Review of SA8000 2008

SA8000:2008 Review of SA8000 2008

• Convenes key stakeholders to develop consensus-based voluntary global social standards. • Created the SA8000 Standard. • Delivers training & technical assistance. • Contracts with SAAS to license qualified organizations to verify compliance with SA8000.

www.sa-intl.org © SAAS 2010 Social Accountability Accreditation Services

• Formerly Accreditation Department of SAI (since 1997). • Incorporated as own organization in 2007 • Primary activities: To accredit and monitor organizations seeking to act as certifiers of compliance with SA8000; To provide confidence to all stakeholders in SAAS accreditation decisions and in the certification decisions of its accredited CBs; To continually improve the SAAS accreditation function activities and systems, in compliance with ISO/IEC Guide 17011 and SAAS Procedures.

www.saasaccreditation.org © SAAS 2010 Perspective:

Impact of Economic Globalization

• Greater expansion of markets • Greater mobility of capital • Shifts in balance of trade • Changes in balance of purchase power (currencies) • Job shifts from developed to developing countries • Competition between countries to be low-cost producers and attract investors • Corporations growing in power and influence (Walmart 288 billion in revenues (2005) vs. Switzerland 251 billion GDP or Ireland 156 billion GDP)

• Increased influence and power of MNCs in the new globalized economy raise expectations both morally and legally • High profile cases of abuse or malfeasance can damage a brand name and reduce market share • Consumers becoming increasingly proactive and demonstrative about companies’ labor practices • Demands that companies operate in a more transparent fashion (consumers and stakeholders) • Realization that it makes a better business

• Compliance with national and international law avoids legal challenges • Concern for human rights addresses consumers’ concerns • Concerns for human rights addresses investors’ interests • Providing a work place which promotes worker rights reduces employee turnover and its associated costs as well as achieves higher productivity

• Express ongoing support for human rights principles and social responsibility both in and outside the organization • Include worker rights considerations in strategic planning and daily business operations • Conduct systematic assessments of worker rights within their operations and those of their business partners and suppliers • Ensure compliance with core labor standards

• The SA8000 Standard is an auditable certification standard based on international workplace norms of International Labor Organization (ILO) conventions, the Universal Declaration of Human Rights and the UN Convention on the Rights of the Child.

• Those seeking to comply with SA8000 have adopted policies and procedures that protect the basic human rights of workers.

• Universal Declaration of Human Rights • Universal Convention on the Rights of the Child

• Various ILO Conventions

Human Rights at Work © SAAS 2010 SA8000 Core Elements

• No Child Labor • No Forced Labor • Health & Safety • Freedom of Association • Freedom from Discrimination • Disciplinary Practices Restricted • Work Hours • Compensation to Meet Basic Needs • Management System for Continuous Improvement.

See standard at www.SA8000.org Human Rights at Work © SAAS 2010 SA8000: Benefits for Employers

• Gains in quality & productivity. • Higher employee retention. • Better relations with workers, trade unions, NGOs, customers. • Effective management systems. • Enhanced brand & reputation. • Increased attractiveness to global buyers.

• Fewer injuries & accidents. • Adherence to labor laws. • More awareness of labor rights. • Enhanced opportunities to organize. • Higher compensation. • Better communications with management.

Human Rights at Work © SAAS 2010 AUDITING

• Audit : systematic, independent and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which audit criteria are fulfilled (ISO19011: 2002)

Open System

3rd Party

Independent Verification

Audit Company Company

Auditors must interpret situations in proper context in order to assign the correct level of non conformity and base their decisions on:

SA8000 standard requirements Laws and international norms Input from external and internal sources Industry/sector knowledge Experience Personal values and bias Facts

16 © SAAS 2010 Certification Bodies Accredited by SAAS

• SGS • Bureau Veritas • Det Norske Veritas • Intertek • TUV Nord • TUV Rheinland • CISE • RINA • STR • Eurocert • ALGI • BSI • TUV Sud • ABS • APCER • LSQA • LRQA • IQNet • HKQAA © SAAS 2010 SA 8000 ELEMENTS

1. Child Labor 2. Forced Labor 3. Health and Safety 4. Freedom of Association & Right to Collective Bargaining 5. Discrimination 6. Disciplinary Practices 7. Working Hours 8. Compensation 9. Management Systems

• SA8000:2001 was redrafted and released in 2008 for implementation by 2010.

• Idea was not to weaken the standard, but to clarify and strengthen it.

• Attempt to make the language of the standard conform to ILO conventions, and other codes, such as the ETI base code and the JO-IN common code.

• New language clearly sets forth the standard’s larger purpose: “to…protect and empower all personnel within a company’s scope of control and influence”

• This language leaves no doubt that everyone employed by the company – within their scope of control and influence – direct-hires, suppliers & subcontractors, sub-suppliers, and home workers, are covered by the standard.

• Under SA8000 2008, industry standards must be complied with, in addition to national laws.

• Some of the newly added international instruments that the revised standard cites include: o ILO Conventions 131 (Minimum Wage Fixing), 169 (Indigenous & Tribal Peoples); 183 (Maternity Protection); the ICESCR; and, the ICCPR.

• SA 8000 policies • Control of Suppliers • Management Review Homeworkers • Company Representatives • Response to concerns of Worker Representative employees and corrective Health and safety action system • Management Outside Communication representative • Record maintenance • Planning/Implementation Training Monitoring activities (audits )

• The term personnel is used throughout the standard, and therefore warrants a definition. Personnel covers all employees and contract workers of a company, including: • All levels of management, directly- hired workers, home workers, and workers hired through employment agencies.

• Workers are distinguished from the more expansive definition of personnel.

• Workers only include non-management personnel.

• No child labor (under 15) should be employed with following exception Children above age of 14* attending school may do “light work” under specific conditions: Two hours per day maximum No night work No exposure to hazardous conditions Total hours not to exceed ten per day from door to door No work on Sundays or holidays • Young workers must also be protected from harm

*ILO Convention 138 Article 7

• The developing-country exceptions under ILO Convention 138 that are cited in the 2001 SA8000 are eliminated in the 2008 standard.

• This was due to the fact that very few countries have taken the ILO exception.

• 1.2 Unlike the 2001 standard, SA8000 2008 requires companies to have written procedures for the remediation of child laborers. This was done in order to clarify and improve auditability.

• Companies must also provide financial support to enable children to attend and remain in school

• SA8000 2008 is clearer that young workers may be employed, but only outside school hours when subject to compulsory education laws. • Young workers cannot work more than 8 hours per day, and never during night hours. • Light work for children no longer permitted.

• SA8000 2008 adds further detail to the situations a company cannot expose children or young workers to:

• Situations that are hazardous or unsafe to their physical and mental health and development.

• Company must effectively communicate child labor policy to workers and interested parties

• Company must have procedures to verify age such as: • National ID card • School records • Birth certificate • “Family book” • Medical records

• Company must have a remediation plan in place

• Should child labor be used the company must have specific procedures to control use of children and assure proper protection within allowable guidelines

• Interviews Children Cambodia Workers Trade Unions and NGOs • Policy • Visual • Pay records • Medical records • Birth certificate or ID • Schooling effectiveness Child interview Records

Courtesy Jon Warren - Photographer

• Company shall not engage in, nor support use of forced labor

• Company shall not use “forced” deposits

• Worker has right to work • Freedom of movement and choice in workplace • Freedom from menace • Freedom to resign Courtesy of Dara O’ Rourke • Freedom from pregnancy testing

• The definition of human trafficking should be read in conjunction with Section 2 of the standard – Forced & Compulsory Labor.

• Companies and their suppliers are prohibited from withholding any part of any personnel’s salary, benefits, property, or documents to force them to continue working for the company. • The 2001 standard required only that a company prohibit the lodging of deposits or identity papers.

• SA8000 2008 makes explicit the right that personnel can leave the workplace premises at any time after the standard workday (this is a partner to ‘overtime must be voluntary in 7.3).

• Also more explicit: Workers are also free to terminate their employment as long as they give reasonable notice to their employer.

• Company holds passport or working papers Beware the “voluntary letter of agreement” • Worker is not given a copy of their contract • Company holds first month salary as a deposit • Company requires worker to pay for job training • Company uses threat of termination as a “tool” for ensuring worker compliance Worker may sign termination letter as condition of employment • Company requires worker to pay recruiting fee

• Worker contract • Security guard contract • Payroll records • Interviews Worker NGO and Trade Unions Security guards • Recruiting policies and procedures • Hiring and termination documents

*Page 17 B guidance © SAAS 2010 HEALTH & SAFETY

• The company shall provide for a safe and healthy work environment • A senior management rep will be appointed to be accountable for implementation of standard elements • Company shall ensure that all employees receive regular and recorded safety training • Company shall establish methods to detect, avoid and respond to threats to health and safety of workers • Company to provide clean bathrooms and access . to potable water and adequate food storage © SAAS 2010 Health & Safety 3.3

• SA8000 2008 contains added details with respect to training personnel on health and safety: These include on-site instruction and job-specific instructions. Additionally, the instructions must be repeated in cases where accidents have occurred.

• Companies are now required to maintain written records of all accidents that occur in the workplace and in company- controlled property. (3.4)

• Companies must also provide, at their expense, personal protective equipment to personnel and first aid treatment. Additionally, companies must help workers obtain follow-up medical treatment. (3.5)

• SA8000 2008 requires companies to ascertain the risks to new and expectant mothers arising out of their work activity.

• Companies must also take steps to minimize the risk of injury to expectant mothers.

*Note: these provisions are partnered in prohibition of pregnancy tests in 5.4.

• This new provision adds the important requirement that all personnel have the right to remove themselves from imminent serious danger without seeking permission from the company.

Medical Risk assessment Training •Treatment availability •Identification •Classroom •Systemic problems •Preventive action •On the job •Records •Periodic •Application Chemicals Equipment Safety •Controls for use •Needle guards Working environment •Storage •Belts •Lighting •Labelling •Boilers •Temperature •Application •Wiring •Airborne particulates •MSDS sheets •Maintenance •Crowded areas •Flammables •Signage •Cleanliness PPE Process Control •Provision •Safety representative •Adequacy •Procedures •Use •Records © SAAS 2010 Health and Safety Most Common Weaknesses

Inadequate PPE or lack of use Management oversight •Climate often a problem •Not systemic •Lack of enforcement •Short term focused •Proper equipment expensive •Reactive •Not root cause based

Safety Training Fatigue related injuries •Not reinforced •Excessive hours related •Not updated •Repetitive functions •Not practiced •Broken machine guards •Not effective •Productivity drivers

• Accident log • Mask filter • Ambient replacement records measurements • Medical treatment • Broken needle records control log • Sanitation inspection • Fire Drill log records • First aid kit log • Training records • Health and safety • Medical personnel risk analysis qualification records • Health inspection log • Local inspection reports

• The company shall respect the worker’s right to form and join trade unions • When these rights are restricted by law, the company shall facilitate parallel means of independent and free association • Company shall ensure that representatives of such personnel have access to members and are not subject to discrimination

• Are worker representatives elected by workers without influence by management? • Are workers aware of representative’s role and the process? • Is there any evidence of threat or intimidation against organizers? • Are there signs of retribution by company? Fines, increased quotas, terminations

• Defined as a worker chosen to facilitate communication with management on all matters relating to SA8000.

• Should be read in conjunction with Paragraph 9.3: SA8000 Worker Representative.

• No trade union present A trade union is not required Workers can choose to elect a representative(s) Role is to provide a communication bridge between management and workers Not empowered to negotiate on behalf of workers Role of facilitator and must be trained

• Trade union present Workers may or may not elect worker representative since they are represented Election, if implemented, should be conducted within union structure Such a representative would normally work within the union system – not a competition Dependent upon worker desires

• Defined as voluntary associations of workers whose aim is to maintain and improve their terms of employment and workplace conditions.

• Defined as labor contracts negotiated between an employer, or a group of employers, and one or more worker organizations, which specify the terms of employment.

• All personnel have the affirmative right to form, join, and organize trade unions, and to bargain collectively. • Company must effectively inform personnel they are free to join T.U. of their choice and guarantee no retaliation from the company. • Explicit prohibition of co. interference in the formation of worker orgs, their activities, and collective bargaining.

• The 2008 standard eliminates the “parallel means”. The meaning is same, but clarifies it is workers’ choice . Where FoA & CB are restricted by law, company must allow workers the right to freely elect their own worker representatives. • It is important to note that in places such as China, such informal, parallel organizing is not illegal, just not with the same protections the ACFTU has.

• Worker interviews • Worker representative • Management review • Worker meeting minutes • NGO and trade union interviews • Company actions taken to improve worker conditions • Collective agreements

Governments •Union may impede investment in economy •Potential obstacle to government control •Global competitive disadvantage

Factories and farms •Increase in wage and benefit expense •Impose production constraints increasing costs •Reduce competitiveness

MNCs •Increase price for products •Increase potential for supply disruption

• The company shall not engage in, or support, discrimination in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, age. • The company will not interfere with personnel rights to observe practices related to social, religious or political identity • The company shall not allow sexually abusive behavior

• The 2008 standard introduces a new prohibition requiring companies to abstain from testing women for pregnancy or virginity

Discrimination refers to any distinction, exclusion, or preference which has the effect of nullifying or impairing equal opportunity or treatment. It inherently denies equal and respectful treatment for all workers.

The DICHO TOMY

Negative Positive Denial of benefits Designed to protect Denial of jobs disadvantaged groups Denial of opportunities © SAAS 2010 Discrimination Sectors

Gender based Physically challenged •Maternity •Blind •Sexual harassment •Deaf •Job restrictions •Lower pay levels Minorities Sexual orientation •Race •Caste Union organizing •Religion

• Arbitrary pregnancy testing to deny women employment • Women denied equal benefits and opportunities • Manager distribution not reflective of workplace demographics • Retribution for union activities • Job applicant criteria based on physical characteristics (want ads)

The company shall not use improper disciplinary procedures . Physical punishment Threats of termination Workplace intimidation Fines and pay deductions

•Late for curfew Fines •Poor workmanship •Failure to follow procedures •Failure to meet quota •Talking during work shift •Smoking in unauthorized area •Breaking equipment

Acceptable When…..

1. Fines are part of national law, related regulations and labor agreements 2. Fines are not retained by the employer

Personnel shall not be required to work in excess of 48 hours per week with one day off per week Personnel shall not work overtime in excess of 12 hours per week “Not on regular basis” Always paid at premium rate Always voluntary

• 12 hours is high end of overtime limits – not a norm • 12 hours per week overtime acceptable for industry peak periods • Hour averaging is not acceptable • Short term excessive hours OK if action plan is implemented and verified • Company must demonstrate viability of plan • Company must manage the overtime process

• SA8000 2008 requires companies to provide personnel at least one day off following six consecutive days of working. Companies can deviate from this rule as long as two conditions are met: –1) National law must allow work time to exceed this limit; and, –2) A freely negotiated collective bargaining agreement must be in place that allows work time averaging. © SAAS 2010 Working Hours 7.3

• The requirements are not new in this clause, but we hope stated more clearly.

• In general: 2 clauses allow flexibility, provided a freely negotiated CBA is in place (7.2 and 7.4).

• Clause 7.1: respect for public holidays was added.

• Definition of a normal working week is clarified and other language moved into lower clauses (7.3).

• Increase capacity Capital investment • Machines • Dormitories BUYER • Canteen • Flexible work force • Sub contract work • Process redesign • Extend production period

SUPPLIER

Wages should be sufficient to meet basic needs and provide discretionary income. market basket survey determine minimum wage/industry wage norm review records for average family size consult NGOs and workers method of payment wage test of “reasonableness” Deductions are legitimate and accurate

• SA8000 2008 explicitly states that a company must respect the right of personnel to a “living wage”. • This statement is intended to place basic needs wage calculations into context (e.g. in some countries it’s not possible to assume two wage earners) • The committee also decided the definition of a living wage has seen emerging consensus around: a basic needs wage and discretionary income.

• Like SA8000 2001, the 2008 standard prohibits companies from deducting wages for disciplinary purposes.

• However, exceptions to this rule apply when two conditions are met: 1) when national law permits such deductions; and 2) when a freely negotiated collective bargaining agreement is in force.

• SA8000 2008 requires companies to ensure that all personnel’s wages and benefits are detailed clearly and regularly for each pay period, and must be in writing.

• Wages must be: Understandable to workers Paid in a convenient manner Paid in a timely and regular fashion Accurately calculated Paid in accordance with contract At least equal to minimum or industry wage

• Review production records Compare with quota • Line quotas vs personal quotas • 100% quota equals at least minimum or industry wage Production orders and output are equal Time cards vs. payroll records • Verify in interviews • Check on overtime hours • Payroll records Sample worker payments for accuracy Concentrate on bonus, overtime and deductions Payment of social insurance Bonus systems (team and individual)

• Consult with NGOs and unions • Any dispute with the wage calculation should be substantiated with analysis or alternative data sources

• Cross-check Full Compliance with SA8000 • Where free association and collective bargaining are effective, unions may be able to verify that the wage meets basic needs

• Adjust numbers for inflation • Determine cost of living from workers • Determine regional differences • Determine workers’ net wage (subtracting out taxes, union dues and health insurance) • Verify quality of data (ex. interview workers, labor experts and social workers about family size) • Deductions for room and board

• Rent • Compare an average • Food for these items • Schooling based on interviews • and compare against Lunch basic needs • Commuting costs calculation. • Health care • Insurance • Clothing

• SA 8000 policies • Control of Suppliers • Management Review Home workers • Company Representatives • Response to concerns of Worker Representative employees and corrective Health and safety action system • Management Outside Communication representative • Record maintenance • Planning/Implementation Training Monitoring activities (audits )

• SA8000 2008 requires a company to define in writing , and in workers’ own language, its policy for social accountability and labor conditions. • This policy as well as the standard must be displayed in a prominent, easily viewable place on the premises. • More explicit re cont. improvement (9.1.c) • Explicit policy must be available in effective form to all stakeholders

• Under 9.3, companies must ensure that workers have the right to representation on all matters relating to the standard. • Where (representative union exists) union performs this role. Where no union exists, workers must be allowed to elect an SA8000 worker representative from among themselves. • Under no circumstances shall the SA8000 worker representative be a substitute for a trade union.

• 9.5b requires reassigned personnel to be trained in the requirements of the standard. (9.5b)

• The 2001 standard “advised” companies to consult the guidance document. The 2008 version requires them to. (9.6)

• SA8000 2008 requires companies to make efforts to ensure that the standard is being met by all suppliers and subcontractors within their sphere of control and influence . (9.9)

• More explicit re complaints: Companies must provide confidential means for all personnel to report non-conformances with the standard to management and the worker representative. (9.11)

• SA8000 2008 requires companies to demonstrate their willingness to participate in dialogues with all interested stakeholders in attaining sustainable compliance with the standard.

• Reflects the emerging consensus within the CSR movement that dialogue with local stakeholders is vital in achieving sustainable compliance with social standards.

• Clause 9.15 requires company to ensure access to the certifiers for unannounced audits (we require CBs to conduct one unannounced audit within each 3-year period). • Under ‘01 standard, companies had to provide access to interested parties in verifying compliance only when required to by contract. This was deleted, seen as covered in norm elements (e.g. other requirements to which co., subscribes).