Horizontal Social Performance Standards

Among these, Social Accountability 8000 (SA 8000) is probably the most important workers rights performance standard to emerge to date, and is clearly destined to evolve into the most widely accepted format for addressing company issues around its social performance. Developed by the Council on Economic Priorities Accreditation Agency (CEPAA), a nonprofit organization, SA 8000 was first published in 1997 as a response to the need for companies to have access to a common, standardized framework for good labor management and workplace environment practices, not only for company-owned facilities, but also latterly to help address labor and employment issues in developing-world factories. Today it is funded from many sources, including grants from foundations, international development organizations, and the U.S. government.

Based on many of the most important ideas taken from the International Labor Organization Conventions, the United Nations Universal Declaration of Human Rights, and the Convention on the Rights of the Child, in 1996 the framework was taken up by Social Accountability International, the New York-based standards and advisory group , which then incorporated various best practice concepts from well-known and widely applied quality standards such as ISO 9000. It is, in their words, a tool for companies to demonstrate a real and credible commitment to achieving decent working conditions in their supply chains. ^{[3 ]}

In many ways, SA 8000 is both an international human resources standard and a verification tool. Building on accepted international labor rights principles ” that employers should provide fair wages and a safe working environment, that labor should be voluntary, should not involve children and should not involve inhumane working hours ” the SA 8000 framework also addresses a variety of other important employment issues such as union membership, discrimination, methods of discipline, and the freedom of association. Member companies receive a Guidance Document that provides them with the codes and guidelines, as well as a consultancy service, education, and training.

But equally important, implementing the standard means adopting a management system that is designed to help companies enforce these rights and provide workers with education and training on modern management techniques. These include a company communication program and assistance with creating the proper organizational structure so that the company provides the necessary budget allocations , management responsibility, and authority for enforcing the standards. For that reason, a standard such as SA 8000 itself can serve as a good foundation document and guideline for helping companies to create an ethical supply chain program such as the one we are describing.

Although companies themselves can be signatories to its principles, actual certification takes place on a facility-by-facility basis. Social Accountability International does not complete the audits itself, but provides training and accreditation for auditors and auditing firms. These SAI accredited firms ” known as certification bodies ” can be hired to provide audit and certification of manufacturing facilities.

Aware of the problems inherent in designing a one- size -fits-all approach, in developing the SA 8000 standard, Social Accountability International solicited input from a variety of industry groups, activists, labor rights organizations, and specialists in certification and auditing, and has designed a framework that is both standardized and yet flexible enough to take into account cultural and legal differences of various labor markets around the world.

In many ways, SA 8000 is very similar to standards already developed for the quality movement, and therefore, like any formal Deming-like management system or quality program, inevitably helps a factory identify quality and process defects and make productivity improvements.

It [SA 8000] looks at many of the same processes and requirements that government regulations such as OSHA would ask for, says Fitz Hilaire, Director of Global Supplier Development at Avon. It looks at the safety procedures. It looks at the policies that govern your hiring and firing, your methods to ensure there is no discrimination, that there is no child labor and those kinds of things. ^{[4 ]}

In fact, Business Week has gone so far in its praise of the standard to assert that SA 8000 was: A potential breakthrough not just on sweatshops, but on common labor standards for the global economy as a whole. ^{[5 ]}

Unlike most other standards, however, SA 8000 has bitten the bullet and requires companies that adopt the framework to demonstrate compliance by submitting to independent audits, completed by third-party certification groups trained in the SA 8000 methodology. There are still some problems, though. Because certification is offered to facilities and not to companies, it is possible to be a member corporation and yet not actually have any company or supplier certification. Moreover, original signatory members still are only required to bring their directly owned and supplier facilities into compliance within an unspecified reasonable time period. This has lead to criticism of companies such as Dole, which although a signatory member since November 1999, at least according to Human Rights Watch, still has not brought any of its supplier plantations in Ecuador into compliance. Thus, as an SA 8000 signatory member, says Carol Pier from Human Rights Watch, Dole pays a $10,000 annual membership fee, can publicize affiliation with ˜a global humane workplace standard, but need not ensure compliance, on its own or its supplier facilities, with SA 8000 s terms. ^{[6 ]}

Whatever its limitations in the area of membership versus compliance, the standard is quickly becoming an important force in the emerging social and labor standards market. In 2003 there were 259 facilities currently certified under the SA 8000 standard, from 35 different industries in 36 countries . Signatories include such well-known names as Avon, Dole, Eileen Fisher, Otto Versand, Tex Line, and Toys R Us. ^{[7 ]}

Case Study: SA 8000 Efficiency: Apparel Avenue

The Apparel Avenue Co., Ltd., a medium- sized factory in the apparel industry in Thailand, has two manufacturing sites and over 600 employees . It is typical of the type of supplier that we have been examining in this book. Founded in 1988, it produces apparel for international brands including Calvin Klein, Tommy Hilfiger, and Nautica, exporting nearly 75 percent of those garments to the United States.

The company obtained ISO 9002 certification for its production system-in 1998, and ISO 14001 certification in 1999 (they claim to be the first garment factory in Asia to have received both certificates). In 2000, the company became the first and only factory in Thailand to earn an SA 8000 certification.

In April 1999, company president Kartchai Jamkajornkeiat initiated the SA 8000 project by appointing a multifunctional working team, representing various departments from throughout the company, led by a senior program manager, Ms. Prawee. She contends that the SA 8000 requirements helped the company greatly improve working conditions, and was widely accepted among employees.

SA 8000 for Apparel Avenue [was] quite easy to implement, she explained. Firstly, this is not the first standard that the company has to comply [with]. Secondly, since the employees are familiar with the implementation of quality standards during the last 3 years , they [were] ready to change. Finally, the employees perceive change in a positive way because every time the change takes place, they work in a better condition. Therefore, they believe that this new standard will improve their working environment again.

Still, attaining certification was not easy. A preliminary assessment revealed that company overtime policies would not meet the SA 8000 criteria. Employees worked on a single-shift basis from 8 am to 5 pm, 6 days a week, but also worked overtime, exceeding Thailand s limit of 36 hours per week (under a total Thailand government legal limit of 84 working hours per week). This meant that in order to comply with the SA 8000 guideline, the company had to reduce overtime for each employee from 36 to 12 hours per week ” a significant hourly reduction that at first appeared impossible , as the company could not afford the loss in productivity, and employees feared the significant loss in pay.

The obvious answer was to improve productivity, and the SA 8000 team essentially began a process improvement investigation that mirrored the business reengineering programs so common in the developed economies in the last decade . They broke down the production process by activity and tasks for each workstation, and then redesigned the workflow process, changing the way work was sequenced , bringing in new tools, and rearranging responsibilities. This new workstation process then became a prototype that was replicated at each workstation throughout the factory.

Within three months, the company had reduced employee overtime by 28.57 percent, and received the SA 8000 certification in August 2000 after an independent audit by Bureau Veritas Quality International (BVQI).

Source: Rohitratana, Kaewta, How to Effectively Implement SA 8000 in Thailand, Paper presented at the 6th ICIT Conference, Ayr Scotland, 17 “19th April, 2001 at www.mallenbaker.net/csr/CSRfiles/sa8000_icit.doc .

 

^{[3 ]} Carol Pier, A Case Study of Corporate Conduct Within the Supply Chain, Human Rights Watch, at http://216.239.53.100/search?q_ cache:OQ0HKPH1fg8C:www.ausncp. gov.au/content/docs/20020901_pier.pdf _ supply _ chain _ supplier _ SA _ 8000 _ inspec tions&hl _ en&ie _ UTF-8 .

^{[4 ]} David Creelman, Interview: Avon s Fitz Hilaire on Social Accountability, The Star Tribune at http://startribune.hr.com/HRcom/index.cfm/WeeklyMag/F754EEA5-73D8-4CB9-98D56A615F9EBB72?ost_wmFeature.

^{[5 ]} See Social Accountability International s Web site at www.cepaa.org/introduction.htm.

^{[6 ]} Carol Pier, A Case Study of Corporate Conduct Within the Supply Chain, Human Rights Watch, at http://216.239.53.100/search?q _ cache:OQ0HKPH1fg8C: wwww.ausncp.gov. au/content/docs/20020901_pier.pdf _ supply _ chain _ supplier _ SA _ 8000 _ inspections&hl _ en&ie _ UTF-8.

^{[7 ]} David Drickhamer, SA 8000 Sets a Standard, IndustryWeek.com, June 1, 2002 at www.iwvaluechain.com/Features/articles.asp?ArticleId_1263 .