Commitment to ethical trading

Pillars of ethical commerce

It is increasingly accepted that companies that adopt labor codes of conduct in accordance with international regulations, need to be able to demonstrate what they have achieved for an effective and credible approach.

Ethical Trading is one that guarantees compliance with internationally recognized labor standards, specifically fundamental human rights in the workplace, including all stages of production and sales. Which means that, companies, retailers and suppliers take the responsibility to improve the working conditions of the people who manufacture the goods they sell.

To this end, the ETI (Ethical Trading Initiative), which brings together NGOs, unions and companies to identify and promote good practices in the codes of conduct implementation, including monitoring and independent verification, has developed a Base Code founded on the conventions of the International Labor Organization (ILO) and is an internationally recognized code of labor practice. It Includes requirements on fair wages, freedom of association, safe work conditions.

The manufacturer of GREEN TRADE WORLD certified products must reflect its commitment to the ETI Base Code, widely recognized as a model for labor practices with 9 guidelines:

• Employment is freely chosen
• Freedom of association and the right to collective bargaining are respected
• Working conditions are safe and hygienic
• Child labor shall not be used
• Living wages are paid
• Working hours are not excessive
• No discrimination is practiced
• Regular employment is provided
• No harsh or inhumane treatment is allowed

The SEDEX Members Ethical Trade Audit (SMETA)

The SEDEX Members Ethical Trade Audit (SMETA) is one of the most used ethical audit formats in the world and consists on a 4 pillar audit (where pillars 3 and 4 are optional)

• Pillar 1: Labor standards
• Pillar 2: Health & safety in the workplace
• Pillar 3: Environment (optional)
• Pillar 4: Ethical business practices (optional)

The SMETA 2-Pillar audit (pillar 1 and 2) has been developed according to the Ethical Trading Initiative (ETI) Base Code, local laws, as well as some additional elements.

The manufacturing company must demonstrate its commitment to good labor practices by conducting an audit that is based and weighs its nine principles.

This audit includes THE BASIC CODE of the Ethical Trading Initiative (ETI), and the requirements to be met are explained below.

Requirements to meet in the Ethical Commerce audit

Employment is freely chosen

• There is no forced, bonded or involuntary prison labor.
• Workers are not required to lodge "deposits" or their identity papers with their employer and are free to leave their employer after reasonable notice.

Freedom of association and the right to collective bargaining are respected

• Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively.
• The employer adopts an open attitude towards the activities of trade unions and their organizational activities.
• Workers representatives are not discriminated against and have access to carry out their representative functions in the workplace.
• 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.

Working conditions are safe and hygienic

• 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 minimizing, so far as is reasonably practicable, the causes of hazards inherent in the working environment.
• Workers shall receive regular and recorded health and safety training, and such training shall be repeated for new or reassigned workers.
• Access to clean toilet facilities and to potable water, and, if appropriate, sanitary facilities for food storage shall be provided.
• Accommodation, where provided, shall be clean, safe, and meet the basic needs of the workers.
• The company observing the code shall assign responsibility for health and safety to a senior management representative.

Child labor shall not be used

• There shall be no new recruitment of child labor.
• Companies shall develop or participate in and contribute to policies and programs which provide for the transition of any child found to be performing child labor to enable her or him to attend and remain in quality education until no longer a child; “child” and “child labor” being defined in the appendices.
• Children and young persons under 18 shall not be employed at night or in hazardous conditions.
• These policies and procedures shall conform to the provisions of the relevant ILO standards.

Living wages are paid

• 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.
• 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.
• 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.

Working hours are not excessive

• Working hours must comply with national laws, collective agreements, and the provisions below, whichever affords the greater protection for workers. Sub-clauses are based on international labor standards.
• Working hours, excluding overtime, shall be defined by contract, and shall not exceed 48 hours per week.*
• All overtime shall be voluntary. Overtime shall be used responsibly, taking into account all the following: the extent, frequency and hours worked by individual workers and the workforce as a whole. It shall not be used to replace regular employment. Overtime shall always be compensated at a premium rate, which is recommended to be not less than 125% of the regular rate of pay.
• The total hours worked in any seven-day period shall not exceed 60 hours, except where covered by clause below.
• Working hours may exceed 60 hours in any seven-day period only in exceptional circumstances where all of the following are met:
  
  • This is allowed by national law.
  • This is allowed by a collective agreement freely negotiated with a workers’ organization representing a significant portion of the workforce.
  • Appropriate safeguards are taken to protect the workers’ health and safety.
  • The employer can demonstrate that exceptional circumstances apply such as unexpected production peaks, accidents or emergencies.
• Workers shall be provided with at least one day off in every seven-day period or, where allowed by national law, two days off in every 14-day period.

* International standards recommend the progressive reduction of normal hours of work, when appropriate, to 40 hours per week, without any reduction in workers’ wages as hours are reduced.

No discrimination is practiced

• 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.

Regular employment is provided

• To every extent possible work performed must be on the basis of recognized employment relationship established through national law and practice.
• Obligations to employees under labor or social security laws and regulations arising from the regular employment relationship shall not be avoided through the use of labor-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.

No harsh or inhumane treatment is allowed

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

Verification: SMETA Audit Report by SGS certifier

The manufacturing company should express its code of conduct through a statement that expresses the policy, values or principles on which its behavior is inspired in terms of the development of its human resources, its environmental management and its interaction with consumers, customers and the communities in which it carries out its activity.

Verification report must present the audit report carried out at the production plants of the company which demonstrates its commitment to maintain compliance with the standards that guarantee ethical commerce through a SMETA 2 - Pilar audit of ethical business initiative, carried out by a third party company.

This verification report issued by a third party, backed by the "on-site" audit, certifies that the applicable principles included in the fundamental ILO conventions and the base code of the TSI have been respected at the shoe production site.