SEDEX – Social Networking for Social Compliance

SEDEX – Social Networking for Social Compliance

In the modern day scenario of Manufacturing & Trade, emphasis on a Good Quality Management system is a must for Business growth and Efficient Operations. Tremendous popularity of Certification like ISO 9001:2015 and similar Certifications is witness to this phenomenon.

Similar to the popularity of a Quality Management System, there is a growing awareness and conscious when it comes to Social Compliance across the Entire Supply Chain, right from the Supplier to the Final Buyer. Social compliance is as important as the products being produced and has a say on import or export business & brand value of an organization.
Social Compliance can be equated to a long term Investment with huge Returns. But the question still persists as to what exactly is Social Compliance why it needs your attention? Let us Find out.

 What is Social Compliance & Compliance Audit?

Social Compliance is a continuous process wherein an Organization takes appropriate measures to protect the health, safety, and rights of their employees, the community and environment directly in contact with their line of work and the lives and communities of workers in their supply and distribution chains.
Social Compliance is achieved from the desire of being Socially Responsible which in turn  comes from the desire to do better and forward thinking attitude of the top management of an Organization
Every Organization or Business in 2021 wants to demonstrate the best working practices of their organization to the world and portray a positive image of themselves both for their Customers and Employees.
Social Compliance Audit looks more at the holistic view of the operations of an Organization taking into consideration various parameters such as Compliance to local labour laws, Health & Safety in an organization, relation with local people and Environment, Wage standard etc.
Audit is conducted by a third-party auditor to ensure fair & honest results.
The most popular standard is SA 8000 to refer for Compliance audits but in this blog we will know more about SEDEX and their methodology for conducting audits.

SEDEX, Just another Certification Body?

SEDEX – Supplier Ethical Data Exchange
SEDEX is an Membership Organization acting as a Database sharing for all relevant Audit Progress or Findings with other members associated with the same platform.

To draw parallels with some real life Instances for better understanding, I would want you for a brief moment imagine SEDEX to be Google. Now Google has their drive servers where one can upload documents and keep them safe there. Only the ones having Gmail & permission by the host can have access to this database.
In similar fashion SEDEX has a membership program where Buyer & Supplier Organization all across the supply chain can share Audit findings with each other and monitor the progress

SEDEX does not conduct Audits neither do they issue any Social Compliance Certification. SEDEX has their own audit methodology called the SMETA which is used as a guide for Social Compliance audits.

Understanding the SMETA Methodology

SMETA – Sedex Members Ethical Trade Audits
SMETA is the audit methodology adopted by SEDEX to evaluate the members associated with them &  their suppliers to check for Social Compliance

SMETA method was originally developed as a standard for members of the ethical trade organization SEDEX (among which are large multinationals such as Nestlé, PepsiCo, Kellogg Company and Sodexo, among others), although at a later stage the beneficial aspects were realized to work for Organizations of all levels, so it was decided to have this Audit for Supplier Organizations as well.

We can choose between a SMETA audit with two or four pillars, depending on the needs of each company’s supply chain or the demands of their respective clientele.
The ETI Base Code, which is based on the International Labor Organization’s agreements as well as relevant local laws, is used in SMETA audits. Labor Standards and Health & Safety are the two pillars that any SMETA audit must include. Business Ethics and the Environment are the two additional pillars of a 4-pillar audit.

2-Pillar Audit Comprises of:

• Labour Standards
• Health & Safety
  Additional Elements:
• Sub-contracting & Work from Home
• Environmental Assessment (Basic)

4-Pillar Audit Comprises of:

• Environmental Assessment (Extended)
• Business Ethics (Anti-Bribery & Anti-Corruption)

SMETA Pillars and Principles takes into consideration many points from SA 8000 Standard as well.

SMETA Audit Implementation

SMETA Audit Process are as follows

• Registration on SEDEX Database
  A supplier organization undergoing SMETA audit must be first a member of SEDEX along with the buyer company calling for Compliance Audit.
• Self-Evaluation
  Organization must fill a self-evaluation form mentioning details of its Operations and various sites.
• On-site Audit
  On-site audit is conducted by Third-party certification body and Audit Report in published according to the SMETA Pillar recommendations.
• Audit Report & CAPR
  In case of a compliance to SMETA Principles an Audit report is generated which can be shared directly to SEDEX Database. A Corrective & Preventive Report (CAPR) when generated must be closed within a stipulated time for successful Social Compliance.
• Monitoring of CAPR
  CAPR status can be monitored directly by Buyer Organization on SEDEX and get regular Inputs. As a combines effort the Gaps can be closed and Supplier organization can get Social Compliance status

Is SEDEX – SMETA Compliance Beneficial for my Organization?

Well the Benefits are quite a lot but will list down a few major ones

• The audit Report and findings can be shared with multiple Buyer Organization eliminating the requirements for multiple Audits and thus no duplication
• Access to a huge number of Organizations boosts chances of new Business Opportunities
• Boosts Brand Image as a “Ethical Trading” organization, inevitably boosting Export Opportunities.
• Legal & Statutory Requirements Compliance becomes a breeze
• Satisfactory working conditions and change in Management culture of Organization

About PQSmitra

PQSmitra provides Social Compliance Consultation for Industries Ranging from Manufacturing, Textile to Supply Chain. With over 20 years of experience in quality assurance & Social Compliance we at PQSmitra are ready to help your business build meaningful Ethical Business and offer handholding right from Self-Evaluation to closing the final CAPR.