Social Accountability International (SAI) Ten Year Report by Joleen Ong

Social Accountability International

10tH AnnivErsAry rEPort

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1 2 3 4 5 1997

Council on Economic Priorities Accreditation Agency (CEPAA) incorporated in May as an affiliate organization of the Council on Economic Priorities (CEP). CEP was founded in 1969 by Alice Tepper Marlin to research corporate social responsibility throughout the globe. CEPAA specifically addresses the implementation of voluntary codes to support corporate social responsibility SA8000 standard drafted; accreditation and certification protocols developed; Guidance Document undertaken; SA8000 field tested in U.S., Mexico, and Honduras. SA8000 standard published in October; Advisory Board meets

1998

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CEPAA accredits first organizations to audit for compliance to SA8000 Guidance Document drafts distributed to more than 200 NGOs, trade unions and companies throughout the world CEPAA conducts 3 pilot audits on agriculture to extend the scope of SA8000; to research, consult on and write a supplement to the SA8000 Guidance Document for agriculture 1st accredited certification body 1st SAI accredited auditor training course 1st factory facility certified to SA8000 8 facilities certified by year end Guidance Document meetings and consultative workshop International Accreditation Forum meeting in Guangzhou

1999

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SA8000 Guidance Document issued Signatory Membership program launched for companies with large supply networks 1st Consultative Workshop held in Sao Paolo, Brazil in June 1st Annual CEPAA Conference held in Brussels, Belgium: “Managing Workplace Practices in the New Era of Social Responsibility” 1st accredited course provider 30 facilities certified by year end Business Principles for Countering Bribery Steering Committee convened by SAI and Transparency International (TI) with funding from Open Society Institute

2000

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1st SA8000 Suppliers Conference: “Social Accountability & Business Excellence SA8000” in Hong Kong SA8000 Standard review begins The United Nations Office of Project Services (UNOPS) becomes the newest Signatory member of the SA8000 Corporate Involvement Program CEPAA changes its name to Social Accountability International (SAI) to reflect the global growth of the SA8000 standard 1st supplier training 37 facilities certified by year end SAI receives $1.6 million in grants from the U.S. State Department and the Ford Foundation for projects including supplier and worker training on workplace standards

2001

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Social Accountability International. The First 10 Years.

Transparency International (TI) and Social Accountability International (SAI) issue draft “Business Principles for Countering Bribery” for public consultation Deborah Leipziger, the former European Director for SAI publishes a new book: “SA8000 – The Definitive Guide to the New Standard” Worker training program launged in partnership with the International Textile, Garment, and Leather Workers’ Federation (ITGLWF) SAI hosts a consultation roundtable on working hours in China First revision of SA8000 standard issued in December-changes include expansion of scope of the standard to cover homeworkers and periodic overtime as part of a collective bargaining agreement 76 facilities certified by year end

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6 7 8 9 10 2002

SAI Guidance Document under revision Supplier trainings convened in India, Peru, and Sri Lanka SAI presents Corporate Conscience Awards to Avon Products Inc. (USA), Prem Durai Exports (India), and Switcher SA (Switzerland) for the SA8000 Implementation Award; Shaklee (USA) for the Environmental Stewardship Award; Hewlett Packard (Brazil) and Tomra Systems (Norway) for the Innovative Partnership Award. The Overall Corporate Responsibility Performance Award given to Co-operative Bank Expanded SA8000 Corporate Involvement Program launched to help businesses and organizations assess SA8000 as the workplace standard in their facilities Signatory Member Avon, is ranked #10 on Business Ethics 100 Best Corporation Citizens List Social Accountability in Sustainable Agriculture (SASA) conducts pilot audits 162 facilities certified by year end Kenya Human Rights Council publishes book on Del Monte, Kenya - SA8000 compliant case study 26 meetings in different Indian cities convened by the Textiles Committee (Ministry of Textiles, Government of India), to support industry certification to SA8000, ISO14000 and ISO9000

2003

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SAI signatory member Eileen Fisher issues its first Social Accountability Progress Report. Becomes the first US retailer to earn SA8000 certification Navy Exchange Service Command (NEXCOM) sets September 1 deadline for suppliers of private label and imported merchandise sold in military exchanges to comply with a new “Policy of Social Responsibility and Labor Standards. ”SA8000 certification is one of three examples cited as preferred evidence of compliance Chiquita Brands Intl. Inc. achieves SA8000 certification of Costa Rica banana farms. Named one of SustainableBusiness.com’s top 20 sustainable stock picks. Local governments in the Italian region of Umbria give preferential contracts to SA8000-certified firms SAI enters a contract with InterAction to launch pilot projects designed to place external accreditation procedures for all InterAction member agencies that undertake child sponsorship programs. Such agencies include Childreach/ Plan International, Children International, Christian Children’s Fund, Save the Children and World Vision. 310 facilities certified

2004

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SAI recognized by Scientific American magazine as a Policy Leader in Manufacturing in the 2004 “Scientific American 50” Worker-Manager Training launched in China; leads to the direct election of worker representatives in China, held in October SAI updates its Corporate Involvement Program to provide a broader range of benefits to corporate members SAI subcontractor in $2.5 million grant from the US Agency for International Development (USAID), for a major multidonor, multi-stakeholder alliance that aims to improve labor standards in apparel and textile factories throughout Central America. The initiative is called Continuous Improvement in the Central American Workplace (CIMCAW) SAI selected by the German Technical Cooperation (GTZ) to serve as the facilitator for a series of roundtables hosted by the GTZ and the Vietnam Business Links Initiative, focusing on health and safety training in footwear factories in Vietnam 572 facilities certified

2005

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SAI joins a collaborative effort called the Joint Initiative on Corporate Accountability and Workers Rights (Jo-In) to explore cooperation between the organizations and facilitate shared learning on voluntary codes of labor practice Certifications to Private Voluntary Organization (PVO) standards awarded by ITS and CSCC to five child sponsorship agencies in SAI-Interaction project San Matteo S.p.A. becomes the second winery to be SA8000 certified SAI and ITGLWF develop training curriculum for worker representatives in China 763 facilities certified by year end

2006

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2007 AND BEYOND...

SAI certified by the International Social and Environmental Accreditation and Labeling Alliance (ISEAL) as being compliant with the ISEAL Code of Good Practice for Setting Social and Environmental Standards SAI and fellow ISEAL member Forest Stewardship Council initiate and conduct a pilot project to address issues in chain of custody audits SAI launches the Factory of the Future program to help New York City apparel manufacturers link better management, productivity and social compliance to competitive production CIMCAW trainings conducted in Guatemala, Nicaragua, El Salvador, Honduras, and the Dominican Republic The number of SA8000-certified companies surpasses the 1000 mark; 1038 facilities are certified as of June 2006, 1200 certified by the end of the year SAI President Alice Tepper Marlin receives the Ashoka Award for Social Entrepreneurship

• The Medak District Collector’s office in India becomes the first governmental entity to receive SA8000 certification • The Business Social Compliance Initiative (BSCI) revises its Code to better conform to the SA8000 standard • SAI and Solaridad complete a trial spinning of certified organic and fairtrade cotton in China, as part of the Made-by Project • Pakistani government launches national project to increase awareness and encourage adoption of SA8000 •Under a large grant from US Department of Labor, SAI launches Project Cultivar to improve labor standards in agriculture in Central America.

L etter from the president and C E O

am delighted to celebrate the remarkably diverse group of people and institutions committed to dramatically improving workplaces worldwide who pioneered SAI’s first decade and will share our journey into our second one. Inside you will hear voices informed by experience and insight. They will share their knowledge and perspectives on what it really takes to provide decent work and a productive work environment, and about the benefits you can expect as a result. These are the voices of: ■■ Workers and managers of farms and factories implementing the SAS8000 standard and putting in place an advanced industrial relations system. ■■ Multi-stakeholder alliance partners working with SAI to embed a culture of compliance in their community, sector and nation. ■■ Italians and Chinese, Indians and Peruvians, North Americans and Europeans, in social dialogue. ■■ Trade unions and global retailers, forging sustainable solutions to seemingly intractable problems, on a scale that can make the crucial difference. ■■ SAI board members, guiding our policy and our administration. ■■ Supply chain compliance managers and progressive governments offering concrete incentives for earning certification to SA8000. ■■ Academics testing impact and exploring new approaches. ■■ SAI staff and trainers offering practical and effective tools and systems.

Development agencies and government supporting high leverage, innovative public private partnerships ■■ Signatories and corporate program participants applying the SA8000 system to achieve the global scale necessary to make the dramatic changes consumers increasingly expect and demand. And beginning to ask tough questions about purchasing practices. ■■

We invite your voice, sharing your questions, your experience, your knowledge, and your best practices. We are all stakeholders, and together we face challenges at the complex intersection of human resource management, empowerment, supply chain management and workplace accountability. SAI’s conferences, stakeholder meetings, public comment processes, and training programs provide a forum for discussion on fundamental issues, new ways to improve and sustain responsible workplaces, and practical tools to assist you and your organization as you addresses these challenges. Spring of 2008 will be our next strategic planning session. We welcome your questions, your advice, and your challenges. We resolve to listen, and will take new steps to advance worker rights and good human resource management. We hope you find our work and strategy both insightful and constructive. We hope too that you will join us, as a Signatory member, Corporate Program participant, NGO or individual supporter. Best wishes, Alice Tepper Marlin President

• SOCIAL ACCOUNTABILITY INTERNATIONAL •

L etter from the chairman O F S A I ’ s B O A R D O F D I R E C T O R S

AM PROUD to be associated with Social Accountability International. My first

SAI’s finances, the professionalizing of the financial functions under Richard Cook, and

involvement with SAI was while I was First Deputy Comptroller of New York City.

the diversification of SAIís funding sources. It is clear that SAI is significantly improving

The Comptroller’s Office had played a critical role in a variety of social responsibility areas.

working conditions and furthering economic democracy in many parts of the world. This

When SAI was formed we recognized the initiative’s importance and the professionalism of

has been accomplished through persuasion, negotiation, participation and training. All SAI

Alice Tepper Marlin and Eileen Kaufman. Hence, we joined the Advisory Board, a Board

staff should be proud of their role in this effort.

that was unique in both having corporate, labor and NGO stakeholder participation and played a significant role in formulating SAI policy decisions.

In our first decade, SAI has helped frame the workers’ rights discussion and helped hundreds of thousands of workers. In the coming decade, I am certain

After I retired from government service, I accepted an invitation to join the Governing

we will expand greatly our activities in terms of countries, companies, factories and work-

Board, then becoming the chair of the Finance Committee and then the Chair of the

ers. My congratulations to Alice, Eileen, and the entire SAI staff.

Governing Board. I have witnessed and to some extent participated in the stabilizing of

Sincerely, Steve Newman, Chairman of SAI Board of Directors

MISSION L etter from the first chair M A N of S A I ’ s A dvisory B oard

Lorem ipsum dolor sit amet, consectetuer Praesent sed with orci an ac lorem As pellentesque fringilla. fringilla tellus. utitmetus. Pellentesque idealistic, altruistic and Duis in theporttitor end realistic as we may haveSed been, was obvious that we RETROSPECTIVE. SAI remains very near adipiscing and dear to elit. my heart. It started sit amet orci ornare Cras in and est. that Fusce scelerisque facilisis a, eleifend non,ofnisl. Nunc congueAauctor dolor. to havevitae, corporate buy-in and the trust unions and NGOs. formidable task, but ideal ipsum that all non people have a rightscelerisque. to the best life thatgravida they canest attain no dolor person,ante,needed Quisque enim. Nulla ullamcorper euismod augue. vel pede ac turpis ultrices accomplished. interdum. Nam metuswere sodales justo viverra vehicula.and Uteven in elit sed diam Ourvel meetings at times loud, argumentative humorous. We all organization or government should be allowed to deny thatDonec basic right. rhoncus ornare. Maecenas blandit. Praesent at erat in felis interdum auctor. Sed varius, augue pulvinar sodales, est enim ultrices neque, vitae felis thought we quis had the right stuff, so it was very important that we had on nonummy every occasion conTen years ago SAI was created to support and promote this ideal through the development est id pede. Maecenas vel libero. Aliquam et libero. Proin erat tellus, laoreet eu, ornare quis, vel, arcu. sensus andtempor not a mere majority. Suffice to say that we struggled and at times seemed unable of a standard called SA8000. It was created specifically to champion the rights of workers globally and to decrease and eventually extinguish the exploitation of workers especially of children who had no voice. This goal was accomplished by the creation of a principled standard called SA8000, under the leadership of Alice Tepper Marlin. Because of her esteemed reputation, she was able to attract an eclectic group of people representing all the affected groups, namely, major corporations, suppliers (large and small), NGOs, unions, lawyers and some members of human rights organizations. They formed Social Accountability International and worked tirelessly to forge the standard, going through several drafts and months of work, making sure that all segments of this coalition had strong input into a document that would be its raison d’etre. This eclectic group realized that it had to become sanctioned and approved for global credibility and to garner the financial resources necessary to be effective. It won international approval, with the leadership of SAI’s Board of Directors, Board of Advisors and officers. The intent of the organization was to introduce SA8000 as a standard associated with a certification that could only be awarded by undergoing and passing a social accountability audit based on meeting all elements of the standard. There were annual global conferences to educate all spheres of influence, to recruit corporations as members and contributors and to partner wherever possible with organizations sharing the same purpose. To that end very early in its existence, SAI was successful. SA8000 became the globally accepted standard.

to have the effect we thought necessary. However, we saw that the need was too important and failure was not an option; so we forged ahead on many fronts, including globalizing the product primarily through major corporations corporations and large supplier groups, leading them and their suppliers be audited,, then to implement whatever improvements it took to come in to compliance with SA8000, inviting government representatives to attend meetings and to learn how to get their support for funding. It was a very difficult time, but a very exciting time. We were full of implementable ideas, but very short on funds, we were exploring territories that were seemingly inexplorable. We attracted competitors, especially those who thought an easier standard would be more palatable to global corporate. We traveled far and wide to roll out SA80000 and though acceptance was slow, it came. We stood our ground and won. It has been ten years since SAI’s inception and if you go to the website you can see the progress that has been made over this period. Even a power like China where labor practices were once hidden is now on everyone’s radar and I think it is in no small part to the role played by SAI.

SAI believes that we can have a better, more humane world and I am proud to have been a small part of it. Congratulations on ten years and growing stronger. With warm affection, Fitzroy Hilaire

• 10 YEAR REPORT •

PART I > ENVISIONING CHANGE

Accountability International (SAI) is a multi-stakeholder non-profit organization dedicated to human rights at work, O U R M I S S I O N Social improving workplaces and communities through social responsibility standards, providing training and technical assistance, and mobilizing brands, consumers and all stakeholders for decent work in every corner of the globe. SAI links NGOs, trade unions, companies, individuals and governments to work for a better world through their purchasing, employment and investment activity.

SAI developed one of the world’s preeminent management systems and social standards — SA8000. SAI and SA8000 provide tools, guidance, training and technical assistance to advance the human elements of SA80000. SA8000 strives to recognize the equal dignity of each person involved — from the worker to the retailer to the consumer.

SAI convenes stakeholders — companies, non-governmental organizations (NGOs), trade unions and governments— to carry out research, training and technical assistance programs.

“SAI and the SA8000 Standard are an important complement to the international labour conventions, adding to the credibility of those campaigns that sign up and go the extra mile as responsible employers. SA8000 incorporates freedom of organizing and collective bargaining to establish the workers as social partners of their employers. As the largest global union, UNI recognizes the important role of SAI and is committed to participating actively in its work.” – Jan Furstenborg, Union Network International and Member of both SAI Advisory Board and SAI Board of Directors

RESEARCH AND DEVELOPMENT • Provide Guidance documents that explain how to achieve SA8000 compliance • Create special Guidance tailored to industries or regions • Update the SA8000 standard • Coordinate the open drafting and revising of auditable social standards • Convene multi-stakeholder roundtables to review auditing challenges and share best practices

Training and Technical Assistance • Train workers in realizing their rights in the workplace • Deliver training in SA8000 and SAI systems to organizations • Develop and deliver specialized professional development training to help producers move toward SA8000 • Partner in specialized training for all parts of the supply chain – from the producer to the brand to the retailer

Outreach and Alliance Building • Host joint events for companies, trade unions, NGOs and governments • Conduct pilot audits and regional workshops • Harmonize various social, environmental, and ethical standards through mutual recognition, joint programs and shared training • Offer participation at SAI conferences to all stakeholders and interested parties

• Provide SA8000 certification information to help concerned consumers identify and purchase ethically sourced goods and services. • Participate in research programs that focus on documenting sourcing and sales improvements from the ethical supply chain • Contract with Social Accountability Accreditation Services (SAAS) to accredit qualified certification bodies to certify facilities that meet SA8000 requirements

Corporate Programs • Operate comprehensive programs to help companies and individuals meet the social responsibility expectations of investors, consumers and supply chain partners • Provide technical assistance to companies in the development of an ethical supply chain • Generate awareness of corporate social compliance through SAI website, publications, partners and other channels

SAAS: AccReditation SAI contracts with Social Accountability Accreditation Services (SAAS) to accredit qualified certification bodies to certify facilities that meet SA8000 requirements. SAAS: • Provide accreditation services for SA8000 • Partner with InterAction to manage accreditation and certification to Child Sponsorship Standards for NGOs • Define training and experience

Promoting the Human Rights of Workers Around the World

SOCIAL ACCOUNTABILITY INTERNATIONAL In our first decade, SAI has developed an array of actions all geared towards working with companies, trade unions, NGOs and governments to achieve more socially responsible employment practices and human resources delivery around the world.

• Analyze the relationship between good employment practice and the bottom line • Make data available for research on CSR • Provide best practice case studies • Participate in ISEAL to set highquality standards for global accreditation agencies and standard setting bodies

• Conduct worker-manager training programs • Facilitate the delivery of technical assistance to companies with a focus on combining industry-specific and social compliance expertise

• Inform the public about SA8000 and social accountability systems, national labor laws, ILO conventions and human resource management systems • Work with companies to generate public awareness of their commitment to SA8000 • Provide open complaint system to increase likelihood of early detection and efficient resolution of workers’ problems

• Assist in promoting SA8000 certified suppliers to potentially interestedbuyers and assist buyers to identify low-risk SA8000 certified suppliers • Conduct detailed assessment of company internal operations, supply chain and related management systems

qualifications for auditors • Publish information on accredited certification companies • Provide an open complaint system on certification and accredited certification companies

E nvisioning C hange : H ow W e G ot S tarted History During the 1990s, as customers became concerned about the conditions under which their clothing was produced, hundreds of businesses drafted codes of conduct describing the appropriate workplace conditions for goods they manufactured or purchased. Many producers were presented with an inconsistent array of requirements from different customers. Producers, customers, consumers, and investors alike were confused.

This organization was founded by the Council on Economic Priorities (CEP), the 30-year-old corporate social responsibility research organization best known for its best-seller book “Shopping for a Better World”. CEP’s highly respected comparative studies of corporate social responsibility in the United States triggered the initiative. SAI published SA8000 in 1997 after field testing it and its verifiability in three countries.

Studies in the mid-1990’s showed that many codes did not include key International Labour Organization (ILO) or UN human rights conventions nor a management system to provide the basis for an industrial relations or human resources system and the documents needed to enable reliable auditing. Very few were verified. A group of concerned stakeholders was determined to address this situation — to seek to implement internationally and embed organizationally credible human rights standards. Together with the Council on Economic Priorities (CEP), they established SAI to define and verify implementation of ethical workplaces.

During 1997, SAI also developed procedures for accrediting certification organizations—based on existing systems for certifying compliance to international standards ISO 9000, ISO14000, Forest Stewardship Council (FSC), and organic standards. Such an accreditation program is designed to address the need for consistency in audits from site to site and country to country, and to define criteria for adequate investigation and corrective action –remediation—processes. In 2007, the accreditation agency was spun off to become Social Accountability Accreditation Services (SAAS). SAAS provides accreditation services for SAI, InterAction, and the Business for Social Compliance Initiative (BSCI).

The group had learned that business codes of conduct need to be carefully based on international norms and linked with independent verification of compliance. In 1996 the SAI Advisory Board came together to work on this issue and develop SA8000 — a standard based on international norms, not on the regulations or system of a single country, NGO or corporation, combined with the labor law of the country where a workplace is located; simultaneously a verification system based on the widely used international methodology of the International Organization for Standardization (ISO). From the start, there was determination to not reinvent wheels but instead to build on the knowledge and communality of the international human rights, labor rights and verification communities.

Since its formation, SAI has worked cooperatively with stakeholders to improve the social performance of organizations around the world. The direct result is a better workplace for hundreds of thousands of people around the world and a way for consumers to be informed about the workplace quality of the companies whose products they purchase. We seek to enable customers—both wholesale and retail—to include workplace quality as a criterion in purchasing. Certification is a useful way of providing information that the range of issues included in SA8000 are complied with.

notes from some of sai advisory board members : “My work with SAI, from its very beginning, has been driven

needed to achieve sustainable compliance with internation-

We have chosen the SA 8000 Standard as an effective tool to

by a need all of us in the CSR world share – to improve the

ally recognized human rights and labor rights norms. So in

defend workers’ rights and because it presupposes a 3d party

daily work lives of all workers in every industry, all over the

pioneering this approach, and proving it can work, SAI set

certification, an important guarantee for our consumers and

globe. I was aware then and am now that the road we have

an important precedent.”

all our stakeholders. We accepted the invitation to participate

taken is a very necessary one towards that goal. What gives

- Morton Winston

on SAI’s Advisory Board because for us it’s very important to

me the most satisfaction ten years on is that SAI has proven to

The College of New Jersey

disseminate values, and we liked the idea of working with the

be the vehicle that has had the most impact, engendered the

group and not just being certified. SAI’s greatest achievement

highest level of respect and displayed the most consistent adher-

“SA 8000 is a comprehensive standard. It has helped in im-

in the last decade has been to disseminate awareness on human

ence to and expansion of that goal than other initiatives have

proving upon some gaps within our own systems. It has been

right at work and the spread of the Standard itself. It wasn’t

seemed to manage. Being part of that quality level, when our

particularly useful when it comes to streamlining and aligning

easy at the time to assume that a more innovative but com-

goal is so intrinsically rooted in increasing the quality of work-

contractors to our value systems which we have adhered to for

pletely voluntary standard could be welcomed and accepted not

ers’ lives, has been enormously gratifying.”

a long time. And all this is becoming more and more relevant

only by specialists of this sector but also by local and national

and useful with the increasing scale and complexity of out-

Institutional Bodies.

sourcing across the supply chains.”

Coop ACCDA and Coop Italia

- Dorianne Beyer

National Child Labor Committee

- Kishor Chaukar

“As Chair of the Amnesty International (AI) USA Board of

Tata Group/ Tata Council for

Directors from 1995-1997, I participated in a conference

Community Initiatives

from which emerged AI’s “Human Rights Principles for

- Marisa Parmigiani and Lara Tolomelli

By joining SAI’s multi-stakeholder advisory board, Eileen Fisher, Inc. contributed to the development of SA8000,

Companies: An Introductory Checklist” that was among

“In 1998 there were a lot of protests against child labour

thereby ensuring that companies of any size could benefit

the first set of guidelines developed for human rights and

used for making products. I was setting up a code of

from SA8000 for their own workplaces and those of their

business. By working with SAI in developing the SA8000

conduct for all suppliers (of WE International’s 300 shops).

suppliers. SAI has raised the bar on what “social compli-

standard and the associated social auditing and training

Soon I found out that our buyers had no time for control

ance” is all about. SA8000 is not simply a code of conduct

systems, I felt I could have a more direct impact on the

and were not capable enough to do that besides their own

to be hung on a wall. It is a dynamic, systemic, people-ori-

lives of workers, by helping to ensure that they enjoyed

work. Then I discovered the SA8000 system and WE

ented process that depends on involvement by all – work-

safe and dignified conditions of employment that enabled

International used it. SAI has made manufacturers, traders

ers and managers alike – in order to move toward a more

them to earn a living wage to support themselves and their

and wholesalers and consumers aware that for leading a

democratic, humane workplace.

families. The multi-stakeholder governance model that SAI

good company, managers have to care for:

has employed from the start is, I believe, the only way in

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I.S.O. 9000 for quality of the articles and work,

which norms governing the conduct of companies will ever

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I.S.O. 14000 for avoiding environmental

Dole’s cooperation with SAI began in 1998, when SAI started

problems,

carrying out SA 8000 pilot audits in the agricultural sector,

SA 8000 for improving working conditions

including on Dole’s farms. One year later, Dole joined SAI’s

become established practice. Neither government regulation alone, nor external pressure from NGOs and the media,

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although they are also important, can bring about the inter-

nal changes within the business community and culture

Corporate Social Accountability

- Frits Nagel

- Amy Hall, Eileen Fisher, Inc.

Corporate Program as a Signatory. And, in 2000, our Company became the first agricultural company to receive SA 8000 certification for our then owned production center in Spain.

• 10 YEAR REPORT •

- Sylvain Cuperlier, Dole Food Company

PART 2 > DRIVING CHANGE: HOW WE WORK

MISSION Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Praesent sed orci ac lorem pellentesque fringilla. Duis porttitor fringilla tellus. Sed ut metus. Pellentesque sit amet ipsum non orci ornare scelerisque. Cras gravida est in est. Fusce dolor ante, scelerisque vitae, facilisis a, eleifend non, nisl. Nunc congue auctor dolor. Quisque enim. Nulla ullamcorper euismod augue. Donec vel pede ac turpis ultrices interdum. Nam vel metus sodales justo viverra vehicula. Ut in elit sed diam rhoncus ornare. Maecenas blandit. Praesent at erat in felis interdum auctor. Sed varius, augue quis pulvinar sodales, est enim ultrices neque, vitae nonummy felis est id pede. Maecenas vel libero. Aliquam et libero. Proin erat tellus, laoreet eu, ornare quis, tempor vel, arcu.

> SETTING HIGHER STANDARDS

Building on its years of experience in the field, SAI works to set the bar higher for the growing network of voluntary standards. It convenes stakeholders to build and continually refine consensus-based ethical workplace and other social accountability standards, and works to ensure that implementation adheres to the highest principles and spirit of human rights at the heart of these standards. Both workers and managers need to understand them and use them as a routine part of their jobs.

the decade since SAI got its start, the idea of applying corporate social responsibility to suppliers globally, as well as in a company’s own operations, has become part of daily business and civil parlance. It is embedded in the consumer landscape. As the ethical treatment of workers around the world has become both a social and business imperative, codes of conduct, multistakeholder codes and other voluntary social standards are increasingly recognized and adopted as instruments of social change and business risk management.

SA8000 Elements The elements of SA8000 cover key needs for a sustainably ethical, humane, and productive workplace. Each is based on well known international rights providing the opportunity for decent work--the topics which one expects to find in a standard promoting workers’ economic and human rights. The nine sections of SA8000 are intimately interrelated—e.g. adult pay with child labor, health and safety with freedom of association. Think about forced labor. If an employer holds your identity or travel documents, you are constrained from protesting or leaving inhumane conditions.. The correlation between accidents and working hours are well documented: the incidence of industrial accidents rises rapidly as the work week exceeds 60 hours.

To measurably and positively impact the lives of workers and their families, these codes and standards must be not only rigorous, but also operational and verifiable. SA8000 set a high benchmark that other codes have emulated or have been revised to meet. It represents a major breakthrough: it was the first auditable, certifiable labor standard, designed to be sufficiently specific to be used to audit companies and contractors alike in multiple industries and countries, and conducive to a system of independent, third-party verification. Based on conventions of the International Labour Organization and the United Nations, and on national laws, SA8000 creates a common language for measuring social compliance. It is an auditable standard that is practical both for internal management and for certification. It is a benchmark against which organizations —factories, farms, even government agencies—can measure their performance and communicate to the public and to their customers that they measure up.

• SOCIAL ACCOUNTABILITY INTERNATIONAL •

Child labor, wages, hours Parents do not send their children to work unless the family needs the money urgently. The SA8000 requirements that adults be paid in a regular work week enough to meet their basic human needs and that hours be limited addresses this root cause of child labor and facilitates family life, education, and investment in human capital. Freedom of Association and the right to collective bargaining An SA8000 workplace is one where workers know and exercise their rights, where their concerns are systematically heard and responded to. The commitment to implementing SA8000 is a commitment to this mature model of industrial relations. A more collaborative workplace, where the skills and knowledge of all are valued and harnessed will be more productive and satisfying, not only more productive for employers but also more satisfying for workers. This organization will better retain staff — saving training and recruitment costs — will enjoy better product quality and will reap customer satisfaction.

Many of the nuts and bolts of sustainability also are addressed in the SA8000 management system requirements. These processes, for worker freedom to speak, associate and raise concerns, are basic. They serve to balance competing interests. There are often dangers to those who speak out about working conditions. The provisions of SA8000 provide for consultation, complaint response and openness to worker dialogue and association, and they emphasize the worker’s right to speak and to organize without fear of reprisal.

Management Systems The management system assures that policies and procedures for sustainable enterprises providing decent work are embedded in business practices. As a result, ethical practices will be purposeful, tracked, and built into daily work, into personnel evaluations and into procurement policies. They are institutionalized and systematic rather than reflecting only the values or behavior of an individual manager or owner. Social Dialogue In a June 2007 report at the International Labour Conference , the annual meeting of the member states of the International Labour Organization (ILO), the Committee on Sustainable Enterprises listed Enterprise-level principles for sustainable enterprises: 1. social dialogue and good industrial relations; 2. human resource development; 3. conditions of work; 4. productivity, wages and shared benefits; 5. corporate social responsibility; 6. corporate governance. It also cited the four key roles of social partners in the promotion of sustainable enterprises: advocacy, representation, services, implementation of policies and standards.

• 10 YEAR REPORT •

The SA8000 system is constantly evolving, in response to changing conditions on the ground, lessons learned, and the input of stakeholders. SA8000 Standard Revision The SA8000 Standard itself is revised periodically in an extensive multi-stakeholder consultative process. The original version of the Standard was reviewed and revised in 2001; that version is under review in 2007, with publication of SA8000:2007 scheduled for December, 2007. SAI elicited input on the text of the Standard from certification bodies, auditors, NGOs, academics, unions, companies and other interested stakeholders, during two rounds of public comment. The revised draft is now in an expert consultation period, under the leadership of Morton Winston, Chairman of the Advisory Board Committee on Standard Revision and Program Director Judy Gearhart. The Standard is revised according to procedures which have been reviewed by the International Social and Environmental Labelling (ISEAL) Alliance and certified compliant with the ISEAL Code of Good Practice for Setting Social and Environmental Standards. The Code emphasizes the importance of transparency, periods for public comment and complaint mechanisms in the process of drafting standards, and diligent efforts to seek input from those who might have difficulties accessing international debates and forums. Guidance Document An important aspect of the SA8000 system is our Guidance Document. First published in 1998 and updated in 2004, the Guidance Document is a reference guide for a wide audience – those seeking to audit or attain compliance with SA8000, and anyone interested in learning about how the SA8000 verification system works in the field.

The Guidance Document acts as a field guide. Auditors pay close attention and follow it. Managers use it to guide companies adopting the SA8000 system. It serves as a teaching tool for managers, workers, trade unions and NGOs. The Guidance does not impose additional requirements to those in SA8000. It builds on the elements of SA8000 with methods, context and techniques – featuring sections on Standard requirements and interpretations, background information and case studies, and auditing issues, tools and techniques, such as tips for conducting effective worker interviews and engaging local NGO and trade union representatives. Like the Standard, the Guidance is thoroughly researched and amended periodically through an open consultative process. For development of the first two editions (1999 and 2004), multi-stakeholder, regional Consultative Workshops were convened in Brazil, Hungary, China, the US, the Philippines, and Honduras to discuss issues involved in implementation of SA8000. For those consultations, we are grateful for the support of several foundations, including the Open Society Institute, the MacArthur Foundation, the General Service Foundation, and the Rockefeller Foundation, and to the U.S. Department of State’s Bureau for Democracy, Human Rights and Labor. Discussions at those meetings provided crucial input to the 50+ person multi-stakeholder committee which commented on and contributed to the text. The input of participants also helped identify improvements for the 2001 edition of SA8000. New Guidance will be developed in 2008-9 to reflect changes in SA8000:2007 and to incorporate learning from the field since 2004.

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The lessons learned from a decade of collaborative research, development and use of SA8000 drive SAI’s work with other initiatives and organizations to improve the drafting, implementation, fairness and wide use of auditable social and environmental global standards:

ISEAL Alliance Code of Good Practice for Setting Social and Environmental Standards

>>How do we know whether a standard reflects stakeholder priorities or is locally applicable? >>Does compliance with a standard result in real social and environmental improvements? >>Do social and environmental criteria constitute barriers to trade or discriminate against developing country producers? In evaluating the effectiveness of the growing number of voluntary standards and consumer labels, these key questions are addressed by the International Social and Environmental Accreditation and Labelling (ISEAL) Alliance in its Code of Good Practice for Setting Social and Environmental Standards, because voluntary standards are effective only in so much as they are credible, consistent and verifiable. SAI is a founding member of the ISEAL Alliance (started in 1999), a collaboration of global social and environmental standard setting and accreditation bodies working to improve standards setting and operating practices, “creating a world where ecological sustainability and social justice are the normal conditions of business.” The Code of Good Practice was launched in 2004 after an extensive stakeholder consultation process that included three public comment rounds and an international workshop. Based on internationally-recognized standard-setting procedures developed by the International Organization for Standardization (ISO) and the World Trade Organization (WTO), and adapted to voluntary social and environmental standards, the Code lays out procedures to ensure that organizations create:

■■ ■■ ■■

standards that are developed in transparent, multi-stakeholder processes, certification schemes that consumers can trust, and relevant, high level performance criteria that create genuine social and environmental change.

The Alliance works to put the ISEAL Code into practice through the delivery of training workshops and materials to various interested organizations. The Code is referenced by governmental and intergovernmental guidelines as the measure of credibility for voluntary social and environmental standards. SAI participated in an Alliance peer evaluation of its compliance to the ISEAL Code and made improvements to its standard-setting and operational procedures to meet Code requirements for certification, which are followed in the current SA8000 Standard revision process. SAI President Alice Tepper Marlin serves on the Executive Committee of the Board of ISEAL. You can find more about ISEAL at www.isealalliance.org.

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Jo-In Code While the growing number of codes of conduct and systems of implementation can serve as positive tools for change in working conditions, concern about the proliferation of codes of conduct is widespread. SAI is among the many organizations recognizing the need for code harmonization. At the same time, we must ensure that the highest principles of workers’ human rights are retained, and the utmost rigor applied to monitoring and independent verification.

BSCI Code of Conduct In 2007 the Business Social Compliance Initiative (BSCI) released its revised code, updated to conform in virtually all provisions to SA8000. BSCI is a membership organization initiated by the Foreign Trade Association (FTA) of Europe to monitor and improve social standards at its members’ suppliers, for all consumer goods. Among the 90+ BSCI members are major European retailers Metro, Ahold, Coop Switzerland, Esprit, Hema, ICA, Karstadt Quelle, Kesko, Metro Group, Migros, Otto Group, and WE.

To these ends, in 2003 SAI joined five other organizations—Clean Clothes Campaign (CCC), Ethical Trading Initiative (ETI), Fair Labor Association (FLA), Fair Wear Foundation (FWF), Workers Rights Consortium (WRC)—to launch the Joint Initiative on Corporate Accountability and Workers’ Rights (Jo-In). The Jo-In project is the first effort to bring together key organizations involved in different aspects of labor code implementation and/or campaigning in a collaborative project.

BSCI draws upon SAAS for accreditation expertise and technical assistance. Beginning in 2008, SAAS will exercise oversight on BSCI gap analysis audits through its rigorous accreditation procedures.

In 2005 Jo-In released a draft Common Code for project trials in Turkey and eventual consideration for adoption by each of the six participating organizations after the conclusion of the project. The Common Code incorporated the highest code elements in the code or standard of the six organizations. The drafting process highlighted the many similarities among the six codes, as well as divergences, most notably in provisions for freedom of association, hours of work, and wages. Each organization also had diverging implementation approaches or a management system; summaries of these are attached to the draft Code. Drafting the Jo-In Common Code was an opportunity for the organizations to build mutual understanding, to debate the respective strengths and weaknesses of their systems, and to learn from each other. The initiative is conducting a trial project in Turkey to test collaborative learnings, described in “Building Alliances” later in these pages.

In addition, SAI works together with BSCI to improve the lives of workers through provision of training and technical assistance to selected suppliers. The first such training program began in Turkey in 2007, in cooperation with ITKIB (Istanbul Textile & Apparel Exporters Associations), under a grant from the European Commission. The goal is to provide focused training and technical assistance to assist and encourage participating suppliers to improve their ratings within the BSCI auditing program, first for compliance with the BSCI code, and then to advance for compliance with and certification to the full SA8000 standard. Utilizing the BSCI and SAI tools for corporate social responsibility provides consistency, and a path for factories to advance towards and attain full compliance with SA8000. Some 40 suppliers and 40 subcontractors have already received initial training. Selected highly committed ones will receive more advanced training and technical assistance (TA). Gap analysis audits and self-assessments before and after the training & TA will evaluate the effectiveness of the training and technical assistance. A worker-manager training program may follow in 2009. You can find out more about BSCI at www.bsci-eu.org.

Find out more about Jo-In at www.jo-in.org.

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Private Voluntary Organization (PVO) Standards In July 2005, demonstrating a commitment to NGO accountability, five child sponsorship organizations that are members of the InterAction Alliance were awarded certification of their compliance with InterAction’s established set of governance and performance standards. InterAction is an alliance of humanitarian aid agencies; its 160 members operate in every developing country and receive over $3 billion in private contributions and more than $1.5 billion in government funding each year. In 1992, InterAction members took it upon themselves to self-monitor their activities through a set of standards—known as the PVO Standards-- out of a commitment to aspire to the highest possible performance. Since then, annual self-certification of adherence to the PVO Standards has been a membership requirement. World Vision, Plan International-USA/Childreach, Christian Children’s Fund, Children International and Save the Children developed additional standards for their specific work, incorporated into the broader PVO Standards in 1999. In order to conduct a useful external review by a third-party, consistent, measurable evaluation criteria need to be developed for every standard. The final product is the Child Sponsorship Certification Standards, which were used by the audit teams as an objective guide to assess compliance with these standards by the child sponsorship programs of these five NGOs.

Under the auspices of InterAction, in partnership with SAI, this sub-group completed a five-year pilot project funded by the child sponsorship agencies and the Carnegie Foundation, for external, third-party certification that their child sponsorship programs comply with the PVO Standards. The actual auditing process started in October 2004, after an extensive and documented self-assessment process by each NGO. Accreditation responsibilities for this program now rest with SAAS. This comprehensive certification process included document reviews and site visits at headquarters and at a sample of field offices in a total of 11 countries. Periodic surveillance audits at further field sites verify ongoing compliance. The certification audits were conducted by teams of subject matter experts and auditors from Cal Safety Compliance Corporation of Los Angeles and Intertek, Testing Services of New Jersey. For the two audit firms, additional accreditation requirements were developed and implemented to address the specifics of this class of organizations. This cutting-edge process is, to the best of anyone’s knowledge, the first such accredited certification of compliance to a set of standards by a group of international NGOs. Audit reports were submitted to a multi-stakeholder Certification Review Panel (CRP), which rendered the final certification decision. More information at www.interaction.org and www.saasaccreditation.org.

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Global Reporting Initiative (GRI) The Global Reporting Initiative (GRI) is the multi-stakeholder network of 30,000+ organizations which have collaborated to develop and advance the most widely used sustainability reporting framework worldwide. The GRI Sustainability Reporting Guidelines, centered on the core “G3 Guidelines”, set out principles and indicators for organizations to measure and report their economic, environmental and social performance. Over 1,000 organizations, including many of the world’s leading brands, have adopted the Guidelines. SAI has worked on the process of developing the GRI framework, on the potential inclusion of independent verification of reporting and on the use of the GRI framework as a set of guidelines for organizations to strive towards meeting labor and environmental standards. It has also worked with GRI to define, design and implement reporting requirements in overlapping areas. A goal of the GRI is to harmonize sustainability reporting so that stakeholders can better evaluate performace. SAI’s President Alice Tepper Marlin served on the 60-member multi-sector, multi-national GRI Stakeholder Council from its founding through 2007. You can learn more about GRI at www.globalreporting.org. ISO Working Group SAI serves on the taskforce working group for the development of the ISO 26000, the forthcoming International Organization for Standardization (ISO) guidance on social responsibility. SAI provides technical advice on the drafting of the labor elements of the guidance, and is working to ensure that these elements draw upon as much multi-stakeholder input as possible. You can learn more about ISO at www.iso.org.

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BUSINESS PRINCIPLES FOR COUNTERING BRIBERY With growing public and governmental expectations of greater accountability from the corporate sector, companies must work within increasingly stringent domestic and international regulatory frameworks and address the risks of bribery. Drawing on its expertise in developing multi-stakeholder driven standards and practical tools for accountability, SAI has worked with Transparency International to facilitate and convene a multi-sectoral, multi-national Steering Committee to develop practical guidelines for companies to use as a comprehensive reference for good practice in countering bribery. In 2003, after three years of work, the Steering Committee, of companies, academia, trade unions and other non-governmental bodies, released The Business Principles for Countering Bribery. The Principles emphasize core values of integrity, transparency and accountability, and lay out a framework for organizations to develop effective approaches to countering bribery in all of their activities. The Principles were designed to be widely accessible and applicable, across both public and private enterprises of all size. SAI participated in pre-publication field tests in Europe and Asia, and in various workshops to introduce the Principles around the world The project counts among its funders the Open Society Institute and the Center for International Private Enterprise, SAI Executive Director Eileen Kaufman continues to serve on the Steering Committee. (more information at www.transparency. org)

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PART 2 > DRIVING CHANGE: HOW WE WORK

MISSION > verifying progress

SA8000 has become known around the world as one of the most credible and useful voluntary standards. But how do we ensure that this standard is actually in use and effective? How do workers know and promote their rights in their workplaces? How do companies and producers apply these norms to practical work-life situations and reap the benefits in terms of staff retention, productivity and quality? Once we begin the application, how do we verify progress – ensure that change is substantive, systematic and ongoing?

The SA8000 verification system is a two-tiered system, with several levels of checks and

A certification is valid for three years, swith semi-annual surveillance audits. Certification is a starting

balances. The two-tiers of verification include: external audits of workplaces applying

point for high achievers, not an end. Once certified, regular internal monitoring, corrective action

for certification, conducted by independent certification bodies (CBs) whose reputations

processes, and surveillance audits are required to maintain sustained improvements. Key aspects

are built upon the reliability of their audits and their accreditation; and rigorous audits by

of the certification system are required audit time in worker interviews and auditors’ clear ongoing

SAAS of those CBs in order to determine if they can demonstrate that they are capable

responsibility to review and later to verify corrective action plans and activities throughout the term of

of quality auditing against SA8000, thus qualifying for accreditation. SAI contracts with

certification. Most certifications are determined by committees with an accredited organization, but in

SAAS to serve as its accreditation body for SA8000.

some cases multi-stakeholder panels review audit reports and determine whether certification has been earned. This practice is likely to spread. Similarly, in a number of cases, multi-stakeholder workshops

The checks and balances include: public posting of certifications so that certification

are being conducted to provide auditors with background and context before they do client audits.

users and the public can identify those facilities that have fulfilled the requirements of the standard; an open complaints and appeals system, so that any individual or institution can bring attention to a potentially erroneous certification; and constant review of the auditing process, with ongoing evaluations by independent experts; and regional roundtables to review auditing challenges and share best practices. These roundtables include calibration meetings to promote consistent national and international auditor interpretation of SA8000.

SA8000 Certification

To certify conformance with SA8000, every facility seek-

ing certification must be audited. Thus auditors will consult stakeholders, visit factories, and assess practices on a wide range of issues, include the state of the company’s management systems, necessary to ensure ongoing acceptable practices. Once an organization has implemented any necessary improvements, it can earn a certificate attesting to its compliance with all the elements of SA8000. This certification provides a public statement of good practice to consumers, buyers, and other companies and represents a significant milestone in improving workplace conditions.

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Accredited Certification Bodies as of September 2007 ABS Quality Evaluations, Inc. ALGI Associação Portuguesa de Certificação (APCER) BSI

Accreditation and Social Accountability Accreditation Services (SAAS) Accreditation Assessment of compliance to the SA8000 Standard and the issuance of SA8000 certifications is available only through accredited, independent organizations. A facility wishing to seek certification to SA8000 must apply to an accredited auditing firm, known as a Certification Body. Accreditation is valid for three years, subject to semiannual surveillance audits witnessing performance in the field. Certification Bodies need to be formally accredited to ensure that they consistently, reliably and effectively perform audits and that these audits are carried out in a professional manner. The SA8000 system sets strict standards for accreditation of qualified organizations that certify against SA8000. The accreditation process includes document review, site audits, and observation of audits in the field. Ultimately, recommendation for accreditation is determined by a multi-stakeholder panel from SAAS.

SAAS Social Accountability Accreditation Services has been established to oversee the organizations that conduct certification audits for compliance to SA8000 and the InterAction Private Voluntary Organization (PVO) standards. SAAS audits these certifying auditors by reviewing their procedures and observing their work in the field at least twice a year. Organizations accredited by SAAS are listed on the SAAS website, www.saasaccreditation.org. (This listing, including notice of any suspended accreditations, is continuously updated.) Like other accreditation members of ISEAL, SAAS works to ensure that social certifications are consistently and reliably performed around the world. Only organizations which are accredited and overseen by SAAS have the right to award certification to the SA8000 and PVO standards.

Bureau Veritas Certification CISE (Centro per L’Innovazione e lo Sviluppo Economico) CSCC (Cal Safety) DNV (Det Norske Veritas) Intertek IQNet Ltd. LATU Sistemas RINA SPA (Registro Italiano Nagale Group) SGS-SSC TUV Nord Group (TUV Asia Pacific) TUV Rheinland Group TUV Sud Group (TUV South Asia) UL (Underwriters Laboratories Inc.)

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SA8000 certification is now one of the most recognized and respected systems in producer countries around the world. Since the first factory earned SA8000 certification in May 1998, the number of certifications has grown at least 35% every year. As of June 31, 2007, over 680,000 workers are employed in 1,373 certified facilities, across 66 industries in 64 countries. SA8000 Certified facilities around the world

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Workers Employed by Country Venezuela

Mexico

Estonia

Bangladesh

Portugal

Sri Lanka

United Arab Emirates

Malaysia

Egypt

Romania

Bolivia

Spain

Slovenia

Madagascar

Chile

Poland

Argentina

Thailand

Slovakia

Macedonia

South Africa

Peru

Switzerland

Vietnam

Singapore

Latvia

Mauritius

Korea

Philippines

Pakistan

Russia

Laos

Lithuania

Czech Republic

Israel

Others (certs < 5)

Puerto Rico

Kenya

Japan

Costa Rica

Hong Kong

Brazil

Panama (and Costa Rica)

Jordan

Finland

Colombia

Indonesia

China

Netherlands

Hungary

Denmark

United Kingdom

Greece

India

Nepal

Honduras and Guatemala

Croatia

Turkey

France

Italy

Morocco

Guatemala

Bulgaria

Belgium

Taiwan

Workers Employed by industry

Landscape & Horticultural Services

Consulting

Glass Products

Industrial Equipment

Construction

Pharmaceutical Services

Technology Services

Waste Management

Toys

Medical/ Pharmaceutical

Government

Environmental Services

Jewelry & Watches

Computer Products & Services

Energy

Training Services

Wood Products

Logistics

Building Materials

Metals & Mining

Industrial Services

Electrical Equipment

Furniture

Lighting

Metals

Safety & Medical Equipment

Hotel Services

Appliances

Plastics

Transportation

Education

Rubber and plastic products

Sporting Goods & Equipment

Social Services

Food

Telecommunications

Staffing

Financial Services

Accessories

Electronics

Insurance

Leather

Paper Products/ Printing

Automotive

Others (employees < 3000)

Machinery

Diversified Services

Tobacco

Business Services

Footwear

Tourism & Recreation

Health Services

Cosmetics

Metal Products

Textiles

Gaming Activities

Security Services

Food Service

Cleaning Services

Real Estate

Housewares

Engineering/ Development Packaging

Information Technology

Agriculture

Chemicals

Apparel

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Top 5 Countries - Number of Certifications, as of June 30, 2007

1 - ITaly Number of Certifications % of Total Number of Workers % of Total Number of Industries

2 - IndIa 626 45.6 % 114,908 16.89 % 58

3 - chIna Number of Certifications % of Total Number of Workers % of Total Number of Industries

Number of Certifications % of Total Number of Workers % of Total Number of Industries

% of Total Number of Workers % of Total Number of Industries

15.8 % 118,188 17.37 % 28

4 - brazIl 159 11.6 % 147,680 21.71 % 26

Number of Certifications % of Total Number of Workers % of Total Number of Industries

5 - PakIsTan Number of Certifications

217

51 3.71 % 23,675 3.48 % 7

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91 6.63 % 54,721 8.04 % 29

As we look around, we also try to see the impact of this work. Of course, SAI counts and seeks impact in terms of individual people, 680,000+ people in SA8000 certified workplaces as of mid-2007. We know that SA8000 is used in many more workplaces than are actually certified, as a management system, a benchmark, an advanced industrial relations system, and as a guide to conduct. We look forward to realistically estimating the market value of goods produced in SA8000 certified workplaces. Based on the research weâ&#x20AC;&#x2122;ve done to date, it is in the billions of dollars annually.

And this does not quantify the benefits of lower incidence of accidents and more work satisfaction. We do know that the gains for workers are concentrated in the easier to identify problems like safety and failure to pay as legally required and woefully less on hard to identify and to fix aspects of SA8000 like freedom of association & the right to organize or discrimination. We are tackling these challenges through better training of auditors and tests of new ways to include workers and other stakeholders in monitoring, developing remediation, and playing a role in certification decisions.

More important, this does not take into account the benefits. Most certified facilities report a positive bottom line effect: the benefits in terms of higher worker retention, productivity and quality, to say nothing of more and better orders, more than offset the costs.

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The benefits of adopting SA8000 are significant and may include improved staff morale, more reliable business partnerships, enhanced competitiveness, reduced staff turnover and better worker-manager communication. Maintaining and improving the systems put in place to achieve SA8000 certification is an ongoing process and substantive worker participation is the best means to ensure systematic change. Progress is not made overnight - organizations must make substantial commitments of time and resources, and commitment to change must encompass an understanding of the underlying principles of SA8000. As seen below, organizations adopting the voluntary SA8000 system benefit from their commitment to the spirit of international human rights instruments. They are ready and willing to engage in social dialogue; such receptiveness to information and opinions of others is a key aspect of modern/mature industrial relations.

Why did your company choose to earn SA 8000 certification? “Because it is/was the right thing to do. With full disclosure and proactive engagement metrics developed by bodies to which we subscribes such as the World Diamond Council, the Council for Responsible Jewelery Practices, and the United Nations Global Compact, SA8000 certification was, for us, a logical move.” - Damian Gagnon, Compliance Officer, Lazare Kaplan International Inc. for Lazare Kaplan Puerto Rico “Management of the working environment is a primary responsibility of TNT Express. TNT Romania has implemented the SA8000 standard in order to meet the requirements of TNT Express Policy Statement and deliver continual improvement in performance. It also demonstrates to all our stakeholders our Social Responsibilty as a company.” - TNT Romania “We had several reasons to earn SA8000 certification. But the most important one was to rise the quality up in our mills and present a workplace where the labor work is more comfortable and more voluntary. And the second one was to promote to the other companies in our country.” - Topkapi, Turkey

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What has been the impact on your company of SA 8000 certification? Please describe qualitative and quantitative benefits and impacts, for the business, workers, managers, customers, community, etc. “Many monitoring systems had been created and today all the Kannenberg team is engaged with actions to guarantee that all SA8000 requirements are straightly followed. For the business, as we were the first Brazilian tobacco Company which has obtained a Social Responsibility certification, international customers started to look to us in a different way. Workers, other suppliers and the community got more involved in supporting our action plans related with Social Responsibility issues.” - Kannenberg & Cia. Ltda., Brazil “We have been the first company to be certified in Scandinavia. I must say that we got no impact until 2005/2006. Now the Danish government has the biggest budget in Europe on CSR and they took Rice as one of their examples: we can do CSR and still make profit. The SA8000 certification has given us an extraordinary credibility. From the last 2 years we can really see that it was a good choice. It’s a positive signal both when we employ new people, or with our customers or journalists.” - Rice A/S, Scandinavia “Increased customer confidence. Easy entry to new bigger customers. For business the impact would be an increase in turnover by 25%. The impact is also positive on workers, managers and customers.” - CCZ International, India

What are the major challenges to earning and maintaining certification? “To make sure that the staff understands that this certification does not cause an increase of the working activities, like ISO9001, but it is an instrument which guarantees and protects their rights. Also, to involve the suppliers within the standard requests of SA8000.” - Antonio Festa, Quality Assurance Manager, De Matteis Agroalimentare S.p.A., Italy “It is a daily effort and work. Because it is difficult under pressure to maintain the system. The most difficult think for us is the following of the overtime.” - Pierre Desouche, Apex VN, Vietnam “The challenges in effective maintenance of the standards expected by the SA 8000 certification is honestly extremely challenging for small / medium units like ours. This is so, because of the cost factor in maintaining these standards especially in an unorganized industry like ours, which is not in a powerful position to negotiate remunerative prices for its products. The deep fluctuations in the market lead to inconsistent orders placed by generally the small importers. As professional managers, we had been trying to create a transparent and an effective and responsive organization. We had the aspiration but did not have a clear script as to how to go about. The SA 8000 stipulations and rules and the assistance received from your staff helped us in putting things in perspective. We now had a practical and internationally approved system at our disposal. It really made things much easier for us to put a system in place in an extremely short space of time.” - H.A.G. Carperts PVT. LTD., India

• 10 YEAR REPORT •

Here we profile three SA8000 certified facilities to provide snapshots of the reach and range of certification around the world, the strides made by facilities as they work to SA8000, and the commitment and vision of their owners and managers.

San M atteo S.p.A ~ Creazzo, Italy “SA8000 certification processes make the workers’ satisfaction grow and they produce benefits for the company.”

- Andrea Scarmin SA8000 elected worker representative

A tour of the San Matteo winery, just outside Vicenza, Italy, is enough to convince a guest that wine and corporate social responsibility make a good pair. This view is strongly supported by Matteo Cielo, the company’s CSR representative and great-grandson of the company’s founder. As he describes every step of the production chain, from the raw grape product to the labeled bottles, he repeatedly cites San Matteo’s SA8000 certification. He proudly displays the company’s most successful product, a table wine packaged in a plastic (PET) container. Portable and inexpensive, it’s perfect for Italy, where table wine is often consumed at lunch as well as dinner. Cielo explains the company’s philosophy: “The wine itself is just part of the way we approach ‘quality’.” He points to the bottle’s shape, ideal for transportation, “this is quality. And so is this” – pointing to the easy twist-off cap. “Quality is the entire bottle, not just its content. Every facet of our production is part of our quality…People are the engine of the facility…the fuel of this engine is represented by the satisfaction of the workers, so the people are fundamental to produce good product and be sustainable for the future.”

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San Matteo has a long tradition in the winemaking business. Matteo Cielo – great grandfather of the current Matteo Cielo – started the company in 1895. The Cielo family has embraced innovation and change throughout the company’s evolution into the dynamic, successful business that it is today. In 1996 San Matteo received its first certification, in ISO 9001, followed by SA8000 in 2004 and ISO 14001 in 2005. San Matteo has created an efficient infrastructure by combining the needs and opinions of its stakeholders. In the nine months it took to earn SA8000, the company installed new health and safety equipment and provided worker and manager training. Regular workers’ surveys keep management aware of employees’ opinions on everything from safety training to bathroom maintenance. At their suggestion, the company built a “Relaxation Room” on the warehouse premises so that workers could eat lunch together; after polling neighbors on potential noise disruption, machinery was moved outdoors to prevent disturbance. According to the surveys, workers’ satisfaction is growing every year.

Italy is a country deeply dedicated to CSR and SA8000, and this meticulous attention does not go unnoticed by customers and media. San Matteo has been the recipient of various awards, including the Azienda Sana (Healthy Business) Award in 2004, the National City Award for Social Responsibility from Rovigo in 2004, the Unioncamere Award for Human Resources in 2006, and the KPMG/GDOWeek Ethic Award in 2006. The company’s bottles line the shelves of large retailers such as Coop Italia and Carrefour in Italy and the rest of Europe. This success in the CSR world has increased the Cielo family’s belief in the usefulness of social standards and multi-stakeholder integration. To this end, they are in the final stages of construction for a new company headquarters: the plan

“I studied two months the English Standard of SA8000 before applying it, but the real thing is that the study of the Standard is never finished. Every day with the workers I search for new methods of doing work better to respect their work and their perspective.” – Matteo Cielo General Manager synthesizes the needs of San Matteo’s workers, neighbors, the local environment, available energy resources, and its various clients and affiliates. The new structure, which is luminous and well-ventilated, will feature guest rooms and an on-site shop to promote a higher level of customer involvement.

Year of SA8000 certification:

2004

Certification company:

Det Norske Veritas

Product:

Cultivation of grapes and production of wine, refining, packaging, bottling and trade of wines

Total workforce:

25 permanent workers, 2 manager owners

Estimated annual production:

20,000,000 liters

Size of facility:

5,000 square meters under roof; 100,000 square meters of vineyard

• 10 YEAR REPORT •

Franky y R icky S.A. ~ A requipa, Peru “I’m very satisfied with SA8000. I work in a company that makes me feel important, concerned about our wellbeing, our family, respecting our rights, listening to us and treating everybody equally.”

Peruvian cotton, considered by some to one of the finest in the world, has long been a staple of generations of Peruvian farmers. The SA8000 certified company Franky y Ricky is working to keep the tradition alive, through an organic cotton initiative in partnership with the farmers of the Cañete and Chincha Valleys on the Pacific Coast of Peru and the Netherlands NGO Solidaridad (an SAI Advisory Board member and Corporate Programs Signatory).

– Dinmar Jesus Centeno Quispe, Facility cleaning and maintenance worker, employed at company 8 years

The organic cotton cultivation is organized by the Oro Blanco co-operative, founded in 2000 by Solidaridad, to encourage the cultivation of cotton through methods beneficial for both the environment and the long-term livelihoods of the farmers. The cotton harvest is certified organic by Skal International, and spun in factories run by Oro Blanco. The remaining steps in the supply chain, such as knitting, dyeing and makeup, are all done at the Franky y Ricky factory. Franky y Ricky sources these garments to U.S. and European brands, including those of the Made-by Initiative. From cotton plant to shirt, the chain of custody integrates product quality with environmental and social responsibility.

• SOCIAL ACCOUNTABILITY INTERNATIONAL •

The commitment of Franky y Ricky to social and environmental responsibility harks back to the vision of its founder Francisco Sahurie Giacaman, who started the company in 1949 with the hopes of “contributing to the development of the southern region of Peru”. He began with 80 workers, creating garments for the local market. Over the years, the company has expanded production and now exports its garments all over the world to high end customers such as Calvin Klein, Burberry, Joseph Abboud and Bobby Jones. The company decided to embed management systems in all of its processes as part of its commitment to high quality, competitiveness and social responsibility. During the process of certification to SA8000, which took two years, the company made significant improvements to its two factories, spending over $10,000 for training and $100,000 for equipment to improve health and safety, such as ergonomic devices, ventilation, improved worker dining halls and bathrooms, fire security and medical evaluations. The company also employed health and safety experts to assist in developing training exercises to prepare employees for emergency situ

ations, safely store all dangerous substances, and implement a system of Health & Safety monitoring and evaluation. All workers have attended SA8000 training sessions and participated in elections of worker representatives. Working hours were modified to be compliant with SA8000 and salaries raised to meet the calculated basic needs wage. To sustain improvements, the company has implemented a management system; in keeping with the SA8000 requirement of supplier control, it has developed a socio-economic alliance with its suppliers of sewing services in order to support them in attaining compliance to the system. Franky y Ricky is pleased with SA8000 certification, noting the greater commitment and satisfaction of employees, the improved productivity and quality, easier access to new markets, the

increased “loyalty of our clients, because they have greater confidence in the work that we do” and the satisfaction of the community - “There is a positive impact for the image and reputation of the company in Peru.”

“Franky y Ricky S.A. decided to certify to SA8000 by its own initiative and the company’s future vision, integrating the Stockholders, the Company and suppliers to assume an authentic compromise of change based on this model of principles, ethic values, good working practices, support, respect, motivation and concern for the human talent.” – Roxanna Castro

Year of SA8000 certification:

2006

Certification company:

SGS del Peru

Product:

Knitting and Sewing Factory

Total workforce:

865 permanent workers, 35 managers

Estimated annual production:

1,400,000 garments

Size of facility:

arque Industrial Facility – 5,080 square meters; Señor de la Caña P Facility – 4,509 square meters

• 10 YEAR REPORT •

Yesim Tekstil ~ Bursa, Turkey Improvements at Yesim after SA8000 certification, according to workers: Veysel Aygun, dyehouse worker, 11 years at company - almost no overtime - more attention to workers health and safety - better communication and easier access to management about concerns Tamer Asilturk, dyehouse worker, 10 years at company - increased awareness as result of increased training - almost no overtime - our opinion is sought more than before like “how would you handle this” or “what do you think?” Sibel Esin, apparel cutting room worker, 12 years at company - better Health and safety management - almost no overtime . Our performance was badly affected from overtime. This was especially stressful from female workers point of view. We used to face problems at our private lives because of staying at work longer than planned Ramazan Korkut, apparel pressing room worker, 7 years at company - almost no overtime and workers are happy about this 32

A tour through SA8000 certified Yesim’s 325,000 square meter facility in Bursa, Turkey reveals the importance given to the “people first” principle and workers’ rights at Yesim. Workers appear both comfortable and highly productive, and very proud of the company’s impressive child care program. As elsewhere in Turkey, a number of workers wear head coverings and there are rooms available for prayer during the day. The free meals served to all workers and managers are extraordinarily delicious, varied and healthy. Trade union representatives are enthusiastic about Yesim and SA8000. A 1,000 person capacity, state-of-theart facility on the plant site provides day-care for employees’ children, offering educational programs to develop their skills and well-being. An on-site health center, featuring facilities comparable to those of a regular hospital, serves Yesim employees in two shifts. Yesim is a fully integrated textile facility, performing all production processes from knitting, dying, printing, finishing and lab-testing finished products. The company began operations in 1983 with home textiles such as tablecloths and sheets; today its large facility has a production capacity of 120,000 units of ready-made clothing and 100,000 unites of home textiles per

• SOCIAL ACCOUNTABILITY INTERNATIONAL •

day, selling to customers Gap Inc., Nike Inc., Tchibo Gmbh, Esprit International, Hugo Boss, Lands End, Zara International, Burberry, and Eddie Bauer. In 2006 the Joint Initiative on Corporate Accountability (Jo-In) project engaged European and U.S. brands and six of their Turkish suppliers in a trial project to test ways to improve working conditions through codes of conduct. The project assessed the degree of compliance to the Jo-In Common Code at the factories of these six suppliers; with the advice of stakeholders the project then developed remediation plans for these facilities to address any noncompliances identified. Like the other suppliers, Yesim was assessed by the Jo-In trained team in early 2007, and found to be in virtually complete compliance with the Jo-In code. The company and Teksif, its trade union, are working together to improve the workers’ use of Yesim’s grievance system. Yesim’s performance was markedly better than any of the other garment factories in the project. It was the only participant certified to SA8000, so the usefulness of SA8000 as a model is an important learning for many of the project participants. Yesim’s role then shifted to become

‘“Never forget that the employees working for you are people and treating them properly is your responsibility.” This advice, given to Sükrü Sankaya, one of our founders, by his father when he entered the business world, is the foundation of our “people first” principle.’ – Yesim Tekstil, Turkey that of a model to demonstrate that compliance is feasible for a garment manufacturer in Turkey, compatible with business success, and a source for learning about how to do it right. The company’s emphasis on management systems, the buy-in and support of top management, and the company’s work with its suppliers and facilities outside of Turkey to bring them also into compliance, are all indicators of commitment to sustainable growth and improvement (in accordance with the “control of suppliers” provision in SA8000). Yesim was the first in its sector in Turkey to achieve and demonstrate compliance with SA8000. As a fast-growing company, Yesim is a persuasive model of social compliance and corporate social responsibility.

Year of SA8000 certification:

2005

Certification company:

ITS

Product:

Knitted apparel and home textile

Total workforce:

3,237 permanent workers, 783 managers

Estimated annual production:

40,000,000 units

Size of facility:

325,000 square meters • 10 YEAR REPORT •

Feature on an auditor in SA8000 system - Rossella Ravagli

Ms. Ravagli, Technical Manager for Bureau Veritas is in charge of BV’s social and sustainability standards work internationally (using SA8000, Codes of Conduct, AA1000AS, et al) and relationships with the main stakeholders She earned a degree in Economics and Statistics from the University of Bologna and has worked in quality verification since 1994; she has spoken and published extensively on CSR’issues, including a “Guidance on the Social Responsibility” (1999). 1. What led you to become interested in the field of social auditing?

4. What did you enjoy about the work? What are some of your favorite aspects?

The “social component” is basic to processes and consequently an important audit focus. For the company, it is important in gaining competitive advantage; for the auditor it is an important occasion to add value to company efforts to improve practices.

The direct contact with people. It is a great satisfaction when an employer understands the scope of SA8000, decides to take business practices in a new direction and workers can see their rights respected and emphasised. I have conducted about 400 social audits in 12 countries. It is not always easy, but there are many cases where it has been a success. I spend a lot of time on training—transmitting knowledge and enthusiasm-- and find it greatly satisfying.

2. What led you to choose the SA8000 system in particular as an auditor? SA8000, using a new approach and perspective in conducting audits, provided a good tool to address human and workers rights and social targets, while developing a company’s ethical and social culture. 3. What were some of the challenges you faced as an auditor? The social audit requires different information and techniques, especially in employee interviews, tools to gather information, consultation with interested parties, and record verification (wage slips, etc). One needs to understand if the records verified represent reality.

5. How has the field of auditing evolved in the decade you’ve been in the field? How has the SA8000 system changed? One key evolution is stressing the need to involve and engage interested parties to gain transparency and credibility. SA8000 is based on this principle. Many other standards now see the importance of engaging stakeholders in auditing.

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6. As an auditor, how is the SA8000 system different from other social systems you have worked with? Primarily, the management system and the concept of continual improvement based on social performances and targets. 7. What qualities do you think a person should have to be an effective auditor? Courage, sensitivity, a psychological approach, an ability to manage conflict, an open mind— in addition to a good knowledge of the norms, standard, laws and human rights’ issues. Also, a good dose of enthusiasm and passion.

8. How do you think we can improve the system, to help auditors become more effective?

10. What do you see as the future of social auditing and monitoring in the next decade?

1-invest more in training, focused on auditing techniques and the analysis of case studies through role play exercises; 2-continue to enforce knowledge of the norms, legislation and the human rights context; 3-put in place multidisciplinary teams including Trade Unions and NGOs; and 4-convene stakeholder forums to share information and calibrate the approach. That open consultation process can greatly help to enforce and improve the system, as well as to catch new challenges.

Social auditing and monitoring are important tools to guarantee credibility; we need to improve the auditing system with more transparency, more inclusion, more engagement with all the interested parties and synergies with other existing standards.

9. How was your experience being a female auditor - did you feel that your gender posed specific challenges as an auditor? For some specific issues and cultural context the female auditor is really necessary on the team. Typical female traits include sensitivity to critical situations, patience, passion, capacity to listen, and persistence. But this does not mean that the male auditors cannot carry out a very good job!

11. How do you see yourself after 10 years of experience? Where do you see yourself in 10 years? I’ve received much satisfaction from this work; I have always tried to work with a balance of professionalism enthusiasm, passion, and tried to transmit the same values to others. Managing SA8000, I’ve had an opportunity to know many colleagues and many different cultures and approaches and to exchange experiences. The challenges are many and the way is always full of obstacles but really I believe that little steps and little actions will add up to great future results.

• 10 YEAR REPORT •

PART 2 > DRIVING CHANGE: HOW WE WORK

Diversity in experience, expertise and outlook, wedded to consensus on goals, can lead to more sustainable and substantial outcomes than can be achieved by one organization alone. SAI works in multi-stakeholder, multi-national and multi-sectoral groups, fostering social dialogue every step of the way.

> building alliances

As globalization redraws economic relationships and supply chains, SAI works to promote development that is sustainable, upholding the human rights and the dignity of each individual. Our alliances link individual workers to the global network and help people exercise their rights in an internationally recognized framework of fundamental ethical principles. These alliances empower workers and other stakeholders to create locally-owned tools and systems for driving change.

S A I B oard O F D I R E C T O R S Steve Newman (Chair)..................Medical & Health Research Association (USA) Riccardo Bagni..............................Coop Italia Societe Cooperativa (Italy) Celina Borges Torrealba Carpi ......Grupo Libra (Brazil) Jan Furstenborg.............................Union Network International (Switzerland) Dana Chasin ................................OMB Watch (USA) Tom DeLuca ................................Toys ‘R’ Us (USA) Nicholas Milowski.........................KPMG LLP (USA) Jeff Samuels . ................................Paul, Weiss, Rifkind, Warton & Garrison (USA) Alice Tepper Marlin.......................Social Accountability International (USA)

S A I A dvisory B oard SAI’s multi-stakeholder Advisory Board is itself a global alliance. It includes representatives from businesses, academia, government, trade unions and NGOs from a dozen countries on four continents. This brings SAI a broad range of expertise: business skills, international human rights, international labor rights, child labor, socially responsible investing, auditing techniques and management of large supply chains. The Board reviews and provides direction regarding SAI’s policy and operations, including the SA8000 standard setting, procedures, programs, and communications. 38

AB members are selected for their experience and knowledge, to ensure that the interests of a wide range of sectors are represented, or, as experts in a particular discipline, to provide impartial expert advice. While reaching a consensus among this diverse group is a formidable challenge, the outcomes for our members, for affected workers and managers, and for SAI’s ongoing projects testify to the distinct strengths of such an approach. Our policy is for half the members to come from business, half from NGOs and trade unions.

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SAI Advisory Board MEMBERS Affiliated with Business*: Giorgio Bertinelli / Marisa Parmigiani (Alternate). .... Legacoop Nazionale (Italy) Kishor Chaukar / Anant Nadkarni (Alternate)........... Tata Group / Tata Council for Community Initiatives (India) Sylvain Cuperlier.................................................... Dole Food Company, Inc. (France) Tom DeLuca........................................................... Toys’R’Us (USA) Durai Duraiswamy / Robin Cornelius (Alternate)...... Prem Durai Exports (India) / Switcher SA (Switzerland) Jan Eggert .............................................................. Business for Social Compliance Initiative - FTA (Belgium) Pietro Foschi / Francis Boigelot (Alternate)................ Bureau Veritas Certification formerly BVQi (UK) Amy Hall................................................................ Eileen Fisher, Inc. (USA) Dan Henkle (Chair) / Chuck Goncalves (Alternate)... Gap Inc. (USA) Achim Lohrie / Sandra Trautwein........................... Tchibo GmbH (Germany) Geoffrey Martin-Henry / Mike Patrick................... TNT Express (Netherlands) Dr. Johannes Merck / Sibylle Duncker (Alternate) .... OTTO GmbH & Co KG (Germany) Manuel Rodriguez / George Jaksch (Alternate)........... Chiquita Brands International (Costa Rica / Belgium)

Affiliated with government and civil society*: Dorianne Beyer / David Zwiebel (Alternate)............... National Child Labor Committee (USA) Ivano Corraini........................................................ CGIL Italian General Labour Confederation (Italy) Jeroen Douglas / Nico Roozen (Alternate). ................. Solidaridad (Netherlands) Jan Furstenborg...................................................... Union Network International (Switzerland) Oded Grajew / Helio Mattar (Alternate)..................... Ethos Institute of Business & Social Responsibility (Brazil) Joseph Iarocci / Linda Cronin................................ CARE International (USA) Frits Nagel.............................................................. Dutch Consultant - Corporate Social Accountability (Netherlands) Alan Spaulding ...................................................... United Food & Commercial Workers International Union (USA) Alice Tepper Marlin ............................................... Social Accountability International (USA) The Honorable William Thompson/ Ken Sylvester (alternate)......................................... Office of the Comptroller, City of New York (USA) Tensie Whelan / Chris Wille .................................. Rainforest Alliance (USA / Costa Rica) Morton Winston .................................................... The College of New Jersey

*Affiliations are for identification only

• 10 YEAR REPORT •

building alliances : W orking with other initiatives

ISEAL

The ISEAL Alliance vision is to create a world where “environmental sustainability and social justice are the normal conditions of business”. Its mission is to strengthen credible and accessible voluntary standards and to promote them as effective policy instruments and market mechanisms to bring about positive social and environmental change. Above we discussed ISEAL in terms of code development, here’s information on an array of ISEAL activities. The seven full members of the ISEAL Alliance comply with the ISEAL Code of Good Practice. They are pioneers of ethical trade and are recognized as the leading consumer and industry standards across sectors such as agriculture, fisheries and manufacturing. Collectively, ISEAL Alliance members represent over US$53 billion of retail value in certified products alone. These labeled products deliver social and environmental benefits to 117 million hectares of agricultural land globally and the workers of over 15,000 factories, fisheries and farms world-wide.

ISEAL’s Emerging Initiatives Program Building on broad-based recognition of the ISEAL Code of Good Practice, the ISEAL Alliance delivers a program of support to new and emerging voluntary initiatives across sectors that will ensure that the standards they develop are credible and result in meaningful impacts, with certification schemes and labels that consumers can trust. Twenty-two initiatives across a wide range of sectors including carbon off-setting, biofuels, cotton, tourism and mining have already formally expressed a desire to participate in the ongoing training and capacity-building program, including the Carbon Trust, The Climate Group, BioTrade, the Better Cotton Initiative, the Sustainable Tourism Stewardship Council and the Association for Responsible Mining.

The full members are: ■■ Fairtrade Labelling Organisation (FLO) ■■ Forest Stewardship Council (FSC) ■■ International Federation of Organic Agriculture Movements (IFOAM) ■■ Marine Aquarium Council (MAC) ■■ Marine Stewardship Council (MSC) ■■ Rainforest Alliance ■■ Social Accountability International (SAI)

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SASA Social Accountability in Sustainable Agriculture (SASA) was a major project of four ISEAL members—SAI, SAN, FLO, IFOAM. Its purpose was to investigate how to best ensure broadbased social accountability in agriculture and explore different ways in which the social, economic and environmental dimensions of sustainability can be coordinated through certification. Technical support came from the UN Food and Agriculture Organization (FAO). 12 pilot audit exercises took place in both developing and industrialized countries, including bananas in Costa Rica, mixed fruit in Italy, oranges in Brazil, cut flowers in Colombia, and rice in Thailand.

The initiative closed with a final conference hosted by the FAO in Rome in April 2004, and reported success in:

■■

Establishing a framework for developing coordination mechanisms, including progress towards designing integrated audits to help producers meet both international labor and environmental standards and improve their competitiveness. Raising the profile of social auditing in agriculture among diverse sectors _ government, union, business, development agencies, farmers and workers through the collaboration among the groups.

SAI drew on the recommendations and considerations for social standards and auditing guidelines in its standard redrafting process. ISEAL’s Accessibility program, Accessibility Network, and Certification Information Center are three more tools members have developed collaboratively, designed as a resource for producers, small and large, and as an information center for the public. They are all available online at www.isealalliance.org.

• 10 YEAR REPORT •

Jo-In

The Joint Initiative on Corporate Accountability and Workers’ Rights (Jo-In) brings together six leading organizations that use voluntary codes of conduct for monitoring employment practices worldwide. The initiative aims to collaborate systematically, identifying what the organizations could do in common, to maximize the effectiveness and impact of voluntary codes of conduct and to ensure that resources are directly as efficiently as possible for workers and their families. Above we discussed this in terms of code development, here’s information on activities on the ground. Jo-In’s pilot project in Turkey aims to improve workplace conditions at a number of workplaces, to identify jointly with Turkish stakeholders the roles multi-stakeholder initiatives and local stakeholders can play in implementing codes of conduct; and through this common task, to learn how to work together more collaboratively.

The pilot project has generated much debate and negotiation among the Jo-In partners, and while they have not always reached agreement on many elements, they have increased the understanding and trust amongst themselves. The project also engaged many interested parties both in Turkey and internationally, and fostered greater social dialogue. It is hoped that after the Jo-In project ends in December 2007, the local multi-stakeholder dialogue will continue, and that the multi-stakeholder Local Working Group might bring policy recommendations to the Turkish government to address some nationwide overarching issues that impede code compliance. The project members are grateful for generous funding provided by the European Commission (DG Employment), the US Department of State, the Interchurch Organisation for Development Co-operation (ICCO), Gap Inc and Nike.

Jo-In and Turkey Pilot Project milestones ■■ Agreed

■■ Convened

■■ Agreed

■■ Convened

a draft Common Code for the purpose of the Turkey pilot project and for consideration for adoption by each of the six after the conclusion of the project. best practice guidance for implementing three key code elements (hours, compensation and freedom of association)

■■ Recruited

seven U.S. and European brand participants and enrolled six suppliers to these brands

■■ Agreed

protocols for the project’s assessments of factories and assessed the degree of compliance to the Common Code at the factories of these six suppliers the advice of local stakeholders, developed remediation plans for these facilities to address any non-compliances identified; these are currently being implemented

a Turkish multi-stakeholder Local Working Group to guide and advise the project and build trust and a problem-solving approach a multi-stakeholder International Advisory Panel to guide and advise on elements of the project which have global implications

■■ Convened

a training seminar and several consultative conferences to engage stakeholders

■■ A

final conference and report December 2007 will disseminate results and share learning

■■ With

For more information on Jo-In, see www.jo-in.org.

• SOCIAL ACCOUNTABILITY INTERNATIONAL •

Jo-in partner organizations ■■ Clean

Clothes Campaign (CCC)

■■ Ethical ■■ Fair

Trading Initiative (ETI)

Labor Association (FLA)

■■ FairWear ■■ Social

Foundation (FWF)

Accountability International (SAI)

■■ Worker

Rights Consortium (WRC)

Some of the organizations consulted for Turkey PROJECT ■■ ILO ■■ GTZ ■■ Ministry ■■ Prime

Ministry Undersecretariat for Foreign Trade

■■ Turkish

Confederation of Employer Associations (TISK)

■■ Istanbul

Jo-In brands engaged for turkey project

■■ Istanbul

■■ Marks

■■ Turkish

■■ Gap, ■■ Hess

& Spencer (ETI)

Inc. (SAI and ETI) Natur (FWF)

■■ adidas ■■ Nike

(FLA)

■■ Patagonia ■■ Puma

(FLA)

of Labour and Social Security

Chamber of Industry (ISO)

Textile and Apparel Exporters Association (ITKIB) Clothing Manufacturers’ Association (TGSD)

■■ Z

IPLIK-I

■■ TEKSIF ■■ TEKSTIL ■■ Working

group on Women Home-based Workers in Turkey (Support Group)

■■ Women

Home-based Workers’ Cooperative

■■ TURKODER

• 10 YEAR REPORT •

MFA Forum With the end of the MultiFiber Arrangement (MFA) in 2005 and the freeing of international export quotas, many developing countries have been struggling to keep their garment industries competitive in the global marketplace. Workers face job insecurity, lower wages, and the risk of ethical working conditions getting sidelined as manufacturers must respond to price pressures and the loss of orders to cheaper producers.

SAI strongly supports the Forum’s emphasis on local capacity building and alliances – building blocks for SAI’s country programs as well. The Forum is an open network of over 70 brands and retailers, trade unions, NGOs and multi-lateral institutions, working together to promote social responsibility and competitiveness in national garment industries that are vulnerable in the new post-MFA trading environment. Several of SAI’s Corporate members, Advisory Board members and staff are active with the MFA Forum and Alice Tepper Marlin currently serves as the MSI representative on the Executive Committee. The Forum’s efforts are guided by The Collaborative Framework (MFA Forum 2005) principles, which emphasize “home owned” and “home grown” actions to sustain national industry

– this means the engagement of all stakeholders of national industries, including the government, and the fostering of social dialogue among these groups to create locally-owned solutions. 2005, the Forum set up in-country groups, first in Bangladesh and in Lesotho, as there was clear evidence that each country was facing difficulties maintaining a sustainable industry in the post-MFA era, facing abnormally low wages, non-compliance with labor standards, factory closings, investments shifted abroad, poor infrastructure, and corruption. The Forum has convened multiple conferences and stakeholder meetings, engaging government ministries, suppliers, garments and knitwear trade associations, trade unions and NGOs.

the Forum produced a report examining the challenges and opportunities facing the garment industry; further to this report three studies have been commissioned by the World Bank to build on the Forum’s findings.

In Bangladesh, the Forum convened a buyers group of brands and companies to work with local stakeholders toward the Forum’s goals. In Lesotho,

SAI staff are active in the MFAF America’s working group, which recently initiated programs in Nicaragua, the Dominican Republic and Mexico after extensive discussions and consultations with local stakeholders in these and neighboring countries. There is a natural link between the MFAF and SAI’s work in CIMCAW to promote social dialogue and capacity building in Central America, while also linking voluntary social compliance to strengthening government enforcement of labor laws. To that end, SAI is also working with MFAF on their monitoring and evaluation framework and strategies for disseminating learnings.

At the MFA Forum April 2007 meetings in Toronto, several dynamic Lesotho projects supported by MFA members as well as national organizations and the government were highlighted at a public event. One of those was the Apparel Lesotho Alliance to Fight AIDS (ALAFA), an initiative which provides needed HIV testing and treatment options to thousands of garment workers. “The MFA Forum enables people and organizations throughout the world to come together to tackle some of the most complex issues in the garment industry,” says Dan Henkle, Gap Inc.’s Senior Vice President, Social Responsibility, and Chair of SAI’s Advisory Board. To learn more about MFA Forum, visit www.mfa-forum.net

• SOCIAL ACCOUNTABILITY INTERNATIONAL •

Look on the label of Gap Inc.’s (PRODUCT) RED T-shirts and you will usually read “Made in Lesotho”. SAI Advisory Board and Corporate Programs Signatory member Gap Inc. was one of the first companies to participate in the MFA Forum and remains an active member today. As part of the company’s efforts to support Lesotho’s garment industry, it sources its iconic RED shirts from a factory in the capital city of Maseru. (PRODUCT) RED is an initiative that raises funds for the Global Fund to Fight Aids, Tuberculosis and Malaria by licensing big household name brands to label some of their products with the (PRODUCT) RED mark. In addition to investing in production in Lesotho, Gap Inc. donates half the profits from sales of its (PRODUCT) RED products to support the Global Fund’s efforts to help African women and children affected by HIV/ AIDS.

BUILDING ALLIANCES: WORKING WITH TRADE UNIONS Organizations whose membership consists of workers, whose mission is decent work, are clearly a special category. Trade union participants were key contributors to both the text of SA8000 and to SAI’s structure and approach. We’ve had the opportunity, from our start, to work with and learn directly from workers and elected worker representatives as we plan and present training, as we envision and carry out all of our work. That’s what multi-stakeholder means to SAI. Here is information on a key trade union partner. UNION NETWORK INTERNATIONAL Union Network International (UNI) sponsored and organized our annual conference in 2006, and participates in SAI’s governance, serving on both the Board of Directors and the Board of Advisors.

UNI is the “global union for skills and services”, a federation of 900 trade unions with 15 million members from over 140 countries. As global as the employer organizations with which it negotiates, UNI aims to sign global agreements with multi-nationals, committing them – wherever they operate – to respect labor rights, open the door to organizing, and monitor their behavior. The sectors of UNI members include retail, finance, telecom, IT, media and entertainment. UNI was formed in 2000 and has global agreements with international businesses such as Carrefour, France Telecom, H&M, Metro, and ISS. UNI is headquartered in Switzerland, near Geneva and the ILO. We are grateful to UNI for the important learning, key guidance, and input it provides to all of SAI’s work.

• 10 YEAR REPORT •

ITGLWF Worker Study CirCles and Worker Training

In 2001, SAI launched an international worker training program – Improving Workers’ Rights Through Voluntary Workplace Standards – in collaboration with the International Textile, Garment and Leather Workers Federation (ITGLWF), the sector’s international trade secretariat with 250 affiliated trade unions in 120 countries, representing 9.5 million workers. The project was designed to strengthen workers’ analysis and use of standards for corporate conduct, like SA8000, through regional and national workshops and plant-level discussion groups, known as study circles. SAI worked with ITGLWF representatives and other experts in the field to develop accessible educational materials and analytical tools for workers. Through this project, ITGLWF and SAI trained 300 study circle leaders in 9 developing countries Through this project, ITGLWF and SAI trained 300 study circle leaders in 9 developing countries, who would in turn train 3,000 workers. The study circles were based on those developed by the ITGLWF as an effective means of organizing and empowering workers. By encouraging workers’ group analysis of their workplace situation and broader contextual issues, the study circles help build a broad base of informed members and future leaders.

• SOCIAL ACCOUNTABILITY INTERNATIONAL •

Workshops were conducted with national trade union leaders with national-level workshops in three regions with significant export trade in textiles, garments and footwear: four in Asia; two in Latin America; and three in Africa. Following their participation in the national workshops, union leaders incorporated the analysis of corporate codes of conduct into study circle discussions during the second and third years. At the end of the third year, national union leaders met in a final evaluation to report on and compare how workers used their knowledge about codes of conduct to ensure better respect for workers’ rights in their region.

Key Achievements to Date: ■■ Trained 3,000 workers in the use of corporate codes of conduct to avail themselves of their rights in the workplace. ■■ Developed educational materials and a train-the-trainer program for trade union leaders in 9 countries in 3 regions: -- Asia (India, Bangladesh, Philippines, Thailand) -- Africa (Lesotho, Ghana, Mauritius) -- Latin America (Honduras, Chile) ■■ Strengthened the existing network/infrastructure of study-circles for worker training ■■ Developed an infrastructure for such study circles in Mauritius and Indonesia, where they were not yet in use ■■ Documented, analyzed and published a report on workers’ feedback on codes of conduct in principle and in practice

• 10 YEAR REPORT •

A key element of SAI’s activity is to work with businesses in a multi-tiered approach to promote accountability and lasting improvements – from worker to supplier to brand to consumer – in the supply chain and in their own workplaces.

building alliances : W orking with business

Here are a range of reports from companies we work with:

SAI engages companies through our Advisory Board,

Coop It started with a little “panettone” – a Christmas

corporate commitment programs, projects, training, technical assistance, and multi-stakeholder initiatives. Building on the management systems approach of the SA8000 system, we encourage companies to take a holistic approach to social responsibility. Engaging and integrating multi-stakeholder perspectives, our corporate members can work effectively and strategically with diverse groups to facilitate meaningful, sustainable change.

cake. The first Coop shop opened in 1854, and in 1896 the panettone made its way onto store shelves in Milan as the first cooperative brand product. Coop is now the biggest retailer in Italy, with a 17% market share and sales amounting to 26.8 billion dollars, 54,000 employees, and 1331 stores. Coop may be big business but it is first and foremost a Consumer Cooperative with 6,500,000 members – the primary values are “mutuality, democracy, social justice and solidarity”. The companies believe that CSR is a way of working and it is directly related to Coop’s mission. Coop has long led the field in implementing sustainability policies and management systems – in 1992 it published its first Social Report, in 1997 developed The Chart of Values and Rules, an ethics code to be signed by every cooperative associated, and in 1999, set its first Sustainability Budget. Coop has a long-standing cooperation with SAI. Since 1999, Legacoop, the association of cooperatives in Italy, has been represented on SAI’s Advisory Board. Since 2003, Coop Italia, in the person of Vice President Riccardo Bagni, has served as an active member of SAI’s Board of Directors.

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In 1998, Coop Italia became the first Italian and European company certified to the SA8000 standard. It was certified that year in the food sector and then in 1999 in the non food sector, on its own brand products. Coop Italia is Coop’s buying office – it provides sourcing, purchasing, marketing and quality control functions for purchases from abroad for the cooperative members in Italy. It is also responsible for the Coop brand products. Over the last 9 years, Coop Italia has been working hard to trace the ethical quality of its 2634 own brand products, wherever they are made. Currently, 727 suppliers are involved in the SA8000 auditing and improvement process: 393 suppliers for own brand product and 334 for high risk suppliers. In November 1999, Centro Nuovo Modello di Sviluppo (CNMS), an Italian NGO campaigning to improve working conditions in the South, filed a complaint with Coop Italia and launched a consumer boycott of Del Monte regarding working conditions at one of Coop’s suppliers, a Del Monte pineapple plantation in Kenya. Through a series of meetings in 2000, Coop worked with Del Monte and an international Solidarity Committee to come to a consensus on an improvement plan based on SA8000 standards. The Solidarity Committee was

• 10 YEAR REPORT •

a multi-stakeholder coalition which included CNMS, the Kenya Human Rights Commission (KHRC), the Kenya Union of Commercial food and Allied Workers (KUCFAW), and local NGOs; the Kenyan Ministry of Labor also cooperated. Working with this broad coalition, the supplier work to implement the corrective action plan, and make improvements, which included building decent housing for the workers, safer application of pesticides, and an enabling environment for the union. In 2003 the plantation successfully earned SA8000 certification. 49

For consecutive years in 2005 and 2006, Coop Italia won KPMG/ GDO Week’s Ethic Award, given to company-created initiatives that achieve “wide consumption and distribution and demonstrate clear commitment, attention and sensitivity towards sustainable development issues”. ■■

The SA8000 Standard is consistent with the values of the Cooperative Movement: equity, business efficiency, social fairness, fair behaviour, participation. Furthermore, SA8000 is consistent with the Consumers Cooperatives’ Mission: to guarantee consumers’ good products at the best price°±. Quality is interpreted as meaning: safety and security of the product, minimization of the environmental impact, social responsibility. In the end working in a SA8000 perspective helps to earn consumer trust and to avoid some business risks.

The implementation of the SA8000 system has been facilitated by good management of suppliers, a historical attention to ethical matters and a strong identity based on values. ■■ The management of Coop Italia believe SA8000 is a strong and important tool to sustain its reputation. The credibility of Coop is closely related to the credibility of SA8000, and naturally, of SAI. This is why Coop invested in SAI in terms of resources, time and money. A strong, well-structured, visible and credible SAI is a good partner for Coop CSR policy. - Coop ■■

Tata GROUP

Travel through India and the letters Tata are an inescapable part of the daily landscape. Engineering, Materials, Energy, Chemicals, Consumer Products, Services, and Information Systems and Communications, producing steel, automobiles, coffee, tea, and offering hotel, financial consulting and software services - the Tata Group, India’s oldest and largest business conglomerate, offers it all. The Tata Group has annual revenue of $21.9 billion as of end 2006, and includes 98 companies across seven business sectors. These companies operate in 40 countries across six continents, export to 140 countries, and employ some 246,000 people.

The Group has a long history of social responsibility. Through its trusts and companies, Tata spends about 30 per cent of its profits after tax on social programs. The Tata Council for Community Initiatives – the umbrella agency that guides Tata Group companies in their community development work – is headed by Kishor Chaukar, who serves on SAI’s Advisory Board (Anant G. Nadkarni, Vice President, Group Corporate Sustainability, is his Alternate). The Tata Group has been applying SA8000 principles and management systems throughout its companies. Certified companies within the Group include Tata Coffee, Plantation division, with 5,177 employees, Tata Steel Ltd., with 20,000 employees, and Tata Tea, Bengal and Bangalore divisions, with 850 employees. Sixteen Tata companies are committed to implement SA8000 and get their facilities certified.

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Tata Steel CSR leader Tata Steel Limited, a

leading global steel producer with 20,000 employees based in Jamshedpur, India, turns 100 years old in 2007. Having helped jump-start the industrial revolution in India, Tata Steel’s early and pioneering adoption of many personnel and operational management practices, such as the 8-hour working day, workers’ compensation and maternity leave, has gone on to become national law in India. With a well-structured human rights system already in place, Tata Steel Works received SA8000 certification in 2005. The company’s Sukinda unit was the first mine to earn SA8000 certification.

The company believes that labor conditions are one of the four crucial and closely related elements (the others being quality, on-time delivery and productivity) of a company’s cost-competitiveness and ultimately its overall performance and sustainability. Thus a major focus is on developing innovative quantitative and data-based measures to better guide action plans to improve labor conditions and to measure impacts. A key tool is its CSR Index, which combines the company’s

TATA Steel CSR Index

Weightage

Development Goals

= 70%

Business Process Accountability Composite Index

= 30%

* CSR Assurance

= 10%

* Ethics Assurance

= 5%

* SA8000 Index

= 5%

* Community Perception Survey

= 5%

* Employee Volunteerism

= 5%

Total

= 100%

developmental goals based on the United Nations Millennium Development Goals, with several other measurements to gauge social performance and stakeholder satisfaction. “The company recognizes that translating qualitative concepts pertaining to the workplace into measurable, quantifiable, and therefore, improvable, systems is complex, and compounded by diverse cultural factors and beliefs. SA8000 and other social standard-setting and assessment initiatives, offer tools for structured, systematic, and internationally-based responses to this variance.” – Priyadarshini Sharma, Senior Manager Business Excellence, Tata Steel Limited Tata Steel issues its CSR report according to GRI guidelines; this report can be accessed at the GRI Register, online at www.globalreporting.org.

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S A I C orporate P rograms

Since the launch in 1997 of SA8000, SAI has encouraged a wide range of “buying” companies – retailers, brand companies, sourcing agents – to publicly commit to using SA8000 as their ethical sourcing tool. SAI introduced an SA8000 Signatory Membership program in 1999. The program has expanded and today SAI Corporate Programs have three progressive levels of corporate participation, culminating with its Signatories. SAI Corporate Programs help and encourage member companies to extend the principles and management systems approach unique to SA8000 throughout their supply chains and often their own organizations as well. Member companies go beyond monitoring their suppliers. They work together with them to eliminate root causes of noncompliance, drive lasting improvements, reward advances, embed an advanced industrial relations system or “ownership of compliance” and increasingly to address elements in their own purchasing practices that may impede compliance or could enable better practices. The goal is for members to fully integrate social compliance into their supplier development and supply chain management. Member companies seek suppliers that have an advanced industrial relations system, engaging workers and managers in internal monitoring and systems to correct non-compliances and prevent their recurrence. SAI member companies have supported and actively participated in the full range of SAI projects and programs, including research studies, training programs, technical assistance and multi-stakeholder collaborations, many funded by governments and foundations.

SAI’s Corporate Assessment Program (CAP)

CAP provides a confidential in-depth review of a company’s compliance management system from headquarters down through the supply chain. These six areas of review in the multi-step process are: ■■ management systems, ■■ supplier development, ■■ auditing, ■■ verification, ■■ transparency and ■■ multi-stakeholder participation.

“The comprehensive SAI Company Assessment Program (CAP) reviewed our strengths and challenges and provided a helpful roadmap for the future development of our program. The involvement of a multi-stakeholder committee added credibility and objectivity to the process and provided for even richer recommendations.” – Dan Henkle, Senior Vice President, Social Responsibility, Gap Inc.

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Here are reports on the work of A SAMPLE of our CORPORATE PROGRAM members:

introductory member Gucci Group Flip through any fashion magazine and you’ll see an interesting example of SA8000 and haute couture: Corporate Programs Introductory Member Gucci Group. Gucci’s fashion brand had nearly $3 billion 2006 revenue and $873 million 2006 recurring operating income. It directly operates 219 retail stores as of year-end 2006, with about 5,000 employees; its design and production divisions employ about 1,000 more, for a total 6,059 employees at year-end 2006. In July 2007, GUCCIO GUCCI SpA and GUCCI LOGISTICA SpA, Gucci’s design and production divisions, both based in Florence, earned SA8000 certification. The certification covers all the design and production of leather products with Gucci brand. During the certification audit, about 16 suppliers were also verified, and a sampling plan is in place to verify more suppliers during the next surveillance audit, in keeping with SA8000 sampling provisions for management systems and control of suppliers. Explorer member Gap Inc. Meet Number 25 in CRO magazine’s “100 Best Corporate Citizens” list (2007), and one of the “World’s Most Ethical Companies”, Ethisphere Magazine (2007): SAI Corporate Programs Member Gap Inc. From its humble beginnings as a single shop on Ocean Avenue in San Francisco, USA, Gap Inc. has grown into a high-profile mover and shaker in the world of business and social responsibility. Gap Inc. is one of the world’s largest specialty retailers, with four of the most recognized apparel brands in the world – Gap, Banana Republic, Old Navy and Piperlime. Gap Inc. had fiscal 2006 revenues of $15.9 billion. The company operates more than 3,100 stores, employs more than 150,000 employees worldwide, and sources from over 2,100 factories in 50 countries across 6 continents. With such reach, the company’s emphasis on ethical workplace conditions and supply chain management positively impacts many workers, their families and

their communities. It also serves as a model for other companies seeking to integrate business with ethical principles. Gap Inc. joined SAI’s Corporate Involvement Program at the “Explorer” level in 2003 and has worked closely with SAI since then. One strategy the company actively pursues is to encourage its suppliers to become SA8000 certified as best practice. As of year-end 2006 it sources from 61 factories that are SA8000 certified, a 46% increase over 2005. These certified facilities are located in a wide range of countries, bringing positive change to workers’ lives in India, China, Thailand, Sri Lanka, Philippines, Pakistan, Indonesia, Vietnam, and Turkey. As a Corporate programs member, Gap Inc. has also participated actively in and helped fund various SAI capacity building and multi-stakeholder projects, to support its suppliers in making lasting improvements in workplace conditions. One of the first was SAI’s Vietnam program, which provided training to facilities to help them implement SA8000 standards. The company also works closely with SAI on the CIMCAW project in Central America and the Jo-In pilot project in Turkey, and is also a member of SAI’s partner Ethical Trading Initiative, based in the United Kingdom. In 2004, Gap Inc. chose to participate in a pilot of SAI’s Corporate Assessment Program (CAP), a comprehensive evaluation of the company’s social compliance program. Although it was not required to do so as an Explorer member, Gap Inc. elected to undergo this in-depth evaluation of its system, in order to identify key strengths and weaknesses and create an action plan to implement SAI’s recommendations. The company has since been implementing many of the recommendations, has had one follow-up assessment, and is scheduled for a second one at the end of 2007. It was the first company to publish its full multi-stakeholder CAP report. It also releases annual CSR reports. These documents are publicly available at www.gapinc.com. In mid-2007, Gap Inc. further demonstrated its commitment by announcing it would step up to the “Signatory” level member of SAI Corporate Programs.

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Signatory Member Eileen Fisher Inc. “To stop, to stretch, to breath” – this is the attitude encouraged at Eileen Fisher, Inc. corporate headquarters in Irvington, New York. The socially conscious women’s apparel company emphasizes personal well-being and work-life balance for its staff, supported by an Employee Wellness program which includes perks such as exercise, relaxation and nutrition classes, as well as education stipends. This focus on employee well-being is part of the company’s commitment to business responsibility and human rights – and is extended for both its own workers and those throughout its supply chain.

Eileen Fisher, Inc. adheres to SA8000 principles in its own company and also calls on all factories that produce its clothes to apply these principles and demonstrate continual improvement in implementation. The company monitors factories and help them set goals in the nine areas of the SA8000 system. It also provides training on SA8000 principles to its wholesale and retail staff as well as to factory managers and workers.

Headquarters Country

USA

Industry Sector

Apparel - women’s

Annual Revenue

$250 Million

An SAI Signatory member since 1999, the company has worked closely with SAI to support its suppliers to improve workplace conditions. It has funded and participated in numerous supplier trainings and various SAI projects and collaborations, such as CIMCAW, the NYC Factory of the Future project, and the China WorkerManager Training Program. Company representatives have been active on the SAI Advisory Board since 2000. Eileen Fisher’s Amy Hall Chairs the Corporate Programs Committee of SAI’s Board of Advisors. “As a women’s clothing company with a global supply chain, Eeileen Fisher, Inc. has, through SAI, joined a network of other concerned brands who have adopted SA8000 for their suppliers. We learn from each other, we work together on issues of mutual interest, and we recognize our shared strength in this global movement.” - Amy Hall, Social Consciousness Director, Eileen Fisher, Inc.

SAI Signatory Start Year 1999 Company Brands

Eileen Fisher

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Cutter and Buck

From the golf field to college campuses to corporate boardrooms (at least on Casual Fridays), Cutter and Buck’s polo shirts and sportswear mark high quality and social responsibility. An early and enthusiastic participant in the SAIHarvard consumer response study, Cutter and Buck has an active and long-standing relationship with SAI, and joined the Signatory Program in December 1999. The USA-headquartered retailer sources from approximately 45 facilities located in Thailand, Peru, India, Vietnam, Indonesia, Hong Kong, China, Macau, and South Korea. Seven SA8000 certified primary suppliers represent over 60% of annual Cutter & Buck production and are primary suppliers. In all correspondence with suppliers regarding audits and remediation, the company encourages them to pursue SA8000 certification. SA8000 serves as the company’s primary code of conduct and compliance policy, complemented by membership in the Fair Labor Association (FLA) as a college licensee. A combination of the two codes and the fact of membership in SAI and FLA is included on all external compliance communication as well as factory posters. Secondary suppliers that manufacture for the collegiate market, and are not SA8000 certified, are audited by Verite on an annual basis, using a customized audit instrument that combines the SA8000 and FLA codes.

Headquarters Country

USA

Industry Sector

Apparel - men’s and women’s traditional sportswear

Annual Revenue

$135 Million

SAI Signatory Start Date

1999

Company Brands

Cutter & Buck

We believe that the SA8000 certification process is highly valuable for factories to gain a better understanding of the compliance issues they face, while creating framework for practical strategies to diminish the instances of noncompliances in their factories. – Cutter & Buck, SAI Signatory Report, 2007

The company sources mainly from suppliers with which it has longstanding relationships. This encourages sustainable oversight of compliance by the company, conveys commitment to suppliers, and gives them the stability to make improvements. A further step in this direction is the company’s recent decision to move to maintaining exclusively factory-direct vendor relationships. Demonstrating a high level of corporate buy-in to social compliance, and close cooperation between the buying and compliance department, the social compliance coordinator reports directly to the Vice President of Global Sourcing and Distribution. Attesting to Cutter and Buck’s emphasis on social responsibility and multi-stakeholder partnerships, the coordinator represents the company at many industry meetings, conferences, and working groups. With the recent acquisition of Cutter & Buck by the New Wave Group, a publicly held Swedish company, human rights issues will be internationally managed.

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T he E thical C onsumer

SAI

seeks to provide useful information for the ethical consumer. If you want to use social criteria when shopping, you might prefer a sweater which meets these criteria: well priced, black, good quality, not scratchy, made under decent work conditions and in an environmentally protective facility. How can you know whether toys, clothing, or appliances come from workplaces where the workers are adults and are paid enough to live on, where they are not worked to exhaustion, where their rights are respected and their health not imperiled. This question is addressed by several aspects of our work. Certification is one way – it provides information on a range of ethical issues. SA8000 has traditionally been a B2B label (businessto-business, encompassing business-to-government procurement). As we embark on our Second Decade, our Advisory Board will decide whether or not to launch a consumer label for items made in SA8000 certified workplaces. Another way is via SAI’s Made-By clothing label partnership with Solidaridad, based on selecting and identifying a whole supply chain on ethical and sustainability criteria, including SA8000 certification and solid work with committed producers working toward certification, with assistance from Solidaridad. SAI works with companies, governments and academics to learn how to enable consumer recognition of and demand for ethical goods and services, as described below.

SAI-Harvard University Study Since early 2007, SAI has been collaborating with a research team at Harvard University headed by Professor Michael Hiscox, on a study testing market effects of different types of social product labels, certifications, and advertising. The tests gather critical information about the extent of consumer demand for socially labeled goods and the potential for expanding and extending the market for such goods in the future. The research team launched the study with an on-line auction offering both Transfair (fairtrade) labeled and unlabeled coffee and SA8000-labeled tee shirts and otherwise identical unlabeled ones. The two garment products, identical except for the SA8000 logo and identification, were displayed in tandem, allowing the researchers to measure from the auction bidding to find out what price premium consumers are actually willing to pay (if any) for the socially labeled good. The team then started a second round of auctions, offering polo shirts from SA8000 certified organizations, some identified as certified and some not. In the coming months the research team plans to expand the scope of the study to add more product offerings, including toys, shirts and candles, from SA8000 certified sites, and then to launch a trial online retail store. The research team hopes to eventually reach a large unbiased sample of consumers, so that they can analyze a range of factors such as product branding, demand elasticity, age, gender and income differences, effects of differing images, logos, labels and information about the certification process, and the perceived credibility of the Transfair and SA8000 information/identification.

Made-by Project Know what you wear! China’s booming textile industry has generated tremendous demand for cotton, making it the largest cotton producer in the world and providing a stable market for domestic cotton producers. There is also a growing interest both domestically and internationally potential for embedding sustainable development principles into this area of China’s economic growth and helping drive the fruits of prosperity to the country’s workers and their families.

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SAI and Solidaridad are partnering in the Made-by China Project, launched in 2006, to provide a model for sustainable, ethical organic cotton production. As part of Solidaridad’s Made-By initiative, the project aims to develop a flagship clothing line “Made-By China” that incorporates organic cotton production, socially responsible manufacturing and fair trade practices. The project seeks to bring global markets directly to smallholder cotton farmers and to facilitate the setup of a vertical apparel supply chain compliant with SA8000. Capitalizing on SAI’s experience in China leading innovative worker-manager training programs, and Solidaridad’s experience as a pioneers in the fair trade movement, the project will empower farmers and workers in the supply chain by offering training, technical assistance, and financial and marketing support. Initial research has found that the price of cotton in China is relatively high internationally. But millions of small-holder cotton farmers, especially in the remote regions of the country, still live in abject poverty. A primary reason is that they lack access to markets that offer fair prices. With increased efficiency in ginning, spinning, and knitting as prescribed by the Made-By program, however, operations will be able to pay more for raw materials while keeping final products price-competitive. Furthermore, global brands such as Coop Italia, Cutter & Buck, Eileen Fisher, Inc., H&M, Nike Inc., Nordstrom, Otto Group, and Timberland are increasing purchases of organic cotton. The project also seeks to engage these and other brands in the Made-by Initiative, to provide farmers with a global market for their socially responsible products and encourage production methods which will benefit China’s farmland and workers’ livelihoods in the long run. This builds upon familiarity in China with using the SA8000 standard, which has been part of the general CSR conversation since soon after it was published. And, today China is one of the three leading countries in number of workers employed in certified facilities.

Developing the network for organic production in Xin-jiang, China’s largest cotton production region: ■■ Technological expertise with the Cotton Institute of the Chinese Academy of Agricultural Science, which has already developed an “Organic Cotton Development Strategy” ■■ Business development with the “Bing-Tuan” national agriculture department of Xin-jiang, which accounts for at least 40% of agricultural production in the region ■■ Political support and enthusiasm from the Bureau of Agriculture of Xin-jiang and the Ministry of Agriculture, which prioritize organic cotton production as a competitive strategy ■■ Trade facilitation with the support of the Changi Agricultural Promotion Center ■■ Small-holder producers - individual family farmers and cooperatives that are the base of cotton production in Xin-jiang Solidaridad is a leading development aid NGO and one of the pioneers in the fair trade movement. Solidarid’s Made-by Initiative is an umbrella label for brands which source from socially responsible producers through a traceable system by which customers can verify they are buying ethically made goods. Solidaridad and Made-by are Signatory members of SAI Corporate Programs. Its representatives also serve on SAI’s Advisory Board. Creating the “Made-By China” responsible production chain: SAI and Solidaridad are laying the foundations of SA8000 compliant production: ■■ Certification of ginning operations to the SA8000 Standard ■■ Training on SA8000 for entire Made-By supply chain ■■ Fomenting fruitful dialogue between workers and managers through SAI-model of joint worker-manager training ■■ Engaging global brands which are increasing purchases of organic cotton

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B uilding A lliances : W orking with G overnments Governments are powerful allies in advancing the mission of human rights based development. SAI works with governments to strengthen ethical working conditions, protect the welfare of constituents and foster social dialogue. From training labor inspectors in Central America, to collaborating with Chinese agencies on organic cotton production, to advising the Regione Toscana on SA8000 incentive programs, SAI engages government at all levels. Government representatives are an important part of our stakeholder consultations, and they can drive fundamental social change.

More and more governments are recognizing that promoting a culture of social compliance leads to positive social and economic benefits. They are teaming up with business and other stakeholders to embed ethical principles in economic development – to improve workers’ lives and communities, enhance business performance, and boost national competitiveness. Italy Italy leads the world in the number of SA8000 certifications, with 590 facilities employing 104,000 workers achieved by June 30, 2007. The Regione Toscana (including Florence ) reports that in Tuscany alone 150 are expected to earn certification in 2007. This comes as a benefit of the strong environment of social consciousness among Italian consumers and businesses, especially in Northern Italy, and the encouragement of the Italian government through regional incentive programs for certification. Capitalizing on the unique cooperative relationship between government, business, and labor in Italy, as well as the prominence of small and mid-sized firms in Italian industry, several regional governments in Italy have taken the initiative to promote SA8000, offering financial assistance to SMEs seeking certification, and linking certification to public procurement. The Italian government has long been a leader in the EU initiative to promote CSR. In 2000, the Italian Ministry of Labor & Social Affairs developed the CSRSC (Corporate Social Responsibility - Social Commitment) Project to support CSR in Italian companies and to create transparency for consumers.

The specifics of the CSR program are decided by regional governments. The Regione Toscana government has been the frontrunner in this area. It has a multistakeholder Regional Ethical Committee that advises on CSR policies, and has instituted an incentive program, Fabrica Ethica, which includes small and mediumsize enterprise (SME) grants that cover up to 50% of consulting and certification costs; tax breaks on IRAP (Regional Tax on Productive Activities) for certifying to SA8000, ISO 14001, EMAS; and extra points in government insurance and other programs for SA8000 certified organizations. Through the program, 146 facilities had become SA8000 certified by December 2006. The Umbrian (including Perugia) regional government has a similar model; legislation provides benefits for SA8000 certified companies, including financial incentives, tax breaks, and modified administrative procedures. Companies seeking SA8000 certification can receive up to 50% of certification and consulting costs from the Regione. This incentive has inspired hundreds of companies to apply. Other regions reportedly having or developing incentives for socially responsible businesses include: Campania (Naples), Emilia Romagna (Bologna), Lazio (Rome), Lombardy (Milan), Le Marche (Ancona, Urbino), Piemonte (Turin), Puglia (Bari, Lecce), and Veneto (Venice).

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B.Venkatesham, Dr. Kalam, K.T. Ramakrishnan, K.T. Chandramohan INDIA In the first SA8000 certification of a governmental entity in Asia, the Collector’s Office of the Medak District, Andhra Pradesh State, earned SA8000 certification in early 2007. The certification was part of District Collector B. Venkatesam’s active promotion of welfare programs and industrial development in the district, which includes socioeconomic empowerment programs for women and youth. The Chief Minister of Andhra Pradesh, Dr. Y.S. Rajasekhara, issued a press release on the SA8000 certification, and encouraged all districts in the state to follow Medak’s example. The former President of India, A.P.J.Abdul Kalam, who had been following the progress of the District’s programs, also took notice of the certification, and has drawn national attention to the District’s efforts. The former President met with Mr. Venkatesam to talk about the programs, and is in communication with SAI about SA8000 and other SAI programs. According to national Indian press, foreign investors have taken notice as well, with some planning funding for other socially responsible projects in Medak. Medak District, with a population of about 2.5 million, is located in the Telangana region of Andhra Pradesh, about 62 miles north of Hyderabad. Indian states are divided into districts administered by a Collectorate. The District Collector is responsible for coordinating and facilitating the entire administrative functions of the District. The certification means that the offices of the Collector meet the requirements of SA8000, and also means that the departments which report to the Collector’s Office are informed about SA8000 requirements and will be monitored on their progress in implementing them. Thus, these departments are comparable to the suppliers to an SA8000 certified manufacturing or retailing enterprise and treated in keeping with SA8000’s emphasis on managements systems and inclusion of suppliers.

SAI and SA8000 are not new to public officials and policymakers in India. In 2002, the Textiles Committee (Ministry of Textiles, Government of India) convened meetings for manufacturers in 26 cities, to support industry certification to SA8000, ISO 14000 and ISO 9000, The Committee provides technical assistance to businesses to do so. SAI Executive Director Eileen Kohl Kaufman was able to join the session in New Delhi, “Quality and Compliances: Route to Global Competitiveness for the Indian Textile & Clothing Industry.” PAKISTAN In early 2007 the Government of Pakistan’s Ministry of Commerce launched a national project encouraging awareness and implementation of the SA8000 standard throughout Pakistan’s manufacturing and export sectors. According to the Ministry’s press release, the project “aims at enhancing the country’s export potential through ethical production and sourcing in the broader perspective of ‘Corporate Social Responsibility’”. The project, titled “Adoption of Social Accountability (SA8000)”, helps industrial facilities earn SA8000 certification by providing government financing of part of the costs, as well as coordinating training and consultancy services. The project is scheduled to run through 2009 and expects to help 250 industrial units earn certification, with a goal of the first 100 in 2007. The government’s expectation is that by addressing workplace conditions and practices and demonstrating compliance with the SA8000 standard, Pakistani businesses will demonstrate a high level of social accountability and become suppliers of choice in the international marketplace, improving Pakistan’s image abroad and increasing national economic competitiveness.

• 10 YEAR REPORT •

PART 2 > DRIVING CHANGE: HOW WE WORK

To be relevant and sustainable, social standards must answer to the needs of diverse users in diverse sectors and locales. Built into the SA8000 system, and informing everything we do at SAI, is a fundamental reliance on local stakeholder input to tailor our programs to the specific needs of our stakeholders, and local capacity building to develop infrastructures to sustain and scale up our impact. We refer to experts â&#x20AC;&#x201C; first and foremost, workers, and local suppliers, NGOs, trade unions, governments and academics â&#x20AC;&#x201C; to help us assess local needs and conditions and develop strategies for improvement. We partner to train workers, giving them the tools to exercise greater voice, and train managers, giving them the tools and ownership of improvements. We partner with regionally based brand staff, to serve as a link between multi-national brands and local suppliers â&#x20AC;&#x201C; building accountability on both sides. We partner to dialogue with trade unions and engage local NGOs who learn new techniques for facilitating workplace democracy and will provide ongoing support to the workers we train. These local members of our global action network are the keys to fundamental and sustainable change.

> building local capacity

SAI in Vietnam “We are aware that SA8000 is an efficient tool to prepare and to satisfy other audits of buyers. SA8000 is like A MIRROR to look at and realize who we are, what we lack and what is still needed to get done”. - Mr. Le Viet Toa, Deputy General Director, Viet Tien Garment Co., HCMC, Vietnam) SAI has developed and supported program activities in Vietnam since 2003, working to support rule of law and ensure the effective implementation of SA8000 through close collaboration with local stakeholders. Support for these activities has come from the U.S. Department of State, two foundations and the German technical cooperation agency, GTZ. At the beginning, SAI brought together a multi-stakeholder Vietnam Advisory Committee (VAC), which helped to shape program activities and priorities. With representatives from the private sector, civil society, labor, and government, VAC members have helped to identify challenges to SA8000’s implementation, and address sector-specific concerns about the standard. Training and capacity building are central to SAI and SAI Vietnam has worked with various local organizations and business associations to provide training to managers, workers, auditors, government officials, and business people. To date, SAI Vietnam has conducted 8 Supplier trainings, including joint manager62

worker training, manager training and trainings for 121 certified factories with 60,500 workers. Training topics include the SA8000 standard and guidance for social auditing, the Vietnamese labor code, the SA8000 complaints and appeals process, the use of self-assessment tools, and how to improve management systems. The SA8000 Self-Assessment tool was originally tested in five factories; 30 factories are now using it.

Pentland, ScanCom, and BSCI members such as the Nilson Group and Esprit. These companies have provided advice and financial assistance to their supplier-factories in their efforts to improve workplace conditions, benchmark, or work toward full compliance with and certification to the SA8000 standard. In return, SAI has provided worker and manager training courses at a low cost. These courses are increasingly led by Vietnamese trainers.

SAI has also worked to build capacity in Vietnam by training trainers and partnering with local associations to deliver the SA8000 supplier training to small and medium enterprises. Partners include: the Ho Chi Minh City Textile and Embroidery Association (AGTEK); the Vietnam Leather and Footwear Association (LEFASO); the Vietnam Textile and Garment Association (VITAS); the International Garment and Textile Training Center in Vietnam (IGTC Vietnam) and the Handicraft and Wood Association (HAWA) of Ho Chi Minh City. Based on our training experience, SAI launched in 2004 the SA8000 Self Assessment Tool (SAT), which was developed to help managers better understand the stipulations of SA8000 and local labor laws, as well as how to properly implement the standard in their facilities.

Furthermore, in 2004, SAI was selected by the German Technical Cooperation Agency (GTZ) and the Vietnam Business Links Initiative (VBLI) to moderate a series of roundtables addressing corporate social responsibility in Vietnam. The five roundtables attracted 100 participants to discuss ways to strengthen the benefits derived from improving labor standards.

Also supporting SAI’s training activities in Vietnam are corporations such as Gap, Kesko, Kids “R” Us, Timberland, Coop Italia, Adidas, Limited Brands, • SOCIAL ACCOUNTABILITY INTERNATIONAL •

In addition to training for managers and workers, SAI has conducted seven auditor training courses for 110 auditors and consultants, and convened five Calibration Meetings for accredited auditing bodies in order to improve and align their practices. In 2007, SAI supported the founding of the Vietnam-based Social Auditor Club (VSAC), in partnership with CSRVietnam, a Denmark-Vietnam JVC consulting company. This working group, which draws about 70 participants to each meeting, assists Vietnam-based social auditors to share knowledge and skills.

Project Cultivar In early 2007, under a grant from the U.S. Department of Labor, SAI launched Project Cultivar, to improve labor law compliance in the agricultural sector in Nicaragua, Honduras and the Dominican Republic. The four-year, $2.5 million project will work with an alliance of international and local stakeholders to improve labor conditions on farms and to strengthen the social dialogue around the importance of labor standards for the region’s competitiveness. Project activities will include training for rural employers and workers on national labor law, how to identify and document labor conditions, and mechanisms for presenting claims and issues to farm management and the Ministry of Labor.

Project Cultivar’s aim is to contribute to workers’ ability to exercise their rights, and for employers to implement changes for sustainable improvement. The project will engage regional and local institutions and organizations, including the Ministries of Labor, employer groups, trade unions and non-governmental organizations, in consultations, roundtables and other activities aimed at promoting social dialogue and building a culture of compliance with national and international labor standards.

New York City Factory of the Future Project The garment industry is a step in the classic immigrants’ road in New York City; many New Yorkers have relatives whose first job was there. Although mass production takes place elsewhere, the NYC garment industry serves a niche market and employs 30,000 workers. The fashion industry remains a major factor in the city economy. Supported by the Hitachi and Nathan Cummings Foundations and others, SAI is working with NYC factories which seek to expand the range of products and services they offer, be more competitive and break with pre-conceptions of poorly managed subcontractors and sweatshops in NYC. As these project factories distinguish themselves as both socially responsible and able to produce quality, fashion-sensitive samples and product runs, their survival will boost NYC’s fashion industry. The ability to innovate, test and respond to market tastes is vital to the future of the design industry; this point has been made by well-known brands and up-and-coming designers in recent opposition to rezoning proposals for Manhattan’s garment district which would drive out the factories. Key to maintaining a vibrant design and fashion industry in NYC are the

workers, especially skilled workers. Thus, as the industry looks to preserve production space, SAI supports programs like the Garment Industry Development Corporation’s (GIDC) on-the-job worker training, and promotes city programs to reward better working conditions. During 2006 and 2007, SAI, GIDC and Systain Consulting conducted production and management assessments in six factories, trained managers from five Eileen Fisher, Inc. factories and met with more than a dozen other factory owners, looking to improve their production efficiency, services and marketing. The project has also convened a series of meetings with brands, designers, factory and city representatives to define how best to support responsible producers in the city. Brand and designer commitment to use – and be public about using – socially responsible producers in the city is key to sustaining these jobs, which have historically enabled workers to go from low to high skilled production, to managing a small factory, working for a famous designer – or even becoming that famous designer.

• 10 YEAR REPORT •

Central America:

Alliance for Continuous Improvement in Central America (CIMCAW) Since 2003, SAI has been partnering on an innovative project in Central America to improve labor standards in the garment manufacturing (maquila) sector. The program, Continuous Improvement in the Central American Workplace (CIMCAW), brings together leading international labor, development and training organizations, US apparel brands, and the US Agency for International Development (USAID). Working with local stakeholders in Guatemala, Nicaragua, the Dominican Republic, Honduras and El Salvador, CIMCAW’s aim is to help countries address the challenges they face with the expiration of the Multifiber Arrangement (MFA), as well as strong competition from other regions of the world. The project seeks to build social dialogue, improve factory compliance with national law and international labor standards, improve the lives of workers, and boost industry competitiveness. At the local level, the effort is supported by a network of trade unions, government, private sector and NGO experts in labor relations. The project trains managers, workers and labor inspectors in ILO and national labor laws, creating a code-neutral approach to remedy issues in the Central American apparel industry such as child labor. With an emphasis on multi-stakeholder input and consensus-building, the project requires frequent consultation among the partners, collaboration on defining and refining training materials and performance indicators, and constant focus on the goal of building the capacity of local organizations.

K ey CIMCAW Achievements to Date ■■ Trained

257 workers and managers in Nicaragua and Guatemala, representing 28 factories with 30,000 workers. ■■ Trained 346 labor inspectors and third party auditors ■■ Established Hygiene and Health bipartite committee in factory in Guatemala, affecting approximately 9,000 workers. ■■ Increased local partner capacity. ■■ Established Consultative Committees in Nicaragua, Honduras, and the Dominican Republic. ■■ Impacted National Policy: the Nicaraguan Ministry of Labor has indicated that it will include the CIMCAW projects achievements on capacity building and social dialogue in its annual report. ■■ Made groundbreaking advances on social dialogue on labor standards. In 2007 alone, CIMCAW trained and disseminated information to

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approximately 40,000 stakeholders, including private sector, unions, NGOs, governments, and multinational brands. ■■ Achieved consensus internationally and nationally behind a set of training principles for workers and managers, which adhere to ILO principles of non-interference and enable workers to determine who among them should receive more training. ■■ Developed training materials and follow up tools for factory improvement plans. ■■ Developed a training model that includes tools such as the Implementation Guide which outlines the CIMCAW approach in detail and the Trainers Guide ■■ Developed tailored worker-manager training programs and vetted them with key stakeholders in Nicaragua and the Dominican Republic.

CIMCAW’s work is led by local multi-stakeholder consultative committees, which include labor and employers, as well as government and/or NGO participants who meet regularly to plan and guide project activities. In 2007, USAID decided to extend the project to CIMCAW II, which will include joint worker-manager training, technical follow-up support for factory improvements, impact analysis, social dialogue to promote a broader culture of compliance, and increasing the competitiveness of the Central American textile and apparel sector by improving working conditions at the factory level.

Alliance Partners: ■■ USAID ■■ Inter-American Development Bank (IDB) ■■ Development Alternatives, Inc. (DAI) ■■ Gap Inc. ■■ Timberland ■■ Walmart ■■ Social Accountability International ■■ International Textile, Garment, and Leather Workers’ Federation (ITGLWF) ■■ Regional Initiative for Social Responsibility and Decent Work (IRSTD)—a consortium of regional monitoring groups including GMIES, EMIH, ASEPROLA, PASE, CIPAF, and COVERCO

• 10 YEAR REPORT •

Participating Countries: Guatemala ■■ El Salvador ■■ Nicaragua ■■ Honduras ■■ Dominican Republic ■■ Costa Rica ■■

PART 2 > DRIVING CHANGE: HOW WE WORK

SAIâ&#x20AC;&#x2122;s stakeholders are the key resource for translating the principles of our mission into a concrete system of positive change. As a global action network, stakeholders and partners in our network develop and share the knowledge and tools to take effective action.

> building knowledge

Over the years we have trained people in the understanding and implementation of social performance standards, through country programs, seminars and workshops around the world. We partner with local organizations in many countries to tailor our curricula to local needs and conditions and to build local capacity to deepen and sustain our impact.

learning with our stakeholders Our trainings build on three of SAI’s key strengths: ■■

Multi-stakeholder input: SA8000 standard is globally recognized and credible because it is a product of the expertise of an international, multi-stakeholder Advisory Board. We bring the same multi-stakeholder approach to our trainings as we do to developing and revising the SA 8000 standard.

■■

Management systems approach: Effective and credible implementation of the SA 8000 standard means going “beyond compliance”. Our trainings highlight ways for producers and companies to incorporate the standard into their management systems to promote continual improvement.

■■

Experience: SAI has conducted trainings since 1998 and has trained over 10,000 delegates.

Worker-Manager Training As one of the leading manufacturing nations in the world, China has seen the importance of compliance to social codes of conduct as a means to attract business from major Western buyers in the US and Europe. Both critics and CSR practitioners, however, have observed that there is a general disconnect between management and the workforce, a shortfall that could impede the genuine implementation of codes of conduct and the sustainability of social compliance programs. In response to this need, SAI has run a model program in China since March 2004, to jointly train workers and managers, encourage managers’ openness to fundamental change in workplace relations and offer workers a secure platform to participate in efforts for better working conditions. Using a curriculum developed with the International Textile, Garment and Leather Workers’ Federation (ITGLWF) and local NGOs, the on-going SAI training program has so far directly trained more than 4,500 workers and managers in three years; and today there are 4 factories with independently elected worker committees. Representatives from the participating factories engage in open dialogue about the benefits of promoting worker participation through social accountability systems as well as the development of management systems for improved CSR. The workers and managers identify areas where their factories are not meeting a base line of acceptable working conditions as prescribed by ILO Conventions, Chinese labor law, and international labor standards such as SA8000, and discuss strategies for improving the factories socially and economically over time. The trainings culminated in the establishment of functioning

• SOCIAL ACCOUNTABILITY INTERNATIONAL •

worker committees that have been able to negotiate with management wage increases and workplace improvements at their respective factories. As brands and NGOs alike search for interventions with more sustainable impact than social audits, this program has served as a best practice example of how better management systems and worker participation can spur real change – the kind that is necessary to enable workers to begin to exercise their rights at work. SAI has witnessed significant changes in the participating factories in terms of both business improvements and worker empowerment. Not only do workers structure and organize the election of worker representatives, but the worker committee representatives also develop their own agenda for improvements and strategies for negotiating. Thus, working conditions and business stability improve and the positive changes stem primarily from workers’ own negotiation efforts.

Worker Training SAI has partnered to conduct worker training on three continents. A project with the ITGLWF is reported on pages 46-7 and pictured on the right.

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ON WORKER RIGHTS & BUSINESS “Without the program, we would never know so much about our own workers.” – Mr. Wu, General Manager of Lisheng, a toy factory participating in the SAI program “It was 8 years ago when we first learned the term “corporate social responsibility.” For many years we had been pretty passive, and more often than not, treating CSR as nuisance. But now I have the strong feeling that improvement in working conditions can benefit a company both in short and long term. In the short term, we all know that there has been a labor shortage all over China. If a company can learn workers’ real needs, and continuously improve the working conditions, I think you cannot even drive workers away. In my company, each time we open a new production group, we can easily fill up the positions. In the long term, the survival of any factory in the labor intensive industry depends on two things: one, a stabilized workforce; two, enhanced productivity. Without fair working conditions, it’s impossible to achieve either.” – Speech by Mr. Yisheng Zhang, General Manager of Chaida Garments at a seminar hosted by the Ministry of Commerce in Beijing, September 2006 “As the profit margin is getting down day by day, we have to pin down all the figures and seek all possible ways to reduce operation costs. Regarding labor costs, the longer a worker stays with us, the more we save.” – Mr. Bugang Lai, business owner, Chaida Garments. ON PRIDE & SENSE OF ACHIEVEMENT “After 10 years [being a migrant worker], that was the first time that I began to feel proud of being a worker.” – Yang Hui, a garment worker, and elected worker representative, telling trainers after the worker committee managed to negotiate a raise in piece-rate for 80% workers.

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Supplier/Manager Trainings SAI conducts supplier and supplier/manager trainings which are intensive workshops focused primarily on the strategic and operational issues and technical aspects of implementing sound management systems and ensuring ongoing compliance with SA8000. The goal of supplier training is to give supplier and managers the tools they need for conducting internal self-assessments vis-à-vis the standard and developing a practical social accountability policy. European Footwear Supplier Training Program Starting in 2003, under a grant from the European Commission, SAI partnered with The European Confederation of the Footwear Industry (CEC) and The European Trade Union Federation: Textiles, Clothing and Leather (ETUF:TCL) in a project to deliver joint training for suppliers and trade unions of the European shoe industry. The partners worked to educate and build capacity throughout the shoe sector to raise awareness of and implement the CEC/ETUF:TCL Code of Conduct/framework agreement, signed as part of the sector-based European social dialogue. The project explored ways to develop and implement a monitoring and verification system that would be both credible and adapted to the size of companies in this sector. The trainings focused on the ILO’s Core Labor Standards, other existing CSR tools such as OECD guidelines and GRI principles, implementation, monitoring, and independent verification, and SA 8000.

Key Achievements: ■■ Delivered

training and capacity building to employers and TU representatives in 15 European shoe factories on the latest developments of: CSR and social standards based on ILO Conventions, monitoring, verification, and SA 8000 ■■ Explored types of management systems to be implemented in small and medium-sized enterprises ■■ Developed a specific toolbox for companies in the European footwear sector in order to help them monitor and verify implementation of codes / the CEC / ETUF:TCL framework agreement ■■ Reported and disseminated the findings for the footwear industry ■■ Liaised with small retailers to find mechanisms to support the implementation of the CEC/ETUF:TCL Code of Conduct. Supplier Training Courses In addition to its supplier training within country programs and special projects, SAI offers supplier trainings as open and custom courses. Supplier training courses have been conducted in Poland, Brazil, Vietnam, Netherlands, India, Sri Lanka, Peru, Italy, Mexico, Thailand, China, Hong Kong, Bulgaria and Turkey, with participants from businesses, auditing firms, NGOS and government.

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Partner organizations and funders over the years: Civil Society Development Foundation Brazilian Institute for Socio-Economic Analysis (IBASE) Peru al Mundo The Center for Labor Assessment (CEDAL) Amana LINK Fair Trade Sri Lanka Export Development Board (EDB) Ho Chi Minh City Textile and Embroidery Association (AGTEK) Vietnam Leather and Footwear Association (LEFASO) Handicraft and Wood Association (HAWA) IGTC (Vietnam) Institute of Contemporary Observation (ICO) Chinese Working Women Network (CWWN ) Institute Ethos (Brazil) TUV Rheinland (Bulgaria) Toys “R” Us U.S. Department of State Eileen Fisher Tchibo Confederation of Indian Industry (CII)

Custom Training

SA8000 Custom Courses

SAI has also conducted numerous customized SA8000 training for company-based compliance auditors, management teams and/or suppliers, working with them to determine specific training needs and to create courses addressing the challenges ahead in developing, implementing or improving social compliance program. The courses cover topics such as; interpretation of SA8000 elements and integration with company’s code of conduct, identifying industry and country-specific compliance issues and opportunities, and tools and techniques for gathering information and facilitating continuous improvement.

Company Location Chiquita Brands Intl. USA, Costa Rica, Belgium DEG Cologne Walt Disney Co. China DNWE Germany Dole Food Co. Switzerland Eileen Fisher, Inc. China FMO Amsterdam Gap Inc. Thailand, India, Manila, United States, Turkey J&J Services Singapore Kenan Institute Thailand Kesko Oyj Finland Otto Group Germany Sears, Roebuck China Tchibo Hong Kong Thomson Corp. Hong Kong Toys ‘R’ Us, Inc. China Univ. of Warwick UK

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SAI’s SA8000 AuditoR Trainings Around the World 1998-2007 ■■ 63

Basic Courses, 41 Advanced Courses ■■ 1,858 Basic Course Attendees, 653 Advanced Course Attendees ■■ Course held in 32 different countries: Argentina Bangladesh Belgium Brazil Bulgaria Canada China Costa Rica Denmark France Greece Honduras India Indonesia Italy Japan Kenya Mexico Netherlands Pakistan Peru Philippines Poland Portugal Spain, Sri Lanka Switzerland Thailand Turkey United Kingdom United States Vietnam

SA8000 Auditor Training A cornerstone of our training program is our SA8000 Auditor training. By promoting reliable auditing and understanding of the standard as it applies to practical situations, SAI trainings address the needs of different partners involved in improving global working conditions and increasing supply chain efficiency worldwide. Starting with our first accredited auditor course in 1998, we have trained over 2500 attendees in SAI courses ranging over 32 countries. Thousands more have been trained through courses run by SAI accredited training partners such as Bureau Veritas, SGS, RINA, CISE, and Plexus. Our five-day Basic Auditor course trains not only auditors but students from a wide range of backgrounds and interests. Over the years the course has

drawn auditors, corporate compliance staff, government officials, academics, and trade union and NGO representatives. The course teaches the background of the SA8000 standard, the interpretation of SA8000 elements, and ways to facilitate implementation and maintenance of the standard going forward. Our three-day Advanced Auditor course reinforces and develops auditing skills for auditors who have had extensive experience conducting SA8000 certification audits in the field. These courses serve to build expanded expertise in area and sector compliance issues and enhance interviewing and other auditing techniques. The class builds on the collective experiences of the students, offering insight into fundamental issues that arise on a regular basis in field assessments and ensuring that a common level of acceptance is applied by all certification bodies.

â&#x20AC;˘ 10 YEAR REPORT â&#x20AC;˘

Communicating Progress

SAI and the SA8000 system are at heart a collaborative process built on communication – incorporating the voices of many stakeholders, and building public spaces for open discussion and feedback. Effective communication extends this public space to engage and mobilize interested parties, including the general public, and makes human rights at work an indelible part of discussion and practice in every corner of the world. We see the communication of our mission, goals and progress as both a responsibility and an opportunity. It allows for evaluation, transparency and accountability. It also allows for sharing learning, reaching a broad base, and mobilizing resources. It helps link the partners in our global action network. Although copyrighted, the SA8000 standard is available for free and SAI freely gives permission for its reproduction and use, in textbooks, internal company policy documents, and reports on social standards implementation. Although English is the official language, there are many translations into other languages, including French, Spanish, Tamil, Portuguese, Arabic, Italian, German, Chinese and Japanese.

Through our websites, conferences, monthly newsletters, and other publications, SAI shares updates on our programs, publicizes the efforts of our partners, reports on progress, and serves as an education and information resource for stakeholders, including the general public. www.saasaccreditation .org – SA8000 information on certification and accreditation processes are posted, as are advisories for auditors and certification bodies. SAAS maintains a public list of all SA8000 certified facilities and accredited certification bodies. www.sa-intl.org – SAI posts news about programs, training schedules, research and reports, case studies as well as statistics on SA8000 certification. Our staff and Board members travel around the world to participate and present in working groups, conferences, roundtables, academic institutions, to share learning, best practices, and to convey the message of decent work.

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Over these years we have archived articles about SAI in hundreds of publications, on most continents, from the very first in the Wall Street Journal and Financial Times to the latest in Ethical Corporation, in English, Chinese, Portuguese, Italian, Norwegian, Finnish, French, Spanish, Dutch, Hindi, Japanese, Polish, Ukrainian and other languages. Our annual conferences gather representatives from NGOs, trade unions, businesses, academia, auditing bodies and government, to learn the latest methods and tools for improving social performance, hear the latest reports from the field, and debate the issues. For a list of our conference programs, speakers and their presentations, go to www. sa-intl.org

As we’ve reflected on the achievements and lessons learned from our first decade, we asked our stakeholders to help in this evaluation process through an on-line survey this summer. We asked for candid opinions on the impact and strength of our programs and our communications to our stakeholders – how effectively are we working, how can we do better? We received a great level of response, and learned a lot from the thoughtful answers. As we look back on our last decade and look to the challenges and milestones ahead, the voices of our stakeholders will continue to challenge and inspire us.

In your own words, what do you think has been the impact of SAI in the last decade? What do you think has been SAI’s greatest achievement to date? There are many codes of conduct related social accountability, but only SA8000 has become the best and has become the meaning of social accountability. SA8000 certification has had the most impact. SAI’s greatest achievement has been the improvement of workers’ rights in certified factories. Greatest achievement: to make it possible for factories in China and India to show through an independent certification that they respect their workers. Setting human justice standards for organizations throughout the world that not only educate but also are good business practices (GRO reporting, social accountability auditing). Made social accountability part of the business strategy. More opportunities for workers to associate in trade unions and bargain collectively. Workers and employers are more conscious about core labor rights and this generates positive change. Public awareness of companies committed to assuring humane working conditions.

SAI should promote the activity in East EU countries. SAI gives SA8000 trainings and observes certified factories most effectively. SAI needs to have local branches in all countries where factories are certified. Does most effectively: a workable certification scheme. Need to improve: The methodological approaches for defining some key issues like the living wage or the accepted maximum hours of work. Establishment of the standard and accompanying guidance is the core value SAI brings. Most effective: Multi-stakeholder engagement and involvement. Improve: SAI needs to become more service oriented. Not many companies support the SA8000 standards By using SA8000 as a framework, SAI can work more like consultants. Needs greater engagement and thrust and visibility in developing world. Benefits of this approach from biz perspective are needed to be made more vocal and apparent . Partnerships with companies is both a strength and an opportunity for more influence. You need more companies.

What do you think SAI does most effectively? What do you think SAI needs to improve? Most effective is capacity building through training on SA8000. Least effective is the research and free sharing of info of what is leading practice and how it can be achieved. SAI effectively conducts training partnerships for workers, managers, auditors and other interested parties in labor rights and workplace improvements plus effective use of SA8000.

What do you think has been the impact of SA8000 in the last decade? Managers understood that quality of products is not enough to be on the top. They have to invest in resource management - Human resources, Infrastructure, work environment, ecology...worker rights. Evolve ‘Compliance Standards’ for ALL stakeholder Vis a Vis each others instead of current burden on END MFG ALONE: a) Top level supply Chain are currently able just pass on the

• 10 YEAR REPORT •

buck down the line and only involved in such ‘Ethical’, ‘Social’ standards CHIEFLY TO PROTECT THEMSELVES FROM POSSIBLE CONSUMER/MEDIA BACK LASH. In a world where people and organizations talk and talk about Social Responsibility, SA8000 is the only certifiable standard. The great achievement of SAI is the worldwide scope of the SA8000 certifications, I guess it is a lot of work to do in order to increase the number of facilities certified. It has drawn attention to areas in international labor that are not addressed by other NGOs or governments including that of the US. No other organization has done as much for social accountability as the SA8000 has. Only credible standard that allows certification and by that enables companies to use social compliance performance for marketing purposes. Focus on management system ensures higher sustainability. In the future the SA8000 norm will be a reference model for companies and will combine the possibility of being competitive and safeguard, at the same time, life quality. This certification will represent one of the highest sales potentials for the companies as the big distribution chains will highlight more and more the ethic guarantee which their marketed product derives from. It is quite clear that in a fast developing country like India, a knowledge-based environment is only a matter of time. In such an environment, a socially responsible organization will be a necessity. Without such a commitment no organization will have a future. We are sure that more and more SA8000 will be recognized worldwide and customers will prefer to trade with suppli75

ers that are compromised with social responsibility best practices. What specific suggestions do you have for making the SA8000 standard stronger? Revise to include learning, make more pragmatic of the complexity of globalization and supply chains. i.e. how could working hours be addressed sustainably without negative impact to workers income and productivity at the same time otherwise this will not work - what are the long term systemic changes needed. Become more involved in the political arena to make it law not just voluntary. Make all possible efforts to extend the applicability of the standard to organizations of every kind and size, with no restrictions (i.e., mining, small and micro companies). In order to do so I guess it will be necessary to make some requirements more flexible and to set guidelines for the implementation and evaluation of some others (i.e. unions in small and micro companies). Push big brand and big shopkeeper to use SA8000 for their supply chain. The SA 8000 should be more visible to consumers. The SA8000 should be applicable for agricultural processing and/or trade companies that mainly sources the produce from small holders. Organizations need more incentive for adopting the SA8000 - this should be considered “best practice” standard but also required for best companies to work for. The credibility of SA8000 needs to be better for more brands to recognize it and for more factories to want it. There needs to be better controls to be able to verify the authenticity of the SA8000 certificates. Shift away from the accreditation system of large commercial certification bodies; create own SAI-trained and constantly calibrated SA8000 specific force of auditors. SAI needs to improve its public visibility among consumers, workers and activists. Auditing must become more uniform within countries and across countries. Some aspects are incredibly difficult to implement (living wage) because they are larger than a single workplace, and there may be ways to point things in the right direction with larger goals worked on at higher (governmental/ industry-wide) levels as necessary. 76

What do you think will be the major challenges in the field of workers’ rights and labor standards in the next ten years? The major challenges depend on the country / region involved, since there are very different levels of compliance/ respect/violations of labour and human rights everywhere. In Chile the major challenges are related to wages, work hours, discrimination (mainly by gender) and unions. Turning commitments into action, and ensuring that workers are enabled to assert their own rights. Working overtime; that is generally guided by law but custom is usually something else. Also the misconduct of the audit system, i.e. cheating in audits, audit reports etc. Increased work hours - organizations in USA seem to increase workers work week more and more. This leads to increases in injuries - especially in musculoskeletal disorders from repetitive motion. Educating workers on their rights and building up local capacity of trade unions and NGOs to support them. Also, instituting management systems in factories and ethical sourcing. Migrant workers , women’s rights in emerging economies and poor countries , poverty and child labour versus social accountability Getting & staying ahead of suppliers’ attempts to circumvent auditing & compliance functions by empowering workers to improve their own workplaces, esp. in places where their options for representation & collective bargaining are limited: “sustainable compliance” - ensuring that labor rights in the supply chain stay high on the agenda of leading companies and become a requisite to do business for all major players in every industry (i.e., avoid “issue fatigue”) - finding ways to ensure that small, local suppliers and firms with less brand equity (i.e., “bottom feeders”) don’t take advantage of more ethical companies’ standards to compete on price by using unethical suppliers - developing universal standards that go beyond voluntary codes Involve workers more actively - Tackling the issue of bad purchasing practices - Manage to involve the consumers, who so far are not aware of MSI, SAI or similar things.

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What do you think will be the challenges for SAI in the next decade? Widen the scope and applicability of SA8000, strenghen its international recognition at every level (consumers, ONGs, governments) and support a strong increase of SA8000 certifications. The launch of ISO26000 will affect the certification of SA8000. Worker education and empowerment, assisting factories to implement management systems effectively.

WHAT DO WORKERS NEED? (OTHER THAN MAKING MONEY) THEY DO WANT TO SPEAK OUT: “We traveled thousands of Li [miles] to come here to make money of course, but [other than making money] we do need to talk sometimes.” --A worker while attending SAI training in 2004 THEY WANT ACCOUNTABLE MANAGEMENT: “Lao Ban (Bosses) should keep their words better.” GIVEN OPPORTUNITY, THEY DO WANT TO PARTICIPATE: “We keep words to ourselves primarily because we find it useless to make requests anyway.” THEY WANT RESPECT OF COURSE: “The thing I hated most is that my Lao Da (line supervisor) yells at us constantly.”

Financial Summary Here are financial snapshots of SAI revenue and spending, with some 2006 data and the pattern of revenue over ten years. Over the past ten years, revenue has grown about five times to roughly $3 million in 2007. Considerably more is spent on programs SAI works in, considering revenue for those programs that comes to another partner. In 2006, revenue was derived approximately equally from grants and other sources. This proportion varies considerably from year to year based on the actual timing of grant award notices and accounting rules on income recognition dates. As a US-based charitable 501(C)(3) organization, SAI files a 990 statement annually with the US Government, these reports are available on line through the Better Business Bureau and Guidestar. Over 80% of our revenue is devoted to program. Throughout this report we’ve indicated funders of major projects and we thank them all for their support of SAI alliances for decent work. Direct funders have included the United States Departments of State and Labor, the Ford Foundation, the Hitachi Foundation, the Open Society Institute, the John and Catherine T. MacArthur Foundation, the Rockefeller Foundation, the Friedrich Ebert Stiftung, CIPE, the Nathan Cummings Foundation, the Robert Sterling Clark Foundation and the J&L Foundation. We are also hugely grateful to the many individual and anonymous donors who have also supported our work over the years. They are listed on our website.

Revenue Growth

EXPENSE ALLOCATION 2006

$3,000,000

$2,500,000

$2,000,000

13% 23% 5%

$1,500,000 ACCREDITATION TRAINING

$1,000,000

CORPORATE PROGRAMS COUNTRY PROGRAMS FUNDRAISING

$500,000

Finance & Administration 16% 30%

$0 1998

1999

2000

2001

2002

2003

2004

2005

2006

2007 P

13%

• 10 YEAR REPORT •

SAI Staff and Consultants SAI and SA8000 are fundamentally about people. SAI has a diverse, talented and dedicated staff and contractors, at its NYC headquarters and abroad, giving their all to promote better lives for their fellow workers around the world. Alice Tepper Marlin President and CEO since 1996, upon the founding of SAI, also serves as Adjunct Professor of Markets, Ethics and Law and 2007-08 Citigroup Distinguished Fellow in Ethics and Leadership at NYU’s Stern School of Business. Ms. Tepper Marlin is the recipient of numerous awards, including: Ashoka’s for Social Entrepreneurship, Japan Society Fellowship, Right Livelihood Award, Wellesley College Alumnae Achievement Award, Social Venture Pioneer Award, and both Adweek’s and Mademoiselle’s Woman of the Year Award. She has been profiled in The New York Times, People, Vogue, The Philadelphia Inquirer, The Los Angeles Times, The Miami Herald, Newsday, The Palm Beach Post, Asahi Shimbun, Time and appeared on “The Today Show,” CNN, “Good Morning America” and more than 1,000 radio programs. In 1969, Ms. Tepper Marlin founded the Council on Economic Priorities (CEP) in 1968 and served for over 30 years as President & CEO. At CEP, she wrote and/or edited dozens of books, including Shopping for a Better World. Earlier, she served as a securities analyst and labor economist at Burnham & Co., and as the 78

editor of the tax journal of the International Bureau of Fiscal Documentation in the Netherlands. She is a graduate of Wellesley College and studies at the NYU Graduate School of Business Administration. Eileen Kohl Kaufman Executive Director since SAI was incorporated in 1997. Prior to joining SAI, she was Director of Strategic Planning at the NYC Department of Environmental Protection, a strategic planner at the NYC Department of Design and Construction, and a financial planner at the NYC Water Board. Earlier, she worked at the Council on Economic Priorities, co-authoring Paper Profits, an analysis of paper mill pollution and its control. Ms. Kaufman earned degrees in economics and business from Wellesley College and Columbia University. Doug DeRuisseau Director of Field Services, has worked with SAI since 1998. Previously, he was President of DJD & Associates and worked as an auditor for SGS. His consulting background has involved providing resources for companies that require additional expertise to implement or redesign their quality and social accountability manage-

ment systems. He has over 29 years of executive management experience in AT&T and its subsidiaries and is a graduate of Norwich University. Judy Gearhart Program Director at SAI and Adjunct Professor at Columbia University. She joined SAI in 1998. She has worked on democratization and women’s labor issues in Mexico and conducted evaluations for UNICEF, Honduras. Gearhart is the author of a national child labor study in Honduras for the International Labour Organization. She has participated in numerous public forums and published on topics including: NGO networks’ influence on policy-making, child labor, and corporate social responsibility. Ms. Gearhart earned a Masters of International Affairs from Columbia University. Richard Cook Chief Financial Officer since 2004, supervising all accounting and administrative systems staff, oversees budget development and prepares interim financial reporting. He also oversees cash management, banking, contracts, policy review and all human resourcerelated dealings. He is a graduate of Pace University. Craig Moss Director of Corporate Programs and Training, joined SAI in 2007. As Corporate Programs Director, Mr. Moss administers SAI’s Corporate Programs and works closely with members to ensure that they realize full value in their investigation and/or application of SA8000. As Director of

Training, he also oversees issues on various types of SA8000 training. He is a graduate of Hampshire College. Elena Arengo Latin American Programs Director. Prior to joining SAI in 2001, Ms. Arengo served as the Program Coordinator for MADRE, an international women’s human rights organization. Ms. Arengo, a native of Argentina, has taught at New York University, and conducted extensive anthropological field research. Ms. Arengo received her Ph.D. and M.A. from the New School for Social Research and her B.A. from the State University of New York at Purchase. Martin Ma China Program Director. He is responsible for SAI’s programs in China and previously for standard development, research, and outreach focusing on Asia, especially East and Southeast Asia countries. Before joining SAI in January 2001, Mr. Ma worked at a pharmaceutical factory in Central China for three years and then worked as a project manager for two years with a multinational company in Beijing, China. Mr. Ma graduated from University of Pennsylvania (M.A.) and Beijing University (B.A.). Marie-Rose Coulibaly Bookkeeper, has been at SAI since 2005 and is responsible for the reviewing, processing and recording of all payables, receivables, cash receipts and cash disbursements, allocations payroll and reconciliation of all

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cash accounts. Matt Daly Executive Assistant & Events Coordinator since 2006, assists the President and Executive Director with administrative and logistical support, and assists various departments with program management, research and fundraising. Prior to joining SAI, Mr. Daly worked for the Development Group for Alternative Policies and Probigua (The Library Project of Guatemala). Matt earned his B.A. from the University of Michigan and M.A. in International Economic Policy from American University. Valentina Gurney Training Associate, coordinated SAI’s training starting in 2004, and is currently pursuing a degree in International Affairs at Columbia School of International and Public Affairs while working for SAI part-time supporting the Training Department. She is a graduate of the University of North Carolina at Chapel Hill Jane Hwang Manager of Corporate Programs and Training, has worked with SAI since 2005, and now manages SAI’s training courses, services for corporate members, and coordinates communications. She earned her B.A. from Columbia University. Yen Phan Vietnam Project Advisor since 2004, works with local organizations and international experts to develop training and facilitate public debates on corporate social responsi-

bility at the workplace. She has experience in the fields of journalism, market research, public relations and advertisement. In 2006 she was a Fellow in Columbia University’s Human Rights Advocacy Program in the US. She is also a co-founder and chairperson of the Vietnam-based Social Auditor Club. Julia Ponce Latin America Program Associate. Prior to joining SAI in 2005, Ms. Ponce was the Program Coordinator of the Mediation Alternative Project, where she rendered conflict resolution services as a certified mediator and arbitrator. Ms. Ponce has participated in research projects at the WTO and UNHCR in Geneva and has also worked in the import-export industry of hazardous materials and commodities. A native of El Salvador, Ms. Ponce received her B.A. in Political Science and Development from Hobart and William Smith Colleges. Jason Turner Office Systems Manager since 2003, working on Web, database, fundraising, responding to information requests and assisting with program-related and communications efforts. Previously, he worked with American Indian Community House and was a Public Programs Associate at the Mashantucket Pequot Museum and Research Center. He holds a B.F.A. from the University of Connecticut. James Childress has been a contractor to SAI and SAAS, starting in 1998, working

as a trainer and accreditation auditor and developer documentation and procedures for the InterAction project for certification of Child Sponsorship Organizations. He is President of International Quality Systems, Inc., and has over 30 years experience in quality management as an auditor and manger around the world. He earned a BSME from Kettering University and an MBA from the University of Dayton. Badri Gulur often serves as a lead trainer and auditor for SAI and SAAS as well as head of 4-D Management Consulting Ltd in Bangalore, India. Mr. Gulur was formerly the Lead Auditor in ISO 9000 & ISO 14000 and the Country Manager for SA8000 for BVQI (Bureau Veritas Quality International), India. Other experience includes working as a consultant for groups such as KPMG (India) Pvt. Ltd., USAID, and working as a researcher for Intervention (India) Pvt. Ltd. and the Waste Wise Project. Deborah Leipziger has worked first with CEP and then with SAI from 1997, playing a key role in the development of the standard Social Accountability 8000 and its Guidance Document. Previously she worked for Senator Lee Hamilton. She is the co-author of Corporate Citizenship: Successful Strategies of Responsible Companies, and the author of SA8000: The Definitive Guide, published by FT in May 2001. A native of Brazil, she holds a Masters of Public Affairs from Columbia

University and a BA from Manhattanville College. Matthew Applebaum, I.T. Consultant , has managed all issues related to information technology since 2003. This includes networks, computers, websites and databases, as well as staff members’ experiences with those items. Matthew comes from Honolulu, graduated from the University of Colorado and Berklee College of Music Victor Thorpe has been a contractor to SAI and SAAS,since 2003, conducting auditing, training and research, and is Coordinator and Principal of Just Solutions Network. Previously, he served as General Secretary of the International Federation of Chemical, Energy, Mine & General Workers’ Unions (ICEM), in other trade union governance positions, and as Associate Director of George & Allen Publishing Co. He is a graduate of King’s College, London University. Yolanda Brenes Hernandez is an independent auditor, conducting auditing and training with SAI and SAAS. She previously worked for certification and consulting firms on both social and environmental audits. She also worked at Chiquita in as Social Accountability Products Regional Manager. Ms. Brenes holds degrees in Biology and Business from the Universidad de Costa Rica.

Sean Ansett works with SAI as a trainer and researcher; he is Managing Partner of At Stake Advising. Previously, he was Global Partnerships Director at Gap, Inc, for seven years. He has published articles on partnerships and social responsibility, served in the US Peace Corps, and holds business degrees from Illinois State University and California State University.

for the national association of State Public Interest Research Groups (PIRGs) and holds her degree in Environmental Policy from Rutgers University.

W i t h a l l o u r t r a v e l i n g , i t’ s h a r d getting us all together for one picture!

Michael Londrigan is Project Manager for the Factory of the Future Project. He has 30 years experience in the clothing industry and teaches business management and marketing in the textile industries at Berkeley College and Westchester Community College. SAAS STAFF: Rochelle Zaid serves as the Director of Accreditation at SAAS, as of this year. Before joining the staff at SAI in 2000, she was an outsourcing manager for many years with Country Miss Inc. and helped develop the social accountability program at Eileen Fisher, Inc.. During that time, she also served as an alternate on the SA8000 Advisory Board. She is a graduate of Brooklyn College. Lisa Bernstein, SAAS Accreditation Manager, started at SAI in 2001. Previously, she was the Registered Representative and Administrative Director for Green Century Capital Management, a socially responsible investment firm. Ms. Bernstein has also directed public interest and recruitment campaigns

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SAI is hugely grateful to Jane Hwang, Eileen Kaufman and Pamela Moss for writing, editing, and producing this report. 79

T H E S A 8 0 0 0 S T A N D A R D

I. PURPOSE AND SCOPE This standard specifies requirements for social accountability to enable a company to: a) develop, maintain, and enforce policies and procedures in order to manage those issues which it can control or influence; b) demonstrate to interested parties that policies, procedures and practices are in conformity with the requirements of this standard. The requirements of this standard shall apply universally with regard to geographic location, industry sector and company size. Note: Readers are advised to consult the SA8000 Guidance Document for interpretative guidance with respect to this standard.

ILO Convention 135 (Workers’ Representatives Convention) ILO Convention 138 & Recommendation 146 (Minimum Age and Recommendation) ILO Convention 155 & Recommendation 164 (Occupational Safety & Health) ILO Convention 159 (Vocational Rehabilitation & Employment/Disabled Persons) ILO Convention 177 (Home Work) ILO Convention 182 (Worst Forms of Child Labour) Universal Declaration of Human Rights The United Nations Convention on the Rights of the Child The United Nations Convention to Eliminate All Forms of Discrimination Against Women

II. NORMATIVE ELEMENTS AND THEIR INTERPRETATION The company shall comply with national and other applicable law, other requirements to which the company subscribes, and this standard. When national and other applicable law, other requirements to which the company subscribes, and this standard address the same issue, that provision which is most stringent applies. The company shall also respect the principles of the following international instruments: ILO Conventions 29 and 105 (Forced & Bonded Labour) ILO Convention 87 (Freedom of Association) ILO Convention 98 (Right to Collective Bargaining) ILO Conventions 100 and 111 (Equal remuneration for male and female workers for work of equal value; Discrimination)

III. DEFINITIONS 1.Definition of company: The entirety of any organization or business entity responsible for implementing the requirements of this standard, including all personnel (i.e., directors, executives, management, supervisors, and non-management staff, whether directly employed, contracted or otherwise representing the company). 2. Definition of supplier/subcontractor: A business entity which provides the company with goods and/or services integral to, and utilized in/for, the production of the company’s goods and/or services. 3. Definition of sub-supplier: A business entity in the supply chain which, directly or indirectly, provides the supplier with goods and/or services integral to, and utilized in/for, the production of the supplier’s and/or company’s goods and/or services.

4. Definition of remedial action: Action taken to make amends to a worker or former employee for a previous violation of a worker’s rights as covered by SA8000. 5. Definition of corrective action: The implementation of a systemic change or solution to ensure an immediate and ongoing remedy to a nonconformance. 6. Definition of interested party: Individual or group concerned with or affected by the social performance of the company. 7. Definition of child: Any person less than 15 years of age, unless local minimum age law stipulates a higher age for work or mandatory schooling, in which case the higher age would apply. If, however, local minimum age law is set at 14 years of age in accordance with developing-country exceptions under ILO Convention 138, the lower age will apply. 8. Definition of young worker: Any worker over the age of a child as defined above and under the age of 18. 9. Definition of child labour: Any work by a child younger than the age(s) specified in the above definition of a child, except as provided for by ILO Recommendation 146. 10. Definition of forced labour: All work or service that is extracted from any person under the menace of any penalty for which said person has not offered him/herself voluntarily or for which such work or service is demanded as a means of repayment of debt. 11. Definition of remediation of children: All necessary support and actions to ensure the safety, health, education, and development of children who

have been subjected to child labour, as defined above, and are dismissed. 12. Definition of homeworker: A person who carries out work for a company under direct or indirect contract, other than on a company’s premises, for remuneration, which results in the provision of a product or service as specified by the employer, irrespective of who supplies the equipment, materials or other inputs used.

and work time does not exceed 10 hours a day. 1.4 The company shall not expose children or young workers to situations in or outside of the workplace that are hazardous, unsafe, or unhealthy.

IV. SOCIAL ACCOUNTABILITY REQUIREMENTS

2. FORCED LABOUR Criterion: 2.1 The company shall not engage in or support the use of forced labour, nor shall personnel be required to lodge ‘deposits’ or identity papers upon commencing employment with the company.

1. CHILD LABOUR Criteria: 1.1The company shall not engage in or support the use of child labour as defined above. 1.2 The company shall establish, document, maintain, and effectively communicate to personnel and other interested parties policies and procedures for remediation of children found to be working in situations which fit the definition of child labour above, and shall provide adequate support to enable such children to attend and remain in school until no longer a child as defined above. 1.3 The company shall establish, document, maintain, and effectively communicate to personnel and other interested parties policies and procedures for promotion of education for children covered under ILO Recommendation 146 and young workers who are subject to local compulsory education laws or are attending school, including means to ensure that no such child or young worker is employed during school hours and that combined hours of daily transportation (to and from work and school), school,

3. HEALTH AND SAFETY Criteria: 3.1 The company, bearing in mind the prevailing knowledge of the industry and of any specific hazards, shall provide a safe and healthy working environment and shall take adequate steps 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. 3.2 The company shall appoint a senior management representative responsible for the health and safety of all personnel, and accountable for the implementation of the Health and Safety elements of this standard. 3.3 The company shall ensure that all personnel receive regular and recorded health and safety training, and that such training is repeated for new and reassigned personnel. 3.4 The company shall estalish systems to detect, avoid or respond to potential threats to the health and safety of all personnel. 3.5 The company shall provide,

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for use by all personnel, clean bathrooms, access to potable water, and, if appropriate, sanitary facilities for food storage. 3.6 The company shall ensure that, if provided for personnel, dormitory facilities are clean, safe, and meet the basic needs of the personnel. 4. FREEDOM OF ASSOCIATION & RIGHT TO COLLECTIVE BARGAINING Criteria: 4.1 The company shall respect the right of all personnel to form and join trade unions of their choice and to bargain collectively. 4.2 The company shall, in those situations in which the right to freedom of association and collective bargaining are restricted under law, facilitate parallel means of independent and free association and bargaining for all such personnel. 4.3 The company shall ensure that representatives of such personnel are not the subject of discrimination and that such representatives have access to their members in the workplace. 5. DISCRIMINATION Criteria: 5.1 The company shall not engage in or support discrimination in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age. 5.2 The company shall not interfere with the exercise of the rights of personnel to observe tenets or practices, or to meet needs relating to race,

caste, national origin, religion, disability, gender, sexual orientation, union membership, or political affiliation. 5.3 The company shall not allow behaviour, including gestures, language and physical contact, that is sexually coercive, threatening, abusive or exploitative.

8. REMUNERATION Criteria: 8.1 The company shall ensure that wages paid for a standard working week shall always meet at least legal or industry minimum standards and shall be sufficient to meet basic needs of personnel and to provide some discretionary income.

6. DISCIPLINARY PRACTICES Criterion: 6.1 The company shall not engage in or support the use of corporal punishment, mental or physical coercion, and verbal abuse.

8.2 The company shall ensure that deductions from wages are not made for disciplinary purposes, and shall ensure that wage and benefits composition are detailed clearly and regularly for workers; the company shall also ensure that wages and benefits are rendered in full compliance with all applicable laws and that remuneration is rendered either in cash or check form, in a manner convenient to workers 8.3 The company shall ensure that labour-only contracting arrangements and false apprenticeship schemes are not undertaken in an effort to avoid fulfilling its obligations to personnel under applicable laws pertaining to labour and social security legislation and regulations.

7. WORKING HOURS Criteria: 7.1 The company shall comply with applicable laws and industry standards on working hours. The normal workweek shall be as defined by law but shall not on a regular basis exceed 48 hours. Personnel shall be provided with at least one day off in every seven-day period. All overtime work shall be reimbursed at a premium rate and under no circumstances shall exceed 12 hours per employee per week. 7.2 Other than as permitted in Section 7.3 (below), overtime work shall be voluntary. 7.3 Where the company is party to a collective bargaining agreement freely negotiated with worker organizations (as defined by the ILO) representing a significant portion of its workforce, it may require overtime work in accordance with such agreement to meet short-term business demand. Any such agreement must comply with the requirements of Section 7.1 (above).

9. MANAGEMENT SYSTEMS Criteria: Policy 9.1 Top management shall define the company’s policy for social accountability and labour conditions to ensure that it: a) includes a commitment to conform to all requirements of this standard; b) includes a commitment to comply with national and other applicable law, other requirements to which the company subscribes and to respect the international instruments and

their interpretation (as listed in Section II); c) includes a commitment to continual improvement; d) is effectively documented, implemented, maintained, communicated and is accessible in a comprehensible form to all personnel, including, directors, executives, management, supervisors, and staff, whether directly employed, contracted or otherwise representing the company; e) is publicly available. Management Review 9.2 Top management shall periodically review the adequacy, suitability, and continuing effectiveness of the company’s policy, procedures and performance results vis-a-vis the requirements of this standard and other requirements to which the company subscribes. System amendments and improvements shall be implemented where appropriate. Company Representatives 9.3 The company shall appoint a senior management representative who, irrespective of other responsibilities, shall ensure that the requirements of this standard are met. 9.4 The company shall provide for non-management personnel to choose a representative from their own group to facilitate communication with senior management on matters related to this standard. Planning and Implementation 9.5 The company shall ensure that the requirements of this standard are understood and implemented at all levels of the organisation; methods shall include, but are not limited to: a) clear definition of roles, responsibilities, and authority;

b) training of new and/or temporary employees upon hiring; c) periodic training and awareness programs for existing employees; d) continuous monitoring of activities and results to demonstrate the effectiveness of systems implemented to meet the company’s policy and the requirements of this standard. Control of Suppliers/Subcontractors and Sub-Suppliers 9.6 The company shall establish and maintain appropriate procedures to evaluate and select suppliers/subcontractors (and, where appropriate, subsuppliers) based on their ability to meet the requirements of this standard. 9.7 The company shall maintain appropriate records of suppliers/subcontractors (and, where appropriate, sub-suppliers’) commitments to social accountability, including, but not limited to, the written commitment of those organizations to: a) conform to all requirements of this standard (including this clause); b) participate in the company’s monitoring activities as requested; c) promptly implement remedial and corrective action to address any nonconformance identified against the requirements of this standard; d) promptly and completely inform the company of any and all relevant business relationship(s) with other suppliers/subcontractors and sub-suppliers. 9.8 The company shall maintain reasonable evidence that the requirements of this standard are being met by suppliers and subcontractors.=

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9.9 In addition to the requirements of Sections 9.6 and 9.7 above, where the company receives, handles or promotes goods and/or services from suppliers/subcontractors or sub-suppliers who are classified as homeworkers, the company shall take special steps to ensure that such homeworkers are afforded a similar level of protection as would be afforded to directly employed personnel under the requirements of this standard. Such special steps shall include but not be limited to: (a) establishing legally binding, written purchasing contracts requiring conformance to minimum criteria (in accordance with the requirements of this standard); (b) ensuring that the requirements of the written purchasing contract are understood and implemented by homeworkers and all other parties involved in the purchasing contract; (c) maintaining, on the company premises, comprehensive records detailing the identities of homeworkers; the quantities of goods produced/services provided and/or hours worked by each homeworker; (d) frequent announced and unannounced monitoring activities to verify compliance with the terms of the written purchasing contract. Addressing Concerns and Taking Corrective Action 9.10 The company shall investigate, address, and respond to the concerns of employees and other interested parties with regard to conformance/nonconformance with the company’s policy and/or the requirements of this standard; the company

shall refrain from disciplining, dismissing or otherwise discriminating against any employee for providing information concerning observance of the standard. 9.11 The company shall implement remedial and corrective action and allocate adequate resources appropriate to the nature and severity of any nonconformance identified against the company’s policy and/or the requirements of the standard. Outside Communication 9.12 The company shall establish and maintain procedures to communicate regularly to all interested parties data and other information regarding performance against the requirements of this document, including, but not limited to, the results of management reviews and monitoring activities. Access for Verification 9.13 Where required by contract, the company shall provide reasonable information and access to interested parties seeking to verify conformance to the requirements of this standard; where further required by contract, similar information and access shall also be afforded by the company’s suppliers and subcontractors through the incorporation of such a requirement in the company’s purchasing contracts. Records 9.14 The company shall maintain appropriate records to demonstrate conformance to the requirements of this standard.

Social Accountability International 2 2 0 E a s t 2 3 r d S t r e e t , S u i t e 6 0 5 , N e w Yo r k , N Y 1 0 0 1 0 w w w. s a - i n t l . o r g