Consumer Compact June 2005Electricity Consumption in China Page
4
Happier Workers Pages 5&6
Carrefour Case Study on Food Hygiene Page 8 Auditing Woolworths
Australia Page 11
Industry News 3 SGS in the News 10
Standards & Regulations 14
Sign Off 16
International Trade
Quotas stitch up autumn’s fashion An update on recent developments
in the global trade in textiles & garments It has not been a
smooth ride for the Chinese textile & garment export industry
since the removal of the Multi Fibre Agreement (MFA) back in
January of this year. Geared up and ready to supply the world,
Chinese factories have been hampered in achieving their goal of
world dominance by political and economic forces working to protect
the older clothing industries of the West. As a result of embargoes
to the EU and on-going safeguard restrictions to the US, other
devel- oping countries have seen their own clothing industries
increase their share slightly from China. Both the US and EU
reacted to the dramatic increase in clothing imports from China
with WTO-sanctioned safeguards and quotas earlier this year. After
a drawn out negotiation, Peter Mandelson, the EU Trade Commissioner
achieved agreement between the EU the Chinese Ministry of Commerce.
Taking effect on July 12th, it stipulated growth limits in exports
of 10 categories of Chinese textiles to a maximum of 12.5% a year
until the end of 2008. The textile industries of Europe, their
workers and the governments of Italy, Spain, France, Greece and
Portugal, though pacified, did not feel the agreement went far
enough. Storm in a D-Cup Then in August it was obvious that these
growth limits were irrelevant. The sight of 80 million pieces of
Chinese garments sitting in ports and ships off the coast of Europe
meant that the quotas for the year had already been reached, less
than a month after accord. With the trade dispute in the public eye
and back on the agenda, the impounded fash- ion lines for this
autumn were referred to as the 'bra wars' in the news reports as
retailers predicted an impending shortage of bras. Retailers
complained loudly, maintaining that many of the garments were
ordered before the agreement’s conclusion, had already been paid
for and needed to get on shelves while they were still fashionable.
They also argued that to block Chinese clothing imports would do
little to prop up Europe’s struggling textiles industry. Most
importantly the embargo was creating "huge uncertainty" among
retailers, who did not know where to place orders for next year's
merchandise. In America, where quotas are imposed on Chinese
imports to protect textile jobs, retailers there also warned that
protectionist measures will not save jobs, and instead mean that
consumers will face higher prices this autumn and next year. During
the blockade, Mr. Mandelson rushed back to Beijing and
re-negotiated to appease the retailers and their shoppers. The
essence of the new trade off is that China would count around 50%
of the blocked merchandise as part of its 2006 EU export quota. For
their part, EU countries would then allow the other 50% onto EU
territory. Under the deal, all items blocked in warehouses were
released. There are many who disagree with this solution and that
by borrowing from next year’s quota will only be delaying the
problem and the need for Europe’s clothing producers to cope with
inevitable restructuring and job losses. Whatever the position
taken, it is evident that retail buyers need to find ways to avoid
becoming too reliant on Chinese garment suppliers.
STOP PRESS - Testing & Labelling for Allergens Page 9
Other countries benefit Textile & garment safe- guards against
China raised the hopes of increased textile exports from other
countries that face less competition, at least while the quotas
were in place. In re- sponse, some countries are pursuing a variety
of strategies to save their clothing industries from oblivion in a
quota-fee world. So far there have been mixed results - yet those
with better organ- ised apparel industries already started to re-
ceive higher orders for certain products after the quotas were f i
rst imposed in March/April.
When the MFA came to an end at the beginning of 2005 it was thought
that low-cost Chinese competition would destroy the cloth- ing
industry in pricier places such as Thailand and Indonesia, and kill
it off altogether in countries like Cambodia, where it had sprung
up solely to take advantage of the quota system (and makes up
almost 80% of all exports). This has not yet happened. Thailand,
for instance, tries not to compete with China on cost, focusing on
quality to raise the value of its exports. The govern- ment there
wants to turn the country into a hub, where local companies do not
just make clothes under contract for foreign retailers, but also
design and market products of their own. Indonesia is in the midst
of a broad campaign to improve the local investment climate and
hopefully reduce the flight of manufactur- ers to more
accommodating business climates. Even before the quota imposition
on China, both Thailand and Indonesia showed that they are able to
hold their own in the face of Chinese competi- tion, respectively
reporting a 5% and 15% increase in textile exports in Jan-May 2005
compared a year earlier. India has so far not seen the benefits of
less competition from China. Poor infrastructure is a major
impediment to industry growth. The Indian government has
historically discriminated against integrated textile mills in
order to help cottage handlooms - as a result, production in the
textile industry is based on a decen- tralised system with small
scale operations. Manufacturing capac- ity is not large or flexible
enough to meet large orders. But the Indian textile industry has a
natural competitive advantage in terms of a strong and large
multi-fibre base, abundant cheap skilled labour and operations
across the entire value chain ranging from spinning and weaving to
the final manufacture of garments. To kick start modernisation the
government recently approved the setting up of 25 textile parks to
centralise operations and know how. For sure, India has huge
potential. When the EU’s borders closed to Chinese-made apparel, it
made sense that panicky buyers from European retailers would make
urgent phone calls to neighbouring garment-making countries such as
Turkey. Turkey's Textile and Apparel Exporters' Associa- tion says
sweater orders, for instance, rose dramatically during the
blockade. They could rise even further as the import quota for
Chinese-made sweaters is full for the rest of this year, and EU
importers fear another shortage next year with the quotas still in
effect. Accounting for a third of total export earnings, the
Turkish textile and apparel industry is sufficiently developed to
cope with such short term surges in orders. A Continental Factory
Floor The EU’s messy standoff this summer with China over its
textile exports has given a boost to Europe's longer-term strategy
to defend its own textile industry against surging Asian
competition.
Pa ge
2
It wants to create network of favoured low-cost factories in
countries to the south and east, to be bound to Europe by a
41-country duty-free agree- ment. With Turkey, Morocco, Tunisia and
others from Iceland to Lebanon, the E.U. is forming a
textile-making cluster, free of tariffs. It aims to create a single
factory floor for tariff purposes, for complex products. Fabrics
made in the E.U. would be made into clothes on the other side of
the Mediterranean and then sold back to the E.U. duty-free,
securing jobs on both sides of the Mediterra- nean. The same would
apply to shoes, appliances and leather goods. This "Pan Euro-Med"
partner- ship was planned in 2003 by trade ministers. Turkish knit-
ters, for instance, already import much of their yarn from Italy.
Cotton-blend weavers in Portugal, Italy and Spain are expecting
orders to rise as contracts for dresses and trou- sers rise in
Morocco and Tuni- sia in the wake of the re-imposed Chinese quotas.
Low-wage workers there and in Turkey, Bulgaria, Romania and Tunisia
transform the material into clothes, sew on buttons and package the
goods, before selling most of them back to the E.U.
Europe's restrictions on Chi- nese imports are scheduled to last
only until 2008. European policymakers are hoping this will be
enough time to allow their concept of a Mediterra- nean clothes
cluster to grow and persist as a competitor. If it does not, then
China will resume its dominance of the textile & garment trade,
free of restricted trade practices.
The EU textile and clothing industry has an
annual turnover of US$250 billion and
exports goods worth $45 billion a year.
Imports of textiles and clothing accounted for $85 billion in
2004,
most of it from China.
Main Feature
Battery Technology
Building a Better Battery From The Economist print edition Energy:
As portable devices become ever more elaborate and demand ever more
power, will battery technology be able to keep up? Just as you can
never be too rich or too thin, you can never have a battery that
lasts too long. But as mobile devices accumulate new power-sapping
features, battery technology has been strug- gling to keep up. This
led Yrjö Neuvo, the chief technologist at Nokia, the world's
largest handset-maker, to warn of an impending mobile-energy crisis
last year. But now several new developments
could be about to come to the rescue. In February, Altair Nanotech-
nologies, a small firm based in Reno, Nevada, announced a new kind
of lithium-ion battery, the technology that powers many portable
devices. Its prototype has three times the capacity of existing
batteries and can be fully charged in six minutes. Lithium-ion
batteries are so named because during charging and discharging,
lithium ions migrate between the battery's positive electrode
(anode) and negative electrode (cathode). Altair's trick was to
coat the an- ode with lithium-titanate nanocrystals, says Roy
Graham, the company's devel- opment director. This enlarges the
surface area of the anode from around three square
metres per gram to 100 square metres, increasing the capacity of
the battery and boosting the rate at which ions are able to move to
and from the anode, which is what determines how long it takes to
charge. In June, Altair secured a US$477,000 grant from Amer- ica's
National Science Foundation to further its design by using
nanoparticles on both electrodes. This could further increase power
density and reduce charging time, says Mr. Graham. Hard on the
heels of Altair's announcement, Toshiba revealed that it too has
developed a battery using nanotechnology that is capa- ble of
charging to 80% of full capacity in one minute. The com- pany is
still working on improving the stability and reliability of the
design, but plans to start selling the new batteries next year.
Hiroko Mochida of Toshiba says the initial uses will be in electric
cars and power tools, where high capacity and rapid charging are
particularly necessary. Toshiba will not go into detail about its
new design, but, like Altair's, it seems to use nanoparticles to
increase the surface area of the electrodes. There have also been
recent improvements to a completely differ- ent kind of battery
design, known as “beta voltaic” technology. Such batteries use beta
particles from a radioactive source to generate a current in
semiconductor material, in much the same way that photons liberate
electrons to generate a current in photo- voltaic solar cells.
Batteries of this type can run for years, and are used in devices
such as space probes and pacemakers, where changing the battery is
impractical. Beta voltaics are safe and reliable but are limited by
very low energy yields, says Philippe Fauchet of the University of
Rochester in New York.
Page 3
Now his team has developed a way to increase the power out- put
tenfold, by increasing the surface area of the exposed
semiconductor. Instead of a flat surface, his design uses a type of
porous silicon, the surface of which is riddled with tiny pits. The
radioactive gas within the pits is then almost entirely surrounded
by the semicon- ductor, increasing the chances of catching the beta
particles. The technology is now being developed by BetaBatt of
Houston, Texas, which co- developed the new design. There is a
growing demand for long-life batteries in medical applications, he
says. It all sounds promising. But no matter how hard researchers
work to cram more energy into batteries, they are vastly
outnumbered by other researchers dreaming up new ways to consume
it. © The Economist Newspaper Limited, London (September 17th,
2005)
Batteries of the beta voltaic type can run for years, and are used
in
devices such as space probes and pacemakers,
where changing the
battery is impractical. Beta voltaics are safe and reliable but
are
limited by very low energy yields.
Industry News
Electricity Consumption in China
A Call to Save Energy A Revolution in Household Appliances: Energy
Efficiency Labelling The deteriorating environment is forcing
China’s house- hold appliances manufacturers to adopt a
revolutionary change in energy-saving technologies. Unscrupulous
consumption of energy has increased air pollution and precipitated
the rate of ecological destruction leading to soil erosion and
desertification. A far greater problem is the lack of energy.
China’s demand for electricity is increasing rapidly and at peak
periods shortages in the power supply can reach up to 20-30 million
kilowatts. Conserving the environment and saving energy is already
a hot topic of the global community. Why not in China?
Energy-saving labels on electrical and electronic prod- ucts have
proved effective in reducing energy consump- tion as well as for
quality control – as such they are widely used and accepted by many
countries. Consumers consider energy savings as the first priority
when choosing electrical appliances. For this reason household
appliances must be improved in terms of energy saving - for the
sake of the environment, health and market demands. Pioneers in
Energy Saving - Energy Efficiency Labelling According to the
International Energy Agency (IEA), 37 countries and territories
have set up energy efficiency labelling systems, including the EU,
USA, Canada, Australia, Brazil, Japan, Korea, the Philippines,
Thailand and Hong Kong. The EU Council announced a framework
directive on mandatory energy efficiency labeling system in Sept
1992. In 1978, the US Department of Energy set a series of
mandatory energy efficiency standards through legislation and a
label programme named “Energy Star” was introduced. In 1986, energy
efficiency labeling for refrigerators and freezers became mandatory
in Australia. As early as the mid 1970s, Korea began a campaign
covering over 100 energy-saving activities for end users, with the
effort focused on mandatory energy efficiency standards and
labeling systems. Asian countries such as the Philippines, Thailand
and China are paying more attention to the demands of reducing the
energy consumption of electrical appliances. It is expected that
the annual
savings from these schemes will reach RMB 800 million
(US$99million). With developed countries taking the lead, the world
is entering a new revolu- tion of energy efficiency and labeling.
What can China do? China consumes the greatest number of household
appli- ances in the world. It is esti- mated that there are over
900 million units of major household appliances in China and this
will increase at a rate of 10% - 46% each year. However the
manufacturers have shrugged off this seemingly big business
opportunity, as China’s energy efficiency labeling system for
household refrigerators and air conditioners only came into effect
on March 1st 2005. All refrigerators and air
Industry News
conditioners that are produced, sold or imported into China must
have a so-called ‘green card’, in demonstrating their energy
efficiency performance. Taking the initiative, large retailers such
as Suning have announced that all air condi- tioners sold in their
stores must have energy efficiency labels. Manufacturers are now
scram- bling to partner with third part testing and certification
companies in a bid to maintain the competitiveness and compliance
of their products. SGS provides test certificates which are
applicable in key markets around the world.
The implementation of energy-saving schemes will undoubtedly
accelerate the progression from traditional
manufacturing model and adoption of green design and production.
This will further bolster China’s forefront position in the
global electrical industry
Industry News
Chinese Factories
Happier Workers Corporations should pick up the bill for social
accountability
With the continued march of globalisation and increasing strong
commercial competition, it is commonplace to closely follow
economic issues such as a company’s ability to innovate, product
quality, resource efficiency and speed and model of economic
development. The issue of corporate social accountability, by
contrast, have been largely ignored, giving rise to a whole series
of social problems and creating a certain amount of negative impact
on both the industrial world and society. Practices such as falling
behind in worker payments, embezzle- ment of employee salaries,
overworking employ- ees, unsanitary and inferior working
conditions, fires in the workplace, workplace injuries, strikes and
the use of child labour, etc. are being too often reported in the
media. Only continuous exposure by non-governmental bodies,
consumer associations and other organi- sations related to people’s
rights will eventually create a trading environment in which
interna- tional buyers are unable to avoid issues of corpo- rate
social responsibilities in developing nations any longer. In this
larger arena, some multinational companies have established their
own policies for social accountability and have initiated approval
and check systems for social accountability in their supply chains.
As a main global manufacturing base since the mid-1990’s, Chinese
companies have also become gradually subjected to the supply chain
assessment procedures of multinational corpo- rations. This has
pushed them to place greater importance on existing social
accountability issues and into taking appropriate measures of
improvement. Chinese companies must become aware of the nature of
social accountability, and must not take the mistaken view that
social accountability requirements from international buyers are an
excuse to create complications. Instead, they should take a
positive attitude by analysing their weaknesses during the develop-
ment stage and implementing international standards. This is will
help to strengthen their position to engage in reputable and
ethical business practices.
The basic nature of social accountability In today’s global
society, the existence and development of enterprises based on
continu- ous business growth and profit not only requires high
product quality and service levels, but it also necessitates
increased social accountabil- ity on the part of the enterprise.
Internally within a company, this means protecting employees’
rights and benefits; externally, it means playing a positive role
in the enterprise’s social accountability towards the environment.
Only in these ways is an enterprise able to attract recognition and
trust from the general public and its consumers. It may also help
improve a company’s competitiveness and brand percep- tion in the
marketplace. In an attempt to better respond to pressures from both
sides, other international organisa- tions and leading industries
have also set related policies for social accountability or have
gone even further to create certified standards. Of these, most
notable have been the Interna- tional Council of Toy Industries
(ICTI) Seal of Compliance within the toy industry, the World- wide
Responsible Apparel Production (WRAP) Certification within the
textile industry, the Busi- ness Social Compliance Initiative
(BSCI) Standard for European Union retailers and the Ethical
Trading Initiative (ETI) Regulations in the UK. In addition, most
multinational corpora- tions have also set their own internal
policies for social accountability. These policies lay out detailed
regulations pertaining to issues such as child labour, forced
labour, health and safety, freedom of group organisation and
collective negotiation, discrimination, discipli- nary action,
working hours, salary and benefits, etc., requiring enterprises to
adhere to local legal regulations and the requirements of related
international conventions. China is an enormous manufacturer of
consumer goods. Most of China’s textile, shoe, toy, furniture,
exercise equipment and other daily use metal and plastic products
are exported to the USA and European countries. The producers of
these products, to varying extents, are all conforming to the
social accountability requirements of their respective customers or
international organizations. For Chinese exporters who utilise
intensive labour production, these required social accountability
practices are a bittersweet medicine. Exporting enterprises must
practise social accountability Mr William Lin, Senior Manager of
Code of Conduct Assessment of China and Hong Kong, says: “As one of
the world’s largest manufactur- ing bases, China’s enterprises have
enjoyed the opportunities and profits brought by global trade.
However, at the same time, Chinese enterprises also have to face up
to the demands of global customers and consumers for them to
practise social accountability. In reality, Chinese workers,
consumers and society also hope to see this from their local
enterprises.”
Page 5
According to companies that verify social account- ability of
Chinese exporting enterprises, the main problems that exist within
these enterprises are as follows: 1. Illegal employment of children
under 16 and il-
legal use of young workers (age 16 to below 18); 2. Collection of
guarantee payments from employ-
ees, withholding of employee identification cards;
3. Exceeding regular shift and work hours, no rest day over a 7 day
working week;
4. Labour salaries below local minimum wage standard;
5. Overtime payments do not meet legal requirements, not providing
legally required benefits;
6. Inadequate or blocked emergency access or exits, insufficient
fire safety equipment and training;
7. Unsuitable use and management of chemicals, insufficient worker
protection for employees;
8. Effective channel of communication has not been established
between workers and management levels.
Given the above, many international buyers are increasingly putting
emphasis on the results of the verification process, and making
numerous re- quests of their suppliers to issue improvement
measures within a limited timeframe, otherwise they may not place
purchase orders, may refuse to take delivery of goods or even
implement fines.
Independent verification of social accountability As a worldwide
reputed standard and technical service company, SGS provides
high-standard and expert second party and third party verifica-
tion services to a wide range of customers from the top 500
enterprises to individual factories. SGS is also recognised as an
independent ex- amination organisation for certification from in-
ternational institutions such as the Fair Labour Association (FLA),
WRAP, ICTI and BSCI. SGS joins Sedex SGS is pleased to announce
that it has joined Sedex as a Founding Associate Auditor. Sedex is
a secure, web-based system for com- panies to maintain data on
labour practices at production sites and make it available to their
customers, in order to drive and demonstrate improvements. Current
retail/brand users of Sedex include Tesco, Marks & Spencer,
Sains- bury and John Lewis Partnership among others and as at the
end of June there were over 2500 factory and supplier members from
55 coun- tries. Sedex registration is fast becoming a key re-
quirement for UK retailers in an effort to share information about
suppliers’ labour practices so as reduce the need for multiple
audits. More in- formation on Sedex can be found at
www.sedex.org.uk. As one of the Founding Associate Auditors, SGS
will work with Sedex to start to drive con- vergence in audit
methodologies and report formats and work on improvements to the
audit upload process. For more information contact
[email protected]
Pa ge
Comparison common issues - Asia Pacific
Child labour Forced labour Health and safety Freedom of assoc.
Discrimination Discipline Hours Wages & Benefits China 5 17 60
100 100
Phillipines 9 100 9 9 0 27 9 Indonesia 91 16 16 75 83 Thailand 4 8
88 32 24 0 64 24
Comparison common issues - Indian Sub continent
Child labour Forced labour Health and safety Freedom of assoc.
Discrimination Discipline Hours Wages & Benefits Bangladesh 3
15 12 4 20 45
India 5 2 85 22 18 10 95 70 Pakistan 2 2 55 5 75 45 Sri Lanka 55 5
71 50
Comparison common issues - Europe and North Africa
Child labour Forced labour Health and safety Freedom of assoc.
Discrimination Discipline Hours Wages & Benefits Morocco 3 22
14 20 23 33 Romania 0 0 68 5 0 0 1 5 Turkey 8 10 72 5 0 2 70
60
Comparison common issues - Mexico
Child labour Forced labour Health and safety Freedom of assoc.
Discrimination Discipline Hours Wages & Benefits Mexico 3 3 100
3 3 0 15 15
Based on how many audit reports had non-compliances against
different parts of the codes. Based on 100 audit reports
Compliance to Audit Codes - Comparison by Region
Industry News
Not to be Toyed With
SGS Partners with Lung Cheong in Quality Assurance for the European
Union
After years of development, China has become the biggest toy manu-
facturer in the world. “Made in China” toys have walked into nearly
70% of the world’s households, an incredible and proud achievement.
Yet quite a few toy Chinese manu- facturers only focus on lowering
their prices, whilst ignoring the quality of their products. The EU
is China’s second largest toy market and is the pie for which every
toy manufacturer vies for a piece. In February 2003, the EU
launched the WEEE & RoHS regu- lations, causing ripples in
China’s industries, including electronics, electrical appliances
and toys and it become a minefield for product compliance. Toys
bring us laughter and fun. This is why the toy industry is often
referred to as “the happy industry”. But now, with storm clouds
gathering, how can China’s toy industry survive? How can it find
its way through the upcoming challenges? A Way through the Storm
Within the Chinese toy industry competition is fierce, but outside
the country global requirements have been raised making it even
harder to get a foothold. Yet Lung Cheong, China’s leader in toy
manufacturing, has blazed a path through all these challenges. With
quality as its first priority, it successfully found its way
through all of the EU’s trade compliance hurdles. Senior QA Manager
of Lung Cheong, Chen Yuchuan said that the company started off in
the 60’s as a small workshop. By the 70’s, it produced remote
controlled toy cars. In 2000, it worked with China’s top
universities to
develop intelligent electronic products such as remote control
devices. Business grew as it focused on advanced, high-end,
top-of-the-line quality products. “Winning through high quality,
and innovating constantly” is Lung Cheong’s key to success. As EU’s
regulations and requirements grew stricter and stricter, the
company initiated a series of reforms. It fully automated its
production processes, cut costs and actively established business
relationships with large suppliers to increase productivity. Most
importantly, it requested suppliers to submit valid product testing
reports by the end of June this year - ahead of the EU requirement
deadline. Armed with materials that have been fully audited, the
company is now able to produce its goods in accordance with EU
standards. Chen added that working closely with SGS has also helped
them increase their product quality and overcome EU and US trade
barriers. With more than 100 years of experience in product
testing, inspection and certification, SGS was well positioned to
help Lung Cheong’s products in complying with relevant EU and US
regulations. Additionally, SGS has also organised a series of
seminars and training workshops for the company to keep pace with
the latest market trends and regulatory re- quirements.
Industry News Page 7
A Case Study in Food Safety for Chinese Consumers
Healthy & Hygienic Food for Carrefour Food Safety and Hygiene:
The Heart and Soul of Retail Giants. Nadege Claudel, Hygiene
Manager, China Products Depar tment , Carrefour explains. In 2000,
when China an- nounced that it was preparing to enter the WTO,
international retail giants made every effort to move into the
China market and quickly expand their mainland networks of stores.
So far, foreign retailers in China number some 300 odd outlets with
a retail value of less than 5% of China’s total. Foreign retail
multinationals have also revived China’s stag- nant retail market,
pushing the mainland’s retail industry up to new service levels,
and in- troducing the concept that “the consumer is always right”.
Most importantly, the subject of food hygiene and safety has been
made a key managerial focus in China, setting new standards for the
entire indus- try. Shop Hygiene Inspection and Testing - The
“Housekeeper” of Hygiene As multi-chain retailers take a greater
share of food sales, food safety and hygiene issues are on the rise
and this, in turn, is drawing more public atten- tion.
Some retailers even suggest that food safety in supermar- kets has
become a core com- petitive strength. For supermarkets, the key
factor in food safety manage- ment is spot management. But as
supermarkets expand, they open more shops, making spot control and
management more difficult. When the retail giants first entered
China, the coun- try’s immature retail market posed many
challenges. Where food safety and hygiene control is concerned,
interna- tional retailers such as Carrefour, Metro and Auchan, as
well as food chains like Kentucky Fried Chicken and Starbucks
Coffee have long been subcontracting manage- ment and control of
food safety and hygiene to independent third parties. This has not
only made their quality manage- ment systems more complete,
professional, efficient and impartial, but it has also short- ened
the system building cycle, creating a better organisational
structure while reducing man- agement and operation costs. The
second largest retailer in the world is French giant Carrefour
which ranks first in terms of its global footprint. Its sales value
tops the list of China’s foreign retailers. Since Carrefour opened
its first superstore in China in 1995, it has increased its outlets
to 61. To ensure that all food lines – which number in the tens of
thousands – remain fresh, hygienic and safe for consump- tion,
cleanliness inspections of the shops have become a Herculean task.
This includes shop hygiene condition in- spections and
improvements, food sampling and testing, staff hygiene and
operation skills training as well as other aspects.
Such challenges did not prompt Carrefour to lower
its standards, just because it was China.
Instead it adhered to its
global operational vision and implementation
strategy by contracting
its hygiene inspection out to a third party; to act as its
‘superstore hygiene house- keeper’. Carrefour’s China Hygiene
Manager Nadege Claudel says, “In Europe, Carrefour has been working
with SGS for some time now. When we came to China, we were also
very pleased to let SGS assist in our superstore hygiene
inspections and sample testing; at the same time the auditors did
their best to know the idiographic standards and requirements, so
that our hygiene manage- ment systems are more effec- tive for
China.” Supplier Inspection: the Guardian of Retailers’ “Lifelines”
A safe and efficient supply chain is, without doubt, a retailer’s
“lifeline”. With typically thousands of companies supplying a
retailer, evaluating and inspecting them requires an enormous and
complex system. Food needs to be fresher and has to comply with an
ever- increasing number or hygiene and safety standards. Some
retailers may even go as far as to check on a supplier’s social
responsibility. In Carrefour’s China stores, 90% of all food
products are sourced from Chinese produc- ers. To manage its
numerous suppliers, Carrefour has ap- pointed SGS to carry out sup-
plier inspection. Nadege Claudel says, “Supplier inspec- tion is an
important aspect of our working relationship with SGS. As a third
party, SGS provides professional and effective services, which have
helped Carrefour set up a first line of defence in food safety and
hygiene right at the source. SGS also helps improve the structure
of suppliers. They conduct comprehensive, impartial and stringent
inspections on the supplier’s food safety and quality systems
according to international standards such as HACCP, GMP and BRC, in
addition to their broad experi- ence in food safety and hygiene.
SGS’s services have also helped us reduce and avoid risks.”
New EU regulations come into effect before the end of 2005
improving consumer awareness of allergenic substances through
stricter product labelling. Your eyes itch, your nose is running,
you're sneezing, and you're skin has erupted in a rash or worse,
blisters. The enemy known as allergies has struck again - and all
you want to do is curl up into a ball of pain. Allergies are
abnormal immune system reactions to things that are typically
harmless to most people. When you're allergic to some- thing, your
immune system mistakenly believes that this substance is harmful to
your body. Allergic reactions can be mild, like a runny nose, or
they can be severe, like having difficulty in breathing. An asthma
attack, for example, is often an allergic reaction to something
that is breathed into the lungs of a person who is susceptible.
That some detergents and certain food products have the potential
to create allergenic reactions in some people is not news. What has
always been needed is proper labelling of potential allergens to
improve consumer understanding and , it is hoped, reduce the
incidence of unbearable allergy moments. In Europe, the incidence
of an allergic reaction exists amongst one child (under the age of
ten) in four. From research it is estimated that 2% of Europeans
are allergic to perfumes and perfumed products with a higher
susceptibility amongst the old and the young. Such disturbing
allergenic prevalence is on the increase. The response from
legislators, manufacturers and distributors is a common goal: To
achieve greater transparency, traceability, security and protection
for consumers through better risk manage- ment for both health and
the environment. The immediate, most practical solution is stricter
product labelling and legislation to ensure its implementation.
Affected Products Sweet smelling molecules such as terpenes,
aldehydes and certain alcohols commonly used in cosmetics and
detergents are frequently responsible for causing allergies, either
through inhaling or through contact with the skin.
Food allergies are also critical for some people. In this case.
proteins (gluten, soya, etc) are often the cause of pain and occa-
sional lead to respiratory prob- lems. For those susceptible to
such negative reactions, the only solution is to avoid eating food
products contain- ing certain ingre- dients. Having an understand-
able label detail- ing potential allergens is thus essential
reading.
In the wash From November 8th of 2005, detergents will be under the
scrutiny of regulators, enforcing labelling requirements accord-
ing to directive 648/2004/CE. The need to define and label for
risks of allergenic side effects is stipulated, yet the regulation
goes further, insisting on proper analysis to measure the
environmental effects, especially biodegrad- ability. Not just
peanuts Peanuts are known to cause nasty allergenic reactions in
some people. The 2000/13/CE directive which comes into effect on
November 25th 2005 covers more than just peanuts. The quantity and
type of ingre- dients added to food during processing, preparation
or during distribution needs to be stipulated on the label, regard-
less of the quantity remaining in the end product. There are a
total of 12 allergenic ingredi- ents defined in the annexe of this
directive, helping to provide traceability to avoid contamination
and achieve label conformity. Food products which do not meet these
criteria are not allowed to be put on sale after this date.
Cosmetics add to the list Cosmetics, as they are regularly applied
to the skin have long been covered by regulations for proper
labelling. 26 allergenic substances were identified in the 7th
amendment to the 2003 EU directive on cosmetics. Four additional
substances have recently been added to this list, the presence of
which above a certain concentration requires that they be mentioned
on the label. Whether testing for either food allergens or other,
the tech- niques used vary greatly, necessitating different
chemical testing methods depending on the type of molecule under
scrutiny. Our laboratories in France, accredited to Cofrac, are
capable of running all allergenic tests on cosmetics, food products
or detergents. Our recently published techni- cal bulletin on this
latest directive is available on our SafeGuards website. Click
here.
Industry News Page 9
0
A new global competency centre will provide a coordinated pool of
technical tools and expertise Quality expectations and the range of
safety requirements customers must satisfy become more complex
every day. To keep up with the volume and density of regulations,
testing methodologies and technology advances has necessitated a
better optimisation of resources to define the right solution. The
aim of the Global Competences Support Centre is to optimise
existing and new technical support resources for the benefit of
both SGS clients and personnel. It will continue and further
improve the very high standards of technical and customer support
that have come to be expected from SGS. The structure of the Global
Competences Support Centre (GCSC) consists of a core team of 20
technical specialists drawn from the numerous product sectors that
Consumer Testing Services (CTS) serves around the world. Additional
expertise is drawn from the many CTS laboratories within the SGS
global network. Carrefour has already experienced the benefits of
this compe- tences centre. Carrefour’s head office is at the heart
of a complex network of both out-sourced manufacturing and retail
operations. It is here that the process of sourcing uniform non
food products for multiple, but distinct markets is harmonised.
Probably the most global of retailers, Carrefour operates as a
local retailer, marketing products which meet local legislation and
standards so that they are safe and meet quality requirements.
Specifically Carrefour needed to collect the individual product
requirements for eleven different countries. The specialists of the
GCSC were able to provide them with technical datasheets per
product and by country listing applicable national legislation and
explaining requirements according to legal requirements for safety
and quality compliance. This case study is an example of the GCSC’s
ability to pull on the right skill to provide assistance to
technical performance challenges, regardless of geographical
location. The GCSC frequently updates test protocols throughout the
SGS network, ensuring a consistent and characterised approach to
all variety of product testing. This massive task is achieved
through working technical committees, focused on product categories
– Toys, Candles, Textiles, Food and the General Product Safety
Technical Committee. These commit- tees and their peripheral
participants offer a huge amount of technical knowledge that is
used for research and development in these fields as well as
providing SGS laboratories, sales personnel and customer service
expert technical aid for their customers. The Global Competences
Support Centre functions as a coop- erative structure of
specialists spread all over the world. By coordinating technical
support and knowledge amongst our network of nearly 100 CTS
laboratories and 5,600 CTS employees, we are able to deliver the
right solution to your technical issue. Email the Global
Competences Support Centre at
[email protected]
Wireless Technology
Ring of Compliance SGS Japan unveils first accredited testing lab
for GSM phones & equipment Japan’s mobile phone net- work works
on the less com- mon CDMA standard as used in N. America. This has
not prevented Japanese handset & equipment designers to
continue to innovate and develop for the more popular GSM protocol
used by 70% of the world’s mobile phone networks. In the past such
development was hampered by the need to send prototype models and
engineers to Europe for con- formance-testing and pre- testing, a
time consuming ef- fort which lengthened the product development
period and time to market. Investing in the expensive equipment to
conduct such tests in SGS Japan was not enough to meet client and
local regulatory need; it was also necessary to achieve various
certifications including ISO17025, GCF, PVG, and PTCRB to be a
qualified test house for this business. The realisation of such ac-
creditation has taken over a year of conformity & process
planning. It has put SGS Ja- pan in the unique position of having
the only accredited mobile phone laboratory for testing of GSM/3G
devices in Japan. Subsequently a first conformance-testing project
has already been com- pleted for a major Japanese telecommunication
manufac- turer. This advanced mobile phone testing laboratory joins
the existing network of Taipei, Shanghai and Seoul to pro- vide an
SGS ‘ring of compli- ance’ around North Asia, sharing resources,
experi- ence and the most sophisti- cated testing equipment avail-
able. All this located right in the global centre for the
development and manufac- ture of mobile technology.
SGS in the News
Physically Better A number of our US-based laboratories have
undergone expansion and upgrading to meet ever demanding physical
testing requirements
Tulsa, Oklahoma According to the National Fire Protection
Association (NFPA), most house fires occur in the bedroom of the
home. The major source of fuel for these fires can be blamed on
mat- tresses and box springs. Preventing this fuel source from
contributing to a fire is vital to prevent loss of life and
property. A recent regulation in California (California Technical
Bulletin) requires that mattresses be sub- mitted to a full scale
open flame test, measuring the Heat Re- lease Rate in kilowatts.
Heat Release Rate is a function of the amount of energy released
from the test specimen as a function of oxygen consumption. If the
mattress exceeds 200 kW or 25 MJ in the first ten minutes, the
mattress does not comply and cannot be sold in the state of
California. Only a few laborato- ries in the US are capable of
running Heat Release Rate tests.
We have one of
systems available, and have gone yet
a step further
The most exciting piece of equipment recently acquired is an
Infrared Thermal Imaging camera. The benefit of using this camera
is in the failure analysis of a mattress. The camera only sees the
heat signature of the particular sample being tested. If a mattress
is on the road to failure, the test room could quickly fill with
thick black smoke. A conventional camera recording the test event
only sees the smoke and not what is happening to the mattress
itself. The thermal imaging camera sees through the smoke and
highlights the hot spots and possible modes of failure for the
mattress. This thermal camera provides us much needed infor- mation
about why and is ex- tremely useful in failure analysis. Rancho
Cucamonga, California SGS CTS opened a new 25,000-square -foot
testing laboratory to provide textile, packaging, fire technology,
and building products testing services. The new lab, Rancho
Cucamonga, is located about 40 miles east of downtown Los Angeles.
The laboratory provides advanced instrumentation and technology in
a modern and open design concept that maximizes work- flow and
staff resources. In the fire technology area, the Rancho Cucamonga
labora- tory provides extensive small and large scale flammability
testing services to many in- dustries and product catego- ries
including aircraft and aerospace components, paints and coatings,
plastics and composites,
furniture and upholstery components, textiles and industrial
fabrics, and building products including roofing, wall coverings,
window cover- ings, insulation, floor cover- ings and other
components used in construction. Spe- cialty equipment and
capabili- ties include the Steiner Tunnel (ASTM E 84), roof
classifica- tion apparatus (ASTM E 108), aircraft cargo liner burn
apparatus, smoke density chambers, toxic gas analysis capability
and radiant panels.
Fairfield, New Jersey Our physical testing laboratories Fairfield,
New Jersey have also been upgraded. The expanded materials
laboratory features a new 55,000 pound Instron Uni- versal Testing
Machine. In addi- tion to performing strength tests such as
adhesion, compression, flexure, tensile and shear, advanced
features include cycle testing, stress relaxation and creep
testing. All of the above tests can be performed in multi- ple
control modes including stress, strain, load and d i s - placement.
We also conduct a variety of other tests including s m o k e densi
ty and
ignition properties.
Page 11 SGS in the News
Faster Toy Development
SGS and IQB - A successful partnership improving response time and
service to clients Brazil is not only the biggest Latin America toy
manufacturer; it is also one of the most concerned with the safety
and security of children, both locally and globally, that may
ultimately use domestically produced toys. From a period of
stagnation in the 90’s, The Brazilian toy industry continues to
restructure. Joint ventures with large international companies have
boosted the exposure of Brazilian toy products on world markets.
Today the sector consists of 300 companies and a labour force of
22,000. The significant improvement in the quality of toys
manufactured locally has meant that the Brazilian toy industry
turned over US$ 336 million during 2003; a 75% increase compared to
1996; it is still growing. SGS Brazil’s toy testing laboratory is
able to undertake about 90 different toy tests. Their evaluation is
rigorous and binding for both national and imported toys, which are
both tested and audited before receiving the stamp from the
Institute for Quality Control on Toys (IQB) and the certificate by
Inmetro, granted by IQB along with SGS. To improve response times,
SGS Brazil installed an ‘Attendance Office’ for IQB within its
facilities to have a permanent, necessary presence from the IQB and
allowing testing turn around times to be dramatically
reduced.
In such close proximity with an IQB office, SGS Brazil has been
able to develop more customised services. In the last year the
"Express Job" was introduced - a differ- ent speed of service which
reduced the usual turnaround time by 50%. “Express Job” has been
well received by clients - speedier jobs that do not comprise SGS’s
ethics, transparency and methodology. Companies like Pepsico,
Faber-Castell and Sonae choose this service option for faster
product development. "The major advantage of the partnership with
SGS was the excellent support to clients who seek product certifi-
cation requiring prompt answers, the right methodolo- gies,
analysis and provision of documents", affirms Mr. Mariano Bacellar
Netto, Technical Director of IQB. SGS represents an important part
of customer’s working routine, adding value to the its services.
Contact:
[email protected]
UK Laboratory Testing of Toys
Crash Testing Toys
SGS UK Pioneers new Toy Crash Test In November 2004 an amendment
was published for the European Toy Safety Standard EN 71 Part 1
mandating a significant change to the method for testing ‘sit on
toys’ during a dynamic strength test. This test involves loading
the toy with a mass equipped with two articulated arms and driving
this into a 50mm high step at a steady speed of 2 metres per
second. The amendment required that the mass had to be suspended
just after impact to stop it falling back on to the toy which could
cause further damage to the object. This requirement has
implications requiring redesign of the test rig used for such
impact testing to incorporate this small but significant change.
SGS UK has worked with a UK-based precision engineer- ing company
called Retrac Productions to produce a workable design for the rig
which incorporated an overhead running track with an upward curve
at the point of impact which lifted and stabilised the toy and mass
after impact. The test rig underwent several modifications
initiated by SGS UK Toy technicians before a feasible design was
produced. SGS UK took delivery of the first rig of this design in
March 2005 and a week later this was nominally approved by the
United Kingdom Accreditation Service (UKAS). This is the first of
many rigs of this design which will be marketed worldwide by
Retrac. Contact:
[email protected]
Pa ge
1 2
SGS Australia
The Fresh Food People Woolworths Australia nominates SGS to Audit
Private Label & Fresh Food Suppliers from Overseas Woolworth’s
is Australia’s leading retailer with the largest network of over
700 supermarkets and serving more than 13 million customers
nationally every week. Woolworths Supermarkets Australia is part of
Woolworths Limited which includes other retail operations such as
Dick Smith Electronics, Tandy, Big W and BWS Liquor. Woolworths Ltd
(Australia) has no affiliation with the other retail operations of
the same name around the world. To reinforce Woolworths “Fresh
Food“ strategy the Woolworths Quality Assurance Program (WQA) was
developed to ensure that the best quality fresh merchandise is
available to Woolworths customers. Woolworths works with and
sources product from quality assured suppliers who are dedicated to
producing goods that meet Woolworths WQA standards. Certification
to the WQA standard is a condition of trade for all suppliers of
fresh food including but not limited to poultry, meat, produce,
seafood, small goods, bakery, deli and all suppliers of Woolworths
Branded products. Together, Woolworths and its Trade Partners have
a responsibility to protect consumer trust. Product safety and
quality are essential in continuing to protect that trust, and the
integrity of Woolworths brands. As a result of SGS Australia’s
successful performance in supplying auditing services to the
Woolworths Quality Assurance program locally in Australia and
because of the strength of SGS Food Assurance services globally,
SGS was also appointed for the Woolworths Austra- lia Private Label
International business. Approximately ten percent of Woolworths
Branded product is currently procured from International Trade
Partners. SGS international auditors are key stakeholders in
ensuring that products sourced internationally continue to conform
to the Woolworths Quality Assurance Standard and all relevant
statutory and regulatory requirements. The Woolworths Brand is one
of the top 5 most trusted brands in Australia. The value of the
Woolworths Brand and the protection of the brand are the key
drivers for the rollout of WQA into the international market. For
more information how SGS can help you with quality assurance
throughout your food supply chain get in touch with Joanne Milton
at
[email protected].
SGS Turkey Lab Accreditation
Safely Stitching Our main textile testing labora- tory in Turkey
has recently been accredited to UKAS standards In the bigger scheme
of world textile trade and due to the quotas placed on Chinese gar-
ment exports, a few traditional clothing producing nations have
seen increases in their exports. Turkey in particular is one of the
most important textile and clothing producers and exporters in the
world and
is seeing a gradual increase in its share of this global trade. In
terms of clothing shipments, the country is ranked 6th in the
world. The production value of the textile industry, which includes
mainly yarns, fabrics and home textiles, was US$8 billion in 2004.
Of this, US$6.8 billion worth of textiles were exported in 2004.
The sector comprises 20,000 manufactur- ing companies and employs
360,000 nationwide. SGS Turkey Consumer Testing Laboratory was
opened in 2004, with the capacity to meet per- formance and quality
needs of all textile and other consumer products manufactured in
Turkey. In August, this state of the art laboratory was accredited
by UKAS (United Kingdom Ac- creditation Services) Certificate
according to the standard ISO/ IEC 17025: 2000 General Requirements
for the Compe- tence of the Testing and Cali- bration Laboratories.
For more information please contact: Rose Aysegul Gokkaya
Page 13 SGS in the News
Sudan & Para Red Colourants Due to its potentially carcinogenic
effects the EU does not allow the use of Sudan red or Para red as
food additives. However those colourings were recently found in a
lot of foodstuffs like all types of spices, sauces, pastes and meat
products. The first alert is situated in 2003 where Sudan red was
found in chilli products. In February 2005 again Sudan red was
detected in chilli-powder and led to the largest recall in the
history of Britain. In May of this year Para red was found in
spices leading to withdrawal from sale by the concerned companies.
For more about this family of risky colourants, click here
Ban on Phthalates in Toys The EU parliament voted on 05 June 2005
in favour of a permanent ban on six phthalates in toys and
childcare articles. From now on three phthalates DEHP, DBP and BBP
are totally banned for use in any toys or child care ar- ticles.
The second group of DINP, DIDP and DNOP af- fects toys and
childcare articles which children could put in their mouths whether
or not they are intended for this use. This is different from the
former decision where products intended to be placed in the mouth
were banned. The ban also applies irrespective of the age
categories. For more on this important toy regulation go here
EU General Product Safety Directive In the EU, the General Product
Safety Directive (2001/95/EC) is a framework directive. The aim of
the Directive is to ensure safe products are placed on the market.
The Directive applies where no specific provisions exist within
Community regulations concerning the safety of products. If
products satisfy more specific legislative requirements in the
field of product safety, such as the Toy Directive, then the
General Product Safety Directive will only apply to risks not
covered by that specific Directive. Where the specific Directive
does not cover a risk, enforcement can prevent the circulation of
the product based on the General Product Safety Directive. For more
information on what type of products are covered click here
Standards & Regulations
Pa ge
1 4
RoHS Directive Manufacturers have to ensure that their products
(and also components of these products) comply with this
regulation. Manufacturers may not place new E&E equipment
containing named substances in exceeding amounts on the market in
the EU. All types of products are covered including household
appliances, IT, telecommunication, consumer, lighting, electrical
and electronic tools, toys, leisure and sports equipment. Equipment
containing Lead, Cadmium, Mercury, Hexavalent Chromium and flame
retardants Polybrominated Biphenyls (PBB) and Polybrominated
diphenyl ether (PBDE) over the given limits are banned. For more
detail go here
New Test Method for Azo Dyes According to the Directive 2002/61/EC
several Azo dyes which can be split into 22 aryl amines are banned
in the EU. Analytical methods have been established in the
laboratories for a long time. The limit for each of these aryl
amines is 30 mg/ kg. Until now, three different methods have been
used for this analysis. These methods are based on the type of dyed
material and on the availability of Azo dyes by extraction.
However, using these methods only 21 out of the 22 banned aryl
amines can be detected; they do not detect the presence of 4-amino
azobenzene. Click here for more.
ECO Labelling People are more and more concerned about chemicals
used in manufacturing processes. For that, several eco labels exist
dealing with restricted and/or hazardous substances. Eco labels are
voluntary and widely used by several organisations and companies.
Different labels exist all over the world. As a market-based
instrument, the primary function of an eco label is to stimulate
both the supply and demand of products with reduced environmental
impact. The objective of providing guidance to consumers has
considerable implications with regards to economic efficiency and
the flow of information. It reduces costs to consumers,
manufactures, and retailers by lowering the time and effort needed
to obtain or provide reliable information on life-cycle considera-
tions and green product. Overall eco labelling has been moderately
successful with individual consumers. Click here for more.
WEEE: EU extends the interpretation on defining Producer While the
first execution deadline for WEEE was on 13 August 2005, there are
still a number of practical issues open for clarifications. Both
the European Commission (EC) and Technical Adap- tation Committee
(TAC) of the EU Environmental division meet frequently and release
additional information. The EC has published a clarification
statement on 15 June 2005 to align and harmonize the understanding
of the definition of producers among the EU member states, and the
implementation of producer responsibilities in order to avoid
unnecessary financial burdens to the industry. Click here for
more.
Standards & Regulations
Page 15
PAH and Benzo(a)pyrene in Food Products On 1st April 2005, EU
Regulation 208/2005 (amended from EU Regulation 466/2001) came into
effect, imposing maximum levels for benzo (a)pyrene in different
food products. Benzo(a)pyrene is used as a marker for the pres-
ence and effect of carcinogenic Polycyclic Aromatic Hydrocarbons
(PAHs) which are a group of different organic compounds, each of
which contains two or more aromatic rings. Many of these organic
compounds are considered to be carcinogenic and genotoxic and
benzo(a)pyrene itself also demonstrates carcino- genic effects. For
more go here
Wembley HA0 1WU
Tel: +44 (0) 20 8998 2171 Fax: +44 (0) 20 8997 9723 E-mail:
[email protected]
Middle East SGS SGEKS A.S.
Abide-I Hurriyet Cad. Gecit Sk. No.10
Sisli Istanbul, Turkey
Tel: +90 212 225 00 24 Fax: +90 212 296 47 82
E-mail:
[email protected]
SGS Hong Kong Ltd.
5-8/F & 28/F, Metropole Square 2, On Yiu St, Sui Lek Yuen,
NT
Hong Kong, SAR
E-mail:
[email protected]
Tel: +1 973 575 5252 Fax: +1 973 575 1193
E-mail:
[email protected]
Regional Contacts
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© 2005 SGS SA. All rights reserved. This newslet- ter is a
publication of SGS SA although certain con- tents have been
submitted by third parties or have otherwise been licensed for use
by SGS SA and all copyrights in such third party contents remain
vested in such third parties. Contents identified as being from
third parties reflect solely the positions of such third parties
and SGS SA neither endorses nor disapproves of said contents. This
newsletter is intended to provide general information on a par-
ticular subject or subjects and is not an exhaustive treatment of
such subject (s). Accordingly, the information in this newsletter
is not intended to constitute consulting or other professional
advice or services. This newsletter is provided “as is” and SGS SA
does not warrant that the information con- tained therein will be
error-free or will meet any particular criteria of performance or
quality. The information may not be quoted or referred to in any
other publication or proceeding without the prior written consent
of SGS SA.
Your Input is Appreciated
Food Products
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directly to your email inbox
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