Sedex SMETA

Sedex SMETA is an excellent and important question that sits at the intersection of ethical business practices and human rights.

Here is a clear breakdown of the rights of people as defined and monitored by the Sedex SMETA audit methodology.

What is Sedex SMETA?

First, a quick primer:

• Sedex (Supplier Ethical Data Exchange): A non-profit membership organization that provides a platform for companies to share and manage ethical and responsible sourcing data.
• SMETA (Sedex Members Ethical Trade Audit): This is not a separate code of conduct. It is the most common audit methodology used to check a company’s compliance with various labor standards, primarily based on the ETI Base Code.

SMETA audits focus on four key “pillars”:

1. Labor Standards
2. Health and Safety
3. Environment
4. Business Ethics

The “Rights of People” are primarily covered under Pillar 1 (Labor Standards) and Pillar 2 (Health and Safety).

The Core Rights of People in SMETA (Based on the ETI Base Code)

The rights are derived from international conventions and standards, particularly those of the International Labour Organization (ILO). Here are the core areas:

1. Freely Chosen Employment

• The Right: No one should be forced to work. This directly prohibits forced, bonded, or indentured labor, and involuntary prison labor.
• SMETA Focus:
  • Workers should not be required to hand over government-issued identification, passports, or work permits to the employer as a condition of employment.
  • Workers should be free to leave the workplace after their shift and reside outside company-controlled facilities.
  • No unreasonable restrictions on movement or freedom of association.
  • All employment should be voluntary.

2. Freedom of Association

• The Right: Workers have the right to form or join trade unions of their choice and to bargain collectively.
• SMETA Focus:
  • The company does not interfere with workers’ rights to organize.
  • Worker representatives are not discriminated against and have access to carry out their representative functions.
  • In situations where the law restricts these freedoms, the company facilitates parallel means for independent and free association and bargaining.

3. Health and Safety

• The Right: A safe and hygienic working environment. This is one of the most detailed and critical parts of a SMETA audit.
• SMETA Focus:
  • Prevention: Risk assessments, safe work procedures, machine guarding, and control of hazardous substances.
  • Facilities: Clean toilets, access to potable water, and adequate lighting and ventilation.
  • Training: Workers receive regular and recorded health and safety training.
  • Emergency Preparedness: Clearly marked exits, unblocked pathways, fire alarms, extinguishers, and regular drills.
  • Incident Management: A process for reporting accidents, providing first aid, and investigating incidents to prevent recurrence.
  • Personal Protective Equipment (PPE): Provided free of charge where necessary.

4. Child Labor and Young Workers

• The Right: No exploitation of children.
• SMETA Focus:
  • No Child Labor: Prohibition of hiring anyone below the age of 15 (or the local legal minimum age for employment, if higher).
  • Protection of Young Workers: Proper management of workers under 18, ensuring they do not perform hazardous work and that their work does not harm their health, safety, or education.
  • Robust Age Verification: Systems must be in place to reliably verify the age of all workers.

5. Living Wages and Benefits

• The Right: Wages and benefits should meet, at a minimum, national legal standards and should be sufficient to meet basic needs.
• SMETA Focus:
  • Wages for a standard working week must meet legal and industry benchmarks.
  • No Unauthorized Deductions: Deductions from wages should not be made for disciplinary purposes and should only occur with worker consent as per law.
  • Overtime Pay: Overtime must be compensated at a premium rate, as legally required.
  • Pay Slips: Workers receive understandable and detailed pay slips for each pay period.
  • The “Living Wage” Concept: While paying the legal minimum wage is a requirement, SMETA also encourages companies to work towards paying a “living wage” that covers basic needs and provides some discretionary income.

6. Working Hours

• The Right: Working hours are not excessive.
• SMETA Focus:
  • Compliance with national laws and benchmark standards on working hours.
  • A typical working week, including overtime, should not exceed 60 hours. Overtime must be voluntary in most circumstances.
  • Workers should be entitled to at least one day off in every seven-day period.

7. Discrimination

• The Right: No discrimination in employment.
• SMETA Focus:
  • Hiring, compensation, access to training, promotion, termination, or retirement decisions must be based on relevant and objective criteria, not on personal characteristics.
  • Prohibition of discrimination based on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, union membership, or political affiliation.

8. Regular Employment

• The Right: Work performed must be based on a recognized employment relationship established through national law and practice.
• SMETA Focus:
  • Obligations to employees under labor or social security laws and regulations must not be avoided through the use of labor-only contracting, subcontracting, or apprenticeship schemes where there is no real intent to impart skills or provide regular employment.

9. No Harsh or Inhumane Treatment

• The Right: To be treated with dignity and respect.
• SMETA Focus:
  • Physical abuse, threats of violence, sexual or other harassment, and verbal abuse are strictly prohibited.
  • The company must have clear policies and procedures for workers to report such treatment without fear of reprisal.

How SMETA Protects These Rights: The Audit Process

1. Documentation Review: Auditors check policies, payroll records, time sheets, training records, and contracts.
2. Facility Inspection: A physical walk-through of the entire site to check health and safety conditions.
3. Worker Interviews: Confidential, one-on-one interviews with a cross-section of workers (without management present) are a critical component to uncover issues not visible in documents.
4. Management Interviews: Discussions with HR, health and safety officers, and senior management.

Key Takeaway

The “Rights of People” in the context of Sedex SMETA are a comprehensive set of principles designed to ensure decency, safety, fairness, and legality in the workplace. For a business, a SMETA audit is a tool to demonstrate due diligence and a commitment to treating its workforce with respect, which in turn mitigates risk and builds supply chain resilience.

What is Required Sedex SMETA

The Required Rights of People (SMETA Pillars 1 & 2)

The requirements are categorized under the four pillars of SMETA, with the “Rights of People” concentrated in the first two.

Pillar 1: Labor Standards

This is the core of human rights in the workplace.

1. Freely Chosen Employment

• Requirement: No forced, bonded, or indentured labor, or involuntary prison labor.
• Key Obligations:
  • Workers must not be required to deposit identity papers (e.g., passports, ID cards) with the employer.
  • Workers must have freedom of movement and must be free to leave the workplace after their shift.
  • Employment must be voluntary. Workers should not be trapped by debt or deceptive recruitment practices.
  • All fees related to recruitment should not be charged to the worker (the employer should pay).

2. Freedom of Association

• Requirement: Workers have the right to form or join trade unions of their choice and to bargain collectively.
• Key Obligations:
  • The company must not interfere with workers’ rights to organize.
  • Worker representatives must not be discriminated against and must have access to carry out their functions.
  • Where law restricts these freedoms, the company must not impede the development of parallel means for independent and free association and bargaining.

3. No Child Labor

• Requirement: No hiring of children. The minimum age for employment must be respected.
• Key Obligations:
  • No worker shall be below the age of 15 (or 14 in certain developing countries as per ILO Convention 138) or below the age for completing compulsory education, whichever is higher.
  • Companies must have a robust age verification procedure during recruitment.
  • Policies and procedures for the remediation of any found child labor must be in place.

4. No Harsh or Inhumane Treatment

• Requirement: No physical abuse, discipline, threats of violence, or other forms of intimidation.
• Key Obligations:
  • A clear policy prohibiting harassment and abuse.
  • A confidential grievance mechanism for workers to report issues without fear of reprisal.

5. No Unlawful Discrimination

• Requirement: Employment decisions must be based on ability, not personal characteristics.
• Key Obligations:
  • No discrimination in hiring, pay, training, promotion, termination, or retirement based on race, caste, national origin, gender, religion, disability, sexual orientation, union membership, or political affiliation.

6. Working Hours

• Requirement: Working hours must comply with national laws and benchmark standards.
• Key Obligations:
  • Working hours, including overtime, should not exceed 60 hours per week.
  • Overtime must be voluntary in most circumstances.
  • Workers must have at least one day off in every seven-day period.

7. Remuneration (Wages)

• Requirement: Wages must meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher.
• Key Obligations:
  • Wages for a standard work week must be sufficient to meet basic needs and provide some discretionary income (the concept of a “living wage” is encouraged).
  • All legally mandated benefits (social insurance, paid leave, etc.) must be provided.
  • Deductions from wages must not be made for disciplinary purposes and must be legal and with worker consent.
  • Overtime must be paid at a premium rate as required by law.
  • Workers must be provided with a clear, written pay slip for each pay period.

Pillar 2: Health and Safety

A safe workplace is a fundamental human right.

• Requirement: A safe and hygienic working environment must be provided to prevent accidents and injury to health.
• Key Obligations:
  • Risk Assessment: Regular, documented risk assessments for all areas and activities.
  • Training: Regular and recorded health and safety training for all workers.
  • Facilities: Access to clean toilets, potable water, and sanitary food storage.
  • Physical Safety: Proper machine guarding, safe electrical systems, and clear emergency exits.
  • Chemical Safety: Safe handling, storage, and disposal of hazardous chemicals.
  • Emergency Preparedness: Clearly marked and unblocked exits, fire alarms, extinguishers, and regular emergency drills.
  • Incident Management: A process for reporting, investigating, and correcting accidents and near-misses.
  • Personal Protective Equipment (PPE): Provided free of charge where hazards cannot be otherwise controlled.

Summary: What is Absolutely Required?

In the simplest terms, to comply with the “Rights of People” in SMETA, a company MUST:

1. Prove that no one is forced to work and that all employment is voluntary.
2. Pay at least the legal minimum wage and all legal benefits.
3. Prevent anyone under the legal minimum age from working.
4. Provide a safe and healthy workplace that meets core safety standards.
5. Protect workers from harassment, abuse, and discrimination.
6. Permit workers to associate freely and bargain collectively.
7. Limit working hours to legal limits and a maximum of 60 hours per week.

These are the baseline requirements. An audit will thoroughly examine records, interview workers, and inspect the facility to verify compliance with these fundamental rights.

Who is Required Sedex SMETA

This gets to the heart of who is responsible for upholding these rights in the Sedex SMETA framework.

The short answer is that the “Required Rights of People” in Sedex SMETA are the legal and ethical obligation of the “Site” or “Producer” being audited. This is the factory, farm, or facility where the workers are located.

However, the responsibility doesn’t end there. The requirement to uphold these rights extends to a chain of responsibility that includes:

1. The Site / Producer (Supplier): The primary entity responsible for implementing and maintaining the standards.
2. The Client (Buyer/Member): The company that commissioned the audit, which has a responsibility for due diligence.
3. Sedex Members: All members who use the platform agree to work towards these standards.

Let’s break down the roles and responsibilities for each.

1. The Site / Producer (Supplier) – PRIMARY RESPONSIBILITY

This is the organization that is directly employing the people and is being audited. They are legally and ethically required to ensure the rights are met for all workers on their premises, including:

• Permanent, full-time employees
• Temporary or seasonal workers
• Contract workers
• Subcontracted labor
• Interns and apprentices

Their specific duties include:

• Creating Policies: Developing and implementing clear policies that prohibit forced labor, child labor, discrimination, and harassment.
• Management Systems: Establishing robust HR systems for payroll, timekeeping, recruitment, and health & safety risk assessments.
• Legal Compliance: Ensuring all practices meet or exceed national and local laws.
• Training: Educating both management and workers on their rights and responsibilities.
• Providing a Safe Workspace: Maintaining the physical factory to meet health and safety standards.
• Remediation: Correcting any violations found during an audit.

2. The Client (Buyer / Sedex Member) – DUE DILIGENCE RESPONSIBILITY

The company that requests and pays for the SMETA audit (e.g., a retailer or brand) also has a required role. They cannot simply audit and walk away.

Their specific duties include:

• Selecting the Standard: They require the audit to be conducted against the SMETA methodology, which is based on the ETI Base Code and legal standards.
• Due Diligence: Using the audit results to understand risks in their supply chain.
• Engagement and Corrective Actions: Requiring the supplier to create a Corrective Action Plan (CAP) to fix any non-compliances found.
• Follow-up: Monitoring the supplier’s progress in implementing the CAP. In cases of critical issues (like child labor), immediate action is required.
• Potential Consequences: If a supplier refuses to make necessary improvements, the client/buyer is required to consider suspending or terminating the business relationship. This is part of their responsibility to not profit from human rights abuses.

3. Sedex and its Members – COLLECTIVE RESPONSIBILITY

While Sedex itself is not a regulator, it creates the framework that requires its members to act.

• Sedex: Provides the platform (the database) and the tool (the SMETA methodology) to enable ethical trade. They require members to use these tools in good faith.
• Sedex Members: By joining Sedex, companies agree to work towards the shared goal of improving working conditions. This implies a collective responsibility to prioritize suppliers who respect workers’ rights.

Summary: Who is Required to Do What?

In essence: The Supplier is required to follow the rules. The Buyer is required to check that the rules are being followed and act if they are not. The SMETA methodology is the common rulebook they both agree to use.

When is Required Sedex SMETA

This is a crucial question because the “Required Rights of People” in Sedex SMETA are not a one-time event but an ongoing obligation.

The rights are required at all times, but they are formally verified and emphasized during specific key moments.

Here is a breakdown of when these rights are required:

1. Continuously: The “Always-On” Requirement

The foundational principle is that compliance with these rights is not seasonal or limited to audit periods. A site must uphold these standards every single day. This is a continuous requirement for:

• Ethical Operation: As a core part of responsible business conduct.
• Legal Compliance: To adhere to national and local labor, health, and safety laws at all times.
• Contractual Obligation: Most buyer-supplier contracts include a code of conduct that mandates these standards be maintained continuously.

2. At Specific Trigger Points

While the requirement is constant, it becomes critically visible and verifiable at these specific times:

A. During a SMETA Audit (The Most Formal Verification)

This is the primary moment when the “requirement” is tested against evidence. Auditors will check if the rights have been upheld consistently over a historical period (typically reviewed over the last 12 months).

• Evidence Reviewed: Payroll records, time sheets, employment contracts, training records, and safety inspections from the past year are examined to prove continuous compliance.

B. During the Recruitment and Hiring Process

This is when several critical rights must be guaranteed from day one.

• When is it required? Before and at the point of employment.
• Rights Triggered:
  • Freely Chosen Employment: Verification of voluntary employment, no retention of passports, no fee-charging to workers.
  • No Child Labor: Age verification checks.
  • No Discrimination: Fair and objective hiring practices.
  • Regular Employment: Providing a clear, legal contract.

C. During the Worker’s Employment

This is the ongoing, day-to-day application of the rights.

• When is it required? Every day, every shift.
• Rights Triggered:
  • Working Hours: Accurate recording of daily and weekly hours, including overtime.
  • Health & Safety: Providing a safe environment, PPE, and training during all operations.
  • Wages: Correct payment of all wages and benefits for each pay period.
  • Treatment: Ensuring a respectful environment free from harassment and abuse.

D. When a New Risk is Identified

The requirement is activated whenever a new hazard is discovered.

• When is it required? Upon identification of a new risk.
• Rights Triggered:
  • Health & Safety: If a machine is found to be unguarded, it must be fixed immediately. If a new chemical is introduced, a risk assessment and training must be provided.

E. During a Corrective Action Plan (CAP) Following an Audit

The requirement extends into the period after an audit if violations are found.

• When is it required? After an audit, with set deadlines for completion.
• Rights Triggered: The specific right that was found to be non-compliant. For example, if fire exits were blocked, the Health & Safety right requires them to be cleared and kept clear permanently.

Summary: Key Timing Takeaways

In simple terms: The Rights of People are required 24/7/365. A SMETA audit is simply a snapshot in time that checks if this continuous requirement has been met. A company cannot “turn on” compliance just for an audit; the evidence (payroll, records) will show if the rights have been consistently respected over time.

Where is Required Sedex SMETA

Primary Location: The Audited Site Itself

This is the core location and includes all areas within the site’s control:

• Production and Assembly Areas: Main factory floors, production lines.
• Warehouses and Storage Facilities: Anywhere materials or finished goods are stored.
• Support Areas: Quality control labs, packaging areas, maintenance workshops.
• Common Areas: Canteens, break rooms, locker rooms, toilets, and showers.
• Outdoor Premises: Loading bays, yards, parking lots, and pathways used by workers.
• On-site Offices: Administrative offices, HR departments.
• On-site Residential Facilities: If the company provides dormitories or living quarters for workers, these are included and heavily scrutinized under Health & Safety and Living Conditions standards.

Extended and Indirect Locations

Critically, the requirement extends beyond the main site’s fence line to include locations where work is organized by or for the audited company.

1. Remote or Off-site Workplaces

• The Requirement Follows the Worker. If the company sends employees to work elsewhere, their rights must be protected there too.
• Examples:
  • A worker sent to a client’s location for installation or repair.
  • A cleaner working at a separate office building owned by the company.
  • A delivery driver operating from a warehouse.

2. Supplier-Controlled Premises (A Major Focus)

This is a crucial aspect of ethical sourcing. While a SMETA audit is typically for one specific site, the principle of the rights extends up the supply chain.

• “Home Work” or “Subcontracted Labor”: If the audited site subcontracts part of its production to smaller workshops or individuals working from home (common in garments, textiles, and electronics), the site is still responsible for ensuring that these workers’ rights are respected.
• Auditor’s Duty: A SMETA audit must investigate if subcontracting is occurring and assess the controls the primary site has in place to manage it. The rights must be upheld wherever the work is physically done.

3. In Transit

• The Health and Safety right can extend to workers in transit if they are being transported by the company (e.g., in company-owned buses to and from work).

Summary: Where are the Rights Required?

The Key Takeaway

The “Required Rights of People” are not tied to a single, fixed address. They are tied to the workers and the work being performed for the audited company.

For a business, this means their responsibility isn’t confined to their own property. They must have visibility and control over their entire operational network, including subcontractors, to ensure these fundamental rights are upheld everywhere their product is being made. A SMETA audit will specifically look for evidence of this broader responsibility.

How is Required Sedex SMETA

A company doesn’t just say it respects rights; it must actively embed them into its operations through concrete actions:

1. Through Formal Management Systems

• Written Policies: Clear, documented policies on anti-discrimination, anti-harassment, health & safety, and prohibition of child and forced labor.
• Assigned Responsibility: Designating specific managers (e.g., for HR, Health & Safety) who are responsible for implementing these policies.
• Record Keeping: Meticulous and transparent records of working hours, wages, payroll, recruitment, training, and safety drills.

2. Through Daily Operational Controls

• Health & Safety:
  • How? Conducting regular risk assessments, maintaining machine guards, providing free PPE, ensuring clear fire exits, and having first-aid kits and trained personnel.
• Freely Chosen Employment:
  • How? Returning passports to workers, having voluntary employment contracts, and ensuring no fees are charged to workers for recruitment.
• Fair Wages & Hours:
  • How? Using automated time clocks, correctly calculating overtime premiums, and providing detailed pay slips that comply with local law.
• No Child Labor:
  • How? Implementing a robust age-verification process during recruitment (e.g., checking original birth certificates or government-issued ID).

3. Through Communication and Empowerment

• Training: Regularly training all workers and managers on their rights and responsibilities, especially on health & safety and anti-harassment.
• Grievance Mechanisms: Providing a safe, confidential, and accessible way for workers to report issues (e.g., harassment, safety concerns) without fear of reprisal. This is a critical “how.”
• Worker Engagement: Communicating with workers through meetings, notice boards (with information in their native language), and engaging with worker representatives.

How the Rights are Verified by the Auditor (The SMETA Process)

The SMETA methodology is the “how” for checking the “how” of the company’s implementation.

1. Document Review (Pre-Desk and On-Site)

• How it’s done: The auditor examines policies, payroll records for the last 12 months, time sheets, employment contracts, training records, and safety permits.
• Example: They cross-reference time sheets with payroll records to ensure all hours worked are paid correctly, especially overtime.

2. On-Site Physical Inspection

• How it’s done: The auditor walks the entire facility—production areas, warehouses, canteens, dormitories, and outdoor spaces.
• Example: They check for blocked fire exits, missing machine guards, availability of PPE, cleanliness of toilets, and potable water access.

3. Confidential Worker Interviews

• How it’s done: This is one of the most critical steps. The auditor speaks privately with a randomly selected, representative group of workers (without management present).
• Example: They ask workers in their own language about their actual working hours, wage payments, whether they feel safe, and if they have ever experienced harassment or pressure. The goal is to see if the workers’ stories match the official records.

4. Management Interviews

• How it’s done: The auditor interviews HR, production managers, and health & safety officers to understand their systems and their knowledge of the standards.

The “How” in Practice: A Concrete Example

Right: “Working hours are not excessive.”

• How the Company Implements It:
  1. Uses an electronic time-clock system.
  2. Has a policy limiting work to 60 hours per week and ensuring one day off in seven.
  3. Requires managerial approval for any overtime.
• How the Auditor Verifies It:
  1. Document Review: Pulls 12 months of time and payroll records. Looks for patterns of systematic overtime beyond 60 hours and checks for the required day off.
  2. Worker Interviews: Asks workers privately: “How many days did you work last week? What time did you start and finish yesterday? Do you feel you can say ‘no’ to overtime?”
  3. Management Interview: Asks the HR manager: “What is your procedure for authorizing overtime? What do you do if a worker refuses overtime?”

If the records show 55-hour weeks, but five workers independently say they regularly work 70-hour weeks and are forced to clock out early, the auditor has uncovered a major non-conformance through this method of verification.

Summary

The “Required Rights of People” are put into practice how?

• By the Company: Through robust management systems, daily controls, transparent record-keeping, and worker empowerment.
• By the System (SMETA): Through a rigorous audit methodology that triangulates evidence from documents, physical observation, and confidential worker testimonies.

The ultimate “how” is a cycle of Plan-Do-Check-Act: The company Plans with policies, Does the implementation, the Audit Checks the compliance, and the Corrective Action Plan Acts to fix any gaps. This cycle ensures the rights are not just words on paper but a lived reality for workers.

Case Study on Sedex SMETA

The SMETA Audit Findings

The audit, conducted over three days, uncovered a mix of good practices and major non-conformances related to the Rights of People.

Pillar 1: Labor Standards – Major Non-Conformances

1. Issue: Excessive Working Hours & Falsified Records

• Finding: Official time records showed a consistent 60-hour work week. However, during confidential interviews, over 20 workers from different production lines revealed that during peak season, they were forced to work 78-84 hours per week. To hide this, management implemented a “two-card” system—one official card for the auditor and a separate, hidden card for calculating their real, but unpaid, overtime.
• Rights Violated:
  • Working Hours: Far exceeding the 60-hour SMETA/ETI benchmark.
  • Living Wages: Workers were not paid for all hours worked, effectively reducing their hourly rate below the legal minimum.
  • Harsh Treatment: Workers reported being threatened with dismissal if they refused the excessive overtime.

2. Issue: Restricted Freedom of Movement & Withheld Documents

• Finding: The auditor discovered that the company was holding the passports of all 300 migrant workers “for safekeeping.” Workers reported they could not get their passports back without special permission, which was rarely granted. The factory gates were locked during shifts, and workers were not allowed to leave the premises during their lunch break.
• Rights Violated:
  • Freely Chosen Employment: This constitutes forced labor indicators under ILO definitions. Workers cannot freely leave their employment if their identity documents are withheld.

Pillar 2: Health & Safety – Major and Minor Non-Conformances

1. Issue: Blocked Emergency Exits

• Finding: The auditor found two of the four main emergency exits on the production floor locked from the outside “to prevent theft,” and a third was blocked by a large pile of unfinished goods.
• Rights Violated:
  • Health and Safety: An extreme fire hazard and a critical life-safety failure.

2. Issue: Lack of Personal Protective Equipment (PPE)

• Finding: Workers in the fabric-cutting section were not provided with cut-resistant gloves. The manager stated they were “too expensive.” The first-aid log showed multiple lacerations in this department over the past month.
• Rights Violated:
  • Health and Safety: Failure to provide a safe working environment and necessary protective equipment.

The Corrective Action Plan (CAP) & Remediation

GlobalActive, the client, required BestStyle to create a formal Corrective Action Plan with immediate, short-term, and long-term actions.

1. Immediate Actions (Within 24 hours)

• Health & Safety: All locked emergency exits were to be unlocked immediately, and all blocked exits cleared. This was verified by a photo sent to the GlobalActive compliance team.
• Document Withholding: All passports were to be returned to workers voluntarily. A new, legal policy was implemented where workers could request a secure locker for their own documents.

2. Short-Term Actions (Within 30 days)

• Wages & Hours:
  • Cease the “two-card” system immediately.
  • Pay all outstanding back-wages to workers for the unpaid overtime from the last 6 months, as calculated with worker representatives.
  • Implement a single, transparent electronic time-clock system.
• Health & Safety:
  • Purchase and distribute cut-resistant gloves to all workers in relevant departments.
  • Conduct mandatory fire safety and emergency evacuation training for all workers.

3. Long-Term Systemic Actions (Within 3-6 months)

• Policy & Management Systems:
  • Revise the company’s Ethical Code of Conduct to explicitly prohibit forced overtime, document withholding, and exit locking.
  • Establish a legitimate, confidential, and worker-trusted grievance mechanism (e.g., a suggestion box with independent review).
  • Hire and train additional production staff to eliminate the dependency on excessive overtime to meet orders.
• Empowerment:
  • Train all line managers and HR staff on the SMETA/ETI standards, focusing on working hours and forced labor.
  • Conduct worker rights training so employees know their entitlements.

Conclusion and Outcomes

• For BestStyle Garments: The process was painful and costly (back-pay, new systems, reduced efficiency). However, it forced a necessary modernization of their management practices. In the long run, this led to lower worker turnover, a better reputation, and a stronger, more sustainable business model.
• For GlobalActive (The Buyer): The audit successfully identified critical human rights risks. By enforcing a robust CAP, they fulfilled their due diligence responsibility. They continued to source from BestStyle but placed them on a “high-risk” monitoring list with follow-up audits in 6 months to ensure sustained compliance.
• For the Workers: The outcome was a significant improvement in their working conditions, dignity, and financial well-being. They received owed back-pay, gained control over their documents, and worked in a safer environment with a legitimate channel to voice concerns.

Key Takeaway:
This case study demonstrates that the “Required Rights of People” in SMETA are not abstract concepts. They are enforceable standards. The “how” is through a rigorous audit process that uncovers the truth behind official records, leading to a structured Corrective Action Plan that forces systemic change to protect the most vulnerable—the workers.

White paper on Sedex SMETA

The global demand for transparent and ethical supply chains has moved from a niche concern to a core business imperative. The Sedex Members Ethical Trade Audit (SMETA) has emerged as one of the world’s most widely used social audit methodologies to meet this demand. At its heart lies a fundamental commitment to upholding the “Rights of People.”

This white paper delineates the conceptual, practical, and strategic dimensions of these rights within the SMETA framework. It argues that viewing these rights not as a compliance burden, but as a strategic foundation for risk management, brand protection, and operational excellence, is critical for modern businesses. Through a detailed examination of the required standards, implementation mechanisms, and the business case, this paper provides a roadmap for companies to meaningfully integrate these rights into their global operations.

1. Introduction: The Context of Modern Supply Chains

Globalized supply chains are complex, often opaque, and susceptible to human rights risks. Instances of forced labor, unsafe working conditions, child labor, and wage theft continue to be reported across industries. In response, stakeholders—including consumers, investors, and regulators—are demanding greater corporate accountability.

Sedex (The Supplier Ethical Data Exchange) provides a platform for sharing ethical data, and its SMETA methodology is the tool used to generate that data. SMETA is not a proprietary code of conduct but an audit procedure designed to assess compliance with a set of principles based on the Ethical Trading Initiative (ETI) Base Code and international labor standards.

2. Defining the “Rights of People” in SMETA

The “Rights of People” in SMETA are a comprehensive set of non-negotiable, fundamental principles derived from International Labour Organization (ILO) conventions. They are encapsulated within the Four Pillars of SMETA, with the most significant concentration in Pillars 1 and 2.

The Four Pillars of SMETA:

1. Labor Standards (The core of human rights)
2. Health and Safety (A fundamental right to a safe workplace)
3. Environment (Environmental management as a duty to communities and workers)
4. Business Ethics (Anti-corruption and fair business practices)

The required rights can be categorized into nine core areas:

3. The SMETA Audit: A Mechanism for Verification

SMETA translates these principles from theory into verifiable practice through a rigorous audit methodology.

Key Audit Components:

• Document Review: Scrutiny of 12 months of records (payroll, timesheets, contracts, training logs) to establish a historical pattern of compliance or non-compliance.
• On-Site Inspection: A physical walk-through of the entire facility to observe working conditions, safety equipment, and hygiene.
• Confidential Worker Interviews: Private, one-on-one conversations with a randomized, representative sample of workers. This is the most critical element for uncovering issues hidden by records.
• Management Interviews: Discussions with HR, safety officers, and senior management to understand systems and policies.

This mixed-methods approach allows auditors to “triangulate” the truth by comparing what documents say, what managers say, and what workers experience.

4. The Business Case: Beyond Compliance

Upholding these rights is not merely an ethical duty; it is a strategic business decision.

• Risk Mitigation: Prevents costly disruptions, legal penalties, reputational damage, and loss of business licenses linked to human rights violations.
• Brand Protection and Reputation: Enhances brand value and consumer trust in an era where transparency is valued.
• Operational Resilience: A safe, fairly treated, and stable workforce has lower turnover, higher productivity, and better quality output.
• Investor Attraction: ESG (Environmental, Social, and Governance) criteria are increasingly critical for investment decisions. A strong SMETA record demonstrates robust social governance.
• Supply Chain Resilience: Ethical suppliers are more stable and reliable partners, reducing the risk of disruptions caused by labor unrest or shutdowns.

5. Challenges and Limitations

While SMETA is a powerful tool, it is not a silver bullet.

• Audit Preparedness: Sites can “clean up” for an audit, masking ongoing issues.
• Scope: A SMETA audit is typically a snapshot of one site at one time.
• Complex Supply Chains: Ensuring rights are respected deep in the sub-contracted supply chain remains a significant challenge.
• Systemic Issues: Some issues, like achieving a true “living wage” versus the minimum wage, require industry-wide collaboration beyond a single audit.

6. Best Practices for Implementation

For companies committed to these rights, a proactive, systemic approach is required:

1. Integrate into Core Business Processes: Embed SMETA principles into supplier contracts, onboarding, and performance reviews.
2. Go Beyond Audits: Use audit results as a starting point for continuous improvement programs and capacity building with suppliers.
3. Empower Workers: Develop and promote effective, worker-trusted grievance mechanisms.
4. Collaborate: Work with industry peers, NGOs, and multi-stakeholder initiatives to address systemic challenges like living wages.
5. Leverage Technology: Use platforms like Sedex to track performance, identify trends, and manage corrective actions over time.

7. Conclusion

The “Rights of People” as defined by the Sedex SMETA framework represent a globally recognized baseline for human decency in the workplace. They are a synthesis of international law and ethical best practice. For businesses, the choice is no longer whether to engage with these standards, but how. The most successful companies will be those that move beyond a tick-box compliance mentality and embrace these rights as a strategic lever for building more resilient, productive, and reputable supply chains. The future of responsible business depends on making these rights a lived reality for every worker.

Industrial Application of Sedex SMETA

The core rights remain the same, but their application and the associated risks vary dramatically by industry. Here’s how they are applied in key industrial sectors.

1. Garment & Textile Manufacturing

This sector is often characterized by intense pressure, low margins, and a high reliance on low-skilled labor, primarily women.

• Most Critical Rights & Application:
  • Working Hours & Wages: The biggest challenge. During peak season, factories may force excessive overtime to meet deadlines. The application involves verifying that order planning is realistic and that overtime is voluntary, recorded, and paid correctly. Auditors cross-check production orders with time records.
  • Freely Chosen Employment: Risk of undocumented migrant workers having passports withheld. Application requires return of all passports and clear, voluntary contracts.
  • Health & Safety: Focus on fire safety (e.g., blocked exits, flammable fabric dust), machine guarding on sewing and cutting equipment, and proper ventilation for chemical treatments (dyeing).
  • No Harsh Treatment: Pressure to meet high targets can lead to verbal abuse and harassment. Application requires anonymous grievance mechanisms and supervisor training.

2. Electronics & High-Tech Assembly

Characterized by complex supply chains, use of hazardous materials, and precise, repetitive tasks.

• Most Critical Rights & Application:
  • Health & Safety: Paramount. Application involves strict control of solvents, acids, and gases used in production. Auditors check for fume extraction systems, chemical safety data sheets (SDS), and proper PPE (respirators, gloves).
  • Student & Intern Labor: High risk of forced intern labor from vocational schools. Application requires verifying that internships are truly educational, voluntary, and paid fairly, and that they do not replace regular workers.
  • Precision Work: Ergonomics is a major focus. Application includes providing adjustable chairs, anti-fatigue mats, and mandatory rest breaks to prevent repetitive strain injuries (RSI).
  • Freely Chosen Employment: Scrutiny of recruitment fees charged to migrant workers for high-demand jobs.

3. Food & Agriculture

Includes farming, fishing, and food processing. Often involves temporary, migrant, and unskilled labor.

• Most Critical Rights & Application:
  • Freely Chosen Employment: This is the highest-risk area. Application focuses on eliminating debt bondage and forced labor among migrant workers who may be charged high recruitment fees. Auditors look for proof of voluntary employment and freedom of movement.
  • Health & Safety: In processing plants, risks include dangerous machinery (bone saws), slippery floors, and exposure to cold temperatures. On farms, risks involve pesticide exposure and improper tool handling. Application requires specific training and protective equipment for each task.
  • Child Labor: Particularly in agricultural harvesting. Application requires robust age verification and policies that do not inadvertently penalize families if child labor is found.
  • Sanitary Facilities: Access to clean toilets and hand-washing stations is a basic right that is critically applied in this sector.

4. Heavy Manufacturing & Automotive

Involves large-scale machinery, metalworking, and complex assembly lines.

• Most Critical Rights & Application:
  • Health & Safety: The primary focus. Application involves Lockout-Tagout (LOTO) procedures for machine maintenance, mandatory hard hats and steel-toed boots in production areas, and extensive protocols for crane and forklift operation.
  • Contract Labor: Widespread use of temporary labor agencies. Application requires ensuring equal treatment for contract workers regarding safety training, PPE, and access to facilities. Auditors check if contract workers receive the same safety briefing as direct employees.
  • Noise & Air Quality: Managing exposure to high noise levels (requiring hearing protection) and welding fumes (requiring extraction systems).

5. Extraction Industries (Mining, Quarrying)

This is a high-hazard sector with isolated work locations.

• Most Critical Rights & Application:
  • Health & Safety: The absolute priority. Application goes beyond basic standards to include atmospheric monitoring for gases, roof stability in mines, emergency evacuation plans, and rescue training.
  • Living Conditions: In remote sites with company-provided dormitories, the application of H&S rights extends to the safety and hygiene of living quarters.
  • Freely Chosen Employment: In isolated camps, ensuring workers are free to leave is a critical application of this right.

The Role of the Auditor in Industrial Application

An auditor in an industrial setting doesn’t just check paperwork; they are forensic investigators of the working environment.

• They “Follow the Risk”:
  • In a garment factory, they will stand near the time clock at the end of the day to see if workers are forced to clock out and return to work.
  • In a food plant, they will check the temperature and air quality in the freezer and processing areas.
  • In an electronics factory, they will review the student intern contracts and interview them privately.
  • In a metalworks, they will observe if machine guards are in place and functional during operation.
• They Corroborate Evidence:
  • The Production Schedule (showing a massive, urgent order) is compared to the Time Records (showing no overtime) and the Worker Interviews (where workers describe working all night). This discrepancy reveals the true application (or violation) of the working hours right.

Conclusion: From Policy to Practice

The industrial application of the Rights of People in SMETA is the critical translation of policy into daily practice. It requires:

1. Industry-Specific Knowledge: Understanding the unique pressures and hazards of each sector.
2. Robust Management Systems: Implementing not just policies, but also the training, maintenance, and monitoring to make them real.
3. Empowerment and Transparency: Giving workers the voice and the safe channels to report issues without fear.
4. Holistic Auditing: Using a combination of document review, physical inspection, and worker interviews to build a true picture of working conditions.

For a business, successfully applying these rights industrially is not just about passing an audit. It is about creating a safer, more stable, and more productive operation that is resilient to disruptions and reputational damage. It is the foundation of a modern, ethical, and sustainable industrial base.