V-Trust has a solid and long history in providing supplier evaluation for overseas buyers and local suppliers including 2 & 4 Pillar standardized SMETA audit reports as well as SMETA training which enclose every single aspect of SEDEX four pillars of Labour, Health and Safety, Environment and Business Ethics for retailers, consumer brands, private labels, and buyers willing to have a comprehensive assessment on their suppliers in China, India, and Vietnam.
Find out how V-Trust’s SMETA Audits can verify whether your suppliers are in compliance with ethical trading protocols.
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:
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:
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.
All the above aspects, plus:
| Pre-Audit | |
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Step 1: Select a reliable audit company that is based where your suppliers are located. |
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Step 2: Encourage your suppliers to share any existing audits with you. |
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Step 3: Prioritize supplier sites for audit and define the requirements for the audit. |
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Step 4: Select and share audit company contact details with your suppliers. |
| During-Audit | |
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Step 5: Opening meeting with management. |
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Step 6: Site tour, interviews and document review. |
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Step 7: Closing meeting and review of Corrective Action Plan Report. |
| Post-Audit | |
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Step 8: Read the audit report and check findings/non-compliances raised. |
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Step 9: Support each supplier to meet the completion date for corrective plan actions. Follow up with the supplier if necessary. |
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Step 10: Check if the corrective actions added have been verified by the auditor (run reports on Sedex Analytics). |
10 Steps to take when you have an audit scheduled:
| Pre-Audit | |
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Step 1: In your account on Sedex Advance, complete your Self-Assessment Questionnaire (SAQ). |
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Step 2: On Sedex Advance, share your SAQ with the audit company. |
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Step 3: Read the pre-audit information sent by the audit company. |
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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 | |
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Step 5: Opening meeting with management. |
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Step 6: Site tour, interviews and document review. |
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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 | |
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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. |
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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. |
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Step 10: If necessary, complete a joint derogation form on certain non-compliances as deemed appropriate. Schedule a follow up audit if needed. |
9 Steps to take when auditing a new client:
| Pre-Audit | |
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Step 1: Share the audit process with the client. |
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Step 2: On Sedex Advance, accept the Audit Upload Request the client has sent, review Self-Assessment Questionnaire (SAQ). |
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Step 3: On Sedex Advance, research any previous audits and Self-Assessment Questionnaire (SAQ). |
| During-Audit | |
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Step 4: Opening meeting with management. |
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Step 5: Site tour, interviews and document review. |
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Step 6: Closing meeting and review of Corrective Action Plan Report. |
| Post-Audit | |
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Step 7: On Sedex Advance, upload the Audit onto Sedex Advance and submit to the client for review. |
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Step 8: On Sedex Advance, verify Corrective Actions. |
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Step 9: If necessary, schedule a follow up. |
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.
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.
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:
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.
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.
Depending on the outcome of risk management and/or audit planning, there are three possible audit notification types:
Some of the news features in SMETA 6.1 include:
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).
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.