Benchmarking social compliance
Pakistani apparel industry is currently under immense pressure from the US and European buyers to comply with social and legal standards. Instead of fruitless discussions if it is a ploy for non-tariff barriers against developing countries, or a genuine concern for workers and society, exporters should plan to become socially compliant due to our own moral, legal and economical reasons.
Social Compliance Audits
The recent wave of social compliance audits in our factories is only a glimpse of what lies ahead in the year 2005 onward. During last one and a half year, we have witnessed admin and other compliance personnel in our production facilities endlessly preparing for compliance audits, one after another.
In last one month alone, we handled audits from about twelve different buyers in our unit in Lahore, some of them quite inconsistent in their demands and expectations. We had to prepare lengthy reports, and suffered interruptions in production due to numerous confidential interviews, questionnaires, and safety rehearsals. This,alongwith other out of routine administrative drill to 'satisfy' our foreign buyers, was both tough and costly. We accepted this, as we do not have many alternatives available. In a quota-free regime, price, quality and shorter production cycle is not the only recipe for success, there is yet another key to survival i.e. social compliance.
Thus there is a greater need than ever for each organization to assess its capability and gaps in terms of social and legal compliance. This, followed by a comprehensive corrective action, and review plan is the only short cut to remain viable in the post-2005 era.
In the following lines, we have introduced the concept of worldwide responsible apparel production (WRAP) as a tool to benchmark our social compliance standards, and how this certification can help our garments industry cope with the year 2005 challenge.
What is WRAP?
The worldwide responsible apparel production (WRAP)
is an initiative of American Apparel Manufacturing Association in
response to public and customers' concerns in US about working conditions
in apparel manufacturing factories. It competes with other social
compliance programs including Fair Labour Association (FLA), SA
8000 and the Workers Rights Consortium (WRC).
WRAP was initiated in 1997 by a task group of then American Apparel Manufacturers Association, now known as American Apparel and Footwear Manufacturers Association (AAFA). The AAFA claims to be the largest sewn products trade association in the United States with over 85% of sewn products sold at wholesale in the USA. In 2000, WRAP became an independent not-for-profit agency with an autonomous board of directors. By November 2003, WRAP had over 700 international manufacturers with more than 1300 participating factories in the program and had certified 570 factories. Certifications are usually valid for a period of one year, and all participating factories may be inspected at any time to ensure ongoing compliance.
WRAP aims to achieve social compliance objective without damaging the business competitiveness of participants. This is supported by satisfaction-contribution equilibrium theory, which is vital for all external actors as well so as for business performance. If this equilibrium remains disturbed with labour within the factory, disequilibria will prevail, and it will be hard to compete in the external market. From factory perspective, WRAP certification means that redundant inspections can be done away with. One such certification may hold good for a period of at least one year, and is a comprehensive alternative to numerous brand based certifications round the year. This results in saving of precious production and support time, which is otherwise consumed by numerous compliance audits. The brand-based audits may still remain as a formal requirement (though for small buyers may be waived off), but their stringent requirements, frequency of audits and time consumption will drastically reduce for a WRAP certified factory. Since 2001, Pakistani knitwear industry has faced the brunt of a row of inspections that have kept administration, human resource and other compliance staff busy alongwith unnecessary extra-ordinary preparations, documentation, and interruptions in production. WRAP certification will also ensure that only consistent (and essentially steady) standards are followed and observed in the factory. On the buyers' part, WRAP will re-affirm their commitment to apply legal, ethical, and humane standards of apparel production to any factory that produces for their consumers.
WRAP process includes self-evaluation, independent inspection, and the corrective action. This is followed by final review by the WRAP board to make a decision about certification. There are a number of accredited firms that perform on-site evaluation in more than 70 countries across the world. Following is a four-step process of certification under WRAP program:
· The factory will conduct a pre-certification review to identify gaps to be addressed to comply with the WRAP Principles.
· An accredited external monitor will inspect the production factory to verify compliance. The monitor will also evaluate if the factory has systems in place to address other compliance-related.
· The WRAP certification agency will review the factory's application, including the monitor's report, and will then certify if the factory meets the WRAP requirements.
· Finally, the WRAP certification agency will determine about the frequency of renewal for certification status.
WRAP principles are twelve benchmarks to evaluate ethical, legal and humane business practices in participating factories, and are now widely supported in the world. Following is a summary of WRAP principles:
1. Laws and Workplace Regulations: Compliance with local laws and regulations.
2. Forced Labor: Prohibition of involuntary or forced labor, indentured bonded or otherwise.
3. Child Labor: Prohibition of hiring under the age of 14 or under the age interfering with compulsory schooling, or under the minimum age established by law, whichever is greater.
4. Harassment or Abuse: Provision of a work environment, free of harassment, abuse or corporal punishment in any form.
5. Compensation and Benefits: Payment of atleast the minimum total compensation and benefits required by local law.
6. Hours of Work: Hours worked each day, and days worked each week, shall not exceed the local legal limitations. Provision of at least one day-off in every seven-day period, except as required to meet urgent business needs.
7. Discrimination: Apparel manufacturers will employ, pay, promote, and terminate workers on the basis of their ability to do the job, rather than on the basis of personal characteristics or beliefs.
8. Health and Safety: Provision of a safe and healthy work environment
9. Freedom of Association: Recognition and respect for the employees' lawful right to free association, including joining or not joining any association.
10. Environment: Compliance with local environment rules, regulations and standards
11. Customs Compliance: Compliance with applicable customs laws and, in particular will establish and maintain programs to comply with customs laws regarding illegal transshipment of apparel products.
12. Security of Shipments: Cooperation with local,
national and foreign customs and drug enforcement agencies to guard
against illegal shipments of drugs, and hazardous material.
WRAP is not a solution to all compliance related problems. There are certain areas in which its standards have been stated to be 'lenient' than ILO benchmarks e.g. hours of work, freedom of association, and gender considerations. Also WRAP certification may not absolve a factory of its requirement to undergo brand-based audits. Yet this is a step in the right direction, and can help our production facilities bring their social and legal standards chiefly in line with the requirements of our buyers.
Jawad S. Naqvi is a human resource practitioner in Lahore and he can be reached at email@example.com.