SMETA Audit Type: 2–Pillar 4–Pillar - pkbdl. · PDF fileI declare that the audit...

Audit company: ESTS Report reference: ESTS-BD201610-2006 Date: October 20, 2016

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Supplier name: Inditex

Site country: Bangladesh

Site name: Pioneer Knitwears (BD) Ltd. Section-2

Parent Company name (of the site): Pioneer Knitwears (BD) Ltd. Section-2

SMETA Audit Type: 2–Pillar 4–Pillar

Date of Audit October 20 , 2016


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Sedex Company Reference: (only available on Sedex System) ZC120303856

Sedex Site Reference: (only available on Sedex System) ZS128841689

Commercial Purchaser

NGO Retailer

Trade Union Brand Owner

Multi–stakeholder Combined Audit (select all that apply)

Auditor Reference Number: (If applicable) ZC1065762

SMETA Declaration I declare that the audit underpinning the following report was conducted in accordance with SMETA Best Practice Guidance and SMETA Measurement Criteria. Any exceptions to this must be recorded here (e.g. different sample size): Auditor Name(s) (please list all including all interviewers): Lead auditor: SM. Imranul Kayes Team auditor: Rasel Parves, Engr. Md. Hasnat Kabir, Tariqul Islam, Md. Omar Sarif Interviewers: Md. Omar Sarif Date: October 20, 2016

Audit Company Name:

Report Owner (payee): Pioneer Knitwears (BD) Ltd. Section-2

Audit Conducted By


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Non–Compliance Table

Issue (please click on the issue title to go direct to

the appropriate audit results by clause)

Area of Non–Conformity (Only check box when there is a non–conformity, and only in the box/es where the non–conformity

can be found)

Record the number of issues by line*:

ETI Base Code Local Law

Additional Elements

(i.e. not part of ETI code )

NC Obs GE

0 Management systems and code implementation

0 0 0

1 Employment Freely Chosen 0 0 0

2 Freedom of Association 1 0 0

3 Safety and Hygienic Conditions 7 0 0

4 Child Labour 0 0 0

5 Wages and Benefits 0 0 4

6 Working Hours 0 0 0

7 Discrimination 0 0 0

8 Regular Employment 0 0 0

8A Sub–Contracting and Homeworking

0 0 0

9 Harsh or Inhumane Treatment 0 0 0

10A Entitlement to Work 0 0 0

10B2 Environment 2–Pillar 1 0 0

10B4 Environment 4–Pillar N/A N/A N/A

10C Business Ethics N/A N/A

*Please note the table above records the total number of Non compliances (NC), Observations (Obs) and Good Examples (GE). This gives the reviewer an indication of problem areas but does not detail severities of each issue – Reviewers need to check audit results by clause.


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Summary of Findings

Summary of main findings: (positive and negative) (Please give a short summary of the main findings per clause)

Summary of main findings (positive and negative) Positive: 1. The factory does not engage any forced or bonded labour. In Bangladesh no prison labour are engaged outside the prison according to the law. Nothing identified during audit. In addition, factory management also does not keep original documents from the workers, confirm by the interviewed. Workers are free to leave their employer at any time giving required notices. 2. No Child or young worker has been identified during Audit. Factory checks the age before recruitment by the doctor and maintains age related documents in the workers personnel files. 3. First Aid box, medical facility, day care room facility and toilet facilities have been found as per legal requirement. 4. No evidence/practice of discrimination found through documents verification workers interview. 5. Workers are free to join or from the trade, no restriction has been imposed to the workers from the management though no trade union has been formed by the workers of the factory yet. Negative: In view of the findings raised, below non-compliance were found in the area of Freedom of Association, Safety and Hygienic Conditions & Environment 2–Pillar. All the non-compliances were given below as per the section. For other areas, no violations were noted. A.Freedom of Association: 1.In Accordance with Bangladesh labour rules 2015, Section 183, Sub section 3: It was noted through document review and management interview that the number of participation committee member was found 15 instead of 22. As total number of workers more than 3000. Factory is recommended that factory should ensure the number of participation committee member meet the legal requirements. B. Safety and Hygienic Conditions: 1.In Accordance with Bangladesh labor rules 2015, Section 77, Sub section 01 It was noted through document review and management interview that there were 3045 employee but were found 01 registered doctor instead of 2. Factory is recommended that factory should ensure number of appointed doctor will be as per law. 2. In Accordance with Bangladesh labor rules 2015, Section 55, Sub section 10 It was noted through document review and management interview that total number of First- aider was found 52 instead of 183.


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It is recommended that the facility management should ensure adequate number of first aider as per law. 3. In Accordance with Bangladesh labor rules 2015, Section 92, During facility tour it was noted that Dining room was not separated for female and male worker. Facility is recommended that Facility should separate the dining hall for female and male worker. 4. In Accordance with Bangladesh labor rules 2015, Section 55, Sub section 08 It was noted through the facility tour that No evacuation plan posted at section linking-3 in shed-5. Facility is recommended that the facility should post Evacuation Plan in section linking-3, shed-5. 5. In accordance with Bangladesh Labour Law 2006, Section- 78 (A) It was noted through facility tour that 50% of total workers were not using face mark in linking section. Facility is recommended that the facility management should provide effective training and ensure the use of proper PPE. 6. In Accordance with Bangladesh labour rules 2015, Section 50, Sub section 06 It was noted through facility tour & management interview that No water cooling system for worker for the month of April to September of the year. Factory is recommended to ensure cooling water system in the month of April to September of the year. C. Regular Employment: 1.In Accordance with Bangladesh labour law 2006, Section 06 Service book of workers were found not updated. Note that part-4, annual leave status and part-5, behavioural status were not updated. Facility is recommended to provide updated service book to the workers. Environment 2–Pillar: 1. In Accordance with The Environmental rules 1997, Rule-12, Schedule – 2 & 4: It was noted though document review and management interview that facility did not have Environmental Impact Assessment from competent authority. Facility management will ensure arrange Environmental Impact Assessment from competent authority (EIA). Observation: None Observed Good example:

1. Attendance bonus. 2. Production Bonus. 3. Rice giving to workers. 4. Social contribution.


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Audit Details

A: Report #: ESTS-BD201610-2006

B: Time in and time out (SMETA Best Practice Guidance and Measurement Criteria recommends 9.00–17.00 hrs. if any different please state why in the SMETA declaration )

Day 1 Time in:9:05 am Day 1 Time out:6:00 pm

Day 2 Time in: N/A Day 2 Time out: N/A

Day 3 Time in: N/A Day 3 Time out: N/A

C: Number of Auditor Days Used: (number of auditor x number of days)

5 Auditors in 1 Day

D: Audit type:

Full Initial Periodic Full Follow–up Partial Follow–Up Partial Other – Define

E: Was the audit announced? (AAG recommends a window of three weeks for semi–announced, this gives optimum results)

Announced Semi – announced: Window detail: 04 weeks Unannounced

F: Was the Sedex SAQ available for review?

Yes No

If No, why not? (Examples would be, site has not completed SAQ, site has not been asked to complete the SAQ.)

The Site has not completed SAQ.

G: Any conflicting information SAQ/Pre-Audit Info to Audit findings?

Yes No

If Yes, please capture detail in appropriate audit by clause

H: Auditor name(s) and role(s): SM. Imranul Kayes (Lead Auditor); Rasel Parves; Engr. Md. Hasnat Kabir, Tariqul Islam, Md. Omar Sarif ( Team Auditors)

I: Report written by: SM. Imranul kayes

J: Report reviewed by: Rasel Parves

K: Report issue date: October 24, 2016

L: Supplier name: Pioneer Knitwears (BD) Ltd. Section-2

M: Site name: Pioneer Knitwears (BD) Ltd. Section-2

N: Site country: Bangladesh

Audit Details


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O: Site contact and job title: Samar Shen Saha, Manager ( Admin, HR, & Compliance)

P: Site address: (Please include full address)

Jamirdia, Hobir Bari, Valuka, Mymensingh-2240

Site phone: +880 (2) 0682555115

Site fax: 880 (2) 7670035

Site e–mail: [email protected], [email protected]

Q: Applicable business and other legally required licence numbers: for example, business license no, and liability insurance

Trade License No: 43/2016, issued by Habirbari union Parishad, which is valid till 30th, 2017. Factory License No: 262/Mymensingh, issued by Bangladesh Government which is valid till 30th December, 2017. Fire License No: mymen/1022/2012, issued by Bangladesh Fire Service & Civil Defence Authority which is valid till June 30, 2017. TIN Certificate Number: 639696332169 EPB Enrolment No.: BD05133 issued by Export Promotion Bureau which is valid till June 30, 2017. Certificate of Incorporation No.: C-80665/09 BGMEA Membership Certification No: 5015 issued by Bangladesh Garment Manufactures & Exporters Association which is valid 31st December, 2016. BERC Licence No. BERC/POWER/CCP-0420/L which is valid 24th November, 2016 Group Term life Insurance: BGA/insu/ 2016/15693 which is valid 6th may 2017.

R: Products/Activities at site, for example, garment manufacture, electrical, toys, grower

Garments manufacturer ( All kinds of sweater item )

S: Audit results reviewed with site management?

Yes

T: Who signed and agreed CAPR (Name and job title)

Samar Shen Saha, Manager ( Admin, HR, & Compliance)

U: Did the person who signed the CAPR have authority to implement changes?

Yes

V: Present at closing meeting (Please state name and position, including any workers/union reps/worker reps):

Factory Representative: Md. Nazmul Parvez ( Deputy General Manager) Samar Shen Saha Manager: (Admin, HR & Compliance)


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Md.Amir Hossain Assistant Manager: (Admin, HR & Compliance) Md. Lutful Kabir In-Charge: ( Admin, HR & Compliance) Pranab Saha ( Sr. Executive Compliance) Hamida Akter ( Welfare Officer) Sheuli Akter ( Welfare Officer) Md. Hafizur Rahman ( Medical Assistant) Aliza Akter ( Medical Assistant) Worker Representative: Sharmin Sultana ( Linking Operator): Vice President

W: What form of worker representation / union is there on site?

Union (name) Worker Committee Other (specify) ( Participation Committee) None

X: Are any workers covered by Collective Bargaining Agreement (CBA)

Yes No

Y: Previous audit date: N/A

Z: Previous audit type:

SMETA 2–pillar

SMETA 4–pillar

Other

Full Initial

Periodic

Full Follow–Up Audit

Partial Follow–Up

Partial Other*

*If other, please define:


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Audit Scope/Actual Results

A: Standard/Contracted work hours: (Maximum legal and actual required working hours excluding overtime, please state if possible per day, week and month)

Legal maximum: 8 hours/ day 48 hours/ week

Actual working hours: 8 hours/ day 48 hours/ week

Yes No

N/A

B: Legal Overtime hours: (Maximum legal and actual overtime hours, please state if possible per day, week and month)

Legal maximum: Legal maximum: 2 hours per day and 12 hours per week. However, an adult worker may work for more than 8 (eight) hours in a day or 48 (forty-eight) hours in a week, provided that the total hours of work of an adult worker shall not exceed 60 (sixty) hours in any week and on the average 56 (fifty-six) hours per week in any year. Exception for 6 months; Government has exempted section 100 and 102 of the Bangladesh Labour Law-2006 publishing a Gazette notification in August 2011 as per section 324 Bangladesh Labour Law-2006 for 06 months relaxing daily overtime hours. In accordance with the Clause/Condition No. – 3 of this notification, no worker shall work more than 04 hours of overtime in any day without his/her consent. This exemption has been extended several times in last few years and latest extension was on April 12, 2015 and it will be in effect from April 17, 2015 to October 16, 2015.”

Actual working hours: Maximum 2 hours/ day and 12 hours per week

Yes No

N/A

C: Legal age of employment: (Minimum legal and actual minimum age at site)

Legal minimum: 14 years 18 years

D: Legal minimum wage for standard/contracted hours: (Minimum legal and actual minimum wage at site, please state if possible per hr, day, week and month)

Legal minimum: Legal minimum: For Garments Section: BDT. 5300 per month (Basic BDT 3000, House rent 40% of the Basic

Actual minimum wage: BDT 5300/ month

Yes No

N/A

Criteria Local Law (Please state legal requirement)

Actual at the Site

(Record site results against the law)

Is this part of a Collective Bargaining

Agreement?


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which is BDT.1200, Medical allowance BDT. 250, Conveyance allowance. BDT.200, Food Allowance BDT.650.)

E: Legal minimum overtime wage: (Minimum legal and actual minimum overtime wage at site, please state if possible per hr ,day, week and month)

Legal minimum: 200% of the basic wage rate per hour.

200% of the basic wage rate per hour

Yes No

N/A

2–Pillar Audit

10B4: Environment 4–Pillar

10C: Business Ethics

All groups of workers are included in the scope of this audit such as; Direct employees, Casual and agency workers, Workers employed by service providers such as security and catering staff as well as workers supplied by other contractors.

Note: The main focus of this ethical audit is on the ETI Base Code and local law. The additional elements will not be audited in such depth or scope, but the audit process will still highlight any specific issues. This report provides a summary of the findings and other applicable information found/gathered during the social audit conducted on the above date only and does not officially confirm or certify compliance with any legal regulations or industry standards. The social audit process requires that information be gathered and considered from records review, worker interviews, management interviews and visual observation. More information is gathered during the social audit process than is provided here. The audit process is a sampling exercise only and does not guarantee that the audited site prior, during or post–audit, are in full compliance with the Code being audited against. The provisions of this Code constitute minimum and not maximum standards and this Code should not be used to prevent companies from exceeding these standards. Companies applying this Code are expected to comply with national and other applicable laws and where the provisions of law and this Code address the same subject, to apply that provision which affords the greater protection. The ownership of this report remains with the party who has paid for the audit. Release permission must be provided by the owner prior to release to any third parties.

Audit Overview

Management Worker Representatives

Audit attendance Senior management Worker Committee representatives

Union representatives

A: Present at the opening meeting? Yes No Yes No Yes No

B: Present at the audit? Yes No Yes No Yes No

C: Present at the closing meeting? Yes No Yes No Yes No

Audit Scope (Please select the code and additional requirements that were audited against during this audit)

Audit Overview


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D: If Worker Representatives were not present please explain reasons why (only complete if no worker reps present)

N/A

E: If Union Representatives were not present please explain reasons why: (only complete if no union reps present)

In Bangladesh there is no obligation to join trade union and freedom of association and collective bargaining. However, factory management has formed a Participation Committee as parallel means as per law.

F: Site description: (Include size, location and age of site. Also include structure and number of buildings)

Pioneer Knitwears (BD) Ltd. Section-2 is 100% export oriented sweater Garments factory. The factory is located Jamirdia, Hobirbari, Valuka, Mymensingh-2240. This is approximately 52.04 km far from the Shahjalal international Airport, Dhaka. Pioneer Knitwears (BD) Ltd. Section-2 has started its operation from January 2012. The factory is mainly producing sweaters item. Total 3047 employees are employed in the factory where male 1981 and 1066 female workers. Out of the total employees are 565 the non-production employees and rests are the production employee. The factory comprises of total 5, 42,330 square feet land area and 30, 90, 96 square feet for production area. The factory building construction quality was found to be good as there were no visible defects identified during the audit. Samar Shen Saha, Manager (Admin, HR, & Compliance) is directly involved in risk assessment and reduces the maximum possible risk. They have appointed Medical officer and Nurse for continuous medical services to the workers. Site description: There are five (05) building in the premises with fourteen (14) sheds where Pioneer Knitwears (BD) Ltd. Section-2. Exists. Building-01 (Admin Building) (05 storied building) Ground Floor: Admin, HR & Compliance & Accounts Office 1st Floor: Managing director, Director Office & IT Room 2nd Floor: Dinning & Rest Room 3rd Floor: Dinning & Rest Room 4th Floor: Dinning & Rest Room Building-02 (Security Building) (02 storied building) Ground Floor: Security Office & Fire Control Room 1st Floor: Rest Room Building-03 (Training Centre Building) (02 storied building) Ground Floor: Medical, Day Care, Office & Store 1st Floor: Training Centre


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Building-04 (Dinning Building) (06 storied building) Ground Floor: Go- down & Utility Office 1st Floor: Rest Room 2nd Floor: Rest Room 3rd Floor: Rest Room 4th Floor: Rest Room 5th Floor: Rest Room Building-05 (Security Building) (02 storied building) Ground Floor: Security Office 1st Floor: Rest Room Shed-01: Winding & Auto Collar/ Placket Section Shed-02: Jacquard Auto Knitting – 01 (Shima Shaki) Shed-03: Jaquard-02 (Proposed) Shed-04: Jacquard Knitting Section-03 (Honquima) Shed-05: Linking-03 Shed-06: Linking-01 Shed-07: Linking-02 Shed-08: Gas Generator & Sub- Station Room Shed-09: RMS Room Shed-10: Compressor Room Shed-11: Winding Room-02 Shed-12: Scrap Store room Shed-13: Civil Store room Shed-14: Yarn Store room General One shift- 08:00 am to 05:00 pm and lunch break 01:00 pm to 02:00 pm but in Jacquard, winding, Auto collar sections are performing


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their job in two shifts and security guards are performing in three shifts. The shifts are given below: Jacquard Section: Shift A: 08:00 am to 05:00 pm with one hour break Shift B: 08:00 pm to 05:00 am with one hour break Winding Section: Shift A: 08:00 am to 05:00 pm with one hour break Shift B: 08:00 pm to 05:00 am with one hour break Auto Collar Section: Shift A: 08:00 am to 05:00 pm with one hour break Shift B: 08:00 pm to 05:00 am with one hour break Security Shift: The security Guards are performing their job in three shifts. There are three shifts as flows: Shift: A (The security Guard) starts from 6.00 am to 2.00 pm with one hour break. Shift: B (The security Guard) starts from 2.00 pm to 10.00 pm with one hour break. Shift: C (The security Guard) starts from 10.00 pm to 06.00 am with one hour break. No Dormitories provided by the factory. Employees and workers’ wages are calculated and paid on monthly rated basis. Note: The factory management follows “The minimum wage Gazette Notification for RMG sector” that has published on 5th December, 2013 for garments division ( Cutting, sewing & finishing)

G: Site function: Agent Factory Processing/Manufacturer Finished Product Supplier Grower Homeworker Labour Provider Pack House Primary Producer Service Provider


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Sub–Contractor

H: Month(s) of peak season: (if applicable)

March to October of the year as reported by the factory management.

I: Process overview: (Include products being produced, main operations, number of production lines, main equipment used)

Product: Garments manufacturer ( All kinds of sweater item ) Process: Winding Section→ Knitting Section→ Linking Section→ Trimming Section→ Mending Section→ Light Checking Section→ Finishing Section. Equipment: 2656 machines. Jacquard M/C (Hong Qi Ma), Jacquard M/C (Shima Seiki), Linking M/C (Golden Star), Overlock M/C (Juki),Loop M/C (Flying Tiger), Linking M/C(Hong Qi Ma), Winding M/C - 12 Drum(Local), Part Opening M/C (China), Auto Coning Machine (RJK- India), Jacquard M/C (Shima), Electric Driven Jocky Pump(3KW), (Singapore), Electric Driven Fire Pump(90KW) (Singapore), Vacuum Cleaner(Panasonic), Vacuum Cleaner (Wieland).

J: Attitude of workers: (Include their attitude to management, workplace and the interview process. Both positive and negative information should be included) Note: Do not document any information that could put workers at risk

Individual interview conducted with 22 workers (8 groups of 5 persons) all the interviewers were favourable with the management and factory environment and no negative information was raised. As per interview, workers are getting all mandatory benefits like annual leave, maternity leave, resign benefit.

K: Attitude of workers committee/union reps: (Include their attitude to management, workplace and the interview process. Both positive and negative information should be included) Note: Do not document any information that could put workers at risk

Participation committee representatives were comfortable with management, workplace and interview process. During opening meeting 01 (One) Participation committee representative Sharmin Sultana (Linking Operator): Vice President- was present and auditors clearly explained her about the audit, audit process, necessity of audit and audit criteria in local language. In the period of interview with workers committee representative discussed her feelings to the auditors without any hesitation and confusion.

L: Attitude of managers: (Include attitude to audit, and audit process. Both positive and negative information should be included)

Management of the factory was positive and supportive during the whole audit Samar Shen Saha; Manager (Admin, HR, & Compliance) was the key person of the compliance team and he was responsible for compliance with the Code, legal requirements, development of policies and its implementation, monitoring & control. In this backdrop, management had comprehensive knowledge, as assumed, about audit requirements and scope; e.g. ETI based code, local laws etc. The factory management was found to be cooperative throughout the audit.


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Key Information

A: Do all workers (including migrant workers) have contracts of employment/employment agreements? (Go to clause 8 – Regular Employment)

Yes No

Contract letter has been provided to all employees.

B: Are maximum standard/contracted working hours clearly defined in contract/employment agreements? (Go to clause 8 – Regular Employment)

Yes No

C: Were appropriate records available to verify hours of work and wages? (Go to clause 5 – Living Wage)

Yes No

D: Were any inconsistencies found? (if yes describe nature) (Go to Wages Table)

Yes Poor record keeping No Isolated incident

Repeated occurrence

E: For the lowest paid production workers, are wages paid for standard/contracted hours (excluding overtime) below or above the legal minimum? (Go to clause 5 – Living Wage)

Wages found: Please indicate the breakdown of workforce according to earnings:

Below legal min

Meet Above

00% of workforce earning under min wage. 33.87 % of workforce earning min wage. 66.13 % of workforce earning above min wage.

F: % of piece rate workers: (if applicable)

30% of the total workers were found piece rated.

G: Do the standard/contracted hours stated in a contract/employment agreement exceed the law or 48 hours per week? (Go to clause 6 – Working hours)

Yes No

H: If yes, what are the standard/contracted hours per week as stated in the contract/employment agreement? (Go to clause 6 – Working hours)

_____ hrs/week Approx. ____% of ALL workers on these contacted hours

I: Combined hours (standard/contracted plus overtime = total hours) over 60 per week found? (Go to Working Hours Analysis)

Yes No

J: Are workers provided with 1 day off in every 7-day-period, or 2 in 14-day-period (where the law allows)?

Yes No

If ‘No’, please explain:

Key Information (click on the key information title to go to appropriate section of the report)


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K: Are the correct legal overtime premiums paid? (Go to Wages Table)

Yes No N/A

L: Please state what actual OT is paid. (As a percentage of the workers standard rate) (Go to Working Hours Analysis)

Please give details of overtime premium as a % of standard wages: 0% 1% – 115% 116% – 124% 125% – 199% 200%+

Please give details:

M: Is there any night production work at the site?

Yes No

General One shift- 08:00 am to 05:00 pm and lunch break 01:00 pm to 02:00 pm but in Jacquard, winding, Auto collar sections are performing their job in two shifts. These three section’s shifting times are mentioned in the factory description.

N: % of workers living in site provided accommodation (if applicable):

N/A Factory does not provide any living accommodation for the workers as all workers live in nearby areas and there is no legal requirement as well.

O: Age of youngest worker found: (Go to clause 4 – Child labour)

18 years

P: Workers under 18 subject to hazardous work assignments? (Go to clause 3 – Health and Safety)

Yes No

No hazardous work found through the work process and no under 18’s worker observed.

% of under 18’s at this site (of total workers) 0 %

Q: What form of worker representation/union is there on site? (Go to clause 2 – Freedom of Association)

Union (name) Participation Committee Other (specify) None

R: Is it a legal requirement to have a union? (Go to clause 2 – Freedom of Association)

Yes No

S: Is It a legal requirement to have a workers committee? (Go to clause 2 – Freedom of Association)

Yes No

For an establishment where there is no trade union, until a trade union is formed, the workers’ representatives to the Participation Committee shall run activities related to workers’ interests in the establishment concerned and workers representative should be elected by direct vote of workers . (amendment 22nd of July 2013, Labour Law 2006)


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T: Is there any other form of effective worker/management communication channel? (Other than union/worker committee) (Go to clause 2 – Freedom of Association)

Yes No

Describe: The factory management has provided complain box in the toilet area through which workers can raise their suggestion / complaints. Workers can also approach the management directly for any grievances which confirmed the interviewed workers.

U: Are there any External Processes? (Go to clause 8A – Sub–contracting and Home working)

Sub–Contracting Homeworking Other External Process No external processes


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Management Systems

A: Nationality of Management Bangladeshi

B: Gender breakdown of Management + Supervisors (Include as one combined group)

Male: 65 % Female: 35 %

C: Majority nationality of workers 100% Bangladeshi

D: Number of workers leaving in last 12 months as a % of average total number of workers on site over the year (annual worker turnover)

4 %

E: Were accurate records shown at the first request?

Yes No

F: If No, why not? N/A

G: In the last 12 months, has the site been subject to any fines/prosecutions for non–compliance to any regulations?

Yes No

Please describe: N/A

H: Do policies and/or procedures exist that reduce the risk of forced labour, child labour, discrimination, harassment & abuse?

Yes No

Please describe: There is effective policy and procedures found to reduce the risk of forced labor, child labor, discrimination and harassment & abuse

I: If yes, is there evidence (an indication) of effective implementation? Please give details.

Effective implementation of the policy and procedures found to reduce the risk of forced labour, child labour, discrimination and harassment & abuse.

J: Have managers and workers received training in the standards for forced labour, child labour, discrimination, harassment & abuse?

Yes No

Please describe: Managers and workers have received training on the standards for forced labor, child labor, legal rights, discrimination, harassment & abuse

K: If Yes, is there evidence (an indication) that training has been effective e.g. training records etc.? Please give details

Managers and workers have received training on the standards for forced labor, child labor, discrimination, harassment & abuse and factory preserved training records as evidence. During interview workers were found aware about the policies and procedures.

L: Are there published, anonymous and/or open channels available for reporting any violations of Labour standards and H&S or any other grievances to a 3rd party?

Yes No

Please describe:

M: If yes, are workers aware of these Not Applicable

Management Systems:


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channels? Please give details.

N: Have health and safety risks been identified e.g. through internal audits, formal risk analysis process, worker involvement etc.?

Yes No

Please describe: The factory management has conducted internal audits to find out the health and safety risks of the production floor. Moreover, the facility management has analyzed the risk in related section. In addition, facility provides health & safety training to the worker regularly.

O: If Yes, has effective action been taken to reduce or eliminate these risks?

The factory management has trained the workers about the risks related with production process and impact.

P: Are accidents recorded? Yes No

Please describe: Factory maintain accident and injury register to analyze the root cause of injury and take corrective action. Moreover, company doctor and nurse are responsible for prepared to the injury analysis as well as minor injury/accidents register.

Q: Has the auditor made a simple calculation to compare capacity with workers’ work load in order to identify possible unrecorded work hours?

Yes No

Please describe: No unrecorded work hours found.

R: Does the site have all required land rights licenses and permissions (see SMETA Measurement Criteria)?

Yes, the factory has business licenses, trade license, Factory License, Fire License, Group Insurance and machine lay out approval plan, Construction approval plan found from concerned authority. Trade License No: 43/2016, issued by Habirbari union Parishad, which is valid till 30th, 2017. Factory License No: 262/Mymensingh, issued by Bangladesh Government which is valid till 30th December, 2017. Fire License No: mymen/1022/2012, issued by Bangladesh Fire Service & Civil Defence Authority which is valid till June 30, 2017. TIN Certificate Number: 639696332169 EPB Enrolment No.: BD05133 issued by Export Promotion Bureau which is valid till June 30, 2017. Certificate of Incorporation No.: C-80665/09 BGMEA Membership Certification No: 5015 issued by Bangladesh Garment Manufactures & Exporters Association which is valid 31st December, 2016. BERC Licence No. BERC/POWER/CCP-0420/L which is valid 24th November, 2016 Group Term life Insurance: BGA/insu/ 2016/15693 which is valid 6th


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may 2017.

S; Does the site have any internationally recognised system certifications e.g. ISO 9000, 14000, OHSAS 18000, SA8000 (or other social audits). Please detail (Number and date).

No, facility has no internationally recognized management system certifications. But the factory qualified for BSCI & other customer CoC audit.

T: Is there a Human Resources manager/department? If Yes, please detail.

Yes No

Please describe: Facility has an independent Human Resources Department and Samar Shen Saha, Manager (Admin, HR, & Compliance) is responsible for this department.


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Worker Analysis

Local Migrant Total

Permanent Temporary Agency Permanent Temporary Agency Home

workers

Worker numbers – male 1981 0 0 0 0 0 0 1981

Worker numbers –female 1066 0 0 0 0 0 0 1066

Total 3047 0 0 0 0 0 0 3047

Number of Workers interviewed 62 0 0 0 0 0 0 62

Contractors: (Individuals supplying workers to site with the workers paid by contractors, not by site)

A: Any contractors on site? Yes No

B: If Yes, how many workers supplied by contractors N/A

C: Are all contractor workers paid according to law?

Yes No

N/A

If Yes, Please give evidence for contractor workers being paid according to law: N/A

Migrant Workers: (Please see SMETA Best Practice Guidance and Measurement Criteria for definitions of migrant workers)

D: Originating Locations/Countries:

N/A; No migrant workers employed by the factory.

E: Type of work undertaken by migrant workers :


F: Were migrant workers recruited through an agency?

Yes No

Worker Analysis


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If yes, please give details. .Please describe: N/A; No migrant workers employed by the factory.

If Yes, is there a contract with the agency? Provide details of agencies and contractual arrangements including any fees lodged during the recruitment process.


G: Does the site have a system for checking labour standards of agencies? If yes, please give details.

Yes No

Please describe: N/A; No migrant workers employed by the factory.

H: Percentage of migrant workers in company provided accommodation:



23

Audit Results by Clause 0: Management systems and Code Implementation

0: Managements system and Code Implementation (click here to return to NC Table)

0.1 Suppliers are expected to implement and maintain systems for delivering compliance to this Code. 0.2 Suppliers shall appoint a senior member of management who shall be responsible for compliance with the Code. 0.3 Suppliers are expected to communicate this Code to all employees. 0.4 Suppliers should communicate this code to their own suppliers and, where reasonably practicable, extend the principles of this Ethical Code through their supply chain.

Current systems: 1. The factory implements and maintains systems for delivering compliance to this Code. 2. Samar Shen Saha, Manager (Admin, HR, & Compliance) is responsible for compliance with the Code. 3. The factory communicates their code of conduct through notice board and regularly company own COC

training. Evidence examined – to support system description (Documents examined & relevant comments. Include renewal/expiry date where appropriate):

1. Facility Management Interview 2. Document review (Training Register Review) 3. Workers Interview

Current Systems and Evidence Examined To complete ‘current systems’ Auditors examine policies and written procedures in conjunction with relevant managers, to understand, and record what controls and processes are currently in place e.g. record what policies are in place, what relevant

procedures are carried out, who is/are responsible for the management of this item of the code. Evidence checked should detail any documentary or verbal evidence shown to support the systems.


24

Non–compliance:

1. Description of non–compliance: NC against ETI/Additional Elements NC against Local Law

None observed Local law and/or ETI requirement: Not applicable Recommended corrective action: Not applicable

Objective evidence observed: Not applicable (where relevant please add photo numbers)

Observation:

Description of observation: None observed Local law or ETI requirement: Not applicable Comments: Not applicable

Objective evidence observed: Not applicable

Good Examples observed:

Description of Good Example (GE): None Observed



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1: Employment is Freely Chosen (Click here to return to NC–table)

ETI 1.1 There is no forced, bonded or involuntary prison labour. 1.2 Workers are not required to lodge “deposits” or their identity papers with their employer and are free to leave their employer after reasonable notice.

Current Systems and Evidence Examined To complete ‘current systems’ Auditors examine policies and written procedures in conjunction with relevant managers, to understand, and record what controls and processes are currently in place e.g. record what policies are in place, what relevant procedures are carried out, who is/are responsible for the management of this item of the code. Evidence checked should detail any documentary or verbal evidence shown to

support the systems.

Current systems: Written policy and procedure are in place to ensure employment is freely chosen. The policy includes the following clause: 1. The factory does not hold main copy of any legal document of the workers during recruitment. The factory maintains only copies of all hiring documents such application, ID proof, date of birth certificates, school certificates etc. 2. The workers are free to leave the work place If workers want to leave their job, they are free to do so, as long as they are fulfilled their obligations agreed under their appointment letter/agreement. 3. The facility has displayed overtime policy stating that over time work is voluntary. Evidence examined – to support system description (Documents examined & relevant comments. Include renewal/expiry date where appropriate):

1. Facility Management Interview 2. Document review (Recruitment policy, working hour policy, workers’ personal file, copy of national ID, date of

birth certificates, school certificates, security guard’s job description etc.) 3. Workers Interview


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Non–compliance:

1. Description of non–compliance: NC against ETI NC against Local Law:

None Observed Local law and/or ETI requirement Not Applicable Recommended corrective action: Not Applicable

Objective evidence observed: Not applicable (where relevant please add photo numbers)

Observation:

Description of observation: None Observed Local law or ETI requirement: Not Applicable Comments: Not Applicable






27

2: Freedom of Association and Right to Collective Bargaining are Respected

2: Freedom of Association and Right to Collective Bargaining are Respected (Click here to return to NC–table)

(Click here to return to Key Information)

ETI 2.1 Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively. 2.2 The employer adopts an open attitude towards the activities of trade unions and their organisational activities. 2.3 Workers’ representatives are not discriminated against and have access to carry out their representative functions in the workplace. 2.4 Where the right to freedom of association and collective bargaining is restricted under law, the employer facilitates, and does not hinder, the development of parallel means for independent and free association and bargaining.

Current systems: 1. Workers can raise their concerns through workers’ representatives, telephone, complain box, meeting and

their team leader or above. 2. There is Participation Committee (PC) as parallel means for trade union. 3. Verified and confirmed through records review and interview process that the facility does not discriminate

any of the workers such as workers representatives also. 4. Factory has a policy where is no restriction imposed to the workers formation of trade union

Evidence examined – to support system description (Documents examined & relevant comments. Include renewal/expiry date where appropriate):

1. Management interview 2. Worker interview 3. Complain box register (Suggestions from the complain box and actions taken) 4. PC formation and meeting records 5. Grievance handling procedure




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Non–compliance:

1. Description of non–compliance: NC against ETI NC against Local Law

It was noted through document review and management interview that the number of participation committee member was found 15 instead of 22. As total number of workers more than 3000. Local law and/or ETI requirement: In Accordance with Bangladesh labor rules 2015, Section 183, Sub section 3 with ETI Base Code 2.3: The number of workers participating in the committee will be determined as mentioned proportional rate of workers in the factory or organization mentioned in the table, namely: - The number of general workers The number of workers participating in the committee 1 To 100 not more than 6 101 To 400 same 10 401 To 800 same 12 801 To 1500 same 14 1501 To 3000 same 18 3001 To 5000 same 22 5001 To 7500 same 24 7501 To more same 30 And Workers’ representatives are not discriminated against and have access to carry out their representative functions in the workplace. Recommended corrective action: Factory is recommended that factory should ensure the number of participation committee member meet the legal requirements. Action BY: Samar Shen Saha, Manager ( Admin, HR, & Compliance) Corrective Action Time frame: 90 days

Objective evidence observed: 1. During document review and management interview. (where relevant please add photo numbers)

Description of observation: None Observed Local law or ETI requirement: Not applicable Comments: Not applicable


Observation:


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A: Name of union and union representative, if applicable:

N/A; This is non-unionized factory.

Is there evidence of free elections? Yes No N/A

B: If no union what is parallel means of consultation with workers e.g. worker committees?

Participation Committee has formed as a parallel means.

Is there evidence of free elections? Yes No N/A

C: Were worker representatives/union representatives interviewed

Yes No If Yes, please state how many: 01 PC ( Participation Member)

D: State any evidence that union/workers committee is effective? Specify date of last meeting; topics covered; how minutes were communicated etc.

1. The last meeting was held on 29 September, 2016 2. It took an hour for the meeting. The topics covered in the meeting are as follows: - Discussion about leave and necessary documents. - Discussion about eliminating the risk from work place. - Discussion about increasing production level and quality of work. - Discussion about the fare wages.

E: Are any workers covered by Collective Bargaining Agreement (CBA)

Yes No N/A, as there is no trade union in the factory.

F: If Yes what percentage by trade Union/worker representation

__0__% workers covered by Union CBA

__0__% workers covered by worker rep CBA

G: If Yes, does the Collective Bargaining Agreement (CBA) include rates of pay

Yes No

N/A





30

3: Working Conditions are Safe and Hygienic

3: Working Conditions are Safe and Hygienic (Click here to return to NC–table)


ETI 3.1 A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimising, so far as is reasonably practicable, the causes of hazards inherent in the working environment. 3.2 Workers shall receive regular and recorded Health & Safety training, and such training shall be repeated for new or reassigned workers. 3.3 Access to clean toilet facilities and to potable water, and, if appropriate, sanitary facilities for food storage shall be provided. 3.4 Accommodation, where provided, shall be clean, safe, and meet the basic needs of the workers. 3.5 The company observing the code shall assign responsibility for Health & Safety to a senior management representative.

Current systems: Through factory tour, it was noted that:

1. The production floor was well ventilated. 2. The electrical system was in a good condition. 3. The factory maintained a comfortable temperature throughout work floors. 4. Sufficient emergency exit with proper exit signs were installed. 5. Sufficient first aid kits stocked with necessary supplies are provided in workshops. Total number of first aid

box: 30 pcs. 6. Workers receive regular and recorded health & safety training. Last Health & Safety training was provided

on October 11, 2016. 7. Fire training and first aid training provided as per law. Last fire training provided on September 18, 2016. 8. Medical and child care facility available in the factory. 9. Workers toilet segregate male and female, adequate number as per law, wash facility provided. Total no. of

male toilets are 139 & female toilets are 77. 10. The facility has done maintenance of the machines on regular basis confirmed through the documents

reviewed. 11. Risk assessment done by the factory and injury register maintain properly. 12. Md. Mizanul Islam, Manager (HR, Admin & Compliance) is responsible to look after the health and safety

issues.


1. Factory tour 2. Document review 3. Worker interview 4. Management interview




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Non–compliance:


It was noted through document review and management interview that there were 3045 employee but were found 01 registered doctor instead of 2. Local law and/or ETI requirement In Accordance with Bangladesh labor rules 2015, Section 77, Sub section 01 with ETI Base Code 3.1. At least one registered Physician shall be in each treatment Unit of the institute or factory with the facility of dispensary. Additionally, at least one trained compounder or medical assistant, nurse and subordinate employee shall be employed for helping him/her, provided that at least two registered Physicians shall be recruited in case of an Institute where more than three thousand employees/workers work and necessary number of medical assistant and nurse shall be recruited for helping the Doctors. And A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimising, so far as is reasonably practicable, the causes of hazards inherent in the working environment. Recommended corrective action: Factory is recommended that factory should ensure number of appointed doctor will be as per law. Action BY: Samar Shen Saha, Manager ( Admin, HR, & Compliance) Corrective Action Time frame: 90 days 2. Description of non–compliance:

NC against ETI NC against Local Law It was noted through document review and management interview that total number of First- aider was found 52 instead of 183. Local law and/or ETI requirement In Accordance with Bangladesh labor rules 2015, Section 55, Sub section 10 with ETI Base Code 3.1 If possible, all workers or at least 18% of the workers employed in each department have to be trained on fire-fighting, emergency rescue operation, first aid and the usage of portable fire-repellent instruments. And the security has to be ensured by dividing the trained workers into fire-fighting team, rescue team and first aid team (6% members in each team) and the records related herewith have to be preserved in accordance with

1. During facility tour and management interview. (where relevant please add photo numbers) 2. During facility tour management and management interview. ((where relevant please add photo numbers) )


32

Form- 22. And A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimising, so far as is reasonably practicable, the causes of hazards inherent in the working environment. Recommended corrective action: It is recommended that the facility Management should ensure adequate number of first aider as per law. Action BY: Samar Shen Saha, Manager ( Admin, HR, & Compliance) Corrective Action Time frame: 90 days 3. Description of non–compliance:

NC against ETI NC against Local Law During facility tour it was noted that Dining room was not separated for female and male workers. Local law and/or ETI requirement: In Accordance with Bangladesh labor rules 2015, Section 92, with ETI Base Code 3.1 Part of the Dining Room and service counter thereof shall be kept separated for female workers with the use of curtain. And A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimising, so far as is reasonably practicable, the causes of hazards inherent in the working environment. Recommended corrective action: Facility is recommended that facility should separate the dining hall for female and male. Action BY: Samar Shen Saha, Manager ( Admin, HR, & Compliance) Corrective Action Time frame: 60 days

3. During facility tour and management interview.


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It was noted through the facility tour that No evacuation plan posted at section linking-3 in shed-5. Local law and/or ETI requirement: In Accordance with Bangladesh labor rules 2015, Section 55, Sub section 08 with ETI Base Code 3.1 The arrangement should be made to show evacuation plan of exit in one or more places easily visible in each floor of each floor of the factory. And A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimising, so far as is reasonably practicable, the causes of hazards inherent in the working environment. Recommended corrective action: Facility is recommended that the facility should post Evacuation Plan in section linking-3, shed-5. Action BY: Samar Shen Saha, Manager ( Admin, HR, & Compliance) Corrective Action Time frame: 30 days 5. Description of non–compliance:

NC against ETI NC against Local Law It was noted through facility tour that 50% of total workers were not using face mark in linking section. Local law and/or ETI requirement: In accordance with Bangladesh Labour Law 2006, Section- 78 (A) 62 with ETI base Code 3.1 the concerned manufacturing institute must necessary equipment’s, including safety shoes, helmets, goggles, masks, hand gloves, ear muffs, ear plugs, waist belts, aprons etc. and arrange training programs for the workers in using these materials and ensure their usage. And A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimising, so far as is reasonably practicable, the causes of hazards inherent in the working environment.

4. During facility tour and management interview. 5. During facility tour and management interview. (where relevant please add photo numbers)


34

Recommended corrective action: Facility is recommended that the facility management should provide effective training and ensure the use of proper PPE. Action BY: Samar Shen Saha, Manager ( Admin, HR, & Compliance) Corrective Action Time frame: 60 days 6.Description of non–compliance:

NC against ETI NC against Local Law It was noted through facility tour & management interview that No water cooling system for worker for the month of April to September of the year. Local law and/or ETI requirement: In Accordance with Bangladesh labor rules 2015, Section 50, Sub section 06 with ETI base code 3.2 In a firm where generally more than 250 workers work, the water should be supplied after cooling with the water cooler to the canteen, dining room and rest room once a year from 1st April to 30th September. Recommended corrective action: Factory is recommended to ensure cooling water system in the month of April to September of the year. Action BY: Samar Shen Saha, Manager ( Admin, HR, & Compliance) Corrective Action Time frame: 90 days

6.During document review and management interview (Where relevant please add photo numbers

Observation:

Description of observation: None Observed Local law or ETI requirement: Not applicable Recommended corrective action: Not applicable




Objective Evidence Observed: Not applicable


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4: Child Labour Shall Not Be Used

4: Child Labour Shall Not Be Used (Click here to return to NC–table)


ETI 4.1 There shall be no new recruitment of child labour. 4.2 Companies shall develop or participate in and contribute to policies and programmes which provide for the transition of any child found to be performing child labour to enable her or him to attend and remain in quality education until no longer a child. 4.3 Children and young persons under 18 shall not be employed at night or in hazardous conditions. 4.4 These policies and procedures shall conform to the provisions of the relevant ILO Standards.

Current systems:

1. The factory establishes a policy that will never employ and use any child Labour. 2. The factory will verify all workers’ original national ID cards, birth certificate, school certificate etc. at the

time of recruitment and keep the photocopies of workers’ ID cards, birth certificate in the personnel files. 3. Factory verify the workers age through registered doctors. 4. Sampling basis 62 employees’ personal files has taken for reviewed. Each employee file includes a bio-

data sheet, recent photo, birth registration certificate / photo copied national identification card. Evidence examined – to support system description (Documents examined & relevant comments. Include renewal/expiry date where appropriate):

1. Policy review 2. Document review 3. Management interview 4. Worker interview 5. Factory tour




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Non–compliance:


None Observed Local law and/or ETI requirement: Not Applicable Recommended corrective action: Not Applicable

Objective evidence observed: (where relevant please add photo numbers)

Observation:


Objective evidence observed: Not Applicable



Objective Evidence Observed: Not Applicable


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5: Living Wages are paid

5: Living Wages are Paid (Click here to return to NC–table)

(Click here to return to Key information)

ETI 5.1 Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any event wages should always be enough to meet basic needs and to provide some discretionary income. 5.2 All workers shall be provided with written and understandable information about their employment conditions in respect to wages before they enter employment and about the particulars of their wages for the pay period concerned each time that they are paid. 5.3 Deductions from wages as a disciplinary measure shall not be permitted nor shall any deductions from wages not provided for by national law be permitted without the expressed permission of the worker concerned. All disciplinary measures should be recorded.

Current systems:

1. The factory management provides appoint letter to all workers mentioning their salary structure, employment conditions.

2. The workers are enjoying benefits such as social insurance, casual leave, sick leave and maternity leave as per law.

3. Wages being paid within 7 working days of the next month. 4. Factory provides cash directly to the workers. 5. No illegal deduction from employees has been identified through document reviewed and confirmed

workers during the interviewed. Evidence examined – to support system description (Documents examined & relevant comments. Include renewal/expiry date where appropriate):

1. Document review 2. Worker interview 3. Management interview




38

Non–compliance:




Observation:




Description of Good Example (GE): Facility provides four facility to the workers which are listed below:

1. Attendance bonus. 2. Production Bonus. 3. Rice giving to workers. 4. Social contribution.

Objective Evidence Observed: During document review (Salary sheet review), workers interview and management interview.


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Wages analysis:

A: Sample Size Checked (State number of worker records checked and from which weeks/months – should be current, peak and random/low. Please see SMETA Best Practice Guidance and Measurement Criteria)

62 attendance records and payroll records from September– 2016 (Current month) 62 attendance records and payroll records from June – 2016 (Random month) 62 attendance records and payroll records from February - 2016 (Random month)

B: Are there different legal minimum wage grades? If Yes, please specify all.

Yes

No

If Yes, please give details: The Government has finally announced the new pay structure which was implemented from 1st December, 2013 for the workers of the Garments Industries. The Gazette Notification has been published on 5th December, 2013. There are two separate pay structures; one for the garment workers (Schedule A) and another for the staff level (Schedule B) employees. 1. For the workers (Schedule A):

Grade Monthly basic wage

House rent 40% of the basic

Medical allowance

Conveyance allowance

Food subsidy

Gross monthly wage

Grade 1 Tk.8500 Tk. 3400

Tk.250 Tk.200 Tk.650 Tk.13000

Grade 2 Tk.7000 Tk. 2800

Tk.250 Tk.200 Tk.650 Tk.10900

Grade 3 Tk.4075 Tk. 1630

Tk.250 Tk.200 Tk.650 Tk. 6805

Grade 4 Tk.3800 Tk. 1520

Tk.250 Tk.200 Tk.650 Tk. 6420

Grade 5 Tk.3530 Tk. 1412

Tk.250 Tk.200 Tk.650 Tk. 6042

Grade 6 Tk.3270 Tk. 1308

Tk.250 Tk.200 Tk.650 Tk. 5678

Grade 7 Tk.3000 Tk. 1200

Tk.250 Tk.200 Tk.650 Tk. 5300

Apprentice Tk.2200 Tk. 880

Tk.250 Tk.200 Tk.650 Tk. 4180

2. For the staff level (Schedule B) employees:

Grade Monthly

basic wage

House rent

40% of the

basic

Medical allowance

Conveyance allowance

Food subsidy

Gross monthly

wage

Wages analysis: (Click here to return to Key Information)


40

Grade 1 Tk.6500 Tk.2600 Tk.250 Tk.200 Tk.650 Tk. 10200




Apprentice Tk. 2300 Tk.920 Tk.250 Tk.200 Tk.650 Tk.

4320

C: If there are different legal minimum grades, are all workers graded correctly?

Yes

No

N/A

If No, please give details:

D: What deductions are required by law e.g. social insurance? Please state all types:

As per section 125 of the Bangladesh Labour Law, 2006, factory may deduct wages for un-authorized absence, for fines, housing facility, advance payments, loans, income tax, provident fund, etc. However, factory is deducting only for un-authorized absence.

E: Have all of these deductions been made? Please list all deductions that have/have not been made.

Yes

No

If Yes, Please list all deductions that have been made: In this facility, the management only deducts for unauthorized absent and revenue stamp

If No, please give details on any deductions which have not been made: Factory does not deduct for fines housing facility, advance payments, loans, income tax, provident fund, etc law.

F: Industry norm for this region: (please include time period e.g. hour/week/month)

The Government has announced the new pay structure which was implemented from 1st

December, 2013 for the workers of the Garments Industries. The Gazette Notification has been published on 5th December, 2013. The minimum wage of the workers of Grade - 7 is as follows: BDT. 5,300 per month (Basic BDT. 3000, House rent 40% of the Basic which is BDT. 1,200, Medical allowance BDT. 250, Food allowance BDT. 650 & Transportation Allowance BDT. 200)

Wages table (Click here to return to Key information)

Worker Type Process Operator (Lowest paid)

Process Operator (Average paid)

Process Operator (Highest paid)

Select from individual worker records one worker from, lowest, average and highest wages and populate the boxes. Ensure comparison is made for same pay period and only uses full–time workers. See SMETA Best


41

Practice Guidance and Measurement Criteria for completing this:

A: Pay period: (State month selected)

February -2016 June-2016 September-2016

B: Anonymous Employee Reference/Dept.

Assistant Operator/ Bartake Section

Sample man/ Linking section

General Operator/ Jacuard Section

C: Employee Gender Male Male Male

D: Contracted/Standard working hours: (excluding OT – please include time period e.g. hour/week/month)

48 hours/ week BDT 5,300.00/ month

48 hours/ week BDT 7,000.00/month

48 hours/ week BDT 9,815.00/ month

E: Contracted /Standard work pay rate: (excluding OT – please include time period e.g. hour/week/month)

BDT 14.42/hour BDT 20.26/ hour BDT 29.92/ hour

F: Standard day overtime – hours: (please include time period e.g. hour/week/month)

12 hour/ Week 12 hour/ Week 12 hour/ Week

G: Standard day overtime – wage: (please include time period e.g. hour/week/month)

BDT 28.85/ hour BDT 40.52/ hour BDT 59.86/ hour

H: Rest day overtime – hours: (please include time period e.g. hour/week/month)

0 hour/ month 0 hour/ month 0 hour/ month

I: Rest day overtime – wage: (please include time period e.g. hour/week/month)


J: Statutory Holiday overtime – hours: (please include time period e.g. hour/week/month)


K: Statutory holiday OT – wages: (please include time period e.g. hour/week/month)


L: Total overtime hours: (please include time period e.g. hour/week/month)

46.00 hour/ month 46.00 hour/ month 45.00 hour/ month

M: Incentives/Bonus/ OT Wage: BDT 1,327.00/ OT Wage: BDT 1,864.00/ OT Wage: BDT 2,694.00/


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Allowances etc.: (please include time period e.g. hour/week/month)

month Attendance Bonus: BDT 300.00/ month



N: Gross wages: (please include time period e.g. hour/week/month)

BDT 6,927.00/ month BDT 9,164.00/ month BDT 12,809.00/ month

O: Social insurance and other deductions; please list which and amount.

Stamp deduction: BDT 10.00/ month Absent Deduction: BDT 0.00/ month



P: Actual wage paid after deduction: (please include time period e.g. hour/week/month)

BDT 6,917.00/ month BDT 9,154.00/ month BDT 12,799.00/ month

Comments: (Please state here any specific reasons/circumstances that explain the lowest and highest gross wages)

Through provided document review, 3rd grade worker has got highest salary and 7th grade worker has got lowest salary.

Q: Is there a defined living wage: This is not normally minimum legal wage. If answered Yes please state amount and source of info: Please see SMETA Best Practice Guidance and Measurement Criteria.

Yes No

Please specify amount/time period: Factory did not define living wages as it is not required by law. However, factory is providing the minimum wage as per Bangladesh “Minimum Wages Gazette Notification December 5, 2013”.

R: Are workers paid in a timely manner in line with local law?

Yes No

S: Is there evidence that equal rates are being paid for equal work:

Yes No

Details: Through factory policy review, payroll records review and employees’ interview, it is confirmed that equal rates are being paid for equal work.

T: How are workers paid: Cash Cheque Bank Transfer Other

If other explain:


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Wages 6: Wking Hours are not Excessive

6: Working Hours are not Excessive (Click here to return to NC–table)


Current systems:

1. Through provided document review, it was found factory’s working hours found within legal limit. 2. Through employees’ interview, overtime is voluntary. 3. Factory closed on weekly holiday (Friday).


1. Employee interview 2. Payroll records 3. Job card records 4. Production records 5. Other document

ETI 6.1 Working hours must comply with national laws, collective agreements, and the provisions of 6.2 to 6.6 below, whichever affords the greater protection for workers. Sub–clauses 6.2 to 6.6 are based on international labour standards. 6.2 Working hours, excluding overtime, shall be defined by contract, and shall not exceed 48 hours per week. 6.3 All overtime shall be voluntary. Overtime shall be used responsibly, taking into account all the following: the extent, frequency and hours worked by individual workers and the workforce as a whole. It shall not be used to replace regular employment. Overtime shall always be compensated at a premium rate, which is recommended to be not less than 125% of the regular rate of pay. 6.4 The total hours worked in any 7 day period shall not exceed 60 hours, except where covered by clause 6.5 below. 6.5 Working hours may exceed 60 hours in any 7 day period only in exceptional circumstances where all of the following are met:

– this is allowed by national law; – this is allowed by a collective agreement freely negotiated with a workers’ organisation representing a significant portion of the workforce; – appropriate safeguards are taken to protect the workers’ health and safety; and – The employer can demonstrate that exceptional circumstances apply such as unexpected production peaks, accidents or emergencies.

6.6 Workers shall be provided with at least one day off in every 7 day period or, where allowed by national law, 2 days off in every 14 day period.




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Non–compliance:


None observed Local law and/or ETI requirement: Not Applicable Recommended corrective action: Not Applicable


Observation:

Description of observation: None observed Local law or ETI requirement: Not Applicable Comments: Not Applicable



Description of Good Example (GE): None observed



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Working hours analysis

Working hours analysis Please include time period e.g. hour/week/month

(Go back to Key information)

Systems & Processes

A. What timekeeping systems are used: time card etc.

Describe: Electric time keeping system.

B: Sample Size Checked (State number of worker records checked and from which weeks/months and type – should be current, peak and random/low: See SMETA Best Practice Guidance and Measurement Criteria)

62 attendance records and payroll records from September – 2016 (Current month) 62 attendance records and payroll records from June – 2016 (Random month) 62 attendance records and payroll records from February – 2016 (Random month)

C: Do ALL workers have contracts/employment agreements?

Yes No

If NO, state which type of workers do NOT have contracts/employment agreements:

N/A

D: Are standard/contracted working hours defined in all contracts/employment agreements?

Yes No

If NO, please state which type of workers NOT standard hours have defined in contracts/employment agreements.

N/A

E: Are there any other types of contracts/employment agreements used?

Yes No

If YES, Please complete as appropriate:

0 hrs Part time Variable hrs Other

If “Other”, Please define:

N/A

Standard/Contracted Hours worked

F: Do standard/contracted standard hours ever exceed the law or 48 hours per week?

Yes No

If YES give details and comparison (local law/48 hrs week)

Note: Through provided document review, standard or contracted standard hours did not exceed the law or 48 hours per week.

G: What are the actual standard/contracted hours worked in sample (State per week/month)

Highest hours: 48 hours/ week

Lowest hours: 0 hours/ week

H: Any local waivers/local law or Yes If YES, Please give details


46

permissions which allow averaging/annualised hours for this site?

No

Exception for 6 months: Government has exempted section 100 and 102 of the Bangladesh Labour Law-2006 publishing a Gazette notification in August 2011 as per section 324 Bangladesh Labour Law-2006 for 06 months relaxing daily overtime hours. In accordance with the Clause/Condition No. – 3 of this notification, no worker shall work more than 02 hours of overtime in any day without his/her consent. This exemption has been extended several times in last few years and latest extension was on September 23, 2014 and it will be in effect from October 17, 2014 to April 16, 2015.”

Overtime Hours

I: Actual overtime hours worked in sample (State per day/week/month)

Highest OT hours:

48 hours in September 2016/ Current month 32 hours in June 2016/ Random month 46 hours in February 2016/ Random month

Lowest OT hours:

20 hours in September 2016/ Current month 26 hours in June 2016/ Random month 24 hours in February 2016/ Random month

J: Range of overtime hours over all workers/or as large a sample as possible. (State per week/month and details)

48 to 20 hours in ______(September-2016) 32 to 26 hours in ______(June-2016) 46 to 24 hours in ____(February-2016)

K: Approximate percentage of workers on highest overtime hours

3.23 %

L: Is overtime voluntary? Yes No Conflicting

Information

Please detail evidence e.g. Wording of contract/employment agreement/handbook/worker interviews/refusal arrangements:

Overtime always done with prior consent from workers.

Overtime Premiums

M: Is overtime paid at a premium? Yes No

Please give details of normal day overtime premium as a % of standard wages:

0%

1 – 115%

116 – 124%

125 – 149%

150 –199%

200%+

Any other comments:


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N: ETI Code requires a prevailing standard to give greatest worker protection. If a site pays less than 125% OT premium and this is allowed under local law, are there other considerations? Please complete the boxes where relevant. Multi select is possible.

No Consolidated pay (May be standard wages above minimum legal wage, with

no/low overtime premium) Collective Bargaining agreements Other

Please explain any checked boxes in N above e.g. detail of consolidated pay CBA or Other.

Not applicable

Rest Days

O: Are workers provided with 1 day off in every 7–day–period, or 2 in 14–day–period (where the law allows)?

Yes No

Maximum number of days worked without a day off (in sample):

Through provided documents, it was found that workers were provided with 1 day off in every 7 day period.

Total Hours

P: Range of total hours: (Quote highest and lowest please include time period e.g. hour/week/month)

Highest total hours

256=208+48(OT)hours/month in September,2016 240=208+32(OT) hours/month in June,2016 254=208+46(OT) hours/month in February, 2016

Lowest total hours

228=208+20 (OT) hours/month in September,2016 234=208+26 (OT) hours/month in June,2016 232=208+24 (OT) hours/month in February, 2016

R: If more than 60 total hours per week and this is legally allowed, are there other considerations? Please complete the boxes where relevant. Multi select is possible.

Overtime is voluntary Onsite Collective bargaining allows 60+ hours/week Safeguards are in place to protect worker’s health and safety Site can demonstrate exceptional circumstances Other reasons

Please explain any checked boxes in R above

Exception for 6 months: Government has exempted section 100 and 102 of the Bangladesh Labour Law-2006 publishing a Gazette notification in August 2011 as per section 324 Bangladesh Labour Law-2006 for 06 months relaxing daily overtime hours. In accordance with the Clause/Condition No. – 3 of this notification, no worker shall work more than 04 hours of overtime in any day without his/her consent. This exemption has been extended several times in last few years and latest extension was on September 23, 2014 and it will be in effect from October 17, 2014 to April 16, 2015.”


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Comments: (please state here any specific reasons/circumstances that explain the highest working hours)

Through provided document review, it was observed that standard/contracted standard hours were not exceeding the law or 48 hours per week


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7: No Discrimination is practiced

7: No Discrimination is Practiced (Click here to return to NC–table)

ETI 7.1 There is no discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, union membership or political affiliation.

Current systems: 1. There is no discrimination in hiring, compensation, access to training, promotion, termination or retirement. 2. The factory provides the same pay to male/female employees. 3. No complain or records found for pregnancy test. 4. There is no restriction formation of trade union in the factory.


1. Management interview 2. Worker interview 3. Local and national law 4. Personal files 5. Compensation records 6. Termination & retirement records 7. Training records 8. Complain register




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Non–compliance:




Observation:







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8: Regular Employment Is Provided

8: Regular Employment Is Provided (Click here to return to NC–table)


ETI 8.1 To every extent possible work performed must be on the basis of recognised employment relationship established through national law and practice. 8.2 Obligations to employees under labour or social security laws and regulations arising from the regular employment relationship shall not be avoided through the use of labour–only contracting, sub–contracting, or home–working arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment, nor shall any such obligations be avoided through the excessive use of fixed–term contracts of employment.

Current systems: 1. Factory maintains service books for all workers. 2. There is no subcontracting or home working from the site.


1. Management interview 2. Worker interview 3. Local and national law 4. Workers’ personal files and service books 5. Policies and procedures 6. Wage sheets




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Non–compliance:


Service book of workers were found not updated. Note that part-4, annual leave status and part-5, behavioural status were not updated. In Accordance with Bangladesh labor law 2006, Section 06 with ETI base code 8.1 Owner of each factory will arrange service book for each worker employed by him/ her by his/ her own cost. Such service book will be kept in the custody of the owner who will refund it to the worker at the time of ending of employment. Local law and/or ETI requirement: In Accordance with Bangladesh labor lae 2006, Section 06 with ETI base code 3.2 Owner of each factory will arrange service book for each worker employed by him/ her by his/ her own cost. Such service book will be kept in the custody of the owner who will refund it to the worker at the time of ending of employment. And, To every extent possible work performed must be on the basis of recognised employment relationship established through national law and practice. Recommended corrective action: Facility is recommended to provide updated service book to the workers. Action BY: Samar Shen Saha, Manager ( Admin, HR, & Compliance) Corrective Action Time frame: 60 days

Objective evidence observed: During document review and management interview (Photo was added by NC- 2 & 2a)

Observation:




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A: Sub–Contracting and Homeworking:

8A: Sub–Contracting and Homeworking (Click here to return to NC–table)


8A.1. There should be no sub–contracting unless previously agreed with the main client. 8A.2. Systems and processes should be in place to manage sub–contracting, homeworking and external

processing. Note to auditor on homeworking:

Report on whether it is direct or via agents. How many workers, relationship with site and what control systems are in place.

Current systems: It was verified through document review, factory tour, management interview and employee interview that no sub-contracting & Home-working was used by this factory. Evidence examined – to support system description (Documents examined & relevant comments. Include renewal/expiry date where appropriate):

1. Management interview 2. Worker interview 3. Production capacity plan 4. Goods in/out register 5. Production process of the factory 6. Policies and procedures

If any processes are sub–contracted – please populate below boxes

Process Subcontracted Process 1 Process 2 Name of factory Address





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Non–compliance:


None Observed Local law and/or ETI /Additional Elements requirement: Not Applicable Recommended corrective action: Not Applicable


Observation:

Description of observation: None Observed Local law or ETI/Additional elements requirement: Not Applicable Comments: Not Applicable






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Summary of sub–contracting – if applicable

A: If sub–contractors are used, is there evidence this has been agreed with the main client?

Yes No

If Yes, summarise details: N/A

B: Number of sub–contractors/agents used

0

C: Is there a site policy on sub–contracting?

Yes No


D: What checks are in place to ensure no child labour is being used and work is safe?

N/A

E: What processes are sub–contracted?

N/A

F: If homeworking is being used, is there evidence this has been agreed with the main client?

Yes No


G: Number of homeworkers Male: 0 Female: 0 Total: 0

H: Are homeworkers employed direct or through agents?

Directly Through Agents

N/A

I: If through agents, number of agents

N/A

J: Is there a site policy on homeworking?

Yes No

N/A

K: How does site ensure worker hours and pay meet local laws for homeworkers?

N/A

L: What processes are carried out by homeworkers?

N/A

Summary of sub–contracting – if applicable

Summary of homeworking – if applicable


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M: Are written agreements in place for homeworkers that include regular employment?

Yes No

N/A

N: Are full records available at the site?

Yes No

N/A


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ETI 9.1 Physical abuse or discipline, the threat of physical abuse, sexual or other harassment and verbal abuse or other forms of intimidation shall be prohibited.

Current systems: The factory established anti-harsh or inhumane treatment policy. The policy states that physical abuse or discipline, the threat of physical abuse, sexual or other harassment and verbal abuse or other forms of intimidation shall be prohibited. Through the factory management and workers’ interview, it was noted that no physical abuse or discipline happened in the factory. Factory install complain box in workers toilet area. No complain records found regarding physical abuse or harassment. Evidence examined – to support system description (Documents examined & relevant comments. Include renewal/expiry date where appropriate):

1. Management interview 2. Worker interview 3. Complain register 4. Policies and procedures

Non–compliance:




9: No Harsh or Inhumane Treatment is allowed (Click here to return to NC–table)

Current Systems and Evidence Examined To complete ‘current systems’ Auditors examine policies and written procedures in conjunction with relevant managers, to understand, and

record what controls and processes are currently in place e.g. record what policies are in place, what relevant procedures are carried out, who is /are responsible for the management of this item of the code. Evidence checked should detail any documentary or verbal evidence shown to



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Observation:







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10 A: Entitlement to Work and Immigration

10. Other Issue areas: 10 A: Entitlement to Work and Immigration (Click here to return to NC–table)

Additional Elements 10A1 Only workers with a legal right to work shall be employed or used by the supplier. 10A2 All workers, including employment agency staff, must be validated by the supplier for their legal right to work by reviewing original documentation. 10A3 Employment agencies must only supply workers registered with them. 10A4 The supplier shall implement processes to enable adequate control over agencies with regards the above points and related legislation.

Current systems: Only workers with a legal right to work shall be employed or used by the factory. There are no immigrate workers in the factory. Evidence examined – to support system description (Documents examined & relevant comments. Include renewal/expiry date where appropriate):

1. Management interview 2. Worker interview 3. Employment records 4. Appointment letter 5. Personal files

Non–compliance:


None Observed Local law and/or ETI /Additional Elements requirement: Not Applicable Recommended corrective action: Not Applicable





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Observation:

Description of observation: None Observed Local law or ETI/Additional Elements requirement: Not Applicable Comments: Not Applicable


Good examples observed:




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10 B 2: Environment 2–pillar

10. Other issue areas 10 B 2: Environment 2–pillar (Click here to return to NC–table)

To be completed for a 2–Pillar SMETA Audit, and remove the following page which is 10B4 environment 4 pillar

10B2. 1 Suppliers must comply with the requirements of local and international laws and regulations including having necessary permits. 10B2. 2 The supplier should be aware of and comply with their end clients’ environmental requirements. Note for auditors and readers, This is not a full environmental assessment but a check on basic systems and management approach.

Current systems:

1. Environmental clearance certificate for the factory provided by the Directorate of Environment (DoE) of Bangladesh government

2. Factory has waste management policy regarding solid as well as hard waste. 3. Factory surrounding environment found acceptable and they have measured Environmental Impact

Assessment (EIA) level test report in last one year. Evidence examined – to support system description (Documents examined & relevant comments. Include renewal/expiry date where appropriate):

1. Environmental policy and procedure 2. Waste management policy and procedure 3. Environmental clearance certificate 4. Training records 5. Wastage disposal records 6. Onsite observation

Current Systems and Evidence Examined To complete ‘current systems’ Auditors examine policies and written procedures in conjunction with relevant managers, to understand, and

record what controls and processes are currently in place e.g. record what policies are in place, what relevant procedures are carried out, who is /are responsible for the management of this item of the code. Evidence checked should detail any documentary or verbal evidence shown to



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Non–compliance:


It was noted though document review and management interview that facility did not have Environmental Impact Assessment from competent authority. Local law and/or ETI/Additional Elements requirement: In Accordance with The Envioronmenta rules 1997, Rule-12, Schedule – 2 & 4: For carrying out the purposes of clause (a) of sub-section (2) of section 20, the standards for air, water, sound, odor and other components of the environment shall be determined in accordance with the standards specified in Schedules - 2, 3, 4, 5, 6,7 and 8. Recommended corrective action: Facility management will ensure arrange Environmental Impact Assessment from competent authority (EIA). Action BY: Samar Shen Saha, Manager ( Admin, HR, & Compliance) Corrective Action Time frame: 90 days

Objective evidence observed: During document review and management interview

Observation:

Description of observation: None Observed Local law or ETI/additional elements requirement: Not Applicable Comments: Not Applicable


Good examples observed:




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Worker Interview Summary Worker Interview Summary

Worker Interview Summary

A: Were workers aware of the audit? Yes No

B: Were workers aware of the code? Yes No

C: Number of group interviews: (Please specify number and size of groups. Please see SMETA Best Practice Guidance and Measurement Criteria)

40 employees in 8 groups (8x 5)

D: Number of individual interviews (Please see SMETA Best Practice Guidance and Measurement Criteria)

Male: 13 Female: 9

E: Total number of interviewed workers (Please see SMETA Best Practice Guidance and Measurement Criteria)

Male: 38 Female: 24

F: Interviews were done in private and the confidentiality of the interview process was communicated to the workers?

Yes No

G: In general, what was the attitude of the workers towards their workplace?

Favourable Non–favourable Indifferent

H: What was the most common worker complaint?

No complain noticed during workers interview.

I: What did the workers like the most about working at this site?

Wages are always paid on time, Factory working environment is good.

J: Any additional comment(s) regarding interviews:

Nil

K: Attitude of workers to hours worked:

Good

Agency Work


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ers

Agency Workers (if applicable) (workers sourced from a local agent who are not directly paid by the site)

A: Number of agencies used (average):

N/A

B: Were agency workers’ age/pay/hours included within scope of this audit

Yes No

C: Were sufficient documents for agency workers available for review?

Yes No

Other findings

Other Findings Outside the Scope of the Code

None Observed

Community Benefits (Please list below any specific community benefits that the site management stated that they were involved in, for example, HIV

programme, education, sports facilities)

None


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Best Practice Photo:

Void

Void

Void

Nil

Nil

Nil

Non-Compliance Photo

[1. During facility tour it was noted that Dining room was not separated for female and male.]

[2. Service book of workers were found not updated. Note that part-4, annual leave status were not updated.]

[2(a). Service book of workers were found not updated. Note that part-5, behavioral status were not updated. ]

General Photo:

01. Facility main entrance 02. Facility overview 03. Linking Section


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04. Linking Section-2 05. Knitting Section 06. Yearn Store room

07. Overlock Section 08. Trimming Section 09. Jacquard Section

10. Identity Mark 11. Security Room 12. Floor Lay-out Plan


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13. Generator Room 14. Fire Extingusher 15. Fire Equiepments

16. Fire Demonstrate 17. PA System 18. Child Care Room

19. Doctors room 20. Medicine Almira 21. Smoke Detector

22. Emergency Contact Number

23. Male Toilet 25. Female Toilet


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26. Grivence Box 27. First Aid Box 28. Electric Room

29. Attandence Machine 30. Training Room 31. Exite Sgin

32. Sub-station room 33. Emergency Light 34. Dinning room


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35. Security Cemera 36. Earth Pit 37. Floor Lay-out Plan

38. Gong Bell 39. Fog light 40. Notice Board

41. Linking Distribution 42. Emergency Staircase 43. Training Hall

44. Risk Assessment 45. H&M COC 46. Central wear house


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47. Emergency Light 48. Neddel Distribution Room 49. Auto Zaquard Section

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SMETA Audit Type: 2–Pillar 4–Pillar - pkbdl. · PDF fileI declare that the audit...

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