An Overview of Social Compliance
&
Introduction to WRAP
Worldwide Responsible
Accredited Production
(WRAP)
September 2015
Tanzania
Agenda
• Overview of Social Compliance
–
–
–
–
Origins and Evolution
What is Sustainability?
Why do Compliance & Sustainability Matter and Have Become so Important?
The Business Case for Compliance
• An Introduction to WRAP
–
–
–
–
–
History / Overview
WRAP Principles
Certification Process
Monitoring Partners Selection & Controls
WRAP Training Offerings
• Benefits of WRAP Certification
• Conclusion / Q&A
Origins & Evolution of Social Compliance
• In the mid-to-late 1990s, US / EU brands and
retailers were embarrassed by reports of worker
abuse in factories making their products in Central
America and Asia.
• Based on those reports, many brands and retailers
wrote corporate Codes of Conduct and began
auditing factories, attempting to ensure legal,
ethical and humane working conditions.
• Evolving from comply-or-die models to
conversations about sustainability.
What is Sustainability?
•
Many Definitions
–
Most of them context driven
•
Need to Look at the Big Picture
•
Our definition of choice:
Sustainability is being able to do whatever it is we are
doing now, without endangering the ability of future
generations to do the same.
Why do Social Compliance &
Sustainability Matter?
• Doing the Right Thing
• If that’s not enough - it comes down to
protecting your company
– Social Compliance = Risk Management
– Sustainability = Business Continuity
Why Has Social Compliance
Become So Important?
• With the advent of modern technology, we now
have global, instant communication.
o Internet / Social Media / Smartphones
• What happens in China, Bangladesh or Vietnam
now appears on CNN or BBC within minutes.
• Reputation/supply chain management are global
issues, with very high stakes.
o Risk Management in a Transparent World
• Greater awareness of need for sustainable
manufacturing and sourcing practices.
o Business Continuity in Uncertain Times
Ali Enterprises-September 11, 2012
Anger and Grief Across Karachi After Fire
-The New York Times
Karachi
factory
fire
highlights
risks for
workers
-Dawn.com
Deadly Karachi blaze was “waiting to happen”
-BBC
Tazreen Fashions-November 24, 2012
Fatal Fire in Bangladesh Highlights the
Dangers Facing Garment Workers
-The New York Times
Retailers and
suppliers
hit by fallout
from deadly
Bangladesh
factory fire
-CNN
Paying with Their Lives: The High Cost of
Cheap Clothing
-Solidarity Center
Rana Plaza-April 24, 2013
Building Collapse in Bangladesh
Leaves Scores Dead
-The New York Times
Factory collapse
A ‘wake-up call’
for fashion industry
-ABC Australia
Big Brands Face Scrutiny Over Factory
Safety After Bangladesh Collapse
-Associated Press
Business Case for Compliance
• Protecting your organization
• Return on investment:
– Systemic approach to management
– Direct business benefits
• More efficient production
– Savings include raw materials and energy costs
• Lower worker turnover
– Satisfying client requirements
An Introduction to WRAP
Mission:
WRAP is an independent, objective,
non-profit team of global social
compliance experts dedicated to
promoting safe, lawful, humane and
ethical manufacturing around the world
through certification and education.
History
•
•
•
•
•
Task force established by AAMA in 1996 to study the issue of
“sweatshops” in offshore manufacturing and recommend an
industry-wide response
Committee sought input from brands, suppliers, NGOs,
academics and governments
Reviewed corporate, industry, multi-lateral organization
codes & national laws
WRAP incorporated in 2000 with 12-point code
Based on universally recognized min. standards
- Core ILO Conventions
•
Compliance to national laws, respect for local culture
Organizational Overview
•
•
•
•
•
Non-profit organization (not a charity)
NOT a membership club
By charter, Board is majority non-industry
HQ in Arlington, VA, USA
2 Regional offices
– Hong Kong, SAR, and Dhaka, Bangladesh
– Representatives in India, Thailand & Vietnam and representation in
Latin America
• 23 full-time staff
– 11 experienced auditors / 7 accredited trainers
• Audits conducted by 3rd-party firms, as well as
WRAP staff (latter mainly for quality control)
Leading Independent Certification Program
• In 2014, received over
2400 applications
• As of early 2015, over
2000 facilities
employing more than
1.8 million workers in
over 40 countries
have been
certified
Communication Leadership
• 7,000+ subscribers to
weekly newsletter
• Website receives over
5,000 unique visitors
each month, and is
available in 4 languages
• Full-time local staff in 7
countries; 15 languages
covered
WRAP
PRINCIPLES
Principle 1
Compliance with Laws and Regulations –
Facilities will comply with laws, codes, rules
and regulations in all locations where they
conduct business.
Principle 2
Prohibition of Forced Labor – Facilities will not
use involuntary, forced or trafficked labor.
Principle 3
Prohibition of Child Labor – Facilities will not hire
any employee under the age of 14, or under the
age interfering with compulsory schooling, or
under the minimum age established by law,
whichever is greater.
Principle 4
Discipline, Harassment or Abuse – Facilities will
provide a work environment free of supervisory
or co-worker harassment or abuse, and free of
corporal punishment in any form.
Principle 5
Compensation and
Benefits – Facilities
must pay at least the
minimum wage
required by law for all
hours worked,
including all mandated
wages, overtime,
allowances and
benefits.
Principle 6
Hours of Work – Hours worked each
day, and days worked each week,
shall not exceed the legal limitations
of the countries in which facility is
located. Facilities will provide at
least one day off in every seven-day
period, except as required to meet
urgent business needs.
Principle 7
Discrimination – Workers must be
employed based on their abilities and paid,
promoted and terminated based on their
ability to do the job rather than on the
basis of personal characteristics or beliefs.
Principle 8
Health and Safety – Facilities will provide a
safe and healthy work environment. Where
residential housing is provided, facilities will
provide safe and healthy housing.
Principle 9
Freedom of Association and Collective
Bargaining – Facilities will recognize and
respect the right of employees to exercise
their lawful rights of free association and
collective bargaining.
Principle 10
Environment – Facilities will comply with
environmental rules, regulations and
standards applicable to their operations, and
will observe environmentally conscious
practices in all locations where they operate.
Principle 11
Customs Compliance – Facilities will comply with
applicable customs laws, and in particular, will
establish and maintain programs to comply with
customs laws regarding illegal transshipment.
Principle 12
Security – Facilities will maintain facility security
procedures to guard against the introduction of
non-manifested cargo into outbound shipments
(i.e., drugs, explosives biohazards and /or other
contraband).
WRAP
CERTIFICATION PROCESS
Implementation Requirements
• Must have management systems approach
• Commitment from Top Management, with specific
individual(s) assigned compliance responsibility
• Adoption, Deployment & Monitoring
• Maintain supporting documentation or other relevant
evidence
• Continuous education of all employees
Certification Process
•
•
•
•
Application
Registration
Self Assessment
Evaluation Audit (Unannounced visit)
•
•
•
•
•
Self assessment
Facility tour
Employee interviews
Management interviews
Document review
• Review of report by WRAP
• Certification
• Unannounced Follow-up Visits
Application Process
• Go to www.wrapcompliance.org
–
–
–
–
–
Click on “Login” and enter information
Verify all information is correct
Select monitoring firm
Pay registration fee
Contact monitoring firm
Certification Fees
• WRAP registration fee: US$1195
– Sets a 6-month clock ticking
– WRAP typically generous in granting extensions to
facilities that have made a true effort to achieve
compliance
• Additional costs: audit fees
– Depends on the size of the factory (no. of
employees)
WRAP Monitoring Partner
Selection & Control
• Monitoring Partners accredited at
organizational level
• All auditors must be individually accredited
and directly trained by WRAP
– Refresher training required once every 2 years
• Ongoing review:
– Office visits, shadow audits & audit file reviews
– WRAP staff conducting unannounced visits
at certified facilities
• Big part of function of staff in regional offices
(approx. 20% of facilities in general, but 100%
re-visited in Bangladesh)
Social Compliance Best Practices
• Even the most progressive of approaches to
auditing will not suffice if auditing is all you do
– Social compliance is a two-way street
• Engagement necessary at all levels
– Understanding the practical challenges faced
– Being consistent with message
• No “disconnect” between sourcing and compliance
– Building partnerships
• Continuous improvement
– Ongoing training and education
WRAP Practices
• Management systems approach to social
compliance and sustainability
– Engaging with facilities to build relationships
• Education is essential
– WRAP Training offerings
WRAP Training Offerings
• General awareness training
• Five-day lead auditor
• Two-day internal auditor
• Modular training courses
– Fire safety training
– C-TPAT training
Five-day Lead Auditor Course
• Designed for third-party and company
auditors
• Interactive training with hands-on
exercises, case studies, role plays, virtual
factory tours, final exam
• Widely recognized as “best in class”
auditor training
• IRCA accredited
Two-day Internal Auditor Course
• Designed for brand compliance managers
or facility managers who are charged
with compliance with customer codes of
conduct and WRAP requirements
• Participatory course which includes
hands-on exercises, role plays, virtual
facility tour and mock audit
• IRCA accredited
WRAP Fire Safety Training
• Started in Bangladesh, September 2011
– Launched in Pakistan in 2012, China and India in
2013, and in Vietnam and Indonesia in 2014
– Local language
– Over 3000 people trained (in local language)
• Aimed not just at evacuation, but also
prevention
– Risk Assessment
– Practical Demonstrations
Benefits of WRAP Certification
• WRAP’s Credibility and Dependability
– Clear requirements; systemic approach
– Cost effective expertise
– Availability of expert resources (training)
•
•
•
•
Safer Working Conditions
Improved Worker Morale and Communications
Avoiding Audit Fatigue
Remember the Business Case for Compliance
– Protecting your organization
– Return on Investment
• Higher Productivity
• Lower Worker Turnover
– Satisfying Client Requirements
Summary
• Sustainability and social compliance
certification are becoming increasingly
important aspects of supply chain
management in today’s global value chain.
• A properly implemented, and credibly
certified (WRAP!) social compliance system
serves the dual purpose of meeting buyer
requirements as well as increasing
worker efficiency and morale, and,
thereby, productivity & profitability.
Conclusion
WRAP is:
• The “standard most often cited” for social
compliance certification in the textile sector.
– “Making Private Standards Work For You”
2010 UNIDO Study
• A respected leader in the training arena.
• A highly recognized, responsive and
effective partner for supply chain social
compliance management.
Thank you!
Clay E. Hickson
Sr. Dir. of Strategy & Bus. Dev.
chickson@wrapcompliance.org
Worldwide Responsible Accredited Production
Arlington, VA, USA
www.wrapcompliance.org
+1-880-2883-6356
+1-703-243-0970