SMETA Audit in China, India, and Vietnam | 2 & 4 pillar Sedex Members Ethical Trade Audit

Understanding SMETA

SMETA is the world’s most commonly used ethical audit format and it works to drive convergence in ethical trade / social auditing based on and helping to shape best practice. It’s applied based on a system of methods, appointing a collection of best practice ethical audit techniques.

An SMETA audit normally follows three principals:

Each SMETA audit owns a unique reference code to make sure that the SMETA audit report can be validated. It can be used in a regular site audit or in the Sedex Offline Audit Tool. Only registered members are able to provide such reference code so that importers and manufacturers can rest assured that Sedex system provides a transparent-based environment.

SMETA is designed in a way that a supplier can share one audit with multiple customers:

Benefits of a SMETA Audit

Non-compliance with SMETA standards is not an option for many companies worldwide as there are so many advantages businesses can take from assessing their suppliers. The main benefits of a SMETA audit are:

SMETA Methodology

The Best Practice Guide is strictly followed by SEDEX members to contribute to a common methodology as well as to improve standards and encourage reciprocal approval of reports. Further to the ETI Base Code aspects, local laws, client’s code and additional elements, SMETA standards cover verifications against management systems, home working, environmental issues, sub-contracting, and migrant workers’ rights.

For over two decades, ETI and its members have been vital to ethical trade, addressing the high obstacles of today’s global supply chains, and helping to develop the life conditions of workers around the world.

Taking a unique approach to business and human rights, ETI Base Code makes sure that:

ETI members include NGOs in more than 40 countries, more than 80 global companies and well-known brands, public sector organizations, and union federations representing over 180 million workers worldwide.

See more: United Nations Global Compact: Sustainable Supply Chain, Resources and Practices.

SMETA Scope

SMETA 2-pillar Audit Scope

SMETA 4-pillar Audit Scope

All the above aspects, plus:

Pre-Audit, During-Audit, and Post-Audit Guidance for Buyers

Pre-Audit
		Step 1: Select a reliable audit company that is based where your suppliers are located.
		Step 2: Encourage your suppliers to share any existing audits with you.
		Step 3: Prioritize supplier sites for audit and define the requirements for the audit.
		Step 4: Select and share audit company contact details with your suppliers.
During-Audit
		Step 5: Opening meeting with management.
		Step 6: Site tour, interviews and document review.
		Step 7: Closing meeting and review of Corrective Action Plan Report.
Post-Audit
		Step 8: Read the audit report and check findings/non-compliances raised.
		Step 9: Support each supplier to meet the completion date for corrective plan actions. Follow up with the supplier if necessary.
		Step 10: Check if the corrective actions added have been verified by the auditor (run reports on Sedex Analytics).

Pre-Audit, During-Audit, and Post-Audit Guidance for Suppliers

10 Steps to take when you have an audit scheduled:

Pre-Audit
		Step 1: In your account on Sedex Advance, complete your Self-Assessment Questionnaire (SAQ).
		Step 2: On Sedex Advance, share your SAQ with the audit company.
		Step 3: Read the pre-audit information sent by the audit company.
		Step 4: Conduct a self-audit of your site and correct any issues in advance. This will help reduce any non-compliances in your audit.
During-Audit
		Step 5: Opening meeting with management.
		Step 6: Site tour, interviews and document review.
		Step 7: Closing meeting and review of Corrective Action Plan Report. It’s very important that you discuss any issues in detail with the auditor, to make sure you understand how to close any non-compliances raised in the audit.
Post-Audit
		Step 8: Review the audit the audit company has uploaded on Sedex Advance. Check that this information is what you discussed in your meeting. You can the publish your audit for customers to see.
		Step 9: Add and submit Corrective Actions for non-compliances raised in the audit. The audit company will then verify these if the actions are suitable.
		Step 10: If necessary, complete a joint derogation form on certain non-compliances as deemed appropriate. Schedule a follow up audit if needed.

Pre-Audit, During-Audit, and Post-Audit Guidance for Auditors

9 Steps to take when auditing a new client:

Pre-Audit
		Step 1: Share the audit process with the client.
		Step 2: On Sedex Advance, accept the Audit Upload Request the client has sent, review Self-Assessment Questionnaire (SAQ).
		Step 3: On Sedex Advance, research any previous audits and Self-Assessment Questionnaire (SAQ).
During-Audit
		Step 4: Opening meeting with management.
		Step 5: Site tour, interviews and document review.
		Step 6: Closing meeting and review of Corrective Action Plan Report.
Post-Audit
		Step 7: On Sedex Advance, upload the Audit onto Sedex Advance and submit to the client for review.
		Step 8: On Sedex Advance, verify Corrective Actions.
		Step 9: If necessary, schedule a follow up.

SMETA FAQ

What is the difference between Sedex and SMETA?

Sedex is the name of the organization – SMETA is the name of an audit methodology. The Supplier Ethical Data Exchange (Sedex) is a not-for-profit, membership organization that leads work with buyers and suppliers to deliver improvements in responsible and ethical business practices in global supply chains.

Is it possible to conduct SMETA audits remotely?

Only Desktop Follow-up Audits can be used for certain corrective actions for which a factory visit is not required and can instead be verified remotely e.g. through photographic evidence or documents provided by email.

How many times does an auditor need to visit the factory?

After the Full Initial Audit which is the first time a factory of employment is audited, there is a sequence of audits that, depending on the client’s code and the results of the full initial audit, might be necessary to be conducted such as a Periodic Audit which is used to monitor supplier sites on an on-going basis; or a Follow-up Audit which is used to check the progress against the issues found in initial audit.

There are three types of Follow-up Audit:

What is the difference between Environment 2-Pillar (shortened) and Environment 4-Pillar (extended)?

Environment 2-Pillar (shortened) is within the scope of mandatory 2-Pillar SMETA Audit. This is not a full environmental assessment but a check on basic systems and management approach. In this assessment, suppliers must comply with the requirements of local, national, international laws related to environmental standards and should be aware of and comply with their end client’s environmental requirements.

Environment 4-Pillar (extended) on the other hand, takes 0.25 audit days but it’s not a full environmental audit. It’s an assessment process which will support the reviewer in deciding if a full environmental audit is necessary.

How are the results of SMETA audit classified?

By default, or unless client has special requirement, no indication about the severity of non-compliance would be shown in the report which means that no conclusion, no rating score, no “Passed” or “Failed” result would be provided for SMETA report, neither of certificate. Client would make the call about the audit result based on the finding during audit.

Also, there will be no expired date for the SMETA report, and client decides the period of validity with their own criteria. Most clients sets one year as the validity period to perform annual audit.

Is it required to notify the supplier about the SMETA audit?

Depending on the outcome of risk management and/or audit planning, there are three possible audit notification types:

What are the changes and improvements in SMETA 6.1?

Some of the news features in SMETA 6.1 include:

How much does a SMETA Audit cost?

V-Trust, as a SEDEX member with a Sedex Affiliate Audit Company (ACC) account, is fully qualified to conduct SMETA audits for overseas buyers and local suppliers and the cost for such service is USD498 per audit (all-inclusive) in all major manufacturing clusters of China, India, and Vietnam. The costs for audits in other regions is USD 598 per audit (all-inclusive).

V-Trust’s Advantages

Don’t get in a bind working with the wrong factory, paying a down payment to a company that you know little to nothing about. Set a strong foundation for your business by building business relationships with the right suppliers. We hope to work with you, providing you with reliable information before you begin your next import project.