BSCI SYSTEM MANUAL · PART I – 1. THE BUSINESS SOCIAL COMPLIANCE INITIATIVE (BSCI) 1.1. RELATIONS BETWEEN BSCI PARTICIPANTS AND THEIR BUSINESS PARTNERS A company can be …

November 2014

BSCI SYSTEM MANUALPART I Understanding the BSCI Implementation Strategy

PART I Understanding the BSCI Implementation Strategy

PART I: Understanding the BSCI Implementation Strategy

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PART I – 1. THE BUSINESS SOCIAL COMPLIANCE INITIATIVE (BSCI)

1. THE BUSINESS SOCIAL COMPLIANCE INITIATIVE (BSCI)

Chapter 1 begins by briefly introducing BSCI. The chapter also describes interrelations between different business enterprises and how they are involved in the BSCI implementation process.

These are the documents related to the chapter:

• BSCI Code of Conduct and Appendices (Annexed to this Manual)

• Greeting letters for business partners

• Annex 1: How to Start with the BSCI Platform

• Annex 11: The BSCI Commitment Formula version 2010

The Business Social Compliance Initiative (BSCI) is a business-driven initiative for companies committed to improving working conditions in factories and farms worldwide. The initiative was created in 2003 by the Foreign Trade Association (FTA) to offer companies a common Code of Conduct and a holistic system towards achieving social compliance in the supply chain.

As an international system with its secretariat based in Brussels, Belgium, BSCI was established by and for its Participants: retail and importing companies that operate across a wide range of business sectors and industries. BSCI Participants and their business partners are committed to implementing the BSCI Code of Conduct version 1/2014.

The BSCI Code of Conduct defines the values and principles for responsible business practices in the supply chain. When a company has signed the BSCI Code, the signature represents its public commitment to responsible business. In addition, BSCI Participants are measured against the BSCI Commitment Formula.

BSCI Participants and their business partners:

• Work towards improving working conditions in their supply chains in a step-by-step development approach

• Integrate the BSCI Code of Conduct into their business enterprise culture

• Act diligently

• Seek early detection of risks and impacts with the support of relevant stakeholders through meaningful dialogue and engagement

Stakeholders are individuals, communities or organisations that are affected by and may affect an organisation’s products, operations, markets, industries, and outcomes.

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1.1. RELATIONS BETWEEN BSCI PARTICIPANTS AND THEIR BUSINESS PARTNERS

A company can be involved in BSCI directly or indirectly:

• Directly: The company becomes a member of FTA and endorses BSCI in its Declaration of Membership. It is a BSCI Participant.

• Indirectly: The company is a significant business partner of one or more BSCI Participants. This company:

¡ May or may not have production work environments

¡ Agrees upon the BSCI Code of Conduct and the relevant Terms of Implementation for Business Partners depending if they are going to be monitored within BSCI or not

IMPORTANT – Only business partners with production working environments can be monitored within BSCI. Business partners that cannot be monitored (e.g. trading offices or companies offering logistics or technical services), will sign the Code with the Terms of Implementation for Business Partners.

The concept of Responsibility (RSP): The relations between BSCI Participants and their business partners in the BSCI system are tied together by the concept of Responsibility (RSP). This concept is a foundation of the BSCI system and directly relates to the exercise of due diligence over the supply chain. Only BSCI Participants can hold RSP in relation to their business partners to be monitored (producers).

RSP empowers BSCI Participants to:

• Encourage their business partners to integrate the BSCI Code into core business practices

• Define the path towards improvements for the business partners that shall be monitored (e.g. by defining when to initiate the monitoring process as well as follow- up)

• Cooperate with other BSCI Participants that share common business partners

The RSP status is managed through the BSCI Platform. BSCI Participants hold responsibility for all their business partners included in the BSCI Platform. In addition, BSCI Participants can hold the status of Lead RSP Holder if they intend to have a stronger influence over the monitoring process, which includes:

• Defining the timing of a BSCI Audit

• Selecting the auditing company

• Authorising BSCI Audits (both full and follow-up)

• Releasing RSP in favour of another BSCI Participant, upon request

BSCI recommends that BSCI Participants have internal policies to define:

• Under which circumstances they should take the Lead RSP Holder status, if available

• Under which circumstances they may withdraw that responsibility

For more information, see BSCI System Manual Part V – Annex 1: How to Start with the BSCI Platform.

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1.2. EXCHANGE AND INTERACTION

To facilitate open and constructive dialogue among business partners and stakeholders, BSCI offers several platforms for exchange and interaction.

• Democratic Governance: Since FTA (hence BSCI) is a Civil Association, the General Assembly is the highest decision-making body. The General Assembly delegates its power for running BSCI activities to the BSCI Steering Committee, which is composed of company representatives nominated by the participants themselves. Additionally, the Stakeholder Council provides stakeholders with an active voice in the governance of the initiative.

• BSCI Working Groups: BSCI Participants shape BSCI’s development through their membership in BSCI Working Groups. Working Groups present a crucial opportunity to exchange learnings and information among peers.

• National Contact Groups: National Contact Groups (NCGs) are formal or informal platforms of exchange organised in countries where there is a significant number of BSCI Participants to justify common strategies and regular exchanges of information. The NCGs are not part of BSCI or FTA governance.

• BSCI Platform: This IT tool offers the possibility to seek and store information concerning the supply chain. Depending on whether the company is directly involved in BSCI (BSCI Participant) or indirectly (business partner of one or more BSCI Participants), the level of access and user rights are different. Auditors are key users of the BSCI Platform as the BSCI audit process is organised using this tool.See www.bsciplatform.org/home

• Capacity Building Sessions: These sessions present many opportunities for exchange among peers. They benefit BSCI Participants and their business partners.See www.bsci-intl.org/bsci-academy

• Stakeholder Round Tables: These sessions aim at developing a regular and meaningful dialogue with local stakeholders in sourcing countries. They offer many opportunities to learn about local stakeholders’ expectations, activities and constraints. The round tables are not part of BSCI or FTA governance.

• Secretariat: The BSCI Secretariat develops and maintains the BSCI system and related tools for all actors involved. It also serves as a liaison between BSCI Participants and specific stakeholders (e.g. trade unions, non-governmental organisations (NGOs), certification schemes, governments).

KEY MESSAGESThe Business Social Compliance Initiative

• All business enterprises involved in BSCI are committed to improve working conditions, engage with stakeholders and endorse the BSCI Code of Conduct and Appendices

• A business enterprise is involved in BSCI either by becoming a BSCI Participant or by being a business partner in the supply chain of one or more BSCI Participants

• Open and constructive dialogue among business partners and stakeholders is crucial for a sustainable implementation of BSCI

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http://www.bsciplatform.org/home

http://www.bsci-intl.org/bsci-academy

PART I – 2. HOW TO USE THE BSCI CODE OF CONDUCT

2. HOW TO USE THE BSCI CODE OF CONDUCT

Chapter 2 explains the structure of the BSCI Code and how it can be used by BSCI Participants and their business partners. This chapter also lists options for the business partners of BSCI Participants that refuse to sign the Code.


• BSCI Code of Conduct and Appendices (annexed to this Manual)

• Greeting letters for business partners

2.1. STRUCTURE

The BSCI Code of Conduct is composed of a set of documents that must be read together:

BSCI Code of Conduct

BSCI Reference

BSCI Glossary

Terms of Implementation for BSCI Participants

Terms of Implementation for Business Partners

Terms of Implementation for Business Partners

to be monitored

Figure 1: The structure of the BSCI Code of Conduct

2.2. CONTENT

The BSCI Code of Conduct:

• Demands observance of the law

• Provides a shared ethical and responsible approach to develop business partnerships, which empowers workers through international trade

• Builds on the International Labour Organization’s (ILO’s) Fundamental Conventions, which apply to all countries

• Aligns with the UN Guiding Principles on Business and Human Rights and similar international standards

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2.3. ENDORSEMENT

BSCI Participants can share the BSCI Code of Conduct with their business partners:

• As a stand-alone document attached to the terms of purchase or contracts

• As a reference in a clause of the contract

• Fully integrated in the contract or terms of purchase

• Fully integrated in their own codes of conduct

The BSCI Code of Conduct can be integrated in these documents but it has to be respected in its entirety. It is not acceptable to change or to eliminate any part, principle or value of the BSCI Code.

Disclaimer: If BSCI Participants decide to change the layout of the BSCI Code of Conduct, the following paragraph must be included at the top of the document:

“The document herein is a literal translation of the BSCI Code of Conduct version 1/2014. As a Business Enterprise which has endorsed the BSCI Code of Conduct, we have adapted the document into our own layout to better contribute to the BSCI cascade effect.”

Legal clause: This is an example of legal clause that BSCI Participants can integrate in purchase contracts to make business partners endorse the BSCI Code of Conduct:

“The [Business Partner] hereby acknowledges that it has been made aware of, and fully adheres to, the contents and requirements of the BSCI Code of Conduct and related Terms of Implementation, [reproduced in annex hereto / available upon request / a copy of which has been provided to the Business Partner], and that such documents will be deemed to form an integral part of this [Agreement/Contract].”

Business partners of BSCI Participants can share the BSCI Code of Conduct in their own supply chains in the same way.

IMPORTANT – Once it has been signed, the BSCI Code and Terms of Implementation provide business enterprises with the legal framework to request information on the social responsibility of the signee. This is particularly important if the company is going to be audited as no audit can be conducted without the previous signature of the Code and relevant Terms of Implementation.

Production facilities must post the BSCI Code of Conduct in poster version to inform the workforce.

See BSCI System Manual Part V – Annex 9: BSCI Code of Conduct 2014 Poster Version.

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2.4. REFUSAL

Some business enterprises may refuse to sign the Code of Conduct and related Terms of Implementation.

If faced by this situation, BSCI Participants or their business partners must consider if they:

• Can still get reliable information on their business partners’ social performance in other ways (e.g. other social audit reports)

• Can use the leverage of BSCI Participants sourcing from the same business partner to get the business partner to sign the Code

• Stop the business relation because the risk of working with unwilling business partners is too high

For information on stopping business, see BSCI System Manual Part I - Chapter 3, subchapter 3.10.: Stop Business.

KEY MESSAGESHow to use the BSCI Code of Conduct

• Business enterprises can endorse the BSCI Code of Conduct as a stand-alone document or if it is integrated in other documents (e.g. terms of purchase)

• The BSCI Code and Terms of Implementation provide business enterprises with the legal framework to request information on the social responsibility of the signee

• Business enterprises at every level of the supply chain should also request their business partners to sign the BSCI Code

• Business enterprises need a policy on what to do with business partners that are unwilling to sign and commit to the BSCI Code and Terms of Implementation

• Business enterprises cannot be audited without having previously signed the BSCI Code and relevant Terms of Implementation

NOTES:

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PART I – 3. HOW TO DEVELOP THE BSCI IMPLEMENTATION STRATEGY

3. HOW TO DEVELOP THE BSCI IMPLEMENTATION STRATEGY

Chapter 3 discusses how to develop the BSCI implementation strategy. Some aspects of strategy apply to all business enterprises regardless of direct or indirect involvement in the initiative.

This chapter also details the methodology of operational processes such as the business partner mapping exercise.


• Countries’ Risk Classification

• Template 1: Business Partner Information

• Template 2: Supply Chain Mapping

• Template 3: Smallholders Self-Assessment

• Template 6: Stakeholders Mapping

• Template 8: Grievance Mechanism

• Annex 3: How to Set Up a Social Management System

• Annex 4: How to Set Up a Grievance Mechanism

• Annex 5: BSCI Zero Tolerance Protocol

• Annex 6: Most Relevant Documents for the BSCI Audit

• Annex 7: BSCI Buyers Checklist

• Annex 8: Quick Assessment of Social Audits from Other Systems

• BSCI Audit Report

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3.1. COMMIT TO IMPROVEMENT

The BSCI Code represents a company’s public commitment to socially responsible business in the supply chain. To make the Code as effective as possible, it should be used as a policy for the company.

Buy-in and cooperation from the CEO and senior management is essential.

Company functions closest to the sustainability side of the supply chain (e.g. CSR managers) will find the BSCI Code and Appendices applicable in their day-to-day work. Cooperation between departments will ensure that, eventually, all departments incorporate the BSCI Code into the business activities.

To assimilate the BSCI values and principles into the organisational culture and operations, BSCI Participants as well as their business partners in the supply chain need to:

• Establish short-, medium- and long-term goals • Set procedures that integrate the BSCI Code • Communicate and engage with internal and external stakeholders• Integrate the learnings from operations on a regular basis

The success of socially responsible enterprises relies on:

• The seriousness of their commitment• The degree to which the core values have been embedded in the business culture

Both aspects of success will present continuous challenges when:

• Defining medium- and long-term business strategies • Taking decisions to address imminent risks

3.2. RELY ON VALUES

Values and principles exist to guide individual behaviours and choices. In a company, different individuals with different values and principles coexist. To ensure that a company behaves according to its values and principles, internal procedures need to be written and implemented.

These procedures need to be coherent with the values and principles endorsed by the company so individuals are:

• Compelled to act upon those values and principles

• Guided by those values and principles when facing difficult decisions or dilemmas

Business enterprises directly or indirectly involved in BSCI share the same values of empowerment, cooperation and continuous improvement.

Importance of the values: Why are these three core values important?

• They represent the business enterprise culture

• They strengthen the business enterprise’s credibility

• They provide a foundation for developing partnerships

• They facilitate decision-making when faced with a dilemma

• They guide day-to-day responsible entrepreneurship

• They distinguish business enterprises involved in BSCI from those that are not

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3.3. OBSERVE THE LAW

The BSCI Code of Conduct reflects universally-accepted international conventions, which most countries have already integrated into legislation. Business enterprises that respect the law most likely follow the BSCI Code of Conduct already.

Obeying the domestic law is in any case the first obligation of business enterprises whether or not:

• Companies are directly or indirectly involved in BSCI

• Their social performance is going to be monitored within the BSCI system

In case of contradiction between the domestic law and the BSCI Code of Conduct, the stipulation that provides the highest protection to workers and the environment prevails. At the same time, BSCI Participants must be vigilant to avoid putting their business partners in a situation where the business partner faces the dilemma of being in breach of domestic law in order to satisfy the BSCI Participant’s demands.

IMPORTANT – Going beyond workers protection provided by domestic law is not the same as being in breach of the law.

3.4. ACT DILIGENTLY

Anticipation: Practicing due diligence aims at anticipating potential risks or harms before they occur by:

• Attitudes: Developing analytical approaches to build relationships

• Systems: Designing internal systems to understand and assess risks

• Resources: Providing processes and resources for preventing and mitigating negative impacts

Community expectations: Due diligence relates to the expectations that the relevant community has on a business enterprise’s behaviour. Although the specific expectations may vary from one community to another, the overall expectation that society has put on business enterprises to behave ethically and responsibly continues to increase dramatically.

Society including governments, consumers and shareholders requests solid and convincing answers from the business community.

Gathering information: In order to respond to these expectations, gathering and assessing information on the supply chain is crucial.

Balance expectations with resources: Aiming at full coverage and transparency of the entire supply chain is unrealistic: businesses need to scope, prioritise and balance societal expectations and resources.

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Early detection: Early detection allows a business to address injuries, quality problems or complaints before they escalate. This allows the company to:

• Strengthen its reputation

• Support a more stable business environment

• Save money

IMPORTANT – No business enterprise should suggest that its sole motivation to support early detection of labour and human rights abuses in the supply chain (and at production sites) is reputational, and by extension financial. Business enterprises that have endorsed the BSCI Code of Conduct should see it as a non-negotiable pillar of the company identity. The application of the BSCI Code of Conduct should be part of the plan, even if there is no imminent crisis or threat identified by critics.

3.5. MAP THE SUPPLY CHAIN

Mapping is an exercise to visualise the relations among the different business partners in the supply chain. It allows BSCI Participants and their business partners to define:

• Who the actors are

• How significant they are for the business

• What level of leverage is possible

• Which actions must be taken

3.5.1. Gathering Information

Sources of information: The following sources of information are useful for the mapping exercise:

• Stakeholders: Information from relevant stakeholders

• Grievance mechanism report: Internal or external

• Self-assessment: Questionnaires or equivalent

• Commercial visits: Buyers or the purchasing team

• Social audit reports (if available)

Not all information has the same relevance. Therefore, it needs to be classified. This is one example of how to classify information according to its reliability:

Irrelevant information (Rumours)

AnecdotesStatementGrievanceEvidence

IMPORTANT – Business partners that will be monitored within the BSCI system will pay special attention to the effectiveness of their record keeping as auditors’ work relies heavily on records verification. Effective record keeping directly depends on having an effective Social Management System.

For more information, see BSCI System Manual Part V:



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3.5.2. Defining Scope

Not all business enterprises are eligible to be involved in BSCI.

BSCI Participants need to define how and where they are going to use BSCI.

They will take into consideration the:

• BSCI mission: BSCI aims at improving working conditions in the supply chain. Therefore, BSCI Participants will not use BSCI for different purposes

• Geographic area: BSCI Participants need to analyse their supply chains to understand where production is carried out

• Specific social risks: BSCI Participants may face additional social risks related to their business models, sectors or sourcing regions

• Significance of their business partners: BSCI Participants need to prioritise where to allocate their efforts and resources

3.5.3. Classify and Select Business Partners

Both BSCI Participants and their business partners need to classify and select:

• Companies with which they do business

• Companies for which additional verification is needed

In general, for any company, significant business partners:

• Represent a large share of the purchasing volume

• Have an impact on the reputation of the company

• Are potentially related to significant risks of adverse human rights (either directly or indirectly)

Out of all significant business partners, some:

• Are more significant than others

• Present more social risks than others

NOTES:

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There are several resources to draw on to classify and select business partners:

• Countries Risk Classification: BSCI classifies countries according to six governance dimensions. For more information: www.bsci-intl.org/bsci-list-risk-countries-0

• Least developed countries: These countries represent a heightened likelihood of risks. For more information: www.un.org/en/development/desa/policy/cdp/ldc/ldc_list.pdf

• Sector-related accumulated experience from purchasing personnel. By drawing on this experience, a company may develop a list of aspects considered risky:

¡ Use of agents to subcontract workers

¡ Manufacturing of goods that is often done using homeworkers, like embroidery or other handcrafts

¡ Products coming from areas where children’s education is not granted

¡ Food crops that are collected using extensive manual labour

• Media and NGO reports: Companies may use these reports to get insight on risks in specific areas.

• Information-gathering techniques such as:

¡ Self-assessment questionnaires

¡ Audit reports

¡ Interviews or checklists

• Diagraming techniques: A company devotes different levels of investment and vigilance to its business partners, depending on where they are placed in the diagram. These are some examples that can be useful:

¡ The arc of human rights priorities

¡ Diagram of Risks - likelihood - versus severity

¡ Strengths, Weaknesses, Opportunities and Threats (SWOT analysis)

IMPORTANT – The more complex the supply chain, the more a company will need to use several sources of information to identify risks and business partners.

BSCI offers BSCI Participants and their business partners a set of templates and annexes to gather information on their potential or existing business partners.

For more information, see BSCI System Manual:

• Part IV:

¡ Template 1: Business Partner Information

¡ Template 2: Supply Chain Mapping

¡ Template 3: Smallholder Self-Assessment

• Part V - Annex 7: BSCI Buyers Checklist

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www.bsci-intl.org/bsci-list-risk-countries-0

http://www.un.org/en/development/desa/policy/cdp/ldc/ldc_list.pdf

http://www.un.org/en/development/desa/policy/cdp/ldc/ldc_list.pdf


3.5.4. Take Action

Once business partners are classified and selected, BSCI Participants as well as their business partners must decide what the best option is for handling those relationships.

This decision needs to be taken at the management level and adapted regularly to account for new information or new business partners.

The following chart helps to visualise the different approaches and related consequences.

APPROACH CONSEQUENCE

ASSUME

• The company acknowledges that a certain business partner represents a risk for the company

• The company deliberately accepts the risk without engaging in special efforts to control it

• A manager needs to approve the decision and bear the consequences if something goes wrong

CONTROL

• The company is aware of the risks

• The company defines extra efforts to handle the risks

• The company implements actions to minimise the impact or likelihood of risk that the business partner brings to the company

• The company allocates financial resources to support the defined efforts

• A person responsible for those efforts closely follows-up on reducing the risks

CASCADE

• The company shares its responsibility and authority with another business enterprise so it controls the risks on its behalf. These are some examples:

¡ A brand requires an importer to control producers’ risks on its behalf

¡ A producer requires the workforce on its behalf

• The cascade effect can be very efficient when both parties exchange information regularly and share responsibility and resources

• Full transfer of responsibility is no longer acceptable. Companies are expected to know and act accordingly to avoid the adverse impact they may have as well as the adverse impacts on the right holders themselves

AVOID

• The company adjusts its requirements to eliminate or reduce the risks. These are some examples:

¡ A brand stops business with an importer that does not disclose satisfactory information on the sourcing location

¡ A company only sources from local and well-known partners

• Full avoidance is not feasible. Companies always assume certain risks

Figure 2: Taking Action in the Supply Chain – Approaches and Consequences

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3.5.5. Decide which Business Partners to Monitor

Only BSCI Participants take this decision: BSCI Participants ultimately decide which of their business partners are to be monitored. In the BSCI system, monitoring relates to BSCI Audits, which can only be done through the BSCI Platform and by following BSCI specifications. Other ways of verification can be complementary, but they are not part of the BSCI system.

The decision to monitor business partners within BSCI or not is done:

• Directly: The BSCI Participant identifies the business partners to be monitored and integrates them as part of its pool of producers in the BSCI Platform

• Indirectly: The BSCI Participant transfers its responsibility to another business partner to identify which business partners are to be monitored. This occurs when the BSCI Participant relies on:

¡ The choice made by other BSCI Participants (e.g. their importers are also BSCI Participants)

¡ The advice and information from an intermediary in the supply chain to build the pool of producers to be monitored

Reasons to monitor:

Significant business partners are to be monitored if:

• They have a production work environment

• The level of trust about their social performance is not acceptable

• Their level of maturity is insufficient to maintain a good social performance

IMPORTANT - The BSCI Audit protocol has been designed to verify production working environments. Other working environments such as trading offices, logistics companies or specialised technical support are not part of the scope of BSCI.

Signature of the Code: These business partners must sign the BSCI Code of Conduct and Terms of Implementation for Business Partners to be involved in the BSCI monitoring process, which includes their agreement to receive BSCI Audits.

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Reasons not to monitor:

BSCI Participants will decide not to monitor business partners if:

• They do not have a production work environment (e.g. agent)

• The level of trust about their social performance is acceptable because:

¡ They provide regular and accurate information on their own social performance and the social performance of their business partners

¡ They hold a valid certificate or audit from an equivalent social scheme:

- SA8000 Certificate: If the producer holds a valid SA 8000 certificate, the related BSCI Participant will present a copy of the certificate to the BSCI Secretariat for verification and eventual uploading on the BSCI Platform. This producer does not need to be monitored as long as it is covered by the valid certificate

- Other social schemes: If the producer claims to have a valid social audit or certificate from another system, the related BSCI Participant shall use the BSCI Quick Assessment of Social Audits from Other Systems to evaluate the extent to which certain non-negotiable criteria are covered by the system in question. To consult the BSCI Quick Assessment, see BSCI System Manual Part V – Annexes

Signature of the Code: These business enterprises will not be monitored against BSCI. However, the BSCI Participant will ask them to sign the Code and relevant Terms of Implementation. With this signature, these business partners commit to proactively share information on their social compliance and/or their supply chains.

Sourcing from a BSCI Participant: BSCI Participants do not have production work environments. Hence they cannot be monitored. Furthermore, their endorsement of and commitment to BSCI is usually reliable enough for fellow Participants. However, in some cases, a BSCI Participant sourcing from another may need additional information and updates on the implementation of BSCI in its supply chain. This occurs, for example, when participant A sources from participant B and the producers linked to participant B are irrelevant for participant A. In this case, two options are possible:

• Participant B includes producers in the BSCI system that are relevant for participant A

• Participant B discloses the information on the relevant producers so participant A can include these producers under its own responsibility

Similar to any other business enterprise, producers may request audits for some of their own business partners.

These audits can be:

• Part of their Social Management System

• Internal audits

• Second-party audits

IMPORTANT – Producers that source directly from farms include these farms as part of their Social Management System and regularly conduct internal audits to verify working conditions at the farm level. For more information, see BSCI System Manual Part III: Understanding the BSCI Audit – From the auditee perspective.

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3.6. INVOLVE WORKERS

Every company should find a way to strengthen workers involvement and their voices within the company.

Making workers aware of their rights and responsibilities is an investment, which contributes to:

• Productivity

• Quality of products and services

• Better governance

• Better social development within and outside the company

Assessment: There is not a universal way of assessing the level of workers involvement but these are some questions that can be used in the process:

• Is the workforce stable or is there high turnover?

• Are there many migrant workers (who in principle have less understanding of the host country’s laws)?

• How is the relation with local unions?

• Is there a workers representative freely elected by the workers?

• Are workers directly hired or subcontracted?

• Is there a competent person in charge of human resources?

• Is there a competent person in charge of occupational health and safety, including risk assessment and remediation?

• Are there any possibilities to raise complaints?

More information can be found in Part II and Part III: Performance Area: Workers Involvement and Protection.

Internal training: Management and workers need a minimum level of competence to promote genuine involvement of workers. Internal trainings will help to close the communication gaps and create the internal habit of involving workers.

NOTES:

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3.7. INVOLVE THE PURCHASING DEPARTMENT

Buying departments have first-hand information on the different business partners. Therefore, they are in the best position to support a robust BSCI implementation strategy.

From the BSCI Participant perspective, purchasing departments need to be involved in BSCI implementation at several steps:

• Mapping the supply chain

• Developing the implementation strategy

• Implementing the strategy

• Reviewing the processes

Challenges and constraints: Involving the purchasing department is not always easy and may include some challenges and constraints.

The chart below helps in understanding the possible constraints and solutions to develop a solid BSCI strategy.

POSSIBLE CONSTRAINTS POSSIBLE SOLUTIONS

Buyers have information only about their immediate interlocutor (e.g. agent) but they have little information about where the agent sources from.

Include the Code of Conduct and Terms of Implementation as part of the contracts. This provides the legal framework to request more information on the supply chain from intermediaries.

Buyers may have classified business partners based on price, quality and delivery time. They may have no interest in revising this classification to include social risks.

Involve buyers in the mapping and prioritisation of business partners so they better understand the link between social risks and quality risks. Provide them with the BSCI Countries’ Risk Classification.

Buyers receive incentives for selecting the cheapest source.

Influence the decision maker to create incentives for buyers to include social performance as part of their selection criteria.

Buyers may not have the time or the expertise to understand the information gathered on social performance (e.g. reading an audit report).

Set a clear procedure on how to understand the information on business partner social performance and/or CSR strategies. Develop a quick scan tool that translates BSCI Audit results into guidelines for them.

Buyers visit factories but may not have the time or expertise to ask producers key questions on social performance.

Provide buyers with a checklist which serves this purpose, e.g. Annex 7: BSCI Buyers Checklist available in the BSCI System Manual Part V – Annexes. In addition, conduct internal trainings on a regular basis.

Figure 3: Involving the Purchasing Department: Potential Challenges and Solutions

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To-do-list: If buyers are not yet involved in the BSCI implementation, define together the immediate to-do list:

• Update purchasing contracts: Include the Code of Conduct and Terms of Implementation in the purchasing contracts to cover at least the significant business partners

• Supply chain overview: Classify the information on the supply chain by distinguishing:

HOW MANY (e.g.)

SOURCING COUNTRIES (e.g.)

Direct sourcing from a producer

Low level of commercial relation stability

(50) Thailand, Italy, Morocco

High level of commercial relation stability

(8) Bangladesh, China

Any social certificate or similar social claim

(35) Bangladesh, China, Thailand, Italy, Morocco.

Indirect sourcing

using agents, importers or

brokers

Low level of commercial relation stability

(50) Thailand, Italy, Morocco

High level of commercial relation stability

(8) Bangladesh, China

Any social certificate or similar social claim

(35) Bangladesh, China, Thailand, Italy, Morocco.

Figure 4: Distinguish Direct and Indirect Sourcing

• Social risk communication: Define together the communication procedure between departments to identify any potential or actual risk associated with business partners

• Business consequences: Define together what the business consequence should be for business partners that do not show any interest in improving their social performance (i.e. when is the right time to stop business with the business partner?)

For more information, see BSCI System Manual Part I – Chapter 3, subchapter 3.10.: Stop Business.

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3.8. INVOLVE STAKEHOLDERS

Stakeholders are individuals, communities or organisations who are affected by and may affect an organisation’s products, operations, markets, industries, and outcomes.

Mapping and engaging stakeholders are integral and indispensable parts of business enterprises’ due diligence.

Benefits of engaging: There is a long list of benefits of why to engage with stakeholders such as:

• They bring to attention specific issues, markets and actors in the supply chain

• They influence public perception of social performance in the supply chain

• They help to assess risks and set priorities

• They hold unique and specific knowledge about local actors, issues and circumstances that otherwise may be difficult or impossible to obtain by a BSCI Participant or its business partner

• They complement or challenge information gathered through social audits

• They collaborate to find root causes and build capacities to close existing gaps

For more information, see BSCI System Manual Part I - Chapter 5: How to Engage Stakeholders.

3.9. SET UP A GRIEVANCE MECHANISM

A grievance mechanism represents the final step in acting as a diligent business enterprise. Therefore, all companies, regardless if they are going to be monitored or not, shall implement or participate in a grievance mechanism. If the company is going to be monitored, the set up and effectiveness of the mechanism will be checked by the auditor.

Benefits: The benefits of setting up an operational grievance mechanism include:

• Communication: It represents an additional channel of communication with both internal stakeholders (workers) and external stakeholders (e.g. community) to anticipate any risk or harm before it escalates

• Relations: It strengthens company relations with workers. If workers realise that they can not only share their concerns but also receive timely solutions, they will feel more motivated and willing to work better. This can lead to better quality products and services and improved productivity

• Confidence: It strengthens confidence about the way to manage the business enterprise and relate to the workforce, which will be well-perceived during any audit and/or visit from existing and potential clients

• Awareness: It serves as a great vehicle to raise workers’ awareness on their rights and obligations. Workers can learn if certain claims are justified or not if the conclusions are openly shared (respecting the necessary confidentiality of the worker)

For more information, see BSCI System Manual:• Part IV - Template 8: Grievance Mechanism• Part V - Annex 4: How to Set Up a Grievance Mechanism

IMPORTANT – Grievance mechanisms must be set up with genuine commitment to hear workers’ voices and to carry out a fair follow-up. Otherwise, the effect would be counterproductive.

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3.10. STOP BUSINESS

The BSCI Code of Conduct inspires all actors in the supply chain to use their leverage to promote long-lasting responsible business behaviour. It does not aim to guarantee a company’s social performance.

Reason to stop business: The fundamental reason to stop business is outright lack of trust provoked by the business partner’s behaviour. Trust can be breached suddenly, but it is often tested following several warnings.

For example, the business partner:

• Does not disclose information on its production sites or provide accurate information

• Does not engage its own business partners to provide information on a regular basis

• Does not verify that its business partners implement their remediation plans

• Shows clear unwillingness or incapacity to align to the BSCI Code

• Compromises the integrity of the audit by means of bribery, falsification or misrepresentation in the supply chain. For more information, see BSCI System Manual Part V – Annex 5: BSCI Zero Tolerance Protocol

Before stopping business: These are some aspects to take into consideration before stopping business or ending contracts with a business partner:

• Is stopping business the best alternative?

• What may be the adverse impacts on the business if the partnership ends?

• Can the issue be solved in another way?

• Is there a better business partner alternative?

Endemic problems: Some deficiencies on social performance relate to endemic problems in the sector, region or country. This makes it more difficult to find other alternatives. It also makes it crucial to engage with stakeholders so they understand the reasons to stop business and support the necessary changes.

NOTES:

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Procedure: Every business has to choose how and when to make the decision of stopping business. However, the decision should always be based on agreed upon procedures that include:

• Clear and communicated rationale: The rationale needs to be communicated and made available to all business partners so they are aware of it even before entering into commercial relations. The rationale should be translated into a cancellation or rescission clause in the contract, which would be the most stringent manner to enforce the BSCI Code of Conduct

• Stakeholder engagement: Business enterprises shall engage with consumers and other stakeholders on a regular basis to be transparent about their business models and the reasons why they would stop business with partners based on social performance

• Warning procedure: Business enterprises shall set up a procedure to issue warnings before stopping business. This will also help the company in the process of seeking alternative business partners

• Communication procedure: Business enterprises shall have a communication procedure to deal with cases where the related business partner has been targeted by the media. In such a case, the decision of stopping business needs to be analysed with extreme diligence as it might end up being totally counterproductive and raise stakeholder concerns

• Stop business or contracts: Business contracts and/or business relations should stop according to the agreed terms and after the agreed warnings. Stopping business because of a business partner’s unwillingness to implement a necessary measure to respect an obligation of the BSCI Code of Conduct does not alter contractual agreements (e.g. financial obligations from existing contracts need to be honoured)

KEY MESSAGESBSCI Implementation Strategy

• Policy: The BSCI Code can be used as policy for the company and it must be incorporated into the business enterprise’s culture

• Mapping: Each company must do its own mapping and classification of business partners

• Scoping: The scoping process requires: a) gathering and keeping information; b) classifying significant business partners; c) setting priorities

• Production environment: Business enterprises with no production working environment cannot be monitored within BSCI

• Engagement: Purchasing departments and stakeholders - in particular workers - need to be engaged in the development of the BSCI implementation strategy

• Grievance: A grievance mechanism represents the final step in acting as a diligent business enterprise

• Stop business: Business relations or contracts should never be stopped as a direct consequence of an audit result but instead be based on a clear and open procedure

• Follow up: The BSCI implementation strategy is not a static exercise but it needs to be regularly revised

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PART I – 4. HOW TO BUILD CAPACITIES

4. HOW TO BUILD CAPACITIES

Chapter 4 describes the steps to identify the skills and capacities needed to successfully implement the BSCI Code of Conduct. In addition, this chapter provides recommendations on how to address any qualification or skill gaps. It also overviews the capacity building activities provided to BSCI Participants and their business partners and auditors.

These are the documents related to this chapter:

• BSCI training materials

• BSCI Academy



• Annex 9: BSCI Code of Conduct 2014 Poster version

To react to dynamic market expectations, business enterprises need to “continuously” build skills, capacities and expertise. This applies to:

• Business enterprises that have endorsed the BSCI Code of Conduct and want to successfully integrate it into the business culture

• Auditing companies and other service providers that want to excel in the market

Gap analysis: The continuous learning process shall start by conducting a gap analysis to:

• Identify the type of abilities and knowledge missing in the company structure

• Define a plan to address the gap

• Define the best tools to transfer knowledge within the structure

• Prioritise the areas where the lack of abilities and knowledge may put business at risk

• Allocate a realistic budget to address the gap

Capacity building plan: Once the gap analysis has been conducted, business enterprises shall initiate their own capacity building and follow up on the progress.

A capacity building plan may be as simple as defining:

• The number of individuals and/or departments that need training

• The respective areas of knowledge to be addressed in a year

• The key indicators that will show that the knowledge has been effectively achieved

• The means for training and allocated time

Workshops for all audiences: BSCI offers capacity building workshops for all audiences related to the system. BSCI workshops:

• Are posted in the BSCI Academy

• Can be face-to-face

• Can be e-learning courses

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The success of these workshops depends on a business enterprise’s ability to:

• Have previously identified the capacities needed

• Select the right course

• Invite the right audience to learn about the topic(s)

Besides building capacities at their own companies, BSCI Participants and their business partners need to understand the missing capacities in their respective supply chains so they can provide support towards filling those gaps.

BSCI Participants shall invite their business partners - particularly those that are going to be monitored or those are already included in the monitoring process - to relevant BSCI workshops.

4.1. BUILDING CAPACITY FOR BSCI PARTICIPANTS

Mandatory training: BSCI Participants shall attend a BSCI workshop on the BSCI system within the first six months after having joined FTA and, in turn, the initiative.

Furthermore, BSCI Participants should use these BSCI workshops to update new personnel (e.g. CSR staff, buyers).

After this training, BSCI Participants should have sufficient background information to understand:

• BSCI values and principles

• The due diligence approach as part of their social responsibility

• How to map their supply chains and define significant business partners to be monitored

• How to analyse the information provided in the BSCI Audit Report

• The best ways to follow up on business partners’ continuous improvement (particularly remediation plans)

• The information available through BSCI to strengthen their strategic decisions

BSCI Platform: Learning how to best use the BSCI Platform is essential and enables the BSCI Participant to succeed in the implementation. The best way to learn about this tool is by using it regularly. However, BSCI Participants need at least a basic understanding of this tool. This information is available through webinars.

For more information, see BSCI System Manual Part V – Annex 1: How to Start with the BSCI Platform.

Topics and audience: The BSCI Secretariat develops workshops on specific topics related to the successful implementation of the BSCI Code. BSCI Participants can use the different governance channels to suggest new topics and/or new audiences to be included in the BSCI capacity building activities.

IMPORTANT – BSCI Participants should verify that their internal personnel in charge of sourcing and contracting (e.g. buyers) are properly instructed about the meaning of BSCI audit rating and that they act accordingly. For more information, see BSCI System Manual Part I – Chapter 6, subchapter 6.2.: BSCI Audit Rating.

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4.2. BUILDING CAPACITY FOR BUSINESS PARTNERS

Regardless if they are going to be monitored or not, BSCI Participants’ business partners play a critical role to:

• Cascade the BSCI values and principles through the supply chain

• Allow the BSCI Participant to detect early on any potential risks and impacts in the supply chain

For these reasons, BSCI Participants shall verify that their business partners have sufficient knowledge of the BSCI system so they can work with them in a cooperative manner.

For business partners not to be monitored (e.g. importers), the BSCI Secretariat may organise workshops upon the request of BSCI Participants.

For business partners to be monitored (producers)

Aim of the workshops: BSCI offers workshops for producers to build their necessary capacities to:

• Understand the expectations of the market in terms of their social performance

• Integrate the long-lasting and continuous improvement defined by the monitoring process

Face-to-face workshops are organised in the countries from which BSCI Participants source the most.

If the producer is based in a country where BSCI does not organise face-to-face workshops, the company will need to make additional efforts to understand BSCI as its peers, in other countries, do. The company can use the BSCI System Manual for self-learning and/or seek additional external support.

NOTES:

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TARGET AUDIENCE LEARNING OBJECTIVES

Producer management

level

• Understanding the labour rights and obligations that apply to the workforce, in the given sector and region

• Implementing a Social Management System

• Conducting risk assessments

• Analysing the root causes of non-observance

• Following-up on the progress of the Remediation Plan

• Handling grievance mechanisms

• Organising internal auditing. Conducting internal audits is a good practice for all producers to monitor their progress

IMPORTANT – Business partners that produce fresh fruits and vegetables are asked to conduct internal audits on the packing houses and the farms they use. Therefore, an internal auditor must be appointed and trained for this purpose.

Workers training

• The social commitment assumed by their employer (e.g. by explaining the BSCI Code in a poster version; see BSCI System Manual Part V- Annex 9: BSCI Code of Conduct 2014 Poster version)

• Their rights and duties at the workplace

• Grievance mechanism procedure and accessibility

• Regular health and safety risk assessments

• How to maintain a healthy work environment

• Specific health and safety requirements relevant for their own tasks (e.g. a worker handling chemicals needs to be specifically diligent in ways which do not apply to other workers)

Figure 5: Target audience and learning objectives

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4.3. BUILDING CAPACITY FOR THE AUDITING COMPANIES

Auditors are key actors in the BSCI system.

Their ability and their knowledge determine the quality of the information gathered through the BSCI Audit.

Auditor competence: Minimum qualifications and specific training requirements are stated in the Auditing Company Framework Contract with FTA as well as in the BSCI System Manual.

Furthermore, there are two skills that auditors may identify as relevant, in their gap analysis:

1. Systemic thinking

This technique allows auditors to gain deeper insights into challenging situations and complex domains. Auditors may need this ability to evaluate business social performance in relation to its larger context.

2. Interpretation of the norms

Although social auditors do not necessarily have a legal background, it is essential that they understand the applicable laws in the right way.

When the literal reading of the norm may cause problems with interpretation, the auditor shall:

• Seek to understand the purpose of the law and avoid absurd conclusions

• Be well-aware of the hierarchy of the different norms and authorities that issue those norms to prevent any contradiction

• Use BSCI’s mission and values to frame the interpretation of the auditee’s social performance

KEY MESSAGESBuilding Capacity

• Across the supply chain: Capacity building needs to be applied across the supply chain, at all company levels with workers involved

• Gap analysis: It is necessary to evaluate the skills that are missing in order to create a capacity building plan

• BSCI offer: BSCI provides a variety of opportunities to build capacities on different topics, for different audiences

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PART I – 5. HOW TO ENGAGE STAKEHOLDERS

5. HOW TO ENGAGE STAKEHOLDERS

Chapter 5 describes practical issues to help understand the process for stakeholder engagement. This includes mapping stakeholders and setting up alliances with them on different fronts. According to the stakeholder type, different kinds of cooperation can be achieved.


• Template 6: Stakeholder Mapping


5.1. MEANINGFUL ENGAGEMENT

Challenges: When trying to transfer the BSCI Code of Conduct into business practice, business enterprises confront internal and external challenges:

1. Reservations to support the changes needed

2. Lack of resources to make sustainable changes

3. Lack of influence to convince business partners to endorse the BSCI Code of Conduct at the operational level

These are only a few examples of challenges. They remind companies that they cannot successfully embed the BSCI Code of Conduct alone. They need to find allies.

Engagement can take place among:

• Internal stakeholders

• External stakeholders

Meaningful engagement relies on:

• Aptitude: None of the parties intend to convince the other of their views or approaches, but instead they concentrate on shared goals

• Interest: They seek long-lasting solutions rather than short-term demands

• Regularity: The agenda agreed upon is followed up on a continuous basis and not just in case of immediate crisis

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5.2. IDENTIFICATION OF THE RELEVANT STAKEHOLDER GROUPS, ORGANISATIONS AND INDIVIDUALS

The table below shows potential stakeholder groups at different BSCI implementation stages. The table is drawn from the perspective of the BSCI Participant. However, it gives inspiration for any company to identify its specific stakeholders.

Relation

BSCI stages

Internal Stakeholders (inside the company)

External Stakeholders

Policy, scoping and assessing

(rules and strategy-oriented)

- Top management

- Sourcing/buying department

- Compliance/legal department

- Local buying offices

- Business partners

- BSCI Secretariat

- Trade union federations

- Civil society organisations

Acting and integrating

(task-oriented)

- Sourcing/buying department

- Local buying office

- Workers

- Business partners

- BSCI Secretariat

- Other BSCI Participants

- BSCI Country Representatives

- Specialised UN agencies (The ILO, UNICEF)

- Government agencies

- Local trade unions

Knowing and showing

(communication and accountability-oriented)

- CSR department

- Compliance department

- Communication department

- Advocacy groups

- Consumers

- BSCI National Contact Groups

- Business Partners

- Trade unions

- Business partners’ workers

- Government agencies

Figure 6: Potential Stakeholder Groups to Support in BSCI Implementation

Business partners to be monitored (producers) can find additional information in the BSCI System Manual Part III: Understanding the BSCI Audit from the auditee perspective.

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5.3. PRIORITISATION OF THE RELEVANT STAKEHOLDERS

The prioritisation of stakeholders depends on:

• Their level of influence on the community and other stakeholders

• Their level of interest in the company’s activity

The table below defines the ways to engage with the different stakeholders depending on their level of influence and interest:

Keep Satisfied Involve

Manage Closely Collaborate

Inform Consult

Influ

ence

Interest

High

Low High

Figure 7: Ways to Engage with Stakeholders

IMPORTANT – Business partners that are not going to be monitored must ensure close engagement and consultation with the related BSCI Participant(s).

5.4. COOPERATION WITH STAKEHOLDERS

Business enterprises should cooperate with stakeholders that have the highest level of influence and interest in their business.

From the BSCI Participant perspective, these are the three major groups of stakeholders to cooperate with:

5.4.1. Business Partners

Engaging business partners already prioritised through due diligence is key.

These are examples of fruitful engagement with business partners:

• Follow up on challenges and improvements concerning their social performance in a regular way

• Build common expertise on the effectiveness of their due diligence

• Exchange information on their respective stakeholder engagement strategies and outcomes

• Support them to implement existing remediation plans

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5.4.2. Other BSCI Participants

BSCI Participants belong to a unique network of like-minded business enterprises that have subscribed to the same Code of Conduct.

BSCI offers easy ways to identify fellow BSCI Participants that share business partners (e.g. same producer) to discuss strategies and to coordinate activities.

As much as possible, BSCI Participants shall:

• Act in a coordinated fashion with their peers

• Send the same coherent messages to external stakeholders on the ways in which they endorse the BSCI Code of Conduct

Acting in a coherent and collective manner increases BSCI’s leverage and the positive impact. This is particularly relevant for small and medium size enterprises that may have less bargaining power.

These are examples of fruitful engagement with other BSCI Participants:

• Join forces to send strong signals to governments that are failing to protect their citizens

• Exchange information on their respective approaches to engage stakeholders

• Request a common business partner to sign the BSCI Code of Conduct and related Terms of Implementation

• Support the implementation of a remediation plan

• Respect the monitoring strategy defined by the BSCI Participant that holds RSP

NOTES:

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5.4.3. Cooperation with Other External Stakeholders

The root causes of deficient social performance can lie outside the supply chain. Engaging with the relevant external stakeholders can lead to a sustainable solution.

These are examples of fruitful engagement with external stakeholders:

• Governments and international organisations such as the ILO: Cooperation with them may support the application of the labour law in the sourcing country

• Trade unions in the sourcing countries: Cooperation with them may help to raise awareness of workers’ rights and obligations; it may be fruitful cooperation for when handling grievances

IMPORTANT – Mapping and genuinely engaging with stakeholders is not an isolated exercise as they relate to finding sustainable solutions. BSCI can be used as a strong and reliable network to create leverage. This is particularly important to increase the impact of a remediation plan.

• Use clusters: Engage with other BSCI Participants related to the same producer, same sector or even same region (e.g. when the problem is endemic)

• Industry associations: Contact relevant industry associations to support the creation of common solutions for the industry

• Specialised NGOs: Regularly consult and inform specialised NGOs that can help regionally, nationally and/or internationally

• Trade unions: Consult local trade unions that have unique insight and information, to take into consideration

• Local labour inspectors: Verify to which extent local labour inspectors can play a role in strengthening the remediation process

• International Labour Organization (ILO) Local office: In many sourcing countries, the ILO has a local office. The support and insight from these offices may be critical

• BSCI Secretariat: The BSCI Secretariat can play a key role in coordinating voices to send strong messages to relevant stakeholders

BSCI Participants may not have the means through which to address these external stakeholders individually. However, the BSCI Secretariat can support in the coordination.

KEY MESSAGESStakeholder Engagement

• Business enterprises cannot successfully embed the BSCI Code of Conduct alone. They need to seek allies

• Business enterprises identify and prioritise their relevant stakeholders through a mapping exercise

• Cooperation with key stakeholders is a powerful tool that greatly increases leverage and impact in the field

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PART I – 6. HOW TO DO MONITORING

6. HOW TO DO MONITORING

Chapter 6 details the BSCI monitoring process for business partners.

This chapter explains how a BSCI Audit is arranged and performed. This includes the entire process from requesting and scheduling an audit to performing and following up on the audit results.

Different types of monitoring are described.

At this point the significant business partner that is going to be monitored:

• Has already been identified as a producer

• Becomes the auditee or main auditee

For more information, see Part II and Part III of the BSCI System Manual.


• BSCI Audit Report

• Template 1: Business Partner Information





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6.1. BSCI AUDITS

In the BSCI System, audits can be:

INTERNAL

The auditee appoints an internal person to assess:

• Its own social performance

• The social performance of its business partners (e.g. farms)

Internal audits are:

• Conducted in a systematic manner

• By a qualified person

• Embedded in the Social Management System

IMPORTANT – Business partners producing fresh fruits and vegetables are asked to conduct internal audits on the packing houses and the farms they use. For more information, see Part III of the BSCI System Manual.

EXTERNAL

A qualified assessor produces an independent verification of the auditee’s social performance.

For BSCI implementation, these audits can only be conducted:

• For a producer that belongs to one or more BSCI Participants’ supply chains

• By BSCI approved auditing companies

• Using the BSCI Audit Report and audit scopes

• If scheduled and reported via the BSCI Platform

Auditors:

• Validate the information provided by the auditee

• Gather satisfactory evidence by means of documentary checks, interviews and site visits

• Rate the outcome of each of the 13 Performance Areas according to the BSCI rating system

• Issue a Findings Report and/or verify the auditee’s continuous improvement disclosed in the Remediation Plan

Figure 8: Different Types of Acceptable Social Audits

IMPORTANT – BSCI Audits can only be organised with a BSCI Participant’s approval. If a producer finds it necessary (based on a risk assessment) to conduct a BSCI Audit of one of its business partners, it will need to organise this in coordination with its linked BSCI Participant. The producer cannot take this approach unilaterally.

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Independent verification: BSCI Audits represent an independent verification of the auditee’s social performance and auditors document the results in the Findings Report. They support:

• The auditee to define its path towards continuous improvements

• The BSCI Participant to understand its social risks and impacts and to take the necessary measures

Performance Areas: The auditee’s path towards continuous improvements is defined through the 13 Performance Areas against which the auditee is evaluated.

The Performance Areas are the translation of the BSCI Code of Conduct principles into measurable practices.

These are the 13 BSCI Performance Areas:

• Social Management System and Cascade Effect

• Workers Involvement and Protection

• The Rights of Freedom of Association and Collective Bargaining

• No Discrimination

• Fair Remuneration

• Decent Working Hours

• Occupational Health and Safety

• No Child Labour

• Special Protection for Young Workers

• No Precarious Employment

• No Bonded Labour

• Protection of the Environment

• Ethical Business Behaviour

BSCI Audits can be:

Fully Announced Semi-announced Fully Unannounced

Full audits The auditee is informed of the date of the audit

The auditee is informed of the “timeframe” when the audit will be conducted

The auditee is not informed of the date of the audit. The audit can take place at any time without previous communication

Follow-up audits

Figure 9: BSCI Audit Types

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Full audits:

• Cover all 13 Performance Areas

• Initiate a BSCI Audit cycle

• The auditor:

¡ Generates and validates the producer profile data

¡ Issues a full Findings Report

¡ Defines the sample of farms to be audited (if applicable), which will remain defined until the next full audit is due

Follow-up audits:

• Do not cover all Performance Areas but only those where the auditor identified findings

• Occur in between full audits to follow-up the continuous improvement

• Relate to the Remediation Plan drafted by the auditee, based on the findings identified by the auditor

• Take place within a maximum of 12 months following the previous audit (either full audit or follow-up audit)

• The auditor:

¡ Updates the producer profile with all the new data (if applicable)

¡ Verifies the progress of the producer using the Remediation Plan or the previous Findings Report as a reference (whichever is more complete)

¡ Issues a new Findings Report with noted actions completed

¡ Identifies and reports new findings that were not identified in the previous Findings Report (if relevant)

IMPORTANT: BSCI Participants may request a follow-up on only part of the findings. In that case, the auditor must report under “General Information” in the Audit Report:

• Audit range: Follow-up

• Audit extent: Limited extent (follow-up of a few Performance Areas only)

• Details to justify the choice: The Performance Areas which are evaluated during the audit

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6.2. BSCI AUDIT RATING

The overall rating reflects to which extent the auditee has integrated the BSCI Code into its daily business culture and operations. It is a result of the combination of ratings per Performance Area.

Rating per question: In every Performance Area, each question can be answered by the auditor:

• YES: The auditor finds the amount of evidence satisfactory

• NO: The auditor finds the amount of evidence unsatisfactory

• PARTIALLY: The auditor finds some satisfactory evidence

The rating for each Performance Area relates to the answers given by the auditor, as each answer has a numerical value. The table below shows the values, which depend on the answer and the type of question:

Figure 10: BSCI Audit Rating: Questions and Values

Rating per Performance Area: The values per question are added up and translated into a fulfilment percentage per Performance Area. This fulfilment percentage determines the rating for each Performance Area.

RATING PER PERFORMANCE AREA FULFILMENT PERCENTAGE

A 86% to 100%

B 71% to 85%

C 51% to 70%

D 30% to 50%

E 0% to 29%

Figure 11: BSCI Rating per Performance Area

ANSWER TYPE OF QUESTION NUMERICAL VALUE

YESAll questions

PARTIALLY

Non-crucialCrucialCrucial in Performance Areas:

• Child Labour

• Bonded Labour

• OHS

NO

Non-crucialCrucialCrucial in Performance Areas:

• Child Labour

• Bonded Labour

• OHS

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Overall rating: Depending on the different combinations of ratings per Performance Area, the auditee will receive a final audit result.

RatingA combination of ratings per Performance Area where:

Consequence

A

Outstanding

• Minimum 7 Performance Areas rated A

• No Performance Areas rated C, D or EThese are three examples:

A A A A A A A A A A A A A

A A A A A A A A A A B B B

A A A A A A A B B B B B B

The auditee has the level of maturity to maintain its improvement process without the need for a follow-up audit.

B

Good

• Maximum 3 Performance Areas rated C

• No Performance Areas rated D or E

These are three examples:

A A A A A A B B B B B B B

A A A A A B B B B B B B C

B B B B B B B B B B C C C

The auditee has the level of maturity to maintain its improvement process without the need for a follow-up audit.

C

Acceptable

• Maximum 2 Performance Areas rated D

• No Performance Areas rated E

These are three examples:

A A A A A A A A A C C C C

A A A A A B B B B C C C D

C C C C C C C C C C C D D

The auditee needs follow up to support its progress. Following the completion of the audit, the auditee develops a Remediation Plan within 60 days.

D

Insufficient

• Maximum 6 Performance Areas rated EThese are three examples:

A A A A A A A A A A D D D

A A A B B B C C C D D D E

D D D D D D D E E E E E E

The auditee needs follow up to support its progress. Following the completion of the audit, the auditee develops a Remediation Plan within 60 days..

E

Unacceptable

• Minimum 7 Performance Areas rated EThese are three examples:

A A A A A A E E E E E E E

A A B B C D E E E E E E E

E E E E E E E E E E E E E

BSCI Participants shall closely oversee the auditee’s progress as the producer may represent a higher risk than other business partners.

Zero Tolerance

A Zero Tolerance issue was identified (see BSCI System Manual Part V – Annex 5: BSCI Zero Tolerance Protocol)

Immediate actions are required. The BSCI Zero Tolerance Protocol is to be followed.

Figure 12: BSCI Audit Rating: Results and Consequences

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IMPORTANT – The auditor must trigger an alert in case of flagrant child labour, bonded labour, imminent risk to workers’ health and/or lives and unethical behaviour. In these cases, the auditee does not receive an overall rating but instead it receives a status of Zero Tolerance. For more information on the Zero Tolerance process, see BSCI System Manual Part V – Annex 5: BSCI Zero Tolerance Protocol.

6.3. AUDIT VALIDITY

Rating A or B: BSCI full audits are valid for 2 years, unless follow-up audits are to be conducted. This is the case for producers that receive an overall rating of A or B.

Producers rated A and B are eligible to receive a Random Unannounced Check in the period between the two full audits.

Rating C, D or E: When an auditee receives an overall rating of C, D or E after a full audit, this audit is valid until the follow-up audit is conducted.

The follow-up audit shall be conducted on the date defined in the Remediation Plan but it can only take place up to a maximum of 12 months after the last audit:

• If the result of the follow-up audit shows improvements (A or B rating) then the audit is valid until the full audit is due

• If the result of the follow-up audit is C, D or E, the audit is valid until the next follow-up audit is due provided that the period between two full audits never exceeds 2 years

Figure 13: BSCI Audit Validity

1 year 2 years

Full audit rated A or B

Full audit rated C, D or E

Follow-up auditFull audit

No follow-up audit within one year means a new full audit is needed. Consecutive follow-up audits can occur provided that:

¡ The period between follow-up audits never exceeds 12 months

¡ The period between two full audits never exceeds 2 years

¡ If the result of the follow-up audit shows improvements (A or B rating), the audit is valid until the full audit is due

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6.4. AUDIT SCOPE AND AUDIT EXTENT

Main auditee: In general, the scope of a BSCI Audit is defined as the legal entity that has signed the Code and Terms of Implementation for business partners to be monitored.

(Main auditee = One legal entity = One production facility).

The length of the audit is calculated based on the number of workers who work at that legal entity. This number shall include the direct as well as the subcontracted workers.

• Subcontracted workers: Workers related to another company form part of the scope of the audit. Therefore, information about their wages, working hours and contracts must be available for auditors’ verification. These are the most common cases:

¡ Security services

¡ Cleaning services

¡ Catering on site

¡ Subcontracted production workers

Main auditee and sampled farms: When the main auditee sources fruits and vegetables directly from farms (without any intermediary process), these are the particularities to be taken into consideration:

• Audit scope: the scope of the audit shall include both the main auditee and a sample of farms, provided that the main auditee:

¡ Has set up a Social Management System to internally monitor the social performance of its farms (owned or independent)

¡ Has internally audited at least two farms before the first full audit is conducted. The auditee has the obligation to continuously monitor the social performance of 2/3 of the farms that are significant for its business. However, this coverage is only expected after three years of having initiated the BSCI monitoring process

¡ Farms owned by the main auditee which are included under the same management shall always be included as part of the audit scope

The auditor seeks evidence of this information before the audit is scheduled.

If these criteria are met, the auditing company will include a sample of farms as part of the audit scope.

In a full audit, auditors will select a sample of 10% of the farms involved in the Social Management System (minimum 2, maximum 10 farms).

In the follow-up audit, auditors will not increase the sample defined in the full audit.

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BSCI does not determine how the auditee or the auditors select the farms. It is, however, recommended to take into consideration the risks and the significance of the farm with regard to overall production.

• Audit Extent: If the auditee and or/related farms hold a valid GlobalGAP Certificate, the auditor will not monitor:

¡ Performance Area 7: Occupational Health and Safety

¡ Performance Area 12: Protection of the Environment

The audit duration is reduced by 30% in this case. The auditor will report this, in the Audit Report, under “General Information”, “Audit extent”: “Combined with other system(s)”.

When to define the scope: The scope of the audit is defined in a timeframe that starts with the audit request and ends with the audit scheduling. Through the BSCI Platform, the BSCI Participant makes the audit request by selecting the auditee and work environment, as shown in the table below. The auditing company receives this information and schedules the audit accordingly.

Main AuditeeFarms

(Only if internally audited prior to the BSCI Audit)

Industrial work environment

X

Agricultural work environment

X X

Figure 14: Scope of the BSCI Audit

Lack of information: It may be that the BSCI Participant lacks sufficient information on the structure of the auditee so it requests an audit with the wrong scope (e.g. the BSCI Participant requests an audit that includes main auditee + farms, but the potential auditee does not source directly from farms).

The auditing company must seek clarification on the structure of the potential auditee before scheduling the audit.

Hiding information: If the auditee hides information on its real structure, and if the misrepresentation is uncovered at the time of the audit, the auditor shall report this in the Executive Summary.

The misrepresentation must be rated under the Ethical Behaviour Performance Area.

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Exceptional limitation of the scope: The scope of the BSCI Audit can be reduced on an exceptional basis with specific approval from the BSCI Secretariat.

Auditing companies can limit the scope in one case only:

The BSCI Participant wants to only monitor the production unit that relates to its business.

The auditing company collects clear evidence that:

• The unit to be audited is clearly and physically separated from the rest of the organisation

• There is no workforce movement or exchange between the unit to be audited and the rest of the units in the organisation

Consequences of limiting the scope: If the scope of the audit is limited to one production facility or unit:

• The audit duration is calculated based on the number of workers in the audited production facility or unit (instead of the total number of workers in the legal entity)

• In the BSCI Platform:

¡ The name of the auditee in the producer profile will not correspond to the legal entity but to the production facility or unit

¡ The name of the auditee will clearly indicate that the scope of the audit does not correspond to the entire legal entity(e.g. Producer Name (production unit 1))

¡ The auditor reports the limited scope under “Audit extent” in the General information section of the Audit Report

Applicable Audit Reports: The BSCI Audit Report is automatically generated by the BSCI Platform, based on the information validated during the audit scheduling.

The Platform will generate:

• An Audit Report for the main auditee only

Or

• An Audit Report for the main auditee and the sampled farms

IMPORTANT – Cases of Zero Tolerance will be investigated using a different report.

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6.5. SELECT THE AUDITING COMPANY

Only auditing companies that have signed the Framework Contract with FTA are entitled to conduct BSCI Audits.

The list of auditing companies can be found at the following link: www.bsci-directory.org/auditors/view/fa.php

BSCI does not define:

• Who selects the auditing company

• Who pays for the audit

• Whether or not the same auditing company needs to conduct both the full audit and its follow-up audit

• How much BSCI Audits cost

BSCI Participants may decide to work with one specific auditing company for all the BSCI Audits they organise.

BSCI Participants should select the auditing companies by taking the following aspects into consideration:

• Capacity: Auditing companies should be approached early enough to plan the audit and assign the auditor who has the right competencies. Requesting audits 3 or 4 months in advance is a good practice.

• Price: BSCI determines the minimum length of a BSCI Audit but every auditing company defines its own service rate. A good audit requires good preparation, expertise and professionalism (prior, during and after the audit). Low cost audits may end up being expensive if they do not provide the information needed.

• Potential conflict of interest: Although auditing companies have mechanisms in place to avoid entering into conflicts of interests, it is important to keep in mind this issue when selecting the auditing company. These are cases where impartiality becomes compromised:

¡ The auditor had previously provided training and/or technical advice to the auditee

¡ The audit is not paid for beforehand but the price depends on the results ¡ The same auditing company is used over time with the same individual

auditor. Long-lasting auditor-auditee relations can compromise the objectivity of the auditor and the quality of the monitoring process

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http://www.bsci-directory.org/auditors/view/fa.php


6.6. SCHEDULE THE AUDIT

Audit Schedule: BSCI Audits can only be scheduled through the BSCI Platform. When a BSCI Participant wants to schedule an audit, these are the steps to be followed:

• Verify that the potential auditee is part of its producers list

• Take the Responsibility (RSP) for the potential auditee

• Click the “Request Audit” button to schedule an audit and use that pop-up window to:

¡ Select the audit time range ¡ Select an audit type (full or follow-up audit) ¡ Select the auditing company and branch if applicable ¡ Select the announcement of the audit:

- Fully announced

- Fully unannounced

- Semi announced ¡ Select the scope of the audit:

- Main auditee

- Main Auditee + farms

• The Audit company receives the request via the BSCI Platform and:

¡ Confirms the request ¡ Fixes a date for the audit ¡ Appoints an auditor ¡ Informs the main auditee of the date of the audit (in case of an announced

audit) ¡ Informs the BSCI Participant (RSP holder) in all cases

IMPORTANT – Audit requests can also be initiated by BSCI Participants’ business partners or auditors. For all possible scenarios and related process details, refer to the BSCI Platform tutorials and capacity building workshops.

NOTES:

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6.7. PREPARE FOR THE AUDIT

6.7.1. For BSCI Participants

Provide information to the auditee: BSCI Participants shall ensure producers understand how their social performance is going to be monitored. To that aim BSCI Participants shall ensure their producers have access to up-to-date information:

• By referring them to the BSCI website and BSCI Platform (with log-ins)

• By keeping buying departments (or responsible personnel) updated on the audit scheduling

Resources management:

• Pre-define who will pay the full audit and/or the follow-up audit

• Allocate budget for specific training activities

• Allocate budget in case a Zero Tolerance issue needs to be followed up

• Assess the kinds of competencies that company staff lack and determine how to overcome the gap (e.g. How many people in the company know how to read and understand a social audit report?). For more information on how to read the audit report see BSCI System Manual Part II: Understanding the BSCI Audit For Auditors

Interaction with other BSCI Participants: BSCI Participants shall have a good overview of how many other BSCI Participants are linked to the producer they intend to audit. This overview shall help them anticipate the leverage they might have to promote improvements in the auditee’s social performance.

6.7.2. For BSCI Auditors

Understand the context of the auditee: The auditor shall take the necessary measures to understand the auditee’s reality. These are the most common practices:

• Verify distance and geography, which are not only relevant to organise the logistics but also to understand workers reality: the way they commute to work, the distance to schools, to hospitals and or other regular administrative offices (e.g. banks)

• Verify particular contexts (gender, social hierarchy, migration, homeworkers, youth situation)

• Pre-calculate a fair remuneration as accurate as possible to the region and sector

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Understand the sector of the auditee: The auditor shall take the necessary measures to ensure he/she understands the auditee’s sector. These are the most common practices:

• Verify the existence of specific trade unions

• Verify the existence of specific collective bargaining Agreements

• Verify if there are discrepancies in the remuneration

• Verify the legislation that is applicable (e.g. for industry or for agriculture)

• Take account of the production structure

• Pre-define the sample of farms (when applicable and possible). Very often the sample is defined during the audit

Make sure to have all relevant documents upfront. This includes:

• The off-line Audit Report (Excel version, printed version)

• The Code of Conduct with the Terms of Implementation for Business Partners to be involved in the BSCI monitoring process (signed by the auditee)

• Copy of the Remediation Plan template (to provide to the auditee when relevant)

6.7.3. For the Auditee (Producer)

Legal framework: Verify that the BSCI Code of Conduct with the related Terms of Implementation have been signed and sent back to the BSCI Participant or related business partner.

RSP Holder: Verify which BSCI Participant holds the responsibility for the audit. This information is available in the BSCI Platform.

Login for the BSCI Platform: Verify that all necessary resources and the progress page are accessible via the producer profile in the BSCI Platform.

The login can be recovered by going to www.bsciplatform.org/home

Seek information: The BSCI System Manual is the best ally for developing a good understanding of the expectations towards being a responsible business enterprise. Further information is also available via the:

• BSCI website: www.bsci-intl.org

¡ BSCI e-learning tools (accessed via www.bsci-intl.org/bsci-academy)

¡ BSCI Workshops (accessed via www.bsci-intl.org/bsci-academy)

• BSCI Platform: www.bsciplatform.org

• BSCI national websites:

¡ China: www.bsci-cn.org

¡ The Netherlands: www.bsci-nl.org

¡ Switzerland: www.bsci-ch.org

• Service providers: BSCI Service Provider Directory

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http://www.bsci-intl.org

http://www.bsciplatform.org

http://www.bsci-cn.org

http://www.bsci-nl.org

http://www.bsci-ch.org

http://www.bsci-intl.org/resources/service-provider-directory


Gather internal information:: The auditee will collect as much information as possible on the way it carries out its business. It shall identify the possible challenges or gaps, if possible before the audit.

These are the requirements most commonly missing:

• Lack of Social Management Systems and written procedures. For more information, see BSCI System Manual Part V – Annex 3: How to Set Up a Social Management System

• Lack of regular training for management on social responsibility issues

• Lack of regular training for workers on their rights and obligations, occupational health and safety issues and access to grievance mechanisms

• Lack of a grievance mechanism to deal with complaints

• Lack of financial resource allocation to improve working conditions

• Deficiencies in the infrastructure needed for production

Install effective record keeping: Effective record keeping is an integral part of a good management system, and therefore helps to embed BSCI principles and values in the business culture. Furthermore, reliable record keeping supports:

• Meeting legal and ethical obligations

• Transparency in the decision-making process

For more information, see BSCI System Manual Part V:



Verify business partners: The auditee shall verify if its commercial relations with other companies present risks to harm workers’ rights or human rights. To do so, it shall assess their management practices.

These are the most common examples to pay extra attention to:

• Security services

• Recruitment agencies

• Cleaning services

• Catering onsite

• Subcontractors, particularly if they use homeworkers

Identify and execute improvement actions: The auditee should envision how to make the necessary improvements even before the BSCI Audit. This proactive approach allows a greater sense of ownership over the process, which shall become evident during the audit.

Provide the auditing company with preliminary data: The auditee can use the BSCI templates related to inform the auditing company about its structure.

For more information, see BSCI System Manual Part III: Understanding the BSCI Audit from the auditee perspective.

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6.8. AUDIT EXECUTION

Every BSCI Audit shall follow these steps:

Conduct the opening meeting: The auditor shall use this opportunity to explain the dynamic and purpose of the BSCI Audit to the auditee.

Collect evidence: The auditor collects evidence on the auditee’s social performance by:

• Verifying documentation

• Visiting and analysing the production facilities and units

• Conducting interviews with management, workers representative and workers from different areas

Evaluate the social performance: The auditor evaluates the different Performance Areas from a holistic perspective to capture the auditee’s overall social performance in the best way.

Elaborate on the Findings Report: The auditor consolidates both “Good practices” as well as “Areas of improvement” for the auditee in the Findings Report. The findings are to be drafted per Performance Area, as a combination of the several pieces of evidence gathered per question.

Conduct a closing meeting: The auditor takes this opportunity to explain the findings.

All questions and concerns shall be addressed at this crucial meeting. In this open dialogue, the auditor suggests deadlines to implement the necessary improvements. However, the auditee will come up with the final Remediation Plan once the root cause analysis has been conducted. The auditee can also ask the auditor to transcribe the allegations or comments with regard to some conclusions.

Both the management as well as the workers representative shall sign the Findings Report to acknowledge the conclusion of the audit, even if they do not agree with all the content.

The auditor reminds the auditee that it has 60 working days to submit the Remediation Plan into the BSCI Platform. The auditor may provide a copy of the Remediation Plan template. The plan is based on the Findings Report.

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IMPORTANT – The execution of the audit can be compromised in several situations:

• Aborted: The audit was scheduled and organised but it did not occur. In this case, the audit report only includes general information but no evaluation of the Performance Areas. The auditor submits the audit report and indicates that the audit was “Aborted” (under “Audit interferences”) and he/she provides details to justify that choice.

• Access denied: The auditee does not allow the auditor to access the site. In this case, the auditor answers all questions in the Performance Areas NO, which triggers an overall rating E. The auditor submits the audit report and indicates indicating “Access Denied” (under “Audit interferences”) and he/she provides details to justify that choice.

• Partially conducted: The audit is conducted but interrupted, which prevents the auditor from finishing the evaluation. In this case, the auditor answers all questions in the Performance Areas that were not evaluated NO. This triggers an overall rating E. The auditor submits the audit report and indicates that the audit was “Partially conducted” (under “Audit interferences”) and he/she provides details to justify that choice.

NOTES:

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6.9. FOLLOW-UP AND CONTINUOUS IMPROVEMENT

Continuous improvement is a core value of the BSCI system. BSCI Participants expect their business partners to continuously improve the working conditions within their companies and supply chains.

6.9.1. For BSCI Participants

The positive impact of BSCI depends on the capacity of BSCI Participants to encourage their business partners to:

• Remediate the short- and medium-term findings

• Make the necessary long-lasting changes

• Integrate the BSCI Code of Conduct into their business culture

Regular follow-up: The auditee that receives an overall audit rating which requires follow up (C, D or E) has 60 working days to submit the Remediation Plan to the BSCI Platform.

A follow-up audit, to validate the effectiveness of the auditee’s Remediation Plan, is conducted up to a maximum of 12 months after the previous BSCI Audit. In case the auditee fails to deliver a Remediation Plan, the follow-up audit is conducted with the auditor’s Findings Report as reference.

The organisation of a follow-up audit at an early stage may be beneficial for keeping the auditee motivated while it is under supervision to make the necessary progress.

This is especially recommended if the auditee has an E rating.

Attentive follow-up: Experience shows that business partners, in particular those that have been audited, require attentive follow-up and encouragement to understand the short-, medium- and long-term changes needed to embed the BSCI Code into their business practices.

Attentive follow-up is relevant at least in the following scenarios:

• The auditee has Zero Tolerance issues: In these cases, the severity of the issues identified during the BSCI Audit demand a specific follow-up, which starts with the alert triggered by the auditor. For more information, see BSCI System Manual Part V – Annex 5: Zero Tolerance Protocol

• The auditee does not submit the Remediation Plan within 60 days: There may be technical reasons as to why an auditee does not submit its Remediation Plan into the BSCI Platform. Respect for the timeline is an indicator of the auditee’s willingness and interest to improve. Failing to respect the 60 day limit shows disregard, which needs to be addressed immediately.

• The auditee has engaged in specific capacity building activities: The BSCI Participant shall verify that the auditee truly attended and engaged in the workshops to which it had committed.

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6.9.2. For Business Partners to be Monitored (Auditee)

The Findings Report is the basis for the auditee to develop the related Remediation Plan. The auditee will be proactive and innovative to make improvements in order to embed the BSCI Code in its business culture.

When drafting the Remediation Plan, the auditee focuses on the following steps:

• Analysis: Read the Findings Report and if needed the entire Audit Report

• Root cause: Identify the origin of the problem(s) causing the breach

• Solutions: Identify feasible solutions (distinguish between short-term and long-lasting solutions)

• Responsibility: Identify a person responsible for the implementation process

• Budget: Allocate a realistic budget

• Strategy: Define and respect the implementation steps

• Monitor: Establish a strategy to monitor improvements

To draft the Remediation Plan, the auditee can use:

• The BSCI System Manual

• The Remediation Plan available on the BSCI Platform under the producer profile

• The information from the Findings Report

• The Remediation Plan Template (see BSCI System Manual Part IV –Template 9: Remediation Plan)

The auditee is granted 60 working days to draft and submit the final Remediation Plan in the BSCI Platform. In case it fails to do so, the follow-up audit takes the auditor’s Findings Report as reference.

6.10. BSCI AUDIT INTEGRITY PROGRAMME

The BSCI Audit Integrity Programme is set up to:

• Ensure BSCI values and principles are upheld during BSCI Audits

• Ensure the independence and legitimacy of the audit process

• Ensure integrity of the auditing process and associated activities

• Ensure consistency of applying the audit process

• Provide an assessment of auditing company performance

• Maintain the credibility of the BSCI auditing process

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Presenting allegations: Internal and external stakeholders can present to the BSCI Secretariat via email or by phone allegations of presumed unethical practices involving auditing companies, auditors and/or auditees. Allegations are reviewed with further investigations in mind.

Final decision: Different governance bodies are involved in the different steps to reach fair solutions. However, the BSCI Steering Committee is ultimately responsible to take any final decision concerning the Integrity Programme.

Audit Quality: The BSCI Secretariat oversees the services provided by the auditing companies to safeguard audit quality and integrity of the BSCI system. This oversight, which consists of internal and external monitoring, is undertaken by the BSCI Secretariat and external service providers.

Examples of external monitoring include:

• Duplicate audits: A BSCI Audit recently conducted is reproduced by a service provider selected for that purpose. The results of the duplicate audit are compared to identify possible deviations or mismatches in the assessment process. An assessment report is issued with conclusions identified

• Field surveillance audits: A service provider witnesses an auditing company’s team perform a BSCI Audit. An assessment report is issued with conclusions identified

BSCI Platform maintenance: The BSCI Secretariat is responsible for the maintenance of the BSCI Platform and for reviewing any data submitted by an auditing company. The BSCI Secretariat verifies that auditing companies submit data in accordance with BSCI auditing requirements as specified by the FTA/BSCI Framework Contract and as stipulated by all the guidelines contained in the BSCI System Manual. Any non-conformity is documented and reported as part of the Integrity Programme. For more information, see the BSCI website: www.bsci-intl.org/bsci-integrity-programme

Random Unannounced Check (RUC): RUCs aim at consolidating sustainable improvements of auditees that have reached a satisfactory degree of maturity in their social performance (rating A and B). Indirectly, RUCs can also serve to identify potential integrity issues related to auditing practices.

The RUC takes the last BSCI Audit received by the auditee as reference:

• Full audit: It covers all Performance Areas• Methodology: It is conducted using the same approach• Rating: It follows the same rating system, which triggers two possible scenarios:

¡ Equal or higher rating: If the auditee receives the same rating as or if it receives a higher rating than the rating it received at the last full audit, the result indicates a steady or improved level of performance. The auditor may still issue a Findings Report. However, the lack of severity in the findings as well as the maturity of the auditee ensure that no immediate follow up is needed. The audit is valid for 2 years if the rating is A or B.

¡ Lower rating: If the auditee receives a lower rating than the rating it received at the last full audit, the result indicates a declining level of performance. The auditor who conducts the RUC issues a Findings Report, which is to be followed-up no later than 12 months after the completion of the RUC. The audit is valid until the next audit is due.

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http://www.bsci-intl.org/bsci-integrity-programme


6.11. AUDITOR COMPETENCY

6.11.1. Requirements for Auditing Companies

Auditing company approval: Auditing companies are accepted into the BSCI system based on competence and professionalism. The BSCI Steering Committee approves auditing companies based on a BSCI Auditing Working Group recommendation.

Once they have been approved, they must sign the FTA Framework Contract, which includes auditing companies’ rights and obligations.

Auditing companies must ensure:

• Qualification: The BSCI Secretariat requests that auditing companies work in line with ISO/IEC 17021:– Conformity assessment: Requirements for bodies providing audit and certification of management systems (latest version)

• Contact person: The BSCI Secretariat requests that auditing companies have a main contact person for the BSCI Secretariat, who attends the BSCI calibration meetings:

¡ Senior manager

¡ Qualified to conduct BSCI Audits

¡ Proficient in English

¡ Present at the BSCI calibration meetings

The BSCI calibration meetings aim at keeping auditing companies up-to-date on BSCI developments.

• Regular trainings: The BSCI Secretariat requests that relevant staff of the auditing companies attend additional training and education programmes organised or recommended by the BSCI Secretariat

• BSCI Lead Auditor: The BSCI Secretariat requests that BSCI Audits are conducted by one BSCI Lead Auditor or a team of auditors (one member of the team being a Lead Auditor)

• Auditors’ update: The BSCI Secretariat requests that auditors keep up-to-date outside of the calibration meetings on the latest BSCI system developments. Active auditors should receive training at least every 18 months. Furthermore, auditing companies shall have mechanisms in place to regularly inform auditors about:

¡ BSCI official decisions

¡ BSCI System Manual updates

¡ BSCI Memoranda of Understanding

¡ Agreements for Cooperation

¡ Training material updates

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6.11.2. Auditor Requirements

BSCI Lead Auditor: Is the ultimate person responsible for the proper execution of the audit. He/she is in charge of:

• Communicating with the auditee to collect relevant information to plan the audit

• Assigning responsibilities for each audit team member

• Conducting the opening meeting

• Coordinating the audit team, adjusting the scheduling if necessary depending on the situation encountered onsite

• Consolidating the information gathered by the audit team members during the audit with the objective of completing the Findings Report

• Conducting the closing meeting

• Explaining to the auditee the outcome, findings and good practices observed, if applicable

• Submiting the BSCI Audit Report into the BSCI Platform

BSCI Auditor: This role corresponds to those who:

• Contribute to the execution of the audit

• Evaluate the performance of the auditee in the respective areas

• Follow the guidance of the lead auditor

Training: A BSCI Lead Auditor and a BSCI auditor have successfully passed the required BSCI training.

They both demonstrate:

• Proficiency in carrying out auditing practices:

¡ ISO 19011: 2011 - Guidelines for Auditing Management Systems

¡ Social Accountability Accreditation Services Procedures 200, 201 and related advisories

¡ Procedure 225, BSCI Assessment Requirements

• Professional experience in:

¡ Social auditing and worker interview techniques

¡ Occupational health and safety protection

¡ Evaluating the auditee’s industry type and business model

• In-depth knowledge of:

¡ ILO Conventions and recommendations (see BSCI Reference, which is part of the BSCI Code of Conduct version 1/2014)

¡ Related labour law and cooperative law

¡ Management systems, particularly Social Management Systems

¡ Due diligence for companies and for auditors

¡ The auditee’s working language(s) (e.g. languages used for official documents as well as languages used by the workforce)

¡ Local, regional and international contexts specific to the auditee

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Behaviour: While appropriate qualifications are critical to perform BSCI Audits, there are additional qualities expected from BSCI auditors:

• Impartiality: Auditors shall not conduct an audit if a conflict of interest compromises their impartiality. Independence and impartiality provide credibility to the auditor’s work

• Integrity: Auditors must be honest and professional. As they represent the BSCI system in the field, they must honour the BSCI values, principles and mission

Qualified judgement: Auditors base their professional judgement on solid evidence. They avoid bias or personal opinions. An auditor’s professional judgement is based on the following principles:

• Consistency: Auditors shall follow BSCI Audit requirements, related rules, guidelines and associated laws, relevant to the work environment. They only use the BSCI Audit Report available from the BSCI Platform

• Reality: Auditors shall portray the auditee in the most accurate way possible. Information and findings shall allow the reader to understand the auditee’s social performance. Auditors shall report on the overall atmosphere in which the audit is conducted

• Respect: Auditors shall be aware that audits are not the core business of the auditee. They take place within a cycle, which differs from the business cycle. Respect for the auditee’s time and resources is paramount

• Continuity: Auditors shall be aware that their work is part of a long-term improvement process where other actors play a role. Auditors shall make sure their reporting is clear, understandable and related to the progress of the auditee (e.g. if previous BSCI Audits have been conducted, the auditor is obliged to consult previous audit reports and use those as a foundation)

• Full disclosure and retention of records: Auditors shall include in attachment all information that the BSCI Secretariat qualifies as mandatory. The information disclosed aims at providing a comprehensive understanding of the auditee. Documents collected or produced during the audit process shall be filed and made available upon the request of the BSCI Secretariat for a minimum period of six years

• Prudence: Auditors may be confronted with situations where reporting certain findings may put individuals at risk (e.g. interviewed workers should be kept anonymous). Protection of individuals and their dignity overrules the principle of full disclosure. Auditors report such issues under “Executive summary of confidential comments” or to their supervisors, who, in turn, would report the undisclosed findings to the BSCI Secretariat

KEY MESSAGESHow to do monitoring

• Audit ratings and all the findings define the path that the auditee needs to follow towards continuous improvement

• Preparation for the audit is essential for all parties involved: BSCI Participant, auditor and auditee

• BSCI Audits can cover all Performance Areas or follow up on the findings from previous audits

• The BSCI Secretariat takes all necessary measures to ensure the integrity of BSCI Audits. This includes close verification of auditors’ competencies

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PART I – 7. HOW TO DO REMEDIATION

7. HOW TO DO REMEDIATION

Chapter 7 details the process involved in cases where the BSCI Participant or a business partner may cause or may have contributed to negative impacts through business activity. Examples of ways to remediate such (potentially) harmful situations are provided.

These are the documents/tools related to this chapter:

• Template 8: Grievance Mechanism

• Template 9: Remediation Plan



Cause or contribution to harm: Business enterprises that have caused or contributed to harm individuals or communities have the responsibility to:

• Change their behaviour

• Provide or contribute to remedies

Operational grievance mechanisms and the genuine involvement of workers represent the most valuable means for changing the behaviour of people who were causing or contributing to harm.

Business enterprises shall map and keep up-to-date the information concerning the grievance mechanisms relevant to their work.

Mitigate impacts: Business enterprises do not have to remediate impacts which they have neither caused nor contributed to. However, if the impacts are linked to their operations, companies shall use their leverage to prevent or mitigate the impacts.

In the prevention and mitigation process, companies shall prioritise the following aspects:

• Severity: Fundamental rights, which usually refers to bodily harm to an individual, shall be prioritised. For example:

¡ Right to Life, Liberty and Security of Person

¡ Freedom from Slavery and Servitude

¡ Freedom from Torture

• Number of affected people: Impacting large numbers of people shall be prioritised

• Direct connection: Companies shall prioritise the cases where their own impacts are directly related to the abuse. This does not exclude the responsibility to take actions when the harm is done indirectly by another actor in the supply chain

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PART I – 7. HOW TO DO REMEDIATION

Clear processes: Business enterprises need to have clear processes in place to respond to allegations and provide remedies. For example:

Informal mechanism

Formal mechanism

Apologies, restitution, rehabilitation x x

Financial and non-financial compensation x x

Prevention of harm such as guarantees of non-repetition

x x

Punitive sanctions: administrative and/or penal x

Figure 15: Informal versus Formal Remedy Mechanisms

Formal remediation processes (provided by the state or third-party institutions) offer alternatives when it is not possible to reach an agreement. Examples of institutions that offer these formal mechanisms are:

• National Contact Points (in OECD countries)

• Legitimate trade unions

• Labour offices

• Labour dispute resolution organisations

• Local community leaders

IMPORTANT – With regard to the risk of causing or contributing to gross human rights abuses (e.g. death, slavery and the worst forms of child labour), companies should act on the prudent assumption that they may be legally liable for such abuses. For more information, see BSCI System Manual Part V – Annex 5: BSCI Zero Tolerance Protocol.

KEY MESSAGESHow to do Remediation

• Business enterprises have the responsibility to cease causing or contributing to harm and they have the responsibility to provide or contribute to remedies

• Business enterprises shall use all possible channels to understand the extent of potential contributions and allegations

• Operational grievance mechanisms as well as workers involvement represent valuable means for companies to anticipate and address adverse impacts

• Business enterprises will map and understand the landscape of grievance mechanisms in the region(s) were they work

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PART I – 8. HOW TO DO COMMUNICATION

8. HOW TO DO COMMUNICATION

Chapter 8 details the process for adequate corporate communication, meaning communicating and valuing company efforts towards stakeholders. Business enterprises are expected to demonstrate their engagement, challenges and progress as an integral part of the BSCI implementation plan.

This is the document related to this chapter:

• BSCI Practical Communication Manual: “How to communicate on corporate responsibility in the supply chain: a step by step approach”

8.1. THE RESPONSIBILITY TO COMMUNICATE

The communication about BSCI engagement can be sensitive and challenging for many business enterprises involved in the BSCI process:

• They do not see improvement of working conditions in the international supply chain as part of the core business

• They are not familiar with the concerns and expectations from stakeholders and fear communication could increase exposure and reputational risks

Increasingly, stakeholders expect companies to communicate about their commitment, efforts and impact to improve working conditions whatever role they have in the supply chain. In fact, companies which do not communicate about their social responsibility efforts are becoming the exception. This refers to the “know and show” expectation for responsible enterprises.

To overcome the challenges, companies will set a procedure to manage societal expectations in the most effective way.

Good communication procedure: These are the characteristics of a good communication procedure:

• Objective: The communication will target external or internal audiences with the objective of showing efforts towards improving working conditions in the international supply chain.

• Factual: The communication will refer to: ¡ BSCI implementation strategy and targets ¡ The involvement of business partners in a continuous improvement

process ¡ The awareness and management of improvements as well as negative

impact

• Reliable: The communication shall be consistent and based as much as possible on objective evidence

• Timely: The communication needs to be shared with stakeholders in a timely manner so the company´s credibility is not jeopardised

• Coherent with corporate identity: The communication shall be aligned with the other aspects of the brand image or corporate identity. Stakeholders should be able to associate the BSCI endorsement with other aspects of the business behaviour

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PART I – 8. HOW TO DO COMMUNICATION

8.2. BUILDING A PROGRESSIVE APPROACH FOR COMMUNICATION

Business enterprises should aim to develop a progressive approach for communication depending on their:

• Size, industry and role in the supply chain

• Visibility in the market

• Maturity level in the BSCI implementation

• Reasons to communicate

Furthermore, corporate communication must be progressive when defining priorities on the different sorts of communication.

Companies shall conduct a gap assessment to identify areas of communication where they need to strengthen their messages or build capacities.

Internal communication: Companies shall show their responsible approach in the supply chain on corporate websites, corporate brochures and in relations with stakeholders.

CSR reporting: Companies may choose the best way to report on their corporate social responsibility depending on their level of maturity:

• Basic: They report on the social performance in their supply chain (e.g. by using the BSCI Platform to gather and analyse their BSCI key performance indicators)

• Advanced: They report results against normalised key performance indicators such as those from Global Reporting Initiative (GRI)

KEY MESSAGESHow to do Communication

• Business enterprises shall include information management as part of their BSCI implementation strategy

• Knowing and showing goes beyond unilateral reporting of achievements. It includes stakeholder engagement and information from grievance mechanisms

• Business enterprises define their communication approaches depending on their maturity

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NOTES:

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BSCI - Business Social Compliance Initiative

c/o FTA - Foreign Trade Association Av. De Cortenbergh, 172 1000 Brussels Belgium

Tel: 0032-2-762 05 51 Fax: +32-2-762 75 06