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Compliance Practices in Garment

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100% found this document useful (4 votes)

2K views388 pages

Sedex Supplier Workbook

Compliance Practices in Garment

Uploaded by

ShafiqulHasan

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as PDF, TXT or read online on Scribd

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SEDEX SUPPLIER

WORKBOOK

SEDEX BACKGROUND

VERIT BACKGROUND

Sedex Information Exchange is a unique and

innovative platform, helping companies to manage
ethical supply chain risk and streamline the
challenging process of engaging with multi-tier
supply chains.

Verit is an international not-for-profit consulting,

training, and research organisation that has been
a leader in supply chain social responsibility and
sustainability since 1995. Verits holistic
approach is based on an extensive, applied
understanding of common obstacles and effective
strategies for managing supply chain
risks. Verits programs help companies and other
stakeholders fully understand social responsibility
issues, overcome the root cause of unsafe, unfair
or illegal conditions for workers, and build
sustainable solutions into business practices,
benefiting companies and workers alike. For more
information, please visit www.verite.org.

As the largest collaborative platform for managing

ethical supply chain data, Sedex engages with all
tiers of the supply chain with the aim of driving
improvements and convergence in responsible
business practices.
Through a secure online platform, Sedex
members can share and manage information
related to Labour Standards, Health & Safety, The
Environment and Business Ethics. Members also
have access to a range of resources and reports,
including industry specific questionnaires and
market leading risk analysis tools, developed with
global risk experts Maplecroft. Additional support
services such as supplier engagement, audit
management and risk screening are also available
through Sedex Information Exchanges
sister company, Sedex Solutions. For more
information, please visit www.sedexglobal.com.

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

FOREWORD
Letter from the General Manager of Sedex
I am very pleased to introduce the Sedex Supplier
Workbook. This workbook has been co-developed with
Verit and is an excellent resource that provides Sedex
members and suppliers around the world with useful
guidance to help improve labour standards, reduce
negative environmental impacts and ensure their
businesses operate in an ethical mannerall of which I
believe will make our members companies more
successful, and therefore sustainable, long into the
future.
Businesses around the world have a responsibility to
protect the rights of their workers and to minimise their
impacts on the environment. Today, every business that
sells products into the global supply chainlarge or
smallhas to think about how they can meet their
responsibilities. Customers who purchase products want
to know the product they are buying has been produced
in a responsible and ethical way. They trust businesses
to do the right thing, and businesses who do not meet
their customers expectations risk losing their trust,
which inevitably impacts the financial performance of the
company. Trust once lost is hard to rebuild. We know
from many years of experience that the most costeffective and long-lasting way for suppliers to meet
these expectations is to make them an everyday part of
their daily operations.
Sedex was launched in 2004 to ease the burden on
suppliers facing multiple audits and questionnaires, and
to drive a collaborative approach amongst brands and
retailers. Since our beginning, Sedex has grown and is
now the largest collaborative platform in the world for
managing ethical supply chain data. We have more than
28,000 Supplier members and over 500 Retailers and
Brands.

Core to our mission is reducing duplication by enabling

members to share data and use common approaches
for collecting information. We are also committed to
helping businesses around the world develop and
become even more successful businesses by providing
information, training and advice. The Sedex Supplier
Workbook is a free resource, providing information and
support on key issues and challenges often experienced
by our members. It also demonstrates the business
benefits that can be gained by successfully addressing
such issues.
I trust you will find this resource useful. As always, I
would welcome any feedback or comments you have on
the workbook, as well as suggestions on other ways
Sedex could support you in the future, so please email
me at carmel.giblin@sedexglobal.com.
Best regards,

Carmel Giblin
General Manager

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

iii

Letter from the CEO of Verit

Achieving ethical sourcing requires that knowledge

and skills are broadly shared and easily accessible.
The wide adoption of this Workbook means that
businesses and workers will share in the benefits of
sustainable practices at a much greater scale.
It is no longer enough that businesses and their
suppliers understand what risks they face. It is
essential that we achieve positive and measurable
change.
Such change not only benefits workers by providing
fair and predictable wages, safe working conditions,
and the opportunity to raise concerns with employers;
it results in more effective businesses as well
businesses that can count on stable workforces, find
efficiencies and build positive profiles for their clients.
Through our extensive involvement with leadershiplevel social responsibility programming, we have both
benchmarked and helped develop best practices in
ethical sourcing, program analysis, risk management
and supplier engagement. For those efforts and for
this Workbook, Verit draws from the expertise and
deep experience of our regional teams and network of
partners in China, Southeast Asia, India, and
Bangladesh, Europe and Latin America. Our programs
range from short-term solutions for urgent conflicts at
factories and farms, to multi-year, industry-wide
partnerships. An underpinning of this work has been
our landmark studies on such issues as trafficking and
forced labour, excessive overtime, labour conditions in
commodity supply chains, and gender equity. Our
contributions to a nuanced understanding of the nature
and systemic solutions to these issues have been
recognised by the 2007 Skoll Award for Social
Entrepreneurship, the 2011 Schwab US Social
Entrepreneur of the Year Award, and the 2010 Clinton
Global Initiative. Weve been grateful to be able to

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

offer this expertise as a member of the Alliance to End

Slavery and Trafficking, and as a Founding Circle
member of the Sustainable Apparel Coalition.
We are similarly pleased for the opportunity to
collaborate with Sedex, and to share our experience
about what businesses can achieve and how they can
achieve it.

With all good wishes,

Daniel A. Viederman
CEO

CONTENTS

Introduction
What is this workbook for?

vii

Who is it for?

vii

Why is it important?

vii

How was this workbook developed?

vii

How to Use the Workbook

Scope of issues
Questions, comments, feedback

viii
xi

Part 1: Labour Standards

Part 2: Health & Safety Standards

1.1 Labour Management Systems

1.2 Employment is Freely Chosen

1.3 Freedom of Association &

2.1 Health & Safety Management

Systems

138

2.2 Health & Safety Training

149

2.3 Emergency & Fire Safety

159

1.4 Living Accommodation

2.4 Machinery & Site Vehicles

170

1.5 Children & Young Workers

2.5 Hazardous Materials

184

1.6 Wages

2.6 Worker Health

197

1.7 Working Hours

2.7 Housekeeping & Hygiene

209

1.8 Discrimination

1.9 Regular Employment

Collective Bargaining

1.10 Discipline & Grievance

101

1.11 Smallholders

114

1.12 Homeworkers

125

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

Part 3: Environmental Standards

Part 4: Business Ethics

3.1 Environmental Management

.1 Business Ethics Management

Systems

224

3.2

Waste

237

3.3

Raw Materials

249

3.4

Water

261

3.5

Pollution

273

3.6

Emissions

287

3.7

Energy & Climate

299

3.8

Renewable Energy

311

3.9

Biodiversity

323

3.10 Supplier Sourcing

335

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

Systems
.2 Anti-Corruption

...............350
364

INTRODUCTION
What is this workbook for?

Why is it important?

This workbook is a guide to help suppliers understand

what good practice looks like when thinking about
meeting ETI and other Code requirements, and how
you can get there. The following chapters will help you
take a systems approach to find and fix the gaps that
can lead to social and environmental noncompliances. What this workbook is not is a standard
for you to adhere to, or another management system.
If you are operating a factory or a farm, you already
have a management system, even if it is an informal
one.

Managing the risk of harm or unfair treatment to your

employees or damage to the environment is good
business practice. In a world where companies are
expected to demonstrate corporate social
responsibility (CSR), you are also protecting your
companys reputation. And because your customers
must protect their own reputation for ensuring the legal
and humane treatment of workers in their supply
chains and the minimising of environment impact, you
are protecting your business relationship with these
customers as well.

What we are offering is a practical risk-management

tool for building controls into the business processes
for example, hiring and paying your employeesthat
you are already using. These controls will help you
meet your customers and your own business, social
and environmental responsibility objectives.

Research has shown a direct link for many companies

between CSR and other business benefits, such as
savings from worker retention and improved
productivity from stronger worker-management
communication and engagement processes. Our
approach recognises this link between the bottom line
and a safe and fair workplace.

Who is it for?
How was this workbook developed?
This workbook is written for the people in factories and
farms who make decisions that have an effect on the
working conditions of their employees or the
surrounding environment. You may be the owner of a
smallholder farm, the human resources director of a
large corporation, or the compliance officer of a midsize factory in charge of making sure your company
passes your customers social audits. The basic riskmanagement approach we have described in these
chapters applies to businesses of all sizes in all
industries.

Verit has developed this workbook in partnership with

Sedex based on over 15 years of experience
researching and helping to address the challenges of
balancing CSR and business imperatives in global
supply chains. We are grateful to the Sedex members
who have contributed case studies, feedback and
resource documents that are the product of their many
years of work on these issues. A number of NGOs
served as valuable reviewers and advisors as well.
We will list all contributors as soon as the workbook is
complete. Even then, this collaboration will continue.
We intend this workbook to be a living document that
will be continuously improved with the learning and
feedback of members and other stakeholders over
time.

The workbook is available in PDF form on the Sedex website either in sections or individual chapters.
Access and download the full Sedex Supplier Workbook

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

vii

HOW TO USE THE WORKBOOK

Scope of issues
Each chapter is devoted to a Sedex issue area covered by the Sedex SAQ. As shown by the
sample sections below, the chapter defines the issue, lists key standards, and describes an
approach to reaching the standards. Common audit findings, best practice suggestions, case
studies and resources are offered as well.

Definition of the issue

The definition comes directly from ILO
conventions or, in the absence of an
ILO definition, is drawn from the
broadly accepted understanding of the
issue.

Benefits
The workbook lists the possible business
benefits of compliance with the Code and
international standards relating to the
issue.

Requirements
The ETI Base Code provisions as well as
other international conventions and
standards are listed in this section, with
links to more detail.

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

viii

Achieving and Maintaining Standards

This section outlines the systems approach to
reaching and sustaining compliance in each issue
area.
Combined with a strong management system
(described in detail in the Management Systems
chapters), this section gives step-by-step guidelines
to help you successfully achieve the standard in:
x
x
x
x
x

Policy
Procedures
Documentation
Monitoring
Communication and Training

Please note that this list is only a suggested course of action, and is not an exhaustive list.

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

Other Features
Each chapter includes a sample of audit non-compliances from the Sedex database and a case
study provided by Sedex members. The chapters also offer answers to common questions, best
practices, resources and guidance, signposts to training, and a glossary of key terms.

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

Questions, comments, feedback

If you have any questions or comments, please contact content@sedexglobal.com.

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

SEDEX SUPPLIER WORKBOOK

PART 1:

LABOUR
STANDARDS

CONTENTS
Part 1: Labour Standards
1.1 Labour Management Systems

1.4 Living Accommodation

Definition

Benefits

Requirements

Achieving and Maintaining Standards

Common Audit Non-compliances

Case Study

Case study

Resources and Guidance

1.2 Employment is Freely Chosen

1.5 Children & Young Workers

Definition

Benefits

Requirements

Achieving and Maintaining Standards

Common Audit Non-compliances

Case Study

Resources and Guidance

1.3 Freedom of Association &

Collective Bargaining

Definition

Benefits

Requirements

Achieving and Maintaining Standards

Common Audit Non-compliances

Case Study

Resources and Guidance

1.6 Wages
Definition

Definition

Benefits

Requirements

Achieving and Maintaining Standards

Common Audit Non-compliances

Case Study

Resources and Guidance

SEDEX SUPPLIER W ORKBOOK PART 1: LABOUR STANDARDS

1.7 Working Hours

1.11 Smallholders

Definition

115

Benefits

115

Requirements

116

Achieving and Maintaining Standards

117

Common Audit Non-compliances

Case Study

122

Case Study

Resources and Guidance

123

Resources and Guidance

1.12
1.8 Discrimination

1.9

Homeworkers
Definition

126

Definition

Benefits

126

Benefits

Requirements

127

Requirements

Achieving and Maintaining Standards

127

Achieving and Maintaining Standards

Common Audit Non-compliances

130

Common Audit Non-compliances

Case Study

131

Case Study

Resources and Guidance

132

Resources and Guidance

Regular Employment
Definition

Benefits

Requirements

Achieving and Maintaining Standards

Common Audit Non-compliances

Case Study

Resources and Guidance

1.10 Discipline & Grievance

Definition

102

Benefits

102

Requirements

103

Achieving and Maintaining Standards

103

Common Audit Non-compliances

109

Case Study

111

Resources and Guidance

112

SEDEX SUPPLIER W ORKBOOK PART 1: LABOUR STANDARDS

SEDEX SUPPLIER WORKBOOK

Chapter 1.1

LABOUR MANAGEMENT
SYSTEMS

Labour Management Systems

What does it mean?

A management system is the set of interdependent

policies, processes, and procedures that a company
uses to achieve its business objectives which include
social responsibility.
A management system also serves to continuously
improve key business processes and outcomes to meet
core strategic goals.
The approach of the workbook is to present an
integrated method that helps suppliers balance social
responsibility objectives with those of running a
successful business.

Benefits

To be successful in this approach we:

Why should you do it?

Describe the possible unintended social

outcomes of policies and procedures that are
meant to achieve business objectives;

Identify operational controls to manage or

avoid these unwanted outcomes; and

Show how to monitor and measure the

effectiveness of your controls to ensure you
meet standards.

Building social responsibility into your business

management system will help you stay within the
law, avoid penalties and meet your customers
requirements.
A well designed management system approach also
has business benefits such as:
a) Improving your companys image and reputation.

This section will help you check whether there is a

risk of not maintaining essential management system
elements in your current business operations, and if
so, how to put controls in place to make sure you
meet standards.

b) Achieving both your business and social

responsibility objectives.
c) Improved labour relations.
d) Less time spent on audits.
e) Cost savings through improvements in system
efficiency.

Benefits of a Management System

Approach

Effective management systems strengthen

your companys ability to:
9 Develop suitable policies and plans
9 Implement the appropriate operational
control processes

9 Ensure that necessary resources are

provided
9 Continually improve performance

Requirements
What do you need to do?

Achieving and Maintaining Standards

How do you do it?

There is no Management System clause in the ETI

Base Code. However, the ETI has established the
following Principles of Implementation to set out in
detail the management
system a company can use
to achieve and maintain the
Base Code standards:
1

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business (like
hiring). And you make sure your policies and
procedures are designed to ensure that:

Commitment (policy,
communication,
resources).

x Supervisors and managers are aware of relevant

legal and customer
requirements.

Integrating ethics into

core business practices
(supplier selection,
terms of agreements,
internal buy-in).

Capacity Building (worker awareness, effective

industrial relations).

Identifying problems in the supply chain (risk

assessing and sharing, monitoring and
evaluation, worker complaint mechanisms).

Improvement actions enabling remediation, timebound remediation, tackling root causes).

Transparency (fair and accurate reporting,

response to violations).

x Risks in current
business processes
that could lead to
social compliance
issues are
proactively
identified.

x Workers,
supervisors and
managers know
their responsibilities
in meeting
standards.

x An effective process to verify that all workers and

managers are working according to Code and legal
requirements.

Other international guidelines state:

x Ability to know if your company is meeting

ISO 26000 Section 7: In most cases,

organisations can build on existing systems,
policies, structures and networks of the
organisation to put social responsibility into
practice.

standards on an on-going basis.

x Elimination of root cause to prevent the same

compliance issues from occurring again and again.

x Ability to measure system performance and

SA8000: Complying with the requirements for
social accountability of this standard will enable a
company to:

improvement.
It is important that you also regularly monitor your
processes and controls to make sure they are working.

Develop, maintain, and enforce policies and

procedures in order to manage those issues
which it can control or influence.

A systems approach is selfcorrecting. It will enable to you

make sure that all requirements
are being consistently met.

Credibly demonstrate to interested parties

that existing company policies, procedures,
and practices conform to the requirements of
this standard.

Policies
(rules)

Procedures
(practices)

Your company should have a policy that includes the

following:

Management should assign a responsible person (or

department) to make sure your policy commitments are
achieved, that regulatory compliance is maintained and
that labour standards are met. This includes:

; A written statement that clearly defines your

companys approach to managing labour issues.
This should include commitments to:

Implementing the ETI Base Code.

Adhering to all customer requirements,

including customer-specific codes of
conduct.

Regulatory compliance.

Continual improvement in social

responsibility performance.

; Communicating your policies to all managers,

supervisors and workers.

; Making sure that all managers and employees of

the company have clearly defined roles and
responsibilities for carrying out your labour policy.

; Meeting regularly with managers and supervisors

responsible for recruitment, selection and hiring,
and other human resources functions to oversee
the implementation of your policies and
procedures.

; The scope of the policy should include all of the

labour standards of the ETI Base Code,
including:

Employment is freely chosen.

Freedom of association and collective

bargaining.

Working conditions are safe and hygienic.

Child labour shall not be used.

Living wages are paid.

Working hours are not excessive.

No discrimination is practised.

Regular employment is provided.

No harsh or inhumane treatment is

allowed.

; Monitoring all concerns and issues related to the

effective implementation of your policies and
procedures.

; Performing an annual review of your management

system to make sure it is effective and achieving
your objectives, and to make any required
adjustments.
Your Human Resources and other business function
procedures should include:

; Ways to track and understand labour laws and

regulations.

; A process to identify the risks in your business

Please refer to the workbook chapters that

specifically cover these topics.

processes that could lead to violations of social

responsibility standards.

; The policy should be signed by the most senior

; Written Human Resources procedures that

manager of the company.

implement your policies in each of the labour

standards of the ETI Base Code.

Your policy is at the heart of what the

company believes in and what it does.
When made part of your business
strategy, there is no reason why it
can't enable profits and growth

; A formal process to screen and select your

suppliers based on their ability to meet your
policies and ETI Base Code standards.

; A formal process for workers, managers,

suppliers and customers to anonymously report
any concerns about the implementation of your
companys policies.
7

Each of the Labour Standards chapters in this

workbook describes in more detail the procedures
needed for specific labour issue areas.

Documentation and Records

Meeting standards requires proper documentation.
You will need to keep the following on file on your
company premises:

; Copy of your labour policy signed by senior

management.

; Copies of key Human Resources procedures,

such as recruitment, selection and hiring,
discipline and grievance, termination and others
as described in the chapters that follow.

; All applicable laws, regulations and customer

codes of conduct and other requirements.

; Copies of internal and third party audit reports,

inspection reports by regulatory agencies.

; Corrective action plans and reports.

Communication and Training

; The topic-specific documents listed in the other

chapters of this workbook.

You should use the following methods to make sure

your employees are aware of your labour policies and
procedures:

Monitoring

; Provide introductory training for new managers,

You will need to check if your labour policies are being

followed and that the controls to make sure your
company is meeting code and legal requirements are
effective. The following steps can be used to evaluate
and improve the effectiveness of your programs:

supervisors, and newly hired workers on your

companys labour policies and procedures.

; Make sure that the training covers all applicable

labour laws and regulations.

1. Audit your system to identify actual and potential

problems in meeting standards. Audits can be
performed by trained and qualified internal staff or
by external auditors including from your
customers.

; Display factory labour policy and local laws and

regulations in areas where workers will see them
and in a language they understand.

; Communicate your companys labour

requirements, as well as laws and standards to
your suppliers using your website, in contract
terms and conditions, and periodic meetings.

; Self-audits should be performed annually to

; Communicate the companys grievance procedure

; Any identified issues should be evaluated to

determine if you are meeting legal and

customer requirements.

and explain how to report issues related to how

your labour policies are carried out.

determine their underlying cause(s) and action

plans established to put in place corrective and
preventive actions.

4. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

2. Establish and track key performance indicators

(KPIs) to measure how well your management
processes and procedures are working on an ongoing basis.

; Often, more than one function is responsible

; Regularly survey workers to measure their

for social responsibility issues. In the case of

excessive working hours, Human Resources,
Sales and Production must work together to
find an appropriate solution that meets
standards but does not prevent the company
from meeting its business objectives.

satisfaction with workplace policies and

practices.

; Track such things as; staff turnover rate, rate

of absence from work, grievances and other
indicators that could point to problems with
policy implementation.

; Determine if changes in social responsibility

Why do management systems fail?

KPIs are linked to changes in business

performance measures. For example, is
worker satisfaction related to productivity or
quality?

x Lack of senior management sponsorship and

commitment.

x Failure to assign a senior manager with

responsibility and accountability for implementing
the system.

Best Practice Example

A company has a business objective to be
the employer of choice. It chooses the
targets for this objective to be a staff
turnover of 1% per month and a worker
satisfaction survey score of 90%.

x Companies try to create a system that is more

complicated than their current business
management system.

The site manager and her staff evaluate

their progress each quarter in a
management review meeting. Based on the
review, they make changes to their policies
and procedures if they find issues that are
damaging their ability to achieve their goal.

x The system creates extra or duplicate work that

x Management believes that the social compliance

objectives of the system will conflict with business
objectives.

management believes does not add any value and

is not integrated into day-to-day operation of the
business.

x Senior management fails to regularly measure and

3. Investigate problems and analyse why they

occurred. When a situation arises that indicates
the existence of a non-conformance with company
labour policies and customer code(s) of conduct,
the company should investigate the root causes
not just the condition, and what can be done to
address them.

review the effectiveness of the system and make

necessary improvements.

; If your internal audit finds the same or similar

issues over and over again it could mean that
your process to identify root causes and assign
responsibility for putting in place corrective and
preventive actions is not working.

; Similarly, if you have taken action, but you are

still not meeting standards, it could mean that
the corrective actions (controls) themselves
are not effective or need to be improved to
better address the root cause(s) of the issue.
9

Common Questions

standards), evaluating risks that may prevent you from

meeting those standards, and establishing objectives
and processes needed to meet standards and achieve
objectives.

Do I need a separate management system for

social responsibility?

Do means assigning responsibilities, implementing

your policies and procedures, and training and
communicating.

No. The most efficient way to apply a management

system approach to meeting labour standards is to
use your current business management system. For
example, every company needs to hire workers. In
order to avoid child labour, discrimination, forced
labour and other issues in hiring, you should evaluate
your current processes for recruitment, selection and
hiring of workers to make sure you have the right
controls in place.
Of course, once you have put the necessary controls
in place you will need to do regular checking
(monitoring) to be sure they are effective.
Wont a management system require a lot of
documentation and other complexity?

Check is making sure that you are achieving your

objectives and meeting standards. This involves
measuring performance using KPIs, performing audits,
surveying workers, and other ways to evaluate how
you are doing.

This is a very common concern, but a labour

Act is taking corrective and preventive actions when

your results are different from your goals, such as
when audits find non-compliances. This step also
includes a regular review by senior management of the
suitability and effectiveness of your overall system.
Outcomes and decisions from that review are used to
Plan system improvements.

As for records, you only need to maintain items that

are needed to verify that you are meeting standards,
such as proof of age documents, working hours and
payroll. Such records are commonly required in most
countries to meet local legal requirements

Common Audit Non-compliances from the

Sedex Database

My company has a certified Quality Management

System. Can we use this system for labour?
Yes. In fact, any company that has a formal
management system, like ISO 9000 or ISO 14001,
should also use it to manage compliance to labour
standards rather than creating a separate labour
management system. The risk assessment,
regulatory tracking, training, communication,
auditing, corrective action, and other elements of
these systems can very easily be adapted for labour
management.

The following are the most common non-compliances

against this issue. If properly implemented, the guidance
in this chapter can help reduce the incidence of these
problems:

x Inconsistent records.
x No general management systems in place.
x Failure to provide proof of legally required
company/factory licences.
x Isolated failures in operating systems.

What is Plan-Do-Check-Act?

x Lack of employee or management awareness of

the companys social standards.

Plan-Do-Check-Act is a way of describing a

management system to show how risks are
controlled and processes and performance are
continually improved.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

Plan means to identify requirements (laws and

Case Study
Often the reason for not doing an initiative is
lack of business case, research or proof that a
new approach or technology works. M&Ss 50m
innovation fund has enabled acceleration of new
thinking and quicker adoption of best practice.

Plan-Do-Check-Act
A management system is how organisations
manage their processes and activities, and meet the
objectives it has set itself. Marks & Spencer (M&S),
with a global supply chain of nearly 2 million
workers in 70 countries, believe in an approach that
goes beyond monitoring.

In 2007, M&S launched Plan A, setting out 100

supplier-related commitments to achieve in 5
years, which was extended in 2010 to 180 by
2015. M&S are on target and have provided over
170,000 hours of supplier training. In 2011, the
initiative generated 70m in benefits which has
been reinvested. Importantly, Plan A
Commitments are owned by the commercial
team rather than the sustainability team, and all
buyers and Executive Directors now have Plan
A-related targets.

Since 2001, the retailer has used its extensive audit

programme to monitor its supply chain, each year
undertaking approximately 1,200 audits. Their
finished product suppliers are required to meet
national law and demonstrate improvements to
meet ETI base code standard, conduct a valid
SMETA ethical audit, register a complete Sedex
self-assessment and have a valid audit and
corrective action plan.

Environmental performance and business

efficiency relies on staff having the right training,
motivation and good communication between
management and the workforce. Ultimately, our
customers benefit too, from better quality, better
value products and peace of mind.

M&S has a head office ethical trading team and

regional teams who support suppliers and work
closely with them to follow up on non-compliances.
M&S review their ethical trading performance
annually with external auditors to reaffirm their
strategy and priorities for the next year. M&S also
report to the ETI, as part of their membership
commitments.

Marks & Spencer is a major UK retailer of food,

clothing and home products sourced from around
2,000 suppliers globally. To find out more about M&S,
visit http://www.marksandspencer.com/.

This annual review is an important part of our

approach as its a chance to review Sedex data and
which initiatives are making a positive impact, says
Louise Nicholls, Head of Responsible Trading at
M&S.
Key to their success has been engagement with
suppliers and in 2005, the Supplier Exchange
Programme and Website was launched. This
includes quarterly meetings for suppliers to share
best practice and discuss ethical trading and an
online platform which presents requirements,
guidance, tools and case studies. Reducing audit
fatigue, encouraging supplier ownership and
collaboration are important to M&S, which is why
Louise Nicholls sits on both the Sedex and GSCP
boards.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

Resources and Guidance

The following sources provide further details on international standards for labour management
systems.

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; International Organization for Standardization (ISO): ISO 26000 Social Responsibility

http://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/iso26000

; Social Accountability International (SAI): SA8000

http://www.sa-intl.org/index.cfm?fuseaction=Page.ViewPage&PageID=937

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org/

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

Managing compliance with labour codes at supplier level:

http://www.ethicaltrade.org/sites/default/files/resources/Managing%20compliance%20with
%20labour%20codes.pdf

A decent work management system by any other name 5 lessons:

http://www.ethicaltrade.org/news-and-events/blog/lydia-long/a-management-system-byany-other-name-5-lessons

The ETI Principles of Implementation: http://www.ethicaltrade.org/resources/key-etiresources/principles-implementation

ETI Management Benchmarks: http://www.ethicaltrade.org/resources/key-etiresources/eti-management-benchmarks

Signposts to Training
x

Verit: http://www.verite.org/Training

ETI, Essential of Ethical Trade: http://www.ethicaltrade.org/training

Key Terms
x

Corrective Action: is the implementation of a systemic change or solution to make an

immediate and on-going remedy to a non-compliance.

Management System: is the framework of policies, processes and procedures used to

ensure that an organisation can fulfil all tasks required to achieve its objectives.

Preventive Action: is the implementation of a systemic change or solution designed to

prevent the recurrence of the same or similar issues elsewhere in the facility.

The information contained in this document is provided by Verit and while every effort has been made to make the
information complete and accurate and up to date, Sedex makes no representations or warranties of any kind, express or
implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information contained
therein. Any reliance you place on such information is therefore strictly at your own risk. In no event is Sedex liable for any
loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever
arising from loss profits arising out of, or in connection with, the use of this document.

SEDEX SUPPLIER WORKBOOK

Chapter 1.2

EMPLOYMENT IS
FREELY CHOSEN

Employment is Freely Chosen

What does it mean?
Employment is Freely Chosen when workers work
voluntarily and without threat of penalty of any kind.
Debt-bondage, indentured labour and the use of
prison labour are all forms of forced labour.
Debt-bondage results when workers borrow money,
for example to pay fees to recruiters or labour
brokers to get their job and then have to spend most
of their wages to pay off that debt. Workers are
unable to quit despite unfair or illegal conditions
because of their debts.
Forced overtime is when workers cannot refuse to
work overtime without fear of penalty (refer to the
Working Hours chapter for more details).
Limited Freedom of Movement means
confinement or not allowing workers to leave the
company grounds and dormitories.

Any management practice that

results in a worker facing
penalties for quitting their job
creates forced or involuntary
labour.

Benefits
Why should you do it?
Respecting your workers rights of freely chosen
employment will help you stay within the law, avoid
penalties and meet your customers requirements.

However complicated the forced labour issue is, it

can be simplified into one question: Can the worker
quit when he/she wants?

There can also be business benefits, such as:

Better worker retention

A socially responsible company makes sure that its

policies or procedures allow workers to resign or to
leave the premises (after suitable notice) and are not
penalised for doing so.

Fewer runaway workers and associated

legal and financial issues

Higher worker satisfaction and

morale

This section will help you check whether there a risk

of not meeting this standard in your current business
operations and, if so, how to put controls in place to
make sure your workers rights are respected.

Reduced cost for recruitment,

hiring and training of new
workers

remuneration and other conditions of work, that

is to say, overtime, hours of work, weekly rest,
holidays with pay, safety, health, termination of
the employment relationship and any other
conditions of work which, according to national
law and practice, are covered by these terms.

Requirements
What do you need to do?
ETI Base Code Clause 1 requires that employment
is freely chosen. This means:
1.1 There is no forced, bonded or involuntary prison
labour.

Achieving and Maintaining Standards

1.2 Workers are not

required to lodge
deposits or their
identity papers with
their employer and are
free to leave their
employer after
reasonable notice.

How do you do it?

You can best meet standards by using a systems
approach. In other words, you add controls to the
processes you already use to run your business (such as
hiring, discipline and termination) and you make sure
your policies and procedures are designed to ensure
that:

Relevant ILO Conventions

x Workers are not charged for obtaining a job

C105: Abolition of Forced Labour Convention, 1957

x Deposits are not taken from a worker either in cash

x Prohibits using any form of forced or compulsory

up front or as
deductions from
wages.

labour:
a) as a means of political coercion or education
or as a punishment for holding or expressing
political views or views ideologically opposed
to the established political, social or
economic system;
b) as a method of mobilising and using labour
for purposes of economic development;
c) as a means of labour discipline;
d) as a punishment for having participated in
strikes;
e) as a means of racial, social, national or
religious discrimination.

x Workers are not

charged or
required to make a
deposit for tools,
personal protective
equipment or
anything workers
need to do their
job.

x A workers original
identity documents
are not held, thus
ensuring freedom
of movement.

Other international standards and guidelines

state:
California Transparency in Supply Chains Act

x Workers are not

Large retailers and manufacturers provide

consumers with information regarding their
efforts to eradicate slavery and human
trafficking from their supply chains.

prevented from
leaving the place of work or living quarters when not
working.

x Overtime is voluntary.

International Convention on the Protection of the Rights of

All Migrant Workers and Members of Their Families (Article
25)

either

directly or through a labour agent/broker.

x Workers do not incur loans or other forms of debt

that could tie them to the job.

x Wages are paid on a regular basis and on time.

Migrant workers shall enjoy treatment not less

favourable than that which applies to nationals
of the State of employment in respect of
16

x All earned benefits and wages are paid to workers

upon termination of employment.

x There are no disciplinary fines and the only

Procedures

deductions from wages are those that are

permitted by law.

(practices)

x Prison workers are paid the same wages and

benefits as non-prison labour where required by
law.

Management should assign a responsible person (or

department) to make sure the above policies are carried
out using the following practices:

It is important you also regularly monitor your

processes and controls to make sure they are
working.

; Communicating your policies to all managers,

supervisors and workers.

; Meeting regularly with managers and supervisors

Policies

responsible for recruitment, discipline, termination,

and wages and benefits to oversee implementation.

(rules)

; Monitoring and reporting all complaints and

management responses related to the issue of freely
chosen employment.

Your company policies should include the following:

; Commitment to avoid all forms of forced labour

; Maintaining a database of reputable employment

(the policy should include definitions of forced

labour).

agencies (if you hire contract workers).

; Statement that all overtime work not listed in the

Your recruitment, selection, and hiring and other human

resources procedures should:

employment agreement is strictly voluntary.

; Statement that the company does not subcontract

; Include ways to track and understand laws and

work to prisons or facilities known to hire prison

labour, unless required by law.

regulations on freely chosen employment.

; Commitment to only work with licensed labour

; Make sure that workers are not required to post

brokers who comply with all applicable laws and

company codes of conduct.

bonds or deposits for their jobs.

; Make sure that original copies of worker identity

documents, such as birth certificates, national

identity cards, or passports are not held by the
company. (see the Discrimination chapter)

; The employment agreement or contract is signed

by the worker and the manager responsible for
hiring workers, and it fulfils the following conditions:

If you hire foreign contract workers, your

procedures must make sure that:

The contents are clearly explained to the

worker before signing and the agreement is
written in a language the worker understands.

Workers are provided with their own copy of

the agreement and another copy is kept on file
in the workers personnel records.

; The labour broker or recruitment agency complies

with laws protecting worker welfare in the country
workers are from and the country where the
employer is located, as well as Code
requirements.

; Workers have freedom of movement and are

Your agreement with the labour broker states:

Workers are not required to pay deposits.

Recruitment fees paid by workers are within

the legal limits.

Regular and overtime work hours and wages,

pay cycle and benefits

never physically prevented from leaving the

workplace or dormitory. Procedures should also
include:

Reasonable rules for quickly granting workers

permission to leave the workplace during work
hours and worker housing (dormitories) during
non-work hours without penalty.

; Employment agreements state the amount and

the way deductions are made from wages and

that, when the worker returns home, the cost of
repatriation will be paid by your company.

Security guards may not take disciplinary

action against workers.

Exit doors cannot be locked to prevent

workers from leaving the workplace
or dormitory.

Workers are provided with access to toilets

and to clean drinking water at all times
and do not require permission to do so.

Interest rates on loans do not financially

bond the worker to the job.

; Any savings deductions from wages are by the

workers written consent and are placed in a
savings accounts that can only be accessed (at
will) by the worker.
Once a worker is hired, terms and conditions of
his/her employment should be clear to the worker.
Your employment procedures must make sure that:

Best Practice

; All workers are provided with an employment

agreement at the time of hiring that contains the
following information:

Nature and type of work arrangement (for

example, probationary, apprentice/trainee,
regular/permanent, foreign contract worker)

Terms and duration of the work

arrangement (for example, probationary
employees should be made permanent after
3 to 6 months if the law does not specify)

Specific job functions

Duration of contract, including terms of

resignation and termination

Work together with your labour agents

and brokers to implement common
processes and procedures to prevent
forced and bonded labour.

Documentation and Records

Meeting standards requires proper documentation. You
will need to keep on file in Human Resources:

; All employment agreements.

; Agreements with security agencies, labour
brokers, or recruitment agencies.

; A list of all contract workers (domestic or foreign)

that include the following information:

Communication and Training

Name of contract worker

Country of origin

Date of hire and length of contract

Recruitment agency

; Records of any complaints (and their resolution)

relating to the implementation of your forced labour
and freedom of movement policies.

You should use the following methods to make sure

your employees are aware of policies and procedures:

; Provide introductory training for new managers

Monitoring

and supervisors and newly hired workers on

your companys policies and procedures on
forced labour and freedom of movement.

You will need to check if your policies are being

followed and that controls to make sure the company
is meeting code and legal requirements are effective.
The following steps can be used to evaluate and
improve the effectiveness of your programs:

; Make sure the contract or employment

agreement is explained to all newly hired
workers, including their right to voluntarily
resign and to refuse overtime work.

1. Monitor trends and key performance indicators

(KPIs) to identify actual and potential problems,
including:

; Display company policies and any laws relating

to forced labour and freedom of movement (for
example, legally compulsory deductions) in a
language that workers understand.

; Regularly obtain worker feedback related to

your freely chosen employment policies.
; Establish and check key performance
indicators (metrics) for business processes
such as recruitment and hiring. For example,
the number of new migrant workers required
to pay a deposit to a labour broker or
percentage of new hires who understand
their employment agreement.

Best Practice:
Before departure from their home
country or region, provide migrant
workers with training and information on
the job they will perform, including the
employment terms and conditions in
their contract.

2. Investigate problems and analyse why they

occurred. If a problem arises that violates local
law, your own internal policies, or the ETI Code,
investigate the root causes, not just the
condition, and what can be done to address
them.

Common Questions
Why are foreign contract workers more vulnerable
to abuses of freely chosen employment and
freedom of movement?
Unlike domestic workers, the threat of deportation
hangs over the heads of all foreign contract workers.
Monitoring foreign contract labour issues should be
handled with sensitivity to their special circumstances.
Foreign contract workers tend to be less vocal
because of the high cost of losing their jobs.

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions that make sure the problem does not
recur and that the solution does not create other
problems.

; Often, more than one function or

How can you make sure your company is not

employing workers who are debt-bonded?

organisation is responsible for social

responsibility issues. In the case of freely
chosen employment, Human Resources
and labour agents must work together to
find an appropriate solution that meets
standards but does not prevent the
company from meeting its business
objectives.

Hire workers directly, not through a labour broker.

Brokers can take advantage of workers. Workers who
have fewer employment alternatives and are
economically desperate might be forced to bond
themselves to these brokers as their only way of
getting a job. The interviewing and selection process
can give you an idea of whether job applicants are
under any financial obligation to a third party or are
paying fees in order to get a job.

; For example, eliminating worker

indebtedness requires more than a change
in policy, but will also require such things
as better screening of labour brokers and
on going monitoring of labour broker
performance in meeting both company and
legal requirements.

How can you prevent those in charge of recruitment

and hiring from accepting bribes or under the table
deals in exchange for a job?

; Establish and communicate policies against such

practices, including penalties.

; Make sure workers have an effective grievance

Best Practice:

procedure for raising such issues.

Periodically conduct confidential

surveys to measure workers
awareness and understanding of
policies that relate to forced labour
and freedom of movement. Results of
the survey can be used both to
improve worker awareness and to
address workers concerns.

Refer to the Discipline and Grievance and Business

Ethics chapters for guidance.

How is a recruitment fee to a labour broker

different than a pre-employment fee to an employer
(which violates forced labour standards)?

Common Audit Non-compliances from the

Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the guidance
in this chapter can help reduce the incidence of these
problems:

; The Supplier cannot charge employment fees.

Company policies, procedures and contracts
must make it clear that there are no employment
fees.

x Retention by employer or labour agent of original

identification papers or passport

; Recruitment fees charged to foreign contract

x Payment of deposits or costs for essential work

workers by labour brokers are acceptable only if

the fee is within the legal limits of both the
workers home country and the country where
they will work. If the legal limits in their home
country and their work country differ, the lower
limit should apply.

x No policy on prison labour

x No free employment policy

x Work is not voluntary (unpaid, bonded, forced or

trafficked)

; Best Practice: Recruitment fees cannot be so

x Unreasonable notice requirements or penalties

for leaving

high that the worker cannot pay it off within a

short period of time. Good guidance is that all
fees paid by the worker to a labour broker
should not exceed one month of regular wages
(not including overtime).

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

The facility should not make deductions from

workers wages to pay for recruitment fees
without the written consent of the worker.

What other situations/practices could result in debtbondage?

Can I retain my workers passports and other

identity documents for safekeeping?

; Asking workers to pay a deposit for their

employment and using the loss of the deposit as a
disciplinary measure or to keep workers from
leaving the company.

Without his or her passport and other personal

documents, migrant workers will be unable to leave
the facility. This lack of freedom of movement is a
form of forced labour. So you may not retain these
documents from workers against their will. However,
there may be situations where workers may feel their
documents are more secure if held by the company.
This is allowable so long as the workers voluntarily
agree, in writing, that you can hold onto their
documents and that they can obtain their documents,
upon demand and without delay.

; Refusal to return workers savings at the end of the

contract, or upon termination or resignation.

; Where loan repayment amounts are such that a

large portion of a workers salary is used to repay
the debt. In such cases, workers may end up
working just to pay off existing debts.
In some countries, the law requires the employer to
collect savings for foreign contract workers. What
can the company do so it does not violate standards
on forced labour?

Can foreign contract workers join unions?

Yes. The ILO Convention on Migrant Workers (ILO
Convention 97) provides this right.

; The amount of savings must be within the

prescribed legal limits and is collected with the
written consent of the workers.

; Savings must be placed in individual workers

savings accounts. Workers should be able to
monitor and access their accounts at any time.
The facility must make sure that savings are
returned to workers when they leave the job
21

Collaboration with other brands, external

stakeholders, and industry initiatives including Social
Accountability International, Global Social
Compliance Program, SEDEX, and Verit is also key
to Disneys approach to tackling forced labour.

What are some examples of violations of workers

freedom of movement?

; Preventing workers from leaving their dormitories

except when a curfew is agreed by residents to
be reasonable for personal safety.

In 2011, Disney conducted and received

approximately 5,800 social compliance audits,
including unannounced audits.

; Limiting the number of toilet passes issued to a

line at a time or any other form of restrictions.

; Unreasonable delay in granting reasonable

If issues occur, we work closely with our licensees

and vendors and expect them to work with the factory
to have the issues corrected. Depending on the
complexity of the situation, we may step in ourselves.
We have also been working with BSRs Licensing
Working Group to build the capacity of the licensing
industry to provide training programs and guidebooks
which include the issue of forced labour.

requests of workers for permission to leave the

workplace.

Case Study
The Walt Disney Company
Forced labour is a violation of international labour law.
Employers have a responsibility to ensure that labour is
freely given and that employees are free to leave in
accordance with established rules. Meeting this
requirement can be challenging in the supply chain
context where buyers and brands must rely on their
business partners and suppliers to comply with Code of
Conduct requirements. For The Walt Disney Company
there can be additional challenges: the vast majority of
Disney-branded products are manufactured and sold
under licences granted by Disney to third party
licensees. Because of this, Disney lacks direct visibility
into the supply chain.

The California Transparency in Supply Chains Act,

along with the broader movement to raise visibility to
human trafficking, is focusing more attention on this
important topic. While our Code of Conduct and audit
process have always included an assessment of
forced labour, these recent developments are
certainly causing us to look at whether there are
opportunities to strengthen our prevention, detection
and remediation of human trafficking in our consumer
products supply chains.
We seldom see child labour or forced labour in the
facilities where our branded products are made.
However, we find that one of the biggest success
factors in having any issue addressed is how
engaged factory management is and how much
influence we can exert through our business
partners.

We have always wanted to be very open about not

just our efforts and progress but, even more so, our
challenges, says Laura Rubbo, Director of Corporate
Citizenship. We operate a very large, diverse
consumer products business and our goal is to do the
best we can given the unique challenges we face.

The Walt Disney Company is an international family

entertainment and media enterprise with four business
segments: media networks, parks and resorts, studio
entertainment and consumer products. To find out more
about Disney, visit their website:
http://corporate.disney.go.com/.

Both Disney and its licensees monitor the 25,000

factories which may be authorised to produce Disneybranded products at any time. Disney prioritises
monitoring resources to locations that have the highest
likelihood of non-compliance by conducting analysis
using data mainly from the World Banks Governance
Indicators. In the past, it has also used information
from past factory assessments as well as external
resources and initiatives such as AccountAbility's
Responsible Competitiveness Index, Freedom House's
Political Freedom Index, Heritage Foundation's
Economic Freedom Index, Transparency
International's Corruption Perceptions Index, and the
United Nation's Human Development Index.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, web sites and documents provide additional information around the topic
of Employment is Freely Chosen:

Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

International Labour Organization

ILO Topics Forced Labour: http://www.ilo.org/global/topics/forced-labour/lang-en/index.htm

ILO Helpdesk Business and Forced Labour:

http://www.ilo.org/empent/areas/businesshelpdesk/WCMS_DOC_ENT_HLP_FL_EN/lang--en/index.htm

Ethical Trading Initiative (ETI): http://www.ethicaltrade.org/

ETI Base Code: http://www.ethicaltrade.org/eti-base-code/employment

ETI Base Code Appendices: http://www.ethicaltrade.org/resources/membershipresources/eti-base-code-appendices

California Transparency in Supply Chains Act: http://info.sen.ca.gov/pub/0910/bill/sen/sb_0651-0700/sb_657_bill_20100930_chaptered.html

International Convention on the Protection of the Rights of All Migrant Workers and Members
of their Families: http://www.ohchr.org/EN/ProfessionalInterest/Pages/CMW.aspx

United Nations Office on Drugs and Crime: http://www.unodc.org/unodc/en/humantrafficking/?ref=menuside

Council of Europe Convention on Action against Trafficking in Human Beings:

http://conventions.coe.int/Treaty/EN/Treaties/Html/197.htm

U.S. Department of State Victims of Trafficking and Violence Protection Act:

http://www.state.gov/j/tip/laws/61124.htm

Anti-Slavery International: http://www.antislavery.org/english/

Slavery and the supply chain: http://www.antislavery.org/english/what_we_do/

programme_and_advocacy_work/slavery_and_what_we_buy.aspx

Verit Help Wanted: http://www.verite.org/helpwanted

UN Global Compact:

The Labour Principles - A Guide for Business:

http://www.unglobalcompact.org/docs/issues_doc/labour/the_labour_principles_a_guide
_for_business.pdf

UN Global Compact Principle Four: Forced and Compulsory Labour:

http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/Principle4.html

Signposts to Training
x

Verit: http://www.verite.org/Training

ILO: http://www.itcilo.org/en/the-centre/areas-of-expertise/rights-at-work/forced-labour-andhuman-trafficking

Key Terms
x

Bonded Labour: Workers work without regular wages in order to repay a debt to a labour
broker, the supplier, or another third party. Workers are not free to leave the supplier
facility at will.

Human Trafficking: The recruitment, transportation, transfer, harbouring or receipt

of persons by means of the threat or use of force or other forms of coercion for the
purpose of exploitation, including forced labour.

Indentured Labour: Workers are bound to the supplier with or without an employment
agreement and are not able to leave at will. Slavery is a form of indentured labour.

Post a Bond: Foreign contract workers are sometimes asked by labour brokers or their
employer to provide insurance to compensate the employer if they leave the job before the
contract term is complete. This insurance is called a bond.

Runaway Worker: A foreign contract worker who leaves his/her employer without notice and
remains in the country. The worker may try to get a job with another employer or may simply
seek to stay in the country to avoid repatriation. This presents compliance issues for
employers, as they are legally responsible for foreign contract workers working at their
facilities.

SEDEX SUPPLIER WORKBOOK

Chapter 1.3

FREEDOM OF ASSOCIATION
& COLLECTIVE
BARGAINING

Freedom of Association &

Collective Bargaining
What does it mean?

Freedom of Association means allowing workers

to form and join trade unions, worker associations
and worker councils or committees of their own
choosing. The purpose is to have good two-way
communication between management and workers.
Collective Bargaining is the way employers and
trade union representatives reach agreements on
working conditions, wages, overtime, grievance
procedures and worker involvement in workplace
affairs.

Worker freedom to join unions or worker organisations

and collective bargaining are basic building blocks for
healthy employer-worker relations.

Benefits

This section will help you check whether there is a

risk of not meeting this standard in your current
business operations and, if so, how to put controls
in place to make sure these worker rights are
respected.

Why should you do it?

Respecting your workers rights of freedom of
association and collective bargaining will help you
stay within the law, avoid penalties and meet your
customers requirements.
There can also be business benefits, such as:

Discouraging workers to form or join

an organisation of their own choosing
is a violation of their rights to freedom
of association.

Better worker retention

Fewer work stoppages and strikes

Improved trust between workers and

management

More effective resolution of worker

grievances

not join a union or shall relinquish

trade union membership;

Requirements
What do you need to do?

ETI Base Code Clause 2 requires that freedom of

association and the right to collective bargaining are
respected. This means:

C135: Workers' Representatives Convention, 1971

2.1 Workers, without

distinction, have the right
to join or form trade
unions of their own
choosing and to bargain
collectively.

2.2 The employer adopts an

open attitude towards the
activities of trade unions
and their organisational
activities.

2.4 Where the right to freedom of association and

collective bargaining is restricted under law,
the employer facilitates, and does not hinder,
the development of parallel means for
independent and free association and
bargaining.

C98:

Workers and employers, without

distinction whatsoever, shall have the
right to establish and, subject only to
the rules of the organisation concerned,
to join organisations of their own
choosing without previous authorisation.

Employersas well as workers...should, in their

common interest, recognise the importance of a
climate of mutual understanding and confidence.
(ILO R129)

x Union members or officials are not discriminated

against.

x Worker representatives are democratically elected

by the workers rather than being selected by the
company.

Workers shall enjoy adequate

protection against acts of anti-union
discrimination in respect of their
employment.

x There is a union at the site or other formal process

for two-way communication between workers and
management and for worker participation in
workplace decision-making.

Such protection shall apply more

particularly in respect of acts calculated
to-:

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business (like
hiring, discipline and termination.) And you make sure
your policies and procedures are designed to ensure
that:

Right to Organise and Collective Bargaining

Convention, 1949

Steps should be taken to promote consultation and

cooperation between employers and workers on
matters of mutual concern. (ILO R94)

How do you do it?

Freedom of Association and Protection of

the Right to Organise, 1948

Achieving and Maintaining

Standards

Relevant ILO Conventions

Workers' representatives shall enjoy effective

protection against any act prejudicial to them,
including dismissal, based on their status or
activities as a workers' representative or on
union membership or participation in union
activities

Other international guidelines recommend:

2.3 Worker representatives are not discriminated

against and have access to carry out their
representative functions in the workplace.

C87:

cause the dismissal of or otherwise prejudice

a worker by reason of union membership or
because of participation in union activities
outside working hours or, with the consent of
the employer, within working hours.

x Worker representative meetings take place on a

make the employment of a worker

subject to the condition that he shall

regular basis.
28

x Decisions made at worker committee meetings

are communicated to the workforce.
It is important that you also regularly monitor your
processes and controls to make sure they are
working.

Procedures
(practices)
Management should assign a responsible person (or
department) to make sure the above policies are carried
out. This includes:

Policies
(rules)

; Communicating your policies to all managers,

Your company policies should include the following:

supervisors and workers.

; Hiring, promotion, transfers and other employment

; Meeting regularly with managers and supervisors

arrangements will not be affected by a workers

involvement or affiliation with a union (see
Discrimination chapter).

responsible for recruitment, performance

management, discipline, termination, and wages and
benefits to oversee implementation.

; Workers, including worker representatives, will not

; Monitoring and reporting all complaints and

be harassed, abused or disciplined for union

activity.

management responses related to the issues of

freedom of association and discrimination.

; Workers are allowed to form and join

; If there is no union, to set up and maintain a process

organisations and negotiate collectively with

management, where there is no union.

for two-way worker-management communication.

Your recruitment, selection, and hiring and other human
resources procedures should:

; Statement that the company is supportive of

workers rights to freedom of association and
collective bargaining.

; Include ways to track and understand laws and

regulations on freedom of association.

; Make sure workers are not discriminated against in

hiring, salary, benefits, or promotion because they
belong to a union. (Applicants should not be asked if
they have ever joined a union before.)

Best Practice
Allow workers to participate in the
setting or revision of workplace rules
and standards. For rules and
procedures to be effective, both
management and workers need to
agree to them.

; Provide a clear and safe way for workers to report

discrimination, harassment or abuse of union
organisers or members (also see the Discipline
and Grievance chapter).

; Make sure unions can conduct their activities

without interference, including providing paid time
29

discussed and solutions or suggestions agreed

upon.

off for union/worker representatives to carry out

their duties.

; If there is no union, there is a formal process for

Note: minutes should be reviewed and approved

by both management and a union/worker
representative.

two-way worker-management communication

and that worker representatives in this process
are elected by the workers.

; The collective bargaining agreements with the

union (a copy of which should also be given to
each worker).

Communication and Training

; Logs of any complaints or grievances, including

You should use the following methods to make sure

your employees are aware of policies and procedures:

how they were resolved. How issues were

addressed should be posted for workers to see.

; Provide training programmes for new

managers and supervisors and newly hired
workers on your companys policies and
procedures on freedom of association and
collective bargaining.

Monitoring
Monitoring is how you check if your freedom of
association and collective bargaining policies are being
followed, and that the controls you put in place to meet
standards are effective. The following steps can be used
to evaluate and improve the effectiveness of your
programs:

; If there is a union or other employee

organisation on site, tell workers where they
can learn more about it.

; Provide continuing education for managers and

supervisors on labour relations, including the
companys grievance procedures.

1. Monitor trends and key performance indicators

(KPIs) to identify actual and potential problems,
including:

; Display company policies and laws on freedom

of association and collective bargaining in a
language that workers understand.

; Regularly review feedback, suggestions,

complaints and grievances from workers.

Best Practice

; Establish and check key performance

Distribute an employee handbook to all

workers (written in their native
language) that describes both legal
requirements and the companys
policies and procedures on freedom of
association and collective bargaining

indicators (metrics) for such tasks as

addressing worker grievances (for example,
how long it takes to fix a problem and if the
same complaint is received over and over
again).

Documentation and Records

Meeting standards requires proper documentation. You
will need to keep on file on company premises:

; Accurate minutes of union-management

meetings or of worker-management meetings
(where no union exists) that cover issues

2. Investigate problems and analyse why they

occurred. If a problem arises that violates local
law, your own internal policies, or the ETI Code,
investigate the root causes, not just the
condition, and what can be done to address them.

Countries where freedom of

association is restricted by law

; Review and analyse common violations of

freedom of association rules and procedures
to identify why they are being broken.

Most of the Gulf States*: Trade unions

are banned completely

China and Vietnam: Union is government

controlled and not independent

*Bahrain, Oman, Qatar, Saudi Arabia,

United Arab Emirates

Best Practice
Hold regular worker feedback meetings to
discuss issues and problems affecting
workers in the day-to-day operations of the
company and to ask for their suggestions on
how to address problems or improve
procedures. The meetings can be either
formal or informal.

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

; Often more than one function or organisation

is responsible for social responsibility issues.
In the case of freedom of association, Human
Resources, Production and the local union (if
any) must work together to find appropriate
solutions.

; For example, eliminating discrimination

against worker representatives of active union
members requires more than changes in
procedures, but will also require such things
as better training and education of
supervisors and HR staff, and an effective
grievance resolution process.

; Analyse on a regular basis issues and

suggestions identified during worker meetings
and worker-management meetings and use
the results to improve company policies and
procedures.

Common Questions
Common Audit Non-compliances from the
Sedex Database

What if the countrys laws limit freedom of

association rights?

The following are the most common non-compliances

against this issue. If properly implemented, the
guidance in this chapter can help reduce the incidence
of these problems:

Where country law prohibits or limits workers rights

to freedom of association and to bargain collectively,
your company must make sure that its practices do
not prevent or workers from forming or joining legally
acceptable worker organisations.

x No channel or workers unaware of a channel

for workers to collectively raise and discuss
issues with management

For example, you must not pressure workers to join a

company-controlled organisation in place of an
organisation created by and controlled by workers.

x No trade union or parallel organisation

x Lack of regular elections for worker
representatives
x Worker representatives not democratically
elected
x Workers do not know their representatives
Sedex provides a document with suggested possible corrective
actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

Can foreign contract workers join unions?

Yes. The ILO Convention on Migrant Workers (ILO
Convention 97) provides for this right.
What practices would be considered examples of
anti-union discrimination or rights violations?

Can labour-management councils be a substitute

for a union?
No, unless unions are not permitted by law or if
workers have chosen not to have a union. Such
councils are a good way to promote worker
participation, but do not replace worker unions and
collective bargaining agreements.

Dismissal or threatened dismissal of union

members or of workers who communicate or
come in contact with union organisers.

Requiring workers to sign a resignation letter as

a condition of being employed, and using such
letters to dismiss workers if they engage in union
activity.

Asking applicants and workers whether they are

members of a union or asking their views on
unions during the application process or during
employment.

Threatening workers with penalties if they

choose to unionise.

How can employing short-term contract workers

violate freedom of association standards?
In many parts of the world, temporary workers are
not legally permitted to join or form unions.
Companies have avoided unions and violated
freedom of association standards by keeping
workers on short-term, temporary contracts.
32

Not allowing workers to speak with other

workers during break time.
confidential, communication shall be sent to all
employees once the grievance or query is addressed
through notices, and documented minutes shall be
sent to the corporate office every succeeding month.

Noting an employees union affiliation in

personnel records, or participating in efforts to
blacklist an employee, or hindering the
workers future work opportunities.

Refusing to negotiate with a union.

Prohibiting workers from attending union

meetings (for example, assigning overtime
during scheduled union meetings).

Our employees have suggested new ideas including

a system for flexible leave, especially for our female
workers. Employees are now entitled to one hour, a
half day and a full day leave, once a month, if they
have something urgent to do or an appointment to
attend. The result is much higher satisfaction and
lower level of absenteeism.
In the first session, the employees werent confident
and were sceptical; the breakthrough came after two
or three sessions when management reviewed the
previous sessions, proving that issues were being
tackled and solutions being made.

Case Study
Communication is Key
Workers opinions and grievances may not be heard
if they are not given structures or procedures to voice
them. To establish an environment of communication
and trust, it is important to allow workers their right to
form groups in order to negotiate working conditions,
pay and health and safety at work.

By building management processes and trust

Synthite now offers an open door policy, under the
same processes as My Voice, where the workers,
including union representatives, are free to engage
with management at any time during working hours,
with a fair hearing as well as being continuously able
to raise their ideas formally through My Voice.

Synthite Industries knows that planning for long-term

employee engagement throughout their sites is vital
to building a stable workforce. The site engages and
has good relationships with two unions. Synthites
Calicut site HR Manager Raeez K.A says it is vital to
use meetings and committees to ensure good twoway communication and to foster inter-level
engagement.

Trust and cooperation has benefitted the whole

team. There is better communication which has
improved the working environment and increased
morale. More satisfied and happy to be a part of a
good company, productivity has improved as worker
retention has increased and absenteeism reduced.
Synthite Industries Ltd. Calicut, Kerala, India is a spice
ingredient provider. They process spices and ingredients
including, turmeric, chilli, pepper and rosemary for use for
flavouring. To find out more about Synthite, visit their
website: http://synthite.com/home.

My Voice, launched in 2009, is a formal employee

engagement programme initiated by the workers
themselves. It is a monthly opportunity for employees
to feedback confidentially on anything work-related.
The results have been positive, with many minor
issues being brought to attention of management that
might not have been noticed. Implementing My Voice
has improved the quality of the management
process.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

Synthite set up guidelines for My Voice to ensure

workers and staff understood the objective and
process. The guidelines state that the session is
chaired by representatives from the HR department,
details discussed in the meeting shall be properly
documented and shared with the concerned Heads of
Departments, workers raising issues will be kept
33

Resources and Guidance

The following organisations, web sites and documents provide additional information on freedom of
association and collective bargaining:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization: http://www.ilo.org
x

ILO Helpdesk - Freedom of Association: http://www.ilo.org/empent/areas/businesshelpdesk/WCMS_DOC_ENT_HLP_FOA_EN/lang--en/index.htm

ILO Helpdesk - Collective Bargaining: http://www.ilo.org/empent/areas/businesshelpdesk/WCMS_DOC_ENT_HLP_CB_EN/lang--en/index.htm

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI Freedom of Association Briefing

http://www.ethicaltrade.org/sites/default/files/resources/FOA%20briefing.pdf

ETI Freedom of Association and Collective Bargaining guidance:

http://www.ethicaltrade.org/resources/key-eti-resources/foa-and-cb-guidance

ETI - Union rights at work: http://www.ethicaltrade.org/in-action/issues/trade-union-rights

; UN Global Compact The Labour Principles - A Guide for Business:

http://www.unglobalcompact.org/docs/issues_doc/labour/the_labour_principles_a_guide_for_
business.pdf

; UN Global Compact Human Rights Dilemmas forum: http://humanrights.unglobalcompact.org/dilemmas/freedom-of-association/

; International Trade Unions Congress: http://www.ituc-csi.org/

; International Covenant on Civil and Political Rights (Article 22

Freedom of Association):
http://www.ohchr.org/EN/ProfessionalInterest/Pages/CCPR.aspx

; International Covenant on Economic Social and Cultural Rights (Article 8

Freedom of

Association and the Right to Organise):

http://www.ohchr.org/EN/ProfessionalInterest/Pages/CESCR.aspx

; European Convention on Human Rights (Article 10

Freedom of Assembly and Association)

http://www.hri.org/docs/ECHR50.html#C.Art10

; European Social Charter (Part 1

Freedom of Association):
http://www.coe.int/t/dghl/monitoring/socialcharter/Presentation/AboutCharter_en.asp

Signposts to Training
x

ILO: http://training.itcilo.org/ils/ils_freedom/freedom_activities.htm

ETI: http://www.ethicaltrade.org/training/eti-supervisor-training-programme

Verit: http://www.verite.org/training

Key Terms
x

Collective bargaining: The process by which union officers or worker representatives

negotiate with management on behalf of the entire workforce.

Grievance: A complaint to management against what a worker believes to be an

unjust or unfair act.

Organise: The process of forming a trade union or worker association.

Parallel means/parallel organisation: Where unions are prohibited or restricted by

national law, parallel means provides another way for workers to collectively
communicate and discuss issues collectively with management.

SEDEX SUPPLIER WORKBOOK

Chapter 1.4

LIVING
ACCOMMODATION

Living Accommodation
What does it mean?
Many companies provide living accommodation or
dormitories for their workers. Whenever an
employer provides a place for workers to live, the
housing must be safe, clean, and offered at a
reasonable price.
In many countries, especially for employers that hire
migrant workers, housing is important since workers
may not have other options of a place to live.
Housing is a basic need for everybody. This means
having a place to live that is safe and sanitary
provided with adequate heat, ventilation and clean
toilet facilities, access to safe drinking water, and
with a reasonable amount of personal space.

Benefits
Why should you do it?

Workers also need to have freedom of movement

in their housing, meaning that they can come and
go as they please and receive visitors where they
live. Also, while a company can charge workers for
housing, these costs cannot be excessively high.
Deductions for housing costs should never
compromise the ETI requirement that workers earn
a living wage.

Respecting your workers rights to clean, safe, and

healthy living conditions will help you stay within the
law, avoid penalties and accidents, and meet
customers requirements.
There can also be business benefits, such as:
a) Well-rested workers are generally more
productive.

Even when the company does not

own or operate the housing offered
to workers, the company must still
make sure workers are living in
acceptable conditions.

b) Hygienic facilities will mean lower rates of

illness, disease and absenteeism.
c) Improved worker satisfaction and morale can
lead to higher productivity and fewer
production mistakes.
d) Worker loyalty earned by providing high
quality living conditions can lead to
decreased costs for recruitment and
hiring.

Once these basic requirements are met, the

specific arrangements for worker housing will vary
by region and country. The living standards in the
region where a company is providing housing are a
good reference to determine if the types of
accommodation provided are acceptable.
The purpose of this section is to help you identify
the risks in workers current dormitory/living
situation that could result in workers general
dissatisfaction as well as a decline in health,
safety, and morale. This section will also help you
put controls in place to ensure a clean, safe, and
healthy living environment.
38

of the workers' contracts of employment;

and,

Requirements
What do you need to do?

c) accommodation should not cost the worker

more than a reasonable proportion of income,
and in any case should not include a
speculative profit.

ETI Base Code Clause 3

states that working conditions
are safe and hygienic. The
code also requires:
3.3 Access to clean toilet
facilities and to potable
water, and, if
appropriate, sanitary
facilities for food
storage shall be
provided.
3.4 Accommodation, where provided, shall be
clean, safe, and meet the basic needs of the
residents.

ILO Convention 97: Migration for Employment

Convention (Article 6, iii) requires that migrants
receive no less favourable treatment than
nationals with respect to accommodation.

ILO Convention 155: Occupational Safety and

Health Convention (Article 16) requires
employers to ensure that, so far as is
reasonably practicable, the workplaces and
processes under their control are safe and
without risk to health.

Universal Declaration of Human Rights, Article

25.1 states: Everyone has the right to a standard
of living adequate for the health and well-being of
himself and of his family, includinghousing

International Covenant on Economic, Social

and Cultural Rights, Article 11.1 states: the
right of everyone to an adequate standard of
living for himself and his family, including
adequate food, clothing and housing, and to the
continuous improvement of living conditions...

Achieving and Maintaining Standards

Relevant ILO Conventions and International

Standards:

How do you do it?

You can best meet standards by using a systems
approach. In other words, you add controls to the
processes you already use to run your business (like
discipline and termination). And you make sure your
policies and procedures are designed to ensure that:

x Conditions are
sanitary.

x Living
accommodation
is not located in
production or
warehouse
buildings.

ILO Convention 161, Occupational Health

Services Convention (Article 5), requires
surveillance of the factors which may affect
workers' health, including sanitary installations,
canteens and housing where these facilities are
provided by the employer.

x Family

ILO Recommendation 115: Workers Housing

Recommendation (1961), in cases where
housing is provided by the employer--

x Accommodation

accommodation
is sufficiently
separate from
the worksite.
is free of insects
and rodents.

a) the fundamental human rights of the

workers, in particular freedom of
association, should be recognised;

x Workers from different work shifts do not share the

same bed.

x Sleeping rooms are never overcrowded.

b) national law and custom should be fully

respected in terminating the lease or
occupancy of such housing on termination

x Fire detection, alarms and emergency exits are

adequate.
39

x Exit doors remain unlocked at night.

x The building is structurally sound.

Procedures

x Hot water for washing and bathing is adequate.

(practices)

x Toilet facilities are adequate and well maintained.

x Access to or supply of potable drinking water is

You should assign a responsible person or

department to make sure your practices are carried out
through the following practices:

adequate.

x There is lighting or space for reading and writing.

x Workers are permitted to leave the

; Communicating your policies to all managers,

accommodation during non-work time.

supervisors and workers.

; Making sure all residents have a copy of the

It is important that you also regularly monitor your

processes and controls to make sure they are working.

accommodation regulations written in a language

they understand.

Policies

; Posting key housing regulations and fire safety

(rules)

instructions in locations highly visible to residents.

; Maintaining a complaint mechanism for

Your company policies on living accommodation

should include the following:

accommodation conditions and practices, and

promptly following up on worker concerns.

; Statement that workers have a choice as to

; Repairing accommodation facilities promptly.

where they live, and that company housing is

only one option.

Follow-up on problems such as broken ventilation

systems or issues with toilet facilities.

; Commitment to provide safe and sanitary living

; Keeping records related to the accommodation,

quarters for all workers.

such as those related to deductions for housing

fees and records of fire / evacuation drills in the
dormitory.

; Statement that the price of company-provided

housing will be at or below the local average and
that all workers will be charged the same rate.

Your procedures should include:

; Clearly defined accommodation rules and any

; Commitment to provide adequate supplies of

disciplinary actions for breaking the rules. Any

disciplinary measures should be reasonable, and
except in the case of deliberate damage to
facilities, workers should never be fined for
breaking the rules.

potable drinking water.

; A separate bed or mat for each worker.

; Separate accommodation for male and female
workers.

; Rules that describe how residents are allowed to

receive and entertain visitors.

; Statement that workers are free to come and go

; Restriction of security guards responsibilities to

as they please, with no restrictions on a

residents freedom of movement beyond what is
reasonable for personal safety.

safeguarding and securing accommodation

properties and residents safety.

; Each worker being provided with a secure box or

locker to store their documents and valuables. Only
the worker should have the key / combination.

; Making sure that family housing (if provided) is

sufficiently separated from the workplace so that
children cannot enter production or other work
areas.
40

; How the company will keep living

accommodation clean and sanitary. Your
procedures must describe how it will ensure that:

Monitoring

Toilets are kept clean, are functional, and

are sufficient in number.

Clean water is provided for washing and

bathing.

Potable water is provided for drinking.

Common areas, like hallways and

recreation rooms, are kept clean.

You will need to check if your accommodation policies

and procedures are being followed and that controls
intended to make sure the company is meeting code and
legal requirements are effective. The following steps can
be used to evaluate and improve the effectiveness of
your programs:
1. Monitor trends and statistics to identify actual and
potential problems, including:

; Regular inspection and maintenance of exit

facilities, fire detectors, fire extinguishers,
alarms, emergency lighting and other facilities
needed to ensure the safety and health of
residents.

; Regularly review resident feedback related to

the administration of the companys
accommodation policy.

; A program of regular fire drills (at least once per

; Establish and monitor key performance

year for all work shifts).

indicators for health, safety, and hygiene

processes so that you can measure their
effectiveness on a continuous basis. For
example: percentage of residents who have
taken part in an emergency evacuation drill in
the past year.

; Regular testing of drinking water supplies.

; Making sure that sleeping rooms are adequately
heated and ventilated.

; Provision of first aid kits within worker

; Regularly review and revise policies and

accommodation; and methods to ensure that

workers are provided with any necessary
medical treatment.

procedures to keep them relevant and up-todate.

2. Regularly inspect the accommodation to make
sure company requirements are in place. Even in
cases when a third party is responsible for
accommodation, the company needs to make sure
its requirements for safe and clean housing are
being met.

Best Practice
Form a housing or accommodation
committee made up of residents to gather
worker feedback on living conditions and
discuss issues with management. This
committee could be an extension of the
worker health and safety committee at the
workplace.

Can the company make workers live in one place or

another?

Common Questions
What if the company does not manage the
accommodation?

No. Workers must choose where they wish to live. In

many settings, workers will need and want company
housing. But the company cannot require workers to
live in company housing (unless required by law), or
direct workers to another companys housing.

Even if your company does not own or directly

manage worker housing, you are still responsible for
the conditions in which workers live. Making sure the
housing is in line with the companys policies and
expectations is best done by monitoring and
listening to workers.
Visit the housing regularly and let workers file
grievances with the company even if they also can
complain to third party housing managers.

Common Audit Non-compliances

from the Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the
guidance in this chapter can help reduce the incidence
of these problems:

Inadequate workers accommodation

What other amenities should be provided in

housing?

x Individuals do not have storage area for

personal effects

Whats expected in worker housing will depend on the

standard of housing in the local community. But some
other amenities that you can provide for workers are:

Premises require minor repairs that affect

personal safety
No firefighting equipment
Lack of basic appliances required for
reasonable living conditions
No or inadequate emergency lighting

Common room for receiving guests, or a

game/recreation room.

Cooking facilities. Even when theres a canteen

workers might want the option to sometimes
cook their own meals.

Mechanical cooling, like a fan or air conditioner

for especially hot weather.

Hygiene facilities require repairs/improvement

Accommodation not structurally safe
Sedex provides a document with suggested possible corrective
actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

What are the requirements if my company provides

accommodation for workers and their families?
For the safety of children, any accommodation where
children may be present must be separate from
unmarried worker housing and located so that children
cannot enter production or warehouse areas.

Is there further guidance on how much workers

can be charged for housing?
While it is acceptable to charge workers for housing,
those charges should be at or below market rates.
Fees for housing can never compromise workers
ability to earn a living wage. Make sure workers are
fully informed and agree to these costs. Issue
receipts for payments or show housing fee
deductions in workers payslips.

Children must also have access to medical care and be

able to attend school until they have completed
mandatory education.
Where both parents work, day care services should be
made available.

Case Study
Habitable, clean and safe
For employers providing housing to their workers as
part of their contract, they need to ensure that they
meet minimum baseline standards of housing,
labour, health and fire safety regulations set by the
nation or state. The goal is to respect the health
and safety of workers in employer provided
accommodation in the same way they do within the
working environment.

One area the Kunshan Yuhua Embroidery Company

had overlooked was the requirement to run
evacuation drills at night, in case of fire. Due to their
close working partnership, Delbanco was able to
advise and implement a procedure to ensure this is
now regularly checked and that escape procedures
are known to all staff.
The result is decent, clean, safe and habitable
accommodation for workers as well as good
employee and customer relationships

For the past 12-15 years, Delbanco Meyer &

Company has been working with their Chinese
supplier Kunshan Yuhua Embroidery Company,
who specialise in traditional hand embroidery
techniques. Delbanco have worked with the
supplier over a number of years to improve
standards.

Delbanco Meyer & Company Limited is a major supplier

of household textiles; including quilts, pillows and bed linen.
Delbanco is based in the UK, working in partnership with
suppliers in China, who are managed by their Shanghai
internal audit office. They supply major retailers such as
M&S, John Lewis, and House of Fraser. To find out more
about Delbanco Meyer, visit their website:
http://www.delbanco.com/.

Linda Hyldgaard, CSR Manager at Delbanco

Meyer, emphasises that, a company cannot push
ideas and expectations on suppliers without an
exchange of money and orders. Only after placing
orders, and trust and relationships are built, can
suggested improvements be made.
In 2005, Kunshan Yuhua Embroidery Company
built new factories, in which both Delbanco and
company employees, through the Company
Committee, (a workers board of about 5 people
elected by the 99 workers) were closely involved.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

This not only ensured health and safety standards

were met but also that accommodation provided
comfortable places for workers to live.
The result was that the workers had a huge input
into plans for the new factory build, in particular
specifications for the dormitories. The workers
emphasised their need for comfortable and safe
accommodation, and the benefits this would add to
their job satisfaction. Their specifications included
safe cooking facilities, not on the floor or near the
exit door, and separation between mens, womens
and couples rooms to respect female safety and
privacy.

Resources and Guidance

The following organisations, web sites and documents provide additional information on
accommodation:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; International Labour Organization: http://www.ilo.org

ILO Helpdesk Workers housing: http://www.ilo.org/wcmsp5/groups/

public/@ed_emp/@emp_ent/@multi/documents/publication/wcms_116344.pdf

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org/

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

; UN Global Compact The Labour Principles - A Guide for Business:

http://www.unglobalcompact.org/docs/issues_doc/labour/the_labour_principles_a_guide_for_
business.pdf

; United Nations Universal Declaration on Human Rights (Article 25):

http://www.un.org/en/documents/udhr/

; International Finance Corporation Workers accommodation; processes and standards

http://www1.ifc.org/wps/wcm/connect/9839db00488557d1bdfcff6a6515bb18/
workers_accomodation.pdf?MOD=AJPERES

Signposts to Training
x

ILO: http://www.itcilo.org/en/training-offer

Key Terms
x

Dormitory: A large room or building that provides living accommodation for workers. Each
dormitory room contains multiple beds typically 8 to 12 for individual workers. Dormitories
may have common washing and toilet facilities or one for each sleeping room.

Hygienic: Means that facilities are free of levels of biological (bacteria and viruses) and
chemical contaminants that can cause illness or disease by inhalation or skin contact.

Potable water: Water suitable for drinking. This means it meets local drinking water
standards and does not contain contaminants (chemical or biological) that can cause illness.

SEDEX SUPPLIER WORKBOOK

Chapter 1.5

CHILDREN &
YOUNG WORKERS

Children & Young Workers

What does it mean?
Child labour is defined as the recruitment, hiring and
employment of workers under the minimum legal
working age or the age of 15, whichever is higher.
Protection of childrens rights is the focus of
international initiatives to end practices that are harmful
to childrens physical, mental, and moral development.
Children are vulnerable to abuse and exploitation and
thus require special protection.
The worst forms of child labour are the most
harmful kinds of child labour, and include: slavery,
trafficking, selling of a childs services for money,
and other forms of forced labour involving children in
hazardous work.

Benefits
Why should you do it?

Child labour is a prime concern of governments, human

right groups and international and local labour groups.
A socially responsible workplace installs ways to identify
and screen out job applicants who are underage.

Protecting the rights of children and young workers will

help you stay within the law, avoid penalties and meet
your customers requirements.
Avoiding child labour and properly using young
workers also has business benefits such as:

Young labour is defined as the employment of

workers of at least the minimum working age but
younger than 18.

a) Improving your companys image and reputation

b) Helping to make sure you have an educated and
capable workforce for the long-term

Companies can employ young workers (also known as

juvenile workers), but only with restrictions on the type
of work performed and the hours of work to protect
their health, wellbeing and development. .

c) Better relationships with technical schools and

other educational institutions which can
lead to an improved ability to attract
qualified graduates

Make sure young workers working

hours, work assignments and other
terms of employment meet legal
requirements.

This section will help you check whether there is a risk

of not meeting this standard in your current business
operations and, if so, how to put controls in place to
make sure child labour is avoided and young workers
are employed under the right conditions.

Requirements
What do you need to do?
ETI Base Code Clause 4
requires that child labour not
be used. This means:

Prevent the engagement of children in the

worst forms of child labour;

Provide the necessary and appropriate direct

assistance for the removal of children from the
worst forms of child labour and for their
rehabilitation and social integration;

Ensure access to free basic education, and,

wherever possible and appropriate, vocational
training, for all children removed from the
worst forms of child labour;

Identify and reach out to children at special

risk; and

Take account of the special situation of girls.

4.1 There shall be no new

recruitment of child
labour.
4.2 Companies shall
develop or participate
in and contribute to
policies and
programmes which
provide for the transition of any child found to be
performing child labour to enable her or him to
attend and remain in quality education until no
longer a child.

Other international guidelines recommend:

Preventing the engagement of children in or

removing them from the worst forms of child
labour, protecting them from reprisals and
providing for their rehabilitation and social
integration through measures which address their
educational, physical and psychological needs.
(ILO R190 - 1999)

Full-time attendance at school or participation in

approved vocational orientation or training
programmes should be required and effectively
ensured up to an age at least equal to that
specified for admission to employment.
(ILO R146 1973)

4.3 Children and young persons under 18 shall not

be employed at night or in hazardous conditions.
4.4 These policies and procedures shall conform to
the provisions of the relevant ILO standards.

Be sure that any on-site child

care facilities are completely
separate and not accessible from
work areas.

Achieving and Maintaining Standards

How do you do it?

Relevant ILO Conventions

C138: Minimum Age for Employment, 1973

You can best meet

standards by using a
systems approach. In
other words, you add
controls to the
processes you already
use to run your business
(like hiring). And you
make sure your policies
and procedures are
designed to ensure that:

x This convention specifies that the minimum age

for employment shall not be less than the age of
completion of compulsory schooling and, in any
case, shall not be less than 15 years (developing
countries may set the legal working as low as 14,
with justification).

x The minimum age for work which by its nature or

the circumstances in which it is carried out is
likely to jeopardise the health, safety or morals of
young persons shall not be less than 18 years.

x You have a clearly

C182: Worst Forms of Child Labour, 1999, requires

that governments:

stated policy on child

labour.

x You employ only workers of legal working age or

15 years old and over, whichever is higher.

x The age of job applicants is verified.

x A remediation procedure is in place in case of
discovery of child labour in the workplace.

x Young workers are not assigned to shift work

(night and weekends) or hazardous work.

x There is a recruitment policy for young workers.

x The company meets all other legal requirements
for young workers, such as registering with the
government or providing health examinations.

x Maintaining records of employee ages to show

they are of legal age for their jobs.
It is important that you also regularly monitor your
processes and controls to make sure they are working.

; Job postings and advertisements clearly state the

Policies

minimum hiring age.

(rules)

; Review and verification of proof-of-age

documents.

Your company policies should include the following:

; Commitment to not recruit or hire workers below

; Means to maintain copies of verified proof of age

the age of 15 or in compliance with the local

minimum age (whichever is higher).

documents on file.

; Labour brokers follow the companys

; Statement for workers above the age of 15 who

requirements on recruitment and hiring of young

workers, including confirming their ages.

have not completed compulsory schooling that

their jobs will not interfere with the completion of
their education.

; Review all jobs in the facility for health and safety

hazards and clearly identify those suitable for
young workers.

; Commitment to not allow young workers to work

overtime, at night, or in hazardous jobs.

; Maintaining a current list of young workers that

includes name, hire date, birth date, department,
job, work schedule (including education-related
restrictions), supervisor name.

; Statement that if child labour is discovered, the

company will remediate the situation in the best
interests of the child and his or her family.

; Commitment to comply with all applicable legal

; Young workers are provided with health checks

when they are hired (and regularly during
employment) to make sure the job they are doing
does not endanger their health or physical
development.

and customer requirements.

Procedures
(practices)

; Employment contracts for young workers include

all job and work hours restrictions and educational
needs, and are signed by the workers parents.

Management should assign a responsible person (or

department) to make sure your policies are carried out.
This includes:

; Registration of young workers with the local

labour authority.

; Communicating your policies to all managers,

supervisors and workers.

; Written procedure to address the discovery of

child labour in the workplace. The procedure
should include:

; Meeting regularly with managers and supervisors

responsible for recruitment and hiring, working
with vocational schools, and workplace health and
safety, to oversee implementation.

; Monitoring and reporting all complaints and

management responses related to the issues of
child labour.
Your recruitment, selection, and hiring and other human
resources procedures should include:

; Ways to track and understand laws and

regulations on child labour and young workers.

; Recruitment and hiring process which screens out

underage workers.

removing the child from the workplace

contacting the family

continuing full salary and benefits until of

legal working age

making sure compulsory schooling is

completed

other financial support, as needed

Documentation and Records

Meeting standards requires proper documentation.
You will need to keep the following on file on your
company premises:
; Copies of verified proof-of-age documents in the
workers personnel file (national identity card,
birth certificate, local school records)
; A register of young workers currently employed
; An inventory of departments and jobs that are
approved for young workers

Communication and Training

; Copies of reports of the discovery of child labour

and how the incidents were resolved

You should use the following methods to make sure

your employees are aware of policies and procedures
on child labour:

Best Practice
Keep copies of the types of falsified
proof-of-age documents found in the
hiring process. On an on-going basis,
use them as a screening tool by
comparing them with the documents
submitted by job applicants.

; Provide introductory training for new managers,

supervisors, and newly hired workers on your
companys policies and procedures on child
labour.
; Make sure that the training covers laws and
regulations related to child labour, particularly
for restrictions on hours and conditions of work.
; Display factory policy and local law and
regulations on child labour (minimum age,
restriction on hours, and conditions of work).

Monitoring
You will need to check if your child and young worker
labour policies are being followed and that the controls
to make sure your company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:

; Train employees responsible for hiring on how

to verify identity papers are valid and how to
use interviewing and other techniques for
verifying age of job applicants.
; Communicate the companys grievance
procedure and explain how to report issues
related to children and young workers.

1. Monitor trends and performance indicators

(KPIs) to identify actual and potential problems.

; Examples of KPIs include: percentage of job

applicants found to be underage; number of
young workers assigned to hazardous work;
and number of underage workers found
working in the facility.

Best Practice

Involve the company in a

community education programme.
Provide funding or scholarships to
local students in need of financial
support.

; Periodic review of complaints and grievances

from workers related to the administration of

your child and young worker labour

procedures.

the company from meeting its business

objectives.

; Regular review of recruitment, selection, and

; Simply removing a child from the workplace

hiring procedures to determine if the existing

process and other controls are effective in
preventing hiring underage workers.

may achieve legal compliance but may not

meet customer code requirements if you do
not also address the childs educational
needs and the familys financial needs.

; Regularly review young worker job

assignments to check that restrictions on the
job type and working hours meet company
requirements.

Common Audit Non-compliances from the

Sedex Database

; Perform random age verification checks to be

sure that hiring procedures are effective.

The following are the most common non-compliances

against this issue. If properly implemented, the guidance
in this chapter can help reduce the incidence of these
problems:

2. Investigate problems and analyse why they

occurred. When a situation arises that indicates
the existence of non-conformance with company
child labour policies and customer code(s) of
conduct, the company should investigate the root
causes, not just the condition, and what can be
done to address them.

x Copies of proof of age documents not available in

worker files
x Lack of health examinations for juvenile workers
x Young workers not registered with the local
government

; For example, if you discover an underage

worker in the facility, after taking appropriate
action to remove the child from the workplace
and taking care of his/her financial and
educational needs, investigate how this
occurred. Was there a gap in your age
verification procedure? Did a labour broker
not follow your requirements?

x Inappropriate hours of work for young workers

x Child labour remediation programmes do not
ensure children complete compulsory education

x Juvenile worker contracts not registered or

approved by local legal authority
x Inadequate child labour policy
x Young workers performing night work

Best Practice

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

Conduct regular meetings with managers

and supervisors who have young workers
under their supervision to review the
implementation of restrictions for them.

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

; Often, more than one department is

responsible for social responsibility issues. In
the case of child labour, Human Resources
and Production must work together to find an
appropriate solution that meets standards, is
favourable for the child, but does not prevent

older than they really are or are unable to verify their

age with correct documentation.

Why do children work?

x Lack of decent jobs for adults.

What if the legal minimum age is lower than a

customers code standard, or the mandatory age for
schooling?

x Large families require multiple incomes to

feed their members.

In both cases, the companys policy should be that the

higher requirement (older age minimum) should be
followed.

x Agricultural jobs pay by the amount of

produce picked. This encourages families to

bring more children into the field to help
collect farmed goods.

Also, in most countries, the minimum age and the

mandatory age for completion of compulsory
schooling is the same. However, there are countries
where the minimum age is lower than the age for
completion of compulsory schooling. In this case, it
should be the companys policy not to hire workers
under the mandatory age for completion of
compulsory schooling even if they are above the
minimum age for employment (except in cases where
school and training are legally combined, such as
apprenticeships).

x It is cheaper to employ young children

because they are less likely to complain than

adults.
x Poor families can't afford to send their

children to school.
x Many families around the world are

unfamiliar with the rights of their children and

deem it acceptable to send children to work.

What else can a company do to help address child

labour in the workplace?

x Families think that school won't help their

children survive.

In spite of good anti-child labour policies and

procedures, it may still be possible to discover
underage workers on the job. This is because
underage workers may not want to be discovered and
lose their jobs. They and their parents may
depend on the income. In such cases you must
remove the child from the workplace and ensure the
child returns to school and completes his or her
education. You should also continue to pay the
workers full salary to the childs family until he or she
reaches legal working age..

x Migrant children don't live in one place long

enough to attend school; instead they work

with their parents.

Common Questions
How can you avoid hiring child workers?
Direct hiring. A common risk for child labour is
when child workers services are sold to labour
brokers by their own parents who, because of
extreme poverty, are unable to feed and provide for
them. These middlemen often transport the children
to distant work sites and present them as older than
they are.
Effective age verification procedures. You
should always require applicants to provide
government authenticated proof-of-age documents.
How can you verify age during an interview?
An interviewer screening an applicant can ask
questions such as, In what year were you born?
or, How old are your siblings? Then ask a followup question such as: Where do you fit in the family
order? These kinds of techniques may help
determine the accuracy of information from young
applicants who may be coached to say they are

Case Study

Upon discovery, the factory immediately drove the

child home, accompanied by the auditor and the
factorys HR manager, where she was interviewed.
The child resigned from the factory and received all
wages, an extra months salary and one months
meal fees as compensation in cash. She was also
given a letter promising employment at any time
after she reached 16.

Protect through procedures

Supply chains are globalised and complex. It is
therefore vital that businesses have proper systems
in place to protect those most vulnerable from
exploitation.
Through a 3rd party audit requested by Tesco,
Paladone Products found a child of 15 working in
their supplier factory in China, where the legal
working age is 16. The child was working in her
school holidays and had been employed on the
assembly line on a full-time contract.

Under Paladones advice and support, the factory

has established formal procedures to ensure all
staff are trained and aware of the seriousness of
child labour. They have also improved their ID
monitoring processes, enforcing verification of IDs
to prevent any future employment of children. The
factory has not found any subsequent incidences
of child labour.

Despite Paladones communication of their child

labour policy, the HR personnel did not have a
strong awareness of it and mistakenly employed the
child, most likely due to the fact that the child had
been recommended by an existing employee.

The incident opened up our eyes to the issue and

workers ID cards are now checked in all factories
to ensure there is no child labour. We have used
this experience to educate our other suppliers in a
similar way. We experienced no backlash from
Tesco: it has in fact strengthened our customer
relationship, as we resolved the issue in a mature
and responsible way.

It was a case of everybody pulling together to

resolve the issue. Tesco was heavily involved, came
to see the child at the factory and supported us every
step of the way, says Paladones Head of CSR,
Audrey Mealia.

Paladone Products Ltd. is a designer and creator of

fun, novelty toy and giftware for nearly 20 years.
Customers include major retailers such as M&S,
Sainsburys and Tesco. To find out more about
Paladone, visit their website: www.paladone.com.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

Resources and Guidance

The following sources provide further details on international standards for child labour.
; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:
http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf
; International Labour Organization: http://www.ilo.org
x

International Programme on the Elimination of Child Labour (IPEC):

http://www.ilo.org/ipec/lang--en/index.htm

For a full list of and links to full text of ILO child labour conventions:
http://www.ilo.org/ipec/facts/ILOconventionsonchildlabour/lang--en/index.htm

Basic guide to the worst forms of child labour:

http://www.ilo.org/ipec/facts/WorstFormsofChildLabour/lang--en/index.htm

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org/

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI - Child Labour: http://www.ethicaltrade.org/in-action/issues/child-labour

; Global March Against Child Labour: http://www.globalmarch.org/

; Fair Labor Association (FLA): http://www.fairlabor.org/topic/child-labor
; Convention on the Rights of the Child (1990):
http://www.ohchr.org/EN/ProfessionalInterest/Pages/CRC.aspx

; UN Global Compact (Principle 5):

http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle5.html

; International Covenant on Economic, Social and Cultural Rights (Article 10):

http://www.ohchr.org/EN/ProfessionalInterest/Pages/CESCR.aspx

Signposts to Training
x

Verit: http://www.verite.org/Training

ILO Training Centre: http://www.itcilo.org/en

Key Terms
x

Adult: An individual 18 years of age or older.

Child: An individual below the age of 15 or the legal working age, whichever is
higher.

Juvenile or Young Worker: A worker less than 18 years of age but at or

above the age of 15 or the legal minimum working age, whichever is higher.

SEDEX SUPPLIER WORKBOOK

Chapter 1.6

WAGES

Wages
What does it mean?

Wages should be enough to meet workers basic living

needs and leave the worker with some discretionary
income. Where the legal minimum wage or local
industry benchmark is not enough to cover workers
basic needs, the employer should strive towards
paying a living wage.

A base wage is what is paid for regular work hours.

This is usually a legal minimum wage set by the
government. If there is no legal minimum wage,
workers must receive the local industry benchmark
wage.
Overtime wages are paid for any work beyond normal
work hours, and must be at the premium rate required
by country law or by the local industry benchmark.
A living wage means wages are enough to meet
workers basic needs for food, shelter, and education
for their children. Discretionary income is money left
over after basic needs have been met.

Benefits
Why should you do it?

This section will help you check whether there are

risks of not meeting this standard in your current
business operations and, if so, how to put controls in
place to make sure that wage standards are met.

Making sure that workers are paid a living wage and

at least the legal minimum wage rates for regular and
overtime hours worked will help you comply with the
law, avoid penalties and meet your customers
requirements.
There can also be business benefits, such as:

Some countries may not set a legal

minimum wage. In such cases, employers
must follow the local industry benchmark
on base wages. This means making sure
that wages paid by the supplier are
comparable to those paid by similar
businesses in the area.

Higher worker motivation, morale and

productivity.

Making it easier to attract and retain qualified

workers.

Allowing workers to send their children to

school helps ensure a more qualified
future workforce.

Strengthening the companys

reputation in the local
community and in the
industry.

contractor or recruiter), shall be prohibited.

Requirements

C131: Minimum Wages Fixing Convention, 1970,

requires that the level of minimum wages shall
include the needs of workers and their families,
taking into account the general level of wages in
the country, the cost of living, social security
benefits, and the relative living standards of
other social groups.

What do you need to do?

ETI Base Code Clause 5 states that wages must meet
legal standards and be enough for basic needs with
some discretionary income.
This means:

Other international standards and guidelines state:

5.1 Wages and benefits

paid for a standard
working week meet, at a
minimum, national legal
standards or industry
benchmark standards,
whichever is higher. In
any event wages should
always be enough to
meet basic needs and to provide some
discretionary income.
5.2 All workers shall be provided with written and
understandable information about their
employment conditions in respect to wages
before they enter employment and about the
particulars of their wages for the pay period
concerned each time that they are paid.

Everyone who works has the right to just and

favourable remuneration ensuring for himself and
his family an existence worthy of human dignity,
and supplemented, if necessary, by other means of
social protection (Article 23 of the Universal
Declaration of Human Rights).

Remuneration which provides all workers, as a

minimum, with: a decent living for themselves and
their families (Article 7, International Covenant on
Economic, Social and Cultural Rights).

Achieving and Maintaining

Standards
How do you do it?

5.3 Deductions from wages as a disciplinary

measure shall not be permitted nor shall any
deductions from wages not provided for by
national law be permitted without the expressed
permission of the worker concerned. All
disciplinary measures should be recorded.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business (like
compensation and benefits) and you make sure your
policies and procedures are designed to ensure that:

Relevant ILO Conventions

C95:

Suppliers are
aware of the
minimum
legal wage.

Regular and
overtime
wages are
correctly
calculated
and paid.

Workers
performing
piece rate
work are paid
the legal
minimum
wage even if

Protection of Wages Convention, 1949,

requires that:

x
x

Wages be paid directly to the worker,

Where access to other stores or services

is not possible, goods are sold and
services must be provided at fair and
reasonable prices.

Deductions from wages shall be permitted

only under conditions and to the extent
prescribed by national laws or regulations

Any deduction from wages to obtaining or

retain employment, made by a worker to
an employer or his representative or to
any intermediary (such as a labour

Employers shall be prohibited from

limiting in any manner the freedom of the
worker to dispose of his wages.

; A commitment to provide all legally required benefits

and social insurance as part of the workers total
compensation package.

they do not meet production targets.

Apprenticeships are never illegally extended as a

way of reducing wage payments.

Wages are adequate to pay for food and housing

and provide discretionary income.

; A commitment to provide annual leave, sick leave,

maternity leave, legal holidays and any other legally
required leave.

Deduction from wages do not reduce net wages

below the minimum legal wage.

Refer to the Working Hours chapter for more guidance on

overtime and rest days.

The facility does not use wage deductions as a

disciplinary measure.

Annual leave and other leave benefits are paid or

given as required by law.

Overtime work is consistently paid at the required

premium.

Subcontractors, homeworkers, casual workers

and other non-regular workers are a basic wage
or piecework wage that is at least equivalent to
the legal minimum wage.

Management should assign a responsible person or

department to make sure these policies are carried out
through the following practices:
; Communicating your policies to all managers,
supervisors, and workers.
; Meeting regularly with managers and supervisors to
oversee implementation of your wage and benefits
policies.
; Implementing an accurate and transparent payroll
system.

Workers are provided accurate payslips and

know how their wages are calculated.

; Maintaining and actively updating laws, regulations

and industry benchmarks regarding wages, paid
leave, and legally mandated benefits and
deductions.

It is important that you also regularly monitor your

processes and controls to make sure they are
working.

; Collecting and updating information on the basic

cost of living in the local community. This means
understanding the cost of basic education, housing,
and food to make sure workers can afford these at
the basic wage level and still end up with a little
extra money.

Policies
(rules)
Your company policies should include the following:

; Regularly communicating all wage-related

information to workers and responding to worker
feedback and complaints.

; A commitment to provide wages to workers that

meet at the least the legal minimum wage or
industry benchmark and is sufficient to meet
workers basic needs and provide discretionary
income.

Signs that workers are not paid a

Living Wage

; A commitment to pay the legally required premium

rates for overtime work, or in the absence of a
legal requirement, at least 125% of the regular
wage rate.

x Not eating while at work so they can afford

to feed their children

; A statement that workers on piece work will

receive at least the minimum legal wage,
regardless of production quotas.

x Asking for advances on their pay

x Being in debt - borrowing from neighbours
or moneylenders

; A commitment to pay legally required overtime

wages for work performed on a rest day and/or a
legal holiday.

x Cutting out extra' spending, such as for

medicine and clothing
x Working more than one job or taking on

homework
60

; Payment methods that include cash, cheque, or by

direct transfer into the workers bank account. If
bank accounts are set up by the factory for migrant
or other workers, only the workers may access and
control the accounts.

Best Practice

The Payslip or Paystub

The payslip provides the worker with a
record and receipt of payment for work
performed over a specified period. It should
specify the hours worked, base wage rate,
overtime hours and overtime premium rate,
and piece rate, if applicable. This allows
workers to determine whether they were
paid the correct amount and for all hours
worked. If the company pays workers
through direct deposits into workers
individual bank accounts, the company must
still issue pay slips for these payments.

; Provisions to ensure that probationary workers must

receive the same entitlements and benefits as
regular workers, even if not required by law.
; Ways to ensure provision of legally required social
security, insurance or medical benefits. Any
contributions from workers wages must be
described in workers payslips.
; A process to make sure that punitive wage
deductions are not used (see also Discipline and
Grievance).
; Workers cannot be fined for production mistakes,
damaged machinery or personal protective
equipment.
; The wage system uses a clearly defined and
communicated formula for wage calculation for all
types of workers, including:

Procedures
(practices)
Your wages and benefits and other Human Resources
procedures should include:
; Ways to track and understand laws and
regulations on wages and benefits.
; Methods to ensure that all workers are provided
with employment agreements at the time of hire.

Local workers (regular and permanent)

Foreign workers

Temporary workers (casual and contractual)

Apprentices/Trainees

Probationary or workers hired on a trial period

; The wage system should clearly describe the

calculations used for:

; These should clearly state the wage rates workers

will earn for regular and overtime work, the pay
period and frequency of payments, and any
legally allowed deductions.
; Maintaining accurate and clear payroll records
and providing payslips to workers every pay
period.
; Ways to regularly monitor the practices of a third
party or labour provider who holds workers
contracts or is responsible for paying their salaries
and benefits.

Regular overtime wages (overtime after regular

hours of a regular work week)

Special overtime wages (overtime on a rest

day and/or legal holiday)

Recording hours worked

Maintenance of payroll registers for all workers

; When the supplier employs migrant workers, the

labour broker or recruitment agency complies with
laws protecting workers wages in both the country
workers are from and the country where they work
(see also Employment is Freely Chosen).

; Defined limits on the length of time workers can

be kept in trainee or apprentice positions before
they are paid the wages and benefits of regular
workers.
; A process that makes sure that workers are paid
on time no more than two weeks after the end of
the pay period.

Documentation and Records

Meeting standards requires proper documentation. You
will need to keep on file on the company premises:
; Payroll registers (preferably computer-generated)
based on an accurate recording of hours worked for
all workers, as long as legally required.
; Payslips showing timely wage payment provided to
workers that detail regular and overtime hours,
regular and overtime wages, benefits, and
deductions.
; Payroll registers containing, at a minimum, separate
columns for the following information:

Communication and Training

You should use the following methods to make sure
your employees are aware of your policies and
procedures:
; Provide introductory training for new managers
and supervisors and newly hired workers on the
companys policies and procedures on wages
and benefits.
; Make sure that the training covers laws and
regulations related to wages and benefits.
; Train workers on the details of their wages,
including wage rates and calculation of earnings
and any deductions.

Pay period

Regular hours worked

Overtime hours worked

Regular wages

Overtime wages

Benefits

Bonuses

Gross earnings

Deductions

Net wage

; Specify the base wage and overtime rates, as well

as the schedule of wage payments in the
employment agreement for all workers.

; Communicate the companys pay and benefits

structure to all workers before employment and
before changes are made.

; Keep a record of all changes in workers

employment status and corresponding changes in
wages and benefits in workers individual files.

; Retrain all workers on how wages are calculated

when there are any changes in the wage
structure.

; Provide all workers with payslips, written in a

language they understand, that contain the following
basic information:

; Display company policy and local laws and

regulations on wages and benefits in a
language(s) that all workers understand.

Regular hours

Regular wages

Overtime hours

Overtime wages

Benefits

Deductions (should be itemised)

Bonuses

wage and benefits policies and customer code(s) of

conduct, the company should investigate the
causes not just the conditions, and what can be
done to address them.
Problems under wages generally fall under three
categories:

Electronic payroll registers that automatically

calculate payroll entries based on hours of work
are preferred over manual or handwritten
payroll registers for the following reasons:
x It minimises the possibility for errors in wage
and benefits calculation and reduces the
time spent addressing worker complaints
and correcting errors.
x It helps to make your pay practices more
credible to workers. Calculation errors
create suspicion and dissatisfaction among
workers, even if errors were not intentional.

Problems related to wage and benefits

administration including errors in
documentation, records keeping, or calculation
on the part of the payroll clerk or payroll
department staff.

Problems related to low worker awareness or

lack of knowledge on wage and benefits policies
and procedures.

Problems related to worker dissatisfaction with

the wages and benefits, including that wages
are not enough to meet basic needs.

x Eliminating human involvement increases

impartiality and transparency in the
calculation of wages and benefits.

Best Practice:
Regularly survey workers to evaluate their
satisfaction with wages. Ask if workers
have enough money for things like food
and housing, and if they are able to save a
little money after each pay period. This will
help you understand if the company is
paying a living wage.

Monitoring
You will need to check if your wages and benefits
policies are being followed and that controls intended
to make sure the company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:

; Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and the
solution itself does not create other problems.

; Monitor and report on trends and statistics to

identify actual and potential problems. The
following can be used to monitor the effective
implementation of your policies:

Solutions to non-compliance issues related to

wages are based on the nature of the problem:

x Frequency and nature of worker complaints

related to errors in the calculation of wages,
benefits and deductions.

Administrative problems: Solutions can include

improving payroll systems, pay practices, and/or
improving the skills of administrative staff.

Worker awareness: Solutions may take the form

of worker training to improve worker knowledge
of policies and procedures, and worker skills in
calculating their wages and understanding their
payslips.

Worker dissatisfaction: Solutions can include

reviewing the wage and benefits package
according to job function, skill level, tenure and
so on.

x Turnover rate (high turnover may indicate low

worker satisfaction with low wage rates).
x Regularly review the local cost of living and
adjust your wages as needed to ensure you
are paying workers a living wage.
; Investigate problems and analyse why they
occurred. When a situation arises that indicates
the existence of non-conformance with company
63

Common Audit Non-compliances from the

Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the
guidance in this chapter can help reduce the incidence
of these problems:

x Overtime not paid at the premium rate specified

by local law.

x Legally required allowances, bonuses or

benefits not paid.

x Worker wages and/or piece work earnings

below minimum wage, industry benchmark or
living wage.

x Falsified, duplicate, or intentionally incomplete

payroll records.

x No pay stubs/payslips were provided.

x Deductions from pay as a disciplinary measure.

Common Questions
Sedex provides a document with suggested possible corrective
actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

Is it acceptable to pay certain workers at rates

below the legal minimum wage?
In some countries there might be a different minimum
wage for apprentices, casual workers and trainees.
The company must make sure that all conditions
required by law regarding the employment of
apprentices or trainees are met. You should avoid the
following practices for these workers:
x

Is it legal to pay foreign workers at less than the

minimum, living wage?
Migrant workers are entitled to the legal minimum wage
rate of the country in which they work. Paying foreign
workers less for the same work as local employees is
discrimination on the basis of nationality. Migrant
workers should also be paid a living wage, the same as
other workers.

The company delays promoting casual and

temporary workers and trainees to permanent
status beyond the time prescribed under local
law to avoid paying legally required benefits that
they would be entitled to if they were permanent
employees, or

How often should workers be paid?

The company routinely dismisses casual and

temporary workers and trainees to avoid
promoting them to permanent (regular) status.

Wages should be paid at regular intervals and as often

as required by law. Usually this means paying workers
at least once per month. Workers must receive their
pay no more than two weeks after the end of the pay
period.

Even if the law allows certain workers to be paid

less, all workers should still earn a living wage
with some discretionary income.

Can workers be paid by other methods rather than

money (for example, in products, food or clothing)?
No. Workers must be paid by cash or cheque, or by
direct deposit to the workers bank accounts. The
company may not pay workers with vouchers, coupons,
gift checks, or in goods.

Can workers be paid through a third party such as

a labour broker or labour provider?

workers (maybe as part of a confidential survey) and

listen to what they say about their day-to-day challenges
of meeting the needs of themselves and their families.

Companies may use third parties to recruit workers.

Once the worker is hired and signs an employment
agreement directly with the company, the worker
should receive wages directly from the company.

How can the company know if workers are earning

discretionary income?
Talking with or surveying workers is a good way to
understand if workers have a little money left over after
each wage payment. Workers should be able to save for
unexpected situations (like illness) after basic costs for
food and housing are met. Survey workers and gather
and maintain data on the actual cost of living in the local
community.

Subcontracted workers who work for a labour provider

are typically paid by the labour provider. In those
cases, you should regularly review the labour
providers wages and benefits records to ensure that
workers are properly compensated.

Can the business make deductions from workers

wages for payment of cash advances/loans?
Some companies offer workers cash advances or loans
to be charged against future wages. When this occurs,
the business should make sure that the maximum
amount allowed for advances is within the ability of the
worker to pay back. Cash advances should not be of
amounts that might keep workers from leaving the
company when they wish to, which can create a
condition of debt bondage and should always meet legal
requirements.

Can the business make deductions from workers

wages for meals, housing, and clothing?
Deductions can be made subject to certain conditions
that the goods or services that the workers are paying
for are adequate, of good quality, and that the cash
value of the goods or services is not inflated, and that
the deductions are legally permitted. The company
must properly account for these deductions and must
explain them to workers, who must provide written
consent to such deductions in advance and
understand how they will impact income earned.
How can the company know if it is paying a living
wage?
Living wages vary from country to country and even
region to region. Information from sources like the
government, NGOs, and community organisations
might help a company better understand what a living
wage should be in its community. While money and
savings are a problem for many, the situation is
different when a person cannot afford to eat. Ask
65

Case Study
Wages; Motivation and value
Wages are fundamental to how valued and motivated
workers feel in their employment. Wages should be
set appropriately in relation to local law to provide
security and a fair income (sufficient to meet basic
needs and to provide discretionary income) in return
for their work.

CMI also offers benefits in addition to wages

which have proved popular with workers, such
as paying a part of workers salary into a
provident fund (in accordance with local labour
laws) as well as providing all meals for free.
As a result, CMI is viewed as an attractive
employer and has seen increased worker
retention, especially of skilled workers, and an
increase in workers returning to work after
marriage or children. CMI has also helped
educate workers that by increasing efficiency,
they can work fewer hours and their wages will
increase. As a result, their Sri Lankan workers
earn a minimum of three times the legal
minimum wage per month.

For Crystal Martin International (CMI), Andy

Woodhouse, CSR Manager says, We believe in
going above and beyond legal labour standards. It is
essential to understand the culture, to educate and to
implement improvements in a considered way.
The difficulty in raising wages is maintaining a
financially sustainable business in a competitive
marketplace. CMI have worked for 10-15 years with
their supply sites in Sri Lanka, Bangladesh and China,
to slowly and sustainably raise wages to attract and
retain skilled workers whilst crucially raising
productivity and efficiency.

Crystal Martin International specialises in producing

high-quality clothing to major UK and European
retailers. Part of the Crystal Group, the largest
apparel manufacturer in South East Asia. To find out
more about Crystal Martin International, visit:
http://www.crystal-martin.com.

By implementing improvements to raise efficiency and

reduce wastage due to poor quality (alongside
automation and other innovations), CMI has been able
to keep their Asian production cost increases to 1015%, whereas the average is 40%. At the same time
they have also been able to increase efficiency from
40% to 50-60%. Education of the workers has been
key to making them understand that increases in
productivity can raise their wages and decrease their
working hours; rather than a reduction in jobs.

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

Workers tend to distrust things they dont

understand; the message needs to be communicated
in the right way. says Andy Woodhouse.

Resources and Guidance

The following organisations, websites and documents provide additional information on wages:
;

Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance: http://www.sedexglobal.com/wpcontent/uploads/2012/07/SMETA-Best-Practice-Guidance-4-Pillar-4_0-L.pdf

SMETA Corrective Action Guidance (behind member log in):

https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

International Labour Organization: http://www.ilo.org

ILO Labour Standards on Wages: http://www.ilo.org/global/standards/subjects-covered-byinternational-labour-standards/wages/lang--en/index.htm

ILO TRAVAIL Wages and Income: http://www.ilo.org/travail/areasofwork/wages-andincome/lang--en/index.htm

Ethical Trading Initiative (ETI): http://www.etihicaltrade.org

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

Living wage: make it a reality: http://www.ethicaltrade.org/resources/key-eti-resources/livingwage-eti-conference-08-briefing-paper

UN Global Compact

The Labour Principles - A Guide for Business:

http://www.unglobalcompact.org/docs/issues_doc/labour/the_labour_principles_a_guide_for_bu
siness.pdf

Signposts to Training
x

Verit: http://www.verite.org/training

ILO: http://www.itcilo.org/en/training-offer

Key Terms
x

Regular or Base Wage: This is the pay workers receive for working their normal working hours.
This rate should be set at least according to the legal minimum wage or industry benchmark
standards.

Living Wage: Income that is enough to pay for workers and their families basic needs with a
little left over (discretionary income).

Discretionary Income: Money left over from wage payments after basic needs have
been paid.

Overtime Wage: Premium pay for hours worked beyond normal working hours.

Payslip: A record of hours worked, wages paid, and wage deductions provided to
workers on pay day for every pay period.

Punitive Wage Deduction: A deduction from a workers wages used as a form of discipline.

Rest Day: A full day (24 consecutive hours) off for workers every seven-day period.

The information contained in this document is provided by Verit and while every effort has been made to make the information
complete and accurate and up to date, Sedex makes no representations or warranties of any kind, express or implied, about the
completeness, accuracy, reliability, suitability or availability with respect to the information contained therein. Any reliance you
place on such information is therefore strictly at your own risk. In no event is Sedex liable for any loss or damage including
without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss profits arising
out of, or in connection with, the use of this document.

SEDEX SUPPLIER WORKBOOK

Chapter 1.7

WORKING HOURS

Working Hours
What does it mean?
A socially responsible business must meet standards
and legal requirements for working hours (both
regular and overtime), and provide workers with
sufficient rest periods, including at least one day off
each week, on average.
Legal and customer limits on the amount of daily and
weekly work cover both regular work hours, or the
time worked during a normal work day, and overtime
work hours, or extra time worked outside the normal
working hours and for which premium wages are paid.
These requirements are meant to protect workers from
too much work, which leads to fatigue and the risk of
accidents, lower productivity, and possible damage to
workers health and wellbeing.

Laws that limit overall hours and

overtime and require that workers are
given at least one rest day a week and
other time off (like public holidays and
vacation) recognise the importance of
rest and providing time for other aspects
of a workers life family, leisure,
educational and vocational pursuits. This
contributes to the workers safety on the
job, overall well-being and continued
development.

Benefits
Why should you do it?
Respecting limits to working hours helps you stay
within the law, avoid penalties and meet your
customers requirements. Making sure that workers
work a reasonable number of hours, and that these
hours are agreed to by the worker, can improve
worker satisfaction and morale, safety and welfare.
These benefits to workers can also bring business
benefits, such as:

Local law and code requirements also require that

workers receive at least one day off in every seven
worked. Workers must also receive rest and meal
breaks during their shift.
Further, all overtime work must be voluntary. Please
see Freely Chosen Employment for further details on
involuntary overtime work.

Increased productivity due to better

worker health and alertness.

Well-rested workers generally work

faster and make fewer mistakes.

Reduced worker turnover.

A more harmonious workplace

as rested workers are less
irritable and less likely to
conflict with co-workers
or superiors.

Requirements
What do you need to do?

Achieving and Maintaining Standards

How do you do it?

ETI Base Code Clause 6 prohibits excessive working

hours. This means:

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business (such
as production planning) and you make sure your policies
and procedures are designed to ensure that:

6.1 Working hours

comply with national
laws and benchmark
industry standards,
whichever affords
greater protection.

x Workers do not work over the legal or code limit for

regular or overtime hours.

6.2 In any event,

workers shall not on
a regular basis be
required to work in
excess of 48 hours
per week and shall be provided with at least one
day off for every 7 day period on average.
Overtime shall be voluntary, shall not exceed 12
hours per week, shall not be demanded on a
regular basis and shall always be compensated
at a premium rate.

x Workers are given a weekly day of rest

x Legally-required breaks provided to workers during
their work day.
x Workers are paid a premium for their overtime hours.
x Overtime is voluntary and workers are not punished
or penalised for refusing overtime.
x Workers hours are inaccurately recorded, preventing
underpayment of wages.

Relevant ILO Conventions:

C1:

Hours of Work (Industry), 1919

C47:

Forty Hour Week, 1935

C14:

Weekly Rest (Industry) Convention, 1921

It is important that you also regularly monitor your

processes and controls to make sure they are working.

C171: Night Work, 1990

Other International Standards and Guidelines:

The United Nations International Covenant

on Economic, Social, and Cultural Rights
addresses labour rights in Article 6, which
states that workers are entitled to sufficient rest
and leisure, including limited working hours and
regular, paid holidays.

ILO Recommendations address work hours,

such as ILO R116, Reduction of Hours of Work
Recommendation, 1962

The United Nations Universal Declaration of

Human Rights also states that all persons have
the right to rest and leisure, including
reasonable limitation of working hours and
periodic holidays with pay (Article 24).

; Coordinating on a regular basis with staff handling

Policies

wages and benefits to ensure that all hours worked,

including overtime hours, are paid in full and on
time.

(rules)
Your company policies on working hours should
include the following:

; Recording and responding to all complaints related

; A restriction on more than 48 hours of regular

work hours per week (or in accordance with legal
requirements).

; Answering questions from workers regarding hours

; A commitment to provide all legally required

breaks during work shifts.

; Communicating guidelines to customers on placing

to the issues of working hours.

and overtime policies.

and changing orders to avoid last minute or

oversized orders that can tax the capacity of your
workforce and therefore lead to excessive overtime
hours.

; A commitment to provide all workers with at least

one day off per seven day week.
; A limit on overtime that follows legal and buyer
requirements, whichever is stricter. When there is
no legal requirement, total working hours should
not exceed 60 per week (or 12 hours of overtime
per week).
; A statement that all overtime is voluntary and
workers will not face penalties for refusing
overtime, including threats, intimidation and loss
of company-provided transportation.
; A commitment to pay for overtime work at a
premium of no less than 125% of regular wages
(ILO C30 Article 7), or 150% as required by
many customers and laws.

Your recruitment and hiring, compensation and benefits

and other human resources procedures should include:

Procedures

; An accurate time recording system in which all

workers record their own work hours (clocking in
and out).

(practices)
You should assign a responsible person (or
department) to make sure the above policies are
carried out through the following practices:

; Making sure that supervisors and security guards do

not record hours worked for employees.

; Communicating your policies to all managers,

supervisors and workers.

; A payroll system that provides workers with payslips

indicating the number of regular and overtime hours
worked for the pay period.

; Coordinating on a regular basis with both hiring

and production order fulfilment staff to:
x

; A process to make sure accurate records are kept of

the hours (both regular and overtime) that each
employee works.

Make sure your workers skills match job

requirements so that they are able to meet
production quotas in normal working hours.

Make sure there are enough workers or shifts

to meet upcoming customer orders and
deliveries.

Plan for and schedule overtime as far ahead

as possible, based on customer orders.

; An overtime scheduling and approval process that

makes sure workers are free to refuse overtime,
except for any overtime hours listed in employment
contracts and collective bargaining agreements (see
also the Freedom of Association chapter).
; A work scheduling process that makes sure all
workers are given a least one day of rest (24
consecutive hours) per seven days worked, .
72

; If relevant, a collective bargaining agreement on

overtime hours (see also the Freedom of
Association chapter).

; List regular hours of work in the employment

agreements for all types of workers (domestic,
foreign migrants, apprentices, temporary workers,
trainees, probationary workers).
; Display company policies, laws and regulations and
employee rights on working hours in noticeable
locations, in a language workers understand and
include them in an employee handbook that is given
to each worker.

Best Practice
How does the company ensure that overtime is
voluntary?
x The company policy states that workers may be
asked to work overtime from time to time, but
that workers can refuse overtime without fear of
penalty or harassment.

Best Practice
Training for Managers

x The facility gives workers at least 24 hours

notice when scheduling overtime work. This
also gives the factory time to make other
arrangements in case some workers cannot
work overtime as scheduled (for example, to find
other workers who can and are willing to do the
work).

Managers are more likely to be supportive if they

understand that reducing work hours can actually
help them achieve their business objectives.

x Workers sign a consent form if they are willing to

work overtime each time they are asked.
x There is a grievance process in place that
workers can use to report violations of the
working hours policy.

Reduced operating costs. Being more

effective in planning, balancing workload
across the facility and implementing lean
production processes will reduce costs for
overtime and improve product quality.

Improved productivity. Tiredness is one of

the negative effects of excessive overtime.
Tired workers are less productive and are
more likely to take longer to complete their
work.

Improved quality. Tired workers are more

likely to make mistakes that lower quality of
product leading to higher costs for your
company.

Reduced accident rate. Alert employees

have fewer accidents. Hidden costs for
accidents include: production down-time,
product damage, hiring and training,
replacement workers, and lower productivity
of new hire replacements.

Better customer relationships. Increased

transparency, communication, and agreement
between customers and suppliers.

Communication and Training

You should use the following methods to make sure
your employees are aware of policies and procedures
on working hours:
; Provide training programmes for new managers
and supervisors and newly hired workers on your
companys policies and procedures on working
hours and time off.
; Make sure that the training covers laws and
regulations and employee rights related to hours
of work, particularly on overtime limits and rest
time.

Documentation and Records

Meeting standards requires proper documentation. You
will need to keep the following on file on your company
premises:

; Regularly retrain all employees - management,

supervisors, and workers - on the procedures for
assigning and refusing overtime.

; Accurate records of hours worked for each

employee, such as worker payslips and summary
73

2. Investigate the problems and analyse why they

occur. When a situation arises that indicates the
existence of non-conformance with company working
hours policies and customer code(s) of conduct, the
company should investigate the causes not just the
condition, and what can be done to address them.

reports generated from the timekeeping and

payroll systems.
; Accurate reflection of regular and overtime hours
worked and the rates paid in the payroll register
and on payslips.
; Records of any complaints related to inaccurate
recording of working hours, or related to
inaccurate wage payments based on recorded
hours.

For example, if you find that some workers did not

get a day off in every seven days, or worked more
than the legal limit for overtime. Find out why this
happened whether because of unexpected
circumstances like a rush order or broken equipment,
or due to a larger problem, like high worker turnover.

; Employee agreements that show what regular

and overtime hours are expected and what rates
will be paid.

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and the
solution itself does not create other problems. For
example:

; If relevant, a collective bargaining agreement on

overtime hours (see also the Freedom of
Association chapter).

; Respond quickly to problems you can fix in the

Monitoring

short term, like repairing broken machines or

bringing workers from another line or another
area to help meet an order with limited lead time.

You will need to check if your working hours policies

are being followed and that the controls to make sure
your company is meeting code and legal requirements
are effective. The following steps can be used to
evaluate and improve the effectiveness of your
programs:

; Use your analysis of why problems occur to plan

longer-term solutions with other departments or
functions. This might mean hiring more workers
to meet increased demand, or rearranging shifts
and production schedules.

1. Monitor trends and key performance indicators

(KPIs) to identify actual and potential problems
relating to your policies on working hours, such as:

Considerations for a system to monitor

and evaluate working hours compliance

x Total overall number of hours, including

overtime, worked by individual workers and by
groups of workers

x How will the monitoring be done?

x What data and metrics will be

monitored?

x Total time lost due to absenteeism or lateness

x What reports will be generated (for

example, total overtime hours per month,
business process root causes,
recommended solutions)?

x Total time lost due to sickness/injury/accident

x Total training time per worker
; Monitor and evaluate trends in hiring,
production needs, working hours and other
functions and data to help you meet
requirements on regular and overtime hours.

x How will the information be used to

control overtime?

; Regularly review the compensation process to

make sure that overtime hours are paid
correctly (for example, 125% or 150%).
; Perform random checks of the working hours
listed on worker payslips against timekeeping
system records to make sure that hours are
being recorded properly.
74

x Reviewing the reliability of, and possibly replacing,

suppliers.

Common Questions
How can a company evaluate and address the
problem of excessive overtime?

Companies usually make decisions based on costbenefit analysis. However, you should make sure that
all costs are factored into your analysis on overtime,
including, for example: the cost of medical expenses,
time lost due to illness, injuries, and accidents, and
rework could all be caused by workers tiredness due to
long working hours.

Excessive overtime is a very common problem. You

can ask the following questions to investigate and
identify both the causes and the effects:
x When does excessive overtime happen? What
days of the week, months, part of the production
process? Which departments are involved?
x How many workers are usually involved? What
jobs do they do?

Common Audit Non-compliances

from the Sedex Database

x What are the common causes of overtime? Is it

changes in orders, late or poor quality materials or
supplies, or machine breakdowns?

The following issues are the most common noncompliances against this issue. If properly implemented,
the guidance in this chapter can help reduce the incidence
of these issues:

x What are the common impacts? You should

check:
Attendance/time records for increased
lateness, absenteeism during and immediately
after periods of excessive overtime.

x No rest day for each 7 days

Medical records for any increase in injuries,

accidents and/or other physical complaints
during and after periods of excessive overtime.

x Daily/weekly/monthly working hours/overtime

hours exceeded the legal maximum

Production departments for trends in quality

problems during peak seasons or during
periods of excessive overtime or night work.

x Inadequate systems for recording working hours

x Excessive working hours/overtime hours

x Overtime exceeds 12 hours per week

x Falsified, duplicate or intentionally incomplete

time records
x No paid annual leave
Sedex provides a document with suggested possible corrective
actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

How can I minimise excessive overtime?

Overbooking, poor capacity planning, unanticipated
client demands, production mistakes, high absenteeism,
and a lack of flexibility in workers skills are typical
contributors to the need to work excessive overtime.

Answers to these questions will give you an idea of

how to approach the problem. Solutions can take the
form of any or a combination of the following:
x Improving workers skills through training,
mentoring or coaching so that mistakes and
rework does not contribute to overtime.

Suggestions from managers to reduce the need for

overtime include:

x Improving production flow and processes so that

delays do not result in overtime.
x Improving capacity planning so that enough
workers are available to manage demands.
x Hiring additional workers or adding another shift.
75

Set reasonable production targets and

schedules based on realistic labour efficiency
rates. Measures of worker productivity form the
basis for setting targets and schedules. If the
efficiency rate is unreasonably set, the timetable is
naturally affected and workers will have to work
overtime to complete their targets. Make sure that

labour efficiency rates consider set-up time, and

allow sufficient time for workers to eat, rest,
stretch, and go to the toilet.

Closely coordinate Human Resource plans

and production targets. Capacity planning
should consider past client demands, the
complexity of the production process and workers
skills.

Continually upgrade workers skills through

training, mentoring and coaching. Having
workers with skills that match their jobs reduces
the amount of rework which often leads to the
need for overtime. Having multi-skilled workers
who are competent in more than one operation
allows more flexibility and efficiency in the
production process, which in turn increases
productivity.

Improve communication with supervisors and

line managers, and between line managers
and workers. Make sure work instructions are
clear and easy to follow. Reduce errors that could
cause costly delays by holding work team
meetings and giving clear instructions. Listen to
worker feedback on how to improve processes.

Establish and maintain a sense of teamwork

and high worker morale. Workers who work
under conditions of fear and intimidation, who are
dissatisfied due to low wages and long hours, who
are exposed to excessive heat, fumes, and other
unhealthy conditions, are not the most productive
workers. On the other hand, workers who take
pride in the organisation they work for and are
treated well by their supervisors and co-workers
are in a better position to meet delivery deadlines.

Case Study
Efficient production reduces overtime
By investing in procedures, sites can manage
production better and by increasing efficiency and
productivity they no longer have huge peaks in
production at certain times of the year. They
sometimes have bottle necks of production but
improvements have meant CMI can manage
planning comfortably within legal limits. The result
has been increased productivity, particularly in
quality of work.

Working hours, if excessive and without adequate

periods of rest, can damage the physical and
mental health of workers and increase the risk of
accidents. It also prevents workers attending to
their family responsibilities, participating in their
community and recuperating.
Crystal Martin International (CMI) has had
difficulties reducing the hours of their suppliers
workers in China. Workers often request long
working hours to supplement their normal wages.
There are an approximate 220 million migrant
workers in China and so overtime is often high due
to many having travelled great distances purely to
work.

We are building our own factory in Cambodia and

will be implementing the same improvements we
have made in our other factories from day one says
CMIs CSR Manager, Andy Woodhouse.
Crystal Martin International specialises in producing
high-quality clothing to major UK and European retailers
and is part of the Crystal Group, the largest apparel
manufacturer in South East Asia. To find out more about
Crystal Martin International, visit http://www.crystalmartin.com.

Key to CMI improving working hours has been

educating the workers. Workers are taught that it is
better for their health and personal wellbeing to
work fewer hours and better production methods
can maximise the workforce output in less time.
To reduce working hours, CMI analyses the
production techniques being used in the site via a
work study. Once the site has been assessed they
implement Western production standards around
inefficiencies and poor quality. Education and
supervisor training is crucial to improvements so
that workers can see the link between increased
efficiency and lower working hours.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, web sites and documents provide additional information on work hours:
; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:
http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf
; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0
; International Labour Organization: Working time - http://www.ilo.org/empent/areas/businesshelpdesk/WCMS_DOC_ENT_HLP_TIM_EN/lang--en/index.htm
; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org/

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

Purchasing practices case studies: http://www.ethicaltrade.org/resources/key-etiresources/purchasing-practices-case-studies

Principles of Implementation: http://www.ethicaltrade.org/resources/key-etiresources/principles-implementation

; Verit: http://www.verite.org
x

For Workers Benefit Solving Overtime Problems in Chinese Factories:

http://www.verite.org/sites/default/files/Chinese_Overtime_White_Paper.pdf

; Impactt: http://www.impacttlimited.com
x

Impactt Overtime Project: http://www.impacttlimited.com/case-studies/impacttovertime-project

Signposts to Training
x

ETI: http://www.ethicaltrade.org/training

Verit: http://www.verite.org//training

ILO: http://www.itcilo.org/en/training-offer

Key Terms
x

Absenteeism: is when a worker is away from work and his/her absence not planned; that is,
it is not a vacation day, public holiday, or weekly rest day.

Lean Production: a production practice with the goal of maximising the use of resources
(financial, energy, equipment, and manpower) for meeting the needs of customers.
Resources that are not directly devoted to production are considered wasted. .

Regular Work Hours: Hours worked during the normal work day. Local law will usually set
the limit of regular hours between 40 and 48 per week.

Overtime Hours: Hours worked in addition to regular hours. Local law will usually set limits
on overtime by week, month, quarter, or year, and specify premium wage rates for these
extra hours.

Rest Periods: Break times, which local laws typically require after three or four hours of
work; and the weekly day of rest, which is a full day off for workers every seven-day
period.

Copyright
All texts, contents and pictures on this publication are protected by copyright or by the law on trademarks. The publication is subject to the
copyright of Sedex Information Exchange Ltd. Reproduction is authorised, except for commercial purposes, provided that
http://www.sedexglobal.com is mentioned and acknowledged as the source. Copyright of third-party material found in this site must be
respected.
The information contained in this document is provided by Verit and while every effort has been made to make the
information complete and accurate and up to date, Sedex makes no representations or warranties of any kind, express or
implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information contained
therein. Any reliance you place on such information is therefore strictly at your own risk. In no event is Sedex liable for any
loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever
arising from loss profits arising out of, or in connection with, the use of this document.

SEDEX SUPPLIER WORKBOOK

(Photo: Eve Brand Farms)

Chapter 1.8

DISCRIMINATION

Discrimination
What does it mean?
Discrimination is any distinction, exclusion or
preference based on a personal or physical
characteristic which deprives a person access to equal
opportunity or treatment in any area of employment.
Discrimination occurs when a person is treated
either favourably or unfavourably due to their
religion, age, disability, gender, race, sexual
orientation, caste, marital status, or union or political
membership or affiliation. Discrimination can be
deeply rooted in some countries or cultures, and can
lead to an underclass of workers who lack
opportunities to develop and improve, or to earn
enough to support themselves or their families.

All workers should be given the

same payment for the same
work and be given equal
opportunities and benefits.

Benefits
Why should you do it?

A socially responsible company makes sure that it

does not discriminate against any individual or
group of individuals in any process or in any area of
workplace operations. This includes hiring, the
assignment of wages and benefits, access to
training, promotion, discipline and termination,
and/or retirement practices.

Respecting your workers rights of equality at work

will help you stay within the law, avoid penalties and
meet your customers requirements.
There can also be business benefits, such as:

Discrimination is common in the recruitment,

selection and hiring process, whether knowingly or
unintentionally. Companies need to make sure that
a job applicant is only evaluated on his or her ability
to do the job.
This section will help you check whether there is a
risk of not meeting this standard in your current
business operations and, if so, how to put controls
in place to make sure your workers rights are
respected.

Better worker retention

Higher worker satisfaction and morale

A more diverse workforce improves creativity

Expansion of business into new markets

A wider pool of talent from which to recruit

Higher productivity and better

employee relations

Requirements
What do you need to do?
ETI Base Code Clause 7 requires that no
discrimination is practiced. This means:
7.1 There is no discrimination in hiring,
compensation, access to training, promotion,
termination or retirement
based on race, caste,
national origin, religion,
age, disability, gender,
marital status, sexual
orientation, union
membership or political
affiliation.

x Decisions to hire are

C183: Maternity Protection Convention, 2000

Prohibition from requiring a test for

pregnancy or a certificate of such a test
when a woman is applying for employment,
except where required by national laws or
regulations.

not based on a
candidates trade
union affiliation or
other memberships.

x The company does not request information on

applications or during interviews which is not related
to a persons ability to perform the job.

x Providing less favourable contract terms or work

conditions based on a personal characteristic. For
example, not providing equal pay for equal work to
women on the basis of their gender.

Other international standards and guidelines:

x
x
x

International Convention on the Protection of the

Rights of Migrant Workers and Members of their
Families, 1990.

advertisements
contain no references
to age, marital status,
gender or other
personal
characteristics which
are not related to the
job requirements.

Requires equality of opportunity and treatment in

respect of employment and occupation, with a
view to eliminating any discrimination.

x Job postings or

C111: Discrimination (Employment and Occupation)

Convention, 1958

Requires appropriate measures to ensure

that maternity does not constitute a source of
discrimination in employment, including
access to employment, and

International Convention on the Elimination of all

Forms of Racial Discrimination, 1966 (Article 5)

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business (like
hiring, discipline and termination) and you make sure
your policies and procedures are designed to ensure
that:

Requires application to all workers of the

principle of equal remuneration for men and
women workers for work of equal value.

How do you do it?

C100: Equal Remuneration,

1951

International Covenant on Economic, Social and

Cultural Rights, 1966

Achieving and Maintaining Standards

Relevant ILO Conventions

ILO Equal Remuneration Recommendation

(R90)

x Workers are not tested for pregnancy during

ILO Discrimination (Employment and

Occupation) Recommendation (R111)

x The company does not require unnecessary medical

International Covenant on Civil and Political

Rights (Article 26 Equality and NonDiscrimination)

x The company does not transfer or demote based on

recruitment or post-hiring.

tests, including HIV/AIDS, Hepatitis B, nor others not

required by law.

a personal characteristic, such as a personal disliking

of the worker that has no relevance to their

capability at their job.

workers, apprentices and trainees, probationary

workers hired on a trial period, and foreign contract
workers.

x Workers are not dismissed for anything other than

unacceptable job performance, breach of factory
rules or general improper or illegal behaviour.

; Statement that explicitly prohibits asking women

applicants about their pregnancy status and
conducting pregnancy tests to determine the hiring
or continued employment of female workers.

x Workers are not dismissed for becoming pregnant

or disabled.

x Workers are not dismissed for attempting to

establish a trade union or other workers
association in the factory.
It is important that you also regularly monitor your
processes and controls to make sure they are
working.

Policies
(rules)
Your company policies should include the following:

Procedures

; Commitment to equality at work and to avoid all

(practices)

forms of discrimination (the policy should include

definitions of discrimination and reference to
relevant ILO Conventions).

Management should assign a responsible person or

department to make sure your policies are carried out.
This includes:

; Explicit prohibition of any practice of discrimination

in hiring, salary and benefits, promotion, discipline,
grievance, termination, or retirement benefits on
the basis of any of the following:

Age

Caste

Colour

Disability

Gender

Sexual orientation

Health status (including HIV, hepatitis B)

Marital status

Nationality

Social, national or ethnic origin

Migrant worker status

Political opinion

Race

Religion

Union affiliation

; Communicating your policies to all managers,

supervisors and workers.

; Meeting regularly with managers and supervisors

responsible for recruitment, discipline, termination,
and wages and benefits to oversee implementation.

; Monitoring and reporting all complaints and

management responses related to the issue of
discrimination.

; Performing an annual review of the implementation

status of your anti-discrimination policies and
procedures. Refer to the Monitoring section for more
information.
Your recruitment, selection, and hiring and other Human
Resources procedures should:

; Include ways to track and understand laws and

regulations on discrimination.

; Focus on the ability of a potential employee to do

the job, job specifications, expected performance

; Commitment to protect all types of workers from

discrimination, including local workers, temporary
84

levels and employment terms and conditions,

rather than personal characteristics.

The decision to dismiss an employee must be based on

work related matters such as job performance, breach of
company rules or general behaviour. There should be
clear documentation that shows the cause for the
dismissal and the procedures that followed.

; Make sure that female workers are not required to

undergo pregnancy tests for their jobs.

; Use objective selection tools and criteria, such as

an interview guide or evaluation form and
selection tests that are based on clear job
descriptions.

Communication and Training

You should use the following methods to make sure
your employees are aware of policies and procedures:

; During interviews, skills tests and other application

processes, focus on work experience, ability to do
the job and performance.

; Provide training programmes for new managers

and supervisors and newly hired workers on your
companys policies and procedures on equality and
prevention of discrimination.

Once a worker is hired, terms and conditions of

his/her employment should be clear to the worker.
Your employment procedures must make sure that:

; Make sure the employment agreement or contract

is explained to all newly hired workers, including
their right to protection against discrimination.

; Workers of the same experience and job

classification receive similar basic terms and
conditions.

; Display company policies and any laws relating to

equality at work in a language that workers
understand.

; Access to an employees information should only

be granted to the employee, a relevant staff
member, or as required by law, to a government
labour inspector.

; Provide relevant information to employees, such as

worker handbooks or supervisor training material.
This information should explain the factory rules
and procedures, and include appeal or grievance
processes available to employees.

; Access to benefits must be provided according to

the law, and not withheld based on any personal
characteristics.

; Decisions concerning training, transfer or

; Train all staff with management responsibilities in

rotation, promotion and demotion should be

based on merit and discussed with the employee
first.

factory policies regarding:

the work environment,

When a workers employment is terminated, your

procedures must make sure that:

use of proper language and behaviour,

the factory disciplinary practices, and

; You discuss the reasons for termination with the

the consequences for engaging in

aggressive or offensive behaviour and
harassment of other employees.

employee and his or her superiors first.

; Establish a system of appeal within the

management structure for employees to
challenge unreasonable or unlawful dismissal.

Best Practice

Use a formal performance management

system to evaluate worker performance
as a basis for promotion, determination of
value of the job with regard to pay, merit
increases, and access to training and job
security.
85

Best Practice
Training and development ensures that
non-discrimination is respected by providing
workers with equal access to training.
Training equips workers with knowledge
and skills necessary to advance to higher
value job functions and for job security.
Best practice companies have a written
training and development policy for the
education, training and development of
workers.

Documentation and Records

Monitoring
You will need to check if your non-discrimination policies
are being followed and that controls to make sure the
company is meeting code and legal requirements are
effective. The following steps can be used to evaluate
and improve the effectiveness of your programs:

Meeting standards requires proper documentation.

You will need to keep on file in Human Resources:

; All employment agreements or contracts.

; Documentation regarding decisions such as to
hire or not hire, transfer, promote or dismiss an
employee.

1. Monitor trends and performance indicators

(KPIs) to identify actual and potential problems,
including:

; Copies of relevant documents such as

evaluations, transfer notices, annual leave
applications or pregnancy benefits on centralised
employee files.

; Review on a regular basis any suggestions

from worker meetings and surveys to
determine if there are any problems related to
the administration of your equal employment
policies.

; Records of any complaints (and their resolution)

relating to the implementation of your nondiscrimination policies.

; Establish and monitor key performance

You should also keep on file as evidence of good

management the following documentation:

indicators for business processes so that you

can measure their effectiveness on a
continuous basis. For example, you could
measure the percentage of women in
supervisory positions, number of grievances
about discriminatory practices, etc.

; Employment applications
; Interview and skills tests forms, even
when a candidate is rejected

; Centralised employee files

; Regularly review and revise policies and

procedures to keep them relevant and up-todate.

; Performance evaluations, which

should be signed by the worker

; Medical records

2. Investigate problems and analyse why they

occurred. Where data indicates the existence of
non-conformities with your companys nondiscrimination policies and customer code(s) of
conduct, the company should investigate these
conditions to determine their root causes and what
can be done to address them.

; Termination notices
; Records of disciplinary actions
; Factory rules and policies

; Carefully investigate worker grievances related

to unfair treatment.
86

; If the composition of your workforce does not

Common Questions

match the local community, try to understand

why.
; Review and analyse common violations of
non-discrimination rules to identify why they
are being broken.

When does discrimination occur in hiring?

Discrimination occurs when a decision to hire or not to
hire an applicant is based on qualities that are not
relevant to the job being applied for. In order to ensure
non-discriminatory hiring practices, selection criteria
should be based solely on job functions and
competencies outlined in the job description. Objective
selection and hiring policies help assure the employer
that it hires employees most suited to do the job, and
avoids hiring workers who lack the competencies
required for the job.

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

; Often more than one function is responsible

for social responsibility issues. In the case of
non-discrimination, Human Resources,
Production and Labour Brokers (if any) must
work together to find appropriate solutions.

What if pregnancy testing is legal under the local

law?

; For example, eliminating discrimination in

Regardless of whether the law allows pregnancy testing

or not, the company should ensure that results of that
test are not used to prejudice an applicants
employment.

areas such as wage increases, training and

job advancement requires more than
changes procedures, but will also require
such things as better training and education
of supervisors and HR staff and establishing
improvement objectives.

How can an employer make sure that it avoids

discrimination on the basis of pregnancy and
maternity?
Examples of positive actions that employers could take
include:

Common Audit Non-compliances from the

Sedex Database

; Establish and communicate policies against such

The following are the most common non-compliances against

this issue. If properly implemented, the guidance in this
chapter can help reduce the incidence of these problems:

practices that include penalties.

; Ensure that all legal protections meant for

pregnant women are implemented.

x No discrimination policy

; Ensure that workers returning from maternity

x Age discrimination

leave get their former jobs back or an equivalent

position at the same rate of pay.

x Pregnancy testing of employees and potential

recruits

; Transfer pregnant women working in jobs that

present health hazards to other less-hazardous
work. Transfer should be agreed by both parties
with no reduction in pay.

x Not ensuring equal pay for equal work and work of

equal value
x Evidence of discrimination in hiring

; Make sure workers have an effective grievance

x Discrimination against married/pregnant workers in

contract and/or treatment of workers.

procedure for raising issues regarding

discrimination in the workplace.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

How can a workplace guarantee the objectivity of its

performance evaluation tools?
Evaluation of a workers performance should be based
solely on how that worker performs his or her job. In
order to minimise personal biases, job performance
ratings must be based on clearly defined, objective
criteria. This means that any job performance evaluation
87

tools you use:

; Have both qualitative and numerical ratings.

For example, you could develop performance
scores for productivity, absenteeism, work
quality, and other areas of job performance.

; Include a two-way feedback process where

workers have the opportunity to explain reasons
for any possible negative results of an
evaluation to an impartial Human Resources
officer before an evaluation is made final.
"From only 10% of supervisors, women now
represent around 25 , says Brenda. Women
have also started to be recruited into positions that
were once reserved only for men - for example, as
security guards.

Case Study
Discrimination in the workplace: Tackling a
silent issue

By getting their own staff to do the training, Finlays

were able to reduce incidences discrimination and
build trust and confidence between the employee
levels of their workforce.

Gender discrimination although widespread in many

workplaces is often a silent problem. Poorer and
less educated women are particularly vulnerable they may know they are being harassed, but are
often unaware of their rights.

"When you build people's confidence, you also get

more creativity. For example, you get people on
production lines getting together to trouble-shoot
problems rather than just sitting passively waiting
for them to be dealt with by their managers. It can
only benefit business."

Finlays Horticulture realised that their supervisors

were key to tackling these issues. One of the
problems is that supervisors get promoted to
supervisory roles without receiving any adequate
training on people management. We knew we had
to tackle this issue, says Brenda Achieng, Finlays
Horticultures Corporate Affairs & Compliance
Manager.

Finlays Horticulture is the Kenyan subsidiary of UKbased ETI member company Finlays Horticulture
Holdings Ltd. It produces vegetables and flowers for
export to Europe and has over 6,500 employees, about
half of them women, across six sites. To find out more
about Finlays, visit their website: http://www.finlays.net/.

Finlays Horticulture set up women's committees and

used the ETIs Supervisor Training Programme to
train all their supervisors in discrimination and
sexual harassment.
All departments now have a gender representative,
who is confident in advocating women's rights and
40 senior managers were themselves trained as
trainers. Staff induction handbook information is
clear and easily accessible to all employees.

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, web sites and documents provide additional information around the topic of
Discrimination:

Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance: http://www.sedexglobal.com/wpcontent/uploads/2012/07/SMETA-Best-Practice-Guidance-4-Pillar-4_0-L.pdf

SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

International Labour Organization

ILO Topics Equality & Discrimination: http://www.ilo.org/global/topics/equality-and-discrimination/lang-en/index.htm

ILO Helpdesk Discrimination & Equality:

http://www.ilo.org/empent/areas/business-helpdesk/WCMS_DOC_ENT_HLP_BDE_EN/lang-en/index.htm

Ethical Trading Initiative (ETI): http://www.ethicaltrade.org/

ETI Base Code: http://www.ethicaltrade.org/eti-base-code/discrimination

Women Workers: http://www.ethicaltrade.org/in-action/issues/women-workers

HIV/AIDS at Work: http://www.ethicaltrade.org/in-action/issues/HIVAIDS-at-work

UN Global Compact

The Labour Principles - A Guide for Business:

http://www.unglobalcompact.org/docs/issues_doc/labour/the_labour_principles_a_guide_for_business.p
df

UN Global Compact Principle Six: Elimination of Discrimination:

http://www.unglobalcompact.org/aboutthegc/thetenprinciples/principle6.html

Signposts to Training
x

ETI: Supervisor Training Programme - http://www.ethicaltrade.org/training/eti-supervisor-training-programme

ILO: Gender Equality and Non-Discrimination - http://gender.itcilo.org/cms/

Verit: http://www.verite.org/Training

Key Terms
x

Affiliation: Includes membership or holding a position in a trade union, worker committee, or any other
workers group or organisation.

SEDEX SUPPLIER WORKBOOK

Chapter 1.9

REGULAR
EMPLOYMENT

Regular Employment
What does it mean?

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.
Also, 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.

Providing regular employment means

that the company will not hire
workers on a temporary basis in
order to avoid paying the same
wages and benefits as permanent
workers.

Benefits
Why should you do it?
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 what they can expect in
wages, benefits and duration of employment and
what is expected of them (for example, hours of
work and production quotas).

There can also be business benefits, such as:

a) Decreased worker turnover
b) Improved worker satisfaction, morale and
productivity

The purpose of this section is to help you identify

the risks in your current business processes that
could result in hiring workers into temporary or
informal employment, and to help you put in place
controls to ensure regular employment.

c) Enhanced company reputation

d) Decreased costs for recruitment and
hiring

What do you need to do?

C177: Homework Convention, 1996, requires

equality of treatment between homeworkers
and other wage earners.

ETI Base Code Clause 8

states that regular
employment is provided.
This means:

C181: Private Employment Agencies Convention,

1997, requires that workers recruited by
agencies receive the same legally required
wages, benefits and protections as regular
workers.

Requirements

Other international standards and guidelines state:

8.1 To every extent

possible, work
performed must be on
the basis of a
recognised employment
relationship established
through national law and practice.

8.2 Obligations to employees under labour or social

security laws and regulations arising from the
regular employment relationship shall not be
avoided through the use of labour-only
contracting, sub- contracting, or home-working
arrangements, or through apprenticeship
schemes where there is no real intent to impart
skills or provide regular employment, nor shall
any such obligations be avoided through the
excessive use of fixed-term contracts of
employment.

Achieving and Maintaining Standards

How do you do it?
You can best meet standards by using a systems
approach. In other words, you add controls to the
processes you already use to run your business (such
as discipline and termination.) And you make sure
your policies and procedures are designed to ensure
that:

x All workers

Relevant ILO Conventions

(regular,
contract,
agency, piece
rate and
homeworkers)
have formal
employment
agreements.

There are no Conventions that deal solely with

Regular Employment. However, Conventions relevant
to the topic include the following:
C95:

Protection of Wages Convention, 1949,

requires:
Wages to be paid only in legal tender.
Payment in the form of promissory notes,
vouchers or coupons is prohibited

Workers to be paid directly and regularly

Only legal deductions are allowed, and

deductions to secure or retain employment
are prohibited

Adequate safeguards should be provided against

recourse to contracts of employment for a
specified period of time, the aim of which is to
avoid the protection resulting from the Termination
of Employment Convention, 1982
(ILO Recommendation R166).

x Copies of
employment
terms and
conditions are
provided to all
workers.

x Workers are not asked to sign blank papers, forms

C158: Termination of Employment Convention,

1982, prohibits the use of short term
contracts to avoid protections against
unjustified termination.

and resignation letters.

x Probation periods comply with legal limits.

x Contract terms are not changed after the worker

C175: Part-time Work Convention, 1994,

requires that part-time workers receive the
same protections as full time workers and
that they receive a basic wage that is the
same as comparable full time workers.

signs the contract/employment agreement.

x Agency and contract workers and homeworkers

receive full legal and social security benefits.
93

; Meeting regularly with all managers and supervisors

x The company, its contractors and labour providers

to ensure that workers rights and benefits related to

regular employment are respected at all times.

do not discharge and rehire workers to avoid

paying permanent worker wages and benefits.

x The company, its contractors and labour providers

; Monitoring and reporting all complaints and

do not employ workers on consecutive short-term

temporary contracts.

corresponding management actions or responses.

; Maintaining all records (such as copies of

It is important that you also regularly monitor your

processes and controls to make sure they are
working.

employment agreements) relating to regular

employment.

Best Practice

Policies
(rules)

Job performance criteria to move

from trainee to permanent status,
including the maximum duration of
time in trainee status, are clearly
defined in writing and
communicated to all workers

Your company policies should include the following:

; Commitment to provide all workers (regular,

agency, contract and homeworkers) with formal
employment agreements that clearly state the
terms and conditions of employment.

; Statement that the company will not use

The terms and conditions of employment should be

clearly established in writing and understood by the
worker at the time of hire. Your recruitment, selection,
hiring, termination and other human resources
procedures should:

consecutive short term contracts in place of

permanent full time or part time employment.

; Commitment to provide trainees with the wages

and benefits of permanent workers after a fixed
time period or as required by law.

; Include ways to track and understand laws and

regulations on regular employment.

; Statement that temporary workers will be

provided with the same wages, benefits and

other terms and conditions of employment as
permanent workers after a fixed time period or as
required by law.

Ensure all workers are provided with an

employment agreement at the time of hiring that
contains the following information:

x Nature and type of worker arrangement (such

; Commitment that apprenticeships will be of

as probationary, apprentice/trainee,
regular/permanent, contract worker)

limited duration and only be used to provide

workers with the practical skills needed for their
course of study or to prepare them for regular
employment.

x Terms and duration of the contract under the

specified employment arrangement that meet
local labour law

x Specific job functions

Procedures
(practices)

x Duration of contract

Management should assign a responsible person

(or department) to make sure these policies are
carried out through the following practices:

x Regular and overtime work hours and wages

; Communicating your policies to all managers,

x Pay cycle

x Benefits

supervisors, workers, contractors and labour

agencies.

x Resignation and termination conditions

; The employment agreement or contract is signed

by the worker and the manager responsible for
hiring workers.

Communication and Training

; The contents of the agreement are clearly

You should use the following methods to make sure your
employees are aware of policies and procedures:

explained to the worker before he/she signs the

document.

; Provide introductory training for new managers

; The agreement is written in a language that

and supervisors on the companys policy and

procedures on terms and conditions of
employment agreements and contracts.

workers understand.

; Workers are provided with their own copy of the

agreement.

; Require all newly hired workers to attend training

; Employment agreement for a worker hired in

where all policies, including the companys

policies on regular employment are explained.

probationary status contains clear description of

the duration of probation and the performance
requirements to achieve permanent status.

; Require the staff in charge of hiring to explain the

employment agreement or contract to all newly
hired workers (this should be done before workers
are asked to sign the employment agreement).

; Employment agreements for apprentices clearly

state the terms and conditions of the position, the
maximum length of the apprenticeship and the
relationship to the workers course of study.

Best Practice

Production Planning

Apprentices

By minimising fluctuations in production

volumes you can help make the work
hours and incomes for workers on piece
work and homeworkers more stable and
predictable.

All apprentices receive regular

wages and benefits.

Apprentices are provided with

regular performance reviews and
ongoing training to help them
graduate to regular employment.

Best Practice

; Provide each worker with a copy of an employee

handbook.

Apprentices have a clear

understanding of when and how they
will become permanent workers.

; Display provisions in the companys policy that

relate to employment relationships in a language
that workers understand.

; Display laws that apply to regular employment (for

example, wages, benefits, social insurance and
legally required deductions) in the language(s)
that the workers understand.

Monitoring
You will need to check if your discipline and grievance
policies are being followed and that controls intended to
make sure the company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:
1. Monitor trends and key performance indicators
(KPIs) to identify actual and potential problems,
including:

; Regularly interview or survey workers to obtain

their feedback on terms of employment,
wages, working conditions, treatment, etc.

; Establish and monitor key performance

indicators for so that you can measure on a
continuous basis how well you and your labour
providers are implementing your policies. For
example, you could measure the wages paid to
temporary contract workers compared the
wages paid to full time workers doing similar
work, the number of issues or grievances by
contract workers about discriminatory
practices, etc.

Documentation and Records

Meeting standards requires proper documentation.
You will need to keep on file on company premises:

; All employment agreements.

; Agreements with technical schools, colleges,

; Regularly review and revise policies and

labour brokers, or recruitment agencies.

procedures to keep them relevant and up-todate.

; Current copies of local legal requirements

relating to employment agreements,
apprenticeship programs, and other aspects of
regular employment.

; Verify that transfers of trainee or apprentice

workers within the facility do not violate
company policies for scope, term and duration
of trainee and apprenticeship assignments.

; All complaints about how the companys policies

on employment relationships and regular
employment are working should be properly
documented and filed.

; Review employment agreements/contracts

regularly and update them as needed to make
sure that contents meet international standards
and local labour law.

Monitoring employment relationship issues

for vocational school apprentices should be
handled with sensitivity as student
apprentices tend to be less vocal because
of their poor bargaining position.

; Regularly review and revise policies and

procedures to keep them relevant and up-todate.

Best Practice
Periodically review a random sample
of personnel files for workers hired in
the past month to verify that all have
received written employment
agreements.
96

2. Investigate problems and analyse why they

occurred. Where data indicates the existence of
non-conformities with your companys regular
employment policies and customer code(s) of
conduct, the company should investigate these
conditions to determine their root causes and
what can be done to address them.

legitimate purpose and meet legal requirements,

rather than being a way to avoid payment of wages
and benefits.

Common Audit Non-compliances from

the Sedex Database

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.
For example:

The following are the most common noncompliances against this issue. If properly
implemented, the guidance in this chapter can help
reduce the incidence of these problems:

x Lack of clear, understandable written terms and

conditions of employment

; Human Resources should regularly work with

x Missing or incomplete worker contracts

staff directly in charge of each policy to

address problem areas and identify best
practices.

x Lack of employment records kept by

management
x Workers not provided with a written contract of
employment

; Production planning and sales need to closely

coordinate with Human Resources to develop
accurate staffing plans in order to minimise
the use of temporary workers.

x Contract misrepresents employment

relationship and entitlements
x No communication to subcontractors of
standards on regular employment

; Analyse on a regular basis issues and

suggestions from worker meetings and use
the results in adjusting company policies and
procedures.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

Common Questions
Isnt the use of short term contracts an acceptable
way of meeting rapidly fluctuating production
volumes?

Why do companies need to take care when

establishing apprenticeship programs?
Apprenticeship programs are only appropriate
to provide student workers with skills related to
their course of study or to teach workers the
skills needed to advance to permanent
employment.

No. Consecutive fixed-term contracts typically prevent

workers from receiving the wages, benefits and other
terms of employment afforded permanent workers.
Workers on short-term contracts are also more
vulnerable to termination without cause and other
abuses.

Unfortunately, apprenticeship programs are often

abused. Faced with a shortage of workers or as a
way to avoid paying legally required wages and
benefits for permanent employees, companies
create so-called apprentice programs. Instead of
learning technical skills, vocational school students
are simply used as a form of inexpensive labour to
perform routine production tasks and trainees are
kept as apprentices indefinitely instead of advancing
to permanent status.

The best way to address variations in production

levels is for production to work closely with Human
Resources and other departments to develop realistic
staffing and production plans. Peak seasons may
also be managed without resorting to fixed term
contracting by addressing capacity issues through
better production process design and automation.
More information can be found in the Working Hours
chapter of this workbook.

Written criteria and procedures are required for any

apprenticeship program to ensure they serve a
97

Case Study
Invest in Human Resources
Aman Knitting had good contracts already but the
training has helped give more information and
communicate better employees rights, entitlements,
responsibilities, terms and conditions of
employment, disciplinary and grievance procedures
to the workers.

Good Human Resources management is crucial to

providing stable, regular employment which is
important to all businesses. Workers should be
informed of their rights, benefits and conditions of
employment before they are employed and given
appropriate contracts.

We have always had a 21 days notice period

policy but our workers didnt follow it. Because the
training has taught us to better communicate, our
workers who wish to leave now follow this
procedure.

Aman Knitting Ltd. has recently piloted the Benefits

for Business and Workers Model which encourages
factories to take part in training and measures
changes at a factory productivity level. Managers
were trained over 2-3 day courses and then rolled
out this training to their workers. The programme
has built management skills and systems in human
resources, production and quality.

The training has implemented better systems for

workers to take leave and increased the attendance
bonus from 300 to 500 taka per week, which has
been very effective at reducing absenteeism. When
we started we had a worker turnover of 8%, which
has decreased to 3 .

A problem in Bangladesh is we dont know how to

improve middle management and lack training. The
programme taught us better ways to recruit people
and how to retain them, says Saif Bhuiyan,
Operations Director at Aman Knitting.

The scheme has allowed the business benefits of

providing better and more stable jobs to be shown
as well as demonstrating how the investment in
tools and systems for long-term has benefitted
workers through HR and productivity changes.

The training has strengthened their 3-month

probationary period, by matching new workers with
stronger members of staff in a buddy system to
support and teach them. It has been so effective
they have rolled this out to existing workers.

Aman Knitting Ltd., part of the Unifill Group, are a readymade garment manufacturer based in Bangladesh.
Suppliers include; Tesco, Mothercare and Sainsburys. To
find out more about Aman Knitting, email
info@amanknitting.com.

The training also helped us start a new system of

HR meetings every 6 months with workers: to
review their performance, to find out how they are
doing, to offer them skill training, to communicate
with them about their employment, health and safety
training. The workers love the new system.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, web sites and documents provide additional information on freedom of
association and collective bargaining:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization: http://www.ilo.org/global/topics/employment-security/lang-en/index.htm

; ILO Helpdesk

Employment Security: http://www.ilo.org/empent/areas/businesshelpdesk/WCMS_DOC_ENT_HLP_SOE_EN/lang--en/index.htm

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

; UN Global Compact The Labour Principles - A Guide for Business:

http://www.unglobalcompact.org/docs/issues_doc/labour/the_labour_principles_a_guide_for_
business.pdf

; United Nations Universal Declaration on Human Rights (Article 23):

http://www.un.org/en/documents/udhr/

; International Covenant on Economic, Social and Cultural Rights (Article 7):

http://www.ohchr.org/EN/ProfessionalInterest/Pages/CESCR.aspx

Signposts to Training
x

ILO: http://www.itcilo.org/en/training-offer

Key Terms
x

Apprenticeship: A program that allows students of vocational schools and other

educational institutions to gain practical work experience in their course of study.
A way for young workers to be paid while learning a specific technical skill or trade.

Employment Agreement/Contract: A legal document between a worker and

employer that defines the terms, conditions and duration of the job.

Probation: An introductory period of employment that allows the company and

the worker determine if the worker is suited for the job.

Short Term Contract: An employment agreement that is valid for a short period
of time, typically less than the amount of time in which a worker would legally
be considered a permanent worker. Consecutive short term contracts are
used to avoid paying the wages and benefits due permanent workers.

100

SEDEX SUPPLIER WORKBOOK

Chapter 1.10

DISCIPLINE &
GRIEVANCE

Discipline & Grievance

What does it mean?
Discipline and grievance processes make sure
that all workers are treated with fairness and in the
same way, and bring issues to managements
attention that affect workers day-to-day working
lives.
Disciplinary procedures make sure that a
companys standards of conduct and performance
at work are followed. They also provide a fair and
humane method of dealing with workers who fail to
meet these standards.
A grievance procedure provide workers with the
opportunity to raise concerns, problems or complaints
and gives your company a way to monitor and resolve
systemic issues that, if left unchecked, could lead to
legal issues, strikes, high absenteeism, poor worker
morale and low labour productivity.
Although many issues can be resolved informally,
grievance procedures allow workers to voice their
problems and complaints to management in a way that
workers feel comfortable reporting them.

Benefits
Why should you do it?

Most important is that these procedures are in place

and that the information they gather helps
management resolve workers concerns before the
problem becomes widespread or grows into a more
serious issue.

Respecting your workers rights of fair and humane

treatment and to voice their grievances will help you
stay within the law, avoid penalties and meet your
customers requirements.
There can also be business benefits, such as:

This section will help you identify the risks in your

current business processes that could lead to
applying discipline in an unfair, arbitrary or
inhumane way and to put in place controls to make
sure worker grievances about workplace practices
are properly addressed.

A grievance procedure provides the

company with a built-in method to
monitor problems related to the
implementation of company policies
and procedures.

102

Reduced absenteeism and improved worker

retention

Fewer work stoppages, strikes and other

disturbances

Higher worker satisfaction, morale

and productivity

Improved worker-management
relations

Requirements
What do you need to do?

Achieving and Maintaining Standards

How do you do it?
ETI Base Code Clause 9 states that no harsh or
inhumane treatment is allowed. This means:
You can best meet standards by using a systems
approach. In other
words, you add
controls to the
processes you
already use to run
your business (like
discipline and
termination) and you
make sure your
policies and
procedures are
designed to ensure
that:

9.1 Physical abuse or discipline, the threat of

physical abuse, sexual
or other harassment
and verbal abuse or
other forms of
intimidation should be
prohibited.
Relevant ILO Conventions
There are no Conventions
that deal solely with
Discipline and Grievance.
However, Conventions
relevant to the topic include the following:

x Workers are not

intimidated,
bullied, or
physically punished.

C158: Termination of Employment Convention, 1982

This convention prohibits termination of

employment for reasons related to the worker's
conduct or performance before being provided
an opportunity to defend him/herself against the
allegations made.

x Workers understand your discipline procedure and

punishments.

x Fair and legal disciplinary procedures are

established to improve worker performance.

C105: Abolition of Forced Labour Convention, 1957

x Workers can report harassment or bullying and all

This Convention prohibits the use of any form of

forced or compulsory labour as a means of
labour discipline and punishment.

allegations are thoroughly investigated and

resolved.

x Workers are not intimidated or punished for raising

Other international guidelines recommend:

workplace issues to management.

x Managers and supervisors consistently follow the

Any worker who, acting individually or jointly with

other workers, considers that he has grounds for
a grievance should have the right
(a) to submit such grievance without suffering
any prejudice whatsoever as a result; and
(b) to have such grievance examined pursuant to
an appropriate procedure. (ILO R130)

established discipline and grievance procedures.

x Disciplinary action taken against workers is

consistent across the company; for example,
vulnerable groups of workers - women, minorities,
and migrants - are treated fairly.

x Appropriate disciplinary action is taken for

The employment of a worker should not be
terminated for misconduct of a kind that under
national law or practice would justify termination
only if repeated on one or more occasions,
unless the employer has given the worker
appropriate written warning. (ILO R166)

supervisors, managers or fellow workers who are

abusive.

x Wage deductions and other financial penalties are

not used as disciplinary measures.
It is important that you also regularly monitor your
processes and controls to make sure they are working
103

; Meeting regularly with managers and supervisors

Policies

responsible for discipline, termination, performance

management and addressing worker grievances to
oversee implementation.

(rules)
Your company policies should include the following:

Discipline

; Forming and facilitating a disciplinary committee

responsible for:

; A code of behaviour for managers, supervisors,

; Evaluating the problem and deciding on the

and workers that forbids verbal and physical

abuse and other inhumane disciplinary practices.

appropriate disciplinary action based on

evidence presented.

; Discipline is a performance improvement process

; Participating in creating or revising rules and

and not punitive.

procedures.

; Prohibition of punitive fines and deductions from

; Maintaining and controlling all records relating to

wages.

disciplinary actions.

; Commitment to a process of progressive

Grievance

discipline.

; Organising a grievance committee composed of

Grievance:

management and worker representatives (if the

company has no union, workers will elect their
representative).

; Commitment to make sure that workers can

report grievances and can do so without fear of
penalty, dismissal, or reprisal of any kind.

; Making sure grievance procedures are

communicated to all employees.

; Maintaining and controlling all records

Procedures

confidentially - relating to grievances.

(practices)

; Analysing and preparing written reports on

Management should appoint a responsible person
(or department) to make sure these policies are
carried out through the following practices:

grievances filed by employees.

; Communicating your policies to all managers,

supervisors and workers.

104

Discipline

; Disciplinary rules that cover all issues of worker

Best Practice

conduct and define:

Use mediators, counsellors and

investigators that are:
x Trusted by workers.
x Specially trained how they handle
the complaint will have a direct impact
on the success or failure of the
companys policy.
x Free of bias or conflict of interest.
x Familiar with the companys discipline
and grievance procedures.

Consequences for violations of rules

Procedures for investigating violations of

rules and taking corresponding disciplinary
actions

A system of progressive discipline

Disciplinary actions against managers and

supervisors who violate policies and
procedures and the code of behaviour

; A way for workers to monitor the status of

disciplinary actions.

; An appeals process for when workers disagree

with a disciplinary action.

Your discipline, termination, grievance and other

human resources procedures should include:

; Ways to track and understand laws and

regulations on discipline and grievance.

105

The process must ensure that workers can

choose be represented by a union
representative or fellow worker.

Grievance

Best Practice

; A confidential process for workers to report

Do not take disciplinary action until the case

has been investigated. The first step in an
investigation is allowing the worker to state
his or her case and to answer allegations.
You can gather additional evidence as
needed, but the workers point of view must
be represented.

workplace grievances, including:

Methods to ensure confidentiality and

prevent retaliation against workers who raise
concerns.

Ways for workers to report a grievance

against a supervisor to someone other than
that supervisor or the supervisors manager
(within the same chain of command).

A process for management to investigate

reported grievances, take action and
communicate the results to workers.

Best Practice
Basic Principles of Grievance Handling

; A way for workers to monitor the status of

grievances.

The company should consider

employee discipline and grievance
handling as two pillars for workplace
peace

The company recognises the right of

employees to express legitimate
grievances and seek solutions

The company understands that a result

of resolving grievances is building
worker trust and harmony

; An appeals process for when workers disagree

with how a grievance is resolved.

The process must ensure that workers can

choose to be represented by a union
representative or fellow worker.

106

Communication and Training

Documentation and Records
You should use the following methods to make sure
your employees are aware of discipline and grievance
policies and procedures:

Meeting standards requires proper documentation. You

will need to keep on file on company premises:

; Provide introductory training for new managers

Discipline

and supervisors and newly hired workers on

your companys policies and procedures on
discipline and grievance.

; All disciplinary notices, which should contain the

signature of the worker as well as the workers
response to the notice.

; Communicate internal rules and regulations to

; Documentation of the disciplinary proceedings,

all workers through postings and by providing

workers with the policies in an employee
handbook.

including the following information:

Discipline

Name of the worker

Summary of problem (when it occurred, where,

witnesses, who reported it and the workers
response)

Results of the committees discussions and the

disciplinary action taken

Signature of members of the disciplinary

committee

; Provide training for all managers and

supervisors on how to take appropriate
disciplinary action. .

; Training should emphasise the standard way to

apply the discipline procedures so that all
supervisors and managers do it the same way.

; Records of disciplinary proceedings should be kept

confidential.

; Train workers on your process on how they can

appeal disciplinary action(s) including their right
to be represented by a union official or coworker in the appeals process.

Grievance

; All grievances and actions taken should be

documented. The report should indicate the
following information:

Grievance

Nature of grievance

Method used to bring grievance forward

Status of complaint

; For grievances, make sure workers are trained

Actions taken

to know when to report and how to report (and

to whom).

Reasons for actions taken

; Provide training for all supervisors, union and

worker representatives on how to handle and
resolve worker grievances.

; Records of grievances should be kept confidential.

; Train workers on your process for them to

Information should be released to the employee

concerned upon his or her request (for example,
copies of any meeting records).

appeal resolutions to grievances with which

they do not agree including their right to be
represented by a union official or co-worker in
the appeals process.

; Written response to grievances should include the

following:

107

Time and date grievance was filed

Name of supervisor/person who first received

the grievance or complaint

Analysis of the facts in the grievance

Affirmation or denial of the allegations

your grievance procedure. You should ask

workers or their representatives if workers are
comfortable using your grievance reporting
channels.

Identification of the remedies or adjustments,

if any, to be made

; A summary of issues gathered from the

grievance process, as well as managements
response(s) to the issues raised, should be
posted in areas accessible to the workers, such
as on notice boards and in the cafeteria.

Another common reason that workers give for not

reporting grievances is that management does not
respond anyway, so it is just a waste of my time.

; Make sure there is a procedure for following up

Monitoring

on grievances and taking action within a certain

timeframe after it is determined the grievance is
justified.

You will need to check if your discipline and

grievance policies are being followed and that
controls intended to make sure the company is
meeting code and legal requirements are effective.
The following steps can be used to evaluate and
improve the effectiveness of your programs:

; Review and analyse common violations of

disciplinary rules to identify why they are being
broken, and address them, for example with
worker awareness training.
3. Work with other departments to identify
reasonable solutions. Take care to develop
solutions that make sure the problem does not recur
and the solution does not create other problems.

1. Monitor trends and key performance

indicators (KPIs) to identify actual and potential
problems, including:

; Regularly review worker grievances. Are the

; Often, more than one function is responsible for

social responsibility issues. In the case of
discipline and grievance, Human Resources and
Production must work together to find an
appropriate solution that meets standards but
does not prevent the company from meeting its
business objectives.

same issues being reported over and over

again? How long does it take to resolve a
grievance?

; Determine if workers are comfortable using

the existing reporting methods.

; Establish and monitor key performance

indicators (metrics) to measure how well
discipline and grievance procedures are
working (for example, grievances addressed
within two weeks or appeal rate for
disciplinary actions is less than 10 .)

; Analyse issues and suggestions raised during

workers forums and use results when you review
and improve your company policies and
procedures.

; Periodic review and revision of disciplinary

Best Practice

rules and regulations to keep them relevant

and up-to-date.

Provide guidance for supervisors

and managers to take disciplinary
actions in private and in such a
way to preserve the workers
dignity.

; Periodic review and analysis of disciplinary

actions taken to make sure that discipline is
applied in a fair and consistent manner.
2. Investigate the problem and analyse why it
occurs. If you have evidence that your
grievance policy (or customers code of conduct)
is not being followed, you should investigate to
find out the cause, and then address it.
The lack of grievances filed by workers may not
mean that workers have no grievances. It could
simply be that workers are not comfortable using
108

Common Questions
How can a company guarantee that worker
grievances are kept confidential?
It is important that workers feel safe from reprisal or
punishment when they report a grievance.

For informal grievances, management should

make sure that proper documentation is made of
the grievance.

For informal meetings with workers, the

supervisor or manager can take notes of these
discussions. On a regular basis (weekly or
monthly) a summary of issues discussed and
managements responses can be posted on the
departments bulletin board.

Make sure that all records of grievance

proceedings are kept confidential. The company
should appoint someone to keep such records and
control access.
Make sure that all members of the grievance
committee respect the confidentiality of the
proceedings, including disciplining anyone who
violates the confidentiality agreement.

Common Audit Non-compliances from

the Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the guidance
in this chapter can help reduce the incidence of these
problems:

Provide a variety of ways to report so that

everyone will feel free to come forward
(especially those who do not want to be
identified). You can set up suggestion boxes
located in areas that workers are comfortable
approaching. The company can also post contact
information of designated staff or worker
representatives who workers can contact
confidentially to put forward a grievance.

x Workers fined for breaking rules

x Lack of a formal disciplinary code for the facility

x Inadequate grievance procedures
x Poor working relationship with management
x Shouting, swearing or other forms of verbal
abuse of workers
x Racial and sexual harassment

Locating a suggestion box near the

security station could cause workers
to not use the suggestion box
because they may feel threatened by
the security guards.

x Rules and disciplinary actions not

documented
Sedex provides a document with suggested possible corrective
actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

What procedures can a company put in place to

guarantee that workers are able to monitor the
status of their complaints?

Assign someone regularly to summarise issues

from the suggestion boxes and forward these
issues to the appropriate department for
resolution.

The status of managements response to each

grievance case should be posted regularly.

The company should specify the time limits for

management to respond, in writing, to worker
grievances.
When responses to grievance complaints are
delayed, the supervisor or manager handling the
complaint should communicate, also in writing, the
reason for the delay. (See Sample Grievance
Process on page 4.)

How does the company make sure that

disciplinary actions are reasonable and that
procedures are fair?
The company should establish specific
penalties for all areas covered in the rules of
discipline. It should be clear to all employees
109

Make sure that disciplinary action is not taken

until the case has been carefully investigated.
Employees must have the chance to state their
case and to respond to allegations that have been
made. If the facts of the case call for formal
disciplinary action, formal procedures should be
followed.

what type of behaviour will be subject to

disciplinary action and what kind of disciplinary
action will be taken.
Involve workers when establishing rules and
standards. For disciplinary rules and
procedures to be effective, they should be
accepted as reasonable to both workers and
managers. Involve your workers and all levels
of management when formulating or revising
rules and procedures.

Why do companies need to document disciplinary

actions?
Disciplinary actions form part of an employees
record of performance in the company. When these
disciplinary actions are properly documented, the
company eliminates the risk of being accused of
illegal or improper discipline, up to and including
dismissal.

Best Practice

Include worker representatives

as members of your grievance
committees to make sure the
handling of grievances is fair
and without bias.

; Some companies wrongly rely on having

dismissed workers sign a resignation letter to
avoid legal challenge of the dismissal. This is
not only bad practice and potentially illegal, but
there is no need to resort to these measures
when a company has properly documented a
workers performance.

Make sure that, except for gross misconduct,

no worker is dismissed for a first offence.
Disciplinary actions should be progressive,
increasing in severity over time (verbal warning,
written warning) Start if possible (for minor
misconduct or poor performance) with informal
advice, coaching and counselling rather than
through a formal disciplinary procedure.

What can companies do to motivate the right

behaviour?

; Companies can try rewarding good behaviour

instead of only punishing the wrong behaviour.
For example, workers can be given a bonus for
perfect attendance. However, the things a
worker must do to earn the bonus must be
clear and reasonable, and apply equally to all
workers.

Make sure your employees understand what

needs to be done, how their
performance/behaviour will be reviewed and
over what period, and what will happen if they
fail to improve. These informal actions should
not be recorded in the employees personnel
records.

What are punitive fines and deductions?

A punitive fine is a disciplinary action that requires
workers to pay a sum of money or lose wages as
punishment for breaking a rule.
Examples of punitive fines (deductions)

; Preventing workers from working that day

when they are late for work, resulting in the
loss of a days wages. Any deductions made
from a workers pay because of being late for
work must not exceed the monetary equivalent
for the time missed. Progressive discipline
should be applied for a worker who is
repeatedly late for work.

110

Examples of punitive fines - continued

As John Lewis will accept recent, good quality audits

from credible companies with similar standards, they
accepted an audit from The Walt Disney Company
(also a Sedex member) to ensure the issue was
resolved which reduced duplication for the supplier.

; Suspension as disciplinary action.

Suspension (with pay) should only follow an
established series of verbal and written
warnings.

; Workers are fined or are not paid legal wage

Through successful communication, the factory has

removed fine rules from the employee handbook
and they changed their policy to offer sick leave of
50% of daily wage, subject to a doctors certificate.
Workers no longer fear that part of their wages will
be deducted as a fine.

rates when they do not meet production

quotas. For example, workers who do not
meet the quota are required to pay a certain
amount for every number of units short of the
quota or are paid regular rather than
overtime rates for overtime required to meet
the quota. Legal wage rates must be paid at
all times regardless of the circumstances.

Support and guidance is vital; as lack of knowledge

on these issues is often common. In 2010, John
Lewis launched their Responsible Sourcing
Programme, creating guides for suppliers on how
their Code of Practice applies to factories. This has
been sent to all suppliers and is available in
Chinese.

Case Study
Fairness, Dignity and Respect

The programme has increased the accountability of

suppliers. Standards are now taken more seriously
as repeated audits are a financial burden. The
programme is developing supplier knowledge and
experience, which is beneficial to them and other
clients, helping to raise standards and giving them
access to tools.

Unfair and harsh treatment can create a culture of

fear, and a high turnover of workers leaving for more
favourable conditions. The problem often results from
misunderstanding, with supervisors unaware that
treating workers fairly, with dignity and respect, will
create a more productive working environment.

John Lewis Partnership is a UK retail business

comprised of John Lewis department stores and Waitrose
supermarket chains. To find out more about John Lewis,
visit their website: http://www.johnlewispartnership.co.uk/.

John Lewis found incidences of fines used as a

threat to prevent workers breaking factory rules in a
recent SMETA audit of a Chinese factory supplying
their first tier supplier, B.C. Pottery. The employee
handbook threatened that workers would be fined
two days wages for one day of unauthorised lack of
attendance, which was not approved by factory
management. The handbook also stated that
workers would not receive sick leave so days off sick
would be deducted from workers wages.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

John Lewis asked B.C. Pottery to communicate with

the factory that the fine was unacceptable, it was
proportionally very high in relation to wages of
workers and company policy should be changed.
Our suppliers dont have the same HR tools and
procedures we have in the UK says Sheetal Nishal,
Responsible Sourcing Technologist at John Lewis,
They often dont see any alternative and see fines as
a way to make workers more responsible to prevent
issues.

111

Resources and Guidance

The following organisations, web sites and documents provide additional information on discipline and grievance:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance: http://www.sedexglobal.com/wpcontent/uploads/2012/07/SMETA-Best-Practice-Guidance-4-Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization: http://www.ilo.org
; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org/
x

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI - Promoting equal treatment of workers: http://www.ethicaltrade.org/in-action/projects/etisupervisor-training-project

; UN Global Compact The Labour Principles - A Guide for Business: http://www.unglobalcompact.org/

docs/issues_doc/labour/the_labour_principles_a_guide_for_business.pdf

; United Nations Universal Declaration on Human Rights (Article 5):

http://www.un.org/en/documents/udhr/

; United Nations Convention Against Torture and Other Cruel, Inhumane or Degrading Treatment or
Punishment: http://untreaty.un.org/cod/avl/ha/catcidtp/catcidtp.html

Signposts to Training
x

ETI: http://www.ethicaltrade.org/training/eti-supervisor-training-programme

ILO: http://www.itcilo.org

Verit: http://www.verite.org/training

Key Terms
x

Absenteeism: Is a measure of the number of workers who do not come to work when
they are scheduled to do so.

Abuse: To hurt someone physically or emotionally. This includes both physical (hitting,
shoving) and verbal abuse (yelling, insulting, threatening)

Discipline: A process to motivate individuals to follow established rules or codes of

behaviour.

Grievance: A complaint to management against what a worker believes to be an

unjust or unfair act

Harassment: Uninvited and unwelcome conduct directed at an individual.

Reprisal: Unjust punishment of a worker for filing a grievance, complaining about

workplace conditions, or other exercise of worker rights.

Progressive Discipline: A way to take disciplinary action that begins with a

verbal warning for the first offence and progresses to ever more formal and
serious measures, up to and including termination.

112

113

SEDEX SUPPLIER WORKBOOK

Chapter 1.11

SMALLHOLDERS

Smallholders

Benefits

What does it mean?

Why should you do it?

Respecting workers rights to basic standards of
employment will help smallholders stay within the
law, avoid penalties,
and meet your
requirements.

Smallholders are farmers that have a small piece

of land to grow a small amount of crops. These
farms are often worked by a family, or employ only
a few workers for short periods of time.

There can also be

business benefits,
such as:

In many countries, a large percentage of crops are

grown by many small, family farms. While the size
and definition of smallholder farms will vary from
place to place, there are some things all
smallholders have in common.

a) Improving
productivity,
farm income
and wages.

Smallholder farms are usually the family business,

and many family members may help work a small
plot of land.

b) Promoting
better relations
between
smallholders
and buyers.

Smallholders do not have complex operations.

They often grow a few other crops to sell at market
or help feed the family. Increasingly, however,
many smallholders are engaged in outgrowing
where they contract individually or through
cooperatives to sell their entire crop to a specific
buyer, often in exchange for production planning,
transport, and other services. .

c) Enhancing
your respect and reputation in
the community.
d) Bringing potential new business from
other buyers, processors and exporters.

Many smallholders do hire workers. But unlike

larger operations, workers may only be needed for
short periods of time to help with specific tasks, like
planting and harvesting.

Smallholder farmers and their workers

are due the same labour protections
as employees of any large company.
This means farming and working
under safe and legal conditions that
meet international labour standards
and the ETI Base Code.
(please refer to Requirements on page 2) .

Smallholders have challenges that other, larger

operations do not face since they do not have the
same resources available to help manage legal and
code compliance issues. Regardless, smallholders
can take steps to provide basic protections for
themselves and the workers they hire.
This section will help you check whether there are
risks in your current business processes of
smallholder farms in your supply chain not meeting
ETI standards and legal requirements. If there are
risks, this section will help identify the controls
needed to make sure that minimum requirements
for working conditions under the ETI Code are
met.

115

Requirements

Relevant ILO Conventions

What do you need to do?

ILO Conventions on basic employment rights (described

in the other chapters of this workbook) also apply to
smallholders, and will help you guarantee these rights
on smallholder farms in your supply chain. Some
important conventions for smallholders are:

The entire ETI Base Code applies to smallholders.

This means that:

x Freedom of Association: C87 and C89

1. Employment is freely
chosen.

x Forced Labour: C105

2. Freedom of association
and the right to collective
bargaining are respected.

x Child Labour: C138 and C182

x Equality and Non-discrimination: C100 and C111

3. Working conditions are

safe and hygienic.

Other international standards and guidelines:

4. Child labour shall not be

used.

x ILO Recommendation on the Promotion of

Cooperatives, 2002 (R.193) recommends that
governments adopt measures to promote the
potential of cooperatives in all countries in order to
assist them and their membership to:

5. Living wages are paid.

6. Working hours are not excessive.
7. No discrimination is practised.

a) Create and develop income-generating activities

and sustainable decent employment;

8. Regular employment is provided.

9. No harsh or inhumane treatment is allowed.

b) Develop human resource capacities and

knowledge of the values, advantages and
benefits of the cooperative movement through
education and training;
c) Develop their business potential, including
entrepreneurial and managerial capacities;
d) Strengthen their competitiveness as well as gain
access to markets and to institutional finance;
e) Increase savings and investment;
f)

Improve social and economic well-being, taking

into account the need to eliminate all forms of
discrimination;

g) Contribute to sustainable human development;

and,
h) Establish and expand a viable and dynamic
distinctive sector of the economy, which
includes cooperatives, that responds to the
social and economic needs of the community.

x United Nations Universal Declaration on Human

Rights (1948).

x International Covenant on Civil and Political Rights

(1966).

x International Covenant on Economic Social and

Cultural Rights (1966).
116

x International Convention on the Protection of the

Policies

Rights of All Migrant Workers and Members of

Their Families (1990).

(rules)
You and your suppliers should have a policy that
includes the following commitments:

Achieving and Maintaining

Standards

; Farms do not use forced, debt bonded or trafficked

How do you do it?

labour.

; Farm workers are free to form and join unions,

You and your suppliers can best meet standards by

using a systems approach. In other words, you add
controls to the processes you already use to run
your farm. And you make sure your policies and
procedures are designed to ensure that:

bargain collectively, and join other organisations of

their choosing as supported by local farm
cooperatives.

; Smallholders can negotiate collectively with the

x All non-family workers enter into employment

company and its suppliers on pricing, production

and support.

freely and the terms and conditions of their

employment are described in written employment
agreements or contracts.

; A safe work environment will be provided, including

clean water and toilets, as well as safe and
sanitary housing.

x Workers are aware of the existence of trade

unions or their right to join a union via a farm
cooperative.

; Children will not be hired or contracted for work.

x Workers are paid a fair wage

; Children of smallholder farmers can provide

x Farm work performed by young children in

assistance to their parents but will not work on

commercial crops.

assisting their families does not interfere with

attending school.

; If your children do help you on your farm, that their

x Legally required benefits such as sick leave and

work cannot get in the way of their schooling or be

hazardous. (For more guidance on Child Labour
please refer to the Common Questions section of
this chapter.)

medical care are provided to all workers.

x Workers are paid a premium for overtime work.

x Adequate record keeping.
x Safe and healthy working conditions are provided,

; Workers should be paid a fair basic wage that

including providing workers with appropriate

protective equipment.

meets legal requirements and is enough to meet

basic needs for food, housing, and education for
their children, with a little money leftover.

x Workers are provided with adequate potable

drinking water and toilet facilities.

; If piece rate wages are paid, these should not be

less than the equivalent of the legal minimum
wage. Additionally:

It is important that you also regularly monitor your

processes and controls to make sure they are
working.

117

All workers are entitled to be paid for their

work, including spouses, for example.

Workers will be paid for all their time on the

farm, as well as time spent at collection
centres.

Payment will be regular and on timedaily,

weekly, or monthly.

; When workers sign employment agreements, make

Overtime will be paid at a premium.

sure they fully understand the contents of the

agreement.

; Overtime will not be more than 12 hours a

week.

; The person in charge of hiring needs to accurately

; There is no discrimination in offering a job to, or

explain the terms and conditions of employment and

the employment agreement or contract to workers
before they are hired.

treatment of, workers based on race, caste,

national origin, religion, age, disability, gender,
marital status, sexual orientation, union
membership or political affiliation.

; Each worker should be provided with a written copy

of the farms policies where feasible. Where this is
not possible, such as due to illiteracy, alternative
means of communicating policies to workers should
be used.

; Workers, whether regular or seasonal, are

given contracts that describe the basic
conditions of work.

; The basic terms and conditions of employment

Procedures

should be displayed in a language that workers

understand.

(practices)

; Laws that apply to employment (for example, wages,

You need to have someone assigned as the

responsible person (or department) to make sure
these policies are carried out. This includes:

health and safety, benefits, social insurance and

legally required deductions) should be displayed in a
language that the workers understand.

; Ensuring that all workers are provided with

; All new workers should be provided with information

contracts or employment agreements that

describe basic conditions of employment, like
wages and work hours.

and training on health and safety. This includes:

; Seeing that your policies are communicated to

everyone who works on the farm, as well as any
labour providers who may recruit farm workers.

; Communicating regularly with smallholders and

cooperatives to make sure that legal requirements
and workers rights are respected at all times.

; Making sure that farm owners and cooperatives

meet regularly with workers to understand their
concerns and listen to their complaints.

; Ensuring prompt follow up on worker complaints.

Communication and Training

You should use the following methods to make sure
your smallholders and employees are aware of policies
and procedures:

; Whenever the farm hires new workers, they

should be given an explanation of the farms
policies and procedures.

118

How to work safely with chemicals such as

pesticides and herbicides

How to use protective clothing and

equipment

How to lift and carry heavy loads, and

What to do if they are injured or become ill

standards, you should investigate these conditions

to determine their causes so not only can they be
fixed, but they do not happen again.

Documentation and Records

A simple example would be: if a worker does not

follow farm procedures, determine if the cause is
that he or she is unable to read or understand the
language used to communicate the policies, rather
than being a trouble maker.

Meeting standards requires proper documentation. You

will need to keep on file on farm premises:

; All records relating to workers employment. Some

critical records to maintain are:
3.

Signed employment agreements. (Give a

signed copy to each worker.)

Proof of age documentation. (If a farmer

cannot make a copy of a personal
identification document, information such as
ID number and date of birth can still be
manually recorded.)

Records of hours worked.

Payroll records of wages paid (workers are

given a payslip whenever they are paid.)

Work with others to identify reasonable

solutions. Taking care to develop solutions with
feedback from your supervisors and especially
your workers helps to make sure the solution is
appropriate, permanent and does not create
another problem.

Farm workers may be entitled to

certain health checks. For example, it
is recommended that workers using
pesticides should receive regular
blood tests. Check local laws and
regulations for specific requirements.

Monitoring
You will need to check that your and your smallholders
policies are being followed and that controls that have
put in place to meet code and legal requirements are
effective. The following steps can be used to evaluate
and improve the effectiveness of your programs:

Common Questions
When can children work on the farm?
Your children under 12 can help you with crops that you
grow to feed your family, but where practical, should not
work on commercial crops. Depending on local law,
children ages 12, 13 and 14 may do light work as long as
it does not interfere with their school work, or add up to
more than 10 hours a day in school, travel, and work
combined. And finally, children cannot be hired or
contracted for work.

1. Monitor conditions to identify actual and

potential problems, including:

; Regularly review smallholder and worker

feedback and listen to their concerns.

; Periodically check that wages are properly

calculated, adequate and paid on time.

Can the farmers own children work on the farm after

school or during the holidays?

; Regularly review farm compliance with

workplace health and safety standards
including exposure to agricultural chemicals
(herbicides, pesticides and fertilisers).

Yes, to the extent that local law allows, and within certain
limits. You need to make sure that they are not doing any
work that might harm them, and that the work they are
doing does not interfere with their education and leaves
enough time to play, rest, and do their homework.

; Visit worker housing and toilets to check

conditions are clean and safe.
2. Investigate problems and analyse why they
have occurred. If you have evidence that
conditions do not conform with the law or ETI
119

How can a smallholder farmer accurately verify

workers ages?

How does the farmer know if workers housing,

toilets, and water are acceptable?

What if some workers dont have documents that

show their date of birth?

Having a clean and safe place to live is a basic need for

everybody. Many countries have laws that define
acceptable conditions. Even when the law is not specific,
you must make sure that the living space you are
providing is in line with acceptable living standards in
your region and is equipped with: toilet facilities, clean
and safe dormitories or rooms, adequate heat and
ventilation, sanitary facilities for food storage and a
reasonable amount of personal space.

The farmer needs to show that he or she has made a

reasonable effort to establish that the workers are
above the legal minimum age (for example, school or
church records, information from the community).
What about the children of seasonal workers?
If the farmer is hiring workers who are living on the
farm with their children, the farmer needs to make
sure these children are not engaged in illegal or
hazardous work. The farmer should keep records of
workers childrens ages and make sure workers are
familiar with the no child labour policy on the farm.
Make it clear to workers that it is not acceptable for
them to involve their children in their work.

Workers also must have access to the same quality and

amount of drinking and washing water that the farmer
uses.
Can farmers pay workers once at the end of the
season?

What should a farmer do if older children are

working alongside their parents in the fields?

No. End of season payments are not acceptable.

Workers should be paid at least monthly, which is usually
what local law will specify as a pay period.

If the children are legally able to work, are not doing

hazardous work, and the work that they are doing is
important on the farm, then the farmer needs to
consider whether they should be formally hired and
receive pay like their parents.

Are smallholder farmers expected to have

documentation?
Yes, but not to the extent that larger operations would
have. Smallholders should maintain documents to show
they are following the ETI Base Code. For example, a
smallholder probably does not have an electronic time
keeping system to record hours. Instead, keep a book
with workers hours that is clear and accurate, and can
show whether the wage payments are proper.

Children, even if they are old enough to work,

cannot work under hazardous (dangerous)
conditions. But what is hazardous?
Possible hazardous work includes:
x

Operating moving vehicles or machinery with

moving parts.

Using sharp tools.

Handling and applying chemicals, like

fertilisers, herbicides, and pesticides.

Carrying heavy loads.

Working at heights.

Working long hours that interfere with health

and well-being.

Working in extreme temperatures.

Working in dangerous weather conditions.

Working at night.

120

How can the farmer inform workers about policies,

procedures, and working conditions when many
cannot read?
In addition to a contract, the farmer can explain the
terms and conditions of employment to the workers
verbally (making sure it is in a language they
understand.) Farmers can also place a poster with
simple pictures that display the key messages (for
example, safety or working hours) in a place normally
used by the workers. Sometimes, worker organisations
like unions or local labour authorities have documents
that can be used to instruct workers. Workers can also
be given contact information of the local labour office
for information.
How can the farmer learn what the labour law is for
the farm and for employing workers?
Possible sources include:
x

A government labour office such as the

Ministry of Labour or similar official agency.

A public legal service.

A farmers association.

A local labour union, NGOs or similar

association.

x
x

The buyer of the crops.

Farmers cooperatives.

121

Case Study
The project has developed training materials for cooperative members who do not speak English, cooperative board members and staff such as a book
keeper. Local trainers based at the Kenyan Cooperative College will also retain the skills and
materials necessary to roll out this training to other
projects, thereby benefiting even more smallholders.

Smallholders: Empower the vulnerable

Despite being a valuable part of the supply chain,
smallholders are often the most marginalised and
vulnerable. Empowering small farmers to work
together, and with support from companies they can
start to meet some of the major economic, social
and environmental social challenges they face.

Using existing trade relations as the basis for a

development project is an innovative co-operative
value-chain model empowering the producers and
the buyers; improving food security in an
increasingly volatile climate and improving income
levels and stability for remote smallholder farmers.
By helping them to form co-operatives, the project
supports the farmers long-term control over their
livelihoods, improves their bargaining power and in
turn reduces their dependency on a single
customer.

In 2008, the UK Governments Department for

International Development (DFID) announced the
launch of a 2m Challenge Fund to UK Retailers.
The aim was to develop innovative business models
bringing new and increased volumes of food
products from Africa to the UK, whilst improving the
livelihoods of African producers.
James Finlay Limited and the UK Co-operative
Group created a multi-stakeholder consortium with
the international development organisation Africa
Now and the Co-operative College, which
succeeded in gaining funding for the launch of the
Kibagenge project. Finlays identified that their
single-crop dependent farmers remained vulnerable
to climatic extremes, price fluctuations, pest and
disease outbreaks, and to denial of access to
markets.

The project has empowered farmers and

strengthened their position in the supply chain. This
will enable the farmers to market their products to a
range of buyers and to negotiate better terms, says
Brad Hill, Fairtrade Strategic Manager of the Cooperative Food. The project also facilitates sharing
of knowledge on good agricultural practice and
enables farmers to pursue their own projects. This
will empower the community long after this project is
over.

The projects aim was to develop a smallholder

organisation model that would empower them to
independently supply tea and other products to the
UK retail market. The objective was for this to be
self-sustaining after 3 years through capacity
building, sharing good practice and commercial
ability.

The Co-operative Group is a leading UK food retailer.

The group also operates other businesses including major
financial services provider and funeral services provider.
To find out more about The Co-operative, visit;
http://www.co-operative.coop/.

Through the project over 11,000 farmers have

formed five individual co-operatives. The Kibegenge
project achieved Fairtrade certification in January
2012, giving the producer groups access to
Fairtrade premiums for their products and new
markets.

Finlays are the largest independent tea trader in the

world trading over 100 million Kg per annum. To find out
more about Finlays, visit; http://www.finlays.net.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

122

Sed
cas
pr

f
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Resources and Guidance

The following organisations, websites and documents provide additional information on smallholder farms:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance: http://www.sedexglobal.com/wpcontent/uploads/2012/07/SMETA-Best-Practice-Guidance-4-Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization - Hazardous child labour in agriculture:
http://www.ilo.org/safework/info/instr/WCMS_110200/lang--en/index.htm

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org/

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI Smallholder Guide: http://www.ethicaltrade.org/in-action/programmes/eti-smallholder-project

; Global G.A.P.

Smallholder Involvement: http://www.globalgap.org/cms/front_content.php?idcat=70

; UN Global Compact The Labour Principles - A Guide for Business:

http://www.unglobalcompact.org/docs/issues_doc/labour/the_labour_principles_a_guide_for_business.pdf

; United Nations Universal Declaration on Human Rights: http://www.un.org/en/documents/udhr/

; Oxfam

Smallholder Supply Chains: http://policy-practice.oxfam.org.uk/our-work/private-sectormarkets/smallholder-supply-chains

Signposts to Training
x

ILO: http://www.itcilo.org/en/training-offer

Global G.A.P. - Capacity building via training: http://www.globalgap.org/cms/front_content.php?idcat=33

Key Terms
x

Cooperative: A cooperative is a way for farmers to join together in an association in order to achieve better
financial outcomes than they could individually. Cooperatives can supply their members with what they need for
agricultural production, such as seed and fertiliser (service cooperative) or transportation, packaging,
distribution, and marketing of their products (marketing cooperative) or working capital (credit cooperative).

Outgrowing: A contract farming scheme in which the farmer agrees to provide a buyer (large farm or
processor) with a set quantity of a specific agricultural product at a pre-determined price. The buyer may also
commit to provide technical support the smallholders production.

Smallholder: Farms that grow crops on a small plot of land and are dependent on
family labour and / or small numbers of workers hired for short periods of time.

123

124

SEDEX SUPPLIER WORKBOOK

Chapter 1.12

HOMEWORKERS

Homeworkers fall into this third category of homebased workers. This section will help you check
whether there is a risk of not meeting standards in your
current business operations and, if so, how to put
controls in place to make sure they have good working
conditions and receive fair wages and entitlements
like other workers.

Homeworkers
What does it mean?
Homework is work carried out by a person in his or her
home or in other premises of choice, other than the
employers.
Homeworkers are subcontracted or dependent workers
working for an employer, intermediary or subcontractor,
typically for a piece rate.
Homeworkers are a valuable part of the supply chain for
many companies. They are involved in producing handcrafted products, such as embroidered and sequinned
garments and accessories, as well as working in
industries such as footwear, electrical assembly and
plastic products, packaging and labelling, and doing
non-traditional handwork for products such as footballs.
Homework provides a vital source of income for poor
families. The income that goes into the hands of female
homeworkers is especially important in meeting the
basic needs of the family and enhancing their quality of
life.
Homeworkers can be found in countries around the
world. There are an estimated 300 million homeworkers
in the developing world. However, homeworkers so
often remain a hidden part of the supply chain.

Benefits

There are the three categories of home-based workers:

Why should you do it?

Protecting the rights of homeworkers will help you stay
within the law, provide better living standards and
conditions for homeworkers, avoid penalties and meet
your customers requirements.

Homeworkers are among the most

vulnerable and marginalised workers
in the supply chain, often having no
legal status, no job security, and
working in unsafe and unhygienic
conditions for very low wages.

Working to improve conditions for homeworkers can

have real business benefits such as:
a) Improving your companys image and
reputation
b) Strengthened relationships with
business partners and contractors

Business people and well-paid professionals

working from home;

Self-employed individuals who design and

market their own products;

Subcontracted or dependent workers who work

for an employer, intermediary or subcontractor
for a piece rate.

c) Improved supply chain efficiency

d) Better quality products
e) Improved community relations
f)

Strengthened local
economy

g) Security of supply

126

Requirements

Achieving and Maintaining Standards

What do you need to do?

How do you do it?

The ETI Base Code applies to all workers, including

homeworkers, in ETI member company supply
chains.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business, and
you make sure your policies and procedures are
designed to ensure that:

Relevant ILO Convention:

x Homeworkers are

C177: Home Work

Convention, 1996
requires:

paid at the same

rate as others
doing the same job
in regular
employment.

Equality of treatment
between homeworkers
and other wage earners,
in relation to freedom of
association, protection
against discrimination, remuneration, social
security protection, maternity protection,
workplace health and safety and access to
training.

x Rates of pay are

not lowered through
unfair deductions
for quality or
miscounting of
pieces.

x Workers performing piece rate work are paid at

Other international guidelines state:

least the legal minimum wage for the number of

hours worked.

A homeworker should be kept informed of his or her

specific conditions of employment in writing, or in any
other manner consistent with national law and
practice, in particular the name and address of the
employer, the scale or rate of remuneration and the
methods of calculation; and the type of work to be
performed.

x Clearly defined employment status to reduce

vulnerability of homeworkers to exploitation.

x Employers provide homeworkers with full

employment rights to social security and benefits,
such as sick pay, holiday pay and inclusion in
pension plans.

ILO R184: Home Work Recommendation, 1996

x In some industries, homeworkers carry out

dangerous activities which involve serious health
and safety concerns.

Homeworkers often earn less

than factory workers doing the
same work. Women are often
only offered the lower paid work
within a sector, and are often paid
less than men for the same work.

x Participation of children in homeworking does not

constitute child labour or affect their schooling.

x Homeworkers are fully aware of their rights.

x Proper records of: employee ages to show they are
of legal working age, piece rates, hours worked and
payments made.
It is important that you also regularly monitor your
processes and controls to make sure they are working.

127

sexual orientation, union membership or political

affiliation.

Best Practice

Creating a formal homeworker

policy will let your customers and
contractors know that you are
committed to making sure
homeworkers in your supply chain
are treated fairly and work in a safe
environment.

; Homeworkers should enjoy social security benefits,

holiday/maternity pay, and other benefits
comparable to other workers, even where these
are not a statutory requirement.

; Suppliers and contractors should try and offer

regular work to homeworkers where possible.

; Physical abuse or discipline, the threat of physical

abuse, sexual or other harassment and verbal
abuse or other forms of intimidation shall be
prohibited.

Policies
(rules)

Procedures

Your company policies should include the following

commitments:

(practices)

; Suppliers, contractors and subcontractors must

Management should assign a responsible person or

department to make sure company policies are carried
out. This includes:

disclose to their customers if they use

homeworkers and for what purpose(s).

; Homeworkers must not be subject to forced or

; Communicating your policies to all managers,

bonded labour.

supervisors, workers and contractors.

; Homeworkers must have the right to establish

Review your supply chain management procedures,

including those for pricing and ordering. This will include:

or join organisations and trade unions of their

own choosing, to participate in the activities of
such organisations, and to engage in collective
bargaining on issues related to their work.

; A way to identify the presence of homeworkers in

your supply chain, including which suppliers and
contractors use them, for what types of work, and
the terms of their employment.

; A safe and hygienic work environment and

training must be provided for all homeworkers.

; How to agree on prices, piece rates and payments

; Assistance provided by the children of

to make sure that homeworkers receive

appropriate payment for their work.

homeworkers may not interfere with their

education.

; Children of homeworkers may not be hired or

; Negotiate product costs that cover piece rates

contracted to perform work.

equal to or higher than the minimum wage for

homeworkers.

; Homeworkers should be promptly paid rates

equivalent to or greater than the minimum wage
defined in national legislation or industry
benchmark standards, whichever is higher, for all
work carried out.

; Develop a system for setting piece rates which

guarantee that rates paid to homeworkers are
equivalent to or higher than the minimum wage.

; Make sure that men and women are paid equally

; Homeworkers should be made aware of the

for work of equal value.

hazards of excessive work.

; There should be no discrimination in offering

homework based on race, caste, national origin,
religion, age, disability, gender, marital status,
128

; Develop practices to guarantee prompt payments

throughout your supply chain and assess your
own commercial practices to identify any reasons
for delay in payments to homeworkers.

; Avoid giving unreasonable deadlines for orders.

Communication and Training

Set up communications channels with your suppliers
and contractors so you can discuss how to make
progress together on working conditions for
homeworkers in your supply chain.

; Work with your contractors to provide support,

advice and practical guidance to ensure they are
able to improve homeworkers conditions.

Monitoring

; Build contractors capacity to develop

documentation and procedures to ensure that
homeworkers rights are respected.

You will need to check if your homeworker policies are

being followed and that the controls which make sure
your company is meeting code and legal requirements
are effective. The following steps can be used to evaluate
and improve the effectiveness of your programs:

; Communicate your company policy on

homeworkers to buyers, agents and suppliers.

1. Monitor trends and key performance indicators

(KPIs) to identify actual and potential problems,
including:

Documentation and Records

Meeting standards requires proper documentation.
You will need to keep the following on file on your
company premises:

; Regularly interview or survey your suppliers

and contractors homeworkers to obtain their
feedback on pay, working conditions,
treatment, etc.

; Contracts: You should have a jointly written

contract with your contractors to cover work with
homeworkers.

; Establish and monitor key performance

indicators for so that you can measure on a
continuous basis how well your suppliers are
contractors are implementing your policies.
For example, you could measure the wages
paid to homeworkers compared the wages
paid to full time workers doing similar work, the
number of issues or grievances by
homeworkers about discriminatory practices,
etc.

; Payslips: Homeworkers should receive payslips

itemising the date of delivery and collection,
piece rate, date of payment and the amount and
nature of any deductions.

; Written agreements on pay.

; Health and safety records.
; A record of hours worked and pieces produced

; Regularly review and revise policies and

by homeworkers.

procedures to keep them relevant and up-todate.

2. Investigate problems and analyse why they
occurred. When a situation arises that suggests
non-conformance with your homeworker policies,
you should investigate the root causes not just
129

the condition, and what can be done to

address them.

Serious health and safety concerns at the home

workers place of employment.

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur
and the solution itself does not create other
problems.

No proper formal or informal communication

channels between company management and
home workers.

Company management refuses to meet with or

communicate regularly with homeworkers or their
representatives.

Homeworkers receiving help from their children to

make products at home.

Monitoring should be an ongoing process. You should

regularly review the implementation status of your
homeworker policies by asking the following questions:

; Has your company policy on ensuring good

working conditions for homeworkers been
distributed and explained to contractors?

Common Audit Non-compliances from the

Sedex Database

; Have you distributed the ETI Homeworker

Guidelines: What Suppliers Can Do to all
contractors likely to have homeworkers in their
chain?

The following are the most common non-compliances

against this issue. If properly implemented, the guidance
in this chapter can help reduce the incidence of these
problems:

; Have you identified what help your contractors

need to meet standards, and has this been
provided?

x Ethical and safe work practices for homeworkers

were unable to be verified.

; Have you set up a system to carry out random

x Legally required deductions and/or contributions

not made, for example, social security, pensions
or healthcare.

checks at homeworker level on issues such as

agreed piece rates, timeliness of payment, debtbonded labour and out-of-school children?

x No communication by company to
subcontractors of labour standards required.

Best Practice

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

Work with local NGOs and trade unions to

identify if debt-bondage is a problem for
homeworkers and follow-up on this.

Common Questions

Workplace visits are a good way of identifying issues

with homeworking arrangements. Some common
things to check for during workplace visits:

Lack of formal employment agreements.

Homeworkers not guaranteed at least the

national minimum wage or living wage. (Please
refer to the Wages chapter for more information)

Homeworkers not paid promptly for the work

they have carried out.

How do I begin to understand the extent of

homeworkers in my supply chain?
You should begin by mapping your supply chain,
which is a difficult process as supply chains are multitiered and lack transparency. Do your contractors
use any subcontractors or homeworkers? Products
such as embroidery, stitching of sequins and other
trim, and labelling may involve homeworkers.
Visit your contractors and find out where they get the
products they supply to you. Are there production
lines at the contractors facility? The absence of
production could indicate that subcontractors and/or

Homeworking has not been adequately

assessed to understand the tasks involved.
130

homeworkers may be involved. After getting this

information from your suppliers and contractors,
make a list of all the suppliers that use
homeworkers and the products involved.

Case Study
Homeworkers: Exposing your supply chain

Once I have identified where homeworkers are

present in my supply chain, what do I do next?

The following case study has been supplied by an

experienced ethical trade professional.

After you determine where the homeworkers are,

you need to learn more about how they are
employed and the working conditions in their
workplaces. Remember, all the provisions of the
ETI Base Code apply to homeworkers just as they
do for workers in factories and other more formal
workplaces.

Working in remote locations, homeworkers can lack

job security, legal status and work in unhygienic and
unsafe conditions for low wages, often hidden in the
supply chain with one or more subcontractors
between the final supplier.
For Company A (a prominent export and design
business), a thorough understanding of their supply
chain was vital to secure a regular and consistent
supply of their woven table mats through Company
B, a subcontractor hundreds of miles from the pack
house.

Ask your suppliers how they compensate

homeworkers for the products they make. Request
copies of employment agreements, piece work
records and payslips. Perform home visits to verify
the information provided by your suppliers is
accurate and to make an assessment of the
homeworkers working conditions.

Company As supply of goods stopped when a

subcontractor retained profit for himself that was
due to the homeworkers. The village found another
subcontractor with whom Company A replaced to
restore supply, however it highlighted the need for
deeper investigation and understanding of their
supply chain through site visits.

What should I do first if I find problems?

You should first determine which are the most
serious issues to address, and where you can make
the greatest positive impact for the homeworkers
involved. In all cases you need to clearly
communicate your expectations for the treatment of
homeworkers to the top management of your
suppliers. Those expectations compliance with
law and the ETI Base Code should be included in
the contracts with your suppliers.

The subcontractor, Company B, didnt want to

divulge his suppliers but over time, trust was built
due to a contractual link. Company As investment
in the new contractors supply chain and honest
intention was to ensure transparent and fair
standards for homeworkers.
To resolve past issues, Company A set up systems
to avoid interrupted supply and pay a fair price. This
was done by using timing production of an item in
the factory as the start point for negotiation of an
agreed piece rate for the village homeworkers,
including costs for Company B.
During the visit site documentation was found, but
was difficult to understand. Many of the agreements
beyond Company B were verbal or done on a
handshake. The visit meant that the paper trail was
improved once the parties understood the
challenges and the homeworkers could show how
their processes worked. It also allowed provision of
basic health and hygiene training to village families.

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
then please send it to
content@sedexglobal.com

To work responsibly with homeworkers, it is vital to

understand the inter-relationships of all supply chain
members. Improvements can only be brought about
if they are the result of a consultation process
between all parties involved.

131

Resources and Guidance

The following organisations, web sites and documents provide additional information around the topic of
Homeworkers:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance: http://www.sedexglobal.com/wpcontent/uploads/2012/07/SMETA-Best-Practice-Guidance-4-Pillar-4_0-L.pdf

; Sedex Case Study: Taking the lid off homeworking: http://www.sedexglobal.com/wpcontent/uploads/2011/07/Taking_the_lid_off_homeworking-case-study.pdf

; International Labour Organization: http://www.ilo.org

For the full text of the ILO Home Work Convention: http://www.ilo.org/ilolex/cgi-lex/convde.pl?C177

For the full text of the ILO Home Work Recommendation: http://www.ilo.org/ilolex/cgilex/convde.pl?R184

Work Improvement for Safe Home (WISH): action manual for improving safety, health and working
conditions of home workers: http://www.ilo.org/asia/whatwedo/publications/WCMS_099070/lang-en/index.htm

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org/

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI Homeworker Guidelines: http://www.ethicaltrade.org/in-action/projects/homeworkersproject/guidelines

ETI - Homeworker Guidelines for Suppliers:

www.ethicaltrade.org/sites/default/files/resources/Homeworker%20guidelines_Suppliers.pdf

ETI The Business Case For Suppliers:

www.ethicaltrade.org/sites/default/files/resources/Business%20case%20for%20suppliers.pdf

ETI

Working Conditions for Homeworkers. What Employers need to know:

www.ethicaltrade.org/sites/default/files/resources/HW%20leaflet%20for%20contractors_4%20pages
_July%202010.pdf

ETI Model Policy on Homeworking:

http://www.ethicaltrade.org/sites/default/files/resources/ETI%20model%20homeworker%20policy.pdf

ETI Practical tools on Homeworking: http://www.ethicaltrade.org/inaction/programmes/homeworkers-project/guidelines/tools

; Homeworkers worldwide - http://www.homeworkersww.org.uk/

Signposts to Training
x

ETI: http://www.ethicaltrade.org/training

132

Key Terms
x

Homeworker: Subcontracted or dependent workers working for an employer,

intermediary or subcontractor, typically for a piece rate.

Piece Rate: Employment where a worker is paid a fixed price (piece rate) for each
unit produced, regardless of the time required.

133

134

SEDEX SUPPLIER WORKBOOK

PART 2:

HEALTH & SAFETY

STANDARDS

CONTENTS
Part 2: Health & Safety Standards
2.1 Health & Safety Management
Systems

2.4 Machinery & Site Vehicles

Definition

171

Definition

139

Benefits

171

Benefits

139

Requirements

172

Requirements

140

Achieving and Maintaining Standards

173

Achieving and Maintaining Standards

141

Common Audit Non-compliances

178

Common Audit Non-compliances

144

Case Study

180

Case Study

146

Resources and Guidance

181

Resources and Guidance

147

2.5 Hazardous Materials

2.2 Health & Safety Training

Definition

185

Definition

150

Benefits

185

Benefits

150

Requirements

185

Requirements

151

Achieving and Maintaining Standards

188

Achieving and Maintaining Standards

151

Common Audit Non-compliances

192

Common Audit Non-compliances

155

Case Study

194

Case Study

156

Resources and Guidance

195

Resources and Guidance

157

2.6 Worker Health

2.3 Emergency & Fire Safety

Definition

198

Definition

160

Benefits

198

Benefits

160

Requirements

198

Requirements

160

Achieving and Maintaining Standards

199

Achieving and Maintaining Standards

161

Common Audit Non-compliances

204

Common Audit Non-compliances

166

Case Study

205

Case Study

167

Resources and Guidance

206

Resources and Guidance

168

SEDEX SUPPLIER W ORKBOOK PART 2: HEALTH & SAFETY STANDARDS

136

2.7 Housekeeping & Hygiene

Definition

210

Benefits

210

Requirements

211

Achieving and Maintaining Standards

211

Common Audit Non-compliances

216

Case Study

217

Resources and Guidance

218

SEDEX SUPPLIER W ORKBOOK PART 2: HEALTH & SAFETY STANDARDS

137

SEDEX SUPPLIER WORKBOOK

Chapter 2.1

HEALTH & SAFETY

MANAGEMENT
SYSTEMS

Health & Safety Management

Systems

Benefits
Why should you do it?

What does it mean?

Building responsibility for health and safety into your

business management system will help you stay
within the law, avoid penalties and meet your
customers requirements.

A management system is the set of interdependent

policies, processes, and procedures that a company
uses to achieve its business objectives, which
include workplace health and safety.

There can also be business benefits, such as:

a) Improving your companys image and
reputation.
b) Achieving both your business and social
responsibility objectives.
c) Improved labour relations.
d) Less time spent on audits.
e) Cost savings through improvements in
system efficiency.

A management system also serves to continuously

improve key business processes and outcomes to
meet core strategic goals. A Health and Safety
Management System is how a company effectively
controls health and safety risks to protect workers
from work-related injury and illness.
The health and safety of workers is an important
social responsibility objective and a regulatory
requirement. An effective Health and Safety
Management System balances these requirements
with running a successful business.
To be successful in this approach, we:

Describe the possible unintended social

outcomes of policies and procedures that
are meant to achieve business objectives.

Identify operational controls to manage or

avoid these unwanted outcomes.

Show how to monitor and measure the

effectiveness of your controls to ensure you
meet standards.

Advantages of a Management System

approach

This section will help you check whether there is a

risk of not maintaining essential management
system elements in your current business
operations, and if so, how to put controls in place to
make sure you meet standards.

Effective management systems strengthen

your companys ability to:
9 Develop suitable policies and plans
9 Implement the appropriate operational
control processes

Note: The approach described in this chapter is similar to

those described in Labour Management Systems,
Environmental Management Systems, and Business Ethics
Management Systems.

9 Identify the necessary human and

financial resources
9 Continually improve performance

139

under their control are without risk to health

when the appropriate measures of protection
are taken.

Requirements

Other International Standards and Guidelines:

What do you need to do?

ETI Base Code Clause 3 requires that working
conditions are safe and hygienic. The management
system requirements of this provision are:

R164 Occupational Safety and Health

Recommendation, ILO 1981

OHSAS 18001 is an international occupational

health and safety management system
specification modelled after ISO 14001
(Environmental Management System). It
includes criteria for a Health and Safety
Management System that enables an
organisation to control its risks and improve its
performance. It does not specify performance
criteria, but describes system elements,
including:

3.1 Adequate steps shall

be taken to prevent
accidents and injury to
health arising out of,
associated with, or
occurring in the
course of work, by
minimising, so far as
is reasonably
practicable, the
causes of hazards
inherent in the working environment.

hazard identification, assessment, and

control
system structure and responsibility

3.5 The company observing the code shall assign

responsibility for health and safety to a senior
management representative.

training, awareness, and competence

consultation and communication
emergency preparedness and response

ETI Principles of Implementation

performance monitoring and

improvement

The ETI has also established the following Principles of

Implementation to help suppliers use a management
system approach in applying the Base Code:

Social Accountability (SA8000) requires that

companies:

Commitment (policy, communication, resources,

strategy)

Integration with core business practices (supplier

selection, terms of agreements, internal buy-in)

Capacity Building (worker awareness, effective

industrial relations)

provide instruction on occupational

safety and health for all personnel

Identifying problems in the supply chain (risk

assessing and sharing, monitoring and
evaluation, worker complaint mechanisms)

implement a system to detect, avoid,

and respond to risks

Improvement actions (enabling remediation,

time-bound remediation, tackling root causes)

Transparency (fair and accurate reporting,

response to violations)

provide personal protection equipment

and medical attention in event of workrelated injury

provide a safe and healthy workplace

prevent potential occupational accidents
appoint a senior manager to ensure
occupational safety and health

record all accidents

remove and reduce risks to new and

expectant mothers

Relevant ILO Conventions

provide for basic hygiene (toilets,

potable water, and sanitary food
storage)

C155: Occupational Safety and Health Convention,

1981, requires employers to ensure that, so far
as is reasonably practicable, the chemical,
physical and biological substances and agents

provide decent worker accommodation

(clean, safe, and meets basic needs)
140

ensure a workers right to remove

him/herself from imminent danger

Policies
(rules)

Achieving and Maintaining

Standards

Your company should have a health and safety policy

that includes the following:

How do you do it?

; A written statement that clearly defines your

companys approach to managing health and
safety. This should include commitments to:

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

x
x

Workers are aware of legal and customer

requirements.
Workers know the risks that could lead to health
and safety compliance issues in current
business
processes.

Implementing the ETI Base Code.

Adhering to all customer requirements,

including customer-specific codes of
conduct.

Regulatory compliance.

Continual improvement in health and safety

performance.

; The scope of the policy should include, at a

minimum, all of the following health and safety
topics:

There is a
process in place
to verify that
workers and
management
are working
according to
legal and
customer
requirements.

Health and Safety Training

Emergency and Fire Safety

Machinery and Site Vehicles

Hazardous Materials

Worker Health (Industrial Hygiene)

Housekeeping and Hygiene

Please refer to the workbook chapters that

specifically cover these topics.

Workers are
aware of critical health and safety risks in the
workplace that may lead to accidents and
injuries.

; The policy should be signed by the most senior

manager of the company.

The same health and safety issues do not occur

repeatedly.

Procedures
(practices)

Workers are properly trained on health and

safety risks and responsibilities.

Management should assign a responsible person (or

department) with documented roles, responsibilities and
authority to make sure your policy commitments are
achieved, that regulatory compliance is maintained and
that health and safety standards are met. This includes:

It is important that you also regularly monitor your

processes and controls to make sure they are
working.

A systems approach is selfcorrecting. It will enable to you

make sure that all requirements
are being consistently met.

; Communicating your policies to all managers,

supervisors, and workers.

; Making sure that all managers and employees of

the company have clearly defined roles and
141

responsibilities for carrying out your health and

safety policy.

; Meeting regularly with managers and supervisors

Communication and Training

responsible for production, maintenance, and other

business functions to oversee the implementation
of your health and safety programmes and
procedures.

You should use the following methods to make sure your

employees are aware of your health and safety policies
and procedures:

; Working with the companys worker-management

; Provide training programmes for new managers,

health and safety committee to make sure that

identified health and safety issues are addressed.

supervisors, and newly hired workers on your

companys health and safety policies and
procedures.

; Monitoring and following up on all concerns and

issues related to the implementation of health and
safety policies and procedures.

; All workers must be provided with health and

safety training and information on the health and
safety hazards of their jobs using classroom
training, on-the-job training, written materials,
and work area postings.

; Performing an annual review of your management

system to make sure it is effective and achieving
your objectives, and to make any required
adjustments.

; Current employees must receive health and

; A formal process for workers, managers,

safety training on an on-going basis and when

they change jobs or responsibilities.

supervisors, suppliers, and customers to

anonymously report any concerns regarding the
implementation of health and safety policies.

; Make sure the training covers all applicable

health and safety laws and regulations.

Your health and safety and other business function

procedures should include:

; Display health and safety policies and local legal

requirements in areas where workers will see
them and in a language they understand.

; Ways to track and understand health and safety

laws, regulations, and customer requirements.

; Communicate the companys health and safety

; A process to identify the risks in your business

requirements, as well as the laws and

standards, to the companys suppliers using
your website, in contract terms and conditions,
and during periodic meetings.

processes that could lead to violations of health

and safety standards.

; Documented safe work practices and the design,

; Communicate the companys grievance

installation, and maintenance of engineering

controls such as ventilation, barrier guards, and
interlocks to minimise the risk of injury and illness.

procedures and explain how to report concerns

related to how health and safety polices are
carried out.

; A formal process to screen and select your

suppliers based on their ability to meet your
policies and ETI Base Code standards.

Documentation

; A formal process for workers, managers, suppliers

and customers to anonymously report any
concerns about the implementation of your
companys policies.

Meeting standards requires proper documentation. You

will need to keep the following on file on your company
premises:

Each of the Health and Safety Standards chapters in

this workbook describes in more detail the procedures
needed for specific health and safety issue areas.

; Copies of your health and safety policy signed by

senior management.

; Copies of all laws and the facilitys legal

responsibilities for health and safety.

142

; Copies of key health and safety procedures, such

2. Establish and track key performance indicators

(KPIs) to measure how well your management
processes and procedures are working on an ongoing basis.

as evacuation, electrical safety, use of personal

protective equipment, industrial hygiene, and
others as described in the health and safety
chapters that follow.

; Regularly survey workers to measure their

; Health and safety committee meeting minutes,

satisfaction with workplace policies and

practices.

action items, and attendance records.

; If there is a worker-management health and

; Copies of internal and third party audit reports and

safety committee, use regular meetings and

minutes to gather evidence of problems
discussed and to inform the development of
action plans.

inspection reports by regulatory agencies.

; Health and safety corrective action plans and

reports, including documented evidence of hazard
control improvements made.

; Measure training effectiveness and learning

; The topic-specific documents listed in the other

retention by testing workers immediately after

training, and using follow-up worker
questionnaires three to six months after
training.

health and safety chapters of this workbook.

Monitoring
You will need to check if your health and safety policies
are being followed and that the controls to make sure
your company is meeting code and legal requirements
are effective. The following steps can be used to
evaluate and improve the effectiveness of your
programs:

Best Practice
Worker-Management Health and Safety
Committee
Even if it is not a legal requirement, forming a
worker-management health and safety committee
is another good way to control safety hazards.
This involves workers in development and
implementation of safe work procedures and
other controls, which is important since workers
are your eyes and ears in the work area and
might spot safety risks before you do. The
Committee, through regular meetings and
listening to other workers feedback, can help the
business achieve its health and safety objectives.

1. Audit your system to identify actual and potential

problems meeting laws and standards. Audits can
be performed by trained and qualified internal staff
or by external auditorsincluding from your own
customers.

; Self-audits should be performed annually to

determine if you are meeting legal and
customer requirements.

; Any identified issues should be evaluated to

determine their underlying cause(s) and action
plans established to put in place corrective and
preventive actions.

; The person or department that oversees

matters related to occupational health and
safety systems should also be assigned to
monitor safety trends. This person can then
identify and/or anticipate problems and
coordinate with other managers or
departments to develop solutions that address
concerns and prevent them from recurring.

143

3. Investigate problems and analyse why they

occurred. When a situation arises that indicates
the existence of non-conformance with company
health and safety policies and customer code(s) of
conduct, the company should investigate the
causes, not just the condition, and what can be
done to address them.

Why do management systems fail?

x Lack of senior management sponsorship and
commitment.

x Failure to assign a senior manager with

responsibility and accountability for implementing
the system.

; Every accident and near miss is an

opportunity to improve your procedures and
other controls. Accidents should be
investigated to find the underlying causes and
develop action plans to make improvements
that will prevent a recurrence of the same
incident. Actions should also aim to prevent
similar incidents throughout the business.

x Companies try to create a system that is more

complicated than their current business
management system.
x Management believes that the social compliance
objectives of the system will conflict with business
objectives.

; If your internal audit finds the same or similar

x The system creates extra or duplicate work that

health and safety issues repeatedly, it could

mean that your process to identify and assign
responsibility for putting in place corrective
and preventive actions is not working.

the company believes does not add any value.

x Senior management fails to regularly measure and

review the effectiveness of the system and make
necessary improvements.

; Similarly, if you have taken action but are still

not meeting standards, it could mean that the
corrective actions (controls) themselves are
not effective and need to be improved.

Common Audit Non-compliances from

the Sedex Database

4. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

The following are the most common noncompliances against this issue. If properly
implemented, the guidance in this chapter can
help reduce the incidence of these problems:

; More than one functional department is often

responsible for health and safety issues.
Solutions to problems may involve, for
example:

Human Resources for the hiring of

workers with different qualifications.

The Training Department for

improvement of new-hire health and
safety orientation.

x
x

x Incomplete health and safety policies.

x Inadequate training of workers on health
and safety.

x Poor internal monitoring that leads to

health and safety issues recurring.

x Not communicating health and safety

requirements to suppliers.

Internal auditors who monitor

problems.

x Failure to identify regulatory requirements

for health and safety that apply to the
business.

Supervisors to monitor the

implementation of policies everyday.

When identifying a solution to a health and

safety problem, work with all departments and
personnel involved.

Sedex provides a document with suggested possible

corrective actions following a SMETA audit. This is
available to Sedex members only in the Sedex Members
Resources section:
Sedex Corrective Action Guidance

144

Common Questions
Do I need a separate management system for
health and safety?

What is Plan-Do-Check-Act?
Plan-Do-Check-Act is a way of describing a
management system to show how risks are controlled
and how processes and performance are continually
improved.

No. The most efficient way to apply a management

system approach to meeting health and safety
standards is to use your current business management
system, which can be easily adapted to help your
company meet health and safety and other social
responsibility standards. You should evaluate your
current processes for production, maintenance, and
training to make sure you have the right controls in
place.

Plan means to identify requirements (laws and

standards), evaluating risks that may prevent you
from meeting those standards, and establishing
policies, objectives, and processes needed to
meet standards and achieve objectives.

Of course, once you have put the necessary controls

in place, you will need to do regular checking
(monitoring) to be sure they are effective.

Do means assigning responsibilities, implementing

your policies and procedures, training, and
communicating.

Will a management system require a lot of

documentation and other complexity?

Check is making sure that you are achieving your

objectives and meeting standards. This involves
measuring performance using KPIs (Key
Performance Indicators (if not already explained)),
performing audits, surveying workers, and other
ways to evaluate how you are doing.

This is a very common concern, but a health and

safety management system does not need to be any
more formal or complex than the system you use to
manage your business. For example, a procedure can
be as simple as a short list of what is to be done, by
whom, and how often. Health and safety regulations
themselves can get quite complicated, so your system
must be at least detailed enough to meet those
requirements.

Act is taking corrective and preventive actions

when your results are different from your goals,
such as when audits find non-compliances. This
step also includes a regular review by senior
management of your overall system.

As for records, you only need to maintain items that

are needed to verify that you are meeting standards,
such as inspection and maintenance records, training
records, audit reports, and permits.
My company has a certified Quality Management
System. Can we use this system for health and
safety?
Yes. In fact, any company that has a formal
management system, like ISO 9000 or ISO 14001,
should also use it to manage compliance to health and
safety standards rather than creating a separate health
and safety management system. The risk
assessment, regulatory tracking, training,
communication, auditing, corrective action, and other
elements of these systems can very easily be adapted
for health and safety management.

145

Case Study
Health and Safety Management: Implement
controls and responsibility

We are getting support from a private company

about environment protection certification, which
we anticipate will be important in a few years in
Turkey. We are working towards being ISO
14001 and ISO 18001 certified by the end of
2012. We have changed the way we look at our
policies and believe the way to grow is by taking
this as our own responsibility internally, as
defined steps not targets.

In the workplace, it is the responsibility of the

employer to ensure that appropriate procedures
and controls are in place to prevent accidents and
maintain a safe place of work.
In 2011, MTM implemented a new organisational
structure for Health & Safety Management in the
workplace. Prior to this, they only had a Quality
Assurance department, and the lack of dedicated
responsible personnel for Health & Safety had
resulted in non-compliances in audits.

MTM Inc. designs and produces holographic masters

and holographic materials for security and brand
authentication applications and supply companies,
including Lipton Tea and Unilever. To find out more
about MTM Inc., visit http://www.mtmsecurity.com/eng.

According to Nesim Faro, MTMs Deputy General

Manager, Improvements to health and safety
were long-term plans, and audits helped us
identify where we needed to improve.
Senior management revised the HR organisation
chart and added specialist Health & Safety and
Environment Protection roles, as well as a senior
role above the QA Manager to oversee the whole
department. This new organisation ensures every
area has a person responsible for Health & Safety
targets. This enables regular reporting processes
and a dedicated chain of responsibility, which is
more efficient at managing feedback and
responding to any potential Health & Safety
issues.

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

Since the new structure, they have also rolled out

first aid seminars, fire safety training from the fire
department, and personal health training to
workers. MTM has put in place new procedures
and given new personal protective equipment to
the workers. They are also measuring the noise
level of the machinery to see whether there is a
health impact to the workers.

146

Resources and Guidance

The following organisations, web sites, and documents provide additional information on Health and
Safety Management systems:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization: http://www.ilo.org

Guidelines on Occupational Safety and Health Management Systems (ILO-OSH 2001):

http://www.ilo.org/safework/areasofwork/occupational-safety-and-health-managementsystems/lang--en/index.htm

; Ethical Trading Initiative (ETI):

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

Principles of Implementation: http://www.ethicaltrade.org/resources/key-etiresources/principles-implementation

; United States Occupational Safety and Health Administration (OSHA):

http://www.osha.gov/Publications/safety-health-management-systems.pdf

; European Union Agency for Health and Safety at Work: http://osha.europa.eu/en

; SA 8000: http://www.sa-intl.org/index.cfm?fuseaction=Page.ViewPage&PageID=937
; OHSAS 18001: http://www.bsigroup.com/en/Assessment-and-certificationservices/management-systems/Standards-and-Schemes/BSOHSAS-18001/

Signposts to Training
x

BSI-OHSAS 18001: http://www.bsigroup.co.uk/en/training/occupational-health-and-safetyohsas-18001/training-courses/introduction-to-bs-ohsas-18001-training-course/

SAI-SA8000: http://www.sa-intl.org/index.cfm?fuseaction=Page.ViewPage&pageId=475

Sedex: http://www.sedexglobal.com/member-services/sedex-training/

Verit: http://www.verite.org/Training

ILO: http://www.ilo.org/safework/events/courses/lang--en/index.htm

Key Terms
x

Corrective Action: The implementation of a systemic change or solution to make an

immediate and on-going remedy to a non-compliance.

Management System: The framework of policies, processes, and procedures used to ensure
that an organisation can fulfil all tasks required to achieve its objectives.

Preventive Action: The implementation of a systemic change or solution designed to prevent

the recurrence of the same or similar issues elsewhere in the facility.

147

148

SEDEX SUPPLIER WORKBOOK

Chapter 2.2

HEALTH &
SAFETY TRAINING

Health & Safety Training

What does it mean?

Keeping workers safe and healthy is a critical part of

operating a successful business. Health and safety
training is how workers, supervisors and managers
learn to prevent injury and illness at work. Supervisors
and managers are responsible for the health and safety
of their workers and therefore need to know how to
identify and correct workplace hazards. Workers need to
understand the health and safety risks in their jobs and
the precautions they should take to work safely.

The right training program prevents

accidents and injuries before they
happen. Problems can be caused
when a worker lacks knowledge on
a work process, is not familiar with
equipment and machinery, or is
incorrectly performing a job task.

Without the right training, there could be serious

consequences for your workers. The specific
training topics will vary depending on the
company and workers jobs. Training starts
when you hire a worker. All new workers
should receive a new hire orientation to
introduce the general health and safety hazards
in the facility and the companys health and
safety policies and rules.

Newly hired workers should also receive onthe-job training after the new hire orientation is
conducted to make sure that they understand
how to work safely in their specific job.

Also, each time workers are assigned to a new

job, they should always receive thorough health
and safety training relevant to their new
responsibilities. You will also need to conduct
refresher training to make sure all workers
knowledge stays relevant and updated.

All of these are risks to workers

health and safety that can be
controlled with an effective training
programme.

Benefits
Why should you do it?
Providing timely and thorough health and safety training
will help you reduce accidents, injuries and illnesses,
meet legal requirements, protect your workers general
sense of well-being, avoid penalties, and meet your
customers requirements.

This section will help you check whether there is a

risk of not meeting this standard in your current
business operations and, if so, how to put controls
in place to make sure safety and health training
standards are met.

There can also be business benefits, such as:

a) Decrease in lost worker time due to accident,
injury, or occupational illness.
b) Decrease in costs related to worker injury or
occupational health issues.
c) Increased worker satisfaction and safety.
d) Creation of trusting relationships with clients and
customers.
e) Lower absenteeism and staff turnover.

150

OHSAS 18001, Section 4.4.2 states that:

any person(s) under its control performing
tasks that can impact on OH&S is (are)
competent on the basis of appropriate
education, training or experience

SA8000, Section 9.5 requires Training of new,

reassigned, and/or temporary personnel upon
hiring and periodic instruction, training, and
awareness programs for existing personnel.

Requirements
What do you need to do?

ETI Base Code Clause 3

states that:
3.2 Workers shall receive
regular and recorded
health and safety
training, and such
training shall be
repeated for new or
reassigned workers.

Achieving and Maintaining Standards

How do you do it?

Relevant ILO Conventions

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

C119: Guarding of Machinery Convention, 1963,

states that the competent authority in each
country shall determine whether and how far
machinery, new or second-hand, operated by
manual power presents a risk of injury to the
worker; such decisions shall be taken after
consultation with the most representative
organisations of employers and workers
concerned.
C121: Employment Injury Benefits Convention, 1964,
requires that employment injury benefits shall
protect all employees, including apprentices, in
the public and private sectors, including cooperatives, and, in respect of the death of the
breadwinner, prescribed categories of
beneficiaries.
C155: Occupational Safety and Health Convention,
1981, requires employers to ensure that, so far
as is reasonably practicable, the chemical,
physical and biological substances and agents
under their control are without risk to health
when the appropriate measures of protection
are taken.

Workers are not operating site vehicles or

equipment in a dangerous way.

Workers wear or use correct personal protection

equipment (PPE).

Supervisors encourage workers to report safety

issues and to wear their PPE.

Legal fines are not incurred for failing to protect the

occupational health or safety of workers.

Workers are trained and aware of equipment

safety procedures so that accidents do not occur.

Accident investigations are properly performed so

that there are not recurrences of the same
problem.

Workers and/or supervisors do not ignore safety

procedures or disable machine safety devices in
order to work faster.

Workers are aware of risks related to worker

health or the spread of disease.

Other International Standards and Guidelines also

contain requirements for health and safety training:

R164 Occupational Safety and Health

Recommendation (ILO 1981) requires
companies to give necessary instructions and
training, taking into account the functions and
capacities of different categories of workers.

It is important that you also regularly monitor your

processes and controls to make sure they are working.
.

151

; Commitment to provide workers with periodic

refresher training and additional training if new
hazards are introduced to their jobs.

Designing a Training Programa basic

outline

9 Determine if training is needed

9 Identify specific training requirements

Procedures

9 Establish goals and objectives

(practices)

9 Develop training materials and learning

Management should assign a responsible person (or

department) to make sure your policy commitments
are achieved, that regulatory compliance is maintained
and that health and safety training standards are met.
This includes:

activities

9 Conduct the training

9 Evaluate program effectiveness

; Communicating your policies to all workers,

Policies

supervisors, and managers.

(rules)

; Identifying the training needs for the

workplace, and making sure that all health and
safety risks and hazards are covered by the
training programme.

Your company policies should include the following:

; A written statement committing to providing

workers with appropriate safety and health
training that meets regulatory requirements and
addresses the sites specific safety and health
hazards.

; Clearly defining the roles and responsibilities

for workers, supervisors, and managers for
health and safety training. Make sure everyone
is aware of their responsibilities.

; Commitment that, upon hire, all employees will

; Hold regular meetings with managers and

be provided with health and safety orientation

training. This should cover the sites:

health and safety policy

safety rules

emergency procedures (including

evacuation)

x
x

supervisors to discuss the implementation of

training policies; review the effectiveness of
the training program and identify gaps or areas
for improvement in training.

; Monitoring all concerns and issues related to

the effective implementation of your policies
and procedures.

method of how to report an injury, illness

or incident

; Performing an annual review of your

management system to make sure it is
effective and achieving your objectives, and to
make any required adjustments.

general safety and health hazards present

at the facility.

; Commitment to provide job-specific health and

Your training procedures should include:

safety training to all workers when they begin

their job.

; Ways to track and understand health and

safety laws and regulations around training.

; Commitment that when workers assume new

responsibilities or are transferred, they will be
provided with additional training to make sure
they understand the hazards and precautions of
the new job so that they remain safe.

; A Training Needs Assessment (TNA) process

to identify the health and safety hazards in
your business processes, such as production,
warehousing and maintenance, which would

152

require training. This is one method of

reducing the risk of injury or illness.

Communication and Training

; The TNA should also consider training for non-

You should use the following methods to make sure

your employees are aware of your health and safety
training policies and procedures:

work related issues, to address health and

safety issues common in the local area.
Topics could include: basic sanitation and
hygiene, reproductive health, HIV/AIDS
awareness, and so on.

; Provide training programmes for new

managers, supervisors, and newly hired
workers on your companys health and safety
policies and procedures, including
requirements for on-going refresher training.

; A way to design or purchase supervisor and

worker training programs that address the
relevant regulations and the training needs
identified in the TNA.

; Inform workers of the training they will need to

complete for their jobs, including any licensing
or certification required by law.

; Specific training courses or modules to cover

the health and safety topics contained in this
workbook and those identified in your TNA
(please refer to the Health and Safety
Management System chapter of this
workbook):

Emergency and Fire Safety

Machinery and Site Vehicles

Hazardous Materials

Worker Health (Industrial Hygiene)

Housekeeping and Hygiene

Any other operation-specific hazards

(for example, working at heights, use
of agricultural chemicals, and so on.)

; Make sure managers, workers, and their

supervisors are aware of when they need to
complete training to meet regulatory
requirements. Jobs such as drivers or
operators of special equipment may need to
obtain (and later renew) a license or operating
certificate.

; Post signs in hazardous areas, restricted

areas, and near machinery and equipment to
remind untrained workers that certain places
and activities are off limits to them.

; Advertise optional training programs on notice

boards, in company newsletters and in the
local community.

; A process to assist workers who do not

; Train your trainersmake sure any employee

successfully complete required training by

providing retraining or one-on-one tutoring.

training other workers is knowledgeable of the

subject matter, is appropriately qualified as a
trainer, and has adequate experience to
perform this critical function.

; A method to determine the frequency of

refresher training.

Best Practice
Make training materials available
to workers at all times for review
and reference. Use the companys
website or intranet, or post
materials in a common area. In
this way workers are able to learn
constantly.

153

1. Evaluate training effectiveness to identify

gaps in workers training and to improve the
program.

Documentation and Records

The effectiveness of health and safety training

is essential in the prevention of injury and
illness. Effectiveness must be measured at the
time of delivery and on an on-going basis, so
that programs can be continually improved.

Meeting standards requires proper documentation.

You will need to keep the following on file on your
company premises:

; Attendance records. Records should include

; Evaluate the effectiveness of your training

the training topic(s), date, and the workers

name and signature.

program using verbal or written tests upon

completion of every class, observation of
learned skills, and discussion with
workers.

; Completion records for all training activities,

including results of testing and demonstration
of skills. This enables you to easily track
workers that have successfully completed your
companys
required
training.

; Survey workers several weeks posttraining to determine if they have

understood and retained the knowledge
needed to stay safe in their jobs.

; Ask workers to evaluate the training,

; Documented

including instructor performance, training

methods and materials. Take suggestions
from workers on how the training program
could be improved.

job
descriptions,
qualifications,
and trainingrelated
responsibilities
for all training
personnel.

; Talk to supervisors. Supervisors can

observe a workers performance after the
training and tell you if the training should
be updated or changed.

; Copies of certificates, licenses or other official

2. Monitor trends and statistics to measure

how well your health and safety training
program is working on an on-going basis.

records that verify that legally required

trainings have been completed.

; Copies of all training materials and training

; Regularly review records of accidents,

plans available for review.

injuries, and near-miss incidents. Use this

data to understand if these incidents could
be avoided with improvements in training.

; Documentation related to health and safety

risk assessment, hazard identification and
training needs.

; Use post-training evaluations to update

the training program and training materials
to cover knowledge gaps.

Monitoring
You will need to check if your health and safety
training policies are being followed and that the
controls to make sure your company is meeting code
and legal requirements are effective. The following
steps can be used to evaluate and improve the
effectiveness of your programs:

154

learning measurement methods to ensure that

workers understand.

Best Practice
Get worker feedback from multiple sources

What are some other ways I can identify training

needs?

Worker feedback is an important source of

information on the effectiveness of your health
and safety training program. Make sure workers
can provide their thoughts in a variety of ways,
such as:
x

Questionnaires and surveys

Suggestion boxes

Verbally to supervisors

Talking directly with trainers

Regular team meetings

Use a combination of methods to determine training

needs, such as:

Make sure workers can offer feedback

anonymously if they want to. The same grievance
processes you use for labour issues can also be
used for training feedback.

Conduct job hazard analyses for each position

in the company.

Review engineering data for machinery,

equipment, and site vehicles.

Always review material safety data sheets for

chemicals and hazardous materials.

Look at the tools, materials, and equipment

workers use in their jobs, then list the hazards
associated with each.

Review training programs provided by other

businesses in the same or similar industry.

Common Questions
Common Audit Non-compliances from the
Sedex Database

Is training the best way to control health and safety

hazards?

The following are the most common non-compliances

against this issue. If properly implemented, the
guidance in this chapter can help reduce the incidence
of these problems:

No. Effective training is only part of the solution.

Eliminating a hazard completely, rather than training
workers to take special precautions, works better.
Even if you have the most effective training program
possible, getting rid of a hazard entirely (for example,
by replacing dangerous outdated equipment or
switching to an alternative non-toxic chemical) is the
best way to guarantee the risk is controlled.

As workers learning styles vary, how can I make

sure that the training they receive is adequate and
effective?
You should use a variety of learning measurement
methods to assess whether your trainings are
adequate for training workers about the health and
safety aspects of their jobs.
Methods include verbal and written testing, on-the-job
skills demonstration, and asking workers to teach
methods themselves. Remember that not all methods
are effective for every worker, so use a variety of

Workers do not receive new hire health and

safety training.

Workers do not receive any refresher training

after onboarding.

Insufficient numbers of workers trained in first

aid.

Only one learning measurement method is used

to assess whether workers understand the health
and safety aspects of their jobs.

Workers trained for one job often have to fill in at

other jobs with different hazards.

Untrained workers handling hazardous

substances.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

155

Case Study
Health and Safety Training and System
Effectiveness
Health & Safety policy and systems effectiveness
is directly linked to the effectiveness of the training
that the workforce and managers receive in how to
prevent accidents, assess risk, act in an
emergency and use machinery and Personal
Protective Equipment (PPE).
For Aluprint (the largest site of Globalpack), Health
& Safety is a serious issue, says Carolina Corts
Ramrez, Head of CSR. Across their three sites
their main identified risks and hazards are
mechanical (due to cylinders in motion), chemical
(due to hazardous substances), physical (due to
handling and maintenance of dangerous
machinery) and ergonomic (due to repetitive body
movements).
Supervisors are given an annual training program
which covers specific topics on safety and hygiene
and their duty as Supervisors towards their
personnel. For the rest of the staff, training is
programmed on a monthly basis based on
requirements identified in the annual training
programme. It addresses the Health & Safety risks
identified in the work areas, including ways to
prevent accidents, the use of PPE, and the
handling of fire extinguishers. New staff members
are also subject to a thorough two-day training
programme.
Despite comprehensive training, Globalpack has
had recurring accidents involving cutting knives,
equipment and moving machinery parts. Risk
evaluation methods were applied to the machinery
and equipment to detect potential risks.
Inspections are carried out at the machines and
evaluation and inspection results are followed up
on a daily basis.

156

To prevent similar future accidents, actions include

immediate corrective action of any issues, and
training of personnel in safe handling and use of
tools. A permanent action plan is also put on
display. Any major accidents and the causes that
have led to them are communicated to workers
through their supervisors and at union meetings.
This information is also displayed on internal
boards distributed to all departments.
We are committed to increasing the safety levels
in all our installations, reduce accidents and
improve the occupational health of all our
employees. We work day-by-day to create and
encourage a good health and safety culture
committed to creating a better work place.
Globalpack develops solutions for the microcorrugated, folding carton, flexible and label packaging
markets supplying the food, beverage, beauty and
tobacco industries. To find out more about Globalpack,
visit http://www.globalpack-usa.com/ .

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, web sites and documents provide additional information on health and
safety training.

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization: http://www.ilo.org
x

Guidelines on Occupational Safety and Health Management Systems (ILO-OSH 2001);

http://www.ilo.org/safework/areasofwork/occupational-safety-and-health-managementsystems/lang--en/index.htm

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI Base Code Appendices: http://www.ethicaltrade.org/resources/membershipresources/eti-base-code-appendices

Principles of Implementation: http://www.ethicaltrade.org/resources/key-etiresources/principles-implementation

; United States Occupational Safety and Health Administration (OSHA): http://www.osha.gov

; European Union Agency for Health and Safety at Work: http://osha.europa.eu/en/front-page
; OHSAS: http://www.ohsas.org/

Signposts to Training
x

ETI: http://www.ethicaltrade.org/training

Verit: http://www.verite.org/training

ILO: http://www.ilo.org/safework/events/courses/lang--en/index.htm

Key Terms
x

Health and Safety Training: Training for workers on how to stay free from accidents, injuries,
and illnesses at work. This includes new hire orientation when workers are hired, on-the-job
training as workers learn how to be safe in their jobs, and refresher training to keep workers
knowledge updated.

Learning Measurement Method: A variety of Learning Measurement Methods should be

used to assess whether workers have understood and retained the health and safety training
provided to them. Methods include verbal testing, written testing, teaching a job, and on-thejob assessment.

Occupational Health: Policies, procedures, and systems for identifying and

limiting/eliminating occupational (directly job-related) accidents, injuries, or illness.

157

158

SEDEX SUPPLIER WORKBOOK

Chapter 2.3

EMERGENCY &
FIRE SAFETY

Emergency & Fire Safety

What does it mean?

Benefits
Why should you do it?

All companies must be prepared for a fire or other

emergency. Protecting your workers lives and safety,

Preparing for emergency events will protect your

workers health, safety and wellbeing, help you meet
legal requirements, avoid penalties, and meet
customer requirements.

as well as your property, means being prepared for an

emergency long before one actually happens. There are
many measures a company can take to prevent and
plan for a fire, natural disaster, or other emergency
situation.

There can also be business benefits, such as:

Fire safety is how a company prepares for and

responds to a fire. This means taking steps to prevent
fires, and having fire fighting equipment, response
plans, and evacuation procedures. Workers know the
plans and procedures for preventing and addressing
any type of fire.
Other likely emergencies that may occur include
natural disasters such as floods, tsunamis, hurricanes,
earthquakes, or tornados. Operational emergencies
include chemical spills, explosions, gas releases and
major equipment malfunctions.

Preventing or minimising business interruption

and downtime.

Minimising property and equipment damage.

Establishing a reputation as both an employer

and supplier of choice.

Preservation of data and vital records.

Requirements
What do you need to do?

A socially and environmentally responsible company

makes sure that it has the policies, procedures and
practices in place to prevent or minimise the impact
of fires and other emergency events.

ETI Base Code Clause 3 requires:

3.1 A safe and hygienic working environment shall be
provided, bearing in mind the prevailing knowledge
of the industry and of any
specific hazards. Adequate
steps shall be taken to
prevent accidents and injury
to health arising out of,
associated with, or occurring in
the course of work, by minimising,
so far as is reasonably
practicable, the causes of hazards
inherent in the working
environment.

This section will help you check whether there a risk

of inadequately preparing for emergency situations
in your current business operations and, if so, how
to put controls in place to make sure you meet
standards.

Your company must be prepared. While

you cannot predict all emergencies,
some events, like fires or releases of
hazardous materials, can be prevented.
Always make sure your company is
doing everything it can to prevent a
likely emergency from happening.

Relevant ILO Conventions

C155 Occupational Safety and Health Convention,
1981, requires that employers to provide, where
necessary, for measures to deal with emergencies and
accidents, including adequate first-aid arrangements.

Since not all emergencies can be

prevented, be sure to put good response
procedures in place so that if something
does happen, workers lives and your
business are protected.

Other International Standards and Guidelines state:

160

OHSAS 18001, Section 4.4.7, Emergency

preparedness and response: The organisation
shall establish, implement and maintain a
procedure(s): a) to identify the potential for

emergency situations; b) to respond to such

emergency situations.
ILO-OSH 2001, Section 3.10.3, Guidelines on
occupational safety and health management
systems state: Emergency prevention,
preparedness and response arrangements should
be established and maintained. These
arrangements should identify the potential for
accidents and emergency situations, and address
the prevention of OSH risks associated with them.
The arrangements should be made according to the
size and nature of activity of the organisation.

Comply with applicable regulatory and code

requirements on emergency and fire safety.

Provide all workers with introductory and on-going

training and drills on emergency preparedness and
response.

Achieving and Maintaining

Standards
How do you do it?
You can best meet standards by using a systems
approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

Procedures
(practices)

Workers health, safety and well-being are

protected.

You should assign a responsible person (or

department) to make sure the above policies are carried
out through the following practices:

Fire hazards are properly controlled,

Workers know how to respond to a fire or other

emergency situation.

; Communicating your policies to all managers,

Emergency exits are never locked or blocked.

; Making sure that all managers and employees of the

Emergency evacuation drills are performed

regularly on all shifts.

Worker teams are specially trained to use fire

fighting equipment.

supervisors and workers.

company have clearly defined roles and

responsibilities for carrying out your emergency and
fire safety policies.

; Meeting on a regular basis with staff responsible for

fire protection and emergency planning and
response to oversee the implementation of your
policies and procedures.

Workers use hazardous materials safely.

It is important that you also regularly monitor your

processes and controls to make sure they are working.

; Monitoring all concerns and issues related to the

implementation of your emergency and fire safety
policies and procedures.
Your emergency and fire safety procedures should
include:

Policies
(rules)

; A detailed fire and emergency preparedness plan.

Your company policies on emergency and fire safety
should include the following commitments to:

Prepare for likely emergencies, including fires.

Ensure the safety of all workers should an

emergency event occur.

This should cover evacuation and response

procedures for all emergencies likely to affect the
company, and provide contact information for fire,
police, and medical services.

161

; Emergency evacuation procedures that describe

every workers responsibility during an emergency
event, and also specify:
x

That drills are conducted every six months.

That drills cover all workers, work areas, work

shifts, canteens and dormitories.

Designated assembly points, with postevacuation headcounts conducted by

assigned personnel.

The names, responsibilities, and contact

information for the companys formally trained
emergency fire brigade or emergency
response team; as well as for team leaders
nominated as evacuation coordinators to
make sure workers and visitors are evacuated
safely.

; Requirements for controlling fire hazards present in

the workplace and safety practices and controls
designed to prevent emergencies.

; Establishing and enforcing No Smoking rules in

areas where combustible and flammable chemicals
and gases are stored and used.

; Requirements for training, such as making sure

emergency response team members know how to
use a fire extinguisher and other types of emergency
response equipment.

; Making sure that there are adequate exits in all

areas of company premises which meet local
regulatory requirements and are:

; Distinct response or evacuation procedures for

different types of emergencies such as for a fire,
weather emergency, earthquake, or industrial
accident.

Fire Extinguisher Types

Different types of fire extinguishers are designed to
fight different kinds of fires.
Fire Class

Ordinary combustibles
(wood, coal, paper,
textiles, rubber)

Extinguisher Type

x Foam

Combustible metals
(aluminium, sodium,
potassium,
magnesium)

Sufficiently remote from each other so workers

can escape regardless of where a fire or
emergency occurs.

Always kept clear of obstructions.

Never locked from the outside and do not

require any special operation to open.

Equipped with exit doors that swing outward.

Clearly marked with an illuminated signs with

battery back-up.

; Providing exit routes that:

x Water

x Dry powder
(type ABC or BC)
x Foam

Flammable gas
(butane, acetylene,
propane, methane)

Sufficient in number (at least two exits per

floor or large enclosed work area).

x Dry powder (type ABC)

x Carbon dioxide
Fuel oil, lubricating oil,
organic solvents and
gasoline

Dry powder (type ABC or BC)

Dry powder extinguisher with

special metal fire powder

Make sure you have the types of extinguishers that are

suitable for the fire risks in your companys operations.

162

Are never obstructed and are free from

tripping hazards.

Are wide enough along their entire length to

accommodate all workers (at least as wide as
the exit doors to which they lead).

Are marked to indicate the direction of travel.

Are designed to lead to a safe location outside

of the building.

Have stairways that are wide enough to

accommodate workers during an evacuation.

Have stairways with handrails on both sides

for stairwells of four steps or more.

; Providing an adequate number of fire extinguishers

of the appropriate type and making sure that they
are identified with signs.

Common Fire Hazards

; Providing emergency lighting along exit routes, at

There are many ways a fire can start.

Controlling the sources of ignition listed
below, combined with fire fighting
equipment and evacuation procedures
will help you control fire risk:

exit doors, and in stairways and hallways.

; An audible fire/evacuation alarm that can be

activated at locations throughout the facility and at
every exit door. The alarm must have a distinct
sound and be loud enough to be heard in all areas
of the facility. Visual strobe light alarms should be
provided where noise levels are high or where
hearing impaired workers are located.

Open flames from sources like

welding equipment, heating appliances,
tobacco smoking and fixed water
boilers.

; Automatic fire sprinklers, fire hoses and other firefighting equipment are installed where required.

Hot surfaces from welding, hot

exhaust ducts, hot process piping,
lighting and other electrical equipment,
frictional heating (for example, from
drive belts), un-lubricated bearings, and
cooking appliances.

; Explosion hazards are controlled, such as those

presented by boilers, build-up of dust,
hazardous/flammable/explosive substances, liquid
propane tanks, and acetylene tanks.

; Electrical systems are properly installed according

to local code requirements to prevent fires.

Sparks or electrical arcs from hand

tools, motors, switches, relays, arc
welding, batteries, or other electrical
equipment.

; All emergency preparedness equipment and

installations are included in a regular inspection
and maintenance programme to ensure they will
work properly when needed.

Static electricity from flammable and

combustible liquids moving through the
air such as when pouring and spray
painting.
Chemical reactions from mixing of
incompatible materials.
Remember that different types of fires
require different responses (please see
previous box), so your fire fighting
equipment and response procedures
must be appropriate for the potential
emergency at hand.

163

; Train all workers who use, adjust, or maintain fire

and emergency equipment to perform these jobs
safely. Operators of powered fire-fighting vehicles
should be trained and qualified for the specific
equipment they operate or maintain. Training should
include formal instruction, practical or hands-on
instruction, and observation and evaluation.

Communication and Training

You should use the following methods to make sure
your employees are aware of your policies and
procedures:

; Provide introductory training for new managers,

supervisors, and newly hired workers on your
companys policies and procedures.

; Make sure that the training covers all applicable

laws and regulations.

; Display factory policy and local laws and

regulations in areas where workers will see them
and in a language they understand.

; Provide all workers with the companys written

policies and procedures covering emergency and
fire safety response and preparedness.

; Include fire and emergency policies and

procedures in new hire orientation and refresher
training. Test workers after training to make sure
they understand and remember this information.

Documentation and Records

; Make all workers aware as to the location and use

Meeting standards requires proper documentation. You

will need to keep the following on file on your company
premises.

of fire and evacuation alarm boxes.

; Provide practical hands on training for a

representative team of workers in emergency
response procedures and the proper use of all fire
fighting equipment. Representative means that
there are workers on all shifts in all work areas that
are formally trained.

; Written records of all fire and emergency evacuation

drills. Record the effectiveness of the drill, such as
what worked well, what did not work well, and your
improvement plans.

; A list of all fire fighting and other emergency

; Conduct emergency drills every six months. Make

equipment. Include the equipment location, the type

of equipment, and maintenance and testing records.

sure you conduct drills for all types of emergencies

that are likely to affect the facility, including fire,
weather, natural disasters, and industrial accidents.
Drills should cover all workers on all shifts. If the
company provides housing, similar drills must be
conducted where workers live.

; Written records to show that worker training for fire or

other emergency event has been completed. Keep
attendance records for all workers who have taken
part in training and drills.

; Post fire and emergency response procedures in

; A list of the team of workers who are fully trained and

all work areas.

certified in fire fighting and other emergency

response skills.

; Provide each work area with up-to-date emergency

evacuation maps.

; Written proof of certifications for each worker who is

formally certified in first aid, emergency response,
and fire response. The written certification should
include at least the:

; Post and enforce No Smoking signs in areas

where combustible and flammable materials,
liquids and gases are stored, dispensed or used.

x
164

Operators name

Training date

Date of evaluation

Trainers/training bodys name

; Regularly monitor, inspect, and maintain all

machinery, equipment, and electrical systems to
make sure that no fire hazards are likely due to
normal operation or misuse.

; Maintain copies of all laws and regulations related

; Always analyse the outcome of evacuation drills

to fire and emergency response. Make sure this

list is kept updated.

and monitor their effectiveness.

; Make sure supervisors monitor workers

; Document worker reports of safety concerns,

performing their jobs to control fire hazards.

including through informal mechanisms, such that if

a worker observes a potential emergency or fire
safety concern, they can immediately report it to a
supervisor or manager for follow-up.

; Conduct regular assessments of the hazards of

chemicals and all other materials in the factory
that may cause a fire or emergency event.
Switch to safer alternatives where possible.

; Keep records of any health and safety incident

; Assign a supervisor or manager from each shift

involving machinery or equipment, including minor

incidents and near misses that resulted in a fire or
other emergency event.

to ensure that all workers take part in fire and

emergency drills every six months.

; Monitor all contractors, vendors, and visitors

whose materials or processes may present
potential fire or emergency hazards.

Best Practice

2. Investigate the problems and analyse why they

occur. When a situation arises that indicates the
existence of non-conformance with company fire and
emergency policies and customer code(s) of
conduct, the company should investigate the causes
not just the condition, and what can be done to
address them.

Post the photos of trained emergency

response workers in each work area,
along with information about where
and when they work. This will help
other workers readily identify them
during an emergency. Also, introduce
these leaders to the workforce during
meetings.

For example, if regular work area inspections

consistently find finished goods blocking emergency
aisles the solution may not be as simple as having
the department manager remove the materials, but to
work with the department in question to understand
why they store materials in the aisles. It could be a
problem with overproduction, lack of warehouse
space or issues with the shipping company.

Monitoring

3. Work with other departments to identify

reasonable solutions. As the above example
shows, you must take care to develop solutions so
that the problem does not recur and the solution itself
does not create other problems. For example:

You will need to check if your fire and emergency

safety policies are being followed and that controls to
make sure your company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:

; Respond quickly to problems you can fix in the

short term, such as setting up a temporary
storage area that does not block emergency
exits.

1. The person or department that oversees matters

related to emergency and fire safety should
monitor and report on trends to identify actual
and potential problems and related to fire safety
and emergency preparedness.

; Use your analysis of why problems occur to

plan longer-term solutions with other
departments or functions. This might mean
changing shipping companies or constructing
additional warehouse facilities.

; Regularly inspect all fire-fighting equipment to

make sure they are in safe and operable
condition at all times.
165

Common Questions
What if my company provides housing for
workers? What are my emergency and fire safety
responsibilities for worker accommodation?

Common Audit Non-compliances from the Sedex

Database
The following are the most common non-compliances
against this issue. If properly implemented, the guidance in
this chapter can help reduce the incidence of these
problems:

Your responsibilities extend to worker housing and any

other building or facility operated by the company.
Requirements for fire fighting equipment, exits, and
emergency drills must be met in any accommodation
you provide.
How do I know how much and what type of firefighting equipment my company needs? How do I
know how wide exits, aisles, and stairways need to
be?
Your best sources for specific requirements are local
regulations, customer requirements, the local fire
department, your fire and property insurance company
and external organisations. Using a combination of
these sources will help you get the right results.
What are some measures I can take to make sure
workers are adequately prepared to respond to an
emergency?
Identifying the types of emergencies or fires that may
take place in a facility allows management to alert
workers to those potential hazards.

All shifts are not covered during fire/emergency

drills.

Fire extinguishers are missing.

Records of fire/emergency drills are not kept.

No fire/emergency response plan is formally written

and communicated to the workforce.

Incompatible materials are stored close to each

other.

Blocked aisles, or aisles too narrow for easy

escape.

Emergency lights not functional.

Exit signs not backed up by battery.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

A good fire and emergency safety response plan

includes regular maintenance of emergency equipment
such as alarms, water hoses, emergency power cut-off,
hazardous chemical absorbents, extinguishers,
emergency lights, and other equipment.
Workers must be made completely familiar with
policies and procedures in the event of various
emergencies, and must take part in drills. Training
review programs should also be in place and
administered on a regular basis.
Fire and other emergency risks should be identified
and monitored by a designated manager to make sure
you always have the right prevention and response
procedures in place.
If you need more help, you can always contact your
local fire department, which may be willing to send
representatives to your company to help conduct
training.

166

Case Study
Historically, all attempts to change were met with
resistance from workers who were unsure of
management motives. However, having overcome a
low-trust situation, they were able to introduce further
improvements whilst relating them to the spiritual
values of the workforce.

Fire Safety: A cultural approach

Fire Safety is a critical issue to be addressed, to
ensure workers have the knowledge and tools to
prevent and act appropriately in the event of a fire.
After joining Sedex and completing the Self
Assessment Questionnaire we were requested to
carry out an audit, says Anil Kariwala, owner of
Kariwala Industries. Health & Safety previously had
no place in the mindset of most of their factory
workers, an issue that is traditionally ignored in India.

An external agency was welding carelessly in the

factory warehouse and ignited rolls of fabrics. Out of
panic the welder fled the scene. Our workers, who
were formally trained in fire safety measures and fire
drills, immediately responded by dowsing the fire
using the firefighting equipment, which was put out
before the firemen arrived.

This attitude has origins in oriental religions, which

encourages the belief that accidents happen to other
sinful people. Since few consider themselves to be
sinful, Health & Safety received little attention. The
major issue was to change this mindset.

This reinforced confidence, ensuring remaining

workers who considered fire safety unnecessary
changed their opinion. There was a substantial
increase in overall productivity and efficiency, which
caused management attitudes to shift from seeing
social compliance as a necessary evil to an important
part of the business model.

When we found that the origins of compromising on

Health & Safety were tied to religious beliefs, we
decided to tackle it with honest religious sentiments.

Kariwala Industries Ltd is a textile manufacturer of

environmentally friendly bags, fashion shirts, accessories
and work wear. To find out more about Kariwala Industries,
visit their website: http://www.kariwala.com/.

The workers agreed that the cleanest buildings are

religious buildings, suggesting that God wants to stay
in clean places. The workers were thus convinced
about the need for cleanliness, which led to
orderliness, which had an immediate benefit on the
working efficiency.
Kariwala built a small Hindu temple in the factory and
held a ceremony, convincing the workers that the
company practices religious harmony as a working
temple.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

167

Resources and Guidance

The following organisations, web sites and documents provide additional information on emergency and fire safety:

Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance: http://www.sedexglobal.com/wpcontent/uploads/2012/07/SMETA-Best-Practice-Guidance-4-Pillar-4_0-L.pdf

SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

International Labour Organization: http://www.ilo.org

Guidelines on occupational safety and health management systems, ILO-OSH 2001:

http://www.ilo.org/public/english/region/afpro/cairo/downloads/wcms_107727.pdf

Ethical Trading Initiative (ETI): http://www.ethicaltrade.org

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI Base Code Appendices: http://www.ethicaltrade.org/resources/membership-resources/eti-base-codeappendices

United States Occupational Safety and Health Administration (OSHA):

https://www.osha.gov/SLTC/emergencypreparedness/gettingstarted.html

European Union Agency for Health and Safety at Work: http://osha.europa.eu/en/publications/reports/307

United States National Fire Protection Association: http://www.nfpa.org

Signposts to Training
x

United States Centers for Disease Control and Prevention: http://www.bt.cdc.gov/training/

United States Occupational Safety and Health Administration (OSHA): http://www.osha.gov/dte/index.html

ILO: http://www.itcilo.org/en/training-offer

Key Terms
x

Fire safety: Measures taken to prevent and respond to a fire to protect life and property.

Likely emergency: Events like weather, earthquakes, tsunamis, industrial accidents, or natural
disasters that are more likely because of a companys operations and geographic location.

Hazard Controls: Policies, procedures, and systems used to identify and limit or eliminate
accidents, events, or injuries.

168

The information contained in this document is provided by Verit and while every effort has been made to make the information
complete and accurate and up to date, Sedex makes no representations or warranties of any kind, express or implied, about the
completeness, accuracy, reliability, suitability or availability with respect to the information contained therein. Any reliance you
place on such information is therefore strictly at your own risk. In no event is Sedex liable for any loss or damage including
without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss profits arising out
of, or in connection with, the use of this document.

169

SEDEX SUPPLIER WORKBOOK

Chapter 2.4

MACHINERY &
SITE VEHICLES

Machinery & Site Vehicles

A socially responsible company makes sure that it

has the policies, procedures and practices in place
to prevent or minimise injury to workers or others
and damage to property and product from the unsafe
design or operation of machinery and site vehicles.

What does it mean?

Most workplaces use some kind of machine or
vehicle. It is critical for workers health and safety
that this equipment be designed, maintained and
used safely. Whether using sewing machines,
complicated machinery, or site vehicles like cutting
presses or forklifts, every precaution should be
taken to protect equipment operators and other
workers from injury.

This section will help you check whether there a risk

of not meeting safety standards in your current
business operations and, if so, how to put controls
in place to make sure your machinery and site
vehicle risks are understood and controlled.

Worker accidents and injury can

occur when workers are not properly
trained to operate and maintain
equipment and machinery and site
vehicles.

Machinery covers all kinds of equipment used for

production, maintenance and facility operations
purposes. The specific machinery used will vary
considerably from worksite to worksite. Machines
present many hazards, such as from moving parts,
sharp objects and high temperatures. Workplace
injuries that may be caused by machine hazards
include crushed fingers or hands, amputated fingers
or hands, burns, blindness, or worse.

Legal violations, fines, and other

penalties can be imposed when
machinery malfunctions and workers
or property are injured or damaged.

Machine safeguards are devices that prevent these

injuries. The health and wellness of your employees
is extremely important, and the best way to prevent
worker health problems is to promote healthy
practices through education and outreach. You also
have to consider the needs of those at risk in your
community and among the workforce, like young
workers, pregnant employees, nursing mothers and
workers with disabilities or special health needs.

Fines and penalties can also be

issued if workers are operating
vehicles and equipment without
proper certification.

Benefits

Site vehicles include forklifts, pallet jacks, powered

hand trucks, material pickers, and utility vehicles, such
as golf carts. All vehicles can cause serious injury to
operators and co-workers if they are not properly
maintained, or if operators are not properly trained.
Vehicle equipment accidents can also damage property
and interrupt production.

Why should you do it?

Respecting machinery and site vehicle safety will help
you meet legal requirements, avoid penalties, protect
your workers health and safety, and meet your
customers requirements.
There can also be business benefits, such as:

171

Less time and money lost due to injury or

accidents.

Minimising damage to property and equipment

and increasing the useful life of equipment
through proper maintenance.

Reduced cost for hiring and training new

workers to replace the injured.

Decrease in product scrap/defect rate.

physical and biological substances and agents

under their control are without risk to health
when the appropriate measures of protection
are taken.
Other International Standards and Guidelines state:
x

OHSAS 18001, Section 4.3.1, Hazard

identification, risk assessment and
determining controls: The organisation shall
establish, implement and maintain a
procedure(s): for the ongoing hazard
identification, risk assessment, and
determination of necessary controls.
Section 4.4.6, Operational control: The
organisation shall determine those operations
and activities that are associated with the
identified hazard(s) where the
implementation of controls is necessary to
manage the OH&S risk(s).

Requirements
What do you need to do?
ETI Base Code Clause 3 requires:

3.1 A safe and hygienic working environment shall be

provided, bearing in mind the prevailing knowledge
of the industry and of any specific hazards.
Adequate steps shall be taken to prevent accidents
and injury to health arising out of, associated with,
or occurring in the course of
work, by minimising, so far
as is reasonably practicable,
the causes of hazards
inherent in the working
environment.
3.2 Workers shall receive regular
and recorded health and
safety training, and such
training shall be repeated for
new or reassigned workers.
Relevant ILO Conventions
C119: Guarding of Machinery Convention, 1963,
states that the competent authority in each
country shall determine whether and how far
machinery, new or second-hand, operated by
manual power presents a risk of injury to the
worker; such decisions shall be taken after
consultation with the most representative
organisations of employers and workers
concerned.
C155: Occupational Safety and Health Convention,
1981, requires employers to ensure that, so far
as is reasonably practicable, the chemical,
172

ILO-OSH 2001, Section 3.10.1, Prevention

and control measures: Hazards and risks to
workers' safety and health should be
identified and assessed on an ongoing basis.
Preventive and protective measures should
be implemented in the following order of
priority:
a) eliminate the hazard/risk;
b) control the hazard/risk at source,
through the use of engineering
controls or organizational measures;
c) minimize the hazard/risk by the
design of safe work systems, which
include administrative control
measures; and
d) where residual hazards/risks cannot
be controlled by collective measures,
the employer should provide for
appropriate personal protective
equipment, including clothing, at no
cost, and should implement
measures to ensure its use and
maintenance.

Policies
(rules)

Your company policies on machinery and site vehicles

should include the following commitments to:

; Identify, evaluate and control safety and health

hazards associated with facility machinery and
site vehicles.

; Control or eliminate all machinery and vehiclerelated hazards prior to being put in service for
the first time.

Achieving and Maintaining Standards

; Ensure that all workers are trained to

How do you do it?

understand the hazard and precautions

associated with the machinery and site vehicles
that they operate.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

; Develop safe work procedures for all tasks with

potential safety hazards to workers.

; Investigate all machinery and vehicle-related

x Machinery and site vehicles are equipped with

accidents and injuries for root cause and

implement corrective and preventive actions to
prevent the same or similar accidents in the
future.

required safety devices.

x Trained and licensed workers are assigned to

operate site vehicles, such as forklifts.

x PPE reliance is used to protect workers from

injury, rather than using engineering controls,
such as guards and interlocks.

x Workers do not remove or bypass protective

safeguards to speed up production equipment.

x Injuries due to lack of proper machine operation

are avoided.

x There are safe work procedures and instructions

in place for potentially hazardous operations.

x There is high worker awareness and

understanding of the hazards of the machinery
and vehicles they use.

x Machinery and vehicles are safe and have

proper regular inspections and preventative
maintenance.
It is important that you also regularly monitor your
processes and controls to make sure they are working.

173

Procedures

Providing operators with safety glasses

when operating sewing equipment unless
the machines have eye shields.

Installing guards for moving machine parts

and drive belts at the point of operation (the
area where the machine performs work). In
a fabric cutter, for example, the point of
operation is where the blade contacts (and
cuts) the fabric.

Making sure that barrier guards and

interlocks are provided for laser-etching
machines to keep operators from opening
them while the laser is on. Interlocks
should automatically shut off the machine if
the barrier guard is removed or opened.

Providing barrier guards (covers) for gears,

drive belts, and other moving parts on
washers and dryers.

(practices)
You should assign a responsible person (or
department) to make sure the above policies are carried
out through the following practices:

; Communicating your policies to all managers,

supervisors and workers.

; Making sure that all managers and employees

of the company have clearly defined roles and
responsibilities for carrying out your machinery
and vehicle safety policies.

; Meeting on a regular basis with staff responsible

for machinery and vehicle safety to oversee the
implementation of your policies and procedures.

; Monitoring all concerns and issues related to

the implementation of your machinery and site
vehicle safety policies and procedures.

General Machine Guarding Requirements

x Guarding must be provided for all machine
parts that could harm or injure a worker.
x Guards should be made of metal or, where
visibility is required, they may be made of
sturdy plastic or safety glass.
x All pinch points on conveyors and gear
drives must be guarded.
x Emergency stop buttons must be installed
on all machinery with potential safety
hazards.
x Machinery should be arranged to protect
visitor and workers at other workstations
from contact with moving parts and hot
surfaces.

Your machinery and site vehicle procedures should

include:

; A formal pre-purchase safety evaluation

procedure for all new machinery and vehicle
purchase.

; A safety sign-off procedure to ensure that all

safety hazards are effectively controlled before
machinery and vehicles are put in service.

; A formal program of regular inspection and

maintenance of all machinery and vehicle
safeguarding.

; A program to provide PPE to workers where

hazards cannot be removed. The program
should include ways to motivate workers to use
the equipment.

Safety procedures for site vehicles should include:

; Allowing only allow properly trained, licensed,

and authorised persons to operate site vehicles.

; Machine safeguarding procedures in garment or

; A checklist for workers to use to perform a

laundering facilities include:

Providing all sewing machine needles with

needle guards to prevent injuries to the
operator from broken needles.

Making sure steam irons and fabric presses

have handle and pedal guards to protect the
operators arms and legs from burns.

safety inspection of each vehicle at the

beginning of every shift to make sure it is in
good working condition.

; Providing all vehicles with audible and visible

back up alarms while operating in reverse.

; If, during a pre-use inspection, an operator finds

that a vehicle is not working properly, he or she
should inform a supervisor and should not

174

; Provide all workers with the companys written

policies covering machinery and site vehicle
safety.

operate the vehicle until it has been repaired

and it is safe to use.

; A program of regular maintenance of powered

; Anyone who will be operating or servicing

machines that may pose safety hazards should
first be trained on the specific procedures for
safely operating or servicing the equipment.

industrial trucks and other site vehicles to

ensure their ongoing safety.

Best Practice

They should be trained about the hazards of the

equipment and about how to use machine
guards to operate the equipment safely.
Training should include:

Facility Maintenance and Machine Shops

Install eye shields on grinding wheels to prevent

flying objects from injuring the operator.

Secure grinding wheels to a bench top.

Guard all cutting blades and other points of

operation on workshop machinery to prevent wood
chips, splinters, or pieces of a broken cutting blade
from flying off the equipment and injuring the
operator.

Belt-sanding machines should have guards at each

pinch point where the sanding belt runs onto a
pulley.

Provide adjustable blade guards for all portable,

power-driven, circular saws with blades greater
than 5 cm (~2 inches) in diameter. The lower part
of the guard should automatically and instantly
return to cover the blade when the saw is not in
use.

Formal instruction (for example, lecture,

discussion, interactive computer learning,
videotape, written material).

Practical or hands-on instruction (for

example, demonstrations by the trainer,
exercises done by the trainee).

Observation and evaluation of the

operators performance with the
equipment in the workplace.

; Provide all workers who operate or service

machines with information about the health and
safety hazards of failing to wear recommended
and/or required PPE, and communicate when
the use of PPE is required.
; Properly train and evaluate all authorised
workers who operate or maintain powered site
vehicles. As with machinery, training should
include formal instruction and practical handson instruction followed by observation and
evaluation of the operators performance.

Bolt machine tools to the floor so they dont tip or

fall when operated.

; Train all workers who use, adjust, or maintain

powered site vehicles to perform these jobs
safely. Operators of vehicles should be trained
and qualified for the specific equipment they
operate or maintain.

Communication and Training

You should use the following methods to make sure
your employees are aware of policies and procedures:

; Make sure that all site vehicle operators

complete the requirements for re-qualification
regularly. Operators safety performance must
be evaluated frequently.

; Provide training programmes for new managers,

supervisors, and newly hired workers on your
companys policies and procedures.
; Make sure that the training covers all applicable
laws and regulations.

; Re-train and discipline site vehicle operators if

they have been observed to operate the
equipment in an unsafe manner or are involved
in an accident or near-miss incident.

; Display factory policy and local laws and

regulations in areas where workers will see
them and in a language they understand.

; Industrial vehicle operators shall be re-trained if,

at any time, they are assigned to drive a
different type of equipment, or there are
175

changes in the workplace that affect the safe

operation of the equipment.
; Re-test operators at least every three years (or
earlier if mandated by local regulations). The requalification test should evaluate the:
x

Operators prior knowledge and skill.

Types of equipment he or she will operate

in the workplace.

Types of hazards in the workplace.

Operators ability to operate the

equipment safely.

Documentation and Records

Meeting standards requires proper documentation. You
will need to keep the following on file on your company
premises.
; Copies of machinery and vehicle safety hazard
assessments.

176

; Start-up authorisations for new machinery and

vehicles signed by a responsible manager.

Monitoring

; Written records of machinery, equipment and

site vehicle inspections and maintenance.

You will need to check if your machinery and site vehicle

policies are being followed and that the controls to make
sure your company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:

; A list of the equipment that has machine guards,

including the equipment location, the type of
equipment, and the type and numbers of
machine safeguards on the equipment.
; Records to show that worker training has been
satisfactorily completed.

1. The person or department that oversees matters

related to machine or equipment safety and site
vehicles should also be assigned to monitor and
report on trends to identify actual and potential
problems related to machinery and site vehicles.

; Copies of operators written and operational

tests qualifying them to operate powered
industrial vehicles.

; Regularly monitor that all machinery with

; Written proof of certifications for each powered

industrial vehicle operator indicating that they
have been trained and have passed
qualification tests. The written certification
should include at least the:
x

Operators name

Training date

Date of evaluation

Trainers name

exposed or moving mechanical parts is

equipped with safety devices and that the
devices are functioning effectively.

; Conduct regular assessments of the

hazards of new and existing equipment to
determine whether existing guards are
effective in protecting workers, or if other
machine guards should be added to control
hazards.

; Watch and make sure that workers use the

required PPE at all times when needed.

; Worker reports of safety concerns.

; Designate a manager who routinely

; Records of any health and safety incident

involving machinery or equipment, including
minor incidents and near misses.

inspects equipment to make sure

equipment guards are in place and working
properly.

; Monitor that only authorised workers, who

have been properly trained and evaluated,
may operate or maintain powered industrial
trucks.

; Assign a supervisor or manager from each

shift to inspect all vehicles at the beginning
of every shift to make sure they function
properly and safely, and do not create
hazards.

; Make sure that a manager is assigned to

monitor industrial truck operators
qualification and re-qualification
requirements regularly. Keep qualification
records on file, on site. Also designate a
supervisor or manager to evaluate workers
safety performance on a frequent basis and
keep performance records on file.

177

; Designate a manager to monitor all

anonymously through a formal grievance mechanism

that protects workers identity in case more serious
concerns need to be reported (please see Discipline
and Grievance chapter).

contractors, vendors, and visitors who may

use powered industrial trucks to ensure that
they are qualified to use equipment and
how to meet the qualification requirements.
2. Investigate the problems and analyse why they
occur. When a situation arises that indicates the
existence of non-conformance with company
machine and vehicle safety policies and customer
code(s) of conduct, the company should investigate
the causes not just the condition, and what can be
done to address them.

Common Audit Non-compliances from the

Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the
guidance in this chapter can help reduce the incidence
of these problems:

x Lack of eye or needle guards on sewing

machines, or belt guards on machines generally
are not in place.

For example, if regular work area inspections find

over and over again that the same guards have
been removed or disabled, this could indicate a
number of possible causes, ranging from
inadequate worker and supervisor training to setting
unrealistically high production quotas.

x No certificate, expired certificate, or special

appliances not registered with the relevant
organisation.

3. Work with other departments to identify

reasonable solutions. As the above example
shows, you must take care to develop solutions so
that the problem does not recur and the solution
itself does not create other problems. For example:

x Adequacy of inspection records for

machinery/safety equipment.
x General machinery maintenance.
x Lack of trained personnel for the safe handling
and maintenance of machinery.

; Respond quickly to problems you can fix in

x Lack of appropriate equipment or training for safe

handling of loads which constitute a serious risk.

the short term, like taking a defective

machine or vehicle out of service until it can
be repaired.

x Adequacy of trained personnel for the safe

handling and maintenance of machinery.

; Use your analysis of why problems occur to

plan longer-term solutions with other
departments or functions. This might mean
purchasing additional production equipment
or converting to equipment with a higher
output. This person can then identify and/or
anticipate problems and coordinate with
other managers or departments to develop
solutions that address concerns and
prevent them from recurring.

Sedex provides a document with suggested possible

corrective actions following a SMETA audit. This is
available to Sedex members only in the Sedex Members
Resources section:
Sedex Corrective Action Guidance

What are some measures I can take to make sure

that unauthorised personnel do not attempt to or
actually use site vehicles such as forklifts?

Common Questions

Accidents and injuries often occur when workers who

are not trained or licensed to use a vehicle attempt to
operate it. To ensure that unauthorised personnel do
not attempt to use site vehicles, use a Lock-out Tag-out
system that requires workers to swipe an authorisation
card or provide a key before the vehicle will respond to
attempted usage.

What are some other ways I can make sure I know

about health and safety risks in my operation?
Your workers are critical in helping to control these risks,
since they use machinery and equipment every day at
work. Make sure workers are encouraged to report
safety concerns as a critical job responsibility, no matter
how minor these problems may seem. Team meetings,
regular safety checks, and verbal reporting to
supervisors are all ways workers can report problems.
Always also provide a way to report problems
178

What is a good way to prevent workers from using

machinery or equipment for which they are not
trained?
Prominently posting posters and instructions about
which equipment should be used in a work area by
whom reminds workers not to attempt to use equipment
or machinery with which they are unfamiliar. Post
danger and warning signs in hazardous areas, and
make sure standard operating procedures are readily
available for all machinery and vehicles.
You can also colour-code worker identification badges
to match the machines that they are trained and
qualified to operate.
When accidents or injuries occur, how can I ensure
that preventative measures are taken in the future?
Although many facility managers adequately record
accidents and injuries when they occur, a lesser number
remember to record minor accidents or injuries or near
misses. Doing so will help managers to identify trends
and consider root cause analysis to avoid future issues.
It is always better to control a safety hazard immediately
after a near miss.
Many countries will have regulatory requirements on
how worker injuries should be recorded. In general,
these records should contain:

Continuously updated information.

Injuries sorted by department or work area.

Description of the injuries.

Description of injury circumstances.

Description of treatment administered.

In addition, always detail minor incidents and near

misses.

179

Case Study
Machinery and Site Vehicles: Hazard prevention
Due diligence in health and safety requires appropriate
preventative and protective procedures to minimise
potential hazards. This involves regular monitoring
systems to assess risk and identify workplace hazards
prior to the introduction of any new work methods,
materials, processes or machinery.

The driver can now stand safely away from the

loading operation.
The introduction of Wingliners came at a cost, but
the investment is worth it to reduce the safety
risks, says Amcor Australasia General Manager of
Supply Chain Jason Bourke.

Safety incidents during loading and unloading trailers

have reduced by two thirds since the introduction of
more user-friendly vehicles at Amcor Paper.

Amcor Australasia is a diverse business offering a

range of packaging goods and services, including
beverage cans and closures, glass bottles, paper and
cardboard products and paper recycling to customers in
Australia, New Zealand and the Asia Pacific.

Using the conventional trailer, handling large paper

reels was a risky job for an Amcor co-worker, who
would have to stand on the back of the truck and work
near heavy machinery to complete the task.

Amcor Australasia is an Amcor Limited business; to find

out more about Amcor, visit http://www.amcor.com/.

As part of the new contract extension signed with a fleet

supplier, Amcor requested that they introduce Wingliner
vehicles to replace many of the conventional trailers in
the network.
While the previous trailers had only a rear door for
loading (similar to a shipping container), the solid sides
of Wingliners can be hydraulically lifted to allow for
loading through the side of a truck.
Amcor believes Wingliners are a safer option because a
person does not have to stand on the back of the
vehicle during loading and unloading, reducing the
need to climb into the vehicle and working close to reel
grabs. The new approach also reduces the risk of
strains in moving heavy reels around the back of the
truck or injury due to reels falling from the back of a
vehicle if there is a fault with the heavy lifting
equipment.

180

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured then please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, web sites and documents provide additional information on machinery
and site vehicles:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization- Code of practice on safety and health in the use of
machinery: http://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/--safework/documents/normativeinstrument/wcms_164653.pdf

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI Base Code Appendices: http://www.ethicaltrade.org/resources/membershipresources/eti-base-code-appendices

; US Department of Labor-OSHA:
x

Principles of Machine Safeguarding http://www.osha.gov/Publications/Mach_SafeGuard/intro.html

Powered Industrial Trucks http://www.osha.gov/SLTC/poweredindustrialtrucks/index.html

; European Union Agency for Health and Safety at Work: http://osha.europa.eu/en

Signposts to Training
x

UK Health & Safety Laboratory: http://www.hsl.gov.uk/health-and-safety-trainingcourses/machinery-safety-series.aspx

UK Health & Safety Executive: http://www.hse.gov.uk/workplacetransport/index.htm

EEF -- The Manufacturers Organisation:

http://www.eef.org.uk/training/open%20courses/health-and-safety-courses/default.htm

Verit: http://www.verite.org/Training

ILO: http://www.itcilo.org/en/training-offer

181

Key Terms
x

Site Vehicles: Any vehicle used on site, which may include but is not limited to the following:
forklifts, material pickers, turret trucks, golf carts, lowboys, highboys, and powered hand
trucks.

Machine Safeguarding: Machines with parts that reach excessive temperatures, have
moving parts, or might otherwise be hazardous to workers must have appropriate safety
guards to prevent injury. Guards can be physical barriers like covers and doors, or electronic
devices such as light curtains, presence sensing devices, pressure mats and two-hand
controls.

Hazard Controls: Policies, procedures, and systems for identifying and limiting/eliminating
accidents or injuries.

Lock out-Tag out: A safety procedure which is used in industry to ensure that dangerous
machines are properly shut off and not started up again prior to the completion of
maintenance or servicing work. It requires that hazardous power sources be isolated and
rendered inoperative before any repair procedure is started.

182

The information contained in this document is provided by Verit and while every effort has been made to make the information
complete and accurate and up to date, Sedex makes no representations or warranties of any kind, express or implied, about the
completeness, accuracy, reliability, suitability or availability with respect to the information contained therein. Any reliance you
place on such information is therefore strictly at your own risk. In no event is Sedex liable for any loss or damage including without
limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss profits arising out of, or in
connection with, the use of this document

183

SEDEX SUPPLIER WORKBOOK

Chapter 2.5

HAZARDOUS
MATERIALS

Benefits

Hazardous Materials

Why should you do it?

What does it mean?

Respecting your workers right to be protected from
the dangers of working with hazardous materials will
help you meet legal requirements, avoid penalties,
protect your workers health and safety, and meet
your customers requirements.

A hazardous material means any substance that

poses a risk to health, property, or the environment.
These substances must be used safely, so when they
are handled, stored, transported or disposed of, the
risks they present are eliminated or minimised.

There can also be business benefits, such as:

Many companies use some kind of potentially

Less time and money lost due to injury or

accident.

Decrease in costs due to spills, poor handling

practices, or improper storage or disposal of
chemicals.

Storing these materials safely, correctly training

workers, using properly designed local exhaust
ventilation, and providing workers with the right
Personal Protective Equipment (PPE), like goggles or
respirators, are ways to help reduce risks. Make sure
your company is up to date on the hazards presented by
materials used on site by carefully reviewing Material
Safety Data Sheets (MSDS) for critical safety
information.

Less future liability by properly transporting and

disposing of hazardous materials.

Fewer business interruptions as a result of

hazardous chemical releases.

Improving environmental impact through proper

use and disposal of chemicals and hazardous
materials.

The health and safety of your workers

should always be your primary concern,
but hazardous materials also present
important risks to your business.

Requirements
What do you need to do?

ETI Base Code Clause 3

Accidental release of material, damage to

the environment through improper
disposal, fines for regulatory infractions,
and industrial accidents are all
unfortunate outcomes if hazardous
materials are mismanaged.

3.1 A safe and hygienic

working environment shall
be provided, bearing in
mind the prevailing
knowledge of the industry
and of any specific
hazards. Adequate steps
shall be taken to prevent
accidents and injury to
health arising out of,
associated with, or
occurring in the course of
work, by minimising, so far as is reasonably
practicable, the causes of hazards inherent in the
working environment.

A socially responsible company makes sure that it

has the policies, procedures and practices in place
to prevent or minimise injury or illness to workers or
others from the unsafe storage, handling, use or
disposal of hazardous materials.
This section will help you check whether there a risk
of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure your chemicals and other
hazardous materials and their associated risks are
understood and controlled.

3.2 Workers shall receive regular and recorded

health and safety training, and such training shall
be repeated for new or reassigned workers.

185

Relevant ILO Conventions

C42:

Workmens Compensation (Occupational

Diseases) Convention (revised) 1934,
establishes a list of occupational diseases and
toxic substances, and the trades associated
with them.

C155: Occupational Safety and Health Convention,

1981, requires employers to ensure that, so far
as is reasonably practicable, the chemical,
physical and biological substances and agents
under their control are without risk to health
when the appropriate measures of protection
are taken.
C170: Chemicals Convention, 1990, requires
employers to ensure that all chemicals used at
work are labeled and that chemical safety data
sheets have been provided and are made
available to workers and their representatives;
and that only chemicals which are identified
and assessed and labeled are used and that
any necessary precautions are taken when
they are used.
protective measures should be implemented in the
following order of priority:

C174: Prevention of Major Industrial Accidents

Convention, 1993, requires employers to
establish and maintain a documented system
of major hazard control including the
identification and analysis of hazards and the
assessment of risks, technical measures,
including design, safety systems, construction,
choice of chemicals, operation, maintenance
and systematic inspection.

a) eliminate the hazard/risk;

b) control the hazard/risk at source, through the
use of engineering controls or organisational
measures;
c) minimise the hazard/risk by the design of safe
work systems, which include administrative
control measures; and

Other International Standards and Guidelines state:

d) where residual hazards/risks cannot be

controlled by collective measures, the
employer should provide for appropriate
personal protective
equipment, including clothing, at no cost, and
should implement measures to ensure its use
and maintenance.

OHSAS 18001, Section 4.3.1, Hazard

identification, risk assessment and determining
controls: The organisation shall establish,
implement and maintain a procedure(s) for the
ongoing hazard identification, risk assessment, and
determination of necessary controls.

The European Community program REACH

(Registration, Evaluation, Authorisation and
Restriction of Chemical substance) provides an
international regulatory framework and system for the
industrial management of chemical substances.

Section 4.4.6, Operational control: The

organisation shall determine those operations and
activities that are associated with the identified
hazard(s) where the implementation of controls is
necessary to manage the OH&S risk(s).

There are also a number of relevant ILO

recommendations on hazardous materials:

ILO-OSH 2001, Section 3.10.1, Prevention and

control measures: Hazards and risks to workers
safety and health should be identified and
assessed on an ongoing basis. Preventive and

R144: Benzene Recommendation, 1971

R147: Occupational Cancer Recommendation,
1974
186

R156: Working Environment (Air Pollution,

Noise and Vibration) Recommendation,
1977
R164: Occupational Safety and Health
Recommendation, 1981
R172: Asbestos Recommendation, 1986
R177: Chemicals Recommendation, 1990
R194: List of Occupational Diseases
Recommendation, 2002

Systems Approach to
Controlling Hazardous
Materials Risks

187

; Prohibiting young workers, pregnant or nursing

mothers, or other at-risk workers from working
with hazardous materials.

Achieving and Maintaining

Standards

; Providing workers with the appropriate PPE

whenever hazardous materials risks cannot be
controlled by other means.

How do you do it?

; Commitment to inform workers interacting with

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business (such
as production management) and you make sure your
policies and procedures are designed to ensure that:

hazardous materials with detailed information

on the hazards presented by the materials.

; Commitment to dispose of hazardous waste

properly, in accordance with local regulations,
and in consideration of the environment.

x Workers are not exposed to dangerous airborne

levels of hazardous dusts, mists, fumes and
vapours.

x MSDSs are provided in areas where hazardous

materials are stored and used.

x Containers of hazardous materials are properly

labelled.

x Chemical storage areas and rooms are properly

designed and maintained.

x Chemicals are stored in approved storage

containers.

x Young workers do not work with hazardous

chemicals.

x Processes and areas where hazardous materials

are stored and used are designed and maintained
to prevent chemical leaks and spills.

x Workers are aware of the hazards of the chemicals

in their work areas.
It is important that you also regularly monitor your
processes and controls to make sure they are working.

Example Hazardous Material Placard

Policies
(rules)
Your company policies regarding hazardous materials
should include the following:

; Company commitment to safely transport, store,

and use hazardous materials.

; Commitment to provide workers with the proper

training to handle, store, transport, or dispose of
hazardous materials.
188

Procedures
(practices)

; A process to identify, evaluate and control worker

Management should assign a responsible person (or

department) to make sure the above policies are carried
out. This includes:

exposures to airborne hazardous materials. The

process should include:

; Communicating your policies to all managers,

An inventory of hazardous materials and

processes and work areas where they are
used and stored.

An estimation of potential for exposure

based on the characteristics of the material
and the method(s) in which it is used.

Exposure sampling to quantify workplace

exposure levels.

Substitution of safer materials to eliminate

health risks to workers.

Installation of engineering controls, such as

local exhaust ventilation, where airborne
levels present a health risk to workers.

Use of administrative controls (such as job

rotation to limit exposure duration) and PPE
when engineering controls cannot reduce
exposures to safe levels.

supervisors and workers.

; Meeting regularly with managers and

supervisors responsible for hazardous material
purchasing, storage, transportation, use and
disposal to oversee implementation.

; Monitoring and reporting all complaints and

management responses related to the issue of
hazardous materials.

; Performing an annual review of the

implementation status of your hazardous
materials policies and procedures.
Your health and safety procedures should:

; Include ways to track and understand laws and

regulations on hazardous material use, including
obtaining the required permits.

; A program to provide workers with all appropriate

; Define the process to ensure that hazardous

PPE needed for their job(s), including:

materials are properly stored. This means the

materials are:
x

Hazardous materials are never stored at

workstations in quantities that exceed the
amount needed for a work shift.

Kept in sealed, approved containers.

Containers should always remain covered
and closed when not in use.
Labelled in a language workers understand
and using internationally accepted hazard
symbols.

eye protection (safety glasses, goggles and

face shields)

chemical aprons

chemical resistant gloves

spill/splash resistant shoes or boots

respirators

; Where respirators are in use, the respirator

Stored away from drinking water facilities,

food preparation and storage areas,
canteens, and worker accommodation.

program must include selection of the proper type

unit, fitting, training, and medical screening. All
PPE must be included in a maintenance and
replacement program.

Stored in specially designed cabinets,

rooms or outdoor areas that contain any
leaks using secondary containment.

; A process to encourage and enforce the use of

required PPE by workers.

Stored by hazard class to prevent the

accidental mixing of incompatible materials.
This means never storing materials that
when mixed would react to create a toxic
gas, explode, or some other dangerous
reaction.

; Making sure that workers have immediate and

unobstructed access (no more than a 10-second
walk) to eye-wash facilities in areas where
hazardous materials are present.

; A process to ensure that hazardous waste is

separated from other waste, and disposed of
189

properly by a licensed, third-party company

specialising in disposal of hazardous materials.

use/handling, and instructions for

responding to unsafe exposure.

; A process to provide workers who work with toxic

chemicals with the legally required medical
exams, at the time of job assignment and on a
regular basis thereafter.

Signs requiring the use of needed PPE are

posted.

No smoking signs are posted in areas

where combustible and flammable materials
are in use.

Signs that require workers to wash hands

after handling, storing, or disposing of
chemicals must be posted in bathrooms,
kitchens, and production areas.

MSDS are posted in the work area or

readily available for worker reference.

; Ensuring that young workers, pregnant or nursing

mothers, or other at-risk workers are not exposed
to hazardous materials.

Communication and Training

You should use the following methods to make sure
your employees are aware of policies and procedures:

; Anyone who will be handling, transporting, storing,

; Provide training programmes for new managers

or disposing of materials that may pose safety

hazards should first be trained on the specific
procedures for safe handling. They should be
trained about the hazards of the chemicals and
about how to respond to unsafe exposure.

and supervisors and newly hired workers on your

companys policies and procedures on hazardous
materials.

; Provide all workers with the companys written

; Provide material-specific handling: workers who

policies covering chemical/hazardous materials

safety.

handle hazardous materials should be trained and

qualified for the specific materials with which they
come into contact (including any legally required
training, like licenses or third-party training
certificates).

; Communicate company policies and procedures

on hazardous materials to suppliers, visitors,
vendors, and third-party contractors.

; Prominently display company policies and any

; Provide re-training to workers if they are assigned

laws relating to hazardous materials in a language

that workers understand.

to use new or different chemicals, or there are

changes in the workplace that affect the safe
usage of chemicals.

; Provide workers with information and instruction

on the health and safety risks of not wearing
appropriate PPE. Their knowledge and
awareness should be regularly monitored.

; Regularly re-evaluate hazardous material

handlers (recommended every two years, or
earlier if mandated by local regulations governing
re-qualification) to ensure they maintain the
knowledge and skills needed to safely handle
hazardous materials.

; Workers who handle, store, or dispose of

hazardous materials must, at a minimum, be
provided with training by a person/supervisor who
is formally trained in safe use and handling of
hazardous materials.

; Ensure that workers are re-trained and, if

necessary, disciplined if they have been observed
handling hazardous materials in an unsafe
manner or are involved in accidental discharge or
near-miss incident.

; Any area where hazardous materials are present

must have relevant danger and warning
information posted or available, and be written in
languages workers understand. This means:
x

Danger and warning signs are posted.

Signs should indicate the potential safety
and health hazards of the hazardous
materials in use, instructions on safe

190

Documentation and Records

Meeting standards requires proper documentation. You
will need to keep the following on file on your company
premises.

; A list of all hazardous materials in the company,

including:

Volume of material on site

Storage locations and associated volumes

Hazard information

; Written records of worker training completion.

; Copies of workers written and operational tests

Monitoring

and certifications qualifying them to handle, store,

transport and dispose of hazardous materials.

The following steps can be used to evaluate and

improve the effectiveness of your programs:

; Records of health and safety incidents, injuries

and illnesses involving chemicals or hazardous
materials, including minor incidents and near
misses.

1. Audit your systems to identify actual and potential

problems in meeting laws and standards:

; A database or inventory of chemical and

; Regularly monitor that all chemical and

hazardous materials safety regulations and laws.

hazardous material handling procedures are

being followed and are effective.

; Records of permits, third-party assessments,

government inspections, and other documentation
to demonstrate legal compliance.

; Conduct regular assessments of the hazards

of new and existing chemicals to determine
whether existing measures are effective in
protecting workers, or if other measures, like
engineering controls, should be added to
control hazards.

; Records of any internal monitoring, like

workplace air sampling.

; Records of any required medical exams.

; Designate a manager who routinely inspects

; MSDS for all hazardous materials on site.

material usage, storage, and disposal to make

sure procedures are in place and company
policies are followed.

; List of workers, like young workers, who are

prohibited from handling hazardous materials
and a listing of jobs/work areas that present a
potential risk to such workers.

; Make sure supervisors are responsible for

observing and correcting workers observed
improperly handling hazardous materials.

; Worker reports of any hazardous material safety

concerns, including those received through
informal mechanisms, so that if a worker
observes a chemical safety concern, they can
immediately report it to a supervisor or manager
for prompt follow-up.

; Make sure that a manager is assigned to

monitor worker qualification and requalification requirements regularly. Also
designate a supervisor or manager to
evaluate worker safety performance on a
frequent basis and keep performance records.

You will need to check if your health and safety training

policies are being followed and that the controls to make
sure your company is meeting code and legal
requirements are effective.
191

; Designate a manager to monitor all contractors,

vendors, and visitors who may be in contact
with hazardous materials to make sure polices
and procedures are followed.
2. Investigate problems and analyse why they
occurred. Where data indicates the existence of
non-conformities with your companys hazardous
materials policies and customer code(s) of conduct,
the company should investigate these conditions to
determine their causes and what can be done to
address them.

Common Audit Non-compliances from the

Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the
guidance in this chapter can help reduce the incidence
of these problems:

; Regularly review monitoring data, such as air

sampling reports, ventilation test records and
inspection reports of hazardous material storage
and use areas, to identify where your policies
and procedures are not being followed or are
not effective so you can correct the problem.

; Stay up to date on the latest research and

information on the risks presented by the
hazardous materials used at the company.
3. Work with other departments to identify
reasonable solutions. Take care to develop
solutions so that the problem does not recur and the
solution itself does not create other problems.

Young workers handling chemicals.

Failure to provide the required medical exams.

Chemical containers unlabelled, or labelled in a

language workers do not understand.

Workers failing to use the needed PPE.

No chemical/hazardous materials certificates from

the local government.

Governmental fines for improper disposal of

chemicals.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex members
only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

; Production should work with both purchasing

and customers to identify less hazardous
materials that can reduce the risk to workers but
still meet customer product requirements.

; Listen to workers. Worker feedback on areas of

improvement and potential hazards is an
important source of information for you,
especially since it is workers who use
hazardous materials every day.

192

Common Questions

Occupational Health and Safety and

Environmental agencies are good sources of
information for chemical use and disposal
requirements.

In many places, professionals from facilities in

similar industries have established work groups
for the purposes of support and information
sharing.

How do I know what types of hazards a material

presents?
MSDS and other literature will give you important
information about the hazards associated with the
material. But in general, hazardous materials could
have the following harmful effects:

Toxic substances can lead to acute respiratory

irritation, poisoning, chemical asphyxiation,
central nervous system effects, narcotic effects,
damage to the optical nerve, kidneys, liver, or
other organs, and chronic anaemia, among
other illness and injury.

Carcinogens are substances that cause

cancer.

Corrosive substances lead to skin, eye, and

respiratory irritations, burns, ulceration, and
tissue destruction, among other effects.

Irritant substances lead to skin problems, as

well as eye and respiratory irritations.

How do I ensure that chemical disposal

procedures are compliant with laws and
regulations?
Talk to your chemical suppliers. Suppliers should
be able to readily provide critical data and
information on material hazards and how to control
them. Many local and national governments
maintain web sites on which chemical handling and
disposal regulations are detailed. Also, contacting
local environmental offices for guidance will often
result in an offer of a site visit by a government
official who can help you determine whether your
disposal procedures are adequate and effective.
It is also critical that you contract only with licensed
hazardous waste transportation and disposal
contractors. Before selecting a vendor, review
their compliance history and their current licenses
and permits. You should then regularly evaluate
their performance by reviewing waste disposal
documentation (manifests) and by performing
vendor audits.

Other harmful substances can cause acute

respiratory problems, skin, and allergic
reactions.

Remember that how you control exposure and risk

from hazardous substances will vary depending on the
material. Always be familiar with the hazards presented
by specific materials so your control measures are
appropriate and effective.
How can I make sure I have the right controls in
place?
One of the best approaches is to hire an occupational
health and safety professional. You can also provide
your responsible person or staff with professional
training.
There are a number of other ways to increase and
maintain your awareness of chemical/hazardous
materials health and safety risks:

Online databases that regularly update new

laws and regulations.

Keeping a file of the most current information for

the chemicals used at your company

Local and national government representatives,

such as from the local fire department or
hospital, are often willing to visit facilities onsite
to help with training and make any necessary
suggestions for improvement.
193

Case Study
Regular visits to the site have helped gained the
factorys confidence. Through their partnership,
they have established a long-term investment in
training in Health & Safety and instilled a sense of
responsibility amongst the workers.

Protecting Workers and the Environment

Chemicals are widely used in supply chains and can
have negative effects on the health and wellbeing of
the workforce. PPE is essential to ensure hazardous
materials are properly used and contained.

To be successfully integrated into the factorys

standard practice, standards need to not be time
consuming, complicated or expensive.
Essentially, it is about building mutual trust and
understanding.

For Delbanco Meyer & Company, improvements in

Health & Safety can only be reached by achieving a
relationship of trust between supplier and customer.
Delbanco has worked to improve standards with a
Chinese supplier, Kushan Yuhua Embroidery
Company, who specialises in traditional hand
embroidery techniques.

Delbanco Meyer & Company Limited is a major

supplier of household textiles including quilts,
pillows and bed linen. To find out more about
Delbanco Meyer, visit their website at
http://www.delbanco.com/

Grease stains on embroidery can be removed by

applying a toxic compound, which is especially
dangerous to women. The issue was discovered as
workers were observed spraying the solvent without
proper ventilation or necessary PPE.
As a customer, I couldnt simply tell them this was
wrong, or insist on an expensive corrective action.
The short-term solution was to suggest spraying took
place in a separate ventilated room and to provide
masks that were cheap, says Linda Hyldgaard, CSR
Manager at Delbanco Meyer.
In 2005, Delbanco started implementing third party
audits. Workers, upon inspection, were found to not
be using the protective masks supplied, which were
left unused in drawers. The audit highlighted the
need for Health & Safety procedures and training.
The factorys HR team appointed an employee to
take responsibility for Health & Safety, and training
related to PPE was introduced. The factory
management understood they needed to raise worker
awareness of the chemicals being used.

194

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, websites and documents provide additional information on hazardous
materials:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization: http://www.ilo.org/ilolex/cgi-lex/convde.pl?R156
; Ethical Trading Initiative (ETI)
x

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI Base Code Appendices: http://www.ethicaltrade.org/resources/membershipresources/eti-base-code-appendices

; United States Occupational Safety and Health Administration (OSHA):

http://www.osha.gov/SLTC/hazardoustoxicsubstances/index.html

; European Union Agency for Health and Safety at Work: https://osha.europa.eu/en/topics/ds

; European Community REACH:
http://ec.europa.eu/environment/chemicals/reach/reach_intro.htm

Signposts to Training
x

US Department of Labor

ILO: http://www.itcilo.org/en/training-offer

OSHA: http://www.osha.gov/dte/library/index.html

Key Terms

Hazardous Material
environment.

Chemical Hazard Controls Policies, procedures, and systems for identifying and
limiting/eliminating chemical hazards accidents or injuries.

Material Safety Data Sheet (MSDS) Document that contains critical information about a
material, including physical data (such as melting points, boiling points, flammability),
reactivity data, details on toxicity, health effects from exposure, first aid measures in case of
exposure, PPE required, and additional information on safe storage, handling, and disposal.

Personal Protection Equipment (PPE) Equipment issued to workers that protects their
health and safety when coming into contact with hazardous materials. Examples include
rubber gloves, eye protection, rubber boots, aprons, filtered breathing masks or respirators.

Any substance that presents a risk to workers, property, or the

195

196

SEDEX SUPPLIER WORKBOOK

Chapter 2.6

WORKER HEALTH

Worker Health

Benefits

What does it mean?

Why should you do it?

One way to help create a successful and efficient

business is to protect your workers health. You
can do this by making sure workers have access
to good medical care while at work and in the
community, and also by promoting good health
practices through worker health programs.

Respecting and promoting worker health will help you

meet legal requirements, avoid penalties, protect your
workers well-being, and meet your customers
requirements.
There can also be business benefits, such as:

Many companies use some kind of potentially

dangerous or hazardous material. Whether using
alcohol, oil, grease, or more hazardous chemicals
like benzene or spot removers, every precaution
should be taken to protect employees working with
or around these substances.
The health and wellness of your employees is extremely
important, and the best way to prevent worker health
problems is to promote healthy practices through
education and outreach. You also have to consider the
needs of those at risk in your community and among the
workforce, like young workers, pregnant employees,
nursing mothers and workers with disabilities or special
health needs.

Less time and money lost due to worker illness.

Increased worker satisfaction and company

image in the community.

Improvement in worker productivity.

Attracting new customers through involvement

in community health promotion.

Requirements
What do you need to do?

ETI Base Code Clause 3

A company also cannot discriminate in hiring or make

an employment decision based on a workers medical
condition or status, unless absence of a particular
condition or infection is legally mandated job
requirement.

3.1 A safe and hygienic working

environment shall be
provided, bearing in mind
the prevailing knowledge of
the industry and of any
specific hazards. Adequate
steps shall be taken to
prevent accidents and injury
to health arising out of,
associated with, or occurring
in the course of work, by
minimising, so far as is
reasonably practicable, the causes of hazards
inherent in the working environment.

A socially and environmentally responsible company

makes sure that none of its policies and practices
negatively impact workers health and that they
encourage healthy living.
This section will help you check whether there a risk
of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure your worker health risks are
understood and properly managed.

3.2 Workers shall receive regular and recorded health

and safety training, and such training shall be
repeated for new or reassigned workers.
Relevant ILO Conventions
C42: Workmens Compensation (Occupational
Diseases) Convention (revised) 1934, requires that
compensation shall be payable to workmen
incapacitated by occupational diseases.

198

C77/78: Medical Examination of Young Persons

(Industry/Non-Industrial Occupations) Conventions,
1946, state that young persons under eighteen years
of age shall not be admitted to employment unless
they have been found fit for the work on which they
are to be employed by a thorough medical
examination
C121: Employment Injury Benefits Convention, 1964,
requires that employment injury benefits shall protect
all employees, including apprentices, in the public and
private sectors, including co-operatives, and, in
respect of the death of the breadwinner, prescribed
categories of beneficiaries.
Other International Standards and Guidelines
R97 Protection of Workers Health Recommendation,
1953, recommends that all appropriate measures
should be taken by the employer to ensure that the
general conditions prevailing in places of employment
are such as to provide adequate protection of the
health of the workers concerned.

Achieving and Maintaining Standards

How do you do it?

R112 Occupational Health Services

Recommendation, 1959 recommends that
occupational health services are provided for the
purpose of contributing to the establishment and
maintenance of the highest possible degree of
physical and mental well-being of the workers.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

R171 Occupational Health Services

Recommendation, 1985 states: surveillance of the
workers health should includeall assessments
necessary to protect the health of the workers
Universal Declaration of Human Rights: Article 25 (1):
Everyone has the right to a standard of living
adequate for the health and well-being of himself and
of his family, including food, clothing, housing and
medical care and necessary social services, and the
right to security in the event of unemployment,
sickness, disability, widowhood, old age or other lack
of livelihood in circumstances beyond his control.

Job applicants are not disqualified because they

are pregnant or infected with HIV or hepatitis-B.

Young workers are assigned only to nonhazardous jobs and tasks.

Workers are provided adequate medical care

and treatment if they are hurt or become ill on
the job.

Workers are provided with legally required

medical examinations.

Workers are offered and participate in wellness

and well-being activities.

Routine health surveillance is provided for

workers who work with chemicals or in noisy
areas.

It is important that you also regularly monitor your

processes and controls to make sure they are working.

199

; Commitment to educating workers, their

Having a healthy workforce starts with

knowledge and prevention. Effective
worker health programs go beyond
making sure workers are taken care of
if they become ill or injured on the job.
Educating workers and their families on
good health practices helps to promote
healthy living in the community.
Worker involvement in well-being and
wellness activities, like blood drives and
immunisations, help workers learn and
also connects the company to the local
community.

families, and the community on staying healthy.

Procedures
(practices)
Management should assign a responsible person (or
department) to make sure the above policies are carried
out through the following practices:

; Procedures to ensure that workers have

immediate access to necessary medical attention
using either on site medical services or in the local
community.

; Program to provide and maintain a sufficient

number of first aid kits, as required by local
regulations or approximately one first aid kit for
every work area. Kits must be:

Policies
(rules)

Clearly visible (indicated by a sign)

Readily accessible (never locked or

blocked)

appropriate health care for all occupational

injuries and illnesses.

Regularly inspected and restocked as

needed

; Commitment to provide workers with required

Provided with adequate supplies

Your company policies regarding worker health should

include the following:

; Commitment to provide prompt access to

pre-employment and regular medical

examinations and medical testing.

; Larger companies should have a professionally

; Commitment to protect the health of at-risk

Stocking First Aid Kits

workers, such as young workers, pregnant

workers, nursing mothers and workers with
disabilities and other medical conditions.
Refer to other chapters in this workbook
for details on controlling health hazards
associated with:

When deciding how to stock your first aid kits,

always check local legal requirements and make
sure your first aid supplies are appropriate for the
types of injuries that might happen at your
company. In general, first aid kits should contain
the following items:

Food and Water See

Housekeeping and Hygiene

9 Sterile adhesive dressings (of varying sizes)

Chemicals See Hazardous

Materials

9 Gauze bandages

9 Sterile wound dressings

9 Disinfectant/antiseptic agent

; Statement that the company will enrol workers

9 Scissors

in any required social insurance or health care

programs.

9 Safety pins
9 Sterile eye pads

; Statement that the company does not

9 Eye-wash bottle

discriminate in hiring or employment decisions

based on medical status or pre-existing
conditions, like disabilities, HIV/AIDS, hepatitis,
or pregnancy.

9 Disposable latex gloves

200

and education activities that address the

identified needs.

staffed medical clinic (with a doctor, nurse, or

other professional) that is:

; A program to provide or sponsor wellness and

Clearly identified and in a central or

otherwise easily accessible location.

well-being activities, such as blood pressure

monitoring, flu vaccinations, health fairs, blood
drives and fitness programs.

Equipped to treat the types of injuries and

medical emergencies likely to occur given
the companys operations.

Kept clean and sanitary.

Open and staffed whenever workers are

present.

Please see the other chapters of this workbook covering

Hazardous Materials and Housekeeping and Hygiene
for more specific procedures on identifying and
controlling workplace health hazards.

; The company must make sure that at least one

Best Practice

trained first-aider is available on all work shifts

for every 100 workers.

Identifying Medically Trained Personnel

; Recruitment, selection and hiring procedures

It is important that workers know which of their coworkers are formally trained in first aid. To make
this obvious to workers, you can:

that ensure that workers must not be

discriminated against in hiring or employment
decision-making based on medical condition,
pregnancy, or disability.

Post photos of the workers

Have these workers wear a unique badge or

armband

Mark their workstations

; Procedures to provide workers with the needed

medical exams and tests, which are often
legally required, as follows:

Pre-employment examinations

Regular examinations and medical

testing based on job assignment and
exposure to work hazards (like
chemicals or dust)

Post-employment examinations

Special examinations for employees at

greater risk, like young workers

Seasonal screening for illnesses

common in the community (like the flu
or dengue fever)

Medical emergency response is more efficient if

workers know who to find when help is needed.

; A process to ensure that young workers and

Communication and Training

workers with other medical needs are employed

with consideration for their condition (such as
job assignment and hours worked, or providing
seating for pregnant workers).

You should use the following methods to make sure

your employees are aware of policies and procedures:

; Ensuring that workers are enrolled in required

; Provide training programmes for new managers

social insurance or health care schemes.

and supervisors and newly hired workers on your

companys policies and procedures on worker
health.

; A program for the company to identify health

needs among its workers and their families and
the community and to provide health promotion

201

; Display company policies and any laws relating to

; Inform workers of opportunities for involvement

in wellness and well-being activities on site and
in the community. This can be done as part of
your normal communication with workers,
through postings, email, or worker-management
meetings.

worker health in a language that workers

understand.

; Provide all workers with a copy of the companys

worker health, first aid, and medical response
policies.

; Post the health, first aid, and medical response

Best Practice - Getting Involved in the

Community

policies in all work areas, including contact

information for the companys medical team,
onsite clinic (or local hospital/clinic), and local
emergency response services.

To support the community in which you do

business, the company can get involved in
community health and wellness activities.
There will be many options, and your workers
can also tell you which health causes are most
important to them. Some examples include:

; Inform all job applicants and employees of the

companys non-discrimination policies regarding
medical conditions and the use of medical
examinations and tests.

; Post signs to indicate the location of first aid

Blood drives

Fundraising workers can participate in

events that raise money for research, such
as a cure for cancer

Health Fairs see how the company can

support one, perhaps by donating goods,
services, or workers time

Volunteering staff and workers could

donate their time for health education or
other outreach activities

kits.

; HSE guidelines state that at least one per cent

of all workers must be formally trained in first
aid. Workers should be made aware of all
persons certified in first aid training.

; Provide workers with information and training on

local health issues and how to maintain healthy
lifestyles.

have the company host one

Promoting Worker Health

Documentation and Records

It is important that the company encourage workers

and their families to lead healthy lives. Healthy
workers have fewer absences and are more
productive. There are several ways the company
can do this:

Meeting standards requires proper documentation. You

will need to keep the following on file on your company
premises:

Serve healthy and balanced meals in the

cafeteria

; A record of all first aid kits, their contents and their

Post prevention information on illnesses or

diseases prevalent in the community

; Records indicating that first aid kits are regularly

If the company has a smoking area, post

information about the serious health risks of
smoking

locations.

inspected to make sure they are stocked with all

needed supplies that have not expired.

; List of workers formally trained in first aid and their

training certificates. Make sure the list is kept
updated as new workers are trained.

Offer flu shots for workers

Eliminate standing water on company property

to reduce diseases carried by mosquitos

; Records showing that required medical exams and

Offer blood pressure screening at the

company.

; List of nearby, professionally staffed medical

medical screening have been conducted.

facilities.
202

; Documents and records demonstrating that

more young workers, for instance, make sure

these workers receive exams.

required social insurance and health care schemes

are available to workers.

; Watch for illnesses or health problems that

; Documentation listing workers who are prohibited

are common in the community, and be aware

that some illnesses are more prevalent
depending on the season, and so require
preventative measures.

from performing certain tasks or jobs due to health

risks (for example, pregnant workers should not
handle certain chemicals), and showing that
workers have received the required medical
examinations.

2. Investigate problems and analyse why they

occurred. Where data indicates the existence of
worker health problems or non-conformities with
your companys worker health policies and
customer code(s) of conduct, the company should
investigate these conditions to determine their root
causes and what can be done to address them.

Monitoring
You will need to check if your worker health policies are
being followed and that the controls to make sure your
company is meeting code and legal requirements are
effective. The following steps can be used to evaluate
and improve the effectiveness of your programs:

; Conduct regular assessments of

absenteeism, illness rates and duration of
illnesses to make sure worker health
programs and procedures are effectively
protecting workers, or if additional procedures
are needed.

1. Monitor and report on key performance

indicators (KPIs) to identify actual and potential
problems, including:

; Look for common or frequent medical

problems among the workforce and then
implement the proper controls.

; Regularly review worker feedback related to

the administration of your companys worker
health policies.

; Carefully investigate worker feedback and

grievances related to worker health.

; Establish and monitor KPIs for your worker

3. Work with other departments to identify
reasonable solutions. Take care to develop
solutions so that the problem does not reoccur and
the solution itself does not create other problems.

health procedures so that you can measure

their effectiveness on a continuous basis. For
example, you could track the percentage of
young workers who were provided annual
medical examinations, or the number of
workers who participate in health promotion
activities.

Analyse on a regular basis any suggestions from

worker meetings and use the results in adjusting
company policies and procedures.

; Set goals and objectives for meeting the

companys worker health requirements. For
example, a goal might be that first aid kits are
inspected and restocked weekly. Track if the
company is meeting goals and modify
systems if goals are not met.

; Regularly review and revise policies and

procedures to keep them relevant and up-todate.

; Regularly assess the adequacy of onsite

medical services, including the number of
available first-aiders.

; Check to see if medical examinations and

screening policies are followed. If you hire
203

Common Questions

Like any other health risk in the workplace, the best way
to deal with it is to see if you can reduce or eliminate the
hazard through engineering controls. This could
mean using mechanical lifting aids and automated
conveyor systems, changing the work process to reduce
repetitive work or forceful exertions, changing
workstation layout and tool design to improve working
postures.

What are some other general measures I can take to

improve worker health?
A variety of measures exist to help improve worker
awareness of job-related health risks and concerns.
Health reminder postings can be posted in each work
area. Bulletin boards in central locations are ideal spots
for reminders, tips and notices of upcoming trainings
and events. Daily departmental meetings also provide a
forum for discussing health concerns.

You can also implement administrative controls, such

as changing rules and procedures to add more rest
breaks, rotate workers across different tasks, or adjust
the work pace.

You can also improve worker wellness by making sure

job assignments and production schedules support
good health. Rotating workers between jobs is a good
way to limit exposure to repetitive work and hazardous
conditions. For example, you can make sure workers
spend as little time as possible in high temperature
areas or working with chemicals. You can also offer
break areas with cold water, healthy snacks, and a
relaxing environment.

Finally, you can provide workers with Personal

Protective Equipment (PPE). But remember that giving
workers PPE should not be your first solution, and you
should explore this option only after exhausting
solutions from engineering and administrative controls.
My company would like to start a health promotion
program. Where can I get more information?
Employee health and wellbeing is important to the
overall health of a company. When workers are
healthier they dont use sick leave and are working at
their best. There are many ways to incorporate a
healthy lifestyle into the workplace.

Common Audit Non-compliances from the

Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the guidance in
this chapter can help reduce the incidence of these
problems:

First aid kits are not adequately stocked.

Too few workers are formally trained in first aid.

Failure to protect the health of pregnant workers.

Medical supplies are expired.

Workers are denied the opportunity to leave their

post to seek treatment for illness.

You can begin by contacting an organisation in your

area that will help you get started. Health care
providers, hospitals and health insurance companies
often work with facilities to put on health and wellness
training programs, health fairs, and other types of health
promotion activities.
An excellent source of information and assistance for
community health programs is the International
Federation of Red Cross and Red Crescent Societies.
You should also contact your local public health
department or health ministry to find out what services
they provide.

Young workers not provided with the legally

required medical exams.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex members
only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

What can I do to control the health risks of

physically demanding work?
Physically demanding work includes jobs with repetitive,
forceful, or prolonged exertions of the hands, frequent or
heavy lifting, pushing, pulling, or carrying of heavy
objects; and prolonged awkward postures. This work
can cause various musculoskeletal illness and injuries.
204

Case Study
Worker Health: Preventing discrimination of
infected workers
As well as providing regular training and education,
the company runs annual awareness weeks, where
Health Ambassadors (workers who have publicly
disclosed they are infected) give health talks,
encouraging fellow workers to come forward for
tests. The message is that they can't discriminate
against someone with HIV, if they don't know their
own status.

People living with HIV/AIDS suffer discrimination and

stigmatisation, which threaten rights at work,
undermining efforts to provide prevention, treatment,
care and support.
Westfalia Ltd in Limpopo, South Africa, was
experiencing the impact of running a business within a
community ravaged by HIV/AIDS. When Dorcus
Molomo joined as Human Resources Manager in 2005,
her first task was to oversee an investigation into the
business risks.
"We sensed something was wrong before we started the
study. Absenteeism rates were high, and the number of
workers ill or dying was escalating. As turnover
increased, so did our training costs, with all the extra
induction training we had to provide.

"We are proud of what we have achieved so far.

Crucially, HIV/AIDS is no longer something that
people are afraid to talk about. People are very
involved and aware about the need to protect their
status."
Westfalia Ltd. is a South African supplier of avocados
and citrus fruits to European supermarkets. To find out
more about Westfalia, visit http://www.westfalia.co.za/.

The company was losing skilled workers, union officials

were dying and the quality of products and services was
becoming compromised.
The first step was to develop an HIV/AIDS policy and
code of conduct, which states the fundamental principles
of providing confidentiality and security for affected
workers.
"The policy clearly states that staff will be disciplined for
discriminating against anyone who is infected, or
gossiping about other peoples' status. The ultimate
sanction is dismissal."
The company decided to provide anti-retroviral treatment
to all infected employees along with free testing, vitamin
and immune boosters. With support from the Waitrose
Foundation, the company's health clinic now employs
full-time nurses and a counselor who provide pre- and
post-test counseling, as well as ongoing counseling for
HIV positive workers.

205

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
ccontent@sedexglobal.com

Resources and Guidance

The following organisations, web sites and documents provide additional information on Worker
Health:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-PracticeGuidance-4-Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance:

https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization: http://www.ilo.org

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org
x

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-basecode

ETI Base Code Appendices: http://www.ethicaltrade.org/resources/membershipresources/eti-base-code-appendices

; Unites States Department of Labor

Occupational Safety and Health Administration

(OSHA): http://www.osha.gov

Medical Screening and Surveillance:

http://www.osha.gov/SLTC/medicalsurveillance/index.html

Medical and First Aid: http://www.osha.gov/SLTC/medicalfirstaid/index.html

; European Union Agency for Health and Safety at Work: http://osha.europa.eu

Musculoskeletal Disorders: http://osha.europa.eu/en/topics/msds

Worker Participation: http://osha.europa.eu/en/topics/whp

OSH and Education: http://osha.europa.eu/en/topics/osheducation

; UK Health and Safety Executive: http://www.hse.gov.uk

First aid at work: http://www.hse.gov.uk/pubns/indg214.pdf

Signposts to Training
x

OSHA: http://www.osha.gov/dte/index.html

ILO: http://www.itcilo.org/en/training-offer

International Federation of Red Cross and Red Crescent Societies: http://www.ifrc.org/whatwe-do/health/first-aid-saves-lives/

206

Key Terms
x

Worker Health: Making sure workers stay healthy through regular medical examinations,
medical screening, and access to medical care.

Medical Examination: A check on a workers health performed by a medical professional.

These are often required for all workers, but are especially important for young workers,
workers performing hazardous work, and workers with medical conditions.

Medical Screening: Testing for medical problems before the person develops any symptoms
of an illness or medical disorder.

Health Fair: An interactive educational event designed to provide basic preventive medicine
and medical screening, such as blood pressure monitoring and cholesterol checks, to people
in the community or employees at work in conjunction with workplace wellness. These events
are typically offered in the community, at work sites or schools. A variety of vendors and
exhibitors educate workers, their families and community members on all aspects of health,
wellness, fitness and lifestyle improvements.

207

208

SEDEX SUPPLIER WORKBOOK

(Photo: DEBAS)

Chapter 2.7

HOUSEKEEPING &
HYGIENE

Housekeeping & Hygiene

What does it mean?
Every workplace is safer when it is kept clean
and sanitary. Your workers spend many hours
each day at the company where they have to
drink water, eat their meals, and use the toilet
facilities. It is important that company premises
are kept clean enough so workers and therefore
your business stay healthy and successful.
Housekeeping and workplace hygiene means
providing adequate sanitation and hygiene facilities that
are regularly cleaned and maintained so they do not
pose a health and safety risk to employees.
Workers need to have potable drinking water that is safe
to drink, sanitary toilet facilities, safe food prepared in
sanitary kitchens and served in clean canteens, and a
work environment that is otherwise kept hygienic.
Performing regular housekeeping and maintenance
helps you identify potential issues and take preventative
action before problems develop. Good housekeeping
practices also help you control problems by eliminating
tripping hazards, making sure floors are never slippery
and keeping exit routes clear.

Benefits
Why should you do it?
Maintaining good workplace housekeeping and hygiene
will help you meet legal requirements, avoid penalties,
protect your workers health and safety and your
business assets, and meet your customers
requirements.

A socially responsible company makes sure that

none of its facilities and practices create a situation
where workers are at risk due to poor housekeeping
and workplace hygiene.

There can also be business benefits, such as:

This section will help you check whether there a risk

of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure your housekeeping and
workplace hygiene needs are understood and
controlled.

Having an effective housekeeping

and hygiene program helps you
control the chemical, physical, and
biological sources of worker illness,
injury, and discomfort in the
workplace.
Keeping your company and company
grounds clean can reduce the risk of
disease, insect infestation, food and
water-borne illness, and other threats
to worker health and your business.

210

Improved workplace efficiency

Less time and productivity lost due to worker

illness

Decrease in workplace accidents and

associated costs

Improved company image

Other International Standards and Guidelines

Requirements

ILO R120 Hygiene (Commerce and Offices)

Recommendation, 1964

What do you need to do?

ILO R164 Occupational Safety and Health

Recommendation, 1981

ETI Base Code Provision 3

The right to water and sanitation is implicitly included

in Article 11.1 of the International Covenant on
Economic Social and Cultural Rights, recognising
the right of everyone to an adequate standard of
living for himself and his family, including adequate
food, clothing and housing, and to the continuous
improvement of living conditions.

3.1 A safe and hygienic working environment shall be

Achieving and Maintaining

Standards

C155: Occupational Safety and Health Convention,

How do you do it?

You can best meet standards by using a systems
approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

C161 Occupational Health Services Convention,

1985, states that all members must develop
progressively occupational health services for
all workers, including those in the public sector
and the members of production co-operatives,
in all branches of economic activity and all
undertakings. The provision made should be
adequate and appropriate to the specific risks
of the undertakings.

211

Slips, trips and falls from wet, oily or cluttered

working and walking surfaces are avoided.

There are no blocked or hard-to-access exit

facilities as a result of improper storage in
aisles, hallways and staircases.

Potable water is available at all times for

workers.

Workers do not get ill from contaminated

drinking water.

Policies
(rules)

There are an adequate number of toilet facilities

for workers.

Washing and toilet facilities are sanitary.

Food storage and preparation facilities are kept

sanitary to prevent food-borne illness.

; Company commitment to maintaining a clean

There are no infestations of insects or rodents in

food storage and living areas.

; Commitment to provide an adequate number of

Your company policies on housekeeping and hygiene

should include the following:

and sanitary work environment.

sanitary and properly maintained toilet facilities.

It is important that you also regularly monitor your

processes and controls to make sure they are working.

; Commitment that workers will be provided with

unrestricted, 24x7 access to potable drinking
water.

; Commitment that food preparation, eating, and

serving areas will be kept clean and sanitary.

5S
Making Housekeeping a Habit

; Commitment to ensure that exit aisles and

stairwells are never used for temporary or
permanent storage of any materials, products
or waste.

Eliminate all the things in the

workplace that are not being
used and store them away

; Statement that all working and walking

surfaces will be kept free of slipping and
tripping hazards such as water and oil leaks,
dust and debris.

Sort

Set in
Order

Arrange the items used on a

daily basis so that they can be
accessed and stored quickly

Procedures
(practices)

Shine

Standardise

Ensure everything is clean and

functioning properly

You should assign a responsible person (or

department) to make sure your policies are carried out.
This includes:

Develop a routine for sorting,

setting and shining

; Communicating your policies to all managers,

supervisors and workers.

Sustain

; Meeting regularly with managers and

Create a culture that follows

these steps daily

supervisors responsible for production and

facilities maintenance to oversee
implementation.

; Monitoring and reporting all complaints and

management responses related to
housekeeping and sanitation.

; Performing an annual review of the

implementation status of your housekeeping
and sanitation policies and procedures.

212

; A program of regular housekeeping, such as

Your facility housekeeping and sanitation procedures

should include:

using 5S (best suited to factory settings), to

ensure that floors, sidewalks and all other
walking and working surfaces are kept free of:

; Ways to track and understand laws and

regulations on housekeeping and hygiene.

; Ensuring an adequate number of toilets for

both male and female workers, based on the
number of workers and local regulatory
requirements.

; A regular maintenance program for toilet

Kept clean and sanitary

Working properly

Separated by gender

Sufficiently private

Able to meet cultural norms (like provision

of wash facilities) if needed for religious
observances

to prevent other potential health problems such

as dust, mould, and mildew.

; A process to keep the facility and grounds free

from insect or animal infestation (for example,
making sure there is no standing water that
could be a breeding ground for insects that
spread disease).

; A program to properly segregate and dispose

of food and sanitary waste.

; A program to provide clean drinking water that

Best Practice

is:

Routine Housekeeping

Freely accessible in all working and

eating areas and in worker
accommodation at all times.
Sufficient for the size of the workforce

Tested regularly to make sure it is potable

As part of the companys overall housekeeping

program, make all workers responsible for basic
housekeeping of their work area.
At the end of every shift, they should make sure
tools are put away, workstations are not cluttered,
scrap material is cleaned up, rubbish is thrown
away properly and dust is swept up.

; Ensuring that food preparation, storage, and

canteen facilities are kept clean and sanitary.
This means:

Food storage (food lockers, refrigerators

and freezers) must be in compliance with
local law, and food must always be kept in
a way that prevents spoilage or illness

Food preparation areas are kept clean

and hygienic

Eating areas are kept clean and hygienic

Keeping these free of rodents and insects

Debris and improperly stored tools and

materials that can cause tripping and
falling

; A program of regular cleaning and disinfection

provided for all toilet facilities, in food

preparation and eating areas, and all other
areas where workers may touch hazardous or
infectious substances.

aisles, hallways and stairwells to make sure

workers can exit the facility quickly and safely
in an emergency.

; Ensuring that hand washing facilities are

Spills and leaks that result in slips and

falls

; Regular inspection and housekeeping of all

facilities to ensure that they are:

Assigning these basic tasks to all company

employees will go a long way toward keeping
your company cleaner and safer.

; Cooks and other food handling and preparation

staff must be medically certified according to
local law.
213

Communication and Training

Good Housekeeping Protects Occupational

Health and Safety

You should use the following methods to make sure

your employees are aware of your housekeeping
policies and procedures:

Having a good housekeeping plan in place

doesnt only keep the company clean, but it will
help you meet requirements for many areas of
occupational health and safety. For example:

; Provide training programs for new managers

and supervisors, and newly hired workers on
your companys policies and procedures on
housekeeping and hygiene.

9 Machinery and Site Vehicles - keeping

machines clean means they are less likely to
break down or create a hazard.

; Display company policies and any laws relating

9 Hazardous Materials - disposing of used

to housekeeping and hygiene in a language

that workers understand.

chemical containers safely and promptly

reduces risks to workers and the
environment.

; Provide relevant information to employees,

such as worker handbooks or supervisor
training material. This information should
explain the factory rules and procedures on
housekeeping and hygiene, and include
feedback and grievance processes available to
employees.

9 Worker Health - keeping company grounds

free from standing water protects against
insect infestation and illness.

9 Emergency and Fire Safety - reducing

clutter at workstations helps keep exit routes
clear.

; Post housekeeping responsibilities in each

work area/workstation.

See the other chapters in this workbook for further

details. A housekeeping and hygiene program is a
key component of good occupational health
management at any company.

; Train all workers who are involved with

equipment or materials that require special
hygiene controls to perform these jobs safely,
such as facilities maintenance employees,
cooks and food handlers.

Documentation and Records

Meeting standards requires proper documentation. You
will need to keep the following on file on your company
premises:

; Inspection records for aisles, corridors and all

exit facilities that verify they are maintained
free of obstructions or storage that could
prevent workers from exiting safely in an
emergency.

; Records of maintenance for toilet facilities

demonstrating that company housekeeping
and hygiene requirements are checked and
consistently met.

; Records of drinking water testing for chemical

and biological contaminants to make sure it is
safe to drink.

214

; Records demonstrating that food preparation,

; Set goals and objectives for meeting the

companys housekeeping requirements. For
example, goals might be that toilet facilities
are always stocked with hand soap or
workstations are swept for dust daily, and
vacuumed weekly. Track if the company is
meeting goals and modify systems if goals
are not met.

storage, and eating area housekeeping and

hygiene requirements are checked and
consistently met.

; Records showing that food handling and

preparation workers are medically certified if
legally required.

; Waste handling, segregation, and disposal

; Regularly review and revise policies and

records.

procedures to keep them relevant and up-todate.

; Written records to show that supervisor and

worker training on housekeeping and hygiene
has been completed, including for general
training orientation for all worker and training
for specific jobs.

2. Investigate problems and analyse why they

occurred. Where data indicates the existence of
non-conformities with your companys
housekeeping and hygiene policies and customer
code(s) of conduct, the company should
investigate these conditions to determine their
causes and what can be done to address them.

; Conduct regular assessments of the

housekeeping and hygiene hazards in all
facility areas and make sure procedures are
effectively protecting workers, or if additional
procedures are needed.

; Regularly inspect toilets, drinking water and

food preparation, storage, and eating facilities
to make sure your housekeeping policies are
followed and control procedures implemented.

; Carefully investigate worker feedback and

Monitoring

grievances related to housekeeping and

hygiene.

You will need to check if your housekeeping and

hygiene policies are being followed and that the controls
to make sure your company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

; Analyse on a regular basis any suggestions

from worker meetings and use the results to
adjust company policies and procedures.

1. Monitor and report on trends to identify actual

and potential problems, including:

; Integrate good housekeeping and hygiene

; Regularly review worker feedback related to

practices into job descriptions. Make general

and job-specific housekeeping practices, like
keeping workstations clean, part of each
workers responsibility.

the administration of your companys

housekeeping and hygiene policies.

; Establish and monitor key performance

indicators for your housekeeping and hygiene
procedures so that you can measure their
effectiveness on a continuous basis.

; Integrate oversight of good housekeeping and

hygiene practices into the job descriptions of
supervisors and managers.
215

Common Questions
What is the best way to ensure that business
conditions are generally kept clean and hygienic?
You have to employ a variety of methods:

Create a list of housekeeping and hygiene

requirements that are needed to meet legal, code,
and customer requirements.

Develop a regular maintenance plan.

Prioritise areas for regular monitoring and checks.

For example, toilets may need to be cleaned daily
and checked to make sure they are stocked with
soap.

Common Audit Non-compliances from the

Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the
guidance in this chapter can help reduce the incidence
of these problems:

Once the plan is created, a manager or

supervisor, or a group of the same, should be
designated and required to monitor conditions on
a daily, weekly, monthly, or yearly basis,
according to requirements.

x Kitchens not sanitary.

x Dust build-up on machines and floors.
x Worker slips due to wet or damp flooring.

What are some measures I can take to make sure

that workers keep their general work area clean?

x Drinking water that is unsafe to drink.

Accidents and injuries can occur as a result of worker

indifference to workplace cleanliness and hygiene. To
encourage workers to take part in regular cleaning and
maintenance of their work areas, train them such that
they understand the health and safety risks of failing to
do so.

x Toilet facilities that are not stocked with hand soap

or toilet paper.
x Standing water on factory grounds.
Sedex provides a document with suggested possible corrective
actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

Prominently post posters and instructions about how

workers can help keep the company clean. Centrally
located bulletin boards can also include posted
reminders of cleaning needs, perhaps on a regular,
rotational basis. Morning production meetings present
good opportunities to remind workers of workplace
hygiene needs and rules as well.
In a factory setting, implementing a formal system, such
as 5S, can make housekeeping a regular part of
production management and a formal part of every
workers job.
Most workers are very eager to avoid accidents, injuries,
or illness and should be willing partners to keep things
clean, if made aware of what is at stake.

216

Case Study
Housekeeping and Hygiene: Cleanliness and
Orderliness
Occupational Health & Safety is required to prevent
injuries and diseases related to work, and to protect the
physical and mental health of employees.
Famar takes a strict approach to Health & Safety
through continuous training and obligatory personal
protective equipment (PPE) use. The site produces
liquid and semi-liquid pharmaceutical products and so
proper standards are vital.
In the past some of the housekeeping staff did not
follow the safety instructions that were provided (use of
yellow cones) in such way to protect employees from
slipping due to the wet surfaces. Issues of chemical
cleaning materials management, storage and proper
labelling were also important to address, says Chris
Messologitis, Corporate HSE Manager, Greek
Operations, Famar.
All employees and contract cleaning staff were trained
in the new CLP labelling and chemical management
and the appropriate PPE were provided in accordance
to the legislation requirements. In a recent audit by
customer Perrigo, Famar was found to have high levels
of cleanliness and tidiness. All fire equipment, eye wash
stations and evacuation points were properly placed
and signposted. PPE was provided and first aid kits
were available, and the facility had established a
system where spill kits materials were placed near
exits, to enable quick collection for use in the outside
area.
There was controlled access to the flammable
chemicals warehouse, separate from the main
production site. Famar had also implemented extra
support for equipment in case of earthquakes.
Management had detailed risk assessments for all
processes and an action plan was being continuously
developed to improve processes relating to HR
management and employees Health & Safety.

217

A document is in place and Famar employees

report any hazards they observe or cases where
they felt they might have had an injury. From the
reporting, an improvement action plan is
implemented. The no injuries objective is reported
and posted through the use of a red-amber-green
communication system highlighting recent daily
hazard at the site.
A continuous communication on sharing incidents
from other sites, the employees commitment to
change their work behaviour and on the job
training, are some of the actions that makes the
difference and improvements to minimise incidents
at workplace.
Perrigo UK recognises Famar as an example of a
Best Practise Supplier with regards to standards.
The recent SMETA audit demonstrates
commitment and enthusiasm in this respect,
specifically with regard to Health & Safety, says
Danielle Coletta, CSR Project Manager, Perrigo
UK.
Famar S.A. is one of Europes leading providers of
contract manufacturing and development services to the
pharmaceutical and health and beauty industry. To find
out more about Famar, visit http://www.famar.gr.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, websites and documents provide additional information on housekeeping
and hygiene:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance4-Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance:

https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; International Labour Organization: http://www.ilo.org

; Ethical Trading Initiative (ETI): http://www.ethicaltrade.org
x

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

ETI Base Code Appendices: http://www.ethicaltrade.org/resources/membershipresources/eti-base-code-appendices

; United States Occupational Safety and Health Administration (OSHA):

http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=STANDARDS&p_id=9
714

; European Union Agency for Health and Safety at Work:

x Factsheet 14 Preventing Work-Related Slips Trips and Falls:
http://osha.europa.eu/en/publications/factsheets/14/view
x Biological agents: http://osha.europa.eu/en/publications/factsheets/41

Signposts to Training
; UK Food Standards Agency: http://www.food.gov.uk/news-updates/news/2012/may/foodhygiene-videos

; US Food and Drug Administration:

x http://www.fda.gov/downloads/Food/FoodSafety/RetailFoodProtection/IndustryandRe
gulatoryAssistanceandTrainingResources/UCM088896.pdf

http://www.fda.gov/Food/FoodSafety/RetailFoodProtection/IndustryandRegulatoryAss
istanceandTrainingResources/ucm124134.htm

; ETI: http://www.ethicaltrade.org/training
; National Environmental Health Association Food Safety Training:
http://www.nehatraining.org/

218

Key Terms
x

5S: The name of a workplace organisation method that uses a list of five words that all start
with the letter "S". The list describes how to organise a work space for efficiency and
effectiveness by identifying and storing the items used, maintaining the area and items, and
sustaining the new order. One goal of 5S is improved Health & Safety. Clear pathways
between workbenches and storage racks can minimise accidents, as can properly swept
floors.

Industrial Hygiene: The anticipation, recognition, evaluation, and control of factors in the
workplace that may cause illness, impaired health and well-being, or worker discomfort.

Housekeeping: Maintaining upkeep and general cleanliness and sanitation at the company.

Potable Water: Water that has been tested for dangerous and/or toxic chemicals such as
lead or bacteria and has been certified to be safe for drinking.

219

220

SEDEX SUPPLIER WORKBOOK

PART 3:

ENVIRONMENTAL
STANDARDS

CONTENTS
Part 3: Environmental Standards
3.1 Environmental Management
Systems

3.4 Water
Definition

262

Definition

225

Benefits

262

Benefits

225

Requirements

263

Requirements

226

Achieving and Maintaining Standards

264

Achieving and Maintaining Standards

227

Common Audit Non-compliances

269

Common Audit Non-compliances

232

Case Study

270

Case Study

233

Resources and Guidance

271

Resources and Guidance

234

3.5 Pollution
3.2 Waste

Definition

274

Definition

238

Benefits

274

Benefits

238

Requirements

275

Requirements

239

Achieving and Maintaining Standards

277

Achieving and Maintaining Standards

239

Common Audit Non-compliances

281

Common Audit Non-compliances

243

Case Study

283

Case Study

245

Resources and Guidance

284

Resources and Guidance

246

3.6 Emissions

3.3 Raw Materials

Definition

288

Definition

250

Benefits

288

Benefits

250

Requirements

289

Requirements

251

Achieving and Maintaining Standards

290

Achieving and Maintaining Standards

252

Common Audit Non-compliances

293

Common Audit Non-compliances

256

Case Study

295

Case Study

257

Resources and Guidance

296

Resources and Guidance

258

SEDEX SUPPLIER W ORKBOOK PART 3: ENVIRONMENTAL STANDARDS

222

3.7 Energy & Climate

3.10 Supplier Sourcing

Definition

300

Definition

336

Benefits

300

Benefits

336

Requirements

301

Requirements

337

Achieving and Maintaining Standards

302

Achieving and Maintaining Standards

338

Common Audit Non-compliances

305

Common Audit Non-compliances

344

Case Study

307

Case Study

344

Resources and Guidance

308

Resources and Guidance

345

3.8 Renewable Energy

Definition

312

Benefits

312

Requirements

313

Achieving and Maintaining Standards

314

Common Audit Non-compliances

317

Case Study

319

Resources and Guidance

320

3.9 Biodiversity
Definition

324

Benefits

324

Requirements

325

Achieving and Maintaining Standards

326

Common Audit Non-compliances

330

Case Study

331

Resources and Guidance

332

SEDEX SUPPLIER W ORKBOOK PART 3: ENVIRONMENTAL STANDARDS

223

SEDEX SUPPLIER WORKBOOK

Chapter 3.1

ENVIRONMENTAL
MANAGEMENT
SYSTEMS

Environmental Management
Systems

Benefits
Why should you do it?

What does it mean?

Building responsibility for environmental protection

into your business management system will help you
stay within the law, avoid penalties and meet your
customers requirements.

A management system is the set of interdependent

policies, processes, and procedures that a company
uses to achieve its business objectives, which
include environmental responsibility.

There can also be business benefits, such as:

a) Improving your companys image and
reputation.

A management system also serves to continuously

improve key business processes and outcomes to
meet core strategic goals. An Environmental
Management System is how a company effectively
controls its environmental aspects to prevent both
short-term and long-term adverse environmental
impacts.

b) Achieving both your business and

environmental performance objectives.
c) Improved community relations.
d) Less time spent on audits.
e) Cost savings through improvements in system
efficiency.

Environmental management is an important

business objective and a regulatory requirement.
An effective Environmental Management System
balances these requirements with running a
successful business.
To be successful in this approach, we:

Describe the possible unintended

environmental outcomes of policies and
procedures that are meant to achieve
business objectives.

Identify operational controls to manage or

avoid these unwanted outcomes.

Show how to monitor and measure the

effectiveness of your controls to ensure
you meet standards.

Advantages of a Management System

approach

This section will help you check whether there is a

risk of not maintaining essential management
system elements in your current business
operations, and if so, how to put controls in place
to make sure you meet standards.

Effective management systems strengthen

your companys ability to:
9 Develop suitable policies and plans.
9 Implement the appropriate operational
control processes.

Note: The approach described in this chapter is similar to

those described in Labour Management System, Health &
Safety Management System, and Business Ethics
Management System.

9 Identify the necessary human and

financial resources.
9 Continually improve performance.

225

performance criteria, but describes system

elements, including:

Requirements

Establishing an environmental policy

that includes commitments to
regulatory compliance, pollution
prevention and continual
improvement.

What do you need to do?

Although there is no ETI Base Code Clause that
specifically addresses Environmental Management,
Sedex recommends that its members and suppliers
adopt a management system
approach to environmental
management, much like that
used for occupational health
and safety.

Determining the environmental

aspects that have or can have a
significant impact on the environment.
Establishing environmental objectives
and targets.
Assigning resources, roles,
responsibility and authority.

ETI Principles of
Implementation

Providing competence, training and

awareness.

The ETI has also established

the following Principles of
Implementation to help
suppliers use a management system approach in
applying the Base Code:
1.

Communication, documentation and

recordkeeping.
Establishing operational controls.
Emergency preparedness and
response.

Commitment (policy, communication,

resources, strategy).

Monitoring and measuring.

Evaluation of compliance.

Integration with core business practices

(supplier selection, terms of agreements,
internal buy-in).

Taking corrective and preventive

action.
Internal audits.

Capacity Building (worker awareness, effective

industrial relations).

Identifying problems in the supply chain (risk

assessing and sharing, monitoring and
evaluation, worker complaint mechanisms).

Improvement actions (enabling remediation,

time-bound remediation, tackling root causes).

Transparency (fair and accurate reporting,

response to violations).

Management review of system

performance.

Other International Standards and Guidelines:

; ISO 14001 is an international environmental

management system specification modelled
after ISO 9000 (Quality Management
Systems). It includes criteria for an
Environmental Management System that
enables an organisation to control its
significant environmental aspects and improve
its performance. It does not specify

226

; The EU Eco-Management and Audit Scheme

(EMAS) is a management tool for companies and
other organisations to evaluate, report and
improve their environmental performance. The
ISO 14001 Environmental Management System
requirements are an integral part of EMAS (Annex
II). However, EMAS takes into account additional
elements to support organisations that
continuously improve their environmental
performance, including:
Proof of full legal compliance.

The risks in current business processes that

could lead to environmental compliance issues
are evaluated and controlled.

Processes are in place to ensure that the facility

is operating according to legal and customer
requirements.

Company management is aware of significant

environmental aspects that could lead to
environmental damage or degradation.

Preventive actions are taken to prevent the

same environmental issues from occurring
repeatedly.

Workers are properly trained on the potential

environmental impacts associated with their
jobs.

The company continually improves its

environmental performance.

Active involvement of employees and their

representatives.
Open dialogue with external stakeholders.
External reporting is on the basis of a
regularly published environmental statement.
; United Nations Framework Convention on
Climate Change (UNFCCC or FCCC), 1992;
also see two important protocols for this
convention contained in the Kyoto Protocols on
Climate Change, 1997, and the United Nations
Copenhagen Agreement on Climate Change,
2009.

It is important that you also regularly monitor your

processes and controls to make sure they are working.

A systems approach is selfcorrecting. It will enable you to

make sure that all legal and
customer requirements are being
consistently met.

; UN Convention on Biological Diversity, 1992.

; United Nations Agenda 21 for Sustainable
Development, 1992.
; ISO 50001 is a standard describing how to
establish an energy management system,
including how to incorporate energy awareness
into daily operations.

Policies
(rules)

Achieving and Maintaining

Standards

Your company should have an environmental policy

that includes the following:

How do you do it?

; A written statement, publicly available, that

clearly defines your companys approach to
managing environmental issues. This should
include commitments to:

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

Company management is aware of legal and

customer requirements regarding environmental
issues.

227

Adhering to all customer requirements,

including customer-specific codes of
conduct.

Regulatory compliance.

Pollution prevention

sure that identified environmental issues are

addressed.

Continual improvement in environmental

performance.

; Monitoring and following up on all concerns and

; The scope of the policy should include, at a

issues related to the implementation of

environmental policies and procedures.

minimum, all of the following topics:

Waste

Water

Pollution

Emissions

Raw Materials

Energy and Climate

Renewable Energy

Biodiversity

Emergency preparedness and response

; Performing an annual review of your

management system to make sure it is effective
and achieving your objectives, and to make any
required adjustments.

; A formal process for workers, managers,

supervisors, suppliers, and customers to
anonymously report any concerns regarding the
implementation of environmental policies.
Your environmental and other business function
procedures should include:

; Ways to track and understand environmental

Please refer to the workbook chapters that

specifically cover these topics.

laws, regulations, and customer requirements.

; A process to identify the risks in your business

; The policy should be signed by the most senior

processes that could lead to violations of

environmental standards.

manager of the facility or company.

; Documented environmentally responsible

Procedures

operational practices.

(practices)

; Programs for the design, installation, and

Management should assign a responsible person (or
department) with documented roles, responsibilities
and authority to make sure your policy commitments
are achieved, that regulatory compliance is maintained
and that environmental standards are met. This
includes:

maintenance of environmental controls, such as

air emissions control equipment and wastewater
treatment systems.

; Documented programs for segregation and

disposal of waste products, waste minimisation,
recycling and reuse of reusable materials, and
energy conservation.

; Communicating your policies to all managers,

supervisors, and workers.

; A formal process to screen and select your

; Making sure that all managers and employees of

suppliers based on their ability to meet your

policies and environmental standards.

the company have clearly defined roles and

responsibilities for carrying out your
environmental policy.

; A formal process for workers, managers,

suppliers and customers to anonymously report
any concerns about the implementation of your
companys policies.

; Meeting regularly with managers and supervisors

responsible for production, maintenance, and
other business functions to oversee the
implementation of your environmental
programmes, procedures and improvement
objectives.

Each of the environmental chapters in this workbook

describes in more detail the procedures needed for
specific environmental issue areas.

; Working with the companys worker-management

environmental management committee to make

228

; Display environmental policies and local legal

requirements in areas where workers will see
them and in a language they understand.

Best Practice Efforts in the Community

Environmental responsibility goes beyond
meeting regulatory and customer requirements.
Your company can set a good example for other
businesses by operating in an environmentally
responsible manner and by reaching out to the
community on important local environmental
issues. Look for opportunities to become involved
in local community environmental initiatives, with
schools, the local government, universities, and
NGOs.

; Communicate the companys environmental

requirements, as well as the laws and
standards, to the companys suppliers using
your website, in contract terms and conditions,
and during periodic meetings.

; Communicate the companys grievance

procedures and explain how to report
concerns related to how environmental policies
are carried out.

Documentation and Records

Communication and Training

Meeting standards requires proper documentation.

You will need to keep the following on file on your
company premises:

You should use the following methods to make sure

your employees are aware of your environmental
policies and procedures:

; Copy of your environmental policy signed by

; Provide introductory training for new

senior management.

managers, supervisors, and newly hired

workers on your companys environmental
policies and procedures.

; Copies of all applicable laws and the facilitys

legal responsibilities for environmental
compliance.

; All employees must be provided with

; Copies of key environmental procedures, such as

environmental training and information on the

environmental aspects and impacts of their
jobs using classroom training, on-the-job
training, written materials, and work area
postings.

waste prevention, minimisation and disposal,

operation and maintenance of pollution control
equipment, energy conservation, and others as
described in the environment chapters that follow.

; Environmental committee meeting minutes, action

; Current employees must receive

items, and attendance records.

environmental training on an on-going basis

and when they change jobs or responsibilities.

; Environmental corrective action plans and

reports, including documented evidence of hazard
control improvements made.

; Make sure the training covers all applicable

environmental laws and regulations.

; Copies of internal and third party audit reports

and inspection reports by regulatory agencies.

; The topic-specific documents listed in the other

environment chapters of this workbook.

229

; KPIs should also be established and tracked

Monitoring

for consumption of energy and raw materials,

for example, amount of energy consumed per
unit of goods produced.

You will need to check if your environmental policies

; Routinely monitor the achievement of your

improvement objectives in order to stay on
track.

Best Practice

1. Audit your system to identify actual and potential

problems meeting laws and standards. Audits can
be performed by trained and qualified internal staff
or by external auditors - including from your own
customers.

Involve Workers in the Companys

Environmental Efforts
It is likely that you will employ many
environmentally conscious workers. Topics like
recycling, pollution control, and reducing human
impact on the environment may already interest
them, and could be issues theyd like to get
involved with through the company. Dont hesitate
to utilise the knowledge, skills, initiative, and
expertise of your workers to broaden the
companys efforts and outreach in the community
on the environment.

; Self-audits should be performed annually to

determine if you are meeting legal and
customer requirements.

; Any identified issues should be evaluated to

determine their underlying cause(s) and
action plans established to put in place
corrective and preventive actions.

; The person or department that oversees

matters related to environmental systems
should also be assigned to monitor trends.
This person can then identify and/or
anticipate problems and coordinate with other
managers or departments to develop
solutions that address concerns and prevent
them from recurring.

3. Investigate problems and analyse why they

occurred. When a situation arises that indicates
the existence of non-conformance with company
environmental policies and customer code(s) of
conduct, the company should investigate the
causes, not just the condition, and what can be
done to address them.

2. Establish and track key performance indicators

(KPIs) to measure how well your management
processes and procedures are working on an ongoing basis.

; Every environmental incident and near miss

is an opportunity to improve your procedures
and other controls. Incidents should be
investigated to find the underlying causes and
develop action plans to make improvements
that will prevent a recurrence of the same
incident. Actions should also aim to prevent
similar incidents throughout the business.

; Regularly survey workers to measure their

satisfaction with environmental policies and
practices.

; If there is a worker-management

; If your internal audit finds the same or similar

environmental committee, use regular

meetings and minutes to gather evidence of
problems discussed and to inform the
development of action plans.

environmental issues repeatedly, it could

mean that your process to identify and assign
responsibility for putting in place corrective
and preventive actions is not working.

; Measure training effectiveness and learning

; Similarly, if you have taken action but are still

retention by testing workers immediately after

training, and using follow-up worker
questionnaires three to six months after
training.

not meeting standards, it could mean that the

corrective actions (controls) themselves are
not effective and need to be improved.

230

Common Questions
Do I need a separate management system for
environment?

Why do management systems fail?

x Lack of senior management sponsorship and
commitment.

No. The most efficient way to apply a management

system approach to meeting environmental standards
is to use your current business management system,
which can be easily adapted to help your company
meet environmental and other social responsibility
standards. You should evaluate your current
processes for production, maintenance, and training to
make sure you have the right controls in place.

x Failure to assign a senior manager with

responsibility and accountability for implementing
the system.
x Companies try to create a system that is more
complicated than their current business
management system.

Of course, once you have put the necessary controls

in place, you will need to do regular checking
(monitoring) to be sure they are effective.

x Management believes that the environmental

compliance objectives of the system will conflict
with business objectives.

Will a management system require a lot of

documentation and other complexity?

x The system creates extra or duplicate work that

the company or individuals responsible believes
does not add any value and is not integrated into
employee day-to-day activities.

This is a very common concern, but an environmental

management system does not need to be any more
formal or complex than the system you use to manage
your business. For example, a procedure can be as
simple as a short list of what is to be done, by whom,
and how often. Environmental regulations themselves
can get quite complicated, so your system must be at
least detailed enough to meet those requirements.

x Senior management fails to regularly measure and

review the effectiveness of the system and make
necessary improvements.

Work with other departments to identify

reasonable solutions. Take care to develop solutions
so that the problem does not recur and the solution
itself does not create other problems.

As for records, you only need to maintain items that

are needed to verify that you are meeting standards,
such as inspection and maintenance records,
emissions monitoring data, training records, audit
reports, and permits.

; More than one functional department is often

responsible for environmental issues and
performance. Solutions to problems may involve,
for example:

Human Resources for the hiring of workers

with different qualifications.

The Training Department for improvement

of new-hire environmental orientation.

Internal auditors who monitor problems.

Supervisors to monitor the implementation

of policies every day.

My company has a certified Quality Management

System. Can we use this system for environment?
Yes. In fact, any company that has a formal
management system, such as ISO 9001, can integrate
it to manage compliance to environmental standards
rather than creating a separate environmental
management system. The risk assessment, regulatory
tracking, training, communication, auditing, corrective
action, and other elements of these systems can very
easily be adapted for environmental management.

When identifying a solution to an environmental

problem, work with all departments and personnel
involved. Be sure to make use of the expertise of stff
and workers alike, and use a mix of people to ensure
that all problems and potential problems are identified
and none are overlooked

231

Act is taking corrective and preventive actions

when your results are different from your goals,
such as when audits find non-compliances. This
step also includes a regular review by senior
management of the suitability and effectiveness of
your overall system. Outcomes and decisions from
that review are used to Plan system
improvements.

Common Audit Non-compliances from

the Sedex Database
The following are the most common noncompliances against this issue. If properly
implemented, the guidance in this chapter can
help reduce the incidence of these problems:

x Non-compliance with local and

international laws and regulations.

x Lack of awareness of customer

environmental requirements.

x Lack of relevant internationally recognised

environmental certification.

x Lack of awareness of environmental laws

and regulations.

x Environmental management system not

appropriate for the sites operations.
Sedex provides a document with suggested possible
corrective actions following a SMETA audit. This is
available to Sedex members only in the Sedex Members
Resources section:
Sedex Corrective Action Guidance

What is Plan-Do-Check-Act?
Plan-Do-Check-Act is a way of describing a
management system to show how risks are controlled
and how processes and performance are continually
improved.
Plan means to identify requirements (laws and
standards), evaluating risks that may prevent you
from meeting those standards, and establishing
policies, objectives, and processes needed to
meet standards and achieve objectives.
Do means assigning responsibilities, implementing
your policies and procedures, training, and
communicating.
Check is making sure that you are achieving your
objectives and meeting standards. This involves
measuring performance using Key Performance
Indicators (KPIs), performing audits, surveying
workers and community members, and other ways
to evaluate how you are doing.

232

Case Study
A Systems Approach to Raw Material
Sustainability
A business with an effective Environmental
Management System will take into account
environmental and sustainable criteria when
sourcing raw materials.

Taking sustainability a step further, Octink has

been appointed as the sole distributor in the
construction and retail sectors for
GreenHoard, the UKs first 100% sustainable
hoarding system. Manufactured from recycled
steel and plastic, and fully compliant with
British Standards, it can be reused and
recycled time and time again, providing a
superior alternative to a traditional timber and
plywood hoarding. For its contribution to
sustainability in the construction industry,
GreenHoard received the 2011 Construction
Recycling Alliance (CRA) Innovation Award.

According to WRAP (Waste and Resources

Action Plan), an organisation set up to promote
re-use and recycling, the construction industry is
the UKs largest user of natural resources and
annually produces around one-third of the UKs
waste.
Display specialist Octink, acknowledged as one
of the UKs greenest companies by the Sunday
Times Green List for three years running from
2009-11, is using an ISO 14001 system approach
to help its clients become more sustainable and
reduce the amount of waste sent to landfills
across all company services: design and artwork,
project management, production, installation and
delivery, maintenance, reclaim and recycling.

GreenHoard offers the most sustainable

solution ever achieved for a construction
hoarding. It is not only a high quality green
product, but in the long term is expected to
deliver significant cost savings, comments Will
Tyler.

Will Tyler, Chief Executive of Octink, says: As

well as protecting the environment, there is a
clear financial case for reducing landfill waste.
The 2010 UK Budget announced that the
standard rate of landfill tax would increase by 8
per tonne from April 2011 until at least 2014;
thats a net increase of around 20% per year.
Cutting back on waste makes good business
sense.

Octink is a leading display specialist working in

signage, large format print, interiors and event
branding. To find out more about Octink, visit:
http://www.octink.com/.

Octink was the first company in the display

industry to pioneer a complete recycling service:
R3 Recover-Recycle-Reuse. Signage is made
out of recyclable materials so that when it is no
longer needed it can, for a small fee, be collected
and recycled. Some items are even recycled into
new display material in a closed loop process.
As well as saving money, clients who use R3
receive a report showing how much they have
recycled to support their green credentials.

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

233

Resources and Guidance

The following organisations, websites, and documents provide additional information on
Environmental Management Systems:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance: https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; Ethical Trading Initiative (ETI):

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

Principles of Implementation: http://www.ethicaltrade.org/resources/key-etiresources/principles-implementation

; United States Environmental Protection Agency (EPA), for Business:

http://www.epa.gov/epahome/business.htm

; European Union, Environmental Rules for Business:

http://europa.eu/youreurope/business/doing-business-responsibly/keeping-to-environmentalrules/index_en.htm

; European Commission, Eco-Management Audit Scheme:

http://ec.europa.eu/environment/emas/index_en.htm

; United Nations Framework Convention on Climate Change: http://unfccc.int/2860.php

; UN Convention on Biological Diversity: http://www.cbd.int/
; United Nations Agenda 21 for Sustainable Development:
http://sustainabledevelopment.un.org/content/documents/Agenda21.pdf

; United Nations Environment Programme for Business Persons:

http://www.unep.org/resources/business/

; ISO 14000: http://www.iso.org/iso/iso_14000_essentials/

; ISO 150001: http://www.iso.org/iso/home/standards/management-standards/iso50001.htm
; United Nations Environment Programme - The Resource Efficient and Cleaner Production
Network: http://www.unep.fr/scp/cp/network/

Signposts to Training
x

BSI ISO 140001 Environmental Management:

http://www.bsigroup.co.uk/en/training/environmental-management-iso-14001/

BSI ISO 150001 Energy Management: http://www.bsigroup.co.uk/en/training/energymanagement-training/

BSI Carbon Footprint: http://www.bsigroup.co.uk/en/training/environmental-managementiso-14001/training-courses/calculating-your-carbon-footprint-training-course/

234

Key Terms
x

Corrective Action: The implementation of a systemic change or solution to make an

immediate and on-going remedy to a non-compliance.

Environmental Aspect: An element of a companys activities, products or services that can

interact with the environment, such as electricity use or solid waste disposal.

Environmental Impact: A change in the environment (good or bad) resulting from the
companys activities and environmental aspects, such as air pollution or groundwater
contamination.

Management System: The framework of policies, processes, and procedures used to ensure
that an organisation can fulfil all tasks required to achieve its objectives.

Preventive Action: The implementation of a systemic change or solution designed to prevent

the recurrence of the same or similar issues elsewhere in the facility.

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Chapter 3.2

WASTE

Waste

Benefits

What does it mean?

Why should you do it?

Waste means any by-product, unused material, or

trash from company operations. Every company
creates some kind of waste. A proper waste
management program that includes reusing,
reducing, and recycling waste helps reduce impact
on the environment and lowers costs for the
company.

Implementing an effective waste management

program, including handling, storage, recycling and
disposal will help you meet legal requirements, avoid
penalties, and protect your workers health and
safety, and the environment. There can also be
business benefits, such as:

The most important goals of a companys waste

management program are to eliminate or minimise
waste where possible and to properly treat and/or
dispose of all waste materials.
Many companies also produce waste that is hazardous,
like empty chemical containers or oily rags. Hazardous
waste must be segregated, or separated, from other
waste and stored safely at the company site prior to
being taken offsite for safe a legal treatment and
disposal.
A socially responsible company makes sure that
none of its practices create a situation where the
environment is harmed or where workers and
members of the community are harmed as a result of
improper management of waste.
This section will help you check whether there is a
risk of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure your waste materials and their
associated risks are understood and controlled.

The separation, treatment, and proper

disposal of waste materials represent
good management practice for
environmental health and safety.
In addition to protection of your
workers health and of the environment,
safe waste disposal is also always
covered by local laws and regulations
that the company must follow.

238

Lower costs by increasing efficiency - reducing

and reusing materials needed for company
operations.

Decreased waste disposal costs.

Revenue generated by selling waste materials

for recycling.

Improved environmental performance.

Enhanced company reputation and brand

image.

a) To identify the environmental aspects of its

activities, products and services within the
defined scope of the environmental
management system that it can control.

Requirements
What do you need to do?
ETI Base Code

b) To determine those aspects which have or

can have significant impact(s) on the
environment (that is to say, significant
environmental aspects.)

The ETI Base Code does not specifically address waste

and waste management. However, Clause 3, Working
Conditions are Safe and Hygienic applies to specific
hazards associated with waste.
3.1

A safe and hygienic working environment shall

be provided, bearing in mind the prevailing
knowledge of the industry and of any specific
hazards. Adequate steps shall be taken to
prevent accidents and
injury to health arising
out of, associated
with, or occurring in
the course of work, by
minimising, so far as
is reasonably
practicable, the
causes of hazards
inherent in the
working environment.

The European Community program REACH

(Registration, Evaluation, Authorisation and
Restriction of Chemical substance) provides an
international regulatory framework and system
for the industrial management of chemical
substances, including hazardous waste.

Waste Management Options

Relevant ILO Conventions

Achieving and Maintaining Standards

How do you do it?

R177 Chemicals Recommendation, 1990 (No. 177),

recommends that as far as is reasonably
practicable, the competent authority should
compile and periodically update a consolidated
list of the chemical elements and compounds
used at work, together with relevant hazard
information.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

Other International Standards and Guidelines state:

ISO 14001, Section 4.3.1 Environmental

Aspects: The organisation shall establish,
implement and maintain a procedure(s):

239

You properly dispose of hazardous waste.

Workers are not exposed to chemical hazards

from improper storage or handling waste.

You do not dispose of waste materials that can

be recycled or reused.

; Statement that the company will prevent and

Hazardous waste materials are not stored near

work areas, worker accommodation or food
storage.

There is no soil or groundwater contamination

from improper waste storage and disposal.

You are not fined for improper transportation

and disposal of waste.

minimise waste generation whenever possible.

; Commitment to reuse or recycle materials

whenever possible.

; Commitment to control the health and safety

risks associated with hazardous waste, and that
the company will dispose of hazardous waste
safely and properly.

It is important that you also regularly monitor your

processes and controls to make sure they are
working.

; Statement that company will train all workers on

waste policies, and the safe handling and
disposal of general and hazardous waste.

Hazardous Waste Management

Procedures

Hazardous waste can be dangerous to workers

and the environment. If your company generates
hazardous waste, make sure you:

(practices)
Management should assign a responsible person (or
department) to make sure the above policies are carried
out. This includes:

9 Identify all types of hazardous waste.

9 Assess the health and safety risks and
environmental impacts associated with each.

; Communicating your policies to all managers,

9 Develop procedures for the safe handling,

supervisors and workers.

storage, transportation and disposal of

hazardous waste and train workers
accordingly.

; Meeting regularly with managers and

supervisors responsible for waste material
storage, transportation and disposal to oversee
implementation.

9 Use only licensed and approved hazardous

waste vendors for waste transportation and
disposal.

; Reviewing company operations to determine

how the facility can prevent or minimise the
generation of waste. Set objectives for waste
recycling, minimisation and elimination.

9 Implement response plans to address

accidental discharge, worker exposure and
other accidents.

; Monitoring and reporting all complaints and

9 Monitor the effectiveness of your program

management responses related to the issue of

waste.

and makes improvements as needed.

; Performing an annual review of the

implementation status of your waste policies
and procedures.

Policies
(rules)

Your environmental procedures should include:

; Ways to track and understand laws and

Your company policies on waste management should

include the following:

regulations on waste management, including

any government permitting requirements.

; Statement that the company is committed to

; A program to ensure that you comply with all

protecting workers, the community, and the

environment through responsible and safe
waste management procedures.

applicable laws and regulations governing

waste management. The program should

240

include obtaining the required permits and

following permit conditions. An individual or
department should be made responsible for
waste management regulatory compliance.

; Processes to segregate your facilitys different

waste streams to enable reuse, recycling and
proper disposal. This could include installing
waste segregation bins throughout the company
site to separate recyclables, materials for reuse,
ordinary trash, and hazardous waste.

; A program to recycle waste materials whenever

possible. This includes reviewing all regularly
purchased items to see which can be recycled
or replaced with recyclable alternatives. Set
annual objectives for recycling.

Best Practice
Environmentally Friendly Alternatives

; Define the process to ensure that hazardous

One of the best ways to reduce or eliminate the risks

presented by hazardous waste materials is to switch to
less toxic or more environmentally friendly materials.
Stay updated on the latest developments in your
industry to see if non-toxic or more environmentally
responsible substances and materials are available.

waste materials are properly identified,

segregated from other materials and stored
safely. This means the materials are:
x

Kept in sealed, approved containers.

Containers should always remain covered
and closed.

Labelled in a language workers

understand and using internationally
accepted hazard symbols.

Stored away from drinking water facilities,

food preparation and storage areas,
canteens, and worker accommodation.

Stored in specially designed cabinets,

rooms or outdoor areas that contain any
leaks using secondary containment.

Handling and having hazardous waste hauled off the

company site is expensive, so even if these alternative
materials cost more, you might still be saving money
by switching to an alternative.

Communication and Training

You should use the following methods to make sure
your employees are aware of policies and procedures:

Stored by hazard class to prevent the

accidental mixing of incompatible
materials. This means never storing
materials that when mixed would react to
create a toxic gas, explode, or some other
dangerous reaction.

; Provide training programmes for new managers

and supervisors, and newly hired workers on
your companys policies and procedures on
waste management.
; Provide all workers with the companys written
policies covering waste materials.

; If you use third party contractors to dispose of

your waste, make sure they are licensed and
qualified to do so. Hazardous waste should only
be hauled away by a licensed, third-party
company specialising in disposal of hazardous
materials at a controlled site.

; Communicate company policies and procedures

on waste materials to suppliers, visitors,
vendors, and third-party contractors.
; Prominently display company policies and any
laws relating to waste management in a
language that workers understand.

241

; Post the companys waste handling and

disposal program and procedures, and clearly
mark waste segregation bins.

Which materials are recyclable?

Many materials you use at your company can be
recycled. Check with your waste disposal vendor(s)
to find out what specific materials can be taken for
recycling. You can typically recycle:

; Any area where hazardous waste is present

must have appropriate danger and warning
information and safe handling procedures
posted in the language workers understand.

9 Paper and cardboard, like office paper or packing

materials from your warehouse.

; Anyone who will be handling, transporting,

storing, or disposing of waste that may pose
safety or health hazards should first be trained
on the specific procedures for safe handling.
They should be trained about the hazards of the
waste materials and about how to respond to
exposures, leaks and spills.

9 Plastic containers, like empty water or food

containers from your cafeteria.

9 Metal and glass cans, like from your companys

beverage vending machines.

9 Metal production waste, like copper wire or metal

shavings.

9 Waste from old electronics.

Documentation and Records

Review your companys operations and the waste

materials generated carefully to take advantage of
all recycling opportunities at the company.

Meeting standards requires proper documentation. You

will need to keep the following on file on your company
premises:
; Records of permits, third-party assessments,
government inspections, and other
documentation to demonstrate legal
compliance.
; Records of regular internal monitoring, like for
waste volumes, leak inspections, and waste
storage areas inspections.
; Records showing how the company is
performing against its waste prevention,
minimisation, recycling, and disposal goals.
; Copies of all laws related to hazardous and nonhazardous waste handling and disposal.

Monitoring

; A list of all types and quantities of hazardous

waste produced at the company. Detail the
hazards associated with each, the proper usage
and storage processes, the type of materials (to
check compatibility with other materials), the
means of disposal of each waste type, and the
type and occasions of safety training for each
worker.

You will need to check whether your waste management

; Records to show that worker training on waste

prevention, minimisation, recycling, segregation,
and disposal has been completed.

1. Monitor waste management practices and

conditions to identify actual and potential
problems in meeting company requirements and
laws and standards:

242

Common Audit Non-compliances from the

Sedex Database

; Inspect waste storage areas and bins to

verify that waste materials are properly
stored and that recycling bins and other
receptacles are being used properly.

The following are the most common non-compliances

against this issue. If properly implemented, the guidance
in this chapter can help reduce the incidence of these
problems:

; Regularly review your process in meeting

your waste minimisation, reduction, and
recycling objectives to determine if you
are accomplishing your goals.

; Review your waste management

procedures and programs to make sure
that your controls are working as
intended.

; Regularly review the performance of your

hazardous waste vendor(s) to ensure they
are performing in line with your
expectations and in compliance with
applicable laws and standards.

Non-compliance with local and international

environmental laws and regulations.

Inadequate waste disposal systems.

Lack of a recycling policy at the site.

Inadequate documentation for waste disposal.

Site did not measure the effects of its

environmental impacts, such as disposal of
waste.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

2. Investigate problems and analyse why they

occurred. Where data indicates the existence
of non-conformities with your companys waste
management policies and customer code(s) of
conduct, the company should investigate these
conditions to determine their causes and what
can be done to address them.

Common Questions
How does waste management relate to management
systems I already have in place, like for ISO 14001
or OHSAS 18001?

; Regularly review monitoring data, such as

waste storage area inspection reports,
hazardous waste manifests and audit
reports of hazardous waste vendors to
identify where your policies and
procedures are not being followed or are
not effective so you can correct the
problem.

Effective waste management procedures are key

components of an ISO 14001 Environmental
Management System. Your experience using ISO 14001
will be useful in implementing proper waste
management procedures. In fact, waste minimisation,
prevention, and recycling are critical to ISO 14001.
Waste disposal, in particular hazardous waste disposal,
can be a companys significant environmental aspect
and must therefore be addressed either through
operational controls or improvement objectives.

; Stay up to date on the latest research and

information on the risks presented by the
waste materials generated at the
company.

How can I make sure that my companys waste

disposal procedures are compliant with laws and
regulations?

; Examine company performance on waste

prevention, minimisation, and recycling to
identify and implement improvements.

There are many public and private sources that can

help. Be sure to thoroughly review the laws and
regulations that apply to your company, since the fines
and penalties for harming the environment through
improper waste management practices can be
significant.

; Use any incident reports of improper

waste handling, such as leaks and spills,
as an opportunity for performance
improvement.

243

Talk to your suppliers, clients, or third-party consultants.

Material suppliers especially should be able to readily
provide critical data and information on material hazards
and how to control leftover waste. They can also help
you select alternative materials that are less hazardous,
are recyclable, or can be re-used.
Many local and national governments maintain websites
on which waste handling and disposal regulations are
detailed. Also, contacting local environmental offices for
guidance will often result in an offer of a site visit by a
government official who can help you determine whether
your storage and disposal practices are adequate and
effective. Material Safety Data Sheets (MSDS) for
hazardous materials can also provide information on
safe disposal.
How do I know which waste is hazardous?
Always research the hazards of specific substances
used on site. In general, chemical wastes have the
following characteristics (often more than one):
x

Reactivity: the waste will react with other

incompatible substances, creating a fire,
poisonous gas, or otherwise becoming more
toxic.

Flammable or combustible: the waste could

catch fire or explode.

Corrosive: the waste could destroy or corrode

another surface, particularly metal surfaces.
Corrosive substances must be properly stored
in the correct containers to avoid accidents.

Toxic: the waste is poisonous.

Make sure you are aware of your companys hazardous

waste characteristics, since different hazard classes will
require different engineering controls, storage
requirements, exposure prevention, Personal Protective
Equipment (PPE), and handling/disposal procedures.
This information can be obtained from Material Safety
Data Sheets, government environmental agencies or
from licensed hazardous waste disposal companies.

244

Case Study
Amcor-Danone collaboration to reduce total
life cycle impacts
Demand for natural resources continues to increase,
yet as many are becoming increasingly scarce,
companies need to manage their consumption and
processes to work to promote resource efficiency. Not
only does this help ensure the best use of raw
materials, avoid waste to landfill and cut C02
emissions; it can also improve efficiency and cut costs.
The contribution of packaged products to the overall
well being of our world, and the challenge of minimising
the inherent impacts of their production and
consumption, are becoming increasingly important to
consumers in their everyday lives. As a result, brand
owners, retailers, industry bodies, governments and
local communities are more invested in packagings
sustainability.
Amcors approach to sustainability is about more than
just the sustainability of the packaging itself. In general,
if a product is spoiled, ruined or lost, far greater
resources are wasted than those invested in the
packaging alone. Responsible packaging protects the
product, keeping it clean, fresh, safe and secure,
without over-packaging or under-packaging.
Responsible packaging reduces waste across the
supply chain by protecting products and extending their
shelf life, says Amcor Ltd. Director of Group
Sustainability Andy Jones.
Amcor takes a total Life Cycle Approach (LCA), and
has implemented tools to systematically evaluate and
improve packaging sustainability from concept to
consumer. Amcor assesses sustainability throughout
the life cycle of the packaged product, from design and
development, through raw material sourcing,
manufacturing, distribution and use to
recycling/disposal.
Working closely with customers, Amcors global
network of sustainability specialists explores various
options, including incremental improvements, downgauging (reducing material thickness), optimisation of
production processes, redesign of existing packaging
and new, more sustainable packaging concepts. In
2010/11 Amcor completed more than 800 life cycle
assessments.

245

We work closely with our customers to evaluate

their product range to find improvement
opportunities that help them achieve their
packaging sustainability objectives, and meet the
expectations of their customers and other
stakeholders, says Amcor Flexibles Sustainability
Leader Dr. Gerald Rebitzer.
Amcor has a long history of working collaboratively
with customer Danone to optimise packaging and
minimise total life cycle impacts. This relationship
was formalised in 2009 under the Danone Carbon
Pactan initiative committing suppliers to a duty
of transparency and actions to reduce carbon
footprint.
The collaborative approach between Amcor and
Danone has resulted in substantial improvements
in total life cycle carbon footprint, resource use,
water consumption and other environmental
impacts. For instance, Amcor and Danone recently
collaborated to reduce the life cycle impact of
yogurt cup lids and labels, resulting in reduced use
of paper and plastic and improvements in resource
efficiency.
Amcor is a world leading packaging manufacturer
producing a broad range of plastic, fibre, metal and
glass packaging related products and services for
beverages, food, healthcare, personal and homecare,
tobacco, and industrial applications. To find out more
about Amcor, visit http://www.amcor.com.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, websites, and documents provide additional information on waste
management:

; United States Occupational Safety and Health Administration (OSHA), Hazardous Waste:
http://www.osha.gov/SLTC/hazardouswaste/index.html

; US OSHA, Green Job Hazards Waste Management and Recycling:

https://www.osha.gov/dep/greenjobs/recycling.html

; European Commission, Waste: http://ec.europa.eu/environment/waste/index.htm

; European Community REACH on Chemical Safety and Dangerous Substances:
http://ec.europa.eu/environment/chemicals/reach/reach_intro.htm

; United Nations Environment Programme, Harmful Substances and Hazardous Waste:

http://www.unep.org/hazardoussubstances/

; ISO 14001, Environmental Management:

http://www.iso.org/iso/home/standards/management-standards/iso14000.htm

; United Nations Environment Programme The Resource Efficient and Cleaner Production
Network: http://www.unep.fr/scp/cp/network/

; WRAP (Waste and Resources Action Plan) Resource Efficiency: http://www.wrap.org.uk/

Signposts to Training
x

US EPA, Professional Training for Waste Management:

http://www.epa.gov/osw/education/train.htm

European Commission EU Waste Law Training:

http://ec.europa.eu/environment/legal/law/waste_law.htm

BSI-ISO 14001: http://www.bsigroup.co.uk/en/training/environmental-management-iso-14001/

The World Bank Solid Waste Management:

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTURBANDEVELOPMENT/EXTUS
WM/0,,contentMDK:20239401~menuPK:497768~pagePK:148956~piPK:216618~theSitePK:4
63841,00.html

United Nations Environment Program (UNEP):

Integrated Solid Waste Management
http://www.unep.org/gpwm/FocalAreas/IntegratedSolidWasteManagement/tabid/56457/D
efault.aspx
International Environmental Technology Centre (IETC): Capacity Building
http://www.unep.org/ietc/ourwork/wastemanagement/capacitybuilding/tabid/56256/default.
aspx (scroll down training listings)

246

Key Terms
x

Recyclable Waste: Material that can be processed for reuse, like paper or plastic containers.
This is done with recycling and replacement programs, which comprise policies and
procedures for reducing or eliminating waste by-products for the purpose of cost reduction,
environmental protection, resource management, and community and internal health and
safety.

Hazardous Waste: Any waste or by-product material or substance that presents a risk to
workers, property, the surrounding community, or the environment.

Material Safety Data Sheet (MSDS): Document that contains critical information about a
material, including physical data (such as melting points, boiling points, flammability),
reactivity data, details on toxicity, health effects from exposure, first aid measures in case of
exposure, PPE required, and additional information on safe storage, handling, and disposal.

247

248

SEDEX SUPPLIER WORKBOOK

(Photo: Brunswick)

Chapter 3.3

RAW MATERIALS

Raw Materials

Sustainability and environmental

management must account for all of the
natural systems impacted by the
companys raw materials sourcing and
use. Good environmental management
minimises impacts on forests, oceans,
the atmosphere, freshwater systems,
land, and land use throughout the
entire product lifecycle.

What does it mean?

Raw materials are unprocessed resources from
nature that a company uses to make a product, such
as latex, cotton, crude oil, wood, or metal. The
growing, extraction, and sourcing of these materials
often have a significant impact on the environments
from which they come.
It is important that companies source raw materials in
a way that preserves their sustainability, meaning
that the resource will be available for the future.
Activities such as clearing forests for agriculture or
grazing of animals can damage ecosystems and make
it impossible to continue deriving resources from the
land. Also, large scale mining or failure to reuse or
recycle metals makes it more likely that the supply of
ore will be exhausted.

Benefits
Why should you do it?
Maintaining responsible raw materials sourcing and
use practices will help you meet legal requirements,
protect the environment, avoid penalties, protect
your business assets, and meet your customers
requirements.

For a business, raw materials are necessary for the

sustainability and health of the company, and without
them, the business would not exist. By striving for
sustainability and environmental protection, companies
are protecting their business assets. Companies do
this first through environmental management, or
responsible stewardship of the environment to
maintain healthy ecosystems. Secondly, companies
must practice consumption management, which
involves controlling the amount of the raw material that
is used, and making the entire production process
more sustainable.

There can also be business benefits, such as:

; Long-term sustainability and health of the

business.

; Decreased costs for waste disposal, energy

and packaging.

; Confidence in the long term availability of

needed raw materials.

; Improved company reputation and image

A socially responsible company makes sure that none

of its policies and practices create a situation where
raw materials sourcing or use harms the environment
or adversely impacts the sustainability of raw material
supplies.

gained through environmental responsibility.

This section will help you check whether there a

risk of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure your materials sustainability
challenges are understood and controlled.

250

for example, with the impact on ecosystems

of mining and forestry, and the emissions
resulting from the use, transport and
processing of materials; and,

Requirements
What do you need to do?

Minimised resource requirements of a

product: Consideration should be given to
the resource requirements of the finished
product during use.

International Standards and Guidelines

There are many international agreements and
standards that provide a framework for international
environmental law covering sustainability. Internally
accepted management system frameworks will also
help you manage your companys raw materials supply
chain responsibly. Key examples are:

; UN Conference on Sustainable Development

(UNCSD), June 2012.

; UN Johannesburg Declaration on Sustainable

Development, 2002.

; UN Framework Convention on Climate

; ISO 26000 (2010), Contains guidance on the

Change, 1992 and the Kyoto Protocol to the

UN Framework Convention on Climate
Change, 1998.

sustainable use of resources:

Section 6.5.4, Environmental issue 2:
Sustainable resource use, states: To ensure
the availability of resources in the future, current
patterns and volumes of consumption and
production need to change so that they operate
within the earth's carrying capacity. The
sustainable use of renewable resources means
that they are used at a rate that is less than, or
equal to, their rate of natural replenishment. For
non-renewable resources (such as fossil fuels,
metals and minerals), long-term sustainability
requires that the rate of use be less than the rate
at which a renewable resource can be
substituted for it. An organisation can progress
towards sustainable resource use by using
electricity, fuels, raw and processed materials,
land and water more responsibly, and by
combining or replacing non-renewable resources
with sustainable, renewable resources, for
example, by using innovative technologies.

; UN Convention on Biological Diversity, 1992.

; International standards for environmental
management systems, such as ISO 14001,
address many environmentally responsible
practices, such as waste and recycling. Also see
ISO 14040 and ISO 14044 for standards on
product lifecycle assessments.

Efficiency in the use of materials: An

organisation should implement materials
efficiency programmes to reduce the
environmental impact caused by the use of
raw materials for production processes, or for
finished products used in its activities or in
the delivery of its services. Materials
efficiency programmes are based on
identification of ways to increase the
efficiency of raw material use within the
sphere of influence of the organisation. Use
of materials causes numerous direct and
indirect environmental impacts, associated,

Source: Marks & Spencer, Plan A

http://plana.marksandspencer.com/about/the-plan/sustainableraw-materials/

251

Preventing and minimising impact on

ecosystems, biodiversity, and the
environment of the natural systems from
which the company obtains, sources, and
produces raw materials.

Conservation of natural resources and raw

materials used by the company in the
processes to make its products and in the
products themselves.

Prevention and minimisation of pollution,

waste, and energy use.

Achieving and Maintaining Standards

How do you do it?
You can best meet standards by using a systems
approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

Raw materials are sourced from suppliers that

practice environmental responsibility and
social responsibility.

A raw material recycling or reuse programme

is implemented.

Products and production processes are not

designed to minimise the use of raw materials.

There is management awareness of how

sustainability affects the company.

You have an ability to procure needed raw

materials.

There is communication with suppliers on

environmental sustainability issues.

; The company will communicate its

environmental sustainability policies,
requirements and objectives to all suppliers and
to the public.

; Practice consumption management in all

company production, sourcing, and product
development activities.

; Continually improve the companys performance

in 1) minimising the overall amount of raw
materials used, 2) increasing the proportion of
responsibly sourced raw materials and 3)
increasing the percentage of renewable
materials in its products and operations.

It is important that you also regularly monitor your

processes and controls to make sure they are working.

More on Sustainability
Good sustainability practices require
companies to conserve, recycle, and reuse
raw materials as much as possible in
company operations. See the Waste, Water,
Energy and Climate, Biodiversity, and
Renewable Energy chapters in this workbook
for further details.

Policies
(rules)
Your company policies on raw material sustainability
should include the following commitments:

; Sourcing of all raw materials in an

environmentally responsible way.

; The company considers environmental

responsibility and sustainability an integral part
of business decision-making.

; Protecting the sustainability of the raw materials

used by the company. The policy should state
that the company is committed to:

252

These should be key factors in choosing

suppliers with which to do business, and supplier
performance on these issues should be critical to
the continuation of business relationships.

Procedures
(practices)
You should assign a responsible person (or
department) to make sure your policies are carried out.
This includes:

; Designing products and packaging to minimise

the use of raw materials and to maximise
recycling and reuse.

; Communicating your raw materials sustainability

policies to all managers, supervisors, and
workers.

Best Practice

; Conducting an assessment to determine the

Use Workers Skills and Knowledge

potential raw materials sustainability impacts of

the companys products, production methods,
buildings, and activities.

Working closely with workers will help you improve

your performance on raw materials use and
consumption. Since workers perform the processes to
make your companys products every day, they likely
have useful suggestions on how to alter these
processes to conserve raw materials. On the surface,
it might seem like changing production processes will
cost more. However, you might find that your company
is actually saving money by decreasing energy and
material inputs.

; Meeting regularly with managers and

supervisors responsible for raw materials
sourcing and production to oversee
implementation of your policies.

; Reviewing the raw materials sustainability

programme regularly to determine whether goals
are being achieved, and if there are gaps or
areas where the company could be doing more.

; Continuously improving the programme based

on the results of your reviews.

Communication and Training

Your raw materials sustainability procedures should

include:

; A process to alter production processes and

You should use the following methods to make sure

your employees are aware of your raw materials
policies and procedures:

company operations to practice consumption

management. This means minimising the use of
raw materials, and recycling or reusing them
whenever possible.

Provide all workers with the companys written policies

covering raw materials sustainability.

; Analysing the raw material sustainability risks

; Regularly communicate with suppliers on

from company operations and activities in order

to prevent and reduce impact. For companies
with limited in-house expertise this may require
working with consultants, local government
agencies or NGOs.

environmental and raw materials sustainability.

Make sure suppliers are aware that the company
considers environmental stewardship as an
important aspect of the business relationship.

; Provide training for suppliers on the companys

; A process and requirements to source raw

environmental and raw materials sustainability

policies and requirements. Work closely with
suppliers to improve knowledge, skills, and
performance.

materials in an environmentally responsible way,

including working closely with suppliers to
maximise the sustainability of resources
extracted from the environment.

; Provide training programmes for new managers

; A way to integrate environmental responsibility

and supervisors and newly hired workers on your

and raw material sustainability into decisionmaking on sourcing and supplier engagement.

253

; Records of efforts by the company to monitor raw

companys policies and procedures on raw

materials use and consumption management.

materials sourcing practices, such as audits, risk

analyses, performance evaluations, or other
regular assessments.

; Train product developers and designers on how

to minimise the use of raw materials and utilise
recycled or reused materials in the design of new
products.

; A listing of laws, regulations and customer

requirements relevant to company operations on
raw material sourcing and sustainability.

; Display company policies on consumption

; Data showing how the company is performing on

management in a language that workers

understand. Make sure policies and practices are
posted at workstations, and that other policies,
like for recycling or material reuse, are
communicated and displayed company-wide.

consumption management, such as documents

tracking raw material reductions in product design
and production, and the performance of recycling
and reuse programmes.

; Written records to show that supervisor and

Sustainability Involve all Stakeholders

worker training on sustainability and consumption

management has been completed, including for
general training orientation for all workers and
training for specific jobs.

When thinking about sustainability in your raw

materials selection and sourcing, remember that
there are many stakeholders involved that are
internal or external to the company. For example,
if you are sourcing an agricultural product, your
raw material supply chain might involve the
companys headquarters, multiple company
manufacturing sites, regional buyers, local
sourcing agents, and finally the smallholder
farmers that actually grow your material. All of
these actors need to be involved in your
sustainability efforts.
Dont forget to look for help and resources outside
of your organisation. There are many government
offices, international bodies, and community
NGOs that can help you understand
environmental issues down to the local level.
Working with these groups can help you better
understand how to help the businesses and
smallholders directly involved in growing and
extracting the raw material.

Monitoring
You will need to check if your raw materials policies
are being followed and that the controls to make sure
your company is meeting code and legal requirements
are effective. The following steps can be used to
evaluate and improve the effectiveness of your
programs:

Documentation and Records

1. Monitor and report on trends to identify actual

and potential problems, including:

Meeting standards requires proper documentation.

You will need to keep the following on file on your
company premises:

; Tracking how your raw material sustainability

; Documentation indicating that raw material

objectives are being achieved, if targets are

being met, and whether the overall goals are
being realised. Adjust objectives if they are
off track, or if changes in company

suppliers are aware of and have agreed to the

companys requirements on sustainable raw
materials extraction, production, and sourcing.

254

; Use the results of your regular reviews and

operations result in new or increased

impacts on raw material sustainability.

investigations to implement new controls and

improve your raw materials sustainability
management programmes.

; Regularly review and revise your raw

material sustainability policies and
procedures to keep them relevant and up-todate.

; Make sure that your suppliers implement

corrective actions to address the findings
from your assessments of their raw materials
sustainability performance.

; Establish and monitor key performance

indicators (KPIs) for suppliers on raw
materials sustainability and environmental
responsibility so that you can measure their
effectiveness on a continual basis.

; Address the issues identified in regular

assessments of your companys raw
materials consumption management
programmes to make sure procedures are
effectively reducing the companys
environmental impact, and that raw materials
are used in the most environmentally
sustainable way possible.

; Establish and monitor KPIs for consumption

management programmes (such as material
recycling and reuse) so that you can
continually measure their effectiveness at all
company sites.

; Regularly review production processes, raw

; Set goals and objectives for meeting the

materials sourcing practices, the use of raw

materials at the company, and recycling,
reuse, and waste programmes, and address
any non-compliances that you find to make
sure your raw materials policies are followed
and the most effective procedures
implemented.

companys raw materials requirements. For

example, goals might be that all cotton will
be sourced sustainably in five years, we
will not buy paper from suppliers that fail to
practice responsible forestry, or 75% of
boxes in the warehouse will be reused.
Track if the company is meeting goals and
modify systems if goals are not met.

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

; Regularly review and revise policies and

procedures to keep them relevant and up-todate.

; Creating good raw materials and

; Regularly meet with suppliers to understand

sustainability practices will require working

with departments across the company. Work
with production and sourcing departments,
for example, to develop solutions and
improve your programmes.

any difficulties or issues they have in

implementing your raw materials
sustainability policies and practices.
2. Investigate problems and analyse why they
occurred. Where data indicates the existence of
non-compliances with your companys raw
materials policies and customer code(s) of
conduct, the company should investigate these
conditions to determine their causes and what
can be done to address them.

; Work closely with suppliers to improve their

environmental sustainability practices.
Integrate performance in this area in the
selection of and business relationships with
suppliers.

; Integrate consumption management

; Where raw materials KPIs and assessment

practices into job descriptions. Make general

and job-specific practices, like recycling and
reuse, part of each workers responsibility.

data indicates that programmes are not

effective or objectives are not being met,
perform a root cause analysis to determine
why, and then make any necessary changes
in your procedures and other controls.

; Integrate oversight of consumption

management and raw material sourcing

255

without the use of fertilisers, pesticides, and herbicides

that could harm the environment. If your company
uses an agricultural raw material, sustainable or
organic agriculture practices will help your company
improve its raw materials environmental sustainability
and performance. Examples include:

practices into the job descriptions of

supervisors and managers.

Common Questions
What is a life cycle assessment (LCA)? How can it
help me better manage raw materials?
A LCA could be a very useful tool for your company,
and is a way to assess the environmental impacts at
all stages of a products lifestarting with raw material
extraction and processing, through manufacturing and
distribution, and going all the way to the use and final
end-life of the product. A LCA starts by looking at all of
the material, energy, and resource inputs for a product,
followed by the environmental impacts of these inputs.
You can then interpret the results of your analysis to
make more informed decisions on raw materials
sourcing, how raw materials are used at your
company, and how to source and use materials in a
more responsible way. Importantly, LCAs cover how a
product is used and disposed, meaning your analysis
could show you how to make the product more
recyclable or reusable, or even how to use less
material in its packaging.

More efficient water use through crop choice

and rotation

Using non-synthetic pesticides and herbicides

Soil management strategies to prevent erosion

Avoiding monoculture, or growing one crop in

a large amount of land, thereby limiting
biodiversity

There are many resources from governments, industry

groups, consumer groups, and NGOs that can help
you understand how sustainable or organic agriculture
could work for your raw materials supply chain.
Sustainability and organic agriculture are also
increasingly important to consumers, and might be an
opportunity for your company to attract new customers
and improve business performance.

Common Audit Non-compliances from the

Sedex Database

What is also useful about this approach is that it

considers all inputs into a product, such as energy
consumption or water use. Environmental
sustainability and consumption management is not
simply limited to the materials used to make your
companys products. Energy itself, for example, is a
raw material, since its production uses raw materials
(such as coal or natural gas). Saving energy during
production results in fewer raw materials required in
the future for energy production.

The following are the most common non-compliances

against this issue. If properly implemented, the guidance in
this chapter can help reduce the incidence of these
problems:

Non-compliance site with local and international

environmental laws and regulations.

For more information, the procedures for a LCA are

covered under ISO 14001, and see ISO 14040:2006
and 14044:2006.

Company is/is not aware of legal and customer's

environmental requirements.

Inadequate system for checking environmental

performance against relevant laws and customer
requirements.

What is sustainable agriculture? What about

organic agriculture?

Lack of infrastructure for improving environmental

performance.

Inadequate recycling policy at site.

Numerous raw materials are grown and come from

agriculture. Sustainable agriculture is when growing
operations improve environmental quality, preserve
natural resources, maintain the economic viability of
the agricultural operation, and take advantage of
natural ecology as much as possible. Organic
agriculture avoids the use of synthetic crop protection
agents, and relies on natural cycles to grow crops

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

256

Case Study
Raw Materials: Securing supply through
education
Challenges around the scarcity of resources,
energy and land combined with an increasing
demand for them mean that companies need to
better manage their supply chains to secure and
maximise future supply of their raw materials.

We have an agronomist working closely with our

local partner to improve vanilla crops. Together
they are also helping villagers implement a
System of Rice Intensification, to double or even
triple the yield of rice, preventing the reliance on
expensive imports.

Almost 80% of the worlds vanilla comes from

Madagascar. Approximately 80,000 farmers grow
it, making it difficult to secure traceable vanilla of a
consistent quality.

Givaudan has appointed a local bureau dtude

to teach farming practices for the prevention and
control of root fungi, as well as the proper
maintenance of 'host trees' on which vanilla
grows.

Givaudan is working with farmers in Madagascar

to improve the quantity, quality and traceability of
vanilla within the supply chain. It is also committed
to improving access to education and helping
farmers implement a System of Rice
Intensification (SRI), a local staple food,
preventing the compromise of agricultural cash
crops.

Givaudan has made a commitment to future

vanilla farmers by helping to build 14 new schools
by 2014, assisting more than 2,000 families in
rural vanilla growing areas. In 2011, new schools
were completed in eight villages.
Not only does investing in educating our vanilla
growers help secure future supplies, but the use
of designated areas and organic farming
practices have also secured completely traceable
and certifiable sources of vanilla, increasing the
price farmers can achieve for their crop.

Scott May, Global Vice President, Strategic

Materials at Givaudan, says: As the world
changes and the population explodes past seven
billion we need to ensure that high-quality raw
materials will be available in sufficient quantities in
the future.

Givaudan is a global leader in the fragrance and

flavour industry, supplying food, beverage, consumer
goods and fragrance companies. To find out more
about Givaudan, visit www.givaudan.com.

Our objective is to support Malagasy farmers with

education and by sharing specific sustainable
agricultural practices to ensure they can maximise
revenues for generations to come.
Working in an exclusive partnership with a local
partner, who has been curing and exporting vanilla
from Madagascar since 1911, Givaudan has
developed a relationship with growers that offers
complete control over the growing, harvesting and
curing in exchange for giving the farmers a
guaranteed market for their crop.

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

257

Resources and Guidance

The following organisations, websites and documents provide additional information on raw materials
and environmental sustainability:

; United States Environmental Protection Agency (US EPA), Sustainable Materials

Management: http://www.epa.gov/wastes/conserve/smm/

; US EPA, Sustainability-based Decision-making:

http://www.epa.gov/nrmrl/std/decision_making.html

; US EPA, Lifecycle Assessment: http://www.epa.gov/nrmrl/std/lca/lca.html

; United States Department of Agriculture, Sustainable Agriculture:
http://www.nal.usda.gov/afsic/pubs/agnic/susag.shtml

; United Nations Environment Programme (UNEP), Ecosystem Management:

http://www.unep.org/ecosystemmanagement/

; UNEP, Guidelines for Social Lifecycle Assessment of Products:

http://www.unep.fr/shared/publications/pdf/DTIx1164xPA-guidelines_sLCA.pdf

; Sustainable Agriculture Initiative (SAI) Platform, Issues Related to the Principles of

Sustainable Agriculture: http://www.saiplatform.org/sustainable-agriculture/definition

; European Environment Agency, Natural Resources: http://www.eea.europa.eu/themes/natural

; European Environment Agency, Waste and Materials:
http://www.eea.europa.eu/themes/waste

; Also see the European Environment Agencys main webpage for many resources and
industry-specific information on environmental protection and sustainability:
http://www.eea.europa.eu/themes

; Unites States Department of Agriculture (USDA), Sustainability in Agriculture:

http://afsic.nal.usda.gov/sustainability-agriculture-0

Signposts to Training
x

United Nations Environment Programme Training Offerings and Events:

http://www.unep.org/training/news_events/index.asp

PECB ISO 26000 Training: https://www.pecb.org/training/iso-26000-and-socialresponsibility?lang=en

BSI-ISO 14001: http://www.bsigroup.co.uk/en/training/environmental-management-iso-14001/

BSI-Calculating your Carbon Footprint: http://www.bsigroup.co.uk/en/training/environmentalmanagement-iso-14001/training-courses/calculating-your-carbon-footprint-training-course/

BSI-Green Deal: http://www.bsigroup.co.uk/en/training/environmental-management-iso14001/Green-Deal-Training-Courses/implementing-a-green-deal-compliant-managementsystem-for-green-deal-advisor-organisations-training-course/

SAI Platform: http://www.saiplatform.org/activities/training

258

Key Terms
x

Consumption Management: controlling the amount of the raw material that is used, and
recycling and reusing all materials whenever possible.

Environmentally Responsible: means 1) procuring materials from suppliers that comply with
local and international environmental standards and guidelines, and 2) selecting and using
materials that are certified to be sustainably produced, contain fewer toxic materials, minimise
waste, contain recycled content, conserve energy and water and contain plant-based
materials.

Raw Materials: unprocessed materials extracted from the natural environment that a
company uses to make a product. The growing, extraction, and sourcing of these materials
often have a significant impact on the environment.

Sustainability: protecting and responsibly using natural resources so they are available
indefinitely.

259

The information contained in this document is provided by Verit and while every effort has been made to make the information
complete and accurate and up to date, Sedex makes no representations or warranties of any kind, express or implied, about the
completeness, accuracy, reliability, suitability or availability with respect to the information contained therein. Any reliance you
place on such information is therefore strictly at your own risk. In no event is Sedex liable for any loss or damage including
without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss profits arising out
of, or in connection with, the use of this document.

260

SEDEX SUPPLIER WORKBOOK

Chapter 3.4

WATER

This section will help you check whether there is a

risk of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure water usage and wastewater
are properly managed.

Water
What does it mean?

Water is critical for almost every business, whether it

is a factory, farm, office or food processing facility.
Using water responsibly means limiting its use when
possible, minimising the environmental impacts of
water use, and properly managing wastewater.

There is a severe global shortage of

fresh water. Roughly 70% of all water
consumed in the world is used for
irrigation in agriculture. If your company
is involved in agriculture, you can make
a meaningful impact on the amount of
water that is available for people to drink
by adopting water conservation
methods, such as drip irrigation, instead
of surface irrigation.

Failure to consider the effects of discharging

contaminated water into the ground or waterways, or
allowing hazardous materials to leak and contaminate
the local water supply can cause illness and damage to
communities and the environment. Contamination can
also adversely impact people who rely on rivers and
lakes for their livelihood. In order to keep this from
happening, companies need effective water and
wastewater management programs that control
potential risks to human health and the environment.

Benefits
Why should you do it?

Another growing problem is that of water scarcity.

Companies and the growing world population are
putting an ever greater demand on limited supplies,
which makes maintaining access to water more difficult.
In order to help maintain good water supplies, it is
important that companies better manage their use of
water and reduce consumption wherever possible.

Implementing an effective water management program

will help you meet legal requirements, protect the
environment, preserve water resources, and meet your
customers requirements.
There can also be business benefits, such as:

Nearly all companies generate wastewater in their

operations, either simply from toilets and sanitary
facilities, or where water is used in the production
process and becomes contaminated as a result. All
wastewater must be properly treated before it is
discharged from the premises.
Every company should assess 1) how it uses water it in
operations, 2) the types of wastewater generated, 3)
potential sources of groundwater and surface water
contamination, and 4) unnecessary uses of fresh water.
The company should then create a water management
system to minimise water use and to properly treat and
dispose of wastewater.
A socially responsible company makes sure that none
of its practices negatively impact worker or community
health or harms the environment.

262

Lower water bills by minimising water use.

Enhanced reputation in the local community.

Ability to attract environmentally conscious

customers.

Improved long-term financial sustainability of the

business.

Avoiding fines or regulatory action for water

pollution.

Requirements
What do you need to do?
b) To determine those aspects that have or can
have significant impact(s) on the
environment (i.e. significant environmental
aspects).

ETI Base Code

The ETI Base Code does not specifically address water
management. However, Clause 3, Working Conditions
are Safe and Hygienic, applies to specific hazards
associated with wastewater.
3.1

A safe and hygienic

working environment
shall be provided,
bearing in mind the
prevailing knowledge
of the industry and of
any specific hazards.
Adequate steps shall
be taken to prevent
accidents and injury to health arising out of,
associated with, or occurring in the course of
work, by minimising, so far as is reasonably
practicable, the causes of hazards inherent in
the working environment.

There are several ISO Technical Committees

that have either published or are currently
developing ISO standards specific to water and
wastewater. ISO Technical Committee (TC)
147 addresses water quality, ISO/TC 113 covers
groundwater planning and conservation, ISO/TC
23/SC 18 covers irrigation, and ISO/PC 253
covers wastewater reuse for irrigation.

ISO/CD 14046 is a forthcoming standard on

calculating a companys water footprint.

Becoming a Responsible Water Steward

A Framework for Action
(from the CEO Water Mandate)

Relevant ILO Conventions

C170: Chemicals Convention, 1990, requires
employers to ensure that all chemicals used at
work are labeled and that chemical safety data
sheets have been provided and are made
available to workers and their representatives;
and that only chemicals which are identified
and assessed and labeled are used and that
any necessary precautions are taken when
they are used.
R177: Chemicals Recommendation, 1990 (No. 177),
recommends that as far as is reasonably
practicable, the competent authority should
compile and periodically update a consolidated
list of the chemical elements and compounds
used at work, together with relevant hazard
information.
Other International Standards and Guidelines state:

ISO 14001, Section 4.3.1 Environmental

Aspects: The organisation shall establish,
implement and maintain a procedure(s)
a) To identify the environmental aspects of its
activities, products and services within the
defined scope of the environmental
management system that it can control.

263

Achieving and Maintaining

Standards

Incident Response
In the event of a significant water contamination,
rapid response is critical to preventing potential
environmental damage. Depending on your
companys operations, this could be a serious
concern. Make sure you have:

How do you do it?

x
x

9 Readily available, trained and properly

equipped response teams, including contact
names, addresses, and phone numbers.

Local drinking water sources are not depleted by

excessive use of water.

9 Procedures to take immediate response

You are not depleting bodies of water and

waterways used by others for their livelihood,
such as fishermen and farmers.

9 First-aid response measures.

measures for minimising contamination events,

including spill containment and clean-up.

9 A list of any government agencies which must

be immediately contacted.

Storm water is not contaminated due to run-off of

hazardous materials.

9 A list of community emergency response

organisations with contact information.

There is no excessive fertiliser run-off in

agricultural operations.

Groundwater contamination from leaks and spills

of hazardous materials and industrial wastewater.

There are no sewage pipe leaks.

You are not fined for improper water and

wastewater management.

Policies
(rules)
Your company policies should include the following
company commitments to:

It is important that you also regularly monitor your

processes and controls to make sure they are working.

; Protect the environment and the local

community through responsible use of water
resources.

; Conserve and minimise water use in all

company operations and at all company sites.

; Adhere to all legal requirements regarding water

use and wastewater disposal, including making
sure that water is not unnecessarily polluted,
contaminated, or irresponsibly handled or
discharged.

; Re-use wastewater for other purposes, rather

than discharging. For example, treated
wastewater can be used for landscaping
irrigation.

; Immediately respond to any incidents of

accidental water contamination, damage to the
environment, or unsafe discharge of water
contaminants and wastewater.

264

; Inform the local community and stakeholders of

the companys goals, objectives and progress in
responsible water management.

run off into storm water or into the ground when

it rains.

; Good water management strategies and

Procedures

practices for agricultural operations. Work with

farmers and agriculture suppliers to conserve
water and use this limited resource responsibly
through such methods as drip irrigation, rain
water capture, reduced tillage, and switching to
more drought resistant plant species.

(practices)
Management should assign a responsible person or
department to make sure your policies are carried out.
This includes:

; Communicating your policies on water to all

managers, supervisors, and workers.

; Meeting regularly with managers and

supervisors responsible for water-using
processes and wastewater treatment to oversee
policy implementation.

; Reviewing company operations to determine

how the facility can minimise the use of water
and maximise on-site water recycling. Set
objectives accordingly.

; Monitoring and reporting all complaints and

management responses related to the issue of
water management.

; Performing an annual review of the

implementation status of your water
management policies and procedures.
Your water management procedures should include:

Best Practice

; Programs to conserve water in company

Regular Internal Monitoring and Testing of

Wastewater

operations. Investigate alternate methods of

production, different equipment, and
opportunities to reuse water onsite. For
example, use low water consumption toilets,
taps and shower heads.

Most businesses receive semi-regular

governmental monitoring of waste/ground water
and potential contaminants. However, internal
monitoring and testing of wastewater contaminants
may identify contamination problems in advance of
government visits and minimise the extent of
contamination. This can also help you minimise
the high costs associated with clean-up and
response.

; A process to regularly check wastewater,

sewage, and groundwater conditions to make
sure that the company is in compliance with
water and wastewater laws and standards.
Testing may be legally required depending on
the companys operations.

; A comprehensive water contamination incident

response plan. Make sure that you identify all of
the potential risks for water contamination, and
include response to these incidents in your
companys emergency response procedures.

; A process and controls to ensure that

hazardous waste or other contaminants cannot

265

Communication and Training

You should use the following methods to make sure
your employees are aware of your policies and
procedures:

Best Practice
Water Footprint Analysis

; Provide training programmes for new managers

A Water Footprint Analysis looks at water use in

all stages of production and use. Conducting one
will show you the impacts of the companys water
use, where water is used the most, and will help
you identify ways to conserve water. At your
company, water might be used:

and supervisors and newly hired workers on your

companys policies and procedures on water
management.

; Provide all workers with the companys written

policies covering water management.

; Communicate company policies and procedures

By suppliers or agriculture in growing crops, or

otherwise during the production of raw
materials.

By your factories and production sites as an

ingredient or during the manufacturing
process.

By your consumers when they use your

companys products.

on water management to suppliers, visitors,

vendors, and third-party contractors.

; Prominently display company policies and any

laws relating to water in a language that workers
understand.

; Inform workers of both their job-related and

personal responsibilities relating to water
conservation.

For more information, you can research the

forthcoming ISO/CD 14046 standard on
conducting a water footprint analysis.

; Train all workers who are assigned to operations

that use water or generate wastewater of the
companys water management requirements and
how to do their jobs in a way that protects water
and the environment.

; Make sure all workers are informed of the

companys emergency water contamination
response policies.

; Workers should receive training detailing how to

perform their jobs in a way that eliminates or
minimises the risk of groundwater and surface
water contamination, and what to do in the event
of a contamination emergency, such as a spill or
leak.

; Communicate the companys water conservation

policies and goals to all suppliers, especially
farms and agricultural suppliers.

266

Documentation and Records

and in worker accommodation, to make sure
that water contamination levels are kept well
below a minimum threshold, or to reduce
water used for growing crops.

Meeting standards requires proper documentation. You

will need to keep the following on file on your company
premises:

; Risk assessment reports detailing water

; Monitor existing controls for workplace water

consumption, identified hazards to ground and

surface water with action plans to implement
controls.

hazard prevention, such as sewage line

checks, potential water line leaks, water
disposal, and standing water monitoring to
make sure existing controls are adequate.
Many locations will have legal requirements for
assessment of water discharges
environmental impact.

; Documentation tracking the companys progress

in meeting goals and objectives for preventing
ground and surface water contamination and
minimising water use.

; Records of completion for training on the

companys water policies for all workers

; Copies of all laws related to water use and

discharge.

; Copies of any needed permits for water use or

discharge.

; Documentation detailing communication with

suppliers and stakeholders regarding the
companys water requirements.

; Copies of internal, external third-party, or

government monitoring reports of wastewater
contaminants or discharge. Also maintain any
records from government and other third-party
clean-up participants regarding any water
contamination incidents and their clean-up.

2. Investigate problems and analyse why they

occurred. Where data indicates the existence of
non-conformities with your water policies and
customer code(s) of conduct, the company should
investigate these conditions to determine their
causes and what can be done to address them.

Monitoring
You will need to check whether your water safety
policies are being followed and that the controls to make
sure your company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:

; Regularly assess your water conservation

controls and procedures to make sure you are
conserving water as much as possible.

; Regularly review wastewater discharge,

contamination, and quality reports to make
sure than any irregular incidents are
addressed, such as high volume water use in
a given time period or higher-than-expected
contamination levels.

1. Monitor and report on conditions and trends to

identify actual and potential problems, including:

; Establish and monitor key performance

; Use the results of your reviews and

indicators (KPIs) for water conservation and

water use.

investigation to implement controls and

improve the companys water management
programs.

; Set goals and objectives for monitoring the

companys water requirements. For example,
goals might be to use less water in production

267

3. Work with others to identify reasonable

solutions. Taking care to develop solutions with
feedback from your supervisors and especially your
workers, as this helps to make sure the solution is
appropriate, permanent, and does not create
another problem.

Pollutants discharged into water bodies can dissolve,

remain suspended in water, or accumulate on the bottom
of the water bodies or waterways. All of these outcomes
may result in water becoming seriously contaminated.
Identifying what types of products and production
processes are in use at the company will lay the
groundwork for understanding and taking necessary
precautions.

Good Agriculture Practices (GAP) - Water

What can I do to control risks of water

contamination?

If your company is involved in agriculture, you

may already use some form of good agriculture
practices. GAP standards cover a variety of
topics, including water use. The UN Food and
Agriculture Organization have many standards
for water use, and some key points are below:

Identify potential hazards including chemical compounds

and structural issues (for instance, old water pipes).
Regularly monitor and test wastewater and compare test
results to standards to identify changes, noncompliances or trends. Investigate and consider using
environmentally safe alternatives to toxic chemicals or
hazardous processes currently used by the company.
Regularly educate supervisors and workers about
wastewater contamination risks and controls.

9 Use surface irrigation only when

necessary.

9 Use drip irrigation where feasible.

9 Recycle water (such as furrow run off)
when possible.

9 Avoid growing crops that need a lot of

How can my company best respond to a water
contamination incident?

water in areas where water is scarce.

9 Avoid fertiliser run-off into surface water.

9 Maintain permanent soil covering

Every company that uses hazardous materials that could

contaminate surface or groundwater needs an
emergency spill response plan. The plan should include
a description of the potential danger of an emergency or
accidental release of substances, and the procedures
that will be used following a spill or accidental release.
This includes, but is not limited to:

(especially during winter) to avoid nitrogen

run-off.

9 Contribute to the preservation and

restoration of local wetlands.

a) A description of the reporting system which will

be used to alert spill response personnel,
responsible managers, and legal authorities;

Common Questions
What are common sources of water contamination
and pollution?

b) A list of all types of substances used, processed,

or stored at the facility which could be spilled;

Pollution from industrial sources is a major factor

contributing to water pollution. Water pollution and
contamination occur when industrial wastewater
containing toxic chemicals is leaked or dumped into
water sources. Excessive levels of contaminants in
industrial wastewater can result in polluting the water
supply of not only the company, but potentially the
surrounding community as well.

c) For each type of substance listed under (b), a

detailed description of preventative measures,
operating procedures, and facilities which will be
used to prevent, contain, recover and/or treat
spills, and;
d) A site layout drawing showing all surface
drainage routes and bodies of water and
waterways.

Common industrial sources of water contamination

include acids, alkalis, toxic metals, oil, grease, dyes,
pesticides, and fertilisers. Some other damaging
pollutants include petroleum products (oils, solvents and
fuels) and hot water (which causes thermal pollution,
damaging fish and plant life).

The Emergency Spill Response plan should be reviewed

annually and amended as necessary by facility
management. Everyone with an identified role in the
response plan should be trained on how to carry out
those responsibilities.

268

Common Audit Non-compliances from the

Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the guidance
in this chapter can help reduce the incidence of these
problems:

Lack of site compliance with local and

international environmental laws and regulations.

Relevant permits not available for use and

disposal of water.

Inadequate wastewater treatment.

Lack of an effluent treatment plant for the

effective treatment of wastewater.

Inadequate management of water usage.

The company does not monitor wastewater

discharge for excessive levels of pollutants.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex members
only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

269

Case Study
Water: Preservation and Conservation
Drip irrigation also provides sustainable income for
these farmers. PepsiCo supported its farmers by
facilitating loans at favourable rates and providing
financial assistance to help procure the necessary
equipment.

Only 3% of the worlds water is fresh, of which 2.5% is

frozen and unavailable. Due to growing industrial,
agricultural and domestic water demand from an
increasing population, water availability and use of
water is escalating in importance.

By working closely with Indian farmers, we were

able to not only help secure potatoes for our supply
chain by using less water but also support local
communities, and in turn grow our business, says
Nishchint Bhatia, Senior Director Agriculture, AMEA,
PepsiCo.

Water is essential to PepsiCo and their goal is to

improve water-use efficiency by 20% per unit of
production by 2015. Part of their water stewardship
goal has focused on addressing the broader
challenge of water scarcity, especially in waterdistressed areas.

Based on the programmes success, PepsiCo is

expanding drip irrigation acreages threefold, by
rolling out to suppliers across other water-scarce
Indian states.

PepsiCo formed a partnership in 2010 with The

Nature Conservancy, a leading conservation
organisation working to protect ecologically important
lands and waters. The partnership piloted a credible,
scientifically sound system to assess the water risk of
selected plants and identify local initiatives that will
improve water availability.

One of the biggest strengths of a company like

PepsiCo is our ability to scale. We can start a small
project, learn from the process, then expand it to
have the biggest impact for our business, says Ian
Hope-Johnstone, Director of Agriculture
Sustainability, PepsiCo.

In India, water scarcity affects approximately 40% of

the potato-growing area. One method PepsiCo used
to achieve a positive water balance was to work with
their potato suppliers to reduce the amount of water
used in farming by converting to drip irrigation
techniques, which delivers water and nutrients directly
to the plant roots, a more productive and efficient
method compared with conventional flood irrigation.

PepsiCo is a global food and beverage leader with net

revenues of more than $65 billion and a product portfolio
that includes 22 brands that generate more than $1 billion
each in annual retail sales. To find out more about
PepsiCo visit, http://www.pepsico.com.

By implementing drip irrigation, 850 farmers covering

more than 1,000 acres in the state of Maharashtra
achieved significant water savings in 2010. In
addition, the average yield has increased by 31%,
from 5.5 metric tons to 7.2 metric tons per acre, and
delivered a 50% reduction in water usage in potato
cultivation, resulting in total water saving in 2010 of
200 million litres of water. The program continued to
expand in 2011 and into 2012.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

270

Resources and Guidance

The following organisations, websites and documents provide additional information on water:

United Nations Water Programs, including many documents and studies for free download:
http://www.unwater.org/

United Nations Environment Programme, Water and Sanitation:

http://www.unep.org/ietc/OurWork/FormerFocalAreas/WaterandSanitation/tabid/56240/Default.aspx

United Nations Food and Agriculture Organization, Water: http://www.fao.org/nr/water/index.html

United States Department of Agriculture, Water Resources:

http://www.usda.gov/wps/portal/usda/usdahome?navid=WATER_RESOURCES

United States Occupational Safety and Health Administration (OSHA), Hazardous Waste (including information
on contaminated water): http://www.osha.gov/SLTC/hazardouswaste/index.html

United States Environmental Protection Agency, Water Pollution: http://water.epa.gov/polwaste/

European Union Europa, Legislation for Water Protection and Management:

http://europa.eu/legislation_summaries/environment/water_protection_management/index_en.htm

World Business Council for Sustainable Development, Global Water Tool: http://www.wbcsd.org/workprogram/sector-projects/water/global-water-tool.aspx

World Business Council for Sustainable Development, Water Facts and Trends:
http://www.wbcsd.org/Pages/EDocument/EDocumentDetails.aspx?ID=137&NoSearchContextKey=true

Signposts to Training
x

US Environmental Protection Agency Water: Education & Training: http://water.epa.gov/learn/

BSI-ISO 14001: http://www.bsigroup.co.uk/en/training/environmental-management-iso-14001/

US Department of Energy Federal Energy Management Program, Water Management Training:

http://apps1.eere.energy.gov/femp/training/course_detail_ondemand.cfm/CourseId=22

UNESCO-IHE Institute for Water Education: http://www.unesco-ihe.org/Education

International Water Centre: http://www.watercentre.org/consultancy/approach

Key Terms
x

Wastewater: Water where the quality is negatively affected through human impact, contaminants, or its use in
manufacturing, agriculture, and industry.

Water Monitoring Programs: Risks to human health and the environment from industrial water pollution are
identified before a problem develops, so the risk can be controlled or eliminated, or the proper response is
initiated to pollution/contamination incidents.

271

The information contained in this document is provided by Verit and while every effort has been made to
make the information complete and accurate and up to date, Sedex makes no representations or warranties
of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with
respect to the information contained therein. Any reliance you place on such information is therefore strictly at
your own risk. In no event is Sedex liable for any loss or damage including without limitation, indirect or
consequential loss or damage, or any loss or damage whatsoever arising from loss profits arising out of, or in
connection with, the use of this document.

272

SEDEX SUPPLIER WORKBOOK

Chapter 3.5

POLLUTION

Pollution
What does it mean?

Source Reduction

Pollution is when the environment is damaged by

human and industrial impact. This means the
contamination of soil, water, and the atmosphere
due to releases or discharge of harmful substances.
A company must prevent and minimise pollution as
much as possible in order to protect workers and
the environment.
Source: the US Environmental Protection Agency

Pollution can come from a variety of sources at a

company, such as air emissions from production
equipment, boilers and generators, solid and hazardous
waste, chemical leaks and spills, and wastewater
discharge. All of these sources of pollution can damage
the environment and harm human health.

Benefits
Why should you do it?

Pollution prevention is eliminating and reducing

pollution at the source by modifying production
processes, promoting the use of less harmful
substances, implementing conservation techniques, and
re-using materials rather than putting them into the
waste stream. A company should always take measures
to eliminate pollution at the source, and also have
pollution response plans. This means being able to
address any type of pollution incident, including
contamination of the soil, water, and the atmosphere.

Preventing, minimising, and properly responding to

pollution will protect the health of your workers and
community members, preserve the natural
environment, and help you meet customer and legal
requirements.
There can also be business benefits, such as:

A socially responsible company makes sure that it

prevents and minimises pollution as much as is feasible,
and responds promptly and effectively to pollution
incidents, to ensure that the environment, workers, and
the community are not unnecessarily affected by
pollution.
This section will help you check whether there a risk
of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure pollution risks are understood
and managed.

Industry is a major source of pollution

worldwide, and a company can make a
significant impact in pollution control.
This not only protects the environment
and the local community, but saves the
company money and is an important
business objective.
274

Elimination of fines or other government

penalties for non-compliant pollutant emissions
and discharges.

Reducing the cost of operating pollution control

equipment by switching to more environmentally
friendly production materials and processes.

Attracting new environmentally conscious

customers.

Contributing to the long-term sustainability of

raw materials and natural resources.

Avoiding the high financial, reputational and

other costs associated with cleaning up leaks,
spills and other pollution incidents.

hazardous chemicals, in a manner which

eliminates or minimises the risk to safety
and health and to the environment, in
accordance with national law and
practice;

Requirements
What do you need to do?

d) keeping a register of the application of

pesticides used in agriculture.

ETI Base Code Clause 3

The ETI Base Code does not specifically address
pollution. However, Clause 3, Working Conditions are
Safe and Hygienic, applies to
specific hazards associated
with pollutants.
3.1

A safe and hygienic

working environment
shall be provided,
bearing in mind the
prevailing knowledge of
the industry and of any
specific hazards.
Adequate steps shall be
taken to prevent accidents and injury to health
arising out of, associated with, or occurring in
the course of work, by minimising, so far as is
reasonably practicable, the causes of hazards
inherent in the working environment.

International Standards and Guidelines

; ISO 26000 (2010), Contains guidance on

Pollution Prevention:
Section 6.5.3, Prevention of pollution, Energy
Efficiency, states: An organisation can improve
its environmental performance by preventing
pollution, including:

Relevant ILO Conventions

C170:

Chemicals Convention, 1990, requires that

each member shall formulate, implement and
periodically review a coherent policy on
safety in the use of chemicals at work.

R156:

Working Environment (Air Pollution, Noise

and Vibration) Recommendation, 1977.

R177:

Chemicals Recommendation, 1990 (No.

177).

R192:

Safety and Health in Agriculture

Recommendation, 2001, which states in
Section 7:

Emissions to air: An organisation's

emissions to air of pollutants such as lead,
mercury, volatile organic compounds
(VOCs), sulphur oxides (SOx), nitrogen
oxides (NOx), dioxins, particulates and
ozone-depleting substances can cause
environmental and health impacts that
affect individuals differently. These
emissions may come directly from an
organisation's facilities and activities, or be
caused indirectly;
Discharges to water: An organisation may
cause water to become polluted through
direct, intentional or accidental discharges
into surface water bodies, including the
marine environment, unintentional runoff to
surface water or infiltration to ground water.
These discharges may come directly from
an organisation's facilities, or be caused
indirectly by the use of its products and
services;

b) spraying and post-spraying precautions in

areas treated with chemicals, including
measures to prevent pollution of food,
drinking, washing and irrigation water
sources;
c) handling and disposal of hazardous
chemicals which are no longer required,
and containers which have been emptied
but which may contain residues of
275

; The European Community program REACH

Waste management: An organisation's

activities may lead to the generation of
liquid or solid waste that, if improperly
managed, may cause contamination of air,
water, land, soils and outer space.
Responsible waste management seeks
avoidance of waste. It follows the waste
reduction hierarchy, that is: source
reduction, reuse, recycling and
reprocessing, waste treatment and waste
disposal. The waste reduction hierarchy
should be used in a flexible manner based
on the life cycle approach. Hazardous
waste, including radioactive waste, should
be managed in an appropriate and
transparent manner;

(Registration, Evaluation, Authorisation and

Restriction of Chemical substance) provides an
international regulatory framework and system
for the industrial management of chemical
substances that could cause pollution.

; The UN Framework Convention on Climate

Change, 1992 and The Kyoto Protocol to the
UN Framework Convention on Climate
Change, 1998, which cover pollution and
climate change.

; United States Pollution Prevention Act, 1990,

declares it to be the national policy of the United
States that pollution should be prevented or
reduced at the source whenever feasible;
pollution that cannot be prevented should be
recycled in an environmentally safe manner,
whenever feasible; pollution that cannot be
prevented or recycled should be treated in an
environmentally safe manner whenever
feasible; and disposal or other release into the
environment should be employed only as a last
resort and should be conducted in an
environmentally safe manner.

Use and disposal of toxic and hazardous

chemicals: An organisation utilizing or
producing toxic and hazardous chemicals
(both naturally occurring and man-made)
can adversely affect ecosystems and
human health through acute (immediate) or
chronic (long-term) impacts resulting from
emissions or releases. These can affect
individuals differently, depending on age
and gender; and,

; International standards for environmental

management systems, such as ISO 14001,
have guidelines on pollution prevention from a
variety of common industrial sources, such as
waste control and water discharge. Also see
ISO 50001, 2011, which covers energy
management.

Other identifiable forms of pollution: An

organisation's activities, products and
services may cause other forms of pollution
that negatively affect the health and
wellbeing of communities and that can
affect individuals differently. These include
noise, odour, visual impressions, light
pollution, vibration, electromagnetic
emissions, radiation, infectious agents (for
example, viral or bacterial), emissions from
diffused or dispersed sources and biological
hazards (for example, invasive species), by
the use or end-of-life handling of its
products and services or the generation of
the energy it consumes.

; The Kiev Protocol on Pollutant Release and

Transfer Registers (2009) to the Aarhus
Convention on Access to Information, Public
Participation in Decision-making and Access
to Justice in Environmental Matters.

; UN Conference on Sustainable Development

(UNCSD), June 2012.

; UN Convention on Biological Diversity, 1992.

276

Noise, Light, and Thermal Pollution

Remember that air, water, and ground pollution
are not the only types of pollution. Depending on
its operations, your company might need to be
aware of and control the following:
9

Noise Pollution: aside from being a

potential health hazard to workers, it can
also disrupt wildlife and be a source of
irritation and annoyance to the community.

Thermal Pollution: is when water at

elevated temperatures is discharged into
local waterways and bodies of water, which
can adversely impact fish and plant life.

Workers do not use hazardous materials in a

way that is dangerous to the environment.

There is prevention of leaks, spills and run-off

resulting in contamination of groundwater and
surface water.

Odours and noise from facility operations do not

cause a nuisance to neighbours.

It is important that you also regularly monitor your

processes and controls to make sure they are working.

Policies
(rules)

Light Pollution: from facility operations can

annoy or disrupt the sleep patterns of
community members and wildlife.

Your company policies on preventing and minimising

pollution should include the following commitments:

; Protection of the environment by preventing and

Make sure that your company identifies all types

of pollution created through its operations, and
takes measures to eliminate or minimise them.

minimising pollution from company operations

and activities.

; Minimisation of solid and hazardous waste

disposal by using less hazardous alternatives,
and through reuse and recycling.

Achieving and Maintaining Standards

; Pollutants that cannot be eliminated, recycled,

How do you do it?

or reused will be treated before discharge to

ensure both legal compliance and minimal
environmental impact.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

Air emissions do not exceed the legal limit for

regulated contaminants.

The adequate design, maintenance and

inspection of process equipment and chemical
and waste storage and treatment systems
prevent leaks, spills and releases of pollutants.

There is no Illegal transportation and disposal of

hazardous waste.

Managers have adequate understanding of

legal and customer requirements for pollution
prevention.

; Disposal or discharge of environmental

pollutants will only be done in ways that comply
with all legal and customer requirements, and
minimise environmental impacts.

; The company will only source raw materials and

components from suppliers that also prevent
and minimise pollution.

; Minimise the impact on facility neighbours from

light, noise, odours, vibration and other sources
of disturbing environmental pollution.

; Provide immediate and proactive response to

any accidental pollution incidents, and pursue
every effort to mitigate impact to the
environment, the community, and the health and
safety of workers and other community
members.

277

hazardous materials and processes for minimising

emissions.
Specific Pollution Controls

; Monitoring and reporting all complaintsboth

internal and externaland management responses
related to the issue of pollution.

Refer to the other environment and health and

safety chapters in this workbook for specific
procedures related to pollution:

; Performing an annual review of the implementation

9 Hazardous Materials controlling risks of

status of your waste policies and procedures.

hazardous materials that might damage the

environment.

Your pollution prevention procedures should include:

; Making sure appropriate procedural and

9 Emissions controlling the release of

engineering controls are in place to prevent and

minimise pollution from the companys operations.
This includes:

contaminants into the atmosphere.

9 Water responsible use of water resources

and for proper management of wastewater.

Installing and maintaining appropriate controls

for air emissions.

practices for waste handling, reuse, and

recycling (including hazardous waste).

Programs for waste recycling and reuse.

9 Emergency and Fire Safety making sure

Management of hazardous waste, including

storage, transportation and proper disposal
procedures.

Treating storm water and wastewater before

discharge, as required.

Ensuring rainwater does not wash hazardous

materials into storm drains.

Installing spill containment, and leak detection

and alarm systems.

Creating and testing pollution incident

response plans for likely types of incidents,
including training all employees with
response, containment and clean-up
responsibilities.

Coordinating with local environmental

emergency response agencies and
organisations.

For farming operations, minimising the use of

chemical fertilisers and pesticides, combined
with water conservation techniques, such as
drip irrigation, to prevent runoff into rivers,
streams and lakes.

9 Waste environmentally responsible

the company can properly prepare for and

respond to a pollution.

9 Raw Materials environmentally

responsible sourcing of materials and
resources.

9 Renewable Energy and Energy and

Climate responsible use of energy and
pursuing renewable sources of energy.

9 Biodiversity biodiversity and ecosystem

protection.

Procedures
(practices)
Management should assign a responsible person (or
department) to make sure the above policies are carried
out through the following practices:

; Communicating your pollution prevention,

minimisation, and response policies to all
managers, supervisors, and workers.

; Making sure that there are emergency response

and evacuation procedures in case dangerous or
hazardous pollution/contamination incidents occur.

; Meeting regularly with managers and supervisors

of operations that generate or control pollutants to
oversee policy implementation.

; Conducting risk evaluations to identify potential

pollution and contamination risks and proper
response plans.

; Reviewing company operations to determine how

the facility can prevent or minimise the generation
of pollutants. Set objectives for reducing the use of

278

; Performing regular reviews of the implementation

pollution/contamination emergencies that are

likely to affect the company.

status of your pollution policies and procedures in

order to identify opportunities for improvement in
preventing, minimising, and responding to
company created pollution.

Communication and Training

You should use the following methods to make sure
your employees are aware of your pollution policies and
procedures:

; Provide training programmes for new managers,

supervisors and newly hired workers on your
companys policies and procedures on pollution
prevention, minimisation, and contamination
response.

; Conduct refresher training on an annual basis,

especially if policies or company operations
change.

Documentation and Records

; Provide all workers with the companys written

policies covering pollution and contamination
incident response procedures.

Meeting standards requires proper documentation. You

will need to keep the following on file on your company
premises:

; Communicate company policies and procedures

on pollution prevention and your companys
objectives to suppliers, visitors, vendors, and
third-party contractors.

; Written records detailing the companys efforts

in pollution prevention and minimisation.

; Prominently display company policies and any

; Written records demonstrating compliance with

laws relating to pollution in a language that

workers understand.

legal requirements, such as environmental

permits and environmental discharge monitoring
reports.

; Test workers immediately after all training

; Written records to show that worker training on

sessions to make sure they understand and

remember procedures for contamination events,
and make sure affected workers are oriented as
to the location and use of
contamination/pollution emergency control
equipment.

the companys pollution policies has been

completed, including training and drills for
pollution/contamination emergency events.
Keep attendance records for all workers who
have taken part in training and emergency drills.

; If needed, depending on company operations,

; Depending on the pollution risks at your

fully and formally train a representative team of

workers (using hands-on training conducted by
qualified personnel, such as a local government
environmental professional or the local fire
department) in the safe response to chemical
contamination incidents.

company, you might need to have workers

specially trained in pollution response, such as
for hazardous material clean up. Maintain
training and certification documentation for
those workers who are fully and formally
certified and trained in pollution/contamination
emergency response.

; Conduct pollution incident emergency response

; A listing of all pollution prevention and

drills at least every six months. Make sure you

conduct drills for all types of

emergency response/clean-up equipment.

279

; Review your pollution prevention procedures,

Include the equipment location, the type of

equipment, and maintenance and testing
records.

programs and monitoring data to make sure

that your controls are working as intended.

; Copies of all laws, regulations and customer

; Establish and monitor key performance

requirements related to pollution and

contamination emergency response. Make sure
this list is kept updated.

indicators (KPIs) for pollution prevention and

minimisation controls so that you can
measure their effectiveness on a continual
basis.

; Worker and community reports of pollution

; Monitor and test all sources of pollution to

concerns, including through both formal and

informal mechanisms.

watch for non-compliances with permit

requirements, indications of production
process issues, abnormal changes, and to
meet customer requirements.

; Records of any incidents that resulted in an

abnormal contamination or pollution emergency
event.

; Set goals and objectives for meeting the

; Readily available and up-to-date lists of any

companys pollution prevention requirements.

For example, goals might be to reduce air
emissions, replace hazardous materials with
environmentally friendly ones, generate less
waste, or conserve water. Track if the
company is meeting goals and modify
systems if goals are not met.

government or community partners who must

be alerted in the event of a pollution or
contamination event.

; Regularly review and revise policies and

procedures to keep them relevant and up to
date.
2. Investigate problems and analyse why they
occurred. Where data indicates the existence of
non-conformities with your companys pollution
prevention policies and customer code(s) of
conduct, the company should investigate these
conditions to determine their causes and what can
be done to address them.

; Identify all of the potential pollution sources in

the facility. Regularly review monitoring data,
such as air emissions and wastewater
discharge monitoring reports, waste storage
area inspection reports, hazardous waste
manifests and audit reports of hazardous
waste vendors, to identify where your policies
and procedures are not being followed or are
not effective, so you can correct the problem.

Monitoring
You will need to check if your pollution prevention
policies are being followed and that the controls to make
sure your company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:

; Regularly investigate all spill, leak and

pollution incidents to determine the cause and
if your response to the incident was adequate,
in order to determine if any improvements are
needed in your control equipment or
procedures.

1. Monitor and report on trends to identify actual

and potential problems in meeting company
requirements and laws and standards, including:

; Regularly review your process in meeting your

pollution prevention objectives to determine if
you are accomplishing your goals.

; Regularly monitor, inspect, and maintain all

machinery, equipment, and systems (for

280

instance, sewage lines, chemical storage

containers, boilers, drainage piping) to make
sure that no uncontrolled pollution hazards
exist due to faulty or damaged equipment.

; Regularly make sure that supervisors monitor

workers while they perform their jobs, so that
supervisors can confirm that pollution and
contamination hazards are properly
controlled.

Common Audit Non-compliances from the

Sedex Database
The following issues are the most common noncompliances against this issue. If properly implemented, the
guidance in this chapter can help reduce the incidence of
these issues:

; Monitor all suppliers, contractors, vendors,

and visitors whose materials or processes
may present potential pollution/contamination
emergency hazards.
3. Work with other departments to identify
reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

; Analyse on a regular basis any suggestions

from workers and use the results in improving
company policies and procedures.

; Integrate pollution prevention, minimisation,

and control practices into job descriptions.
Make general and job-specific practices, such
as properly disposing of trash and conserving
water, part of each workers responsibility.

Non-compliance with local and international

environmental laws and regulations.

Inadequate waste disposal programs.

Company unaware of the customers

environmental requirements.

Lack of permits for use and disposal of

resources, such as water and air emissions.

Inadequate wastewater treatment.

Site is unaware of the laws and regulations

governing the environment.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

; Integrate oversight of pollution prevention and

minimisation practices into the job
descriptions of supervisors and managers.

Common Questions
How do I identify pollution sources and implement
good pollution prevention approaches?
You will have to first review company operations and
determine all sources of pollution caused by company
activities. Pollution prevention approaches should be
applied to all pollution-generating activities and all
pollutants, and in any case, pollution prevention should
never result in practices that create new risks or
concerns. Pollution can come from the following
sources:

281

Air Pollution the release of chemicals, gases,

mists and other contaminants into the
atmosphere.

What are some measures I can take to make sure

workers are adequately prepared for pollution or
contamination emergencies?

Water Pollution the discharge of industrial

materials into bodies of water, or discharge of
wastewater contaminated with industrial or
domestic waste (sewage) waste into the
environment.

Soil Contamination when chemicals or other

pollutants are spilled or leak into the soil.

Solid Waste disposing of trash outside of

designated disposal facilities, directly on
company grounds, or otherwise in the
environment.

Radioactive Contamination when hazardous

radioactive materials are improperly disposed of
or released into the environment.

Light Pollution excessive, unnecessary, or

intrusive artificial light.

Noise Pollution excessive industrial noise

which passes beyond the facility to cause
annoyance, impact the health of community
members or damage to wildlife.

Thermal Pollution caused when water of

elevated temperature is discharged into bodies
of water or waterways, impacting fish and other
aquatic life.

Identifying specific hazards and adopting appropriate

responses can often be accomplished by several
means. Local government environment regulation
agencies, customers, the local fire and other emergency
response departments, and external organisations all
can help you identify the risks inherent in company
operations, as well as safe handling and processing
procedures. Using a combination of these sources will
help you create a program that identifies and addresses
the pollution and contamination risks in your company.
In addition, identifying the types of pollutants or
contaminators that are present in your company sites
allows management to design various means for alerting
workers to those potential hazards. A good pollution
safety response plan includes regular maintenance of
emergency equipment, such as alarms, water hoses,
emergency power cut-off, valve wrenches, hazardous
chemical absorbents, extinguishers, emergency lights,
and other equipment. Workers must also be completely
familiar with policies and procedures in the event of
various emergencies, and must take part in drills.
Training review programs should also be in place and
administered on a regular basis. Pollution/contamination
risks should be identified and monitored by a designated
manager responsible to ensure the correct prevention
and response procedures are in place.

Remember that controls will be different depending on

your companys operations. For example, in the
agricultural sector, pollution prevention approaches
might include reducing the use of water and agricultural
chemicals; adoption of less environmentally harmful
pesticides or cultivation of crop strains with natural
resistance to pests; and protection of sensitive
ecosystems, such as wetlands. The impairment of
wetlands, ground water sources, and other critical
natural resources is pollution, and prevention practices
are essential to protect and preserve these habitats.
Practices may include conservation techniques and
changes in management practices to prevent harm to
sensitive areas. Also, especially in industrial settings,
make sure you have the right engineering controls in
place, like dust collection systems, scrubbers for air
emissions, waste segregation and control facilities,
sewage treatment facilities, and industrial wastewater
treatment facilities. Consider all of these factors when
developing your pollution prevention approach.

282

Case Study

Human and industrial practices can cause pollution

to the natural environment through discharge of
harmful materials into soil, water and the
atmosphere.

Every department head of the factory is responsible

for environmental compliance and an environmental
protection working group has been established. Fuji
Oil also provides environmental protection trainings
to employees to raise their awareness and
organises relevant activities to encourage employee
participation.

Fuji Oil (Zhang Jia Gang) Co. Ltd was founded in

1995 and, in accordance with China environment
laws and regulations, completed an Environment
Impact Assessment (EIA), which was approved. The
factory invested 3,680,000 CNY to build a
wastewater treatment plant (WWTP), which mainly
treats production wastewater. The WWTP was
designed with a maximum daily capacity is 235
tonnes, and the CODCR (Chemical Oxygen
Demand) of treated water was 80mg/litre , less than
the national standard of 100mg/Litre.

Implementing the Cleaner Production system and

analysing wastewater data has enabled control of
pollution at the source to reduce the total amount of
wastewater for the WWPT. Through the Cleaner
Production system, we 1) rerouted our wastewater
piping, 2) reduced the amount of wastewater from
production, 3) separately collect domestic
wastewater and send it into municipal wastewater
treatment system - reducing the wastewater amount
of the factory WWTP, and 4) collect rain water and
discharge it directly.

As the factory expanded in 2003, in order to be

compliant with stricter China laws and regulations,
the factory invested one million CNY to upgrade the
WWTP. The upgrade resulted in a significant
reduction of CODCR to below 60mg/L. As Chinas
environment protection requirements continued to
increase, explicit requirements were also made on
the control mineral and organic nutrients in
wastewater that promote an intensity of plant life,
such as algae, reducing dissolved oxygen and often
causing the extinction of other organisms. This led to
Fuji Oil to invest in new equipment and control
measures, including over 100,000 CNY to install a
continuous CODCR tester, which is connected to the
monitoring system of local Environmental Protection
Bureau, for their monitoring of the factorys WWPTs
overall performance.

In addition, by improving technical treatment

technology to meet legal requirements for the
control of eutrophic materials, Fuji Oils total
phosphorus concentration in treated wastewater
has been reduced to not more than 0.2mg/l, a
significant improvement over the legal requirement
of 0.5mg/l.

Pollution

Fuji Oil is supplying Chocolate and Specialty Oil to

Kraft China. The performance of Fuji Oil in terms of
quality and service is good. Were happy to know
that Fuji Oil has implemented pollution management
and hopefully this good practice will be sustainable
and benefit both Fuji Oil and Kraft, says Tony Luo,
Kraft China Procurement Manager, Ingredients.
Fuji Oil (Zhang Jia Gang) Co. Ltd. is a Japanese
manufacturer of oils and fats used worldwide in
chocolate, confectioneries, bakery goods, and dairy
products. To find out more about Fuji Oil, visit
http://www.fujioil.com.cn/.

We achieved Cleaner Production certification in

2005, enforced by Chinas Cleaner Production
Promotion Law. By implementing an environmental
protection system, the concept of saving resources,
preventing pollution, and compliance with legal
requirements, environmental protection and
sustainability have been embedded in company
management system and daily operations, says Mr.
Qian, Factory Maintenance Manager, Fuji Oil.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

283

Resources and Guidance

The following organisations, websites and documents provide additional information on pollution and
contamination safety:

; The United Nations Environment Programme contains many resources on pollution control
and prevention: http://www.unep.org/

; ECOLEX, Environmental Law Gateway: http://www.ecolex.org/start.php

; United States Environmental Protection Agency (EPA), P2 Pollution Prevention:
http://www.epa.gov/p2/pubs/basic.htm

; Pollution Prevention Resource Exchange, National Partnership funded by the US EPA:

http://p2rx.org/

; EU REACH: http://ec.europa.eu/environment/chemicals/reach/reach_intro.htm
; UK Environment Agency Pollution prevention advice and guidance:
http://www.environment-agency.gov.uk/business/topics/pollution/39083.aspx

; European Environment Agency; covers many pollution topics with industry-specific

information: http://www.eea.europa.eu/themes

Signposts to Training
x

United Nations Environment Programme Training Offerings and Events:

http://www.unep.org/training/news_events/index.asp

Environmental Protection Agency, State of Ohio Pollution Prevention Training:

http://www.epa.state.oh.us/ocapp/p2/onlinep2training/onlinep2training.asp x

PECB ISO 26000 Training: https://www.pecb.org/training/iso-26000-and-socialresponsibility?lang=en

BSI-ISO 14001: http://www.bsigroup.co.uk/en/training/environmental-management-iso-14001/

BSI-Calculating your Carbon Footprint: http://www.bsigroup.co.uk/en/training/environmentalmanagement-iso-14001/training-courses/calculating-your-carbon-footprint-training-course/

BSI-Green Deal: http://www.bsigroup.co.uk/en/training/environmental-management-iso14001/Green-Deal-Training-Courses/implementing-a-green-deal-compliant-managementsystem-for-green-deal-advisor-organisations-training-course/

284

Key Terms
x

Pollution: The contamination of the environment, such as soil, water, and the atmosphere
due to human impact, industrial activity, or the discharge of harmful substances.

Contamination: When safety and prevention systems fail to protect soil, water, and the
atmosphere from pollution or impurity, environmental contamination takes place.

Pollution Prevention: eliminating and reducing waste at the source by modifying production
processes, promoting the use of non-toxic or less-toxic substances, implementing
conservation techniques, and reusing materials rather than putting them into the waste
stream.

Habitat: The natural home or environment of an animal, plant, or other organism.

Radioactive: A radioactive material (solid, liquid or gas) is one that emits radiation energy in
the form of alpha or beta particles, or gamma or x-raysall of which can damage or kill living
organisms.

Ecosystem: A complex system that includes the communities of organisms (plants, animals
and microbes) in a particular area and the interactions with the non-living (such as air, water,
and mineral soil) environment.

285

286

SEDEX SUPPLIER WORKBOOK

Chapter 3.6

EMISSIONS

Emissions
What does it mean?

Emissions are the gases, vapours and particulate

(dust) discharged into the air from sources, such as
exhaust stacks, vehicle exhausts, generators, and
facility vents. These emissions cause air pollution,
which can affect the environment and the health of
workers and community members.
The type and quantity of air emissions depends on
industrial activity, technology, energy consumption,
traffic, farming trends, and many other factors. But all
air emissions can cause health problems and harm the
environment. Greenhouse gases, such as carbon
dioxide (CO2) and fluorinated gases, also known as
Ozone Depleting Substances (ODS), are major
contributors to climate change and are generated by
most industries.

Benefits
Why should you do it?

In order to protect the health of workers, the

environment, and surrounding communities, air
emissions from company operations must be
minimised, controlled and regularly monitored to make
sure legal and customer requirements are met.

Implementing an effective air emissions

management program will help you meet legal
requirements, avoid penalties, protect your workers
and surrounding communities health, your business
assets, and the environment, as well as meet your
customers requirements.

A socially responsible company makes sure that

none of its practices and operations create a
situation where workers, community members, or
the environment are exposed to harm due to air
emissions.

There can also be business benefits, such as:

This section will help you check whether there is a

risk of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure your air emissions are
understood and controlled.

In 2010, China, the United States,

India and Russia generated well
over 50% of global carbon dioxide
emissions from energy
consumption.
Source: U.S. Environmental Protection Agency

288

Avoiding fines for discharge of toxic emissions.

Improved worker health and wellness.

More efficient and better performance during

Environmental, Health and Safety (EHS)
audits.

Improved company image and reputation

within the community.

Reduced costs.

endeavour to limit and, as far as possible,

gradually reduce and prevent air pollution
including long-range transboundary air
pollution.

Requirements
What do you need to do?
x

UN Montreal Protocol on Substances that

Deplete the Ozone Layer, 1989.
An international treaty designed to protect
the ozone layer by phasing out the production
of numerous substances believed to be
responsible for ozone depletion.

UN Vienna Convention for the Protection of

the Ozone Layer, 1985.

The ISO standard for environmental

management systems, ISO 14001 contains
requirements on how a company should
manage its significant environmental aspects,
such as air emissions.

ISO 14064-2006, Specification with

guidance at the organisation level for
quantification and reporting of greenhouse
gas emissions and removals.
Specifies principles and requirements at the
organisation level for quantification and
reporting of greenhouse gas (GHG) emissions
and removals. It includes requirements for the
design, development, management, reporting
and verification of an organisation's GHG
inventory.

ETI Base Code

The ETI Base Code does not specifically address air
emissions. However, Clause 3, Working Conditions
are Safe and Hygienic, applies to specific hazards
associated with emissions
that may impact workers.
3.1

A safe and hygienic

working environment
shall be provided,
bearing in mind the
prevailing knowledge
of the industry and of
any specific
hazards. Adequate
steps shall be taken
to prevent accidents
and injury to health arising out of, associated
with, or occurring in the course of work, by
minimizing, so far as is reasonably practicable,
the causes of hazards inherent in the working
environment.

International Standards and Guidelines

UN Framework Convention on Climate

Change, 1992 and the Kyoto Protocol to the
UN Framework Convention on Climate
Change, 1998.
In 1992, countries joined an international
treaty, the United Nations Framework
Convention on Climate Change, to
cooperatively consider what they could do to
limit average global temperature increases and
the resulting climate change, and to cope with
whatever impacts were, by then, inevitable. In
2010, governments agreed that emissions
need to be reduced so that global temperature
increases are limited to below 2 degrees
Celsius.

UN Convention on Long-Range
Transboundary Air Pollution, 1979.
The aim of the Convention is that Parties shall

289

Policies

Achieving and Maintaining

Standards

(rules)

How do you do it?

Your company policies should include the following
company commitments to:
You can best meet standards by using a systems
approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

; Compliance with all legal requirements governing

air emissions.

; Protection of the environment and the health of

Air contaminants are within legal limits.

workers and the community by minimising and

controlling air emissions, including greenhouse
gases.

There are no unknown greenhouse gas

emissions.

; Monitoring and maintenance for emissions control

equipment and for sources of emissions, such as

boilers, generators, and production equipment.

Process emissions inside the facility do not

cause worker health problems.

Air emissions control equipment is well

maintained.

Air quality is not poor in the immediate vicinity

around the facility.

; Train workers and supervisors on the companys

air emissions policies, programs and
improvement objectives.

; Understand and quantify the companys carbon

footprint (CO2 emissions), including of its
suppliers, and establish programs and objectives
to reduce them.

It is important that you also regularly monitor your

processes and controls to make sure they are working.

Procedures
(practices)

Greenhouse Gases
In addition to controlling the amount of
greenhouse gases generated by production,
there are many ways the company can help
reduce its overall greenhouse gas output:
9

Encourage workers to use public

transportation, cycle or carpool to work.

Switch to electric-powered site vehicles.

Increase the efficiency of plant equipment,

like boilers, air compressors and air
conditioning systems.

Participate in a carbon offset program.

Sourcing raw materials from suppliers that

limit greenhouse gas output.

Management should assign a responsible person (or

department) to make sure your policy commitments
are achieved, that regulatory compliance is
maintained, and that emissions standards are met.
This includes:

; Developing programs to reduce or eliminate air

pollutants and greenhouse gases generated by
company operations.

; Implementing an air emissions management

program, so that air emissions are:

Utility companies are major emitters of carbon

dioxide. By reducing energy consumption, your
company can help reduce these emissions.
See the Energy and Climate chapter in this
workbook for more detailed information.

290

Characterised (inventoried by type and

volume) on a regular basis.

Controlled as needed.

Regularly tested and the results compared

to regulatory and permit requirements and
improvement objectives.

Subject to prompt remedial action when

testing indicates noncompliance.

Communication and Training

You should use the following methods to make sure
your employees are aware of your air emissions
policies and procedures:

; Establishing routine inspection and maintenance

procedures for emissions control equipment,
such as scrubbers and bag houses.

; Provide training programmes for new

managers, supervisors and newly hired
workers on your companys policies and
procedures on air emissions management.

; Programs to identify mobile sources of air

emissions, such as trucks, site vehicles,
company cars, and landscaping equipment, and
to reduce their emissions by keeping them
properly maintained, minimising their use, and
replacing them with more efficient or electric
models in order to limit greenhouse gas
emissions.

; Provide all workers with the companys written

policies covering air emissions.

; Communicate company policies and

procedures on air emissions, including
greenhouse gases, to suppliers, visitors,
vendors, and third-party contractors.

; Outreach to the local community to provide

information on company operations and air
emissions programs and performance.

; Prominently display company policies and any

laws relating to air emissions in a language
that workers understand.

; Programs to ensure that facility indoor air is free

of contaminants from air emissions and is not a
health hazard for workers.

; Post job responsibilities specific to emissions

in each work area/workstation.

; Make sure workers performing specific

functions (such as inspecting and maintaining
emissions control equipment) have received
any certifications or special training that might
be required.

; Make sure workers are aware of the

companys efforts to reduce greenhouse gases
in production, in the supply chain, and from
worker commuting.

; Attend community and local government

meetings to describe the companys efforts to
minimise and control air emissions.

Tesco's carbon footprint labelling of food

291

Best Practice
Commute Reduction Programs
Commute Reduction Programs reduce automobile
and motorbike emissions from commuting to the
workplace. Under these programs, employers assist
their employees with the use of alternatives to
single-occupant-vehicle commuting. Even if your
company does not have any smoke stacks,
carpooling, cycling and encouraging employees to
use public transportation (for example, by offering
bus passes) will help reduce air pollution.

Documentation and Records

Electric Pallet Truck
Meeting standards requires proper documentation.
You will need to keep the following on file on your
company premises.

; A list of the air emissions generated, specific

Monitoring

risks/hazards of each emission source,

corresponding controls, testing and monitoring
requirements, and associated inspection and
maintenance.

You will need to check whether your emissions policies

; Inspection and maintenance records to show

that your companys required controls are in
place and always functional.

1. Monitor and report on trends to identify

actual and potential problems, including:

; Records of regular monitoring of emissions for

regulated contaminants, such as particulate,
gases, vapours, mists and fumes.

; Stay up-to-date on the latest research

; Written records of maintenance for emissions

and information on the risks presented

by the air contaminants in the
companys air emissions.

point sources (boilers, generators, and

production equipment) to show that company
requirements and legal regulations are
checked and consistently achieved.

; Conduct regular assessments of the

emissions in each work area and
make sure procedures are effectively
protecting workers, community
members, and the environment, or if
additional procedures are needed.
Inspect emissions point sources to
make sure your emissions prevention
policies are followed and control
procedures implemented.

; Documentation for any emissions permits that

are required by the company.

; Written records for workers general training

orientation and training for specific jobs
(including any special certification), as needed.

; Up-to-date copies of all laws and regulations

related to air emissions and emergency
response.

292

; Establish and monitor key

leaks and accidents, as an opportunity

for performance improvement.

performance indicators for your

emissions procedures so that you can
measure their effectiveness on a
continuous basis.

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur
and the solution itself does not create other
problems.

; Set goals and objectives for meeting

the companys emissions
requirements. For example, goals
might be to upgrade scrubbing
equipment over a multi-year period,
switch all site vehicles to electric
alternatives, or to continuously reduce
greenhouse gas output. Track if the
company is meeting goals and modify
systems if goals are not met.

; Integrate oversight of emissions

management into the job descriptions of
workers, supervisors, and managers.

; Work with representatives from across the

company to reduce emissions of regulated
air contaminants and greenhouse gases.
Explore alternatives, such as cleaner
burning fuels, installation of more efficient
emissions control equipment, or otherwise
altering production processes to minimise
and eliminate emissions.

; Regularly review and revise policies

and procedures to keep them relevant
and up to date.
2. Investigate problems and analyse why they
occurred. Where data indicates the existence
of non-compliance with your companys
emissions policies and customer code(s) of
conduct, the company should investigate these
conditions to determine their causes and what
can be done to address them.

; A company should regularly discuss ways

to reduce emissions, and whenever
changes are anticipated in operations. You
should always take should always take
preventative measures before changes
are made.

; Conduct regular assessments of

company-wide emissions issues and
make any necessary changes to
controls and procedures to effectively
protect workers, community members,
and the environment.

Common Audit Non-compliances

from the Sedex Database
The following issues are the most common noncompliances against this issue. If properly
implemented, the guidance in this chapter can help
reduce the incidence of these issues:

; Address issues found in inspections of

emissions point sources to make sure
your emissions prevention policies are
followed, and proper and effective
control procedures are in place.

x
x

; Regularly review the company

performance objectives on reducing

and minimising air emissions to
determine if you are on track and to
identify if changes are needed in your
approach.

x
x

Air emissions monitoring equipment is

broken or non-existent.
Emissions monitoring reports are not
kept.
Emissions monitoring reports are not
reviewed by necessary personnel.
Emissions exceed legal requirements.
The company does not make efforts to
reduce or eliminate emissions.

Sedex provides a document with suggested possible

corrective actions following a SMETA audit. This is
available to Sedex members only in the Sedex
Members Resources section:
Sedex Corrective Action Guidance

; Use any incident reports of unplanned

releases of air emissions, such as

293

What about indoor air quality? How important is

that?

Common Questions

Indoor air quality is critically important, since emissions

of harmful contaminants from facility activity can
become more concentrated inside where air circulation
is more limited. In many cases, indoor air quality may
be significantly poorer than outside the facility.
Pollutants like carbon monoxide, ozone, or organic
vapours can build up to harmful levels. Your emissions
monitoring program should include indoor air quality to
make sure that the concentrations of hazardous or
toxic pollutants are maintained within safe limits at all
times. Workplace exposures can often be caused by
equipment malfunction, making regular inspection of
your emissions control facilities critically important.
Make sure you also have effective engineering
controls in place for heating, ventilation, and air
conditioning so air is well-circulated where potential
emissions hazards are present.

What are some measures I can take to prevent air

emissions emergencies?
Having an effective emissions management plan in
place not only keeps the company in compliance with
legal and customer environmental standards, but it will
help you ensure the well-being of workers and
community members. For example:

Emissions Inventory keeping lists of the

types of air emissions generated by your
production processes and accompanying
standards helps reduce risks.

Inspecting Source Points keeping smoke

stacks, air vents, and other air emissions
discharge points well-maintained means they
are less likely to break down and create a
hazard.

Regular Maintenance of Control

Equipment control equipment such as bag
houses, scrubbers and electrostatic
precipitators require regular maintenance in
order to effectively remove contaminants from
your facilitys air emissions.

Emergency Planning Creating an

emergency response plan and procedures and
practicing them, such as for the accidental
discharge of a toxic gas, will enable you to
respond quickly and prevent a major event and
limit potential damage.

Why should I care about greenhouse gas

emissions?
The majority of scientists believe that generation of
greenhouse gases from burning of fossil fuels and
from certain industrial operations is causing climate
change. Global climate change is predicted to cause
potentially catastrophic change, such as rising sea
levels, loss of wildlife habitat and biodiversity, and
serious economic harm in the medium and long term.
Your company should try to do what it can to reduce
emissions of greenhouse gases from both its own
operations and that of your supply chain. Simple
actions include:

It is also critical to obtain worker buy-in for controlling

air emissions. Each work area should have a list of air
emissions control requirements needed to meet legal,
code, and customer requirements. Involving workers in
the creation of regular maintenance plans prioritised by
the most important areas for regular inspection will
also create an informed and invested work force.
Prioritise areas for regular monitoring, and inform
workers of how critical they are for maintaining
emissions standards that ensure their health, and that
of their community and the general environment.

294

Reducing energy consumption by installing

more energy efficient lighting, and purchasing
boilers, production equipment, vehicles and air
conditioning systems that use less energy.

Installing solar panels to generate a portion of

your facilitys electricity needs.

Purchasing some of your power from utilities

that utilise wind, solar and other renewable
sources of energy.

Working with your suppliers to make some of

the same improvements in their operations.

Case Study
Emissions: Working collaboratively

By partnering with 2degrees to deliver the

Knowledge Hub, Tesco and its suppliers are
able to continue to explore challenges and
opportunities between events, with suppliers
sharing know-how and experience, sourcing
information and learning through online
discussions, forums, meetings and
presentations. This is a much more efficient
way of identifying and implementing business
improvements that save money, guard
against risks, support current business and
open up opportunities for new products.

As world energy prices rise, organisations need to

improve their energy performance, increase
energy efficiency and reduce climate change
impacts.
In 2010/11, Tesco asked UK suppliers to complete
questionnaires on their carbon reduction, watersaving, and waste and packaging reduction
projects. Using the 2degrees platform, an online
community for driving growth and efficiency
through sustainability, they set up the Tesco
Knowledge Hub.

The results of the Knowledge Hub in its first

year means the programme can be expanded
to engage all of Tescos top 1,000 suppliers.
The tools of new media are being used to
forge better relationships, drive business
innovation and problem solving, and unlock
growth from environmental constraints.

Tescos supplier engagement programme on

2degrees is now the worlds largest-ever online
collaboration between retail suppliers. The
collaboration helps to reduce the energy costs,
waste and environmental impacts of the products
Tesco buys, and aims to cut 30% of the carbon
emissions from the supply chain by 2020. The
project was recognized with a Gigaton Award for
outstanding carbon reductions and sustainability
performance.

We have seen suppliers who would be too

small to implement big carbon reduction
changes on their own work together to
innovatively reduce their carbon emissions.
For example, two suppliers in close proximity
have established a joint anaerobic digester
facility, together producing enough food waste
to run it efficiently. With the international
growth of the hub, comes further opportunity
to develop the community, says Andrew Yeo,
Head of Supply Chain Carbon Reduction at
Tesco.

The Hub is a private online community that links

Tesco suppliers to share sustainable business
best practices; to exchange experiences, solve
practical problems; and make informed decisions.
The Hub currently includes 750 supplier members
from over 470 companies, plus 100 Tesco
representatives and partners like WRAP, IGD and
the Carbon Trust.

Tesco PLC is one of the worlds largest

supermarket chains operating in 14 markets across
Europe, Asia and North America. To find out more
about Tesco, visit http://www.tesco.com/.

A full-time team at 2degrees works with members

to both identify and articulate challenges, and find
solutions. This knowledge sharing is clustered
around key topics across the value chain,
including renewable energy, water, sustainable
sourcing, energy efficiency, facilities management
and logistics.
With hundreds of suppliers in many countries,
many with expertise in different aspects of
sustainability, the best way to make progress is to
share knowledge through our supply chains,
across the industry, and across national
boundaries, says Helen Fleming, Climate Change
Director, Tesco.

295

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

Resources and Guidance

The following organisations, websites and documents provide additional information on emissions:

; Carbon Disclosure Project: https://www.cdproject.net/en-US/Pages/HomePage.aspx

; European Environment Agency, Air Pollution: http://www.eea.europa.eu/themes/air
; European Union Environment Agency, EMEP/EEA Air Pollutant Emission Inventory
Guidebook: http://www.eea.europa.eu/publications/emep-eea-emission-inventory-guidebook2009

; United Nations Environment Programme (UNEP), Intergovernmental Panel on Climate

Change (IPCC), Greenhouse Gas Inventories: http://www.ipccnggip.iges.or.jp/public/gl/invs6.html

; United States Occupational Safety and Health Administration (OSHA), Indoor Air Quality:
http://www.osha.gov/SLTC/indoorairquality/index.html

; US Environmental Protection Agency (US EPA), Air Pollutants:

http://www.epa.gov/air/airpollutants.html

; US EPA, Emissions Factors & AP42, Compilation of Air Pollutant Emission Factors:
http://www.epa.gov/ttn/chief/ap42/index.html

; UK National Atmospheric Inventory, Emission Factors:

http://naei.defra.gov.uk/emissions/index.php

; WRI GHG Measuring and Accounting: http://www.ghgprotocol.org/about-ghgp

; WWF Climate Savers:
http://wwf.panda.org/what_we_do/how_we_work/businesses/climate/climate_savers/

Signposts to Training
x

United Nations Environment Programme Training Offerings and Events:

http://www.unep.org/training/news_events/index.asp

BSI-OHSAS 18001: http://www.bsigroup.co.uk/en/training/occupational-health-and-safetyohsas-18001/training-courses/introduction-to-bs-ohsas-18001-training-course/

BSI-ISO 14001: http://www.bsigroup.co.uk/en/training/environmental-management-iso-14001/

BSI-Calculating your Carbon Footprint: http://www.bsigroup.co.uk/en/training/environmentalmanagement-iso-14001/training-courses/calculating-your-carbon-footprint-training-course/

BSI-Green Deal: http://www.bsigroup.co.uk/en/training/environmental-management-iso14001/Green-Deal-Training-Courses/implementing-a-green-deal-compliant-managementsystem-for-green-deal-advisor-organisations-training-course/

296

Key Terms
x

Electrostatic Precipitator: An emissions control device that can remove very fine particulate
matter from exhaust air using an electrostatic charge.

Emissions: The gases and particulate discharged into the air from various sources, such as
smoke stacks, car exhausts, and industrial vents. These emissions cause air pollution, which
must be controlled to protect the environment and the health of workers and community
members.

Emissions Inventory: A detailed list of the emissions generated by the company, tracked by
work area, type of emission, and risk prevention tactics and emergency response plans.

Greenhouse Gas: gases generated by industry, internal combustion engines, energy

generation, and other sources that is a main cause of climate change.

Ozone Layer: A layer in the Earths atmosphere that contains relatively high concentrations
of ozone (O3). This layer of ozone helps absorb some of the suns harmful ultraviolet (UV)
radiation.

Particulate: Small pieces of solids or liquids suspended in the atmosphere. Particulate can
be natural, such as dust or sea salt, or man-made, such as smoke and soot.

Point Sources: Origination points of emissions release and/or pollution, like incinerator
stacks.

297

The information contained in this document is provided by Verit and while every effort has been made to make the information
complete and accurate and up to date, Sedex makes no representations or warranties of any kind, express or implied, about the
completeness, accuracy, reliability, suitability or availability with respect to the information contained therein. Any reliance you
place on such information is therefore strictly at your own risk. In no event is Sedex liable for any loss or damage including without
limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss profits arising out of, or in
connection with, the use of this document.

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Chapter 3.7

ENERGY &
CLIMATE

Companies should also calculate their carbon

footprint, or record an inventory of greenhouse gases
released as a result of the organisations activities and
that of its supply chain. The carbon footprint can help
identify the best ways to manage and conserve
energy.

Energy & Climate

What does it mean?

Energy is what runs your business, and electricity

and power are critical to the functioning of your
company. Scientists believe that energy generated
by burning fossils fuels such as coal, natural gas and
oil can adversely impact global climate. It is
therefore important to use energy as efficiently as
possible.

A socially responsible company makes sure that none

of its policies and practices create a situation where its
use of energy harms the environment.
This section will help you check whether there a
risk of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure your use of energy is
minimised.

In order to operate, most offices, factories and farms

use electricity. They may also use fuels such as
natural gas, gasoline, wood, diesel oil or propane to
power plant and production equipment and vehicles.
Energy represents one of the major costs associated
with running a business, and the production of energy
has a significant impact on the environment, since
most of the worlds energy is generated by burning
fossil fuels. This produces carbon dioxide (CO2), a
greenhouse gas, which traps heat in the atmosphere.

Benefits
Why should you do it?
Maintaining responsible energy practices will help you
meet legal requirements, protect the environment,
avoid penalties, be more competitive and meet your
customers requirements.

Most scientists believe that the build-up of CO2 and

other greenhouse gases in the atmosphere is causing
global climate change. Clear signs of climate change
include increases in air and ocean temperatures,
widespread melting of snow and ice, and rising sea
levels. A warmer Earth is generally less able to
regulate temperature shifts, so weather patterns
become more extreme and unstable, greatly impacting
important activities, such as agriculture.

There are business benefits, such as:

Given all of these serious environmental impacts from

energy generation and greenhouse gas emissions, it is
critical that a company conserves energy. Companies
should develop a strategy of adjusting and optimising
energy use, using systems and procedures to reduce
energy requirements, and thereby minimising negative
impacts on environment.
All companies need energy to operate.
Reducing your use of energy generated by
fossil fuels (coal, oil and gas) will reduce
the amount of carbon dioxide (CO2)
released to the atmosphere and help
prevent climate change.
A highly effective way to reduce
environmental impact from energy use is
through renewable energy. See the
Renewable Energy chapter for more details
on the topic.
300

Lower utility costs and therefore reduced cost

of production

Ability to attract environmentally conscious

customers

Lower transportation costs as a result of using

more fuel efficient vehicles and other means of
transportation

Improved company reputation and image in

the community

Review the quantity and type of

significant fuels usage within the
organisation and implement
programmes to improve efficiency and
effectiveness. A life cycle approach
should be undertaken to ensure net
reduction in GHG emissions, even
when low-emissions technologies and
renewable energies are considered;

Requirements
What do you need to do?
ETI Base Code
The ETI Base Code does not specifically address
environmental issues, such as energy and climate.
However, there are numerous other international
standards and guidelines that address energy use.

Prevent or reduce the release of GHG

emissions (particularly those also
causing ozone depletion) from land
use and land use change, processes
or equipment, including but not limited
to heating, ventilation and air
conditioning units;

International Standards and Guidelines

; ISO 26000 (2010) contains guidance on both

the sustainable use of resources and climate
change mitigation:
Section 6.5.4, Sustainable Resource Use,
Energy Efficiency, states: An organisation
should implement energy efficiency
programmes to reduce the energy demand of
buildings, transportation, production
processes, appliances and electronic
equipment, the provision of services or other
purposes. Efficiency improvements in energy
use should also complement efforts to
advance sustainable use of renewable
resources such as solar energy, geothermal
energy, hydroelectricity, tidal and wave
energy, wind power and biomass.

Realise energy savings wherever

possible in the organisation, including
purchasing of energy efficient goods
and development of energy efficient
products and services; and
Consider aiming for carbon neutrality
by implementing measures to offset
remaining GHG emissions, for
example through supporting reliable
emissions reduction programmes that
operate in a transparent way, and
carbon capture and storage.

; United Nations Framework Convention on

Section 6.5.5.2.1, Climate Change

Mitigation, states: To mitigate climate change
impacts related to its activities an organisation
should:

Climate Change.

; The Kyoto Protocol to the UN Framework

Convention on Climate Change.

Identify the sources of direct and

indirect accumulated greenhouse gas
(GHG) emissions and define the
boundaries (scope) of its
responsibility;

; Internationally accepted management system

standards, such as ISO 14001, address
environmental responsibility. Also refer to ISO
50001, 2011 for an energy management
system, ISO 14064:2006 for standards on the
quantification, monitoring, and reporting on
greenhouse gases by organisations, and
ISO/DIS 14067 for guidance on the calculation
of a carbon footprint.

Measure, record and report on its

significant GHG emissions, preferably
using methods well defined in
internationally agreed standards;
Implement optimised measures to
progressively reduce and minimise the
direct and indirect GHG emissions
within its control and encourage
similar actions within its sphere of
influence;

301

Policies
(rules)
Your company policies on energy and climate should
include the following commitments:

; Minimising the use of energy generated by

fossil fuels in order to reduce the companys
impact on climate change.

; Improving the energy efficiency of lighting,

Source: National Aeronautics and Space Administration (NASA)

production equipment, site vehicles and other

uses of energy in facility operations.

Achieving and Maintaining

Standards

; Establishing objectives to track and reduce the

companys carbon footprint.

How do you do it?

; Reducing the output of greenhouse gases

from the companys supply chain.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

Procedures
(practices)

An effective energy conservation program is

implemented.

You should assign a responsible person (or

department) to make sure your policies are carried out.
This includes:

Lights, computers and other equipment are

turned off when areas are unoccupied or the
facility is closed.

; Communicating your energy policies to all

managers, supervisors and workers.

Regular maintenance is performed for site

vehicles and facility machinery to maintain
maximum fuel efficiency.

; Developing an energy conservation program

for the company that identifies where energy is
used (energy inventory), sets energy reduction
goals and regularly measures energy use.

Site equipment and vehicles are turned off when

not in use.

; Developing department-specific energy

Heating and air conditioning temperatures are

set to minimise energy consumption.

Employees and managers are aware of energy

use and the companys impact on climate
change.

The company has a program to replace energy

inefficient machines, equipment and vehicles.

Communication with suppliers on energy and

climate issues.

conservation programs. For example, making

sure maintenance employees turn off lights
when completing off-shift work, or making sure
warehouse personnel do not leave site
vehicles running when not in use

; Meeting regularly with managers and

supervisors across the company to oversee
implementation of the energy management
program. Energy conservation will involve all
company operations, so it is important that you
include managers and supervisors from all
departments.

It is important that you also regularly monitor your

processes and controls to make sure they are working.

302

; Performing an annual review to assess

of their responsibilities for saving energy and

decreasing the companys carbon footprint.

effectiveness of the implementation of your

energy management policies and procedures.

; Involve workers or worker representatives in the

Your energy management procedures should include:

energy conservation programme.

; A way to link performance objectives for

; Make sure that training programmes are tailored

employees and managers to the companys

energy reduction goals.

for specific groups of workers. Energy

conservation, lowering greenhouse gas output,
and reducing the companys carbon footprint will
likely vary according to employees individual
responsibilities.

; Programs to determine how the company can

replace or redesign equipment and facilities to
reduce energy use, such as by replacing
outdated equipment and vehicles with energy
efficient alternatives or renovating facilities to
improve the efficiency of lighting, heating and
air conditioning systems.

; Communicate your energy conservation and

carbon footprint reduction requirements to all
suppliers as basic expectations for doing
business with the company.

; Regular inspection and maintenance of

vehicles, production machinery and facility
equipment to make sure they are operating at
peak energy efficiency.

Best Practice

; Performing a greenhouse gas inventory and

Energy and Climate as Part of WorkerManagement Communication

calculating the companys carbon footprint,

then implementing programs to reduce
greenhouse gas output caused directly or
indirectly by the company. Track the carbon
footprint over time to make sure it is
decreasing.

In addition to the many impacts management can have

on the companys energy use and carbon footprint,
workers should be your partners in energy
conservation.

; A process to ensure that products are shipped

Your employees are the ones actually using machines,

adjusting thermostats, or turning lights on and off, and
can help make your energy programs successful.
Work closely with them to find ways to save energy
and reduce greenhouse gas output. For example, the
companys environmental committee could likely
include discussion of energy conservation programs
and reviews of energy management performance in
their regular meeting agendas.

in the most energy efficient way.

; Working with suppliers to decrease the energy

consumption and the carbon footprint of the
companys raw materials sourcing activities.

Communication and Training

Continually look for ways to facilitate simple changes

in behaviour that can go a long way to helping the
company save energy.

You should use the following methods to make sure

your employees are aware of your energy and climate
policies and procedures:

; Provide introductory training programmes for

new managers and supervisors, and newly hired
workers on your companys policies and
procedures on energy and climate.

; Provide all workers with the companys written

policies on energy management.

; Post reminders on energy conservation

throughout company facilities to remind workers

303

used to evaluate and improve the effectiveness of your

programs:

Documentation and Records

1. Monitor and report on trends to identify actual

and potential problems, including:

Meeting standards requires proper documentation.

You will need to keep the following on file on your
company premises:

; Establish and monitor key performance

indicators for your energy conservation
programs so that you can measure their
effectiveness on an on-going basis. For
example, you can track the energy required
per unit of finished goods (kilowatt hours per
unit) or the kilograms of CO2 generated per
product.

; Copy of your companys energy and climate

policies signed by senior management.

; Records indicating the companys energy use

in order to track if the company is reducing
energy consumption.

; Records of internal monitoring or assessments

; Set goals and objectives for meeting the

related to energy and climate, such as for the

efficiency of generators, boilers, air
conditioning, vehicles and other energy using
equipment.

companys energy management and

greenhouse gas reduction requirements. For
example, objectives might be heating is
kept two degrees cooler for one month
longer each year, or the company will use
10% less electricity this year, or we will
replace all light bulbs with compact
fluorescent bulbs within six months. Track if
the company is meeting goals and modify
systems if goals are not met.

; The companys greenhouse gas inventory and

carbon footprint, as well as documentation
tracking progress in reducing these.

; Records of any laws, regulations and customer

requirements that apply to the companys use
of energy and greenhouse gas emissions.

; Regularly review and revise policies and

; Records of general and job-specific training on

procedures to keep them relevant and up-todate.

the companys energy and climate policies.

; Monitor existing controls for energy

management, such as vehicle and
equipment maintenance programmes, to
make sure existing controls are adequate.
2. Investigate problems and analyse why they
occurred. Where data indicates the existence of
non-compliances with your companys energy
and climate policies and customer code(s) of
conduct, the company should investigate these
conditions to determine their causes and what
can be done to address them.

; Where energy usage data indicates that

programmes are not effective or objectives
are not being met, perform a root cause
analysis to determine why, and then make
any necessary changes in your controls.

Monitoring
You will need to check if your energy and climate
policies are being followed and that the controls to
make sure your company is meeting code and legal
requirements are effective. The following steps can be

; Use the results of your regular reviews and

incident investigations to implement new
controls and improve your energy
management programs.

304

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

Common Questions
What are carbon offsets? Can they help my
company reduce emissions?

; Collaborate closely with workers and worker

Carbon offsets are when emissions are reduced in one

place in order to offset emissions in another place.
However, these are not a long term solution for your
company. The trade in carbon offsets has become big
business in many countries, and is one way
companies are able to meet goals and objectives for
reducing emissions, as well as to help meet legal
requirements (or other agreements under international
law, like Kyoto protocols.) A company can buy
emissions reductions in one place, allowing emissions
to continue in some other aspect of company
operations.

committees to find more effective ways of

saving energy and reducing greenhouse gas
output.

; Work with departments, such as

procurement and production, to make sure
that energy efficiency is included in
decisions to purchase new machines,
equipment, and vehicles, and in the
selection of suppliers and contractors.

; Integrate good energy and climate practices

into job descriptions. Make general and jobspecific energy saving requirements, like
turning equipment off when not in use, part
of each workers responsibility.

While you may consider carbon offsets while

developing your companys energy and climate
change programs, always make sure you are taking
more targeted energy reduction actions within the
company. A carbon offset may help you meet a shorter
term goal (for example, while you wait for funding to
become available to buy more energy efficient
equipment), but the most effective way to prevent
climate change, and reduce energy costs, is to
eliminate emissions at the source, conserve energy,
and switch to renewable sources.

; Integrate oversight of good energy and

climate practices into the job descriptions of
supervisors and managers.

Common Audit Non-compliances from the

Sedex Database

How should I set targets for greenhouse gas

reduction?

The following are the most common non-compliances

against this issue. If properly implemented, the guidance in
this chapter can help reduce the incidence of these
problems:

Lack of compliance with local and international

environmental laws and regulations.

Company is unaware of the customers

environmental requirements.

Inadequate system to check environmental

performance against relevant laws and
customer requirements.

It varies by company, but a combination of common

sense, reviewing company operations, taking a
greenhouse gas inventory, and calculating a carbon
footprint will help. For starters, common sense will tell
you that turning off lights, running vehicles less, and
otherwise saving energy will get the company moving
toward greenhouse gas reduction.
Take careful inventory of emissions from each
company business unit and identify specific
opportunities for reductions, and then add up those
opportunities to inform your target. Benchmark with
peer companies, including company responses* to the
Carbon Disclosure Project (CDP)

Inadequate infrastructure for improving

environmental performance.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

*https://www.cdproject.net/enUS/Results/Pages/responses.aspx

305

Companies also have to make strategic decisions as

to what kind of target to set. For example, to what
extent the company should target greenhouse gases
directly or indirectly through electricity use; whether to
set an absolute target or one that is relative to product
units or sales; or whether to target direct emissions or
those of their suppliers. These are important decisions
that depend on the specific characteristics of the
company. In any case, set targets that are challenging
but achievable and that can make a meaningful
impact, with an overall objective of continual
improvement.

Courtesy of the Department of Ecology, State of Washington:

http://www.ecy.wa.gov/climatechange/whatis.htm

306

Case Study
Energy and Climate: Collaborative,
Practical Tools

The agricultural team communicate at farm level to

seek the most effective, practical solutions to drive
improvement. The success of this joined up
approach, and the resource embedded into the
supply base to understand producer challenges
and work to seek solutions is evident through the
savings made to date. These have amounted to
10.4 million of producer savings, and 48,000
tonnes of carbon.

With escalating energy costs, depleting energy

resources and increasing awareness of climate
change, more companies are looking to create a
framework to manage their energy consumption.
Sainsburys is committed to the provision of quality
food to its customers, and recognises that
sustainability of food supply and producers is
fundamental. As such, and in-line with
Government targets of carbon reductions of 80%
by 2050, they have taken an industry leading
position to carbon footprint their UK supply base.

The initiative has been fundamental to us at

Sainsburys for unlocking the door, allowing us to
begin to communicate and build relationships at the
farm base without being intrusive. Natalie Smith,
Agriculture Manager at Sainsburys.

To achieve this, in 2007 Sainsburys partnered

with third party AB Sustain to build an exclusive
carbon footprint model for dairy farmers to the
highest level of Carbon Trust accreditation, the
only model of its kind across the globe.

The concept of carbon is relatively new to

producers, and we have invested heavily in
ensuring we at Sainsburys provide a clear
message and support our farmers, to ensure trust
is built and sustainability, both environmentally and
economically, is achieved at the supply base.

Within just 2 years of data collection carbon

savings had been made, with producers reaping
considerable cost savings. Based on this success,
the initiative was rolled out to multiple sectors,
including beef, lamb, pork, egg and chicken
throughout 2009-2011, with 2012 now seeing the
expansion into produce. All models are accredited,
each specific to each species group, for which
there are now 7.

We are very proud of our achievements to date

with our producers and hope to continue and grow
the initiative going forward.
Sainsburys Supermarket Ltd. is a major UK
supermarket chain with over 900 stores, stocking
approximately 30,000 products, half of which are its own
label. To find out more about Sainsburys, visit
http://www.sainsburys.co.uk.

By implementing the Sainsburys Development

Groups across all sectors, in conjunction with
Sainsburys investment in a specific Sainsburys
Agricultural team focused on building mutually
beneficial relationships with producers, the
initiative now encompasses some 2,700 producers
across the UK. Each producer participates in an
annual carbon footprint assessment, fully funded
by Sainsburys.

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

307

Resources and Guidance

The following organisations, websites and documents provide additional information on energy and
climate:

; United Nations Framework Convention on Climate Change:

http://unfccc.int/key_documents/the_convention/items/2853.php

; UN Kyoto Protocol to the United Nations framework Convention on Climate Change:

http://unfccc.int/resource/docs/convkp/kpeng.pdf

; United Nations Environment Programme, Ozone Secretariat:

http://ozone.unep.org/new_site/en/vienna_convention.php

; United States Environmental; Protection Agency (USEPA), Climate Change:

http://www.epa.gov/climatechange/

; US EPA, Transportation and Climate Change: http://www.epa.gov/otaq/climate/index.htm

; Carbon Disclosure Project (CDP): https://www.cdproject.net
; Greenhouse Gas Protocol (GHG): http://www.ghgprotocol.org/feature/ghg-protocol-basedsector-guidance-product-rules-and-calculation-tools

; European Environment Agency, Climate Change: http://www.eea.europa.eu/themes/climate

; European Environment Agency, Energy: http://www.eea.europa.eu/themes/energy
Signposts to Training
x

United Nations Institute for Training and Research, UNITAR/WTI: ''Trade, Energy and Climate
Change": http://www.unitar.org/event/unitarwti-trade-energy-and-climate-change-2012

United Nations Environment Programme Training Offerings and Events:

http://www.unep.org/training/news_events/index.asp

PECB ISO 26000 Training: https://www.pecb.org/training/iso-26000-and-socialresponsibility?lang=en

BSI-ISO 14001: http://www.bsigroup.co.uk/en/training/environmental-management-iso-14001/

BSI-Calculating your Carbon Footprint: http://www.bsigroup.co.uk/en/training/environmentalmanagement-iso-14001/training-courses/calculating-your-carbon-footprint-training-course/

BSI-Green Deal: http://www.bsigroup.co.uk/en/training/environmental-management-iso14001/Green-Deal-Training-Courses/implementing-a-green-deal-compliant-managementsystem-for-green-deal-advisor-organisations-training-course/

308

Key Terms
x

Energy Efficient: Energy efficient machines, equipment, and vehicles use the least amount
of energy possible to maintain usability and functionality.

Climate Change: Changes in the planets climate attributed directly or indirectly to human
and industrial activity.

Greenhouse Gases: Gases, like carbon dioxide (CO2) and fluorinated gases (halon and
refrigerants), that absorb and re-emit infrared radiation (sunlight), causing global warming and
climate change.

Greenhouse Gas Inventory: A detailed list of all sources of greenhouse gases created by
the company.

Carbon Footprint: The total greenhouse gas output from an organisation, typically listed in
tons of CO2 per year, which is a good gauge of the companys impact on climate change and
global warming.

Carbon Neutrality: Achieving net zero carbon emissions by offsetting the amount of carbon
released by company operations with an equivalent amount captured or sequestered, or by
buying carbon credits to make up the difference.

Carbon Sequestration: Carbon sequestration is the process by which atmospheric carbon

dioxide is taken up by trees, grasses, and other plants through photosynthesis and stored as
carbon in biomass (trunks, branches, foliage, and roots) and soils.

309

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SEDEX SUPPLIER WORKBOOK

Chapter 3.8

RENEWABLE
ENERGY

Renewable Energy

Using renewable energy is an effective

way to reduce a companys carbon
footprint and impact on climate change
and global warming. Renewable
sources of energy, such as wind and
solar, produce no greenhouse gases
when they are used, and should be a
part of any companys pollution
reduction, emissions control, and
energy and climate programs. See the
Energy and Climate chapter of this
workbook for further information.

What does it mean?

Most of the worlds energy is produced using

resources that are limited, such as oil, natural gas
and coal. Since these resources also produce
pollution and contribute to climate change, it is
important that businesses utilise sources of
renewable energy to save money and protect the
environment.

Renewable energy is energy which comes from

natural resources such as sunlight, wind, biofuels and
geothermal heat. This energy is produced from
sources that are replenished naturally, and are called
renewable because they cannot be used up. Although
renewable, the use of biofuels can contribute to
climate change because they generate carbon dioxide
(CO2) when burned. This type of energy is also known
as sustainable energy.

Benefits
Why should you do it?
Using energy from renewable sources will help you
protect the environment, meet customers
requirements, conserve energy, and generate less
pollution.

At a business, renewable energy replaces

conventional fossil fuels in electricity generation,
powering machines and equipment, and for running
site vehicles. There are many ways a business can
make use of renewable energy, which is not only
better for the environment, but can also help the
company save money by reducing on-going energy
costs.

There can also be business benefits, such as:

a) Lower monthly utility bills.
b) More stable energy costs by avoiding price
fluctuations of the oil and gas markets.
c) A more reliable energy supply largely
unaffected by municipal power outages.

Companies can generate renewable power onsite, for

example, by installing solar panels or a wind turbine on
company property. There are also sources of
renewable power that might be available from local
utility companies, such as hydroelectric, solar and
wind-generated power. Companies can maximise their
use of renewable energy by both generating it onsite
and purchasing it from other sources.

d) Improved company image and reputation in

the community.
e) Ability to take advantage of government
benefits, such as tax write offs or other
reimbursements, by switching to renewable
energy.

A socially responsible company makes sure that none

of its policies and practices create a situation where
failing to use renewable energy could potentially harm
the environment.
This section will help you check whether there is a
risk of not meeting these standards in your current
business operations and, if so, how to put controls
in place to make sure your renewable energy
needs are met and fulfilled.

312

; UN Montreal Protocol on Substances that

Requirements

Deplete the Ozone Layer, 1987

What do you need to do?

; The Kyoto Protocol to the UN Framework

Convention on Climate Change

International Standards and Guidelines

; Internationally accepted management system

; ISO 26000 (2010), Contains guidance on both

standards, such as ISO 14001, address

environmental responsibility. See ISO 50001,
2011 for an energy management system.

the sustainable use of resources and climate

change mitigation:
Section 6.5.4, Sustainable Resource Use,
Energy Efficiency, states: Efficiency
improvements in energy use should also
complement efforts to advance sustainable
use of renewable resources such as solar
energy, geothermal energy, hydroelectricity,
tidal and wave energy, wind power and
biomass.

; The ISO Technical Committee (TC) 180 on

Solar Energy has developed a number of
guidance documents on solar energy systems
and components.

; Many countries and municipalities have put in

place regulations to require and encourage the
use of renewable energy sources. The World
Bank (http://ppp.worldbank.org/public-privatepartnership/sector/clean-tech/lawsregulations#renewable) and other
organisations are excellent sources of
information on regulatory requirements.

Section 6.5.5.2.1, Climate Change

Mitigation, states: To mitigate climate change
impacts related to its activities, an organisation
should:
Implement optimised measures to
progressively reduce and minimise the
direct and indirect GHG emissions
within its control and encourage
similar actions within its sphere of
influence.
Review the quantity and type of
significant fuels used within the
organisation and implement
programmes to improve efficiency and
effectiveness. A life cycle approach
should be undertaken to ensure
overall reduction in GHG emissions,
even when low-emissions
technologies and renewable energies
are considered.
Many of the international standards and guidelines
referenced in this guidebook for climate change
and pollution will be useful for your companys
renewable energy programs.

; United Nations Framework Convention on

Climate Change

; UN Vienna Convention for the Protection of

the Ozone Layer, 1985

313

upgrading existing facilities, and

purchasing/replacing equipment, machines,
and vehicles.

Achieving and Maintaining

Standards
How do you do it?

; Working with suppliers to make sure that at

least some of the energy used in the
production of raw materials, parts and
components comes from renewable sources.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

What is Renewable?

You are aware of local requirements and

initiatives on renewable energy.

You meet greenhouse gas emission reduction

goals due to utilising renewable energy.

You consider renewable energy when

constructing or renovating company facilities.

There are no delays to operations due to

dependence on unreliable public sources of
power.

You consider purchasing vehicles that run on

alternative sources when replacing company
cars or trucks.

There are many sources of renewable energy your

company should consider producing or purchasing.
Look at all of your options to make sure you are
maximising benefits to the environment and
generating cost savings. Renewable energy comes
from the following sources:

It is important that you also regularly monitor your

processes and controls to make sure they are working.

Solar: electricity generated by solar panels can

be used almost anywhere to supplement a
facilitys electricity needs. Solar water heaters
can be used to provide hot water for wash
rooms.

Wind: electricity is efficiently generated by wind

turbines. Your company might be able to
construct a turbine on company property.

Biomass: organic matter, such as plant mulch

and waste from food production, can be burned
to generate electricity or converted into
methane gas and other fuels. However, burning
biomass fuels does generate greenhouse
gases.

Hydrogen: hydrogen can be extracted and

used as fuel, often to power vehicles.

Geothermal: taps the Earths internal heat for

electric power production and the heating and
cooling of buildings.

Hydropower: electricity generated from flowing

water, such as hydroelectric dams on a river.

Ocean/Tidal: the action of waves in the ocean

can be tapped to produce electricity.

Policies
(rules)
Your company policies on energy and climate should
include the following commitments:

; Using renewable energy is an important

component of the companys strategy and
programs for environmental protection,
including reducing its carbon footprint.

; The company will use as much renewable

energy as feasible, and continuously increase
the amount of energy used that is derived
from renewable sources.

; Renewable energy will be a critical

component of business decisions on
constructing new company facilities,

314

; Performing an annual review of the

implementation status of your renewable
energy policies and procedures.
Your renewable energy procedures should include:

; A program to install and operate renewable

energy facilities at company sites, such as
solar panels, solar water heaters, wind mills
and geothermal heating and cooling systems.

; A process to determine how much renewable

energy the company can cost-effectively
purchase from other sources. Governments
often provide tax incentives for companies that
purchase at least some of their power from
renewable sources.

Procedures

; Include energy consumption beyond electricity

use in the companys renewable energy
programs. Switch to electric, hydrogen, or
biodiesel vehicles for on-site work, employee
transportation, or transporting finished goods.

(practices)
You should assign a responsible person (or
department) to make sure your renewable energy
policies are carried out. This includes:

; Work with local governments, NGOs, and

industry associations to advance the
companys renewable energy programs.

; Communicating your energy policies to all

managers, supervisors and workers.

; Explore funding sources that could help you

; Conducting an assessment to determine the

upgrade to renewable technology. In many

locations, companies can, for example, deduct
capital expenditure for renewable technology
against taxable profits.

costs and benefits of potential renewable

energy technologies. The assessment should
include factors such as your companys
location and the nature of its facilities.

; Work with raw materials suppliers to expand

; Developing and managing a renewable energy

their use of renewable energy. Share the

lessons and learnings from your own
companys experiences.

program for the company.

; Developing building-specific renewable energy

programs. For example, warehouses with their
large flat roofs are well suited for solar panel
installations, and small office buildings can
easily be heated and cooled using geothermal
HVAC (heating, ventilation, and air
conditioning) systems.

; Meeting regularly with managers and

supervisors across the company to oversee
implementation of the renewable energy
program. Finding appropriate uses for
renewable energy will involve all company
operations, so it is important that you include
managers and supervisors from all
departments.
Source: Technology Review, published by MIT

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Communication and Training

You should use the following methods to make sure
your employees are aware of your renewable energy
policies and procedures:

Documentation and Records

Meeting standards requires proper documentation.
You will need to keep the following on file on your
company premises:

; Provide training programmes for new

managers and supervisors, and newly hired
workers on your companys policies and
procedures on renewable energy.

; Copy of your companys renewable energy

policies signed by senior management.

; Provide all workers, supervisors, and

; Copies of assessments and feasibility studies

managers with copies of your renewable

energy policies.

on different types of renewable energy

technology, as well as the plans to take
advantage of this technology.

; Publicise the companys plans and objectives

for renewable energy company-wide. Update
workers on the companys progress in
switching to renewable technology, such as
through the company intranet, website, or on
company notice boards.

; Energy consumption and cost data that can

demonstrate the cost-effectiveness of using
renewable energy over time.

; Any laws and regulations relevant to company

; Provide on-going training programmes for

operations on energy conservation and

renewable energy, especially for new company
construction.

supervisors, workers, and management on

renewable energy. The renewable energy
technology you install may require some
workers to acquire new skills, such as
maintenance workers.

; Copies of contracts, agreements and

communication on renewable energy
requirements with suppliers.

; Communicate the companys renewable

energy policies and requirements to suppliers.
Discuss with suppliers how they can also
increase their use of renewable energy.

Monitoring
You will need to check if your renewable energy
policies are being followed and that the controls to
make sure your company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:

Best Practice
Renewable Energy Get a Head Start
Not too far into the future, use of renewable energy will
become increasingly enforced by law. Regulations
requiring companies to use renewable energy are
coming as climate change and pollution increase, and
non-renewable energy costs increase. Even now,
many governments require energy conservation and
renewable energy considerations when constructing or
renovating facilities.

1. Monitor and report on trends to identify actual

and potential problems, including:

Your company can get ahead of this trend by

implementing renewable energy solutions now. Doing
so is a good business decision.

316

Establish and monitor key performance

indicators for your renewable energy
programs so that you can measure their
effectiveness on an on-going basis. For
example, you can track the percentage of
electricity from renewable sources of the
total amount of electricity used by the
facility.

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

Set objectives and targets for meeting the

companys renewable energy goals. For
example, an objective could be to convert
one company building each year to have
50% of its energy needs supplied by solar
power, or each year we will increase the
percentage of renewable energy used by
10% until we operate fully on renewable
energy, or within five years the company
vehicle fleet will be powered entirely by
renewable sources of energy. Track if the
company is meeting goals and modify your
implementation plans if goals are not met.

; Work with departments such as facilities,

production and procurement to determine
ways more energy can be obtained from
renewable sources.

; Work with facilities management to

determine the feasibility of renewable energy
sources such as solar and wind at company
sites.

Make sure you regularly review new

options and advancements in renewable
energy. Technology in this area is moving
rapidly, so even if a renewable source was
not feasible last year, it might work now.

Common Audit Non-compliances from the

Sedex Database

2. Investigate problems and analyse why they

occurred. Where data indicates the existence of
non-compliances with your companys renewable
energy policies and customer code(s) of conduct,
the company should investigate these conditions
to determine their causes and what can be done
to address them.

The following are the most common non-compliances

against this issue. If properly implemented, the guidance
in this chapter can help reduce the incidence of these
problems:

; Conduct a regular assessment of your

companys renewable energy programs to
make sure your procedures and other
controls are effective. When your
assessments identify potential issues,
perform a root cause analysis and
implement changes that address the
identified cause(s) of the problem.

; Make sure your assessments examine your

Lack of compliance with local and international

environmental laws and regulations.

Company is unaware of the customers

environmental requirements.

Inadequate system to check environmental

performance against relevant laws and
customer requirements.

Inadequate infrastructure for improving

environmental performance.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

success at generating renewable energy onsite, purchasing it from other sources, and
using renewable transportation fuels. Check
to see if the company is maximising its use
of renewable energy in line with your
policies.

; Use the results of your regular reviews and

investigations to implement new initiatives
and controls, and improve your renewable
energy programs.

317

renewable sources are a good business decision right

now. Also, there might be national or local government
incentives you can take advantage of. Talk to local
government environment offices to see if they offer any
programmes for businesses that could result in
reimbursement or tax write-offs for installing renewable
technology.

Common Questions
Which form of renewable energy is best for my
company?
Solar, wind, geothermal, biomass/biogas, and
hydroelectric are the most common forms of renewable
energy, but you will have to determine which is most
appropriate. While there isnt one form of energy that is
best, different kinds of renewable energy may work
better depending on the climate in which you live. In
the sun-drenched southeast and southwest regions of
the United States, solar energy has a great deal of
potential. In the wetter northwest regions, hydro is a
popular renewable option. Wind power is a feasible
option for many coastal communities in the UK. Your
choice will also depend on the nature of your business.
For example, if you have lots of large industrial sites,
you probably have plenty of roof space for installing
solar panels. But if you operate farms, wind turbines
might work much better.

I can only install so much renewable technology at

my company, and the power company doesnt
really use much in the way of renewables. What
else can I do?
If youve maximised the technology you can use at
company sites, and you know that the local power
company only provides limited renewable energy,
there are other options. First, see if you can work with
other companies in your area. Many companies are
located in industrial zones or parks. See if you can
collaborate with industrial zone authorities and other
companies to share technology. For example, multiple
companies might be able to pool resources and share
a solar or wind farm, or construct a geothermal power
plant to provide power to several businesses. Also,
while you wait for more renewable options at main
company sites, see what you can do for suppliers. If
you work with smallholder farms, for instance, see if
there are ways you can help them buy equipment that
runs on renewable energy. Even one wind turbine
could potentially provide enough power to share
among a couple of smallholders. If your suppliers are
saving on energy costs, you might see cost savings for
your own company.

Your choice can also depend on the local regulatory

and tax environment. Some countries and
communities offer significant tax incentives for
investing in certain types of renewable energy.
There are many diverse forms of renewable power,
and they are all beneficial, so choose the one that is
most cost-effective and works best with your
companys operations.
Are renewables financially competitive?
Yes. The renewable energy sector is increasingly
demonstrating its capacity to deliver cost reductions,
and deployment is expanding rapidly. Non-hydro
renewables, such as wind and solar, are increasing at
high annual growth rates. Costs have been going
down and renewable energy technologies are
becoming cost-competitive in an increasingly broad
range of circumstances. Established technologies such
as hydroelectric and geothermal are often fully
competitive already. Where resources are favourable,
technologies such as onshore wind are nearing full
competiveness. However, economic and cost barriers
remain in some cases. While costs need to decrease
further to make renewables financially possible in a
wider variety of settings, the trend is clear. Considering
that non-renewable energy costs continue to rise,

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Case Study
Biomass Fuels: Innovation and opportunity
There are significant risks to businesses
associated with biodiversity and ecosystem
degradation, such as a lack of natural pollinators
and soil biodiversity, which can lead to serious
human, environmental and economic costs.

Since 1990, Suiker Unie has already reduced

their energy consumption by 42%. For the
remaining 58% of energy consumption, 15%
will be supplied by green gas from our
fermentation plants by the end of 2012.

According to UNEP (United Nations Environment

Programme), farmers and farming communities
have a significant part to play in the promoting of
sustainable livelihoods. UNEP reports that it is
vital for countries to mainstream climate change
issues into national economic and development
plans. Conversion of emissions can reduce
climate change impacts.

In addition to energy savings, the initiative

has opened up a revenue stream for Suiker
Unie as they receive 0.58 per m of green
gas they produce, by supplying the national
grid. Future plans include expanding biogas
production by fermenting residual products
from other business.
We will soon open our second biomass
fermentation plant. Almost 20 million m of
green gas will be produced, which will be
sufficient for 15.000 households. We will then
become one of the largest suppliers of green
gas in the Netherlands.

Dutch sugar producer Suiker Unie had wanted to

prevent sugar-rich wastewater ending up in the
municipal sewer system, and started producing
biogas through anaerobic water-purification. In
addition to financial and energy savings, the
system also reduces CO2 emissions. The initiative
has been rolled out at three of their plants.

Suiker Unie is a producer of granulated sugar and

sugar specialties derived from sugar beets. To find
out more about Suiker Unie, visit their website:
http://www.suikerunie.nl/.

We started thinking how we could create the most

value out of the sugar beet, in a sustainable way,
says Bertram de Crom, Jr., Environment Engineer
at Suiker Unie.
Suiker Unie discovered another opportunity to
produce biogas through fermentation of their
residual sugar beet waste prior to composting.
With government support, Suiker Unie opened
their first biomass fermentation plant in the
Netherlands in November 2011, with a production
capacity of16 million cubic metres (m) per annum
of biogas, which can be fed into the national grid.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

319

Resources and Guidance

The following organisations, websites and documents provide additional information on renewable
energy:

; Kyoto Protocol to the United Nations Framework Convention on Climate Change:

http://unfccc.int/resource/docs/convkp/kpeng.pdf

; United States National Renewable Energy Laboratory: http://www.nrel.gov/learning/

; United States Environmental Protection Agency (US EPA), Clean Energy:
http://www.epa.gov/cleanenergy/

; UNEP, Climate Change Mitigation, Renewable Energy:

http://www.unep.org/climatechange/mitigation/RenewableEnergy/tabid/29346/Default.aspx

; United Kingdom Government, Increasing the Use of Low-Carbon Technologies Policy:

https://www.gov.uk/government/policies/increasing-the-use-of-low-carbon-technologies

; European Environment Agency, Renewable Energy Plans:

http://www.eea.europa.eu/highlights/take-a-closer-look-at

; European Environment Agency, Energy: http://www.eea.europa.eu/themes/energy

; The World Bank, Renewable Energy and Energy Efficiency:
http://web.worldbank.org/WBSITE/EXTERNAL/
TOPICS/EXTENERGY2/0,,contentMDK:22505284~pagePK:148956~piPK:216618~theSitePK
:4114200,00.html

; The World Bank, Renewable Energy Laws and Regulations: http://ppp.worldbank.org/publicprivate-partnership/sector/clean-tech/laws-regulations#renewable

Signposts to Training
x

The European Energy Centre Energy Courses: http://www.euenergycentre.org/training

Green Power Academy: http://www.greenpowerconferences.com/academy/courses

United Nations Environment Programme Training Offerings and Events:

http://www.unep.org/training/news_events/global.asp

PECB ISO 26000 Training: https://www.pecb.org/training/iso-26000-and-socialresponsibility?lang=en

BSI-ISO 14001: http://www.bsigroup.co.uk/en/training/environmental-management-iso-14001/

BSI-Calculating your Carbon Footprint: http://www.bsigroup.co.uk/en/training/environmentalmanagement-iso-14001/training-courses/calculating-your-carbon-footprint-training-course/

BSI-Green Deal: http://www.bsigroup.co.uk/en/training/environmental-management-iso14001/Green-Deal-Training-Courses/implementing-a-green-deal-compliant-managementsystem-for-green-deal-advisor-organisations-training-course/

320

Key Terms
x

Biomass: Energy from plants and plant-derived materials. Wood is the largest biomass
energy resource, but biomass also includes such things as waste materials from agriculture
and forestry, oil-rich algae, methane from landfills, and the organic parts of industrial and
municipal solid waste.

Climate Change: Changes in the planets climate attributed directly or indirectly to human
and industrial activity.

Geothermal Energy: Uses the heat from the earth to generate electrical power or provide
heating and cooling for buildings.

Greenhouse Gases: Gases, such as carbon dioxide, that absorb and re-emit infrared
radiation (sunlight), causing global warming and climate change. Biomass fuels, although
renewable, produce greenhouse gases when burned.

Hydroelectric Power: Uses dams to convert the movement of running water into electricity.
Hydroelectric power is currently the largest source of renewable power in the world.

Renewable Energy: Energy sources that are either inexhaustible (solar, wind) or replenished
over a short period of time (biomass, geothermal) are considered renewable. Also called
sustainable energy.

Solar Energy: Energy from the sun. Passive solar energy is using heat from sunlight to heat
water or a building. Active solar systems convert sunlight to electrical energy using solar
(photovoltaic) cells.

Wind Energy: Energy from wind is captured by wind turbines (wind mills) and converted into
emissions-free electrical power.

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SEDEX SUPPLIER WORKBOOK

Chapter 3.9

BIODIVERSITY

Biodiversity
What does it mean?
Getting involved with biodiversity projects
will link your company with good
environmental practices. A commitment to
environmental improvements is good for
your businesss own credibility and good for
the community in which you are
established.

Biodiversity is a way to describe the variety of life on

earth. It is also a way to measure the health of natural
ecosystems. Many companies, whether directly or
indirectly, rely on natural resources to sustain their
business. Failing to maintain biodiversity and the
health of natural environments can have serious
impacts on the economic sustainability of business.

Biodiversity is the variety of life in the natural world,

from insects to plants to trees. Ecosystems are
communities of plants and animals in a limited, defined
area, such as forests or lakes.
It is important that ecosystems are healthy, since they
provide many natural resources that humans and
businesses need and use. The benefits ecosystems
provide are also known as ecosystem services.
Maintaining biodiversity is critical, since all of the plants
and animals within an ecosystem rely on each other
for survival. Without biodiversity, many of the natural
resources and raw materials used by business and
manufacturing would not exist.
All companies rely on natural resources in all parts of
their business, be it the raw materials used in
manufacturing, or the furniture and paper at the
company offices. Thus sustainable procurement is a
vital part of controlling a company's direct and indirect
biodiversity impacts.

Benefits
Why should you do it?
Paying attention to biodiversity in your company and
its supply chain will help improve the companys image
and environmental programs. There can also be
important business benefits, such as:

These resources have to be used responsibly so that

they are sustainable in the long term and can continue
to be used by the business.

; Strengthening supply chain viability

Maintaining biodiversity in the ecosystems affected by
your companyand the raw materials and natural
resources they provideis essential, since this
supports your business.

; Appealing to ethical consumers

; Ensuring sustainable economic growth

This section will help you check whether there is a

risk of not meeting standards on biodiversity in
your current business operations and, if so, how to
put controls in place to make sure environmental
training standards are met.

; Attracting socially responsible investors

; Avoiding damage to company image and
reputation

324

fuel, flood control, soil, pollinators,

natural fibres, recreation and the
absorption of pollution and waste. As
ecosystems are degraded or destroyed,
they lose the ability to provide these
services;

Requirements
What do you need to do?
The ETI Principles of Implementation require that
member companies commit to ethical trading and
sourcing practices. This includes integrating ethical
trade into company culture and business practices,
capacity building for suppliers, identifying problems in
the supply chain, taking action for improvement, and
transparency in reporting.

Using land and natural resources

sustainably: An organisation's land-use
projects may protect or degrade habitat,
water, soils and ecosystems; and,
Advancing environmentally sound
urban and rural development:
Decisions and activities of organisations
can have significant impacts on the
urban or rural environment and their
related ecosystems. These impacts can
be associated with, for example, urban
planning, building and construction,
transport systems, waste and sewage
management, and agricultural
techniques.

Relevant International Standards and Guidelines

; ISO 26000 (2010) contains guidance on

protection of the environment and biodiversity:
Section 6.5.6, Protection of the
environment, biodiversity and restoration
of natural habitats, states: Since the 1960s,
human activity has changed ecosystems more
rapidly and extensively than in any comparable
period in history. Rapidly growing demand for
natural resources has resulted in a substantial
and often irreversible loss of habitat and
diversity of life on earth [119]. Vast areas
both urban and ruralhave been transformed
by human action.

; UN Convention on Biological Diversity,

1992: An international legally binding
agreement covering the use and conservation
of biodiversity, and that requires countries to
develop and implement strategies for
sustainable use and protection of biodiversity.

An organisation can become more socially

responsible by acting to protect the
environment and restore natural habitats and
the various functions and services that
ecosystems provide (such as food and water,
climate regulation, soil formation and
recreational opportunities) [119]. Key aspects
of this issue include:
Valuing and protecting biodiversity:
Biodiversity is the variety of life in all its
forms, levels and combinations; it
includes ecosystem diversity, species
diversity and genetic diversity.
Protecting biodiversity aims to ensure
the survival of terrestrial and aquatic
species, genetic diversity and natural
ecosystems;
Valuing, protecting and restoring
ecosystem services: Ecosystems
contribute to the well-being of society by
providing services such as food, water,

Source: Marks & Spencer

325

; UN Convention on International Trade in

Biodiversity management involves designing

processes, products, and projects to safeguard
business success while protecting biodiversity. To
start, your company should analyse the impact of
business activities on biodiversity. Review
business practices with particular regard to what
effects they have on the environment generally,
and with a view to minimising impacts on
biodiversity.

Endangered Species of Wild Fauna and

Flora (CITES), 1975: an international
agreement between governments aiming to
ensure that international trade in specimens of
wild animals and plants does not threaten their
survival.

; UN Convention on Migratory Species

(CMS), 2004: strives to strictly protecting
animals threatened with extinction, conserving
or restoring the places where they live,
mitigating obstacles to migration and
controlling other factors that might endanger
them.

All businesses use natural resources like paper

and electricity from fossil fuels, even if they do not
grow crops or source cotton. Examine how the
company can use resources responsibly.

; Equator Principles, 2006: a credit risk

management framework for determining,
assessing and managing environmental and
social risk in Project Finance transactions. The
EPs are adopted by financial institutions and
are applied where total project capital costs
exceed US$10 million. Of particular relevance
is IFC (International Finance Corporation)
Performance Standard 6, Biodiversity
Conservation and Sustainable Management of
Living Natural Resources (2012).

; Internationally accepted management system

standards, like ISO 14001, provide guidance
on how to minimise the environmental impacts
of business operations using a system
approach.

The company is not subject to consumer

boycotts and campaigns by environmental
NGOs.

Economic impact on the local community from

depletion of animal and plant species and of
natural resources on which it depends for
livelihoods and well-being is minimised.

(rules)
Your company policies on biodiversity should include
the following commitments:

How do you do it?

; Regular assessments and plans to evaluate

and minimise the impacts on biodiversity from
your companys buildings, operations and
activities.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

The company is aware of its impacts on the

environment that could result in damage to local
ecosystems from pollution, waste disposal and
unsustainable use of resources, both directly
and indirectly.

Policies

Achieving and Maintaining Standards

; Evaluation of the biodiversity impacts in your

supply chain and working with supply chain
partners and stakeholders to minimise the
biodiversity impacts of their operations.

The company prevents legal infractions and

fines by adhering to environmental regulations.

; Pursuit of biodiversity conservation

opportunities and responsible management of
biodiversity are important company goals.

Cost savings from efficient use of natural

resources and materials.

326

; Responsible stewardship of the natural

should enable management to identify ways to

reduce resource consumption, manage
resources responsibly, and work with suppliers
to do the same.

resources used by the company.

; Integration of biodiversity conservation into the

companys environmental and social decisionmaking.

; A way to understand and comply with any

legal or customer requirements governing
biodiversity.

; Staff and worker involvement in biodiversity

conservation activities and in work habits that
support biodiversity.

; A program to involve workers in the

biodiversity program and to encourage their
participation. This can include paid time to
participate in community projects.

Procedures
(practices)

; A process to identify and align with similar

efforts among other companies in the area and
within the local community that the company
might be able to support.

Management should assign a responsible person or

department to make sure your policies are carried out.
This includes:

; Setting regular objectives and targets for

; Communicating your biodiversity policies to all

improved biodiversity management at the

company and among suppliers.

workers, supervisors, and managers.

; Conducting an assessment to determine the

potential biodiversity impacts of the companys
buildings, operations and activities.
Creating a Biodiversity Action Program

; Creating a biodiversity program for the

Develop a biodiversity action program to help

shape the companys positive impact on the
environment:

company that involves all stakeholders,

including workers, community organisations,
suppliers, and customers.

; Assessing the companys impact on

biodiversity at all levels of the supply chain.
Look at how all company activities impact the
environment and biodiversity.

; Prioritising the risks and impacts on

biodiversity created through the companys
activities.

; Reviewing the biodiversity program regularly

with senior management to determine whether
goals are being achieved, and if there are
gaps or areas where the company could be
doing more.

; Continuously improving the program based on

the results of your reviews.
Your biodiversity procedures should include:

; A process to review the companys biodiversity

impacts and risks, and determine what the
company can do to mitigate them. The process

327

Assess the companys impacts

Assess impacts in the supply chain

Prioritise risks and impacts on biodiversity

Determine actions the company can take to

minimise impact and risk

Develop targets and indicators for

performance improvement

Implement actions and programs

Monitor the program and review progress

Improve the program

Report progress to employees, board of

directors, shareholders, and customers.

; Documents that track company progress on

Communication and Training

biodiversity goals, as well as documentation

on reviews and corrective action if progress is
off track.

You should use the following methods to make sure

your employees are aware of your biodiversity policies
and procedures:

; Copies of agreements with and requirements

for suppliers to uphold the companys
biodiversity requirements.

; Provide all workers with the companys written

policies covering biodiversity conservation.

; Provide introductory training for management

and workers on your companys policies and
procedures on biodiversity. You can do this as
part of training on other environmental topics,
such as energy and climate, renewable
energy, pollution, emissions, waste and water.

; Publicise ways workers can contribute to the

companys biodiversity program, both inside
and outside of the company.

; Communicate with community leaders and

organisations on the companys biodiversity
programs and objectives.

; Communicate the companys biodiversity

program and requirements to suppliers.

; Talk to workers. A businesss staff can provide

a good source of ideas, skills, and commitment
for biodiversity initiatives at its own site, or
externally in the community. Identify the skills
and interests of your workers, which will be of
great use to you to make your biodiversity
action program successful.

Documentation and Records

Monitoring
Meeting standards requires proper documentation.
You will need to keep the following on file on your
company premises:

You will need to check if your biodiversity policies are

being followed and that the controls to make sure your
company is meeting code and legal requirements are
effective. The following steps can be used to evaluate
and improve the effectiveness of your programs:

; Copies of your biodiversity policies and plans.

; Copies of your biodiversity action program,
including identification of the companys
biodiversity impacts and risk assessment.

1. Monitor and report on trends to identify actual

and potential problems, including:

; Copies of all laws and regulations and

; Tracking how your biodiversity objectives are

customer requirements related to biodiversity

conservation. Make sure this list is kept
updated.

being achieved, if targets are being met, and

whether the overall biodiversity goals are

328

; Work with departments such as planning

being realised. Adjust objectives if they are off

track, or if changes in company operations
result in new or increased impacts on
biodiversity.

and facilities to make sure that enhancement

of and impact to biodiversity are included
and considered in decisions regarding site
selection, building construction and
renovations.

; Regularly review and revise your biodiversity

policies and procedures to keep them
relevant and up-to-date.

; Integrate oversight of biodiversity programs

and practices into the job descriptions of
supervisors and managers.

; Establish and monitor key performance

indicators (KPIs) for your biodiversity
program so that you can measure its
effectiveness on an ongoing basis. For
example, you can track the percentage of
company-owned land that is undisturbed
(natural state).

Best Practice Build Partnerships in the

Local Community
There are many ways a company can go beyond
focusing on its own activities to have a positive
impact on biodiversity:

; Make sure you include suppliers and

subcontractors in your assessment of
biodiversity impacts, as well as impacts at
headquarters.
2. Investigate problems and analyse why they
occurred. Where data indicates the existence of
non-compliances with your companys
biodiversity policies and customer code(s) of
conduct, the company should investigate these
conditions to determine their causes and what
can be done to address them.

; Where biodiversity KPIs and assessment

data indicates that programmes are not
effective or objectives are not being met,
perform a root cause analysis to determine
why, and then make any necessary changes
in your procedures and other controls.

Contributing to a local school or community

biodiversity project, like planting trees or
cleaning up a wetland.

Donating expertise to a local biodiversity

initiative.

Working with local environmental NGOs on

projects within the community.

Setting good practices regarding the

environment and biodiversity, and publicising
these to inspire best practice by other
companies.

Common Questions

; Use the results of your regular reviews and

What issues related to biodiversity are particularly

relevant to companies?

incident investigations to implement new

controls and improve your biodiversity
management programs.

All companies rely on resources that depend on

biodiversity. Finding out which biodiversity issues are
specifically relevant to the company depends on
several factors, and will require you to assess
company activities and operations and their
relationship with and impact on biodiversity. Consider
the companys indirect and direct impacts in its
operations, within the supply chain, and through
company use of products and services. Examine the
natural resources and raw materials used by the
company, as well as how company sites impact the
environment (such as through new construction). Find

3. Work with other departments to identify

reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

; Collaborate closely with workers and worker

committees to find more effective ways of
implementing your biodiversity programs and
achieving your objectives.

329

ways the company can reduce impacts or ways that

resource use can be responsible and sustainable.
Are there any policies, practices, and procedures
my company already has in place that address or
relate to any of these issues? Does my company
need to implement new systems?
It is possible that the company already has policies,
activities, or procedures that relate to biodiversity in
some way, perhaps as yet unrecognised. Recycling,
for example, is something the company probably
already does. This is not only a good environmental
practice (and may help save the company money), but
also has a positive impact on biodiversity since it
contributes to saving resources and reducing impact
on environmental ecosystems. Many of the
management systems, you already have in place can
work for your biodiversity program, such as systems
for environmental protection, waste management, and
supplier engagement.

Common Audit Non-compliances from the

Sedex Database
The following are the most common non-compliances
against this issue. If properly implemented, the guidance in
this chapter can help reduce the incidence of these
problems:

Why is the supply chain so important for

biodiversity?
Numerous companies are involved in meeting the
demands of your company for energy, materials,
goods, and services. All of these companies have
impacts on biodiversity, as does how your company
utilises the materials and services provided by
suppliers. Your company could have a significant
impact on making sure that other suppliers and all of
the stakeholders in your supply chain minimise their
impacts on biodiversity (and make positive
contributions to conservation where possible). Use
biodiversity and environmental practices as part of
your criteria for selecting and engaging with suppliers,
which can help ensure security of supply for resources
on which you depend.

Lack of compliance with local and international

environmental laws and regulations.

Company is unaware of the customers

environmental requirements.

Inadequate system to check environmental

performance against relevant laws and
customer requirements.

Inadequate infrastructure for improving

environmental performance.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

Suppliers of raw materials, whose operations involve

significant land use (and potential degradation) such
as mining and farming, are particularly important to
include in your program.

330

Case Study

Cards are to be provided for the employees on the

site, so that when they see different wildlife they
are able to record it, which helps engage interest
from the workforce on the subject of biodiversity.

Biodiversity Enhancement
Biodiversity and ecosystem degradation pose
serious risks to businesses, as all rely on natural
resources and raw materials in some capacity. A
lack of variety and health of the natural
environment can, directly or indirectly, lead to
significant environmental and economic costs.

One of the benefits of this project has been the

use of waterwater utilisation is high up on the
regulators agendawhich would otherwise have
gone to drain or groundwater. This has also
attracted diverse wildlife, says Nigel Youd, Head
of Environment, Noble Foods Ltd.

Noble Foods are committed to the enhancement

of biodiversity across their group, especially at
their Thornton site, a Shell Egg Packing Centre, in
Fife, Scotland.

The site has also been reducing waste through

lean working and recycling general waste (now
zero waste to landfill). We optimise our resource
use, reduce our energy use and our plans are to
not only preserve the biodiversity of the site, but
enhance it.

Noble Foods have dedicated 3 acres of land on

the Thornton site for the development as a
biodiversity enhancement project. The land was
previously monoculture grasslands (the practice of
producing or growing a single crop or plant
species over a far-ranging area and over a large
number of consecutive years), with a SuDS
(Sustainable Drainage System) system covering
part of the area. SuDS are a series of
management practices, strategies, and control
structures designed to efficiently and sustainably
drain surface water, while minimising pollution and
managing the impact on water quality of local
water bodies. The area was chosen for the
biodiversity project because, although not by
design, the SuDS had already attracted wildlife to
the area, including a pair of swans.

Noble Foods Thornton, which is ISO14001

accredited, has shown exemplary standards in
terms of reducing the costs of the business while
reducing their environmental impacts. The Green
Team have also done a great job implementing
environmental targets and policies on site to
encompass many of our Plan A ambitions,
commented Jo Bowen, Foods Plan A Delivery
Manager, M&S.
Noble Foods Ltd. are the leading supplier of fresh eggs
to major UK retailers. To find out more about Noble
Foods, visit www.noblefoods.co.uk.

The sites Green Team Champion consulted with

the local Biodiversity coordinator who provided a
record of the known existing biodiversity in the
area (from the Fife nature record centre). The site
was planted with a range of grass-based seed
mixtures designed for sowing on entry level
stewardship, which contains a mixture of grasses
(including Chewing Fescue, Common Bent and
Smooth Stalked Meadow Grass) to boost food
plants for several butterflies and insects, and once
established, will help protect habitats from sprays
and fertiliser applications.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

331

Resources and Guidance

The following organisations, websites and documents provide additional information on biological
diversity:

; General Information:
x

Ocean News. Biodiversity: What is it all about?:

http://oceanlink.island.net/ONews/OceanNewsReader/ON5.pdf

One World Guide. Biodiversity Guide:

http://uk.oneworld.net/guides/biodiversity?gclid=CL6exIPZxrACFcURNAodJy_NWQ

; United Nations resources:

United Nations Convention on Biological Diversity: http://www.cbd.int/intro/

United Nations Global Diversity Outlook: http://www.cbd.int/doc/publications/gbo/gbo3final-en.pdf

See the following for good practice guides:

http://www.cbd.int/development/training/guides/

United Nations Environment Programme

Ecosystem Management:

http://www.unep.org/ecosystemmanagement/
; Earthwatch Institute, resources on biodiversity for businesses:
x

Earthwatch Institute, Business and Biodiversity Resource Center:

http://www.businessandbiodiversity.org/index.html

Earthwatch Institute, Business Case for Taking Action:

http://www.businessandbiodiversity.org/taking_action.html

Earthwatch Institute, Employee Involvement in Conservation:

http://www.businessandbiodiversity.org/action_involve.html

Earthwatch Institute, Business and Biodiversity. The Handbook for Corporate Action:
http://www.businessandbiodiversity.org/pdf/IUCN-EW-WBCSD%20Handbook.pdf

; Other resources for businesses from NGOs active on biodiversity:

Biodiversity British Columbia: http://www.biodiversitybc.org/EN/main/what/125.html

BSR, Ecosystem Services:

http://www.bsr.org/en/our-work/working-groups/ecosystem-services-tools-markets

Northeast Scotland Biodiversity, Biodiversity Advice for Business:

http://www.nesbiodiversity.org.uk/files/publications/BiodiversityAdviceforBusiness.pdf

Global Environmental Facility (GEF) NGO Network, Biodiversity:

http://www.gefngo.org/index.cfm?&menuid=36&parentid=35

Natural England, Information for Business:

http://www.naturalengland.org.uk/information_for/business/default.aspx

The Economics of Ecosystems and Biodiversity (TEEB): www.teebweb.org/

WBCSD, Ecosystems:
http://www.wbcsd.org/work-program/ecosystems.aspx
http://www.wbcsd.org/publications-and-tools.aspx

332

WRI, Biodiversity:
http://www.wri.org/publication/content/8142

WWF, Living Planet Report:

http://wwf.panda.org/about_our_earth/all_publications/living_planet_report/

WWF UK, Working with Business:

http://www.wwf.org.uk/what_we_do/working_with_business/

Zoological Society of London (ZSL), Business and Biodiversity:

http://www.zsl.org/conservation/about-conservation/business-biodiversity/

Signposts to Training
x

United Nations Convention on Biological Diversity Training Resources:

http://www.cbd.int/nbsap/training/

United Nations Institute for Training and Research (UNITAR), Biodiversity Offerings:
http://www.unitar.org/biodiversity-at-unitar

WBCSD, Business Ecosystems Training:

http://www.wbcsd.org/bet.aspx

WWF UK, Training and MBA:

http://www.wwf.org.uk/what_we_do/working_with_business/become_a_one_planet_leader/

Key Terms
x

Biodiversity: the variability among living things that maintains the health of ecosystems that
provides natural resources and raw materials. Many companies, whether directly or indirectly,
rely on natural resources to sustain their business.

Natural resources: any resource used by a company that is derived from the natural
environment.

Raw materials: the basic material(s) from which a product is made or produced.

Ecosystem: communities of plants and animals in a limited, defined area, such as forests or
lakes.

Ecosystem services: People and businesses benefit from a wide variety of resources and
processes that are supplied by ecosystems. Collectively, these benefits are known
as ecosystem services and include products such as clean drinking water and timber, and
processes such as the decomposition of wastes.

333

334

SEDEX SUPPLIER WORKBOOK

Chapter 3.10

SUPPLIER
SOURCING

Supplier Sourcing
What does it mean?
Supplier sourcing is the system a company uses
to make sure that social and environmental
responsibility standards are met by the suppliers
who provide products and services to the company.

Supplier sourcing, also called Ethical Trading,

means that companies require their suppliers to
meet code of conduct and legal requirements and
that continued or new business with the supplier
should be based on the suppliers performance to
those requirements.

Benefits

Implementation of a supplier sourcing programme

includes: an ethical sourcing policy, contract terms
and conditions, supplier monitoring and verification
procedures, supplier training and capacity building,
and the development and implementation of
corrective action plans.

Why should you do it?

Building responsibility for supplier sourcing into your
business management system will help you stay within
the law, avoid penalties and meet your customers
requirements.

An effective supplier sourcing programme also

helps a company to continuously improve supplier
performance to meet customer requirements.

There can also be business benefits, such as:

a) Improving your companys image and
reputation.

To be successful in this approach, this section:

Describes the possible unintended social

and environmental outcomes of policies
and procedures that are meant to achieve
business objectives.

b) Achieving both your business and social and

environmental responsibility performance
objectives.
c) Improved community relations.

Identifies operational controls to manage or

avoid these unwanted outcomes.

Shows how to monitor and measure the

effectiveness of your controls to ensure
you meet standards.

d) Less time spent on audits.

e) Cost savings through improvements in system
efficiency.

Advantages of Ethical Supplier

Sourcing

This section will help you identify the risks in your

current sourcing processes and, if so, how to put
controls in place to make sure you and your
suppliers meet standards.

Effective supplier sourcing programs

strengthen your companys ability to:
9

Note: The approach described in this chapter is similar to

those described in Labour Management Systems, Health &
Safety Management Systems, Environmental Management
Systems and Business Ethics Management Systems.

Select suppliers who can meet cost,

quality and social responsibility
requirements.

9 Maintain long-term supplier relationships.

336

Continually improve the business and

social performance of your suppliers.

Achieve your social and environmental

responsibility objectives.

Encourage other organisations to adopt

similar policies;

Requirements
What do you need to do?

Carry out appropriate due diligence and

monitoring of the organisations with which
it has relationships;

All of the clauses of the ETI Base Code apply to your

suppliers operations. Sedex recommends that its
members and suppliers adopt a management system
approach to supplier sourcing.

Actively participate in raising the

awareness of organisations with which it
has relationships about principles and
issues of social responsibility; and,

ETI Principles of
Implementation

Promote fair and practical treatment of the

costs and benefits of implementing socially
responsible practices throughout the value
chain, including, where possible,
enhancing the capacity of organisations in
the value chain to meet socially
responsible objectives. This includes
adequate purchasing practices, such as
ensuring that fair prices are paid and that
there are reasonable delivery times and
stable contracts.

The ETI has also established

the following Principles of
Implementation to help
companies use a
management system
approach in applying the Base
Code to its supply chain:
1.

Commitment (policy,
communication, resources, strategy).

Integration with core business practices

(supplier selection, terms of agreements,
internal buy-in).

Capacity Building (worker awareness, effective

industrial relations).

Identifying problems in the supply chain (risk

assessing and sharing, on-going monitoring
and evaluation, worker complaint mechanisms).

Improvement actions (enabling remediation,

time-bound remediation, tackling root causes).

Transparency (fair and accurate reporting,

response to violations).

Other International Standards and Guidelines:

; ISO 26000 (2010), Contains guidance on

promoting social responsibility in the value
chain (Section 6.6.6):
To promote social responsibility in its value
chain, an organisation should:
Integrate ethical, social, environmental
and gender equality criteria, and health
and safety, in its purchasing, distribution
and contracting policies and practices to
improve consistency with social
responsibility objectives;

337

; Providing suppliers with awareness and

capability building training.

Achieving and Maintaining

Standards

; Working with suppliers to ensure corrective

action(s) is taken for identified noncompliances.

How do you do it?

; Considering a suppliers social and

environmental responsibility performance when
awarding or renewing contracts.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

environmental performance of the companys

supply chain.

Company management is aware of the risks in

its supply chain.

Supplier management is aware of customer and

legal social and environmental responsibility
requirements.

Risks in supplier selection and management that

could lead to social and environmental
responsibility issues are identified and
controlled.

Effective processes in place to verify that

suppliers are operating according to legal and
customer requirements.

There are no significant supplier noncompliances that can damage the companys
reputation and business.

; Continually improve the social and

; The policy should be signed by the most senior

manager of the facility or company and
reviewed and updated on a regular basis.

Companies who practice ethical

supplier sourcing require their
suppliers to meet legal and
customer standards for social and
environmental responsibility.

Procedures
(practices)

Suppliers have the internal capability to properly

manage their social and environmental
compliance and to correct deficiencies identified
in customer audits and government inspections.

Management should assign a responsible person (or

department) with documented roles, responsibilities
and authority to make sure your policy commitments
are achieved, that regulatory compliance is maintained
and that social and environmental standards are met.
This includes:

It is important that you also regularly monitor your

processes and controls to make sure they are working.

; Communicating your policies to all managers,

supervisors, and workers who work with suppliers
and contractors.

Policies
(rules)

; Meeting regularly with managers and supervisors

responsible for procurement, supplier
management and other business functions to
oversee the implementation of your supplier
sourcing programme and procedures.

Your company should have a supplier sourcing policy

stating that the company is committed to ethical
sourcing and includes the following commitments:

; The company will require all suppliers to adhere

; Working with supplier management to make sure

to legal compliance and the ETI Base Code (or

equivalent).

that identified social, environmental and

sustainability issues are addressed.

; Monitoring and verification of supplier

compliance.
338

; Monitoring and following up on all reported

assessments and audits performed by company

staff or independent third parties.

concerns and allegations related to supplier

compliance with your companys code of conduct.

; A formal corrective action management process

; Performing an annual review of your supplier

to ensure that suppliers and contractors correct

identified non-compliances in a reasonable time
period.

sourcing programme to make sure it is effective

and achieving your objectives, and to make any
required adjustments.

; A programme to identify supplier training and

awareness needs and to provide the required
training and information.

; A way(s) for workers, managers, suppliers and

customers to anonymously report any concerns
about the implementation of your companys
supplier sourcing policies.

; A process to recognize and provide incentives to

suppliers who demonstrate good social and
environmental performance.

Your supplier sourcing procedures should include:

; Ways to track and understand social and

environmental laws and regulations that pertain to
your suppliers operations.

; A process to identify the risks in your supply chain

that could lead to non-compliance with social and
environmental regulatory and code requirements
or other impacts.

; A formal process to screen and select your

suppliers based on their ability to meet your social
and environmental standards.

; A procedure to communicate your social and

environmental expectations to suppliers and
contractors.

; Contract terms and conditions that commit a

supplier or contractor to compliance with legal
requirements and your companys social and
environmental code requirements.

; Procedures to monitor the social and

environmental performance of your suppliers and
contractors. This should include supplier self-

339

; Communicate the benefits of working toward legal

and code compliance.

; How the supplier can achieve compliance,

including the support offered by your company.

; Explain how the company will work with the

supplier or contractor to identify and correct legal
and code non-compliances.

; Make sure the supplier understands how their

social and environmental performance will be
measured, the incentives for good performance
and the business consequences of noncompliance.

; Communicate your companys whistleblower

policy and procedures on how to report concerns
related to how company employees are carrying
out your supplier sourcing policies.

Best Practice Supplier Scorecard

Measuring the performance of your suppliers
goes beyond evaluating cost, quality and on-time
delivery. Social and environmental compliance
must also be considered.

Communication and Training

Develop a supplier scorecard that grades

supplier performance in meeting both business
and social and environmental responsibility
objectives. Use the scorecard as part of your
regular business reviews with supplier
management.

You should use the following methods to make sure

your employees and suppliers are aware of your
supplier sourcing policies and procedures:
Company employees:

; Provide introductory and on-going training for

supplier-facing company staff on your companys
supplier sourcing policies and procedures,
including their implementation responsibilities.

Documentation and Records

Meeting standards requires proper documentation.
You will need to keep the following on file on your
company premises:

; Provide all company employees with awareness

training on your supplier sourcing policy.
Suppliers and contractors:

; A copy of your supplier sourcing policy signed by

senior management.

; Provide all suppliers and contractors with copies

of your companys code of conduct and social
and environmental policies, and your
requirements for supplier certification, if any.

; A copy of the ETI Base Code or your companys

own supplier code of conduct, if different from the
ETI Base Code.

; Explain how the suppliers commitment to social

; Copies of all applicable social and environmental

and environmental compliance is a requirement

for doing business with your company.

laws related to supplier sourcing.

; Copies of key supplier sourcing procedures, such

; Explain your contract provisions regarding social

as risk identification and evaluation, supplier

selection, supplier self-assessment, performance

and environmental compliance.

340

; Track the compliance status of each of your

verification and auditing, corrective action

management, performance scoring, and the
process for considering social and environmental
performance in determining continued or new
business.

suppliers on a regular basis to identify

suppliers in need of additional assistance or
recognition for good performance. Selfaudits of your supplier sourcing programme
should be performed annually to determine if
you are complying with your policies and
meeting legal and customer requirements.

; Copies of supplier contracts, including signed

commitments to fulfil your social and
environmental responsibility requirements.

; The person or department that oversees

; Copies of supplier audit reports, corrective action

matters related to supplier sourcing should

also be assigned to monitor trends. This
person can then identify and/or anticipate
problems and coordinate with other managers
or departments to develop solutions that
address concerns and prevent them from
recurring.

plans and training records.

Monitoring
You will need to check if your supplier sourcing
policies are being followed and that the controls to
make sure your company is meeting code and legal
requirements are effective. The following steps can be
used to evaluate and improve the effectiveness of your
programs:
1. Monitor and report on trends to identify actual
and potential problems in meeting your
companys supplier sourcing policies, including:

; Regularly review your process in meeting

your supplier sourcing objectives to
determine if you are accomplishing your
goals.

Excerpt from:
Sedex Supplier Self-Assessment Questionnaire (SAQ)

; Review your supplier sourcing procedures,

programmes and monitoring data to make
sure that your controls are working as
intended.
341

established to put in place corrective and

preventive actions.

2. Establish and track key performance indicators

(KPIs) to measure how well your supplier
management processes and procedures are
working on an on-going basis.

; Every environmental incident and near miss

is an opportunity to improve your procedures
and other controls. Incidents should be
investigated to find the root causes and action
plans developed to make improvements that
will prevent a recurrence of the same or similar
incident throughout the business.

; Ask your suppliers to report KPIs for key

compliance areas. Depending on the
identified issues for a specific supplier,
indicators could include:

; If your internal audit finds the same or similar

Total hours worked per worker per

week.

Percentage of workers receiving one

rest day off per week.

Percentage of workers covered by social

insurance.

Percentage of non-compliances
corrected within 30 days.

environmental issues repeatedly, it could

mean that your process to identify and assign
responsibility for putting in place corrective and
preventive actions is not working.

; Similarly, if you have taken action but are still

Number of emissions measurements

exceeding permit requirements.

Percentage of solid waste recycled.

not meeting standards, it could mean that the

corrective actions (controls) themselves are
not effective and need to be improved.
4. Work with other departments to identify
reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

; More than one functional department is often

responsible for supplier selection,
management and performance. Solutions to
problems may involve, for example:

; Regularly survey suppliers to understand any

difficulties or issues they have in
implementing your supplier sourcing policies
and practices.

Pre-screening and risk assessment by

procurement before selection of new
suppliers and contractors.

Production management and engineering for

the day-to-day management of supplier
performance.

Internal and external auditors who monitor

supplier facilities for compliance.

The entire management team for deciding

whether or not to reward additional or new
business to suppliers, based on their social
and responsibility performance.

; Use regular supplier business review

meetings to review KPIs and identify
compliance problems where you may need to
work closely with them to identify sustainable
solutions.

; Measure training effectiveness and

knowledge retention by testing workers
immediately after training, and using follow-up
worker questionnaires three to six months
after training.
3. Investigate problems and analyse why they
occurred. When a situation arises that indicates
the existence of either supplier non-compliance
with your company supplier code of conduct, or
issues with your implementation of the supplier
sourcing programme, the company should
investigate the causes, not just the condition, and
what can be done to address them.

The thing to remember is that to find solutions to

supplier performance problems, you need to work
with all departments and personnel involved.

; Any identified issues should be evaluated to

determine their root cause(s) and action plans
342

A company can take a simple step-by-step approach

to assessing supplier social and environmental
responsibility (SER) risks.

How to Assess Supplier Social and

Environmental Risks
x Map your supply chain, including:

1) Read the human rights and environmental

reports on the web for those countries where
your suppliers are located.

Countries where your suppliers are located

What they supply to you

2) Map your suppliers operations by country.

Volume of business with the supplier

x Understand the legal requirements in the countries
where your suppliers do business.

3) Look for connections between 1) and 2) and

create a list of potential risks for each supplier
based on type of operation and location.

x Know the social and environmental risks of the

4) Ask suppliers to complete a social and

environmental responsibility self-assessment.

suppliers location and type of business.

Please note that Sedex A and AB members can use

the Sedex Risk Assessment Tool for this purpose.

x Ask the supplier to complete a self-assessment,

such as the Sedex Self-Assessment Questionnaire
(SAQ). Evaluate the SAQ for potential compliance
risks.

My company has a certified Quality Management

System. Can we use this system for supplier
sourcing?

x Audit or request audit report of those supplier sites

with potential compliance risks.

Yes. In fact, any formal management system, such as

ISO 9001, could also be used to manage a suppliers
compliance to social and environmental standards
rather than creating a separate supplier sourcing
management system. The risk assessment, regulatory
tracking, training, communication, auditing, corrective
action, and other elements of these systems can very
easily be adapted for supplier management.

Common Questions
Why is it important for my company to make
ethical supplier sourcing part of how we do
business?
A companys supplier sourcing programme directly
impacts the social and environmental practices of its
suppliers. If your company wants to improve working
conditions in the supply chain, you must integrate your
commitments to ethical sourcing into core business
decision-making and management practices. A socially
responsible company understands that nearly all the
commercial decisions made in different parts of the
company can either worsen or improve working
conditions and environmental practices in its suppliers
operations.

A supplier is more likely to comply with legal and code

requirements if those requirements are a formal part of
their commercial relationship with the company and if
on-going monitoring and verification of compliance is
part of the supplier management process. Finally, if the
ability to remain a supplier to your company or to
obtain more business depends on good social and
environmental performance, then the supplier may
begin to manage social and environmental compliance
in the same way that it does cost, quality, delivery, and
other business performance areas.

Do means assigning responsibilities, implementing

your policies and procedures, training, and
communicating.
Check is making sure that you are achieving your
objectives and meeting standards. This involves
measuring performance using KPIs, performing
audits, surveying suppliers and the community,
and other ways to evaluate how you are doing.
Act is taking corrective and preventive actions
when your results are different from your goals,
such as when audits find non-compliances. This
step also includes a regular review by senior
management of your overall system.

How can my company assess supplier social and

environmental responsibility risks?
343

Common Audit Non-compliances from

the Sedex Database

Their entry included building the UKs first sweet

corn-fuelled anaerobic digestion (AD) plantwhich
converts all of the companys green waste into three
times the amount of energy needed to power its
processing facilitieswith the residual energy being
fed into the national grid and residue matter
providing an organic fertiliser, used on their crops,
creating a sustainable, integrated farming production
system. The plant waste saves 50,000 miles of
diesel per year by eliminating waste transportation
and, to date, has offset 125 percent of CO2e.

The following are the most common noncompliances against this issue. If properly
implemented, the guidance in this chapter can help
reduce the incidence of these problems:

x There is no programme in place to assess

the social accountability of suppliers.

x Lack of management awareness of the

social and ethical standard the company
upholds.

Notably, Barfoots also set up a new business,

Barfoots Projects Ltd, to offer project management
advice to landowners interested in building their own
plantsdemonstrating their commitment to
encouraging renewable energy usage.

Sedex provides a document with suggested possible

corrective actions following a SMETA audit. This is
available to Sedex members only in the Sedex Members
Resources section:
Sedex Corrective Action Guidance

Laura Strangeway, Sustainable and Ethical Sourcing

Manager, said, Barfoots have developed a solution
that not only makes them self-sufficient in energy at
their processing factory, but also diverts waste from
landfill. Barfoots is an outstanding example of how to
rise to the challenge.

Case Study

A characteristic of our business model is that we

have close, long-term relationships with our key
suppliers. This means we are closely aligned through
a joint business planning process, which is also
covered through third party auditing and membership
of a variety of environmental stewardship schemes,
such as LEAF, says uentin Clark, Head of Ethical
Sourcing and Sustainability at Waitrose.

Environmental Management Systems

Incentivise Environmental Performance
Companies are responsible for their impact on the
environment and consumption of natural resources
in their business and throughout their global supply
chains. Environmental Management Systems are a
crucial set of policies and procedures companies
use to set business objectives, monitor progress,
boost efficiency and achieve targets.

We had a very large number of entries (circa 200)

reflecting the high levels of activity and motivation in
this area amongst the Waitrose supply base.
Scale is an issue and clarity is essential. Sometimes
you can be the catalyst that starts the change
everybody wanted to make.

Led from the top of the business, Waitrose shares

with its own label supply base common objectives
to reduce the negative aspects and enhance the
positive aspects of its business footprint to
contribute to a more sustainable future,
communicated via their mission The Waitrose
Way. The focus is on three areas that are directly
measurable, namely Carbon Dioxide Equivalent
(CO2e), Waste and Water.

Waitrose is a UK supermarket retailer and a part of the

John Lewis Partnership. To find out more about Waitrose,
visit http://www.waitrose.com/.

In 2012, Waitrose launched the Waitrose Way

Awards to recognise and reward suppliers who
achieve high environmental performance and to
incentivise their environmental management.

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

344

Resources and Guidance

The following organisations, websites, and documents provide additional information on
Environmental Management Systems and Supplier Sourcing guidance:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance (log in to Resources Hub):

https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; Ethical Corporation: http://www.ethicalcorp.com/supply-chains

; Ethical Sourcing Forum: http://www.ethicalsourcingforum.com/
; Ethical Trading Initiative (ETI):

ETI Base Code: http://www.ethicaltrade.org/resources/key-eti-resources/eti-base-code

Principles of Implementation: http://www.ethicaltrade.org/resources/key-etiresources/principles-implementation

Managing compliance with labour codes at supplier level:

http://www.ethicaltrade.org/resources/key-eti-resources/managing-compliance-withlabour-codes-at-supplier-level

ETI Workbook (Edition 2), Ethical trade.a comprehensive guide for companies:
http://www.ethicaltrade.org/resources/key-eti-resources/eti-workbook

; Impactt: http://www.impacttlimited.com/our-work/our-work-part-7
; WWF, Analyzing Supply Risk:
http://wwf.panda.org/what_we_do/how_we_work/businesses/transforming_markets/solutions/
methodology/company_partnerships/analyzing_supply_risk

Signposts to Training
x

ETI: http://www.ethicaltrade.org/training/essentials-of-ethical-trade

PECB ISO 26000 Training: https://www.pecb.org/training/iso-26000-and-socialresponsibility?lang=en

Verit, Verit Systems Approach (VSA): http://www.verite.org/training

United Nations Global Compact, BSR and Maplecroft Quick Self-Assessment and Learning
Tool: http://supply-chain-self-assessment.unglobalcompact.org/

345

Key Terms
x

Ethical Sourcing: The business processes that promote more social and environmental
practices in the supply chain.

Corrective Action: The implementation of a systemic change or solution to make an

immediate and on-going remedy to a non-compliance.

Management System: The framework of policies, processes, and procedures used to ensure
that an organisation can fulfil all tasks required to achieve its objectives.

Preventive Action: The implementation of a systemic change or solution designed to prevent

the recurrence of the same or similar issues elsewhere in the facility.

346

347

SEDEX SUPPLIER WORKBOOK

PART 4:

BUSINESS ETHICS

CONTENTS
Part 4: Business Ethics
4.1 Business Ethics Management
Systems
Definition

351

Benefits

351

Requirements

352

Achieving and Maintaining Standards

353

Common Audit Non-compliances

358

Case Study

360

Resources and Guidance

361

4.2 Anti-Corruption
Definition

365

Benefits

365

Requirements

366

Achieving and Maintaining Standards

367

Common Audit Non-compliances

373

Case Study

374

Resources and Guidance

375

SEDEX SUPPLIER W ORKBOOK PART 4: BUSINESS ETHICS

349

SEDEX SUPPLIER WORKBOOK

Chapter 4.1

BUSINESS ETHICS
MANAGEMENT
SYSTEMS

Business Ethics Management

Systems

Benefits
Why should you do it?

What does it mean?

Building responsibility for business ethics into your

business management system will help you stay
within the law, avoid penalties and meet your
customers requirements.

A Business Ethics Management System is the set

of interdependent policies, processes, and
procedures that a company uses to conduct its
operations legally, ethically and consistent with its
values.

There can also be business benefits, such as:

a) Improving your companys image and
reputation.
b) Achieving both your business and social
responsibility objectives.

A management system also serves to continuously

improve key business processes and outcomes to
meet core strategic goals. A Business Ethics
Management System is how a company effectively
controls risks of bribery, corruption, collusion and
other business conduct issues.

c) Building and maintaining customer trust.

d) Avoiding ethical dilemmas.
e) Cost savings through improvements in system
efficiency.

Conducting your business in an ethical manner is

an important social responsibility objective and a
regulatory requirement. An effective Business
Ethics Management System balances these
requirements with running a successful business.

Advantages of a Management System

approach to Business Ethics
Effective management systems strengthen
your companys ability to:

To be successful in this approach, we:

Describe the possible unintended business

ethics outcomes of policies and procedures
that are meant to achieve business
objectives.

9 Develop suitable policies, plans and

objectives.
9 Implement the appropriate business
process controls.

Identify operational controls to manage or

avoid these unwanted outcomes.

9 Identify the necessary human and

financial resources.

Show how to monitor and measure the

effectiveness of your controls to ensure you
meet standards.

9 Measure and continually improve

performance.

This section will help you check whether there is a

risk of not maintaining essential management
system elements in your current business
operations, and if so, how to put controls in place
to make sure you meet standards.

Note: The approach described in this chapter is similar to

those described in Labour Management Systems,
Environmental Management Systems, and Health & Safety
Management Systems.

351

Other International Standards and Guidelines:

Requirements

; ISO 26000 (2010), Section 6.6, Fair Operating

What do you need to do?

Practices, contains specific guidance on how

companies can manage business practices
risks:

There are no ETI Base Code

Clauses that address business
ethics. However, business ethics
is an essential component of
corporate responsibility and social
compliance. As such, Sedex
recommends member companies
to use a management systems
approach to control business
ethics risks like bribery, corruption, legal compliance,
protecting sensitive information and whistleblower
protection.

Fair operating practices concern ethical

conduct in an organisation's dealings with
other organisations. These include
relationships between organisations and
government agencies, as well as between
organisations and their partners, suppliers,
contractors, customers, competitors, and the
associations of which they are members.
Fair operating practice issues arise in the
areas of anti-corruption, responsible
involvement with public officials, fair
competition, socially responsible behaviour,
relations with other organisations and respect
for property rights.

ETI Principles of Implementation

Although developed primarily to improve conditions for
workers, the ETI Principles of Implementation provide
useful guidance for suppliers who would like to
integrate ethical business practices into their business
management system.
1.

Commitment (policy, communication,

resources, strategy).

Integration with core business practices

(supplier selection, terms of agreements,
internal buy-in).

Capacity Building (worker awareness, effective

industrial relations).

Identifying problems in the supply chain (risk

assessing and sharing, monitoring and
evaluation, worker complaint mechanisms).

Improvement actions (enabling remediation,

time-bound remediation, tackling root causes).

Transparency (fair and accurate reporting,

response to violations).

; FCPA Foreign Corrupt Practices Act

(1998) requires:
Due diligence on customers, the nature
of their business and the types of
financial transactions they undertake.

Relevant ILO Conventions

All of the ILO core conventions are essential for
compliance to good business ethics, as well as
important considerations in supply chain
management.

Conducting senior management

meetings where the risks of bribery and

352

corruption are reviewed, discussed and

recorded.

There is no damage to company reputation as

a result of fraudulent or unfair business
practice.

The same business ethics issues do not occur

repeatedly.

Workers, supervisors and managers are

properly trained on ethical business practices
and responsibilities.

There is a process to protect the confidentiality

of supplier and employee whistleblowers.

Staff training.
Independent monitoring.

; Sarbanes-Oxley Act (2002) requires

companies to protect investors by improving
the accuracy and reliability of corporate
disclosures made pursuant to the securities
laws.

; UK Bribery Act (2010) creates the following

offences:

It is important that you also regularly monitor your

processes and controls to make sure they are
working.

Active bribery: promising or giving a

financial or other advantage.
Passive bribery: agreeing to receive
or accepting a financial or other
advantage.

A systems approach is selfcorrecting. It will enable to you

make sure that all requirements
are being consistently met.

Bribery of foreign public officials.

The failure of commercial
organisations to prevent bribery by
an associated person (corporate
offence).

Policies

Achieving and Maintaining

Standards

(rules)

How do you do it?

Your company should have a business ethics policy or
code that includes the following:

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business. And
you make sure your policies and procedures are
designed to ensure that:

You are aware of legal and customer

requirements.

There is a company or facility policy on

business ethics.

You know the risks in current business ethics

that could lead to compliance issues.

There is a process in place to verify that

workers and management are working
according to legal and customer requirements.

; A written statement that clearly defines your

companys approach to conducting business in a
fair and ethical manner. This should include
commitments to:

Compliance with applicable local and

international laws and regulations.

Adhering to all customer requirements,

including customer-specific codes of
conduct.

Continual improvement in ethical business

performance.

; The scope of the policy should include, at a

minimum, all of the following business ethics
topics:

353

Prohibiting bribery, corruption and

extortion.

Giving and receiving gifts.

Protection of company and customer

intellectual property and information.

Fair business practices (anti-collusion,

advertising).

Protection of identity (whistleblower

protection).

Protecting privacy of personal

information.

Accuracy of financial records and

reports.

allegation reporting process to make sure that

alleged business conduct issues are addressed.

; Monitoring and following up on all concerns and

issues related to the implementation of business
conduct policies and procedures.

; Performing an annual review of your

management system to make sure it is effective
and achieving your objectives, and to make any
required adjustments.

; A formal process for workers, managers,

supervisors, suppliers, and customers to
anonymously report any concerns regarding the
implementation of business ethics policies.
Your business ethics and other business function
procedures should include:

Please refer to the Anti-Corruption chapter that

provides more details on these topics.

; Ways to track and understand business ethics

; The policy should be signed by the most senior

laws, regulations, and customer requirements.

manager of the company.

; A process to identify the risks in the way you

conduct business that could lead to violations of
business ethics standards.

Procedures
(practices)

; A procedure that limits the amount and frequency

of business gifts that employees can give or
receive from suppliers and customers.

Management should assign a responsible person

(or department) with documented roles,
responsibilities and authority to make sure your
policy commitments are achieved, that regulatory
compliance is maintained and that business ethics
standards are met. This includes:

; A formal process to screen and select your

suppliers based on their ability to meet your
policies and business ethics laws and regulations.

; A process describing how the company records,

discloses and reports its business activities and
financial performance.

; Communicating your policies to all managers,

supervisors, and workers.

; A procedure that describes how the company

; Making sure that all managers and employees of

protects its own intellectual property and that of

its suppliers and customers.

the company have clearly defined roles and

responsibilities for carrying out your business
ethics policies.

; Meeting regularly with managers and supervisors

responsible for sales, supplier and vendor
management, advertising, finance, and other
functions, to oversee the implementation of your
business ethics programmes and procedures.

; Working with the individual or department

responsible for the companys business ethics

354

; The ways in which the company protects the

Communication and Training

privacy of personal information of every person

you do business with.

You should use the following methods to make sure

your employees are aware of your business ethics
policies and procedures:

; A formal process for workers, managers,

suppliers and customers to anonymously report
any concerns about the implementation of your
companys policies. The process should detail the
way your company investigates and resolves
reported allegations.

; Provide training programmes for new managers,

supervisors, and newly hired workers on your
companys business ethics policies and
procedures.

; A disciplinary procedure for company employees

; All employees must be provided with on-going

and managers who are found to have violated

company business conduct policies and
standards.

training and information on the business ethics

issues associated with their jobs using classroom
training, team and department meetings, written
materials, and work area postings.

The Anti-Corruption chapter in this workbook describes

in more detail the procedures needed for specific
business ethics issue areas.

; Make sure the training covers all applicable

business ethics laws and regulations.

; Use scenarios in the training that are tailored to

The Headline Test

local issues and culture.

Before making a business

decision, consider how it would
look on the front page of the
newspaper or as the lead story on
the evening news.

; Display business ethics policies and local legal

requirements in areas where all employees will
see them and in a language they understand.

; Communicate the companys business ethics

requirements, as well as the laws and standards,
to the companys suppliers using your website, in
contract terms and conditions, and during periodic
meetings.

; Communicate the companys allegation reporting

procedures and explain how to report concerns
related to how the company conducts its
business.

355

; The topic-specific documents listed in the Anti-

Living Up to Your Companys

Values

Corruption chapter of this workbook.

Always do the right thing in business

dealings with customers, suppliers
or governments, even with pressure
or incentive to do otherwise.

However, do not put yourself in

danger. Report any incidents of
threats or pressure to violate
business ethics policies to your
companys responsible manager.

Remember that your companys

reputation is your most valuable
asset but can be easily lost.

Monitoring
You will need to check if your business ethics policies
are being followed and that the controls to make sure
your company is meeting code and legal requirements
are effective. The following steps can be used to
evaluate and improve the effectiveness of your
programs:
1. Audit your system to identify actual and potential
problems meeting laws and standards. Audits can
be performed by trained and qualified internal staff
or by external auditorsincluding from your own
customers.

; Self-audits, including spot audits, should be

performed regularly to determine if you are
meeting internal standards and both legal and
customer requirements.

Documentation and Records

; Any audit issues should be evaluated to

determine their underlying cause(s) and
action plans established to put in place
corrective and preventive actions.

Meeting standards requires proper documentation.

You will need to keep the following on file on your
company premises:

; The person or department that oversees

; Copies of your business ethics policy signed by

matters related to ethical business practices

should also be assigned to monitor issue
trends. This person can then identify and/or
anticipate problems and coordinate with other
managers or departments to develop
solutions that address concerns and prevent
them from recurring.

senior management.

; Copies of all applicable laws and the facilitys

legal responsibilities for business ethics.

; Copies of key business conduct procedures, such

as anti-bribery, fair advertising, gifts, reporting
allegations of misconduct, and others as
described in the chapter that follows.

What Are Examples of Conflicts of

Interest?

; Management and Board of Directors meeting

minutes, action items, and attendance records.

Company employee has outside

employment or receives compensation
from a supplier, customer or competitor.

Officer or owner of the company has a

major financial interest in a supplier,
customer or competitor.

Conducting business with a company

when someone in your family has a
major role in that company.

; Copies of internal and third party business and

financial audit reports, and inspection reports by
regulatory agencies.

; Records of allegations of business misconduct.

; Business ethics corrective action plans and
reports, including documented evidence of
improvements made.

356

; More than one functional department is often

responsible for business conduct issues.
Solutions to problems may involve, for
example:

2. Establish and track key performance indicators

(KPIs) to measure how well your business
management processes and procedures are
working on an on-going basis.

Procurement staff who manage

contracts with sub-contractors, on-site
contractors and other suppliers.

Finance staff for the practices of

reporting business and financial
performance.

Internal auditors who monitor problems.

Supervisors to monitor the

implementation of policies every day.

; Regularly survey workers to measure their

satisfaction with the implementation of your
business conduct policies and practices.

; Track the number and type of reported

allegations of business misconduct. Establish
goals and metrics for issue areas that may be
in need of improvement.

; Measure training effectiveness and learning

When identifying a solution to a business

ethics problem, work with all departments and
personnel involved.

retention by testing employees immediately

after training, and using follow-up
questionnaires three to six months after
training.

Best Practice

3. Investigate problems and analyse why they

occurred. When a situation arises that indicates
the existence of non-conformance with company
business ethics policies and customer code(s) of
conduct, the company should investigate the
causes, not just the condition, and what can be
done to address them.

Cooperate with Internal Investigations

x Make sure that everyone in your company
cooperates with investigations of alleged
misconduct.
x Be sure to answer any questions from
investigators or regulators openly and
honestly.

; Every allegation and incident is an

opportunity to improve your procedures and
other controls. Every reported issue should
be investigated to find the underlying causes
and develop action plans to make
improvements that will prevent a recurrence.
Actions should also aim to prevent similar
incidents throughout the business.

x Preserve all documents and records that may

be requested as part of an investigation or
audit.

; If your internal audit finds the same or similar

business ethics issues repeatedly, it could
mean that your process to identify and assign
responsibility for putting in place corrective
and preventive actions is not working.

; Similarly, if you have taken action but are still

not meeting standards, it could mean that the
corrective actions (controls) themselves are
not effective and need to be improved.
4. Work with other departments to identify
reasonable solutions. Take care to develop
solutions so that the problem does not recur and
the solution itself does not create other problems.

357

must be at least detailed enough to meet those

requirements.

Common Audit Non-compliances from

the Sedex Database

As for records, you only need to maintain items that

are needed to verify that you are meeting standards,
such as financial records, copies of non-disclosure
agreements, and records of allegations of misconduct
and how they were investigated and resolved.

The following are the most common noncompliances against this issue. If properly
implemented, the guidance in this chapter can
help reduce the incidence of these problems:

My company has a certified Quality Management

System. Can we use this system for business
ethics?

x Inadequate code and system

implementation.

x Inconsistent recordkeeping.

Yes. In fact, any company that has a formal

management system, like ISO 9000 or ISO 14001, can
also use it to manage compliance to business ethics
standards rather than creating a separate business
ethics management system. The risk assessment,
regulatory tracking, training, communication, grievance
process, auditing, corrective action, and other
elements of these systems can very easily be adapted
for business ethics management.

x No general management systems in place.

x Lack of employee awareness of the social
and ethical standards the company
upholds.
Sedex provides a document with suggested possible
corrective actions following a SMETA audit. This is
available to Sedex members only in the Sedex Members
Resources section:
Sedex Corrective Action Guidance

What is Plan-Do-Check-Act?
Plan-Do-Check-Act is a way of describing a
management system to show how risks are controlled
and how processes and performance are continually
improved.

Common Questions
What resources should I make available to
employees who need help thinking through an
ethical dilemma?

Plan means to identify requirements (laws and

standards), evaluating risks that may prevent you
from meeting those standards, and establishing
policies, objectives, and processes needed to
meet standards and achieve objectives.

The best thing you can provide your employees is a

business ethics policy and accompanying procedures
that describe the types of issues that may be
encountered, the companys position on them, and
how to address them. With that, you need to make
available a confidential way for employees to report
allegations of misconduct that guarantee there will be
no reprisal against the person making the report.

Do means assigning responsibilities, implementing

Will a management system require a lot of

documentation and other complexity?
This is a very common concern, but a business ethics
management system does not need to be any more
formal or complex than the system you use to manage
your business. For example, a procedure can be as
simple as a short list of what is to be done, by whom,
and how often. Business and financial regulations
themselves can get quite complicated, so your system

Act is taking corrective and preventive actions

when actual practices differ from your business
ethics policy, such as when audits and allegation
investigations find non-compliances. This step also
includes a regular review by senior management
of your overall system.

358

The government is investigating a company in the

area that my company does business with. The
investigation is looking closely at all documents,
including email. What should I advise my
employees to do?

Why do management systems fail?

x Lack of senior management sponsorship and
commitment.

x Failure to assign a senior manager with

Your employees need to understand that whenever

they create documents and records, including emails,
it is important to always assume that they may be
made public. Your training should instruct them that
they need to cooperate fully with any investigation and
that once written, emails and other documents are
company business records. Their original form should
not be altered.

responsibility and accountability for implementing

the system.
x Companies try to create a system that is more
complicated than their current business
management system.
x Management believes that the business ethics
compliance objectives of the system will conflict
with business objectives.

x The system creates extra or duplicate work that the

company believes does not add any value.

x Senior management fails to regularly measure and

review the effectiveness of the system and make
necessary improvements.

359

Case Study
Business Ethics Management Systems:
Collaborative responsibility

Breaches of conduct are reported through official

processes to the global Compliance & Ethics
team, who monitor and work to resolve issues on
the ground. The Diageo Audit and Risk
Committee will also receive regular reports on
compliance to this policy. Any employee can raise
a concern or report breaches to SpeakUp, a
whistleblowing hotline managed by a company
independent from Diageo. All contact is
confidentially reported to Diageo, who thoroughly
investigates and follows up any issues.

Corruption presents significant risks to

businesses, including poor use of management
time and resources, legal liability and damage to a
companys reputation. By engaging with their
supply chain through meaningful anti-corruption
programmes, firms can reduce fraud and related
costs, enhance their reputation and create a more
sustainable growth platform.
As a global business, Diageo has a large
responsibility to manage standards in their supply
chain. David Lawrence, Diageos Compliance &
Ethics Programme Director, says, Corruption is
an inhibitor to our business, meaning we have to
pay more and it takes us longer to do business,
especially across country boundaries.

For Diageo, progress has been made by working

collaboratively with their peers. This has been via
industry groups such as AIM-PROGRESS, a
forum of consumer goods manufacturers and
suppliers assembled to enable and promote
responsible sourcing practices and sustainable
production systems, and business integrity
coalitions in Nigeria and Cameroon. Through
collaboration, they have formed more influential
movements and raised awareness, often
escalating the issue up to governments in order to
build more robust legal frameworks.

To prevent corruption its vital to have strong,

coherent communication from the top of your
company of your policy, and to implement
systems to support your employees to resist
corruption.
Diageo has a comprehensive human rights policy
that applies to all company, subsidiary and jointventure employees, and to their upstream and
downstream supply chain as far as is reasonably
achievable. Diageos policy is fully endorsed
internally and is sponsored by the Group HR
Director. Each Diageo employee is responsible for
compliance with the Code of Business Conduct
and Diageo policies in addition to all laws,
regulations and industry standards.

Theres nothing so powerful as acting

collaboratively.
Diageo is a global alcoholic beverages company
trading in approximately 180 markets with
manufacturing facilities across the globe. To find out
more about Diageo, visit http://www.diageo.com.

Sedex is always looking for new

case studies. If you have a best
practice example case study that
you would like to be featured,
please send it to
content@sedexglobal.com

360

Resources and Guidance

The following organisations, websites, and documents provide additional information on Business
Ethics Management systems:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance:

http://www.sedexglobal.com/wp-content/uploads/2012/07/SMETA-Best-Practice-Guidance-4Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance (behind member log in):

https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; SMETA Draft Supplement for Environment and Business Practices Process (2010) (behind
member log in): https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; Ethical Trading Initiative (ETI):

Principles of Implementation: http://www.ethicaltrade.org/resources/key-etiresources/principles-implementation

; International Organisation for Standardisation (ISO): ISO 26000

Social Responsibility:

http://www.iso.org/iso/home/standards/iso26000.htm

; UK Bribery Act: http://www.fco.gov.uk/en/global-issues/conflict-minerals/legally-bindingprocess/uk-bribery-act

; US Foreign Corrupt Practices Act: http://www.justice.gov/criminal/fraud/fcpa/

; Sarbanes-Oxley Act: : http://www.soxlaw.com/
; Transparency International Business Principles for Countering Bribery:
http://www.transparency.org/whatwedo/tools/business_principles_for_countering_bribery/1/

Signposts to Training
x

ISO 26000: http://www.ethicalperformance.com/training/course/40

Transparency International: http://www.transparency.org.uk/ti-uk-programmes/training

DuPont Sustainable Solutions Ethics and Compliance Training:

http://www.training.dupont.com/human-resources-training

Global Compliance Compliance and Ethics Courses:

http://www.globalcompliance.com/Training-Education/Courses.aspx

361

Key Terms
x

Corrective Action: The implementation of a systemic change or solution to make an

immediate and on-going remedy to a non-compliance.

Management System: The framework of policies, processes, and procedures used to ensure
that an organisation can fulfil all tasks required to achieve its objectives.

Preventive Action: The implementation of a systemic change or solution designed to prevent

the recurrence of the same or similar issues elsewhere in the facility.

Whistleblower: An informant who exposes wrongdoing within an organisation in the hope of

stopping it. A whistleblower can be from within the organisation itself, from a supplier or
customer, or from the general public. Persons who act as whistleblowers are often the subject
of retaliation by their employers. Typically the employer will discharge the whistleblower.

362

363

SEDEX SUPPLIER WORKBOOK

Chapter 4.2

ANTI-CORRUPTION

Anti-Corruption
What does it mean?

Corruption is making or receiving illegal or improper

payment for goods or services. Examples include
such things as facilitation payments to government
officials to obtain needed government approvals or
kickbacks to customers in order to obtain their
business. Anti-corruption programmes help protect
companies and their employees against these and
other risks of bribery and corruption.

An effective anti-corruption program helps a company

understand its corruption and bribery risks, practice
good due diligence, and investigate and resolve reports
of unethical behaviour by employees of the company.

Benefits
Why should you do it?

Bribery and corruption are issues faced by nearly all

companies. Those faced by small companies may
be very different than the situations that challenge
large multi-national corporations. Whether a
company is large or small, the corruption risks it
faces can fall into one or more of the following
categories:

Establishing and implementing firm anti-corruption

policies and procedures will help you stay within the
law, avoid penalties and meet your customers
requirements.
There can also be business benefits, such as:
a) Improving your companys image and reputation.

Geographic location

Business sector

Use of business partners (contractors,

agents and other intermediaries)

c) Building and maintaining customer trust.

Type of business transaction (for example:

permitting and public procurement)

e) Reduced cost of doing business.

b) Achieving both your business and social

responsibility objectives.

d) Avoiding ethical dilemmas.

If a company engages in or tolerates

corrupt business practices, it will be
widely known to its employees,
customers, suppliers, business
partners, and government officials.

Less pressure to pay bribes.

Note: Please refer to the Business

Ethics Management Systems chapter for
more information on controlling the risks
of bribery, corruption and other business
ethics issues.

This section will help you identify the risks in your

current business processes that could lead to
knowingly or unknowingly engaging in corrupt
business practices and to put in place controls to
make sure bribery and corruption issues are properly
addressed.

365

of political processes, impoverishment of societies

and damage to the environment.

Requirements

It can also distort competition, distribution of wealth

and economic growth.

What do you need to do?

Related actions and expectations

There are no ETI Base Code

Clauses that address corruption
and bribery. However, anticorruption is an essential
component of corporate
responsibility and social
compliance. As such, Sedex
recommends that members
establish programmes and
procedures to control business ethics risks such as
bribery and corruption.

To prevent corruption an organisation should:

Identify the risks of corruption and implement
and maintain policies and practices that counter
corruption and extortion;
Ensure its leadership sets an example for anticorruption and provides commitment,
encouragement and oversight for
implementation of the anti-corruption policies;
Support and train its employees and
representatives in their efforts to eradicate
bribery and corruption, and provide incentives
for progress;

Other International Standards and Guidelines:

; OECD Anti-bribery Convention, establishes

Raise the awareness of its employees,

representatives, contractors and suppliers about
corruption and how to counter it;

legally binding standards to criminalise bribery of

foreign public officials in international business
transactions and provides for a host of related
measures that make this effective.

Ensure that the remuneration of its employees

and representatives is appropriate and for
legitimate services only;

; ISO 26000 (2010), Section 6.6, Fair Operating

Practices, contains specific guidance on how
companies can manage corruption risks:

Establish and maintain an effective system to

counter corruption;

Fair operating practices concern ethical conduct in

an organisation's dealings with other
organisations. These include relationships
between organisations and government agencies,
as well as between organisations and their
partners, suppliers, contractors, customers,
competitors, and the associations of which they
are members.

Encourage its employees, partners,

representatives and suppliers to report
violations of the organisation's policies and
unethical and unfair treatment by adopting
mechanisms that enable reporting and follow-up
action without fear of reprisal;
Bring violations of the criminal law to the
attention of appropriate law enforcement
authorities; and,

6.6.3 Fair operating practices issue 1:

Anti-corruption

Work to oppose corruption by encouraging

others with which the organisation has operating
relationships to adopt similar anti-corruption
practices.

Description of the issue

Corruption is the abuse of entrusted power for
private gain. Corruption can take many forms.
Examples of corruption include bribery (soliciting,
offering or accepting a bribe in money or in kind)
involving public officials or people in the private
sector, conflict of interest, fraud, money
laundering, embezzlement, concealment and
obstruction of justice, and trading in influence.
Corruption undermines an organisation's
effectiveness and ethical reputation, and can
make it liable to criminal prosecution, as well as
civil and administrative sanctions. Corruption can
result in the violation of human rights, the erosion
366

; FCPA Foreign Corrupt Practices Act (1998)

requires:
Due diligence on customers, the nature of
their business and the types of financial
transactions they undertake.

Achieving and Maintaining Standards

How do you do it?

Conducting senior management meetings

where the risks of bribery and corruption are
reviewed, discussed and recorded.

You can best meet standards by using a systems

approach. In other words, you add controls to the
processes you already use to run your business (such
as procurement and permitting) and you make sure your
policies and procedures are designed to ensure that:

Staff training.
Independent monitoring.

; Sarbanes-Oxley Act (2002) requires companies

x There is no pressure to make facilitation payments

to protect investors by improving the accuracy

and reliability of corporate disclosures...

in order to ensure prompt shipment of products from

ports and airports.

; UK Bribery Act (2010) creates the following

x Company employees are not faced with requests

offences:

from customers for favours, gifts or kickbacks in

exchange for orders.

Active bribery: promising or giving a

financial or other advantage.

x You understand the bribery and corruption risks

faced by the company.

Passive bribery: agreeing to receive or

accepting a financial or other
advantage.

x You establish and broadly communicate a company

Bribery of foreign public officials.

x When entering into business relationships with

anti-corruption policy.

partners, agents and contractors, you perform due

diligence to learn their business practices.

The failure of commercial organisations

to prevent bribery by an associated
person (corporate offence).

x You evaluate the companys compliance with the

; UN Global Compact, Principle 10: Businesses

US Foreign Corrupt Practices Act, UK Anti-Bribery

Act and other applicable legal requirements.

should work against corruption in all its forms,

including extortion and bribery.

x There is a procedure for company employees and

external parties to report allegations of bribery and
corruption and no procedure to investigate such
allegations.

x There is no intimidation or punishment of workers for

raising issues of bribery or corruption to company
management.

x Company managers and employees follow the

established anti-corruption policy and procedures.
It is important that you also regularly monitor your
processes and controls to make sure they are working.

367

Policies

Best Practice

(rules)

Due Diligence
Your company policies should include the following
commitments:

When your business depends on the use of

contractors, vendors, agents and other
intermediaries, due diligence is a must. Be sure
to take a risk-based approach when working with
any persons or organisations that provide goods
and services to or on behalf of the company, in
order to identify and control bribery and
corruption risks.

; Written public statement that ethical business

practice is a core value, supported by the owner,
board and senior management, and the company
will not participate in or tolerate any kind of
bribery or corruption

; The company will comply with all legal and

customer requirements concerning bribery and
corruption.

Procedures

; All allegations of ethical misconduct reported to

(practices)

the company will be thoroughly investigated and

addressed.

Management should appoint a responsible person (or

department) to make sure these policies are carried out
through the following practices:

; The company will cooperate with investigations

regarding bribery and corruption conducted by
government agencies.

; Communicating your policies to all managers,

; Company employees will only provide and

supervisors and workers.

accept gifts that are of nominal value and only to

foster goodwill in business relationships.

; Making sure that all managers and employees of

the company have clearly defined roles and
responsibilities for carrying out your anti-corruption
policies.

; Company will demonstrate ethical business

practices through transparent financial reporting.

; Meeting regularly with managers and supervisors

responsible for procurement, finance, sales and
supplier and contractor selection and management
to oversee implementation.

; Working with the individual or department

responsible for the companys bribery and
corruption allegation reporting process to make
sure that alleged issues are addressed.

; Monitoring and following up on all concerns and

issues related to the implementation of anticorruption policies and procedures.

; Performing an annual review of your anti-corruption

programme to make sure it is effective and
achieving your objectives, and to make any
required adjustments.

; Maintaining and controlling all records relating to

allegations and investigations of bribery and
corruption.

368

; A code of behaviour (business conduct) for

managers, supervisors, and employees that aligns
with international anti-corruption standards, local
laws and regulations, and customer requirements.

; A formal process to screen, select and monitor

your business associates, including agents and
suppliers, to assess their compliance with your
policies and business ethics laws and regulations.

Corruption and Bribery Red Flags

Your anti-corruption procedures should include:

Business partner refuses to certify

compliance with anti-bribery legal
requirements.

Business partner refuses to participate

in due diligence regarding relationship
with or interests involving government
officials.

A company or individual does not

appear to be qualified to deliver the
services for which it has been
engaged.

Bribery and corruption reputation of

the country.

The industry sector has a history of

corruption issues.

Potential business partner is related to

a government official with jurisdiction
over your business.

Requests for commissions to be paid

to a third party, or in cash or
untraceable funds.

A desire to keep third party

representation secret.

Relationship problems with other

companies.

; A bribery and corruption risk assessment

process by which the company can understand
and rank risks presented by country, business
sector, business partners, and types of business
transactions.

; Ways to track and understand laws and

regulations on bribery and corruption.

; A formal process for workers, managers,

supervisors, suppliers, and customers to report
through secure and confidential channels any
concerns regarding the implementation of anticorruption policies.

; Methods to ensure confidentiality and prevent

retaliation against workers who raise concerns.

; A procedure that limits the amount and frequency

of business gifts that employees can give or
receive from suppliers and customers and
ensures that such gifts are open and genuine
and not related to a current business transaction.

; Process that specifically prohibits bribes,

kickbacks and other types of corruption, and
includes the consequences for doing so.

; A process for management to investigate

reported allegations of bribery and corruption,
take action and communicate the results to
workers.

; A clear process for discipline and termination

as a result of proven acts of bribery and
corruption.
369

Communication and Training

You should use the following methods to make sure
your employees are aware of your anti-corruption
policies and procedures:

scenarios in the training that are tailored to local

issues and culture.
; Display anti-corruption policies and local legal
requirements in areas where all employees will see
them and in a language they understand.

; Provide training programs for new managers and

supervisors and newly hired workers on your
companys policies and procedures on anticorruption.

; Communicate the companys anti-corruption

requirements, as well as the laws and standards, to
the companys suppliers and vendors using your
website, in contract terms and conditions, and
during periodic meetings.

; All employees must be provided with on-going

tailored training and information on the bribery
and corruption issues associated with their jobs
using classroom training, team and department
meetings, written materials, and work area
postings.

; For allegations of policy violations, make sure

workers know when to report and how to report
(and to whom).

; Make sure the training covers all applicable

business ethics laws and regulations, and use

370

; Training should emphasise the standard way to

apply the anti-corruption procedures so that all
supervisors and managers do it the same way.

Communicate internal regulations to all workers

through postings and by providing workers with
the policies in an employee handbook.

Documentation and Records

Meeting standards requires proper documentation.
You will need to keep on file on company premises:
; Copies of your anti-corruption policy signed by
senior management or the board.
Note: Your company may have a business ethics
policy that covers all ethics issues and is not
specific to anti-corruption.

Best Practice

; Copies of all applicable laws and the facilitys

legal responsibilities for anti-corruption.

Accepting an expensive gift from a supplier

can send the wrong message to both
suppliers and your fellow employees. You
should never give or accept gifts of more
than nominal value. If you are given an
expensive gift, notify your manager and
send it back to the giver with a note
explaining the companys gift policy.

; Copies of key anti-corruption procedures, such

as giving and receiving gifts, facilitation
payments, reporting allegations of misconduct,
and others as needed.
; Records of reporting to Management and Board,
including Management and Board of Directors
meeting minutes, action items, and attendance
records.
; Copies of internal and third party business and
financial audit reports, and inspection reports by
regulatory agencies.

Monitoring

; Records of allegations of bribery and corruption.

You will need to check if your anti-corruption policies are
being followed and that controls intended to make sure
the company is meeting code and legal requirements are
effective. The following steps can be used to evaluate
and improve the effectiveness of your programs:

; Anti-corruption investigations, corrective action

plans and reports, including documented
evidence of improvements made.

; Documentation of any disciplinary proceedings

and actions taken for proven cases of bribery
and corruption, including the following
information:

1. Monitor trends and statistics to identify actual

and potential problems, including:

Name of the employee.

; Regularly review allegations of corruption.

Summary of issue.

; Determine if employees, suppliers and

Results of the committees discussions and

the disciplinary action taken.

Signature of members of the disciplinary

committee

customers are comfortable using the existing

reporting methods.

; Establish and monitor key performance

indicators (metrics) to measure how well anti371

results to improve your company anti-corruption

policies and procedures.

corruption procedures are working (for

example, all allegations of corruption are
investigated and addressed with two weeks
or 90% of employees surveyed understand
the companys anti-corruption policy.)

; Periodic review and revision of anticorruption policies and procedures to keep

them relevant and up to date.

What does Nominal Value mean?

2. Investigate the problem and analyse why it

occurs. If you have evidence that your anticorruption policy (or customers code of conduct)
is not being followed, you should investigate to
find out the root cause, and then address it.

A gift is of nominal value if its cost

or worth is so small that no one
would think that it could influence
the judgment of the person
receiving the gift.

The lack of allegations filed by workers, suppliers and

others may not mean that acts of bribery or corruption
are not occurring. It could simply be that individuals
are not comfortable using your reporting procedure.
You should survey employees and suppliers to
determine if they are comfortable using your existing
reporting channels.
Another common reason given for not reporting
allegations of misconduct is that management does
not respond anyway, so it is just a waste of time.

; Make sure there is a procedure for following up

on corruption allegations and taking action
within a certain timeframe after it is determined
the report is justified.

; Review and analyse common violations of anticorruption rules to identify the root cause of
why they are being broken, and address them,
for example, with employee awareness training
or meetings with suppliers to review your
policies and contract terms.

; Carefully evaluate any threats made to your

employees for failing to make a facilitation
payment or take part in any other corrupt
activity. Serious threat may require involving
law enforcement authorities.
3. Work with other departments to identify
reasonable solutions. Take care to develop
solutions that make sure the problem does not
recur and the solution does not create other
problems.
Analyse issues and suggestions raised during
employee meetings, supplier forums and use the

372

Common Questions

What kind of allegation reporting does my company

need?

Is it ever appropriate to accept a gift or business

courtesy from a supplier?

As with your grievance procedure (see the Discipline

and Grievance chapter), your reporting process must be
anonymous and must protect the person or organisation
making the allegation from reprisal. It is suggested that
a specific individual or department be assigned to
manage the process. This person should have no
responsibilities in purchasing, procurement, contracting,
or managing contractors and vendors.

It depends on the situation. You should not accept

anything of value from a current or prospective
supplier or vendor if there is a competitive bid or
other procurement process pending or underway.
If you work in purchasing or procurement or in a
similar role, you should not accept gifts or business
courtesies from anyone who may seek contracts or
business from the company. However, if you do not
make procurement or contracting decisions and work
with an existing supplier on a regular basis, some
business courtesies may be allowable. For example,
it might benefit your company to have lunch with a
business partner if the lunch is a meeting to discuss
business issues and build working relationships. That
is a valid business purpose. In contrast, it does not
benefit your company to accept gifts of personal
items, such as jewelry.

The reporting mechanism can be a hotline phone

number, email, or a special postal address. Each of
these communication channels must be accessible only
by the designated person or department.
All reports of misconduct should be thoroughly
investigated and the results of the investigation
communicated back to the person or organisation
making the report (if known).

If in doubt, politely refuse the gift or courtesy, or ask

your manager for guidance.

Common Audit Non-compliances from

the Sedex Database

Best Practice

The following are the most common non-compliances

against this issue. If properly implemented, the guidance
in this chapter can help reduce the incidence of these
problems:

In order to reduce the threat of bribery

and corruption in your locale, work
with other companies to adopt the
same or similar anti-corruption policies
and practices.

x Inadequate code and system implementation.

x Inconsistent recordkeeping.
x No general management systems in place.

What does it take to perform due diligence on a

prospective business partner?

x Lack of employee awareness of the social and

ethical standards the company upholds.

The type of due diligence depends on the potential

risk of the engagement. In low risk situations, your
company may decide that there is no need to conduct
any due diligence. In higher risk engagements, due
diligence may include conducting direct questioning of
the prospective partner, indirect investigations, or
general research on proposed associated persons or
organisations. Appraisal and ongoing monitoring of
associated persons, once engaged, may also be
required, depending on the identified risks. Generally,
more information is needed from prospective and
existing companies than from individuals.

Sedex provides a document with suggested possible corrective

actions following a SMETA audit. This is available to Sedex
members only in the Sedex Members Resources section:
Sedex Corrective Action Guidance

373

Case Study

Among the Coalitions 2013 objectives is to sign up

200 additional companies. Meanwhile, with the
assistance of TI, Diageo will continue to provide
training programmes to companies who have already
signed up to the initiative, to help organisations and
companies embed core values such as respect for
the rule of the law, probity, accountability, integrity
and transparency. The Coalition is committed to
supporting organisations to practically and
consistently embed ethics and compliance principles
in their day-to-day business, by creating a platform
for public bodies and private companies to combat
corruption together.

Anti-Corruption: Combat through Alliance

Corruption has financial costs, impacts on
management time and resources, and can impair
reputation. To prevent corruption in your supply
chain, it is critical to focus on capacity building,
implementing systems and building comprehension.
Diageo subsidiary Guinness Cameroon SA was
having multiple issues with corruption, such as
drivers being stopped on the road and asked for
money due to a real or imaginary infringement.

We are convinced that this initiative will make a

difference in Cameroun as we plan for the third phase
of the project when we aim to introduce anticorruption legislation. The results on the ground are
visible with Guinness employees experiencing
significantly reduced levels of interference at airports,
on the roads and at customs.

These were frustrating as employees knew that

paying these bribes was against company policy and
was adding unnecessary complications to doing
business, says David Lawrence, Compliance &
Ethics Programme Director. Diageo decided to use
its position as a leading company in the country to
influence the government to commit to legislate
against corruption.

Diageo is the worlds leading premium drinks business with

its products sold in more than 180 countries around the
world with manufacturing facilities across the globe. To find
out more about Diageo, visit: http://www.diageo.com.

Diageo gained Government sponsorship and brought

together sixty other companies, NGOs and
government bodies to discuss ways of tackling
corruption; who, by signing up to an anti-corruption
pact, formed the Business Coalition against
Corruption in Cameroun. The aim was to better
develop the governments anti-corruption agenda
and it was officially launched in 2011.

Sedex is always looking for new

case studies. If you have a best
practice example case study
that you would like to be
featured, please send it to
content@sedexglobal.com

The event, which included a presentation by

Transparency International (TI), the worlds leading
anti-corruption NGO, made the front page of the
main national newspaper, showing the importance
and impact it had in Cameroun and that corruption
will not be tolerated.
In 2012, a partnership project was initiated between
the German Development Cooperation and the
Business Council for Africa. The projects second
phase sees the establishment of a permanent office
for the Coalition, with the appointment of a project
manager supported with a budget of 200,000. An
event attended by several ministers, including the
Prime Minister, and the Head of Police, marked the
occasion.

374

Resources and Guidance

The following organisations, websites, and documents provide additional information on anti-corruption:

; Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance: http://www.sedexglobal.com/wpcontent/uploads/2012/07/SMETA-Best-Practice-Guidance-4-Pillar-4_0-L.pdf

; SMETA Corrective Action Guidance (behind member log in):

https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; SMETA Draft Supplement for Environment and Business Practices Process (2010) (behind member log in):
https://www.sedex.org.uk/sedex/go.asp?wsfedsession=0

; Ethical Trading Initiative (ETI):

Principles of Implementation: http://www.ethicaltrade.org/resources/key-eti-resources/principlesimplementation

; International Organisation for Standardisation (ISO): ISO 26000 Social Responsibility:

http://www.iso.org/iso/home/standards/iso26000.htm

; UK Bribery Act: http://www.fco.gov.uk/en/global-issues/conflict-minerals/legally-binding-process/uk-briberyact

; US Foreign Corrupt Practices Act: http://www.justice.gov/criminal/fraud/fcpa/

; Sarbanes-Oxley Act: : http://www.soxlaw.com/
; OECD, Good Practice Guidance on Internal Controls, Ethics, and Compliance:
http://www.oecd.org/investment/briberyininternationalbusiness/anti-briberyconvention/44884389.pdf

; Transparency International
x

Business Principles for Countering Bribery:

http://www.transparency.org/whatwedo/tools/business_principles_for_countering_bribery/1/

Business Principles for Countering Bribery Small and medium enterprise (SME) edition:
http://www.transparency.org/whatwedo/tools/business_principles_for_countering_bribery_sme_editi
on/1/

Adequate Procedures: Guidance to the UK Bribery Act 2010: http://www.transparency.org.uk/ourwork/publications/10-publications/95-adequate-procedures-guidance-to-the-uk-bribery-act-2010

; UN Global Compact - Transparency International Reporting Guidance on the 10th Principle against
Corruption: http://www.unglobalcompact.org/docs/issues_doc/Anti-Corruption/
UNGC_AntiCorruptionReporting.pdf

375

Signposts to Training
x

ISO 26000: http://www.ethicalperformance.com/training/course/40

Transparency International: http://www.transparency.org.uk/ti-uk-programmes/training

DuPont Sustainable Solutions Ethics and Compliance Training: http://www.training.dupont.com/humanresources-training

Global Compliance Compliance and Ethics Courses: http://www.globalcompliance.com/TrainingEducation/Courses/Course-Library/Global-Anti-Corruption-Training.aspx

UK Anti-Corruption Forum Anti-Corruption Training: http://www.anticorruptionforum.org.uk/acf/fs/training/

Key Terms
x

Absenteeism: A measure of the number of workers who do not come to work when
they are scheduled to do so.

Conflict of Interest: When someone has competing personal or professional financial interests or obligations
that could wrongly influence that persons decision making.

Due diligence: The investigation or audit of a potential business partner (individual or company) before
entering into a contract, in order to determine the corruption or bribery risks of the engagement.

Facilitation payment: A form of bribery made for the purpose of expediting or facilitating performance of a
routine government action by a public official, such as approval of a shipment from a port or airport.

Nominal value gift: A value so small that it is not likely to influence the judgment or behaviour of the recipient.

Reprisal: Unjust punishment of an individual worker for filing an allegation of bribery or corruption.

376

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Sedex Supplier Workbook

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SEDEX SUPPLIER

Sedex Information Exchange is a unique and

Verit is an international not-for-profit consulting,

As the largest collaborative platform for managing

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

Core to our mission is reducing duplication by enabling

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

Letter from the CEO of Verit

Achieving ethical sourcing requires that knowledge

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

offer this expertise as a member of the Alliance to End

With all good wishes,

How was this workbook developed?

How to Use the Workbook

Part 1: Labour Standards

Part 2: Health & Safety Standards

1.1 Labour Management Systems

1.2 Employment is Freely Chosen

1.3 Freedom of Association &

2.1 Health & Safety Management

2.2 Health & Safety Training

2.3 Emergency & Fire Safety

1.4 Living Accommodation

2.4 Machinery & Site Vehicles

1.5 Children & Young Workers

2.5 Hazardous Materials

2.6 Worker Health

1.7 Working Hours

2.7 Housekeeping & Hygiene

1.9 Regular Employment

1.10 Discipline & Grievance

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

Part 3: Environmental Standards

Part 4: Business Ethics

3.1 Environmental Management

.1 Business Ethics Management

Energy & Climate

3.10 Supplier Sourcing

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

This workbook is a guide to help suppliers understand

Managing the risk of harm or unfair treatment to your

What we are offering is a practical risk-management

Research has shown a direct link for many companies

Verit has developed this workbook in partnership with

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

HOW TO USE THE WORKBOOK

Definition of the issue

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

Achieving and Maintaining Standards

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

Questions, comments, feedback

SEDEX SUPPLIER W ORKBOOK INTRODUCTION

SEDEX SUPPLIER WORKBOOK

1.4 Living Accommodation

Achieving and Maintaining Standards

Achieving and Maintaining Standards

Common Audit Non-compliances

Common Audit Non-compliances

Resources and Guidance

Resources and Guidance

1.2 Employment is Freely Chosen

1.5 Children & Young Workers

Achieving and Maintaining Standards

Common Audit Non-compliances

Resources and Guidance

1.3 Freedom of Association &

Achieving and Maintaining Standards

Common Audit Non-compliances

Resources and Guidance

Achieving and Maintaining Standards

Achieving and Maintaining Standards

Common Audit Non-compliances

Common Audit Non-compliances

Resources and Guidance

Resources and Guidance

.1 Business Ethics Management