Accordia Global Compliance Group Sourcing... · Accordia Established 2002 ... SMETA, Costco,...
Transcript of Accordia Global Compliance Group Sourcing... · Accordia Established 2002 ... SMETA, Costco,...
Labor/Human Rights AuditsAccordia Global Compliance Group
Accordia
Established 2002
Agriculture – Apparel – Food Processing
Operates in 22 Major Sourcing Countries
Americas – Asia Subcontinent – Southeast Asia
Annual Global Audit Volume 2014 - 4,000+
Social Auditing
All Major Retailers and Brands Want to be seen as ‘Socially Responsible’• Commitment to labor and human rights laws, regulations and
practices from the top level of their organizations
• Driven by Shareholder Pressure, Customers, NGOs, Labor Organizations, Media Attention
• “Push” Compliance Through their Supply Chain
• Integrating Ethics into Core Business Practices of their Own Companies as well as their Suppliers
Social Auditing
Compliance is a Result of Industrial Revolution
– Initially Protection of Workers Health and Safety
– Then Protection of Workers Wages, Overtime
– Then Child Labor, Civil Rights, Unionization, etc.
1990’s – Gain Influence among Media and Government
– Rallying point for Students, Labor Unions, Fledgling NGOs looking for a cause
Social Auditing
1990’s (Awareness)
Media Driven, Labor Unions Stoked the Flames
2000 – 2005 (Development of Codes/Standards)
Retailers Searched for Best Practices and Auditable Codes and Standards to Prove Compliance
2005 – Present (Auditing & Sustainable Practices)
Walmart, SMETA, Costco & others
Social Auditing
Today - Four Drivers for Retailers
1. Integrating ethics into core business practices
– Supplier selection, terms of agreements, ‘buy-in’
2. Identify Problems in the Supply Chain
– Risk assessing and sharing, monitoring and evaluation, worker complaint mechanisms
Social Auditing
3. Improvement Actions Enabling Remediation
– Timebound actions, tackling root causes
4. Transparency
– Fair and accurate reporting and response to violations
When it Becomes Burdonsome
Audit Impacts:
– Preparation Consumes Resources (time & money)
– Interruption to Business and Production Processes
– Creates Worry among Managers and Workers
– Costly
Repetitive Auditing Impacts are Exponential
– Add: Audit Fatigue
– Add: Diminishing Benefits
Case for a Multiple Audit Event
Auditing will Remain a Supply Chain Tool for Retailers and Brands for the Future
Most Codes and Standards Converge Covering 90%
Child Labor, Forced Labor, Wages, H&S, Environment
Social Audit Protocols by Firms are Almost Identical
Walmart, SMETA, Costco, Walgreens, Starbucks, etc.
Case for a Multiple Audit Event
SMETA Audit is Becoming Most Widely Accepted in Agriculture and Food Processing Industries
Problem Brands may Not Accept SMETA as a Substitute for their own Assessments
Recommendation:
Wherever Practical, Conduct Combination Audits of SMETA and Brand/Retail Code Audits
Case for a Multiple Audit Event
Benefits:
1. Cost Reduction – Pay for one audit, multiple reports are written
2. Reduced Visits – Frequency of audits may be reduced from 5 or 6 per year to 1, 2 or 3 per year
3. Preparation/Resource – Reduce Audit Preparation Time, Conserves Resources
Changes to Walmart Program
Walmart will be moving to a ‘risk based’ approachUse data from the World Bank Governance Indicators report of
215 countries to create 3 risk level categories
Auditing requirements for each facility in thesupply chain will be based on the category of the country in which the facility is located
Category 1 – Lower Risk
Category 2 – Medium Risk
Category 3 – Higher Risk
Walmart reserves the right to audit any facility in their supply chain regardless of category risk rating
Changes to Walmart Program
While the approach to auditing is changing, many aspects of the overall program and requirements remain the same.
• All Suppliers (excluding Approved Brands) are still required to disclose their facilities producing product for Walmart.
• All Suppliers (including Approved Brands) and all of their facilities producing goods for Walmart are expected to adhere to Walmart’s Statement of Ethics and Standards for Suppliers.
Changes to Walmart Program
Accordia’s interpretation
Audits in North America will be reduced in:
– Number of audits
– Frequency of reaudits
Historically high risk industries (agriculture – child labor) will likely continue to have audits performed
Final Comments and Q&A
Thank You
Please accept our appreciation for the invitation to present
Accordia is a company focused on the importance of Sustainable Ethical and Responsible Sourcing of our clients