Uitic 18th congress session 5 4 andreas tepest presentation

Social and environmental standards in the shoe industry Andreas Tepest, Head of Quality Management DEICHMANN SE

16 November 2013

Social and Environmental Standards  The DEICHMANN Group …  feels responsible for its worldwide operations’ socialand environmental compliance  has come up with a code of conduct that draws upon the BSCI Code of Conduct  expects that all suppliers and their subcontractors follow this code of conduct without any exception  Most of the requirements follow ILO Conventions and Recommendations or similar international regulations Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Social and Environmental Standards  The DEICHMANN Group …  wants to establish and develop social and environmental standards together with supplier and producer  will not be terminate the business relationships in the event of non-compliance  will rather be looking for solutions in order to improve the situation of all parties concerned Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

BSCI  A successful story  BSCI was established in 2003  DEICHMANN decided to join BSCI in 2005  By the end of 2013, DEICHMANN had BSCI Audits at 113 shoe manufacturers worldwide  80 of them are in China

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

BSCI  A successful story  After 3 ½ years of membership 70 per cent of member’s suppliers have to be rated no lower than “good“ or “need improvement“  More than 90 per cent of the current DEICHMANN suppliers and producers rated “good” or “need improvement“

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Risk-Countries  Shoe manufacturer …  without BSCI Audit or SA 8000 certificate often show huge deficits  are asked to participate in the seminars organised by BSCI when working for the DEICHMANN Group for the first time

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Risk-Countries  Shoe manufacturer …  will first complete a BSCI “Self Assessment“ after having attended these seminars  asks for support of external consultancies specialised in the implementation of social and environmental standards

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Introduction First BSCI Audit  Audit Process - Assessment through Common Code of Conduct  DEICHMANN will commission an external BSCIrecognised auditor to run the first BSCI Audit  The costs will be borne by the DEICHMANN Group

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Introduction First BSCI Audit  Audit Report  The result is taken down in an Audit Report  The manufacturer and DEICHMANN will receive the Report 5-10 days after the Audit  In many cases a shoe manufacturer will not get a “good” rating right after the first Audit

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Introduction First BSCI Audit  Audit Report  The “Corrective Action Plan“ (CAP) lists the actions to be taken in order to see improvement  Areas that show very often deficits are  Management and Documentation

Industrial Safety

 No Emergency Management Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

BSCI Audit Process  Re-Audit  DEICHMANN demands an implementation after 3 months  We initiate a Re-Audit by an external auditor  Often actions listed in the CAP cannot be corrected in the agreed period

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

BSCI Audit Process  Conclusion  In most cases, shoe manufacturers need up to 12 months before getting a “positive” audit rating  It is very helpful if the owner of the company is personally involved in the process

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

New Initial Audit  Monitoring and Identifying Continuous Improvements Areas through Re-audits  3 years after the first Initial Audit a new Initial Audit has to be started

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

New Initial Audit  The Producer …  will not achieve a “good” rating at the first time without a good preparation  is asked to attend BSCI seminars on a regular basis  has to send new CSR officers for BSCI training

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

New Initial Audit  DEICHMANN will …  discuss potential weak points with the manufacturer’s pertinent staff  check that the maximum number of working hours per week is not exceeded  work pro-active with supplier and spread the orders and delivery dates more evenly in order to avoid the usual bottlenecks in shoe production Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

New Initial Audit  Conclusion  The social and environmental standards also have to be discussed in between the audits and actually “lived” in the factories  The local QA/QC staff needs to be involved to report problems that might arise

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Voluntary Measures  Best Practice – DEICHMANN Partner  Well-trained and content staff is very important in a labour-intensive industry like the shoe industry  Pay more than the official minimum wages  Pay social insurance contributions

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Voluntary Measures  Best Practice – DEICHMANN Partner  Employ a real co-determination system  Set up regular labour-management meetings to discuss problems and come up with solutions  Improve accommodation facilities

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Voluntary Measures  Conclusion  These measures help to improve the employees´ satisfaction  The factory benefits from a small staff turnover  It helps to achieve a very constant product quality

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Voluntary measures  Conclusion  Implementation of voluntary social standards contributes to an improvement of productivity  A good relation ship with employees is an important competitive factor to stay successful in times of rising labour costs

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013

Thank you very much for your attention‌. ‌.and welcome to BSCI

Andreas Tepest - Social and environmental standards in the shoe industry - 16 November 2013