eve dress shirts ltd-dc1305924-sedex initial audit report dress shirts ltd-dc1305924-sedex i… ·...

Audit company: SGS Bangladesh Limited Report reference: DC1305924 Date: May 07, 2013

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Supplier name: Eve Dress Shirts Limited

Site country: Bangladesh

Site name: Eve Dress Shirts Limited

SMETA Audit Type: 2-Pillar 4-Pillar


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Audit Company Name: SGS Bangladesh Limited

Report Owner (payee): Eve Dress Shirts Limited

(If paid for by the customer of the site, please remove for Sedex upload)

Sedex Company Reference: (only available on Sedex System): Not provided

Sedex Site Reference: (only available on Sedex System) Not provided

Audit Conducted By

Commercial Purchaser

NGO Retailer

Trade Union Brand Owner

Multi-stakeholder Combined Audit (select all that apply)

Auditor Reference Number: (If applicable) DC1305924

SMETA Declaration I declare that the audit underpinning the following report was conducted in accordance with SMETA best practice guidance. Any exceptions to this must be recorded here (e.g. different sample size): NIL Auditor Name(s) (please list all including all interviewers):

1. Md. Mokhlesur Rahman 2. Md. Zuiel hossen 3. Syful Alam Mallick


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Role:

1. Lead Auditor, 2. Member Auditor 3. Member Auditor

Date: May 07, 2013


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Audit Details

Audit Details

A: Report #: DC1305924

B: Date of audit: May 07, 2013

C: Time in and time out:

Time in: 09.30 Time out: 18:30

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

3.5 Auditor days

E: Audit type:

Full Initial Periodic Full Follow-up Audit Partial Follow-Up Partial Other - Define

F: Was the audit announced?

Announced Semi – announced Unannounced

G: Was the Sedex SAQ available for review?

Yes No

If no, why not? NA

I: Auditor name(s) and role(s): Md. Mokhlesur Rahman (Lead Auditor) Md. Zuiel Hossen (Member Auditor) Mr. Syful Alam Mallick (Member Auditor)

J: Report written by: Md. Mokhlesur Rahman (Lead Auditor)

K: Report reviewed by: Kanika Sarkar

L: Report issue date: May 07, 2013

M: Supplier name: Eve Dress Shirts Limited

N: Site name: Eve Dress Shirts Limited

O: Site country: Bangladesh

P: Site contact and job title: Mr.Jahangir Kabir, Manager, Compliance

Q: Site address: Ashulia, Savar, Dhaka-1341, Bangladesh

Site phone: +88-02-7741720, Cell No: +88-01718-455444, 01976-600800

Site fax: + 88-02-7741721


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Site e-mail: [email protected]

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

Trade License No: 701/2012-13, issued by Ashulia Union Council, Thana-Ashulia, Upazilla-Savar, Dist-Dhaka which is valid till June 30, 2013. Factory License No: 12706/Dhaka, issued by Bangladesh Government which is valid till December 31, 2013. Fire License No: Dhaka/19040/05 issued by Bangladesh Fire Service & Civil Defence Authority which is valid till June 30, 2013.

S: Products/Activities at site, for example, garment manufacture, electricals, toys, grower

Woven shirts

T: Audit results reviewed with site management?

Yes

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

Mr. Jahangir Kabir, Manager, Compliance

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

Yes

W: Previous audit date: NA. This is the full initial audit.

X: 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: NA


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Audit Scope

Local Law (Please state legal requirement)

A: Standard work week: (total hours excluding overtime)

8 hours per day and 48 hours per week

B: Maximum allowed overtime hours: (please state per day, week, month)

Daily 2 hours / Weekly: 12hours / Monthly: 52 hours. If any worker is required to work for more than 8 hours in a day or for more than 48 hour in week that will be treated as overtime hours, provided that including overtime the total hours of work of an adult shall not exceed 10 hours in a day. Exception for 6 months: Gazette published by the Peoples Republic of Bangladesh. From October 18, 2012 to April 18, 2013; From now, without taking consent from the worker, no worker can work maximum 4 hours overtime in a day, 24 hours overtime in a week and 104 hours overtime in a month. Government has exempted section 100 and 102 of the labour law and added this in the notification. This declaration was published by Gazette notification on October 18, 2012 as per section 324 of Bangladesh Labor Law, 2006.

C: Minimum work age: 14 years

D: Minimum legal wage for standard hours: (please state per day, week, month)

BDT. 3000 per month (Basic BDT. 2000, House rent 40% of the Basic which is BDT. 800, Medical allowance BDT. 200)

E: Minimum legal overtime wage: (please state per day, week, month)

200% of the basic wage rate

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

2-Pillar Audit

10B4: Environment 4-Pillar

10C: Business Practices

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


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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.


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Non-Compliance Table

Issue

Area of Non-Conformity (Only check box when there is a non-conformity)

Record the number of issues by line*:

ETI Base Code Local Law Additional

Elements NC Obs GE

0 Management systems and code implementation

1 Employment Freely Chosen

2 Freedom of Association 1

3 Safety and Hygienic Conditions 5

4 Child Labour

5 Wages and Benefits 1 5

6 Working Hours

7 Discrimination

8 Regular Employment

8A Sub-Contracting and Homeworking

9 Harsh or Inhumane Treatment

10A Entitlement to Work

10B2 Environment 2-Pillar

10B4 Environment 4-Pillar

10C Business Practices

*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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Audit Overview

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

D: If Worker Representatives not present please explain reasons why

NA

E: If Union Representatives not present please explain reasons why:

NA; This is a non-unionized factory.

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

Eve Dress Shirts Ltd. has started business from April, 2005 & started production from March, 2006. Factory comprises with 1 owned building and 2 Shed. Building # 1 (07 storied building): Ground floor: Cutting, fusing, bonded wear house, finished goods area, sample section, medical, child care room, office. 1st floor: Sewing, finishing, boiler, spot removing room. 2nd floor: Under construction. 3rd floor: Under construction. 4th floor: Under construction. 5th Floor: Under construction. 6th Floor: Roof top. Shed-1 Generator (gas). Shed-2 Dining for workers, canteen.

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


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Service Provider Sub-Contractor

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

Round the year same

I: Typical production level as a % of the total capacity by month (record below):Site declaration only – this has not been verified by auditor.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

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

Product: Woven shirts. Process: Cutting → Sewing→ Ironing → Packing. Line: 6 Lines. Equipment: Plain machine, over lock machine, lock stitch machine, chain stitch machine, high speed lock stitch machine, straight knife machine, hydraulic cutting press machine, band knife machine, fusing machine, automatic shirt placket machine, pocket creasing machine, automatic collar cuff pressing machine, thread sucking machine, cone winding machine, snap button pull tester, colour matching cabinet etc.

K: 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

The workers were comfortable with management and contented with their wages, payment system and work place environment. During audit workers had been selected by the auditors at random basis for interview from different work processes cosidering their duration of work in the present facility, designation, ethnicity and gender. Individual and group interview were conducted in a private place without the presence of any representative from the management. In the period of interview, workers unveiled their feelings to the auditors without any hesitation and confusion. 12 employees were selected for the individual interview and total 30 employees for group interview, 04 groups of 5 female workers, 02 groups of 5 male workers were selected for the group interview, all the interviewees were favorable with the management and factory environment.

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

Attitude of management was positive and cooperative during the audit. Mr. Md. Jahangir Kabir, Manager, 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.

M: Summary of main findings: (positive and negative)(This is a summary not a repeat of the section detail)

Audit Process:


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This full initial audit was conducted by Md. Mokhlesur Rahman (Lead auditor), Md. Zuiel Hossen (Member auditor) and Mr. Syful Alam Mallick (Member auditor). A team of three auditors assessed / verified the factory’s operations against the ETI Base Code and local legislations on a sampling basis in a long day.

Overview of opening meeting, factory management responses

On the day at 09:30 am, auditors entered the facility then held an opening meeting according to the ETI Base Code; the facility management Md. A D M Nurul Mowla, Managing Director; Mr. Jahangir Kabir, Manager, Compliance; Mr. Salahuddin Ahmed, Manager, HR & Compliance; Mr. Babul Miah, Welfare & Compliance Officer ; Ms. Sonia, WPC Member; Ms. shima ,WPC Member were present in the meeting. They stated that they would be co-operative with this audit.

18 attendance records and payroll records from March, 2013 (current month), 12 attendance records and payroll records from December 2012 (random month) and 12 attendance records and payroll records from May, 2012 (another random month) were reviewed in this audit. 42 workers were interviewed, including 14 males and 28 females.

Summary of Findings (positive and negative): In view of the findings raised, below non-compliances were found in the areas of freedom of association, Safety and Hygienic Conditions and Wages and Benefits. For other areas, no violations were noted.

1. Workers are not aware about WPC and factory has not sent the meeting minutes of WPC to the director of Labour and the conciliator within seven days of meeting. However WPC meeting in the factory held within two month regularly.

2. During the audit it was noted that Approx. 25 workers found congested in the fusing section and pressing section in the factory.

3. Smoke detector found inactive in the fabric and accessories store in the factory. 4. Electrical installations are not checked periodically in a schedule manner. 5. Factory is not provided fire safety training to the 6% workers from each department of the factory by the Fire

Service and Civil Defence Authority. However factory has given fire fighting training internally for 169 workers.

6. Insufficient seating capacity found in workers dining area. The required seats are 261 as per their presence workforce where as the available seats are 140.

7. Factory has not formed Workers Participation Fund (WPF) and Workers Welfare Fund (WWF) as per law. However factory has formed a registered trustee board for WWF & WPF.

Please refer to the details of non-compliances in the individual sections. Best Practices Observed:

• Factory provides attention bonus of BDT 500 for all workers who are present for 100% working days. • Factory provides Festival bonus to workers who are completing their work 12 months, getting 100% of

basic salary, completing six month, getting 75% of basic salary and in probation period (three month), getting 25% of basic salary.

• Factory arrange annual picnic for all workers once in a year. • Factory provides transport facilities for the workers those are living in far away from the factory. • Factory has made an agreement with the Hospital (Nari & Sishu hospital) for all workers to give medical

treatment in case of serious illness or accident. Additional Auditor Remark: None


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Key Information

Key Information

A: Do all workers (including migrant workers) have contracts of employment?

Yes No

B: Were appropriate records available to verify hours of work and wages?

Yes No

C: Were any inconsistencies found? (if yes describe nature)

Yes Poor record keeping No Isolated incident

Repeated occurrence

D: For the lowest paid production worker, are wages paid for standard hours (excluding overtime) below or above the legal minimum?

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

Below legal min Meet Above

00% of workforce earning under min wage 51 % of workforce earning min wage 49% of workforce earning above min wage

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

Not Applicable, No piece rate workers engaged in the factory.

F: Combined hours (standard and overtime) over 60 per week found?

Yes No

G: Are the correct overtime premiums paid? Yes No

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

Yes No

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

No dormitory facility provided by the factory and there is no legal requirement regarding this.

J: Age of youngest worker found: 18 years

K: Workers under 18 subject to hazardous work assignments?

Yes _____% of under 18’s at this site (out of total workers) No

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

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

Union (name) Worker Committee Other (specify) None

M: Is it a legal requirement to have a union? Yes No


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N: Is It a legal requirement to have a workers committee?

Yes No


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O: Is there any other form of effective worker/management communication channel? (Other than union/worker committee)

Yes No

Describe:

P: Are there any External Processes? Sub-Contracting Homeworking Other External Process (detail) No external processes

Management Systems:

Q: Nationality of Management Bangladeshi

R: Majority nationality of workers 100% Bangladeshi

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

8.40%

T: Were accurate records shown at the first request?

Yes No

If not, why not?

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

Yes No

Please describe:


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Worker Analysis

Worker Analysis

Local Migrant Total

Permanent Temporary Agency Permanent Temporary Agency Homeworkers

Worker numbers – male

288 00 00 00 00 00 00

288

Worker numbers –female

582 00 00 00 00 00 00

582

Total 870 00 00 00 00 00 00 870

Number of Workers interviewed

42

00

00

00

00

00

00 42

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: (please record evidence)

N/A

Migrant Workers: Please see SMETA Best Practice Guidance - Page 37

D: Originating Locations/Countries: NA; No migrant workers employed by the factory.

E: Work undertaken by migrant workers: NA; No migrant workers employed by the factory

F: Were migrant workers recruited through an agency?

NA; No migrant workers employed by the factory

If yes, is there a contract with the agency? Provide details of agencies and contractual arrangements



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G: Percentage of migrant workers in company provided accommodation:


Audit Results by Clause

0: Management systems and code implementation:

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.

Evidence of Compliance and Current Status Please Note: include evidence examined & description of current status.

Documents checked & comments: 1. Management Interview 2. Policy & Training Records 3. Workers Interview

Description of Current Status:

1. The factory implements and maintains systems for delivering compliance to this Code. 2. Mr. Jahangir Kabir, Manager, Compliance is responsible for compliance with the Code. 3. The factory communicates this Code to all employees by training as confirmed by orientation training

records & workers interview. 4. The factory communicates this code of conduct through notice board.

Non-compliance:

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

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

Objective evidence observed: Not applicable


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Observation

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


Good Examples observed:

Description of Good Example (GE): None Observed



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1: Employment is Freely Chosen

ETI1.1 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.

Evidence of Compliance and Current StatusPlease Note: include evidence examined & description of current status.

Documents checked & comments: 1. Policy documents 2. Worker interviews 3. Personnel files 4. Contracts to establish notice periods 5. Security guard job description.

Description of current status:

1. The factory does not limit the employees’ freedom. 2. There is no forced, bonded or involuntary prison labour. 3. Employees are free to leave their employer after reasonable notice.

Non-compliance:

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

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


Observation




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

ETI2.1 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.

Evidence of Compliance and Current Status:Please Note: include evidence examined & description of current status.

Documents checked & comments: 1. Management interview 2. Worker interview 3. Complain box register (Suggestions from the complain box and actions taken) 4. WPC meeting records 5. Grievance handling procedure


1. Through the factory management interview and workers’ interview, it was noted that there wasn’t union in the factory.

2. Workers can raise their concerns through workers’ representatives, complain box, meeting and their team leader or above.

3. There is Workers Participation Committee (WPC) as parallel means for trade union. 4. Verified and confirmed through records review and interview process that the facility does not discriminate

any of the workers such as workers representatives also. 5. Factory has a policy where is no restriction imposed to the workers formation of trade union. 6. Meeting of Workers Participation Committee (WPC) is conducting regularly within two month.

Non-compliance:

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

Workers are not aware about WPC and factory has not sent the meeting minutes of WPC to the director of Labour and the conciliator within seven days of meeting. However WPC meeting in the factory held within two month regularly. Local law or ETI requirement: This violates section 207 of The Bangladesh Labour Law, 2006. (1) The participation committee shall meet at least once in every two months to discuss and exchange views and recommend measures for Performance of the functions under section 202.

Objective evidence observed: 1. Workers interview and Documents review.


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(2) The proceedings of every meeting of the participation committee shall be submitted to the Director of Labour and the conciliator within seven days of the date of the meeting Recommended corrective action: It is recommended that factory should increase the awareness for the workers about WPC and send the meeting minutes of WPC to the director of Labour and the conciliator within seven days.

Observation



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

NA; This is a non-unionized factory.

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

Workers Participation Committee (WPC), Complain box and WPC meeting

B: Is there any evidence that this is effective? Specify date of last meeting; topics covered; how minutes were communicated etc.

1. Workers Participation Committee (WPC) members selected by voice vote from the workers as per law.

2. WPC meeting held on every two months. 3. WPC meeting minutes recorded, action taken, previous issues

review and communicated to the workers. 4. Complain box and register maintain and action taken by senior

management if there any complain.

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

Yes No

If yes what percentage by trade Union/worker representation

0% workers covered by Union CBA 0% workers covered by worker rep CBA

D: Does the Collective Bargaining Agreement (CBA) include rates of pay

Yes No No CBA


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3: Working Conditions are Safe and Hygienic

ETI3.1 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.


Documents checked & comments: 1. Factory tour 2. Document review 3. Worker interview 4. Management interview


1. The factory is well ventilated and lighted. 2. The factory maintained a comfortable temperature throughout work floors. 3. All switches in the electrical control panels have been labelled with danger sign marks. 4. The factory posted the evacuation plans on work floors, which indicated escape routes and the location of

the fire extinguishers. 5. Exit signs and emergency lights were installed. 6. Drinkable water was available in workshops. 7. Last fire drill conducted in the month of 17, April 2013. 8. Medical and child care facility available in the factory. 9. Workers toilet adequate number for male and female, as per law and wash facility provided. 10. The facility has done maintenance of the machines on regular basis confirmed through the documents

reviewed. 11. The factory has obtained building and fire certificates for current period. 12. The factory fire extinguishers are renewed for current period. 13. Risk assessment done by the factory and injury register maintain properly. 14. Mr. Jahangir Kabir, Manager, Compliance is responsible to look after the health and safety issues.


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Non-compliance:


During the audit it was noted that Approx. 25 workers found congested in the fusing section and pressing section in the factory. . Local law or ETI requirement: This violates section 56 of The Bangladesh Labour Law, 2006. (1) No work-room in any establishment shall be overcrowded to an extent injurious to the health of the workers employed therein. Recommended corrective action: It is recommended that factory should make the area congested free for all section in the factory. 2. Description of non-compliance:

NC against ETI NC against Local Law Smoke detector found inactive in the fabric and accessories store in the factory. Local law or ETI requirement: This violates section 62(5) of The Bangladesh Labour Law, 2006. (5) In every establishment every window, door, or other exit affording means of escape in case of fire to every person employed therein. Recommended corrective action: It is recommended that factory should install active smoke detector in fabric and accessories store. 3. Description of non-compliance:

NC against ETI NC against Local Law Electrical installations are not checked periodically in a schedule manner. Local law or ETI requirement: This violates ETI Base Code 3.1 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. Recommended corrective action: It is recommended that factory should arrange the check of all electrical items periodically in a schedule manner.

Objective evidence observed:

1. Site tour 2. Site tour 3. Document review 4. Document review 5. Site tour


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4. Description of non-compliance:

NC against ETI NC against Local Law Factory is not provided fire safety training to the 6% workers from each department of the factory by the Fire Service and Civil Defence Authority. However factory has given fire fighting training internally for 169 workers. Local law or ETI requirement: This violates instruction/condition no-5(4) of fire license which issued as per section 4 of Bangladesh Fire Service & Civil Defence Ordinance, 2003. Factory should have 6% trained fire fighters. Training has to be provided by Bangladesh Fire Service and Civil Defence authority. Recommended corrective action: It is recommended that factory should arrange fire safety training to the 6% workers from each department by the Fire Service and Civil Defense Authority 5. Description of non-compliance:

NC against ETI NC against Local Law Insufficient seating capacity found in workers dining area. The required seats are 261 as per their presence workforce where as the available seats are 140. Local law or ETI requirement: This violates section 58(1) of Factories Rules 1979.

(1) The dining hall shall accommodate at least 30 percent of the workers working at a time:

Provided that, in any particular factory or in any particular class of factories, the Chief Inspector may, by an order in writing in this behalf, alter percentage of workers to be accommodated.

Recommended corrective action: It is recommended that factory should arrange sufficient seating capacity in dining area as per law.

Observation

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



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Description of Good Example (GE): Nil

Objective Evidence Observed:


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4: Child Labour Shall Not Be Used

ETI4.1 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.


Documents checked & comments: 1. Policy review 2. Document review 3. Management interview 4. Worker interview 5. Site tour


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 employees’ personal files has taken for review. Each employee file includes a bio-data

sheet, recent photo, birth registration certificate / photo copied national identification card.

Non-compliance:




Observation

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



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Comments: Not applicable



Objective Evidence Observed: Not applicable


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5: Living Wages are Paid

ETI5.1 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.


Documents checked & comments: 1. Document review 2. Worker interview


1. All workers are provided appoint letter during recruitment mentioning their salary structure, grade, employment conditions, benefits etc.

2. Benefits such as social insurance, annual leave, casual leave, sick leave and maternity leave are provided to workers as per law.

3. Factory provides cash and check directly to the workers. 4. No illegal deduction from employees has been identified through document reviewed and confirmed

workers during the interviewed. 5. No workers found getting below minimum wage.

Non-compliance:


Factory has not formed Workers Participation Fund (WPF) and Workers Welfare Fund (WWF) as per law. However factory has formed a registered trustee board for WWF & WPF Local law or ETI requirement: This violates section 234 (a)of the Bangladesh Labour Law, 2006 Establishment of Participation Fund and welfare fund : (1) Every Company to which this chapter applies shall- (a) Establish a workers’ Participation Fund and a workers’ Welfare Fund in accordance with this chapter within one month of the date of which the chapter becomes applicable to it. Recommended corrective action: It is recommended that factory should share profit to the workers as per law.

Objective evidence observed: 1. Documents review & management interview


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Observation




Description of Good Example (GE): 1. Factory provides attention bonus of BDT 500 for all workers who are present for 100% working days. 2. Factory provides Festival bonus to workers who are completing their work 12 months, getting 100% of basic salary, completing six month, getting 75% of basic salary and in probation period (three month), getting 25% of basic salary. 3. Factory provides transport facilities for the workers those are living in far away from the factory.4. Factory provides free lunch for all workers 4. Factory arrange annual picnic for all workers once in a year . 5. Factory has made an agreement with the Hospital (Nari & Sishu hospital) for all workers to give medical treatment in case of serious illness or accident

Objective Evidence Observed: 1. Documents review & workers interview. 2. Documents review & workers interview. 3. Documents review & workers interview. 4. Management interview & workers interview. 5. Management interview & workers interview.

Wages analysis:

A: Sample size: (number of wages checked and which weeks or months – please see BPG)

18 attendance records and payroll records from March, 2013 (current month), 12 attendance records and payroll records from December 2012 (random month) 12 attendance records and payroll records from May, 2012 (another random month)

B: Legal minimum wage for standard time: (excluding OT - please include time period e.g. hour/week/month)

BDT. 3000 per month (Basic BDT. 2000, House rent 40% of the Basic which is BDT. 800, Medical allowance BDT. 200)

C: Are there different legal minimum wage grades? If yes, please specify all.

Yes No

If yes, please give details: The Government announced the new pay structure on 31st October, 2010 for the workers of the Garments Industries. The Gazette Notification has been published on 31st October,


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2010 for the implementation of the new pay structure. There are two separate pay structures; one for the garment workers and another for the employees. 1. For the workers:

Grades Monthly basic wage

House rent 40% of the basic

Medical allowance

Gross monthly wage

Grade 1 Tk. 6500

Tk. 260 Tk. 200

Tk. 9300

Grade 2 Tk. 5000

Tk. 2000 Tk. 200

Tk. 7200

Grade 3 Tk. 2870

Tk. 1148 Tk. 200

Tk. 4218

Grade 4 Tk. 2615

Tk. 1046 Tk. 200

Tk. 3861

Grade 5 Tk. 2395

Tk. 958 Tk. 200

Tk. 3553

Grade 6 Tk. 2230

Tk. 892 Tk. 200

Tk. 3322

Grade 7 Tk. 2000

Tk. 800 Tk. 200

Tk. 3000

Apprentice

Tk. 2,500

2. For the employees:

Grades Monthly basic wage

House rent 40% of the basic

Medical allowance

Gross monthly wage

Grade 1 Tk. 4500

Tk. 1800 Tk. 200 Tk. 6500

Grade 2 Tk. 3500

Tk. 1400 Tk. 200 Tk. 5100

Grade 3 Tk. 3000

Tk. 1200 Tk. 200 Tk. 4400

Grade 4 Tk. 2200

Tk. 880 Tk. 200 Tk. 3280

D: Where there are different legal minimum wages grades are all workers graded correctly?

Yes No

If no, please give details:

E: What deductions are required by law:

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.

F: Have all of these deductions been made?

Yes


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

BDT. 3000 per month (Basic BDT. 2000, House rent 40% of the Basic which is BDT. 800, Medical allowance BDT. 200).

H: Legal overtime premium for weekdays: (please include time period e.g. hour/week/month)


I: Legal overtime premium for rest days: (please include time period e.g. hour/week/month)


J: Legal overtime premium for holidays: (please include time period e.g. hour/week/month)



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Worker Type Process Operator (Highest paid)

Process Operator (Average paid)

Process Operator (Lowest paid)

Select one worker’s records from each “Worker Type” and populate the boxes. Ensure comparison is made for same pay period (peak) and only uses full-time workers. See SMETA Best Practice Guidance for completing this:

A: Pay period (please include time period e.g. hour/week/month):

March, 2013 March, 2013 March, 2013

B: Anonymous Employee Reference/Dept.

Marker man Cutting section

Cutter man Cutting section

Ordinary sewing operator Sewing section

C: Employee Gender Male Male Female

D: Contracted wage ( please include time period e.g. hour/week/month):

BDT 10000/month

BDT 8000/month

BDT 4100/month

E: Standard working hours (excluding OT - please include time period e.g. hour/week/month):

8 hours / day 8 hours / day 8 hours / day

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

BDT 33.65

BDT 26.78

BDT 13.39

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

16 hours/ month

16 hours/ month

0/ month

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

BDT. 1077/ month

BDT. 857/ month

0/ month

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

Nil Nil Nil

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

Nil Nil Nil

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

Nil Nil Nil

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

Nil Nil Nil


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

16 hours/ month

16 hours/ month

0/ month

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

Att. Bonus BDT. 500.00 / month



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

BDT. 11577/ month BDT. 8857/ month

BDT. 4600/ month

P: Social insurance and other deductions

Nil Nil Nil

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

BDT. 11577/ month BDT. 8857/ month

BDT. 4600/ month

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

3rd grade workers getting highest salary and 6th grade workers getting lowest salary.

R: Is there a defined living wage: This is not normally legal wage. If answered Y please state amount and source of info: Please see BPG)

Yes No

Please specify amount/time period:

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

Yes No

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

Yes No

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

U: How are workers paid: Cash Cheque Bank Transfer

If not explain:

Actual overtime premium paid in sample for…

V: Weekdays: 200% of the basic wage rate

W: Rest days: 200% of the basic wage rate

X: Holidays: 200% of the basic wage rate


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6: Working Hours are not Excessive

ETI6.1 Working hours comply with national laws and benchmark industry standards, whichever affords greater protection. 6.2 In any event, workers shall not on a regular basis be required to work in excess of 48 hours per week and shall be provided with at least one day off for every 7 day period on average. Overtime shall be voluntary, shall not exceed 12 hours per week, shall not be demanded on a regular basis and shall always be compensated at a premium rate.


Documents checked & comments: 1. Employee interview 2. Payroll records 3. Job card records 4. Production records 5. Other documents


1. Factory’s working hours found within legal limit. 2. Through employees’ interview, overtime is voluntary. 3. All overtime is compensated at a premium rate. 4. Factory closed on weekly holiday (Friday).

Non-compliance:





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Observation




Description of Good Example (GE): None observed

Objective Evidence Observed: Not applicable.

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

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

Manual card

B: size checked (number of workers): Please see BPG

18 sample from March, 2013 12 sample from December 2012 12 sample May, 2012

C: Legal standard work week (hours): (Excluding OT - please include time period e.g. hour/week/month).

8 hours per day and 48 hours per week

D: Contracted standard work week this site (hours) (excluding OT - please include time period e.g. hour/week/month)::

48 hours

E: Actual standard work week averaged over sample for full time workers: (excluding OT - please include time period e.g. hour/week/month)

48 hours

F: Lowest standard hours worked (excluding OT - please include time period e.g. hour/week/month)

48 hours

G: Highest standard hours worked (excluding OT - please include time period e.g. hour/week/month)

48 hours

H: Percentage workers on part-time 0 % age


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contracts

I: Legal permitted overtime hours (please include time period e.g. hour/week/month)

Daily 2 hours / Weekly: 12hours / Monthly: 52 hours. If any worker is required to work for more than 8 hours in a day or for more than 48 hour in week that will be treated as overtime hours, provided that including overtime the total hours of work of an adult shall not exceed 10 hours in a day. / Exception for 6 months; Gazette published by the Peoples Republic of Bangladesh. From October 18, 2012 to April 18, 2013; From now, without taking consent from the worker, no worker can work maximum 4 hours overtime in a day, 24 hours overtime in a week and 104 hours overtime in a month. Government has exempted section 100 and 102 of the labour law and added this in the notification. This declaration was published by Gazette notification on October 18, 2012 as per section 324 of Bangladesh Labor Law, 2006.

J: Any local waivers or permission for annualised hours for this site:

Government has exempted section 100 and 102 of the labour law and added this in the notification. This exemption notice is valid for 6 months till 22-09-2012. This declaration was published by Gazette notification on Tuesday, April 10, 2012 as per section 324 Bangladesh Labor Law, 2006.

K: Actual overtime hours: (averaged over sample) (please include time period e.g. hour/week/month)

25 hours in March, 2013 31 hours in December,2012 34 hours in May, 2012

L: Range of overtime hours over all workers: (quote highest and lowest please include time period e.g. hour/week/month)

13-36 hours in March, 2013 11-49 hours in December,2012 12-52 hours in May, 2012

M: approx % of workers on highest overtime hours:

60 %

N: Peak season(s): months

Round the year same

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

The above wage information is based on the attendance and payroll records provided by the factory.


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7: No Discrimination is Practiced

ETI7.1 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.


Documents checked & comments: 1. Employee interview 2. Management interview 3. Documents review


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.

Non-compliance:




Observation




39





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8: Regular Employment Is Provided

ETI8.1 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.


Documents checked & comments: 1. Document review 2. Worker interview 3. Management interview


1. All workers getting appointments letter and ID card during their recruitment. 2. Factory maintains service books for all workers. 3. There is no subcontracting or home working from the site.

Non-compliance:




Observation




41





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8A: Sub-Contracting and Homeworking:

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.


Documents checked & comments: 1. Document Review 2. Factory Tour 3. Management interview 4. Worker interview

Description of current status: It was verified through document review, factory tour, management interview and employee interview that no sub-contracting & Home-working was used by this factory.

Non-compliance:


None Observed Local law 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: Number of sub-contractors/agents used

0

B: Is there a site policy on sub-contracting?

Yes No

If yes, summarise details:

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

NA

D: What processes are sub-contracted?

NA

Summary of homeworking – if applicable

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

F: Are homeworkers employed direct or through agents?

Directly Through Agents

NA

G: If through agents, number of agents

NA

H: Is there a site policy on homeworking?

Yes No

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

NA

J: What processes are carried out by homeworkers?

NA

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

Yes No

NA

L: Are full records available at the Yes


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site? No NA


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9: No Harsh or Inhumane Treatment is Allowed

ETI9.1 Physical abuse or discipline, the threat of physical abuse, sexual or other harassment and verbal abuse or other forms of intimidation be prohibited.


Documents checked & comments: 1. Policy review 2. Worker interview 3. Management interview

Description of current status: According to factory policy 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.

Non-compliance:




Observation




46





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10. Other Issue areas: 10 A: Entitlement to Work and Immigration

Additional Elements10A1 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.


Documents checked & comments: 1. Factory tour 2. Document review 3. Worker interview 4. Management interview

Description of current status: Only workers with a legal right to work shall be employed or used by the factory. There are no agency staffs, employment agencies and immigration workers in the factory.

Non-compliance:




Observation

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



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Good examples observed:




49

10. Other issue areas 10 B 2: Environment 2-pillarTo 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.


Documents checked & comments: 1. Document review 2. Factory tour 3. Management interview


1. Factory has waste management policy regarding solid and hard waste. 2. Factory surrounding environment found acceptable.

Non-compliance:

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



Observation

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



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Good examples observed:



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 BPG

30 employees in 06 groups (10 male in 2 group and 20 female in 4 group)

D: Number of individual interviews Please see BPG

Male: 04 Female: 08

E: Number of interviewed workers Please see BPG

Male: 14 Female: 28

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?

Nothing reported

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

Factory working environment is good.

J: Any additional comment(s) Nil


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regarding interviews:

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

A: Number of agencies used (average):

Nil And names if available: NA

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

Yes No

NA


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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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Photo Form Non-compliance Photos:

Workers are blocked in the pressing

section. Inactive smoke detector found in the

accessories store. Insufficient seating capacity found in

the workers dining. General Site Tour Photos:

Front view of the factory building Cutting Section Sewing section

Ironing section Quality section Fabric store


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Accessories store Fire fighting equipment Visual fire alarm

Fire extinguisher Emergency light Exhausted fun

Evacuation plan Drinking water facilities Toilets are segregated by gender

Wash facilities in toilet area Complain box Emergency exit


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First aid box Notice board Child care

Doctors room Workers dining Canteen

Rooftop of the factory found open Boiler Generator

End of Photos


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