SOCIAL COMPLIANCE for Apparel sector

SOCIAL COMPLIANCE : 

SOCIAL COMPLIANCE Presented by Nidhi Bose

Objectives : 

Objectives To understand the meaning of Social Compliance. To know the regulations set by government of India with regards to the same. See real life examples and case studies to better understand the concept of social Compliance.

Slide 3: 

NEED HIERCHARCHY OF COMMON MAN

Compliance : 

Compliance Meeting the requirements of safety and basic working conditions set by the law enforcement agencies in the manufacturing country or set by the client. The core areas of social responsibility are on the principles set by the International Human Rights keeping in mind the local culture and tradition.

NEED FOR COMPLIANCE : 

NEED FOR COMPLIANCE Price driven Outsourcing. Buyers do not want to associate themselves with sweat shops/ poor working condition shops. Government needs to bring in equality of labor and working conditions by offering certain set parameters for the same.

Compliance : 

Compliance Types of compliance Social. Meeting preset norms of equality, fair working conditions, safety, hygiene etc. for an equal society. Technical – client specific. Meeting the machinery needs for a particular product.

Basic areas - Compliance : 

Basic areas - Compliance Retailers/Manufacturers take guidelines from the International Labor Organization, government rules and regulations and covering the 4 basic areas of Wage, Hour Laws and safety Restriction on child labor and forced labor. Subcontracting and transshipments Environmental protection and other laws Law and local culture of the country of manufacturing too needs to be kept in mind.

Methodology of reviewing compliance standards : 

Methodology of reviewing compliance standards

Social compliance – Wage, Hour Laws and safety : 

Social compliance – Wage, Hour Laws and safety Minimum Wages – Gross pay must not be less than the total no. of hrs worked x legal minimum wage. Applies to all – skilled, semi skilled and unskilled. As per Indian norms, minimum per day wages are – Rs 168, Rs 158 and Rs. 151 for the above.

Social Compliance-Wage, Hour Laws and safety : 

Social Compliance-Wage, Hour Laws and safety Working hours – Need to comply with all local requirements of the maximum no. of hours worked; normally not more than 60 hours / week. The 60 hours are calculated as :48 hours – normal working hours and 12 hours – overtime. Overtime in case of additional hours worked by workers beyond the stipulated no. of hours – generally at double the rate. At least 1 day of the week to be given as an off to each worker; should take into account local holidays and festivals.

Social Compliance-Wage, Hour Laws and safety : 

Social Compliance-Wage, Hour Laws and safety Clean, safe and Healthy environment to every worker – free of hazards/ harmful conditions proper lighting, adequate protection by way of gloves / masks, clean drinking water, first aid box, well marked fire exits, good housekeeping, separate toilets (for male and female workers.) ETC.

Housekeeping as a part of Social compliance : 

Housekeeping as a part of Social compliance Refers to the general tidiness and upkeep of the factory. It is important to have a clean and well lit work place for achieving better production and to improve overall appearance of the factory. Good housekeeping should include( but not be limited) to the following No raw materials, semi finished components , finished components on the floor. No food or drink allowed on the floor Clean corridors Well lit work areas Clean work places Hand gloves and protective masks to be used for operations which are hazardous. Separate space for storing hazardous chemicals 13

Examples of Social Compliance violations : 

Examples of Social Compliance violations Violation: Weekend and overnight worked hours were not recorded in the time cards and payroll sheets and also not compensated properly. Corrective Action: Factory shall record all worked hours in payroll sheets and time cards and shall compensate those correctly. Violation: Female workers were working from 8 a.m. to 12 a.m. as overtime. Corrective Action: Factory shall allow female workers to work between 7 a.m. to 8 p.m. only. Violation: Overtime worked hours had exceeded the legal limits of stipulated hours per month with a large margin. Corrective Action: Factory shall not allow anyone to work more than 10 hours per day and 60 hours per week. The duration of 60 hours per week shall be represented as 48 hours general duty plus 12 hours overtime.

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Violation: Fire extinguishers were found blocked in some areas of the factory and were not easily accessible.Corrective Action: All fire extinguishers shall be cleared from obstruction at all time. Area in front of fire extinguishers shall be marked on the ground with yellow lines to indicate that the area must be kept clear at all times.Violation: Aisles were not marked at different sections of the factory.Corrective Action: Factory shall put marking on the floor with yellow lines to indicate the evacuation paths.Violation: No evacuation plan was observed throughout the factory.Corrective Action: Factory shall prepare and post evacuation plan at different areas of the factory to facilitate smooth evacuation in the case of emergency.Violation: Primary/secondary aisles were found blocked by fabric roll, cartons, garments etc. in different sections of the factory. Electrical control panel was also found blocked.Corrective Action: Factory, in accordance with The Factories Act shall make sure that all the passages and control panels remain unblocked at all times. Examples of Social Compliance violations

Social Compliance- Restrictions on child labor, forced labor, discrimination. : 

Social Compliance- Restrictions on child labor, forced labor, discrimination. Minimum age law of c/o applies (14 years for India) Separate working hour rules apply for children between 14-18 years. No labor under threat (labor which is working voluntarily) No discrimination on a/c of cultural differences, gender, age, disability, racism, beliefs etc – equal opportunities to all. All workers to be treated with dignity and respect; no use of corporal punishment, physical /psychological /verbal harassment.

Slide 17: 

Violation: Overtime wages of the workers were deducted as a means of punishment if they could not achieve the daily production target. Violation: Employees, if fail to attend weekend work, were deliberately made absent for 2 to 3 days from his working period. Violation: One of the factories working for a reputed brand of USA, physical torture was reported for simple mistakes including no payment of wage. Corrective Action: The factories shall not engage in or support the use of corporal punishment, mental or physical coercion, and verbal abuse. Wages shall not be deducted as a form of punishment. Examples of Social Compliance violations

Some more real life examples…. : 

Some more real life examples…. Violation: Factory management is reluctant to recruit employees from the area where the factory is situated. This is to avoid local protests against working condition.Thus, there is discrimination in hiring workforce. Corrective Action: To comply with social accountability standard, recruitment shall not be biased towards avoiding local candidate at the time of recruitment.

Social Compliance- Restrictions on child labor, forced labor, discrimination. : 

Social Compliance- Restrictions on child labor, forced labor, discrimination. Setting up an independent body to address issues. Labor free to join any trade union / association.

Social Compliance - Subcontracting and transshipments : 

Social Compliance - Subcontracting and transshipments Use of approved subcontractors – working conditions and other rules – same as applicable to chief supplier. No illegal transshipments; country of manufacturing has to be the same as agreed upon with the buyer at the time of order placement.

Social Compliance- Environmental protection and other laws : 

Social Compliance- Environmental protection and other laws All regulations set by local government with regards to efficient waste material discharge, any other local law to be adhered to. To conduct business in an ethical manner – No bribery / gifts / compensation to client and his team. Gap Case study.

Examples of Poor Social Compliance : 

Examples of Poor Social Compliance

: 

Example of questionnaire

Customs –Trade Partnership Against Terrorism( CTPAT) Compliance : 

Customs –Trade Partnership Against Terrorism( CTPAT) Compliance Main Objective: To ensure that : the goods are being made in a risk free environment, with proper security and there is no way in which the goods can be tampered with and any hazardous material/substance can be shipped with the goods to the USA. Personal Propriety - Restricted Circulation 26

CTPaT Compliance : 

CTPaT Compliance Undertaken by US post 9/11 to enhance social security. Evaluation done by physical verification of site at which the production will take place, worker and management interviews, review of security related documents.

CTPAT continued….. : 

CTPAT continued….. Checklist to enclose.

International best practices – some examples : 

International best practices – some examples

International best practices – some examples : 

International best practices – some examples