combined ethical and quality audit - hit promo...standard eti base code and iso 9001:2000 type of...

INS# : 1424199

Report Date : 24 November 2014

Supplier : Growth-Sonic Limited

Factory : Ningbo Yongtai Metal Products Co., Ltd

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F-Audit-SA,QS,C-TPAT-Hit Promotional Products 131031-1

COMBINED ETHICAL AND QUALITY AUDITGeneral DetailsSupplier Name Growth-Sonic LimitedSupplier Location 1829-1835 18th Floor Star House 3, Salisbury Rd Tsimshatsui, Kowloon, Hong KongSupplier Contact Victor HoSupplier Telephone and E-mail Tel: 852 93027045 E-mail: [email protected] Name Ningbo Yongtai Metal Products Co., LtdFactory and Full Address Sanjunzhuang Village, Meilin, Ninghai County, Ningbo City, Zhejiang Province, ChinaFactory Contact Ms. GeFactory Telephone and E-mail Tel: 86 574 65290580 E-mail:[email protected] date 17~18 November 2014Standard ETI Base Code and ISO 9001:2000Type of audit Full Initial AuditProducts currently or proposed to besupplied

Aluminium hook, bottle opener and electric torch

Overall gradingKEY

A = Factory is fully compliantB = Minor issues foundC = Major issues foundD = Critical issues found

(See end of report for notes and auditmethodology)

Overall Results(Non Compliances)

Grade Total Minor Major Critical

Ethical C 22 11 11 0Quality

Systems C 9 6 3 0ProductSafety C 3 0 3 0

C-TPAT C 4 0 4 0

Executive SummaryNingbo Yongtai Metal Products Co., Ltd was established in 2003 and located in Sanjunzhuang Village, Meilin, Ninghai County,Ningbo City, Zhejiang Province, China. They had 6 buildings as workshop, office, warehouse and canteen. Total number ofemployees was 168. Total area was around 13,000 square metres.

The factory specialises in production of aluminium hook, bottle opener and electric torch. As per the management interview theirmain customers are overseas in Europe, Japan and America. Main production processes are cutting, metal processing, oxidizing,assembly and packing.

Factory management was courteous and granted full access to all areas during the audit including document review, factory tourand worker interview. They commented that they had been audited many times by their clients. They promised to improve thefindings as soon as they can.

Remark:Evertrust is the name of their trade company, the factory’s name should be: Ningbo Yongtai Metal Products Co., Ltd

Audited by Checked by Approved byNameTitleDate

Viola LuAuditor17~18 November 2014

NameTitleDate

Tracy XuAudit Coordinator20 November 2014

NameTitleDate

Julia HouAudit Manager24 November 2014

mailto:[email protected]

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CORRECTIVE ACTION PLAN

CODE OF CONDUCT ISSUESNon-Compliance Grade Corrective Action Advised Proposed

Complete date1. No risk assessment was carried out. B Risk assessments for Health & Safety

concerns should be carried out.

2. The instrument lathe had no belt guard.(See image 27)The punching machine had no belt guard.(See image 28)

C The instrument lathe and punching machineshould be equipped with belt guard.

3. No secondary containers were prepared forthe storage of some chemicals. (See image26)

B Secondary containers should be prepared forthe storage of chemical materials.

4. No eye washer and shower facility wasavailable in chemical usage and storagearea.

C Eye washer and shower facility should beavailable in chemical usage and storage area.

5. The punching operator didn’t wear earplugs.(See image 28)

C The punching operator should wear earplugsduring working.

6. The first aider was not visibly identified. B The first aider should be visibly identified.

7. Intake drugs and expired medicines werestored in the first aid box.(See image 29)

C Intake drugs and expired medicines should notbe stored in the first aid box.

8. No fire alarm was installed in some areas,such as: material warehouse, canteen andone lathing workshop.

C Fire alarm should be installed in eachworkshop/ warehouse and canteen.

9. No emergency light was installed above thefire exit of mould processing workshop. (Seeimage 30)

C Emergency light should be installed aboveeach exit.

10. No exit sign was installed above the fire exitof mould processing workshop. (See image30)

B Exit sign should be installed above each exit.

11. No evacuation plan was posted in someareas, such as: material warehouse andcanteen.

B Evacuation plan should be posted in eacharea.

12. The passageway was partly blocked. (Seeimage 32)

C The passageway should be kept free ofobstruction.

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13. 1 out of 2 fire exits of mould processingworkshop with around 100 square meterswas blocked and locked. (See image 31)

C The fire exit should be kept unlocked andunblocked.

14. The toilets were cleaned regularly, but norecords were kept.

B Keep toilets cleaning records from now on.

15. Some toilets were not equipped with doors.(See image 33)

B Toilets should be equipped with doors.

16. The chef didn’t wear mask and hat. (Seeimage 34)

B The chef should wear mask and hat whencooking.

17. The kitchen and canteen were cleanedregularly, but no records were kept.

B Keep kitchen and canteen cleaning recordsfrom now on.

18. No evidence to show the pest control wascarried out.

B Pest control should be carried out with recordskept.

19. There was no register of young workers. B Young workers should be registered at locallabour bureau.

20. No health exam was provided to youngworkers.

C Health exam should be provided to youngworkers.

21. Fine rule was posted in the workshop. (Seeimage 35)

C Adopt other measures to educate workersinstead of fine.

22. There were 156 employees in the factory inSeptember 2014, based on the providedsocial insurance receipt, all employees werecovered with disability caused by work-related injury or occupational diseaseinsurance, 43 employees were covered withchild-bearing insurance, 31 employees werecovered with unemployment insurance, 32employees were covered with retirementinsurance and 30 employees were coveredwith illness or injury insurance.

C All workers should be provided with 5 types ofsocial insurance.

QUALITY SYSTEMS ISSUESNon-Compliance Grade Corrective Action Advised Proposed

Complete date1. Quality objectives were not measured. B Quality objectives should be measured.

2. Relevant job descriptions were not in place. B Job descriptions should be in place.

3. No training records to show training wereprovided to all employees.

C Training should be provided to all employeesand training records should be kept.

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4. No internal data was assessed to initiatemeaningful corrective actions.

C Internal data should be assessed to initiatemeaningful corrective actions.

5. Passed materials were not clearly identified. B Passed materials should be clearly identified.

6. No clear work instructions were visible tosome stations.

B Clear work instructions should be visible to allstations.

7. No approved sample was visible to somestations.

B Approved sample should be visible to allstations.

8. No AQL sampling plan was used. B AQL sampling plan should be used.

9. Hazardous waste was not disposed byqualified company.

C Hazardous waste should be disposed byqualified company.

Product Safety PracticesNon-Compliance Grade Corrective Action Advised Proposed

Complete date1. The Contract Factory didn’t maintain a PLI

(Product Liability Insurance) policyindependent of the Supplier.

C The Contract Factory should maintain a PLI(Product Liability Insurance) policyindependent of the Supplier.

2. No evidence to show mechanical andperformance tests were performed duringdesign and development to identify andevaluate product hazards.

C Mechanical and performance tests should beperformed during design and development toidentify and evaluate product hazards.

3. No evidence to show revisions were made toproducts identified as presenting a producthazard.

C Revisions should be made to productsidentified as presenting a product hazard.

C-TPATNon-Compliance Grade Corrective Action Advised Proposed

Complete date1. Criminal background was not carried out. C Criminal background should be carried out.

2. Visitors were not issued a visitor pass. C Visitors should be issued a visitor pass.

3. No evidence to show ISO17712-compliantseals were affixed to loaded containersbound for the US.

C ISO17712-compliant seals should be affixed toloaded containers bound for the US.

4. No evidence to show the third-party logisticsproviders were C-TPAT-certified.

C The third-party logistics providers should be C-TPAT-certified.

Recommended Re-audit date 17 February 2015

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Factory Profile1. Factory Name (Include all names) Ningbo Yongtai Metal Products Co., Ltd2. Factory Address Sanjunzhuang Village, Meilin, Ninghai County, Ningbo City, Zhejiang Province,

China3. Any Other Factory Location

(give address)N/A

4. Factory History Company founded Factory Site Opened3 July 2003 3 July 2003

5. Factory Owners Name TitleWang Jian Lin General Manager

6. Factory Representatives Present Name TitleMs. Ge Chun XiaMr. Liu Hua Xi

Sales ManagerOffice Director

7. Sercura/ Client Staff Present Name TitleViola Lu Auditor

8. Products being produced on site Aluminium hook, bottle opener and electric torch

9. Factory Area in Square Metres 13,000 square metres.

10. No. of Buildings 6

11. Factory Capability: Main Products Monthly CapacityAluminium hook, bottle opener and electric torch 3,000,000 pieces

12. Main manufacturing processes /Equipment / Machines

Key processes Monthly CapacityCutting, metal processing, oxidizing, assembly andpacking, etc

3,000,000 pieces

13. Total Number of Employees Total Male Female168 85 83

14. Total Number of Employees 168

15. Breakdown of employees Managers Admin Engineering QA/QC Workers Part-time10 35 15 8 100 0

16. Ethnic background of workers Chinese 168

N/A N/A

17. Does the factory provideaccommodation to workers?(How many rooms)

No.

18. Does the accommodation belong tofactory or is it rented?

N/A.

19. What accreditations does the factoryhave?

ISO9001 and ISO14001 certificate.

20. When did management hear ofcustomer code of conduct?

Around 2 weeks ago.

21. Explain what has been done toensure compliance with thestandard?

Training, internal audit, etc.

22. Customer Base- retailer/largestcustomer that the factory is workingwith.

Hit Promotional, Dollar General

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23. Management Style- Autocratic,Democratic, Participative or Laissez-faire

Democratic.

24. Main Languages spoken in thefactory

Mandarin and local dialect.

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A. ETHICAL SECTION (ETI Base Code)

1. Employment is freely chosenNo Question NA NC PC C Remarks / Comments1. There is no forced or involuntary

prison labour.X

2. Workers are not required to lodge‘deposits’ or their identity paperswith their employer.

X

3. Workers are free to leave theiremployer after giving reasonablenotice.

X

4. Are workers during off-hours free tocome and go?

X

5. Is there a curfew time for workers attheir dormitories?

X There was no dormitory in the factory.

6. Are their security guards? What aretheir duties?

X Safeguard the factory’s property and workers’ safety.

7. Does the factory have a writtenpolicy regarding forced or prisonlabour?

X

2. Freedom of association & the right to collective bargaining are respectedNo Question NA NC PC C Remarks / Comments1. Workers have the right to join or

form trade unions or their ownchoosing and to bargain collectively.

X

2. The employer adopts an openattitude towards the activities oftrade unions and their organisationalactivities.

X

3. Workers’ representatives are notdiscriminated against and haveaccess to carry out theirrepresentative functions in theworkplace.

X

4. Where the right to freedom ofassociation and collective bargainingis restricted under law, the employerfacilitates, and does not hinder, thedevelopment of parallel means forindependent and free associationand bargaining.

X The right to freedom of association and collectivebargaining is not restricted under law.

5. Is there a union or workersassociation in the factory thatprovides the means for CollectiveBargaining?

X

6. What other methods exist for theworkers to raise their grievances andconcerns to management?

Report to supervisor or through suggestion box.

7. Is there a written grievanceprocedure available?

X

8. By what means is the grievanceprocedure communicated to theworkers?

Through training.

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9. Is there any evidence of intimidationin relation to the right to collectivebargaining?

X

10. Is there evidence that the factorymanagement has been responsive togrievances raised by workersindividually or collectively?

X As claimed by factory representative, no grievance wasraised by workers.

3. Working Conditions are safe and hygienicNo Question NA NC PC C Remarks / Comments1. A safe and hygienic environment

shall be provided, bearing in mindthe prevailing knowledge of theindustry and of any specific hazards.

X Still needed to be improved.Such as: No risk assessment was carried out.

2. Adequate steps shall be taken toprevent accidents and injury tohealth arising out of, associatedwith, or occurring in the course ofwork, by minimizing, so far as isreasonably practicable, the causes ofhazards in herent in the workingenvironment.

X Still needed to be improved.Such as: No health and safety training records wereprovided.

3. Does the company have writtenrecords of regular risk assessmentsfor Health & Safety concerns?

X No risk assessment was carried out.

4. Workers shall receive regular andrecorded health and safety training,and such training shall be repeatedfor new and reassigned workers.

X

5. Does the company have an injury oraccident record that is up to date?

X

6. What the most common injuriesnoted in this record?

As shown in the injuries records, no accident happenedtill now.

7. In general, have the facilitiessufficient ventilation, heating andlighting?

X

8. In general, is the housekeepingsufficient?

X

9. Are electrical installations adequateand properly maintained and do notpresent any safety hazard?

X

10. Has the structural integrity of thebuilding been inspected? Is theredocumentation to prove this?

X

11. Is machinery well maintained? Howoften is it inspected and is thisdocumented?

X Monthly.

12. Are machine guards being usedwherever appropriate?

X The instrument lathe had no belt guard.(See image 27)The punching machine had no belt guard.(See image 28)

13. Are hazardous materials/ chemicalsproperly stored in a separate well-ventilated storage facility and underlock and key?

X No secondary containers were prepared for the storageof some chemicals.(See image 26)

14. Are Material Safety Data Sheets(MSDS) for hazardous chemicalssuitably displayed and in locallanguage?

X

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15. Are warning posters visible in areaswhere hazardous chemicals arestored or used?

X

16. Is appropriate First Aid availablenear toxic chemicals?

X No eye washer and shower facility was available inchemical usage and storage area.

17. Is there any evidence of pollutionfrom chemicals or paints in the air?

X

18. Is proper Personal ProtectiveEquipment (PPE) such as clothing,masks, ear plugs, respiratorsavailable at company expense?

X

19. Is PPE being used by the workers inthe correct manner and whererequired?

X The punching operator didn’t wear earplugs. (Seeimage 28)

20. Are there records to show thatworkers have been trained in thecorrect use and importance of PPE?

X

21. Are there records to show whichworkers have been trained in FirstAid. Are these workers visiblyidentified by some means?

X 3 out of 168 employees were trained in first aid.The first aider was not visibly identified.

22. Are there sufficient First Aid boxeson each floor and easily accessible?

X

23. Are First Aid boxes correctly stockedwith items suitable for the mostcommon injuries that need instantattention?

X Intake drugs and expired medicines were stored in thefirst aid box. (See image 29)

24. What types of warning system isused for emergency?

No fire alarm was installed in some areas, suchas:material warehouse, canteen and one lathingworkshop.

25. Are there fire alarms on each floorand emergency lighting above exits?

X No fire alarm was installed in some areas, such as:material warehouse, canteen and one lathingworkshop.No emergency light was installed above the fire exit ofmould processing workshop.(See image 30)

26. Are exits clearly marked and is therean evacuation plan on each floor?

X No exit sign was installed above the fire exit of mouldprocessing workshop.(See image 30)No evacuation plan was posted in some areas, suchas: material warehouse and canteen.

27. Are all aisles clearly marked andpassable?

X The passageway was partly blocked. (See image 32)

28. Are all floors clean and free ofobstruction? Are the floors non-slippery?

X

29. Are fire evacuation plans clearlyexplained in local language?

X

30. Are all emergency exit routes clearlypassable and unlocked duringworking hours?

X 1 out of 2 fire exits of mould processing workshop witharound 100 square meters was blocked andlocked.(See image 31)

31. Do these exits lead to a place ofsafety and is the route easy to followeven for elderly workers?

X

32. Are fire escapes and exits availableand accessible on all floors?

X

33. Are there adequate fireextinguishers, or other means offighting fire, on each floor?

X

34. Are fire extinguishers thoroughlyinspected on an annual basis?

X

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35. How often does the factory practice afire evacuation drill? When was thelast one? Is there evidence tosupport this?

X Once per year.As shown in the fire drill records, the latest one wascarried out on 24 April 2014.

36. Is there written documentationregarding smoking in the factory? Isthere evidence that these rules arestrictly implemented?

X

37. Access to clean toilet facilities and topotable water, and, if appropriate,sanitary facilities for food storageshall be provided.

X

38. What is the ratio of toilets to maleand female workers.

For male: 1:8For female: 1:9

39. Describe the type of toilets and theconditions they are in.

Water-flushing type.The toilets were clean.

40. Is there a regular cleaning roster forall toilets and is this correctlydocumented?

X The toilets were cleaned regularly, but no records werekept.

41. Is there sufficient privacy for workerswhen using the toilet facilities?

X Some toilets were not equipped with doors. (See image33)

42. Are toilets and potable wateraccessible to all workers and canthey use these facilities at any time?

X

43. What are the arrangements thefactory makes for providing food tothe workers?

There was a canteen in the factory.

44. Are the kitchens maintained in aclean manner?

X The chef didn’t wear mask and hat.(See image 34)

45. Is there a regular cleaning roster forthe kitchens and canteen area and isthis correctly documented?

X The kitchen and canteen were cleaned regularly, but norecords were kept.

46. What provisions does the factorymake for pest control? Is theredocumented and visible evidence ofthis?

X No evidence to show the pest control was carried out.

47. Are there any medical facilities onsite?

X No any medical facilities.

48. Are there written procedures todocument action to be taken formedical emergencies?

X

49. List all issues relating to health andsafety found during the factory tour?

Refer to the context.

50. Accommodation, where provided,shall be clean, safe, and meet thebasic needs of the workers.

X No dormitory was provided to workers.

51. How many workers live in factoryprovided dormitories/accommodation?

X

52. How many workers will share oneroom? Approximate square metresize of room?

X

53. Does each worker have a locker forkeeping their private possessions?

X

54. What furniture is provided by thefactory?

X

55. What is the condition of the toiletfacilities?

X

56. Is hot water available for washing? X57. Are dormitories and common areas

safe for both women and men?X

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58. Is there some form of security thatcontrols access by unauthorisedpeople to the dormitories?

X

59. Are dormitories correctly segregatedbetween men and women?

X

60. Are dormitory rules posted in thelocal language?

X

61. Is there adequate heating in thedormitories and is this provided bythe factory?

X

62. Are fire escapes adequate,accessible, unlocked?

X

63. Is fire fighting equipment easily athand?

X

64. Are emergency routes posted clearlyin local language?

X

65. The company observing the codeshall assign responsibility for healthand safety to a senior managementrepresentative. What is his name?

X Mr. Liu Hua Xi, the office director.

66. Has the factory had any violationsagainst local or international Healthand Safety laws in the last 5 years?

X

4. Child labour shall not be usedNo Question NA NC PC C Remarks / Comments1. There shall be no recruitment of

child labourX

2. What are the local governmentregulations relating to minimum ageof employment?

16 years old.

3. If young workers are permitted bylocal law what are the specialconditions related to thisemployment?

No young workers shall be arranged to engage inworking that is poisonous or harmful, work with GradeFour physical labour intensity as stipulated by theState, or other work that they should avoid.

4. Does the factory have a documentedpolicy relating to minimum age ofemployment?

X

5. How is the factory’s policy and locallaw communicated to all theworkers?

Through training.

6. What age is the youngest worker inthe factory?

17 years old.

7. How does the factory ensure thatworkers meet the minimum agerequirements?

ID check.

8. If any child labour is found, what isthe factory’s explanation orjustification for this?

X No child labour was found during this audit.

9. Companies shall develop orparticipate in and contribute topolicies and programmes whichprovide for the transition of any childfound to be performing child labourto enable her or him to attend andremain in quality education until nolonger a child.

X

10. Children and young persons under18 shall not be employed at night orin hazardous conditions.

X

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11. Is there a register of workers under18 in the factory?

X There was no register of young workers.

12. Do workers under 18 have a halfyearly health exam?

X No health exam was provided to young workers.

13. Is there any provision for workersunder 18 to further their studies?

X No any provision.

14. These policies and procedures shallconform to the provisions of therelevant ILO standards.

X

15. Are there any apprenticeship or workexperience schemes in the factory?What is the duration of theseschemes?

X No such schemes.

5. Living wages are paidNo Question NA NC PC C Remarks / Comments1. Wages and benefits paid for a

standard work week meet, at aminimum, national legal standards orindustry benchmark standards,whichever is higher. In any event,wages should always be enough tomeet basic needs and to providesome discretionary income.

X

2. What are the local governmentregulations relating to wages andbenefits? What is the legal minimumwage?

RMB1,310 per month since 1 August 2014 andRMB1,200 per month before 1 August 2014.

3. What is the factory’s minimumwage?

The minimum wage in the factory was RMB2,300 permonth which was more than the legal minimum wage.

4. What bonus schemes exist? No bonus.5. How are the workers paid? Cash monthly6. Are the workers paid by any other

means besides national currency?X No others.

7. Are the workers provided with a clearwage statement?

X

8. Are workers paid by the hour or bypiecework? Is there evidence thatthey can meet the legal minimumwage?

X By the hour.The minimum wage in the factory was RMB2,300 permonth which was more than the legal minimum wage.

9. If there are any deductions fromwages permitted by local law is thisclearly stated on the wage slips andagreed by the worker?

X

10. Are workers compensated forovertime and how is this calculated?

X 200% of basic wage for overtime on Saturday. Noovertime happened on weekdays, Sunday andholidays.

11. How is the special overtime paycommunicated to the workers?

Through training.

12. What is the local legal requirementfor special overtime pay?

150% of normal wage for overtime on working days,200% of normal wage for overtime on rest days and300% of normal wage for overtime on public holidays.

13. All workers shall be provided withwritten and understandableinformation about their employmentconditions in respect to wagesbefore they enter employment andabout the particulars of their wagesfor the period concerned, each timethat they are paid.

X

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14. Deductions from wages as adisciplinary measure shall not bepermitted nor shall any deductionsfrom wages not provided for bynational law be permitted without theexpress permission of the workerconcerned.

X Fine rule was posted in the workshop. (See image 35)

15. All disciplinary measures should berecorded.

X Only verbal warning was used.

16. Does local labour law provide for anyannual holidays to workers?

X

17. What is the factory’s policy for leaveor annual holiday?

5 days annual leave was provided to workers whoworked in the factory for over one year.

18. What sick leave benefit is providedby the factory?

Basic wage would be provided to workers for sick leavebenefit.

19. What notice periods apply fortermination of the workers’contracts?

One month notice in advance.

20. How long does a woman need to bein employ to qualify for maternityleave?

No such definition.

21. What special rules apply forpregnant women in the factory?

98 days maternity leave with basic wage would beprovided to pregnant women.

22. Is termination of services a result ofbecoming pregnant?

X No such evidence.

6. Working hours are not excessiveNo Question NA NC PC C Remarks / Comments1. Working hours comply with national

laws and benchmark industrystandards whichever affords greaterprotection.

X

2. In any event, workers shall not on aregular basis be required to work inexcess of 48 hours per week.

X

3. What is the local legal requirementrelating to overtime?

Overtime should not be more than 36 hours per month,3 hours per day.

4. Does the factory have a writtendocument detailing their overtimepolicy?

X

5. How much overtime is performed onaverage by workers in the factory ona daily, weekly and monthly basis?

8 hours on Saturday, not more than 36 hours permonth.

6. If overtime exceeds the local legalstandard, does the factory have awaiver document from a localauthority?

X

7. What is the normal working day orshift for the workers?

From Monday to Friday:7:30~11:00, 12:00~16:30

8. How many breaks do the workershave during their working day?

11:00~12:00, one hour.

9. Workers shall be provided with atleast one day off for every 7 dayperiod on average.

X

10. Overtime shall be voluntary. X11. Overtime shall not exceed 12 hours

per week. (48 hours/ month)X

12. Overtime shall not be demanded on aregular basis.

X

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13. Overtime shall always becompensated at a premium rate.

X

7. No discrimination is practisedNo Question NA NC PC C Remarks / Comments1. There is no discrimination in hiring,

compensation, access to training,promotion, termination or retirementbased on race, caste, national origin,religion, age, disability, gender,marital status, sexual orientation,union membership or politicalaffiliation.

X

2. Is there a written Equal Opportunitiespolicy?

X

3. What is the retirement age of theworkers?

No such definition.

4. Is there any evidence ofdiscrimination between people ofsimilar skills but differentbackground?

X

5. Does the factory practice pregnancytesting prior to employment?

X

8. Regular employment is providedNo Question NA NC PC C Remarks / Comments1. To every extent possible work

performed must be on the basis of arecognised employment relationshipestablished through national law andpractice.

X

2. Are the workers given a clear,understandable contract with termsand conditions and their benefitsoutlined?

X

3. Obligations to employees underlabour or social security laws andregulations arising from the regularemployment relationship shall not beavoided through the use of labour-only contracting, sub-contracting, orhome-working arrangements orthrough apprenticeship schemeswhere there is no real intent toimpart skills or provide regularemployment, nor shall any suchobligations be avoided through theexcessive use of fixed term contractsof employment.

X

4. Are minimum social insurancecovered?

X There were 156 employees in the factory in September2014, based on the provided social insurance receipt,all employees were covered with disability caused bywork-related injury or occupational disease insurance,43 employees were covered with child-bearinginsurance, 31 employees were covered withunemployment insurance, 32 employees were coveredwith retirement insurance and 30 employees werecovered with illness or injury insurance.

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5. Are apprenticeship schemes used?Describe their terms and conditions?

X

6. Are sub-contractors/ home workersused? Describe their terms andconditions?

X

9. No harsh or inhumane treatment is allowedNo Question NA NC PC C Remarks / Comments1. Physical abuse or discipline, the

threat of physical abuse, sexual orother harassment and verbal abuseor other forms of intimidation shallbe prohibited.

X

2. Do valid records and reasons justifyrecent company dismissals.

X No dismissals happened.

3. Is there any evidence of abuse bymanagement?

X

4. Are workers allowed to speak duringworking hours?

X

5. Do workers have reasonable seatingand have sufficient breaks whileperforming their work?

X

B. QUALITY SYSTEMS SECTION (ISO 9001:2000)

10. Quality SystemsNo Question Grading Remarks/ Comments

NA NC PC C1. Is there a quality manual that

includes scope of a QMS andreferences documented proceduresand their interaction?

X

2. Are there documented proceduresand do they cover all sections of theoperations?

X

3. Is there evidence that theseprocedures implemented?

X

4. Describe the general flow ofproduction from incoming material topacking.

1. Incoming material;2. Cutting;3. Meal processing;4. Oxidizing;5. Assembly;6. Packing.

5. Is there a robust document controlsystem in operation that includesapproval, review, updating, changeidentification and obsolescence?

X

6. Is there evidence of managementcommitment to the quality system?

X

7. Are regular management reviewsconducted and documented?

X

8. Are there a quality policy and qualityobjectives?

X

9. Are the Quality Objectivesmeasurable and do records reflectthis data?

X Quality objectives were not measured.

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10. Are there an organization chart andrelevant job Descriptions?

X Relevant job descriptions were not in place.

11. Is there a quality manager whoreports directly to top management?

X Mr. Xin Qi Sheng, QA Manager.

12. Does the quality manager havesufficient authority to stop theproduction?

X

13. Is there an appropriate internalcommunication system regardingquality and processes?

X

14. Is there a way of capturing customerfeedback?

X

15. Is training provided and do trainingrecords exist for all employees?

X No training records to show training were provided to allemployees.

16. Is the general factory area clean,tidy and well lit?

X

17. Is there a system of regular internalquality audits?

X

18. Is internal data assessed to initiatemeaningful corrective actions?

X No internal data was assessed to initiate meaningfulcorrective actions.

19. Are detailed product specifications orproduction instructions establishedfor each product beingmanufactured?

X

20. Are incoming goods checked againstpurchase order and specifications?

X

21. Knowledge of applicable safetystandards for productsmade/country(ies) of export

Such as: the content of heavy metal.

22. Are passed materials clearlysegregated and identified?

X Passed materials were not clearly identified.

23. Is there a documented stock controlsystem?

X

24. Are rejected materials clearlyidentified?

X No rejected materials were found.

25. Are subcontractor’s and suppliersaudited and records kept?

X

26. Is there a documented calibrationsystem for equipment?

X

27. Are clear work instructions visible toall stations?

X No clear work instructions were visible to some stations.

28. Is an approval sample visible to allstations?

X No approved sample was visible to some stations.

29. Are in-process inspections carriedout during the course of theproduction process?

X

30. Do QC people report to the qualitymanager directly?

X

31. Are QC people present on eachproduction line?

X

32. Are they fully independent ofproduction staff?

X

33. Are inspections carried out oncompleted production batches usingan AQL sampling plan?

X No AQL sampling plan was used.

34. Are inspection records and reportsmaintained?

X

35. Are corrective action plansimplemented based on these reports?

X

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36. Are defective products correctlylabeled and segregated fromacceptable products?

X

37. Is there a broken needle controlprocedure in place (where relevant)?

X

38. Is there a glass breakage and/ foreignbody control policy in place (whererelevant)?

X

39. Is there a tools control policy (whererelevant)?

X

40. Is metal detection applied to relevantproducts before or after packing (eg:food, cosmetic and baby items)?

X

41. Are records kept of the metaldetection results?

X

42. Is there a final QC inspection onpacked goods using an AQLsampling plan?

X No AQL sampling plan was used.

43. Are each customer’s products clearlysegregated and marked once packingis complete?

X

11. EnvironmentNo Question NA NC PC C Remarks / Comments

1. All waste that is created in thefactory is disposed of in line withlocal laws, or in a way that will notharm the environment or the localpopulation?

X Hazardous waste was not disposed by qualifiedcompany.

2. Is there any evidence that the factoryis polluting the waterways or areasaround it?

X

3. Is there a written environmentalpolicy?

X

4. Is there evidence that it is beingapplied?

X

5. Is responsibility for environmentalcompliance assigned to a seniormanager? What is that manager’sname and who does he/she reportto?

X Mr. Liu Hua Xi (Office Director) reports to Mr. WangJian Lin (General Manager)

C. Product Safety Practices

12. Product Safety PracticesNo Question NA NC PC C Remarks / Comments

1. Does the Contract Factory maintain aPLI (Product Liability Insurance)policy independent of the Supplier?If yes, please provide for documentreview.

X The Contract Factory didn’t maintain a PLI (ProductLiability Insurance) policy independent of the Supplier.

2. What are the key activities beingperformed for product safety?

Design Manufacturing Testing Packing

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3. Product DesignAre specifications including a bill ofmaterial, a technical drawing(depiction), scale and manufacturingprocess available for all products?

X

4. Are safety-related criteria (applicablelaws, regulations and standards)highlighted for all sets of productspecifications?

X

5. Are mechanical and performancetests performed during design anddevelopment to identify and evaluateproduct hazards?

X No evidence to show mechanical and performancetests were performed during design and developmentto identify and evaluate product hazards.

6. Are revisions made to productsidentified as presenting a producthazard?

X No evidence to show revisions were made to productsidentified as presenting a product hazard.

7. Do product specifications reflectdated revisions?

X

8. If hazards cannot be removed fromproduct, is product labeled?

X

9. If hazards cannot be removed fromproduct, are user instructionsprovided?

X

10. Is manufacturability considered inproduct design?

X

11. Do quality control procedures reflectdesign considerations?

X

12. Is testing effective? SufficientComprehensive

13. PurchasingAre item specifications used inprocurement process?

X

14. Are current (within last 12 months)third party testing certificatesavailable for raw materials?

X

15. Are MSDS available for rawmaterials?

X

16. ManufacturingAre received materials verifiedagainst specifications?

X

17. Are received materials appropriatelystored?

X No rejected materials were found.

18. Are MSDS available for raw materialswhere those materials are used?

X

19. Is there a regularly scheduledproduct safety assurance or qualitymeeting?

X

20. Does Manufacturing Plan considerquality control procedures,particularly those related to productsafety assurance?

X

21. Is inspection coverage sufficient? X22. Are product performance and

mechanical testing sufficient?X

23. Is there an in-house individualqualified to maintain manufacturingequipment?

X

24. Is there an equipment maintenanceschedule?

X

25. Is there a formal system forevaluating subcontractors?

X

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26. Is there a formalized correctiveaction planning process in place?

X

D. C-TPAT

13.Supply Chain SecurityNo Question NA NC PC C Remarks / Comments1. Personnel

Does your facility require acompleted application to be hired forwork in the facility?

X

2. Does that application require:Copy of government-issued photoID?

X ID card photocopies of all sampled workers were keptin the factory.

3. Reference check? X4. Criminal background? X Criminal background was not carried out.5. If not all sections of the company

require criminal backgroundchecks, which sections do requirecriminal background checks?

As above 13.4.

6. Do you have a termination policy? X7. Do you have procedures in place for

removing access to computersystems and facility for personnel nolonger employed by your company?

X

8. Access ControlAre all entrants to your facilityrequired to sign in?

X

9. Are all entrants to your facilityrequired to provide photo ID forverification?

X

10. Are visitors issued a visitor pass? X Visitors were not issued a visitor pass.11. Are visitors escorted in the facility

during their visit?X

12. Are drivers restricted to loadingarea?

X

13. Does your company have areas thatare restricted access by authorizedpersonnel only?

X

14. Do you have written proceduresdocumenting these policies?

X

15. PhysicalIs your facility constructed ofmaterials that resist unlawful entry?

X

16. Is your facility fenced? X17. Is your loading / unloading area

separate from parking for / entrancesto your offices and productionareas?

X

18. Does your facility have an alarm? X19. Does your facility employ electronic

surveillance?X

20. Is security lighting employed insideand outside your facility?

X

21. Procedural SecurityAre containers inspected beforeloading for unauthorized goods,false compartments, etc.?

X

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22. Does container inspection includeUS Customs and Border Protection’s7-point inspection?

X

23. Are ISO17712-compliant seals affixedto loaded containers bound for theUS?

X No evidence to show ISO17712-compliant seals wereaffixed to loaded containers bound for the US.

24. Are security seals logged? X25. Does your company have

procedures addressingcompromised containers or seals?

X

26. Do you require all incoming andoutgoing goods to be accompaniedby documents properly describinggoods including weight and count?

X

27. Are in-process goods storedseparately from packed goods?

X

28. Is hazardous cargo maintainedseparately from other cargo?

X

29. Security AwarenessHave members of your companycompleted C-TPAT training?

X

30. Are your third-party logisticsproviders C-TPAT-certified?

X No evidence to show the third-party logistics providerswere C-TPAT-certified.

NA = Not Applicable, NC = Not compliant, PC = Partially Compliant, C = Compliant

Methodology of AuditThis audit provides a summary of the findings and other applicable information gathered during the audit conducted on the abovedate only and does not officially confirm or certify compliance with any legal regulations or industry standards. The Audit processrequires that information be gathered and considered from documentary review, worker interviews, management interviews andvisual observation. More information is gathered during the audit process than is provided here. The audit process is a samplingexercise only and does not guarantee that the audited facility prior, during or post audit are in full compliance with the code beingaudited against. The provisions of this code constitute minimum and not maximum standards, and this code should not be used toprevent companies from exceeding these standards. Companies applying this code are expected to comply with national and otherapplicable law and where the provisions of the law and this Code address the same subject, to apply that provision which affordsgreater protection.

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AVAILABLE DOCUMENTS LIST(Detach during opening meeting. Factory to provide 1 copy of each document for verification unless otherwise noted)

No Document Yes No N/A Remarks / Comments1. Legal Registration document X2. Local Labour Law X3. Customer’s Code of Conduct Document X4. Employment Contracts (5 copies) X5. Personnel Files (5 copies) X6. Training Records (5 copies) X Insufficient7. Time Cards (20 copies) X8. Days-Off/ Leave Records (5 copies) X9. Pay-Slips (5 copies) X10. Record of ID cards showing Proof of Age X11. Organisation Chart X12. Factory Lay-out plan X13. Accident Record X14. Fire Extinguisher Maintenance record X15. Health & Safety Certificates X16. Risk Assessment/ Internal Audit Records X Insufficient17. Environmental Policy X18. Local Environmental Law X19. Stock Control Records X20. Sub-contractor Audit Reports X21. Sample Checking Records X22. Inspection Records X23. Corrective Action Plans X24. Hygiene Policy X25. Jewellery Policy X26. Tools Control Policy X27. Quality Manual X28. Procedure Manual X29. ISO 9000 Certificate (if available) X30. Production Line work instructions X Insufficient31. Material Safety Data Sheets (MSDS) X32. Equipment calibration/ maintenance record X33. Equipment and machinery list X34. Security Breach procedure X35. Security Guard Contract X

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Digital Images

1. Factory signage. 2. Factory entrance. 3. Attendance checking system.

4. Infrared alarm. 5. CCTV was installed. 6. Material warehouse

7. Cutting area 8. CNC lathe workshop 9. Instrument lathe workshop

10. Punching workshop 11. Oxidizing workshop 12. Assembly workshop

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13. Packing workshop 14. Work instruction. 15. Approved sample

16. Defective products were separatedand labelled.

17. CNC center. 18. Moulding processing workshop

19. Exit sign and emergency light wasinstalled above the fire exit.

20. Evacuation plan. 21. Drinking water

22. Fire alarm. 23. Canteen 24. MSDS of chemicals.

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25. Packing area was restricted accessby authorized personnel only.

26. No secondary containers wereused for the storage of chemicals.

27. The instrument lathe had no beltguard.

28. The punching machine had no beltguard. The punching operator didn’twear earplugs.

29. Intake drugs and expiredmedicines were stored in the first aidbox.

30.No exit sign and emergency lightwas installed above the fire exit ofmould processing workshop.

31. The fire exit of mould processingworkshop was blocked and locked.

32. The passageway was partlyblocked.

33. The toilets were not equipped withdoors.

34. The chef didn’t wear mask and hat. 35. Fine rule was posted in theworkshop.

N/A

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