Detailed explanation of BSCI certification system

A program initiated by the Foreign Trade Association (FTA) is aimed at implementing a social standard joint supervision system for the retail industry, industry, and importers, and improving the social responsibility of suppliers in their respective countries

One System Introduction

Currently, more and more discussions about the human rights situation are focused on the conditions of developing countries or emerging industrialized countries that produce consumer goods Improving the social standards of the producing countries that provide their retailers has become a very important agenda for many companies in industrialized countries The problems faced by suppliers around the world include child labor, forced labor, lack of safety in the workplace, wages that cannot even reach the minimum level, interference with the establishment of unions, obstruction of employee representatives' work, excessively long working hours, overtime hours, and possible forms of discrimination To address these issues, companies, traders, and industry associations from the retail and industrial sectors in Europe and around the world have developed codes of conduct These codes are usually based on the main labor conventions of the International Labour Organization (ILO), with the aim of improving working conditions in supplier countries Many countries have established supervision systems for these codes of conduct, including Finland, France, Germany, the Netherlands, Sweden, the United Kingdom, and Canada The purpose and related supervision system of these codes of conduct are very similar, even their content is similar The numerous standards make it difficult for retailers to bear their social responsibility Their suppliers are also facing the same situation; They have to meet more and more requirements and audit procedures Therefore, it is urgent to take concerted action in both the retail and industrial sectors

With the increasing international attention to these issues, it has become more urgent to develop common actions Many international organizations have taken the initiative to submit this issue for internal discussion, such as the United Nations'; ldquo; Global Action Plan& rdquo;, The Organization for Economic Cooperation and Development (OECD); ldquo; Principles of Multinational Enterprises& rdquo;, And& ldquo; World Trade Organization (WTO); rdquo;, We are considering incorporating social standards into multilateral trade regulations

The European Commission also issued a joint communiqu é on social issues in 2002 Some companies and associations, such as the Foreign Trade Association, have also participated in discussions and initiated actions However, the European retail industry emphasizes voluntary principles rather than mandatory enforcement, and complies with corresponding government and organizational regulations in the international community Since 2002, the Foreign Trade Association (FTA), headquartered in Brussels, Belgium, has been committed to establishing a common platform for many different codes of conduct and supervisory systems in Europe, and laying the foundation for the establishment of a common European supervisory system In 2002 and 2003, major retail companies and associations held multiple seminars to establish a framework for such a system. In March 2003, FTA officially established the Business Social Compliance Initiative (BSCI) with the aim of developing implementation measures and procedures for European business social responsibility programs

II BSCI

a) Goal

Improving social standards in the countries where suppliers are located is part of the company's social responsibility as a member of the global economy This will be a long-term and enduring process jointly undertaken by suppliers, governments, and other stakeholders in the countries where the suppliers are located

Act as a communication bridge between companies, employee representatives, non-governmental organizations, and other groups in civil society A common supervisory system helps to convince consumers that the retail industry has adopted a socially responsible attitude The outstanding transparency of the system enables it to gain credibility both internally and publicly

Provide an internationally recognized and feasible monitoring system aimed at helping suppliers comply Each member company and association should consider each supplier as a partner in this process This action involves various consumer products, but currently mainly focuses on textiles, clothing, footwear, and toys BSCI does not intend to replace other verification systems

Bring economic advantages to suppliers and retail companies By implementing a common social standard supervision system in suppliers' production sites, not only can duplicate and redundant audits be avoided, but time and costs can also be saved Adhering to social responsibility standards can also improve the productivity and product quality of suppliers, while high-quality products can make retailers more competitive

Serve as a platform for BSCI members to exchange knowledge and perspectives BSCI hopes to combine the extensive experience and professional opinions of participants

BSCI is committed to collaborating with other similar systems This cooperation can take the same actions or be in the form of mutual recognition BSCI believes that it is a part of the international effort to bring sustainable improvements to supply chains worldwide

b) BSCI is a non-profit organization headquartered in Brussels, Belgium All European and non European companies or associations are eligible to become members of BSCI BSCI mainly provides solutions for the retail industry, and is also open to importers and producers of various consumer goods to join

There are two types of membership, namely formal membership and informal membership Formal members are retailers, traders, and manufacturers who actively participate in and include suppliers in the BSCI qualification certification and audit process Informal members are any companies, associations, or organizations that are interested in the process but have not directly participated The board of directors has the right to decide on the admission and dismissal of BSCI members Any member who intends to withdraw from BSCI can submit a written notice six months before the end of each year

Upon joining, members must commit to summarizing their support and promoting BSCI and its goals Especially promise to audit its suppliers and include them in the process of complying with social responsibility This review and inclusion should be conducted within a reasonable time frame, which is jointly agreed upon by the members and the representative committee Members have the obligation to pay membership fees according to the BSCI payment system If you do not comply with or fulfill your membership obligations, your membership may be revoked

Only formal members have the right to vote

BSCI consists of the following main components:

Member Board of Directors:

The board of directors consists of all formal and informal members The board of directors shall convene at least twice a year, primarily responsible for formulating long-term plans and making strategic decisions The main responsibilities include budget, activities, procedures, and structure Conventional decisions are passed by a simple majority If it involves existing decisions, such as the structure of BSCI, a two-thirds majority vote is required to pass

The board of directors may establish working groups to handle special issues A permanent working group is the leadership group The leadership group is responsible for formulating specific suggestions on the system and its components, and then submitting them to the member board of directors Each participating country has a representative in the leadership group Other individuals with relevant professional knowledge will also be invited to attend the meetings of the leadership group

Representative Committee:

The representative committee shall be composed of at least three senior members of the board of directors and one representative of the secretariat The representative of the member board of directors shall be appointed by the member board of directors, which shall reflect the country and geographical distribution of the member board of directors The representative committee is the official representative of the government and other institutions in public It needs to issue regular announcements The representative committee shall convene regularly as needed, but at least twice a year All decisions are passed by a simple majority vote

The representative committee may elect a member as the spokesperson The spokesperson must be a representative of a company

The members of the committee serve every two years Can be elected as a committee member three times in a row, for a total of six years

Advisory Committee:

The Advisory Committee represents the majority of stakeholders concerned with social interests, mainly consisting of representatives from trade unions, non-governmental organizations, suppliers, import-export business associations, the European Commission, the International Labour Organization (ILO), and a United Nations member; ldquo; Global Action Plan& rdquo; The representative composition The Advisory Committee convenes twice a year to provide recommendations on monitoring social standards and addressing issues within BSCI itself The advisory committee also handles complaints arising from BSCI audit activities The appointment period for members of the advisory committee is two years Can be appointed three times, for a total of six years

secretariat:

The Secretariat is affiliated with the Foreign Trade Association Its main task is to handle the administrative work of the organization, including:

Supervision Procedure for Organizing BSCI

Preparation for meetings of the board of directors and representative committees

Develop and implement management measures proposed by the member board of directors

Clarify the issues raised by member companies and associations involved in the action

Manage the database of BSCI

Provide assistance to the Representative Committee as an external representative of BSCI

public relation

c) Budget

BSCI uses membership fees paid by members and third-party donations as funding for its activities The annual budget and membership fees are determined by the board of directors

III The social requirements of BSCI are based on relevant:

Related International Labour Organization (ILO) conventions

United Nations Convention on the Rights of the Child

United Nations Convention on the Elimination of All Forms of Discrimination

United Nations Declaration of Human Rights

Principles for Multinational Enterprises of the Organization for Economic Cooperation and Development (OECD)

In addition to the above principles, some basic environmental requirements are also included in the requirements of BSCI In addition to the audit requirements made by member companies, further requirements related to ecology and other production may be included in the supervision and audit procedures

4 Review the participation conditions of the company

At present, only independent auditing companies that have passed SAI qualification level assessment and have been selected by BSCI will be entrusted to carry out BSCI social responsibility audits This ensures the best audit quality while avoiding expensive and bureaucratic appraisal methods

In addition to SAI certification, the audit companies selected by FTA to implement BSCI social responsibility supervision must meet certain prerequisites and comply with certain conditions

The selected auditing company must exist in the region where the most important suppliers are located and have sufficient agency to implement supervision and auditing activities This is a necessary condition in terms of regional specific experience and optimization of the review process

The auditing company must sign a written contract with BSCI to establish the terms of the cooperation agreement between both parties

The following BSCI terms must be complied with:

1. BSCI audits can only be carried out on behalf of BSCI member companies or suppliers

2. BSCI survey questionnaire and guidelines must be used during the review process

3. The audit results must be comprehensively recorded in writing and verifiable

4. Auditors and auditing companies must collaborate with local non-governmental organizations and employee representatives

5. The hired auditors must possess high quality and be prepared to receive regular training as well as further education and qualification assessment from SAI At the same time, they must also:

6. Absolute independence, fairness, and integrity, ready to implement regular inspections at any time

7. Having professional experience in relevant fields, such as social responsibility audits, workplace safety, quality management, etc

8. Familiar with local business and language, possessing excellent psychological qualities, communication and interpersonal skills

9. The audit results are only provided to the audited company and relevant BSCI member companies for use

Five Suppliers should submit their existing audit reports and certificates to the auditing company before accepting the performance audit If a valid SA8000 certification certificate or equivalent recognized certificate related to BSCI scope is submitted, no further audit measures are required If the supplier is currently undergoing SA8000 certification or certification to similar standards, the same applies

Principle: The audit is conducted in accordance with the provisions of the BSCI Management Manual and Audit Guidelines The purpose of the audit is to assist suppliers in improving their social standards To ensure consistency in the application of BSCI goals and principles, the BSCI audit survey questionnaire must be used in all audit processes

Program:

a) The program is based on the principles outlined in the BSCI Code of Conduct It includes all relevant social responsibility and environmental requirements Confirming and implementing the BSCI Code of Conduct is a fundamental condition of the contract between BSCI members and suppliers Suppliers and their subcontractors must accept and implement the code of conduct as part of the contract

b) The program starts with supplier self-assessment This evaluation provides initial information about the supplier's supply chain and supplier performance, and defines the priority and urgency of further audits

c) The requirements for audit shall be proposed by BSCI member companies or by suppliers themselves Companies certified as qualified by SAI must use the BSCI audit survey questionnaire, BSCI audit report, and BSCI audit guidelines The entire review process consists of three parts:

-A - Main Information

-B-BSCI Social Responsibility Requirements

-C - Industry best practices, such as SA8000 or equivalent certification schemes Currently, BSCI recognizes SA8000 as its best practice

d) If any deficiencies are found during the audit process, the auditing company must discuss a mutually agreed corrective plan with the audited company and record it The corrective measures taken for non-compliance issues in section B of the audit questionnaire are mandatory The corrective measures developed for the issues in section C are voluntary choices, but it is recommended that they may help achieve SA8000 or related certification standards

e) The correction and improvement of supplier issues shall be carried out by BSCI members, their representatives, and/or the suppliers themselves The timing and extent of corrective action implementation are determined by BSCI members themselves, with some depending on the specific nature of the required measures Ending the business relationship between BSCI members and suppliers is the ultimate solution, but if the supplier fails to comply with the obligations outlined in Section B of the audit within the agreed reasonable period, then terminating the business relationship is inevitable

f) The audit results should be provided to the supplier and BSCI member companies, and may be discussed among them. Some information related to the supplier will be retained in BSCI's database

g) The payment method for expenses incurred during the monitoring process of auditing, improving activities, and implementing necessary corrective measures shall be directly discussed by BSCI members and their suppliers

h) The audit process should be repeated every 3 years, starting with the initial audit The frequency of supervision and certification required for suppliers who have passed SA8000 or other recognized relevant standards depends on the requirements of their respective systems

i) The BSCI supervision system will establish a complaint mechanism Establish local roundtable discussion meetings for stakeholders These meetings will be used to discuss and publicize complaints in the BSCI monitoring system activities For complaints regarding other standard certifications, it is necessary to consult the complaint mechanism of the relevant certification body

VI Promote sustainable improvement processes in supplier countries

The ultimate goal of BSCI is to promote sustainable improvement in supplier countries The government, trade associations, unions, non-governmental organizations, and other civil society organizations should be responsible for improving the social standards of their respective countries These organizations have to bear the burden of improvement and apply the relevant processes to them Roundtable discussions or other platforms for communication and cooperation can help achieve this goal BSCI will encourage and promote all efforts towards these goals in supplier countries

BSCI will also support:

Further train supplier management and their employees

Guide and consult with the management of retail companies

Train internal auditors, supply chain managers, and procurement officers in supply and retail companies

Provide learning materials on best practices and business case analysis

Economically support suppliers in implementing and improving social standards

Improvements can be achieved through the following channels:

BSCI member companies and/or service providers monitor suppliers, provide guidance, and grant qualifications

Training, guidance, and consulting within BSCI member companies

Attract local business associations and other stakeholders to participate

Initiate and assist in establishing a local support structure

Encourage the government to take action, provide bilateral development assistance, and involve international organizations in it

7 BSCI's partners include the European Commission and all government agencies involved in BSCI funding or any other specific support