1Photo courtesy of Edwards, Ltd.

EICC member outreach meetingAudit Protocol 5.0, student workers, and other vulnerable workers.

Agenda议程

08:30 - 08:45 WELCOME

08:45 ~ 10:00 EICC VAP 5.0 Training/培训

10:00 ~ 10:30 Coffee Break 茶歇

10:30 ~ 12:00 EICC VAP 5.0 Training/培训

12:00 ~ 13:00 Lunch 午餐

13:00 ~ 13:30 Report Launch & Key findings sharing

报告发布 & 调研分享

13:30 ~ 14:45 Panel Section 专题讨论

14:45 ~ 15:00 Coffee Break 茶歇

15:00 ~ 16:00 Presentations 专题发言

16:00 ~ 16:15 Summary and Closing/总结&发布会结束

16:15 ~ 17:15 EICC Member Meeting/会员会议

Audit Operations Manual 501EICC’s new protocol to operationalize the Code of Conduct

What we plan to cover today

• An overview of the VAP protocol and program

• A deeper look at VAP 5.0:• What is new?

• What is revised?

• What should companies do to prepare?

• The rollout of VAP 5.0, and advice for customers and auditees on implementing this program

• Plenty of time for questions

1. An Overview of the VAP Protocol and Program

What is the EICC audit protocol?

• It is how EICC members put the code into business practice

• It provides a common standard for what “code compliance” looks like at the factory level

• It helps procurement managers figure out which companies are effectively following EICC’s code of conduct, and which need some help coming into compliance

The VAP provides a comprehensive social and environmental assessment

1) Occupational Safety

2) Emergency Preparedness

3) Occupational Injury & Illness

4) Industrial Hygiene

5) Physically Demanding Work

6) Machine Safeguarding

7) Sanitation, food, housing

8) H&S Communication

Evaluate & control exposure to hazards

Treat employees with dignity & respect

1) Freely Chosen Employment

2) Child Labor Avoidance

3) Working Hours

4) Wages and Benefits

5) Humane Treatment

6) Non-Discrimination

7) Freedom of Association

Uphold the highest standards

Protect the environment

1) Permits & Reporting

2) Pollution Prevention

3) Hazardous Substances

4) Wastewater and Solid Waste

5) Air Emissions

6) Stormwater management

7) Materials restrictions

8) Energy and Greenhouse Gases

1) Business Integrity

2) No Improper Advantage

3) Disclosure of Information

4) Intellectual Property

5) Fair Competition

6) Protection of Identity

Management Systems 1) Company Commitment

2) Management Accountability and Responsibility

3) Legal and Customer Requirements

4) Risk Assessment and Risk Management

5) Performance Objectives with Implementation Plan and Measures

6) Training

7) Communication

8) Worker Feedback and Participation

9) Audits and Assessments

10) Corrective Action Process

11) Documentation and Records

EICC Code of Conduct www.eicc.info/eicc_code.shtml

Labor

Health & Safety

Environmental

Ethics

Management Systems

The VAP Process

Audit report is reviewed by the

EICC APM for quality assurance

and released by the Auditee

On site audit is conducted under the oversight of the EICC APM

The APM schedules the audit with the

facility and the approved auditors

The Validated Audit Process follows a simple five step process from the initial request for an audit to corrective action management and the Closure Audit.

Corrective Action Plans are

reviewed and approved, and

VAP Closure audits are arranged.Request a VA of a

supplier or your own company facility;

initiate contracts with the APM

Initiate Request

Schedule

Onsite Audit

Report

Follow Up

Why do companies use the VAP process?

• A common standard for ALL audits

• 3rd party management reduces conflict of interest, improves audit report quality and consistency

• Save facilities time – reduce redundant audits

• Save buyers money – 1 audit to share with 100 member companies

Value proposition for shared audits

500 audits, 3 companies/audit

• Audits currently saving member companies $2.3 million/yr in audit fees (sharing 500 audits among 1,500 requestors.)

• Sharing also saves suppliers 10,000+ hours of audit-related work.

Scope of EICC Validated Audit

1. The Scope of the Validated audit is ALWAYS full site (all buildings and sections or areas of a facility)

2. The scope of the audit can be limited due to the following reasons ONLY:

• Site has more than 40,000 workers

• Some operations of the site are not within the ICT industry

• A section of the site is non accessible due to proprietary or confidentiality

reasons - ONLY accepted if a written proof of “do not audit” to the APM

• Different management systems, management teams

• More than 5 km separation between the sections

• Operate under a different legal entity or license

Types of EICC VAP audits

• Manufacturing: • Any site of which the main activity is manufacturing, assembly, repair, chemical,

significant mechanical or distribution operation.

• Service Provider: • Any site of which the main activity is to provide a service such as design, tele-

center, helpdesk, customs service agency,• On site audit will happen at office of service provider and 1 deployment site (if

applicable)

• Labor Agent/Labor Contractor: • Any service provider who provides any type of labor or staff to a site. • On site audit will happen at office of service provider and 1 deployment site (if

applicable)

Duration and cost of a Validated Audit

2. Audit costs are provided by the Audit Program Manager when an auditee submits the EICC-ON facility profile.

13 24 June 2010

1. The price of a Validated Audit includes the following:

• Auditor labor cost

• Auditor expenses

• EICC mgmt fee

• Taxes to audit firm and/or EICC (in applicable)

1. Size: employees include both hourly paid workers and salaried employees2. Days: person days on siteNote:

Complexity of operations within the scope of the audit.

Criteria: dormitory, significant chemical operations, intensive physical handling, complex manufacturing operations, canteen, special operations, etc.

Size1 - number of workers at a facility

< 1000 1000-5000 > 5000

Low – no listed complexity criteria

4 days

4 days 8 days

Medium – 2 listed complexity criteria 6 days 10 days

High – 3 or more listed complexity criteria8 days 12 days

3. Costs have already been negotiated, is the result a competitive comparison

analysis and breakdown is not provided because of legal/contractual restrictions

How to initiate a Validated Audit

1. Click on “Add a New Audit” (orange button on right) from • your company’s audit page

• your suppliers’ audit page. (This option is now also available for your subsidiaries and your subsidiaries’ suppliers if applicable).

• As a supplier when receiving an audit request click on “accept”

2. Follow up with an email to APM (audits@vectra-intl.com)• Your company

• Preferred audit week up to 9 months

• Critical contact info for audit and accounting

• Your supplier• Preferred audit week up to 9 months

• Indicate clearly who will pay for the audit

• Your supplier “audit” main contact info

What does an audit look like on-site?

• Good practice audit

• Opening meeting

• Facility tour/document review/management interview/worker

interview

• Daily wrap up/daily opening meeting

• Priority audits are communicated immediately when confirmed

• Close meeting

• Provide resources / all documents are ready for review by

lunch time on Day 1. If not, audit will be canceled.

• APM support:

– provision guidance

– auditor performance

• Feedback: http://www.surveymonkey.com/s.aspx?sm=Tc0cRSnR8UUpVQoKpBDYZw_3d_3d

Report process

1. Audit Finding Acknowledgement to APM (+2 from close meeting)

2. Audit team submits Draft VAR to APM (+14)

3. Feedback provided by Auditee to APM (+21)

4. QA feedback to Audit firm by APM (+28)

5. Final draft VAR received by APM (+32)

6. Final VAR QA reviewed by APM (+35)

7. Final VAR in released (+38)

Attachment B!

Why do we have a new protocol?

• Align with new EICC Code of Conduct

• Increase protection for vulnerable workers

• Align with the UN Guiding Principles, and other best practices

• Add key environmental, health, and safety provisions

Resources for VAP in Chinese

• Available now:• EICC Code of Conduct 5.0 in Chinese

• EICC self-assessment questionnaire in Chinese: www.eicc-on.info.

• 4 Intro to EICC modules in Chinese on Learning Academy: https://eiccacademy.litmos.com/account/login or training@eiccoalition.org

• Available in 2015:• VAP Operations Manual 5.0 in Chinese

• Available in 2016?• A VAP training in Chinese (we’re hiring!)

2. A Deeper look at VAP 5.0

501 process changes

• EHS experts will be added to select audits

• Critical documents for review (permits for example) must be sent in pre-audit prep

• Priority audits for working hours moved from 90 days to 180 days (unless working hours over 84h/w.)

• Aligned CAP timeline for working hours with non-working hours

• Adjust wording to allow only EICC-ON-only audits (beginning 1/1/2015)

• Service provider scoping clarification

• Smart EICC-On / Data collection template

• 45 day limitation removed

What has changed?

• This version of the Audit Operations Manual includes updated guidance on all Code revisions

• Updated guidance on 19 major code revisions

• New guidance on three code additions and one code provision consolidation

• Major changes in guidance a result of major changes in code

• Every section of the Protocol has significant guidance added

• Biggest protocol changes include Freely Chosen Employment (A1), Young Workers (A2), Non-Discrimination (A6), Resource use and waste management (C2 and C4), and Protection of Identity and Non-Retaliation (D6).

• Note there are other major changes (day of rest, material communicated in workers’ primary language, wages, etc…) that are significant code changes, but require minimal changes to audit protocol.

• New code provisions

• There are new code provisions on Health and Safety communication (B8), Stormwatermanagement (C7) and Energy Consumption and Greenhouse Gas Emissions (C8)

Code and provisions structure

• 5 sections• A. Labor

• B. Health & Safety

• C. Environment

• D. Ethics

• E. Management systems

• Code and provisions (audit protocol) same structure

• Code paragraph = provision (audit protocol) subsection• E.g. Labor (A)

• Involuntary employment (A1)

• young workers (A2)

• …

Nonconformance ratings• Priority Nonconformance:

• is a Major Nonconformance with significant and immediate impact. These are predefined. forced labor, health and safety issues that can cause immediate danger to life, limb, health, facility or immediate harm to the community.

• Major Nonconformance:• is seen a significant failure in the management system or if the process or

procedure is totally ineffective.

• Minor Nonconformance:• A minor Nonconformance by itself doesn’t indicate a systemic problem with the

management system. It is typically an isolated or random incident or a procedure that has not been revised to reflect a change in regulations.

• Risk of Nonconformance: • Rating where management system is not strong enough to prove conformance at

all time.

Protocol subsection structure

• Labor • Question 1 – “hard” compliance (do you have it)• Question 2 - policies and procedures• ….

• Health& Safety• Question 1 – permit, license, …• Question 2 – “hard” compliance (do you have it)• Question 3 - policies and procedures• ….

• Environment• Questions by environmental process or impact area

• Ethics• Questions are risk based not compliance questions

• Management systems• Exclusions if valid certification in place• By management systems component across 4 elements (labor, H&S, env, ethics)• Rating same structure for all questions

Resources to learn more about VAP 5.0 and the entire VAP process

• For this presentation and future reference, please follow along with a copy of VAP

Audit Operations Manual 5.0 – Chapter 12, Code Interpretation Guidance. The VAP

Audit process is described in detail at

http://www.eiccoalition.org/standards/assessment/

• VAP Operations Manual will be available in Chinese, Malay, Thai, and Korean in March,

2015.

• Verite’s EICC 5.0 Labor and Ethics Course (online) will be available in late February on

EICC’s learning Academy. To get a free Learning Academy account, email

training@eiccoalition.org.

• This training and 5 other short intro trainings on VAP 5.0 (Labor 1, Labor 2, Ethics, and

Management Systems will be available on EICC’s Learning Academy as well for download.)

• For lead company audit program managers, Verite’s 5-day, in-person training is the most

comprehensive preparation for VAP 5.0. To find a training in your area, go to

http://www.verite.org/catalog/10

A. Labor

Critical changes V403 to 5011. A1 – Freely Chosen Employment - complete rework

2. A2 – Young Workers – no overtime – additional requirements on student workers, interns, apprentices

3. A3 – Working Hours - 1 day off in every 7

4. A6 – Non-Discrimination – addition of Reasonable religious accommodation

5. A7 - Freedom of Association – complete rework

A1 – Freely chosen employment

• A1 Freely Chosen EmploymentForced, bonded (including debt bondage) or indentured labor; involuntary prison labor; slavery or trafficking of persons shall not to be used. This includes transporting, harboring, recruiting, transferring or receiving persons by means of threat, force, coercion, abduction or fraud for labor or services. There shall be no unreasonable restrictions on workers’ freedom of movement in the facility in addition to unreasonable restrictions on entering or exiting company-provided facilities. As part of the hiring process, workers must be provided with a written employment agreement in their native language that contains a description of terms and conditions of employment prior to the worker departing from his or her country of origin. All work must be voluntary and workers shall be free to leave work at any time or terminate their employment. Employers and agents may not hold or otherwise destroy, conceal, confiscate or deny access by employees to employees’ identity or immigration documents, such as government-issued identification, passports or work permits, unless the holding of work permits is required by law. Workers shall not be required to pay employers or agents recruitment fees or other aggregate fees in excess of one month’s salary. All fees charged to workers must be disclosed and fees in excess of one month’s salary must be returned to the worker.

Key elements of freely chosen employment –and what has changed?

• A1.1 Any type of forced, involuntary prison, indentured, bonded (including debt bondage), trafficked or slave labor is not used

• A1.2 Adequate and effective policy and procedures are established ensuring that any form of forced, bonded involuntary prison, trafficked or slave labor is not used.

• A1.3 Terms of contract are provided in writing and in their own language prior to employment (in case of migrant workers, before they leave their home country/region) of the key employment terms and conditions via employment letter/agreement/contract as required by law and explained verbally so workers understand what the contract states.

• A1.4 Upon hiring, the workers government issued identification and personal documentation originals are not held by employer/labor agent/contractor (if applicable)

• A1.5 There are no unreasonable restrictions on the movement of workers and their access to basic liberties

A2 – Young workers

• No work if under 15 (or local legal limit, whichever is greater)

• No hazardous work

• No night work

• No overtime

A2 - Student workers

Student worker

Intern Apprentice

Tri-party agreement (student, school, and company/Auditee)

Yes N/A N/A

No financial/scholastic penalty (note scholastic penalty is allowed only if directly related to underperformance on educational component of program)

Yes Yes N/A

Due Diligence: verify that worker is actively enrolled in a valid program of study at an educational institution. Take corrective actions to address any nonconformance by an educational institution and establish sanctions as appropriate, including termination of the relationship

Yes No N/A

Wage rate the same as other workers performing equal or similar tasks

Yes No (at least minimum wage during intern period)

N/A*

A3 – working hours

• Moved from 1 day off in 7 (allowing 12 consecutive days if followed by 2 days off) to one day off every 7 (no more than 6 consecutive days).

• Adjusted timing on working hours priority closure audits (now after 6 months, looking at 3 months of CAP data.)

• Adjusted rating scale for day of rest

A6 – Discrimination and “Reasonable Religious Accommodation”

Reasonable?• A mechanism for receiving religious accommodation

requests is in place• Requests are kept, reviewed and decision and reason of

decision of accommodation (or no accommodation) is provided to the requestor in a timely manner.

• Reasonable Religious Accommodation maybe refused for safety and security concerns, after seeking alternatives (including off-site options) and/or significant impact on business operations, operating costs or other workers.

• Granting a religious accommodation should be evaluated against the Collective Bargained Agreement (CBA - if in place) and may vary from the CBA.

• Dialogue with worker representatives is held if there is a difference between the religious accommodation and the CBA, if this does not violate the privacy of the Reasonable Religious Accommodation requestor.

Accommodation?• The procedures must

reasonably accommodate group or individual‘s religious practice requests made to management and may include:

• Scheduling Changes

• Voluntary Substitutes and Shift Swaps

• Change of Job Tasks and Lateral Transfer

• Dress and Grooming Standards

• Use of Employer Facilities

• Tests and Selection Procedures

A7 – Freedom of Association

• Coming soon?

Note – changes to A7 are NOT FINAL – Freedom of Association audit language will be finalized and available February 15th.

B. Health and Safety

Key elements of H&S

B1 - Occupational Safety –1. Make sure all permits and licenses are up-to-date

2. have a management system to limit hazards

3. make sure everyone has the right PPE

B2 - Emergency Preparedness -1. Equipment and Inspections are up-to-date

2. Fire equipment is in place and working

3. Emergency preparedness plan is strong and practiced regularly

4. Emergency exits are working, clearly identified

5. Emergency response personnel are present, trained, and protected

B3 - Occupational Injury and Illness1. Permits, licenses, and testing reports are up-to-date

2. First aid process and personnel are in place and trained

3. First aid kits are available and inspected regularly

Key elements of H&S - continued

B4 - Industrial Hygiene–1. Permits are in place, and process to limit/manage exposure is in place2. Controls to protect workers from physical, chemical, and biological hazards are in

place

B5 - Physically Demanding Work1. Worker exposure to physically demanding work is controlled effectively

B6 - Machine Safeguarding 1. Machine safeguarding is in place2. Workers understand machine safety procedures

B7 – Sanitation, Food, and Housing1. All health, sanitation, and housing permits are in place and up-to-date2. Dormitories are clean, safe, and well maintained3. Cafeterias are clean, well maintained, and in line with local law/standard

B8 – Health and Safety Communication – new section1. H&S is communicated to workers in a language they can understand

Critical changes V403 to 501

B1 - Occupational Safety - added additional PPE requirements

B2 - Emergency Preparedness - added 1. Asbestos-containing fire-suppression are prohibited.

2. work place violence

3. Impact assessment of emergency response, business continuity, business resumption plan

4. lighting requirements

5. specific emergency response responsibilities

B3 - Occupational Injury and Illness – added expected tracking of injuries, fatalities, and near misses.

B4 - Industrial Hygiene– added program to assess employee health risk from chemicals.

B5 - Physically Demanding Work – clarified ergonomics control strategy expectations

B7 – Sanitation, Food, and Housing- clarified water testing expectations

B8 – Health and Safety Communication – new section

c. Environment

Key Elements of Environmental Section

C1 – Environmental Permits and Reporting1. All permits are up-to-date2. All required regulatory reporting is completed and up-to-date.

C2 – Pollution Prevention and Resource Reduction1. Programs, objectives, and targets are developed to identify, manage, and mitigate

waste of all types

C3 – Hazardous substances1. Hazardous materials are properly categorized, labeled, handled, stored, transported

and disposed using government-approved and/or licensed vendors as per local laws. 2. Workers working with hazardous substances are effectively trained3. Hazardous waste disposal suppliers have been evaluated to ensure they dispose of

waste in accordance with both contracts and local requirements

C4 – Wastewater and Solid waste 1. Solid wastes are identified, managed, minimized, and responsibly disposed of or

recycled in accordance with applicable legal requirements 2. Effluent discharge is managed to prevent contamination/pollution and monitored for

performance

Key elements of Environmental Section -Continued

C5 – Air emissions1. Air emissions have been identified, characterized, routinely monitored,

controlled, and treated prior to discharge, meet the discharge limits for regulated constituents, and air emission control systems are routinely monitored for performance.

2. Environmental noise levels are within regulatory limits

C6 – Materials Restrictions1. effective program is in place to meet legal and customer requirements for

product content/ Materials Restrictions as a formal part of the procurement and manufacturing processes including effective processes, procedures and records are in place to measure and/or document the chemical composition of products.

C7 – Stormwater Management – NEW REQUIREMENT

C8 – Energy Consumption and Greenhouse Gas Emissions – NEW REQUIREMENT

Environment - Critical changes V403 to 501

C2 – Pollution Prevention and Resource Reduction – removed performance, moved to a “materiality analysis”

1. Identify important environmental impacts

2. Develop a plan to monitor, manage, and reduce these impacts over time

C7 - Storm Water Management – new section1. Identify stormwater risks – what are potential runoffs from stormwater?

2. Develop stormwater controls – how do we minimize runoff, and protect against hazardous spills?

C8 – Energy Consumption and Greenhouse Gas Emissions – new section1. Measure greenhouse gas emissions at Corporate OR facility level

2. On-site combustion, fuel use, purchased electricity required, process and fugitive emissions encouraged.

3. Develop a plan to assess and implement opportunities to reduce energy consumption and fuel use (thereby reducing GHG emissions.)

4. Ethics

Ethics overview• D1.1 No identified risk that Employees/Workers who refuse to participate in

bribery, corruption, extortion and embezzlement or who have declared conflicts of interest do not suffer demotion, penalty or other adverse consequences even if this action may result in the enterprise losing business.

• D2.1 No identified risk of bribes or obtaining undue or improper advantage being promised, offered, authorized, given or accepted. Appropriate investigations and sanctions occur when there is an alleged violation.

• D3.1 No identified risk of misreporting, record falsification, or misrepresentation

• D4.1 No identified risk of Intellectual Property or business information loss or unauthorized disclosure (the Auditee’s own and that of their customers/suppliers)

• D5.1 No identified risk of communicating inaccurate information to the public

• D5.2 No identified risk of collusion

• D6.1 A way to confidentially report suspected ethical misconduct is available to workers and workers of suppliers

• D6.2 No identified risk of retaliation

• D7.1 No identified risk of unauthorized disclosure of personal information

• D8.1 – conflict minerals

Critical changes V403 to 5011. D8 – Responsible Sourcing of Minerals – aligned with CFSI

• Document review:• Adequate and effective program and clear policy on Conflict Minerals is in place to avoid knowingly

purchasing 3TG minerals avoids minerals that directly or indirectly finance for benefit illegal armed groups from conflict-affected regions.

• Conflict Minerals Sourcing policy is publicly available

• The program must at least include:• A documented management system exists to support the policy and is capable of demonstrating procurement

practices are in place. Auditee should actively verify compliance with these requirements:• Policies are incorporated in management and procurement procedures to assure conflict mineral free sourcing• Demonstrate that Auditee has developed a process to determine whether sources of materials are either 3TG free or (if

procured by the smelter/refiner site) are conflict‐free• Information from the EICC-GeSI CFS Program or equivalent is used to understand the source of minerals in the Supply

chain from the smelters/refiners they directly or indirectly procure from.• Direct suppliers have written requirements to source from smelters validated by an independent private sector audit

firm (EICC-GeSI CFS program or equivalent)• Corrective Action Plan is implemented if a potentially non-conflict free mineral source is identified• Annual review of the procedures to ensure compliance and improve where process improvements have been identified.

• Management interview: • Management can state:

• The detail of the policy and Conflict Minerals and the Conflict-Free Sourcing Program• What action is taken when a non-conflict free source is identified.

• Worker interview:• Employees (in procurement or sourcing) state can state:

• The detail of the policy and Conflict Minerals and the Conflict-Free Sourcing Program • What action is taken when a non-conflict free source is identified

5. Management Systems

Critical changes V403 to 501

1. E10.2 - Added closure audit responsibilities for violations found in past audits

E12 - Supplier Responsibility

• E12.1 - The EICC Code requirements have been communicated to the next tier major suppliers

• E12.2 - An effective process to ensure that the next tier major suppliers implement the EICC Code

Learn more?• EICC Learning academy

• For beginner – intro to EICC modules

• For advanced – EICC lead auditor online training

• EICC Member SharePoint • All code, manual and audit documents

• Audit tracker (weekly updated)

• EICC Public Website – www.eiccoalition.org• All critical documents

• Process overview

• In person trainings

• Webinars

• Coming soon – Manual 501 in 7 languages

• Support• General

• On-site

Use the EICC Audit Protocol, and Help Us Continue to Improve

• Living documents – your inputs are appreciated

• We constantly look for feedback (on site / before or after how we did)

In 2014…

• Our code is stronger

• Our protocols are more detailed and clearer

• Our Program is growing

• Our supply chain impact is bigger

• Your cost is lower through sharing

See you on an audit soon!