I often get asked how to get started with implementing an Ethical Supply Chain strategy by potential customers. Having an extensive experience in working with Business Social Compliance Initiative (BSCI), where as an example my organization helped out with initially screening for and hiring their China Representative on their behalf, contracted through my organization. We also delivered workshops to thousands of factories, almost exclusively at some point. I want to share a little more about what BSCI can actually help you achieve – and how.
However, there are probably as many ways to comply with international standards as there are companies that attempt to do so. Just as every business is individual and unique, so is the set of rules and regulations that apply to it. Long-term enterprises establish proprietary internal controls and processes to ensure that they are always in compliance with regulations. For companies that are new to actively managing their international supply chain, established frameworks offer excellent guidance to achieving and maintaining compliance in the ever-changing industrial world. In this regard BSCI is an excellent starting point.
The Business Social Compliance Initiative (BSCI), which is maintained by the Foreign Trade Association (FTA) in Brussels, Belgium was established in 2003, under the umbrella of the FTA. It is a business initiative (as opposed to a multi stakeholder initiative) where a small group of retailers created the code to improve the social performance of the factories within their international supply chains. To harmonize their efforts, they combined the Core Conventions set up by the International Labour Organisation with a set of management tools to generate a business practices system which would improve their capacity to meet social compliance goals without adding any additional regulation. Since its inception, the BSCI has expanded to include almost two thousand corporate members, which engage thousands of factories and millions of workers around the world. The fundamental goal of the Initiative is to continuously improve social welfare through collaboration and empowerment.
Contributors to the BSCI
The BSCI encompasses a system of voluntary standards, sharing of information, collaborating on audits and implementation of the Code of Conduct which impact the social responsibility goals of the member corporations. There are two membership types for the Foreign Trade Association, one for “ordinary” members – those in the branded, retail, trade and importing industries, and “associate’ members – those who don’t actively participate in global supply chains but who do support the principles of the Initiative. All members are encouraged to actively engage in the development of the initiative by contributing information upon which standards can be revised, updated or enhanced.
Currently, BSCI country representatives are stationed in China, India and Bangladesh. However, the scope of the Initiative includes risk countries in Central and South America, much of Eastern Europe and Asia, and several nations in Africa. BSCI members who have business interests in these areas commit to involving their producers and suppliers in the Initiative through comprehensive audits of business practices and to undertake capacity building projects to improve.
How the BSCI Works
BSCI members subject their companies and supply chain partners to voluntary audits that covers the BSCI Code of Conduct. Audits are always performed by an independent accredited auditing company. Audit results are entered into a database which all members have access to (with some limitations). The first audit identifies the baseline from which the entity must work to achieve compliance. Corrections of non-conforming activities must be completed within a reasonable time, but no longer that 12 months after the audit is final (severe cases like Child labour has shorter deadlines). After that, reviews occur annually. While no one expect perfection from day one, there is a membership requirement that improvement at the factory level is actively pushed for by the member company. The BSCI doesn’t issue certificates of compliance, but the first page of the Report can be displayed to prove audit results.
BSCI Social Requirements
These business practices involve establishing a Code of Conduct (CoC) for the protection of human rights, including – among others – the right to healthy and safe working conditions, the right to be compensated appropriately for work performed, and the right to improve one’s circumstances through collective bargaining and other self-empowering activities.
To identify the standards that apply to your international enterprise, product or service, you can use the “StandardsMap,’ which will find applicable codes of approved conduct based on the product, producing nation and destination nation. Each of the entries that come up will have an attached menu that describes that entities standards around production and extraction activities, processing and manufacturing, and trading and retailing.
While the BSCI is just one of many frameworks that international producers can use to ensure that their enterprise attains and retains appropriate social responsibility standards, it also happens to be a system in which I have significant experience. You can find examples of other such compliance strategies in my book.
Helping an importer establish an Ethical sourcing policy, and effectively implement and manage it is as much an art as it is a science. In my close to 2 decades as a consultant working with Asia, I’ve worked with hundreds of global businesses to improve their sustainability practices. I’ve written more on this topic in my Huffington Post blog, which you can find here. In my book, you can learn how to avoid some of the pitfalls that can occur when buying in these markets.
You can also take your own quick ethical risk assessment here. (Estimated 4 minutes duration, and with an instant result via email).
For assistance to evaluate the sustainability practices of the participants in your supply chain or to get an understanding on how to get started with an Ethical Sourcing Strategy you are welcome to contact me directly. I can be reached at (+61) 413 089 020 or via email: firstname.lastname@example.org