2014 BSCI Factory Audit Latest Supplier Code of Conduct

This 1/2014 BSCI Code of Conduct aims to establish the values and principles that BSCI participants strive to implement in their supply chains. It was approved by the Board of Directors of the European Foreign Trade Association (FTA) on November 28, 2013 and replaces the 2009 BSCI Code of Conduct. This BSCI Code of Conduct consists of three main information sections: a) Preamble, Interpretation, Our Values and Implementation applicable to all companies; b) Principles for Business Partners of BSCI Participants, and c) BSCI Implementation Clauses, BSCI References and BSCI Glossary, as part of the Code, provide more detailed information on BSCI interpretation and implementation. The 1/2014 BSCI Code of Conduct came into force on January 1, 2014. BSCI will monitor according to the principles set out in this Code from January 2015. Therefore, audits based on the 2009 BSCI Code will no longer be valid as of January 2015. The English version of this document is legally binding. All local language translations are for reference only. In case of doubt, the English version shall prevail. I. Preface The Business Social Compliance Initiative (BSCI), launched by the European Foreign Trade Association (FTA), recognizes that international trade is a fundamental vehicle for human prosperity and social economic growth. This Code of Conduct (BSCI Code of Conduct) is a set of principles and values that reflects the beliefs of BSCI participants and their expectations of their business partners. The BSCI Code of Conduct refers to international conventions on improving labor conditions in the supply chain, such as the Declaration of Human Rights, the Rights of the Child and the Business Principles, the UN Guiding Principles on Business and Human Rights, the OECD Guidelines, the UN Global Compact and the International Labor Organization (ILO) Conventions and Recommendations. Enterprises that subscribe to this BSCI Code of Conduct commit to comply with the principles set out in this document and to fulfill their responsibility to respect human rights within their sphere of influence. BSCI and its participants (BSCI Participants) seek a constructive and open dialogue between business partners and stakeholders to consolidate the business principles of social responsibility. In addition, they regard the construction of mature industrial relations between workers and management as key to the sustainable development of enterprises. II. Explanation The term "businessenterprises" in this BSCI Code of Conduct covers BSCI Participants and their business partners in their supply chain, in particular producers. The annexes mentioned at the end of this BSCI Code of Conduct (Terms of Implementation, BSCI References and BSCI Glossary) are an integral part of the BSCI Code of Conduct. This BSCI Code should be read and interpreted in conjunction with them. Each business has different Terms of Implementation to comply with, depending on its role in the supply chain and whether it will be monitored by BSCI. III. Our Values By endorsing the BSCI Code of Conduct and communicating it to the supply chain, BSCI Participants are guided by the following values: Continuous Improvement: BSCI Participants commit to implementing the BSCI Code of Conduct in a progressive, development-oriented approach. BSCI Participants require their business partners to ensure continuous improvement of labour conditions within their organizations. Collaboration: By collaborating and taking a common approach, BSCI Participants can have a greater impact on improving labour conditions in the supply chain. The value of collaboration is equally important in relationships with business partners in the supply chain, especially those who need support to achieve improvements. Similarly, a collaborative spirit is key to relationships between companies and affected stakeholders at all levels. Empowerment: One of the aims of BSCI is to enable BSCI Participants and their business partners, in particular producers who will be monitored, to develop supply chains in a way that respects human and labour rights and to provide business units in the supply chain with the tools they need to sustainably improve labour conditions. The development of internal management systems plays a key role in embedding the BSCI principles into the core of corporate culture. IV. Implementation The principles set out in the BSCI Code of Conduct represent the aspirational goals and minimum requirements for the social behaviour of BSCI Participants with regard to their supply chains. While the aspirational goals do not change, the minimum requirements of the BSCI Code of Conduct, which are translated into verifiable social standards, can change as society changes. BSCI Participants commit to make reasonable efforts to achieve the goals set out in the BSCI Code of Conduct. Although they cannot guarantee full compliance by all their business partners at all times, BSCI Participants commit to take reasonable steps to comply with the principles of the BSCI Code of Conduct, especially in those regions and/or sectors where there is a higher risk of non-compliance with the BSCI Code of Conduct. Needless to say, full compliance is a process that consumes a lot of time, resources and effort; gaps, deficiencies, failures and unforeseen events can always occur. Nevertheless, BSCI Participants have a strong commitment to early detection, monitoring and remediation of all such deficiencies in their supply chains and to maintaining an open and constructive engagement with stakeholders who have a genuine concern for social responsibility. Code Compliance Compliance with domestic legislation is the primary obligation of companies. Where national legislation conflicts with the BSCI Code of Conduct or sets different standards of protection than the BSCI Code of Conduct, companies should seek to comply with the principles that provide the greatest protection for workers and the environment. Supply Chain Management and Cascading Effects BSCI Participants recognise their ability to influence social change in their supply chains through their sourcing activities. They manage their relationships with all business partners in a responsible manner and expect to be treated the same. This requires each company to work together to (a) involve its business partners; (b) take all reasonable and appropriate measures necessary to implement the BSCI Code of Conduct within its sphere of influence, and (c) communicate information to promptly identify any challenges that need to be mitigated. BSCI Participants and their business partners strive to conduct a detailed analysis of the root causes of any such adverse human rights impacts, particularly when sourcing in high-risk regions or sectors. In order to embed this responsibility, enterprises should conduct due diligence, develop the necessary management systems, reasonable policies and procedures, and effectively prevent and address any adverse human rights impacts that may be found in the supply chain. For producers who will be monitored, internal management systems are particularly encouraged as an effective means of embedding the BSCI Code of Conduct into their business practices. Although termination of a business relationship or individual contract with a business partner due to disputes over the implementation of the BSCI Code of Conduct is a last resort. However, if a business partner violates the principles set out in the BSCI Code of Conduct and/or is unwilling to take the necessary measures to fulfil any obligations set out and/or inherent in the BSCI Code of Conduct, the business relationship or individual contract may be terminated. Worker participation and protection Enterprises should establish good management practices that allow workers and worker representatives to participate in the exchange of information on workplace-related matters and allow for appropriate worker protection measures around the ideal goals of the BSCI Code of Conduct. Enterprises should take specific steps to make workers aware of their rights and responsibilities. In addition, enterprises are required to build sufficient capacity among employers, managers, workers and worker representatives to successfully embed these practices into their operations. Continuous education and training at all levels of work is essential, especially in occupational health and safety. Companies should establish or participate in effective operational level grievance mechanisms for individuals and groups that may be adversely affected. Even where judicial systems are effective and well-resourced, grievance mechanisms can offer certain advantages, such as speed of access and redress, reduced costs and management across borders. V. Principles BSCI Participants expect all of their Business Partners to adhere to the BSCI Code of Conduct. In addition, any Business Partner found to have violated the following principles will be required to demonstrate that it has taken (a) all necessary measures to ensure its own compliance with the BSCI Code of Conduct, and (b) reasonable measures to ensure compliance with the BSCI Code of Conduct by all Business Partners involved in its production process. Freedom of Association and Collective Bargaining Business Partners must: (a) respect the right of workers to form trade unions in a free and democratic manner; (b) not discriminate against workers for membership in a trade union, and (c) respect the right of workers to bargain collectively. Business Partners must not prevent worker representatives from accessing workers in the workplace or from interacting with them. In countries where trade union activity is illegal or where free and democratic trade union activity is not permitted, Business Partners must respect this principle by allowing workers to freely elect their own representatives and by allowing companies to engage in dialogue with elected worker representatives on workplace issues. Non-discrimination Business Partners shall not discriminate, exclude or give preference to a person on the basis of sex, age, religion, race, caste, birth, social background, disability, ethnicity, nationality, membership of a trade union or any other legally established organization, political affiliation or opinion, sexual orientation, family responsibilities, marital status, medical condition, etc. In particular, workers shall not be harassed or disciplined on any of the above grounds. Fair Remuneration Business Partners abide by this principle and respect the right of workers to fair remuneration sufficient to provide a decent living for the worker and his or her family, as well as social benefits provided by law, without prejudice to the specific expectations set out herein. Business Partners must comply with at least the legal provisions of the government on minimum wages, or the industry standards agreed on the basis of collective bargaining, whichever is higher. Wages shall be paid promptly, regularly and in full in legal tender. Partial payments in the form of benefits in kind may be accepted in accordance with ILO norms. Wage levels shall reflect the worker's skills and education and refer to normal working hours. Any deductions from remuneration may only be made under the conditions and to the extent permitted by law or stipulated in collective agreements. Decent Working Hours Business Partners comply with this Principle and ensure that workers do not work more than 48 hours per week, without prejudice to the specific expectations set out in this document. However, BSCI recognizes exceptions as provided for by the International Labour Organization. Applicable national regulations, industry standards or collective agreements shall be interpreted within the international framework set out by the International Labour Organization. In exceptional circumstances as defined by the International Labour Organization, the above working hours limits may be exceeded, in which case overtime is permitted. Overtime must be exceptional, voluntary, paid at least 1.25 times the normal working hours wage, and must not entail a significant increase in the likelihood of occupational hazards. In addition, Business Partners shall grant workers the right to rest during each working day and at least one day off every seven days, unless there are exceptions provided for in an applicable collective agreement. Occupational Health and Safety Business Partners comply with this Principle and respect the rights of workers and local communities to healthy working and living conditions, without prejudice to the specific expectations set out in this document. Vulnerable individuals such as, but not limited to, young workers, pregnant and postpartum women, and persons with disabilities shall be given special protection. Business Partners shall comply with occupational health and safety regulations or, where domestic legislation is weak or poorly enforced, international standards. Active cooperation between management and workers and/or workers’ representatives is key to developing and implementing a system to ensure a safe and healthy working environment. This can be achieved through the establishment of an occupational health and safety committee. Business partners must ensure that systems are in place to detect, assess, avoid and respond to potential threats to workers’ health and safety. They must take effective measures to prevent accidents, injuries or illnesses to workers arising out of or in the course of their work. These measures should be designed to reasonably minimize the causes of hazards inherent in the workplace. Business partners will seek to improve the protection of workers in the event of an accident, including through compulsory insurance schemes. Business partners must take all appropriate measures within their sphere of influence to ensure the stability and safety of the equipment and buildings they use, including accommodation facilities provided to workers by the employer, and to prevent any foreseeable emergency. Business partners must respect the right of workers to leave the workplace without permission in the event of imminent danger. Business partners must ensure adequate occupational medical assistance and related facilities. Business partners must ensure that workers have access to drinking water, safe and clean eating and rest areas, and clean and safe cooking and food storage areas. In addition, business partners must provide effective personal protective equipment to all workers free of charge. No Child Labour Business Partners comply with this Principle and do not directly or indirectly employ children under the minimum age for completion of compulsory education, which is not less than 15 years of age, unless an exception recognized by the International Labour Organization applies. Business Partners must establish a robust age verification mechanism as part of the recruitment process and must not in any way degrade or disrespect workers. This Principle aims to protect children from all forms of exploitation. Special care must be taken when dismissing children, as they may turn to more hazardous occupations such as prostitution or drug trafficking. When removing children from the workplace, Business Partners should proactively identify measures to ensure the protection of the affected children. Where appropriate, they must provide opportunities for adult family members of the affected children to participate in decent work as far as possible. Protection of Young Workers Business Partners comply with this Principle and, without prejudice to the specific expectations set out herein, ensure that young people do not work at night and avoid working conditions that are detrimental to their health, safety, morals and development. When employing young workers, Business Partners should ensure that (a) the type of work does not harm their health or development; and (b) the hours of work do not interfere with their ability to attend school, participate in vocational training approved by the competent authority, or benefit from training or mentoring programmes. Business partners must establish the necessary mechanisms to prevent, detect and mitigate hazards to young workers; paying particular attention to the rights that young workers must have to access effective grievance mechanisms and to participate in occupational health and safety training programs and courses. No Insecure Employment Business partners adhere to this principle and, without prejudice to the specific expectations set out herein, (a) they ensure that the employment relationship does not lead to workers’ insecurity and social or economic vulnerability; and (b) the performance of work is based on a recognized documented employment relationship, consistent with national legislation, custom or practice and international labour standards, whichever provides greater protection. Before entering into an employment relationship, business partners should provide workers with understandable information about their rights, responsibilities and conditions of employment, including working hours, remuneration and payment terms. Business partners should aim to provide decent working conditions that support both men and women workers in their roles as parents or caregivers, particularly temporary and seasonal workers whose children may be left behind in migrant workers’ hometowns. Business Partners shall not use employment arrangements that intentionally circumvent the true purpose of the law, including but not limited to (a) internship programs without the intention of imparting skills or regularization, (b) seasonal or emergency work that is used to reduce worker protections, and (c) labor subcontracting. In addition, subcontracting shall not be used to undermine workers' rights. No Forced Labor Business Partners shall not engage in any form of slavery, forced, bonded, indentured, trafficked or involuntary labor. If Business Partners benefit from their Business Partners engaging in such forms of labor, they risk being charged with complicity. Business Partners shall exercise particular caution when directly and indirectly hiring and recruiting temporary workers. Business Partners must give workers the right to resign and terminate the employment relationship freely after reasonable notice to the employer. Business Partners must ensure that workers are not subjected to inhumane or degrading treatment, corporal punishment, mental or physical coercion and/or verbal abuse. All disciplinary procedures must be in writing and explained to workers verbally in a clear and understandable manner. Protecting the Environment Business Partners comply with this principle and take necessary measures to avoid environmental degradation without prejudice to the specific expectations listed in this section. Business partners shall assess the significant impact of their operations on the environment and establish effective policies and procedures that reflect their environmental responsibility. Take appropriate measures to prevent or minimize adverse impacts on society, natural resources and the environment as a whole. Ethical Business Conduct Business partners comply with this principle and, without prejudice to the objectives and expectations set out in this section, do not engage in any corruption, extortion or embezzlement, or any form of bribery, including but not limited to the promise, offer, payment or acceptance of any improper money or other benefits. Business partners are required to maintain accurate information about their activities, structure and performance and disclose it in accordance with applicable regulations and industry practices. Business partners should not engage in the falsification of such information or any misrepresentation in the supply chain. In addition, they should exercise reasonable care when collecting, using and otherwise processing personal information (including from workers, business partners, customers and consumers within their sphere of influence). The collection, use and other processing of personal information should be in accordance with the requirements of privacy and information security regulations.

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