of assessment is to protect employees not infringe on privacy
Does an audit adhere to Privacy Protection laws?
• There is no comprehensive standard (yet) that covers all the 4 Pillars
• Standards that are relevant to an individual pillar e.g. OHSAS 18001, would be taken into account during the audit process
• Other audit protocols e.g. SA8000, may be acceptable if conducted by an independent 3rd party auditor and within a reasonable timeframe.
• Check with your customer for specifics
Are other standards acceptable (ISO, SQF, SA8000, etc)?
Step 3:
3rd Party
Assessment
Common Method
3rd PARTY ASSESSMENTS
• Assessment duration varies depending on size of facility and scope of production. In general, two auditors spend one day in a facility, but can take up to 4 person days
How long does the audit take?
Time Assessment Process Key Staff
45 Min Opening Meeting
Explanation of the audit scope, deliverables and process
Review of your self-assessment information off SEDEX
Review of the document request list
Identification of documentation to be prepared for review
Site Manager, HR
and EHS Manager
1 hour Site Inspection: Understanding site areas Site & EHS Manager
2 hours Document Review
Review of management documentation
Review of employee personnel files
Review of wages and payroll related information
HR Manager
Payroll Clerk
EHS Manager
3 hours Interviews with production employees Floor Staff only
30 min Secondary Site Inspection/Misc None
30 min Preparation of Onsite Report None
30 min Presentation of Onsite Report to Management Site, HR, EHS Manager
Step 3:
3rd Party
Assessment
Common Method
CORRECTIVE ACTION PLAN
Non-compliances identified must be addressed
through Corrective Action Plans
Timeframe and follow-up methods depend on the
type of issue and the severity
Desk based verification vs. follow-up visit
Critical, Major, Minor categorization of issues
Individual buying companies determine the corrective
action plans
Step 4:
Corrective
Action Plan
SUPPLIER COMMENTS
● Supplier comments on the purpose of internal responsible sourcing program:
► “To earn the trust of our customers, licensing partners, suppliers, and consumers by
manufacturing and purchasing quality products using ethical standards”. MWV
► “We believe that companies must take steps to manage their impact on the natural
environment. As a consequence we are committed to conducting our business in a manner
that is sensitive to the environmental needs of the communities within which we operate.
External validation of our activities in this area is key to maintaining our creditability and this
validation process is supported by our membership of SEDEX.” Simon Houghton-Dodd,
Head of Quality & Sustainability Tate & Lyle Sugars
Supplier comments on the benefits of Sedex:
► “Over 20 customers have now asked for SEDEX information – All we have to do is go into
SEDEX and give access to those companies to view the questionnaire and audit we already
completed.” Givaudan
► “SEDEX has been very useful within Doehler as it provides a Group standard for CR across
multiple sites. In addition, as SEDEX is recognised by many clients, it has been particularly
beneficial in developing customer relationships” Doehler
CONCLUSION
Responsible Sourcing is a growing movement and is critical to
maintaining a positive reputation and meeting customers demands.
This as an opportunity to grow our business together with our
suppliers in a sustainable and responsible manner.
www.aim-progress.com
NEXT STEPS…
Review your customer specific requirements
If required by your customer, register on Sedex and conduct self-
assessment to identify areas for improvement
Schedule assessment and share results with AIM-PROGRESS
companies
Focus on continuous improvement by:
addressing non-compliances in requested timeframes,
leveraging results and remediation across business,
engaging suppliers in similar work and requirements
www.aim-progress.com
Tea Break
Hours of Work
Work Hours & Overtime
AIM-PROGRESS Member Principles
Baseline requirement:
Supplier will comply with all applicable local
and national working hours and overtime law
References
Labour Act Chapter 198 Laws of the Federation of Nigeria
National Minimum Wage (Amendment) Act, 2011
Hours of Work
Laws and Regulations –
Normal hours shall be those fixed-
by mutual agreement; or
by collective bargaining
by an industrial wages board
Hours of Work
Laws and Regulations
Overtime
Hours in excess of the normal hours fixed shall constitute
overtime.
Daily Rest
Not less than 1 hour on the aggregate: For workers engaged
for more than 6 hours.
Hours of Work
Laws and Regulations –
Weekly Rest
In every period of 7 days a worker shall be entitled to 1 day of
rest which shall not be less than 24 consecutive hours
Annual Rest
6 working days for every 12 months.
Hours of Work
Laws and Regulations –
Other Requirements
● No woman shall be employed on night work.
● Nursing mothers, be allowed half an hour (30 minutes) twice a
day during her working hours for that purpose.
Expectations
● Working hours within the
requirements
● Defined work week
● Attendance records must be
consistent
● Process for identifying level
loading peak constraints
● Rest day must be in line with local
law
Expectations Relating to Wage
All workers receive at least legal minimum wage for all hours
worked
Overtime is paid at agreed premium rates and is performed
on a voluntary basis
Wages are paid directly to the worker
Pay slips are provided indicating the number of hours worked
and deductions
Communicate wage and payment practices in a manner
understood by workers
Verification Process
Employee Interview
Employee Interviews done confidentially
Documentation Review
At least 12 months of pay journal, timecards and production
records
Pay slips
Employees should be provided with statutory rest days and
annual leave as required by local law
Questions?
Assessment Overview – Auditor’s
Perspective
Assessment Process Overview
41
1. Suppliers engaged by Company
2. Supplier Self Assessment
3. 3rd Party Assessments
4. Corrective Action
FOUR STEPS
What do you need to do?
Getting Started
Getting Started with Sedex
SAQ AB
B
Grants
Access to
Site Data
Register
On Sedex Completes
your SAQ Add your
customers
Create your
site of
employment
Member
Assessment Process Overview
44
Independent
Activity:
AIM-PROGRESS
Members propose
suppliers to follow
the assessment
process.
Common Method:
Sedex Members request
a site self-assessment
questionnaire to a common
format
(uploaded onto
Sedex database)
Common Method:
3rd Party Auditor conducts
a site audit to a common
protocol
(SMETA)
(uploaded onto
Sedex database)
Independent Activity:
AIM-PROGRESS
Member accepts
supplier’s corrective
action plans
(using the SMETA guidelines
remediation
timelines)
This process creates synergies: data can be shared among various
customers, since AIM-PROGRESS members mutually recognize 3rd Party
Assessment to avoid duplication
Supplier Self-Assessment
● Best practice is for sites to complete the
Self Assessment Questionnaire (SAQ) and
make it available to customers before they
decide whether to commission an audit.
● The SAQ, which includes site profile
information, should also be made available
to the audit company to help plan the audit.
The SEDEX Self-Assessment Questionnaire
Labour
Standards
Health
& Safety
Environment Business Ethics
Self Assessment
Questionnaire
3rd Party Assessment
3rd Party Assessment
• Audits are conducted by independent, accredited professionals (examples include Partner Africa, SGS, Intertek, STR, BV, and LevelWorks)
Who conducts the audits?
• Auditors are independent and impartial professionals trained to evaluate compliance to laws and responsible sourcing standards. Through assessment processes, they determine supplier compliance levels to the requirements
What is the role of the auditor?
• Suppliers pay for the audits as this allows them to own the data and share the reports with multiple customers through AIM PROGRESS
Who pays for and owns the audit?
• There is no comprehensive standard (yet) that covers all the 4 Pillars
• Standards that are relevant to an individual pillar e.g. OHSAS 18001, would be taken into account during the audit process
• Other audit protocols e.g. SA8000, ETI (SMETA) may be acceptable if conducted by an independent 3rd party auditor and within a reasonable timeframe.
• Check with your customer for specifics
Are other standards acceptable (ISO, OHSAS etc)?
Assessment Types
1. Pre-Assessment
2. Full Assessments
a) Initial Assessment
b) Re-Assessment
3. Follow Up Assessments
a) Full Follow Up Assessment
b) Partial Follow Up Assessment
4. Desk Assessment/Review
5. Mutual Recognition
4
Ethical Audits on Sedex
Audit
Audit is
scheduled &
completed offline
Submit your
corrective actions to
the auditor to verify
Your customer
will confirm an
audit is required
Your auditor will
confirm if the issue
has resolved
Audit report is
uploaded to
Sedex by your
auditor
Audit Overview – 4 Stages
1. Audit request.
2. Preparation.
3. Audit execution.
4. Audit outputs and follow-up.
● Client requests audit from the audit
company
● Audit company asks client if they had been
audited before
● Audit company requests details of the
company to be audited
● Audit Company sends quote, showing
duration & fees
● Client Pays for the audit
● Audit is scheduled .
Stage 1 - Audit Request
Pre-Audit Information
● The minimum information needed before audit is
scheduled include:
● Site location and contact details.
● Number and composition of workforce, including languages spoken.
● Location and availability of documentation covering audit topics.
● Sedex members supplied by the site (to establish whether other
requirements apply e.g. Semi announced audits).
● Any requests concerning the date of audit.
Audits should ideally take place during a period when the site is in
full operation (such as peak Production or harvest)
Auditors are assigned
Audit body communicates to site :
● The Standard or Code that the site will be audited
against.
● Documentation that needs to be available during the
audit
● Key people to be available on the day of the audit.
● Arrangements for employee interviews.
● Audit agenda and the process for raising issues.
Site informs staff of the coming audit and what is required.
Stage 2 - Preparing for the Audit
● Opening Meeting
● Management interview to ascertain
company practice.
● A tour of the premises.
● A detailed review of documents.
● Employee interviews
● Second site tour to ascertain close-out
● Closing Meeting
Stage 3 – Audit Execution
How long does the last?
56
Time Assessment Process Key Staff
30 Min Opening Meeting
Explanation of the audit scope, deliverables and process
Review of your self-assessment information of SEDEX
Review of the document request list
Identification of documentation to be prepared for review
Agree on logistic s for the day
Site Manager, HR
and EHS Manager
1 hour Site Inspection: Understanding site areas/ identification
of safety, health and environment issues
Site & EHS Manager
2 hours Document Review
Review of management documentation
Review of employee personal files
Review of work hours, wages and payroll related information
HR Manager
Payroll Clerk
EHS Manager
3 hours Interviews with Production Employees Floor staff only
30 min Secondary Site Inspection/Misc. (to check closure of any
issues highlighted during the initial site inspection)
Site & EHS Manager
30 min Preparation of Onsite Report None
30 min Close out Meeting: Presentation of onsite report to facility
management
Site, HR, EHS Manager
Assessment duration varies depending on size of facility and scope of production. In general, two auditors spend one –two days in a facility
Typical 1 day timetable:
Triangulation of Data
Factory
Records
Management
Workers
Why triangulate data ?
1. To verify workers’ comments with official documentation.
2. To separate facts from fiction.
3. To hear management’s side of the story.
4. To understand the extent or scale of an issue raised during worker interviews.
Audit Issues
Audit issues can be both positive and negative
Audit issues will be categorised as:
Good Example (GE)
Observation (Obs)
Non-Compliance (NC)
Non-compliances: you will need to add a
corrective action for the auditor to verify
Common Assessment Topics
Corrective Action
61
Non-compliances identified must be addressed through Corrective Action Plans
Time frame and follow-up methods depend on the type of issue and the severity
o Desk based verification vs. follow-up visit
o Critical, Major, Minor categorization of issues
Different companies/audit protocols may determine the corrective action plans and dates for closure
Audit Issues – closing down non-compliances
Audit Issue Uploaded
by the auditor
You upload your
corrective action plan
Submit this corrective action plan
to the auditor
Auditor will review the information
‘Verify’ the issue is closed
3rd Party Assessment Activities Flow Chart
Next Steps
1. Review your customer specific requirements
2. Register on Sedex, if it is required by your customer
3. Conduct self-assessment to identify areas for improvement, if it is required by your customer
4. Schedule a 1st party (pre-audit) assessment to identify areas for improvements as you prepare for a full 3rd party assessment
5. Schedule a 3rd party assessment and share results with AIM-PROGRESS companies
6. Focus on continuous improvement by addressing non-compliances in requested timeframes, leveraging results and remediation across business, engaging suppliers with similar work and requirements
Mutual Recognition
Since one of the missions of Sedex is to encourage
audit sharing, the audit body should ask the site if
they already have a previous audit, loaded on Sedex
and, if yes, encourage them to ask their client if they
will accept that audit, or whether a new audit is
required.
Questions?
Labour Contract
LABOUR CONTRACT: Definition:
Labour Contract it is a document showing the legally binding agreement between an employer and an employee. It could also be between two corporate entities for the purpose of hiring workers for a specified range of jobs. The major highlight is that the terms are known, agreed upon and are binding on the contracting parties
● Employment contracts define the relationship between workers and their employer. They should include the terms and conditions of employment, comply with legal requirements and be understandable to workers.
● Employment security is central to workers’ rights, including protection against unjustified termination and subsequent financial hardship
LABOUR CONTRACT:
LABOUR CONTRACT:
Disciplinary measures should be established and made known
to all workers and supervisors, so that workers know what is
expected of them and the consequences for poor performance
or misconduct.
Grievance and dispute resolution procedures are important,
because they enable workers to raise concerns about their
employment and to have them heard, and they help to ensure
that disputes are handled fairly and effectively.
LABOUR CONTRACT:
The Nigeria Labour Law Article 7:1 (a-g) of the Labour Act, 2004, says,
“Not latter than three months after the beginning if a worker’s period
of employment with an employer, the employer shall give to the
worker a written statement specifying :
a) the name of the employer or group of employers and where
appropriate, of the undertaking by which the worker is employed;
b) the name and address of the worker and the place and date of
his engagement;
c) the nature of employment;
d) if the contract is for a fixed term, the date when the contract
expires
The Nigeria Labour Law
Article 7:1 (a-g)of the Labour Act, 2004
(e) the appropriate period of notice to be given by the party wishing to terminate the contract, due regard being heard to section 11 of this Act;
(f) the rates of wages, a method of calculation thereof and the manner and periodicity of payment of wages;
g) any terms and conditions relating to
(i) hours of work, or
(ii) holidays and holiday pay, or
(iii) incapacity for work due to sickness or injury, including any provisions for sick pay; and
(h) any special conditions of the contract”.
Nigeria Labour Law
Article 75:2 of the Labour Act, 2004.
“Without prejudice to the generality of subsection
(1)of this section, every employer shall keep in respect of each of his workers to whom a statement has been given under section 7 of this Act, a record showing
a) The name and address of the worker;
b) His town (or other place) of birth;
c) The date of his birth;
d) The name and address of his engagement;
e) The date and place of his engagement;
f) His National Provident Fund number; and
g) The date of cessation of employment”.
According to ETI Base it states :Regular Employment is
provided
Regular Employment means that all workers are provided with a
legally recognised employment relationship and that every effort is
made to ensure that employment is continuous.
Workers without employment agreements with their employer or who
are provided only with short-term contracts often do not receive the
wages and benefits given to permanent, full time workers.
Workers in temporary/casual working arrangements are vulnerable to
abuse because they may not be legally entitled to the same pay,
benefits and rights as other workers.
LABOUR CONTRACT:
Contracting Procedures
Employers must comply with the legal limits set for workers to be
considered in training working as apprentices, or on probation. There
also may be limitations on the use of fixed-term contracts . Refer to
Article 7.1 of Nigerian Labour Act as cited.
The employer should follow all procedures for recruiting migrant
workers, including for example, work permit and visa requirements, and
provisions governing recruitment fees and the use of recruitment
agents.
LABOUR CONTRACT:
TYPES OF LABOUR CONTRACTS
1.Permanent employment ( Hired for indefinite period of time)
2.Fixed term Contract (Hired for a fixed period of time e.g 1 year,2 year of
5 years)
3.Seasonal Contract (hired only a given season when there is glut
production-Labour demand). Jobs that are Seasonal or cyclical in
nature.
4.Temporary Contract- (Hired for short time basis)
5.Casual Contract employment (Hired and paid on daily basis at end of
work)
6.Homeworking (Hired and given piece of work to do at home)
7. Daily workers/Piece rate contracts (Paid per piece of work done)
TYPES OF LABOUR CONTRACTS
8.Outsource/Subcontract employees (non employees workers found at the
facility not on payroll of the company e.g contracted Security workers,
Catering workers and cleaners)
9.Apprenticeship employees;(Young worker/student on vocational training)
LABOUR CONTRACT:
Advantages of Issuing Proper Contracts:
Respecting your workers’ rights to regular employment will help you
stay within the law, avoid penalties and meet your customers’
requirements.
Formal employment agreements (contracts) that spell out the terms
and conditions of the work help workers to understand their situation.
Business benefits
•Decreased worker turnover
•Improved worker satisfaction, morale and productivity
• Enhanced company reputation
• Decreased costs for recruitment and hiring
LABOUR CONTRACT:
Common Practices by Employers
Lack of clear, understandable written terms and conditions of
employment
Missing or incomplete worker contracts
Lack of employment records kept by management
Workers not provided with a written contract of employment
Vague and ambiguous Contracts that misrepresents employment
relationship and entitlements
No communication to subcontractors of standards on regular
employment
LABOUR CONTRACT:
Common Practices by Employers
Absence of employment agreements.
Copies of terms and conditions not provided to workers. Workers
required to sign blank papers and resignation letters. Probation periods
exceeding sensible legal limits.
Company imposes additional contract terms after contract is signed.
Agency workers do not receive full legal and social security benefits.
Workers fired and rehired to avoid paying permanent worker wages
and benefits.
Workers are consistently employed on temporary contracts.
LABOUR CONTRACT:
Good practices
•The employment agreement or contract is signed by the worker and
the manager responsible for hiring workers.
•The contents of the agreement are clearly explained to the worker
before he/she signs the document.
•The agreement is written in a language that workers understand.
• Workers are provided with their own copy of the agreement
• Employment agreement for a worker hired in probationary status
contains clear description of the duration of probation and the
performance requirements to achieve permanent status.
LABOUR CONTRACT:
Good practices Contd.
•Employment agreements for apprentices clearly state the terms and
conditions of the position, the maximum length of the apprenticeship
and the relationship to the worker’s course of study.
Ensure all workers are provided with an employment agreement at
the time of hiring that contains the following information: i. Nature and type of worker arrangement (such as probationary,
apprentice/trainee, regular/permanent, contract worker)
ii. Terms and duration of the contract under the specified employment
arrangement that meet labour laws in Nigeria.
iii. Specific job functions
iv. Duration of contract
v. Regular and overtime work hours and wages
vi. Benefits
vii. Pay cycle
viii. Resignation and termination conditions
LABOUR CONTRACT:
Thank You
Lunch
Health & Safety
Supplier will comply with all applicable
local and national health and safety
laws.
Baseline Requirement
Code Requirements
1. A safe and hygienic working environment shall
be provided
2. Adequate steps shall be taken to prevent
accidents and injury to health
3. Workers shall receive regular and recorded
Health & Safety training,
4. Access to clean toilet facilities and potable
water
5. Accommodation, where provided, shall be
clean, safe, and meet the basic needs of the
workers.
6. The company shall assign responsibility for
Health & Safety to a senior management rep.
Applicable Health & Safety Legislation
Factories Act 2004
Labour Act 2004
Nigerian Safety & Security of Sources
Regulations 2006 (under the NNRA Act 1995)
Nigerian Road Traffic Regulations 2004
Lagos Sate Anti-Smoking Law 2014
NESREA Noise Standards and Control
Regulation 2009
Health& Safety Permits / Certificates
● Registration of Factories
● Building Licenses or Construction Approval
● Site insurance eg. for worker accident,
● Statutory Inspection Certificates (for Lifting
Machines, Hoists, Chains, etc)
● Boiler Calibration certificates
● Electrical Inspection Certificates
● NNRA License (if you use radioactive sources)
● Fire Certificate
● Material Safety Data Sheet (MSDS)
● Drivers License
Cleanliness
Every factory shall be kept in a clean state
Factories Act Section 7 Law :
Ventilation
Effective and suitable provision shall be
made for securing and maintaining the
circulation of fresh air in each workroom
Factories Act Section 9 Law :
Lighting
Effective provision shall be made for
securing and maintaining sufficient and
suitable lighting,
Factories Act Section 10 Law :
Noise
Maximum permissible noise levels are
specified for various durations of time
NESREA Noise Standards and Control
Regulation 2009 Law :
Maximum Permissible Noise Levels
Law : NESREA Noise Standards and
Control Regulation 2009
Safe Access
A substantial hand-rail shall be
provided for every staircase
Factories Act , 28 (4) Law :
Women
1. No woman shall be employed on night work
(10pm-5am) in a public or private industrial
undertaking (except nurses and women in management
positions)
2. No woman shall be employed on
underground work in any mine.
Labour Act Section 55 Law :
Young Persons
1. No young person under the age of
sixteen years shall be employed :
(a) to work underground
(b) to work on machines
(c) to work on public holidays
(d) to work during the night
.
Labour Act Section 59 & 60 Law :
Drinking Water
An adequate supply of drinking
water shall be provided and
maintained at suitable points
conveniently accessible to all
persons employed.
Factories Act Section 40 Law :
Sanitary Convenience, by gender.
Sufficient and suitable sanitary
conveniences for the persons
employed in the factory shall be
provided, segregated by sex .
.
Factories Act Section 12
NESREA SWC 2009 Art 72 (a) Law :
Training
No person shall be employed at any
machine (including forklifts) . . .
unless he has received sufficient
training to work at the machine.
Factories Act; Section 23 Law :
Machine Guarding
Every dangerous part of any
machinery... shall be securely fenced.
.
Factories Act Section 17 Law :
Equipment Inspection
● Every hoist or lift every six months
● Chains, ropes and lifting tackle six months (section 25, 1d)
● Safe working load shall be plainly marked on every lifting machine
Factories Act Section 17 Law :
Steam Boilers
Every steam boiler and all its fittings
and attachments shall be thoroughly
examined by an authorized boiler
inspector at least once in every
period of fourteen months
Factories Act Section 31 (7) Law :
Electricals
Every electrical equipment or appliance
intended for use in a factory shall be of
such construction as to be safe for use
and shall be maintained at all times in a
safe condition.
Factories Act Section 16 (2) Law :
Fire Detection
In every factory there shall be
correctly installed, in appropriate
places, effective means for
detecting fire, for alerting occupants
Factories Act Section 36 Law :
Emergency Exit
● Every factory shall be provided with adequate means of escape in case of fire (at least 2 exits on each floor)
● All emergency doors, except sliding doors shall open outwards.
● Fire Exit doors must be distinctively and conspicuously marked by a notice printed in red letters
Factories Act Section 36 Law :
PPE
Protective gloves, footwear, goggles and head coverings
protect the persons employed against inhalation of dust or fume or other impurity
.
Factories Act Section 45, 47 & 48 Law :
First Aid
First Aid Boxes shall be provided
and maintained so as to be
readily accessible
.
Factories Act Section 43 Law :
Flammable Chemicals
All stocks of highly inflammable
substances shall be kept either in a
fire-resisting store or in a safe place
outside any building.
.
Factories Act Section 35 Law :
Notification of Accidents
All fatalities or injuries that keep a
staff out of work for 3days must be
reported to the Director of Factories.
.
Factories Act Section 51 Law :
Notification of Industrial Diseases
All disease or illness which, may be
contracted by an employed person
by reason of the nature of his
employment in a factory shall be
reported.
.
Factories Act Section 51 Law :
Prohibition of Deductions
No employer shall, in respect of anything
to be done or provided by him in
pursuance of this Act make any
deduction from the sum contracted to be
paid by him to any person employed
.
Factories Act Section 62 Law :
Smoking
Smoking shall only be in designated
smoking places.
Lagos State Anti-Smoking Law 2014 Law :
Radioactive Sources
Shall only be used by Trained persons.
Personnel Monitoring Records must be
maintained
.
NNRA Safety & Security of Radioactive Sources
Regulation 2006 Law :
CASE STUDY- FIRE SAFETY
Bad Example Good Example
PPE
CASE STUDY- EMERGENCY EXITS
Bad Example Good Example
Bad Example Good Example
CASE STUDY- EMERGENCY EXITS
CASE STUDY- PROTECTIVE DEVICES
Bad Example Good Example
CASE STUDY- ELECTRICAL SAFETY
Bad Example Good Example
BAD EXAMPLES - ELECTRICAL HAZARDS
CASE STUDY
Bad Example Good Example
Thank You
Social Compliance Management
Definition
Management System:
A management system is a set of interrelated or
interacting components that Organisations use
to implement policy and achieve objectives.
- As defined by ISO 9000, 9001, AND 9004 QM Definitions
Influencing Forces
Social Accountability International’s
SA8000 Standard
Developed in 1997
The “9th section” of the SA8000 Standard is a
stringent Management Systems Component
included to support the long-term compliance
of the 8 foundational elements
“The SA8000 management system is designed to protect employees’ basic rights,
to improve working conditions, and to enhance worker-‐manager communication”
Influencing Forces
Other Industry Associations
EICC – Strong Reference
ICTI – Some reference
WRAP – Little to no reference
BSCI – Reference, but no
requirements
Sedex – TBD
Influencing Forces
Leading Brand and Retailer
Programs
Apple
Others TBD
Influencing Forces
Global Social Compliance
Programme (GSCP)
Develops Reference tools and common
interpretation on best existing practice.
One such reference tool is the:
Reference Tool on Social & Labour
Management Systems for Suppliers
Foundation of PDCA
Plan Do
Check Act
Generally speaking,
Management systems
should be built on a
foundation of:
Plan, Do, Check, Act
Foundation of PDCA
Plan
• Define Strategy
• Develop Policy
• Map processes
• Allocate resources &
responsibility
• Set Targets
Plan Do
Check Act
Foundation of PDCA
Do
• Define & Implement
procedures
• Measure and collect
data
Plan Do
Check Act
Foundation of PDCA
Check
• Monitor impact
• Review outcomes
Plan Do
Check Act
Foundation of PDCA
Act
• Amend policy and
processes to
engage in
continuous
improvement
Plan Do
Check Act
Foundation of PDCA
Define Strategy
Does the strategy provide for
compliance with applicable national
laws and international labour
standards? Does the strategy encompass
requirements from
buyers/contractors on social
compliance? Are there clear targets, objectives
and key performance indicators in
terms of social and labor
performance?
Do you understand the key
social and labor risks affecting
your business? (i.e. migrant
labor, student labor etc.)
Have workers, their Trade Unions
and representatives been included in
the development of the strategy?
Does the company have a written social
and labour strategy?
Has the Board or equivalent endorsed the social
and labor strategy?
Have stakeholders, notably
customers, suppliers and
contractors been involved in the
development of the strategy?
Is this commitment widely known within the company?
Develop Policy and Procedures
Do policies & procedures cover all
relevant national, international and
common industry standards and
customers/buyers requirements?
Do all policies exist in written format?
Are all procedures documented?
Is there a process to assess
and understand risks within
operations and supply chain?
Do policies & procedures
cover key social and labor
issues as outlined in the
strategy?
Have policies been developed in
consultation with internal and external
stakeholders?
Have tangible targets and key
performance indicators been established
to measure implementation of policies?
Have sufficient resources been allocated
to ensure implementation?
Communication
Are all managers, supervisors and workers aware of the
factory’s policies and procedures?
Is there a process to
ensure that managers’,
supervisors’ and
workers’
understanding is
regularly reinforced?
Have policies been communicated to
all subcontractors and suppliers?
How does the
facility actually
communicate the
policies and
procedures?
Case Study- Management Systems Plant Name: Mango Foods Ltd-
audit status : The plant has a history of non-compliance and fall back into non-compliance each time a re-audit is done. In the latest round of re-audit, they once again received a Red score with the following findings
( it is seen that several of them are repeat findings): .
*Hypothetical account for training purposes 138
Findings
Expired Business License (Facility’s factory license and Pollution consent expired on 31-Dec-2013. Facility has applied for the same on
dated 25-Feb-2014 & the same were awaited from the Authorities on the audit day)
Insufficient Payroll records due to Facility’s failure to provide In & Out time records of 15 contract workers , Missing time records for 5
permanent workers and time records of 10 workers not matching Production records)
Facility retains original worker documentation (Facility has retained original mark sheets of 5 selected employees )
Factory has a clause in agreement with contractors that no Female workers will be deployed in the facility.
Age proof were not available for 20 contract labor employees and 6 permanent employees
1. What steps will you take to comply with requirements for each of the above
findings?
2. What steps will you take to ensure that these findings do not repeat in the next
round of re-audit (i.e. how will you ensure that there is no fall back into non-
compliance?
You are the HR Manager of the plant. How will you correct the findings in a way that there is
sustained compliance & so that the plant moves into a 3 year re-audit cycle.
Serena works for a company that supplies toys to an AIM
Progress Member. Serena's supervisor asked her to help prepare
for an upcoming audit. While gathering documents for the audit,
she notices that some documentation is missing. Serena's
coworker tells her that she should create some records and
backdate others to have better files for the audit. What should
Serena do?
1. Do what the coworker suggests
2. Tell the coworker that this is a violation of the Code and talk to her
supervisor
3. Ask the coworker to help her create and backdate the documents
4. Investigate why the documentation is missing and find out who is at
fault
CASE STUDY
Sedex Introduction
SEDEX (Supplier Ethical Data Exchange)
What is Sedex?
Sedex- Global Membership
Data taken from Sedex Annual Review 2012-2013
Sedex / AIM-PROGRESS Members
Why Sedex?
1. Reduce Duplication and audit fatigue
2. Reduce duplicative costs
3. Align standards and share best practices
Why Sedex?
2. Collaboration
Why Sedex?
3. Supplier-led
Why Sedex?
4. Secure database
Overview of Sedex
Sedex does not
X
Pass Fail Certify
What do you need to do?
Getting Started
Getting Started with Sedex
SAQ AB
B
Grants
Access to
Site Data
Register
On Sedex Completes
your SAQ Add your
customers
Create your
site of
employment
Member
Sedex Membership types
B
A Functionality: Views others’ data
Functionality: Uploads own data
Functionality:
Uploads own data
AND views others’ data
Member
Member
Site of employments
What is a ‘Site of employment’?
• Office / warehouse / factory owned by your
company
Your ‘Site of Employment will determine your ‘Sector Profile:
Sedex Sector Profiles
Manufacturing
Agriculture (Big)
Service Providers
Intermediaries
Agriculture (Small)
The SEDEX Self-Assessment Questionnaire
Labour
Standards
Health
& Safety
Environment Business Ethics
Self Assessment
Questionnaire
Completing the Questionnaire - Supplier Workbook
Check Sedex Supplier Workbook for more guidance
What do you need to do?
Ethical Audits
Next Steps: Ethical Audits on Sedex
Audit
Audit is
scheduled &
completed offline
Submit your
corrective actions to
the auditor to verify
Your customer
will confirm an
audit is required
Your auditor will
confirm if the issue
has resolved
Audit report is
uploaded to
Sedex by your
auditor
Next Steps: Ethical Audits on Sedex
● Sedex is a tool for storing and analysing data
● Any auditor can upload audits onto Sedex
● Any audit can be uploaded onto the Sedex system
● Requirements and frequencies will be determined by the
customer
SMETA- SEDEX Members Ethical Trade Audit
Audit Issues
Audit issues can be both positive and
negative
Audit issues will be categorised as:
Good Example (GE)
Observation (Obs)
Non-Compliance (NC)
Non-compliances: you will need to
add a corrective action for the auditor
to verify
Audit Issues – closing down non-compliances
Audit Issue Uploaded
by the auditor
You upload your
corrective action plan
Submit this corrective action plan
to the auditor
Auditor will review the information
‘Verify’ the issue is closed
Summary of Issue Status
Site Review: Issue has not yet been submitted to auditor for review or
needs to be re-submitted.
Auditor Review: The site is waiting for the auditor to review the evidence
and verify the corrective action.
Progress Made: The auditor acknowledges the site is working towards
resolution but requires further Corrective Actions.
Actions Rejected:The Corrective Actions are not satisfactory.
Verified: The auditor is satisfied with the Corrective Actions. This
Completes and closes the issue.
Guidance and Support Sedex Guidance Packs
Registration Guidance: http://info.sedexglobal.com/docs/en/stage1.pdf
Account Set Up: http://info.sedexglobal.com/docs/en/stage2.pdf
Audit upload: http://info.sedexglobal.com/docs/en/stage3.pdf
Telephone and email support:
UK Helpdesk
► tel. +44 (0)20 7902 2320
► email: [email protected]
www.sedexglobal.com
Break
Questions & Discussions
Wrap Up
