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

V-Trust has a solid and long history in providing supplier evaluation for overseas buyers and local suppliers including 2 & 4 Pillar standardized SMETA audit reports as well as SMETA training which enclose every single aspect of SEDEX four pillars of Labour, Health and Safety, Environment and Business Ethics for retailers, consumer brands, private labels, and buyers willing to have a comprehensive assessment on their suppliers in China, India, and Vietnam.

Find out how V-Trust’s SMETA Audits can verify whether your suppliers are in compliance with ethical trading protocols.

2 4 pillar smeta sedex audits in China India Vietnam

Understanding SMETA

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

  • An SMETA audit normally follows three principals:

  • A common Best Practice Guidance on conducting ethical trade audits
  • A common Audit Report format
  • A common Corrective Action Plan format

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

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

Benefits of a SMETA Audit

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

  • Maintaining competitive advantages in the changing supplier selection mechanisms of buyers
  • Wide adoption among buyers to reduce audit frequency
  • Demonstrating the will to improve social compliance level and boosting company reputation
  • Non-SEDEX members may also apply for SMETA

SMETA Methodology

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

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

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

  • Employment is freely chosen
  • Freedom of association and the right to collective bargaining are respected
  • Working conditions are safe and hygienic
  • Child labor shall not be used
  • Living wages are paid
  • Working hours are not excessive
  • No discrimination is practiced
  • Regular employment is provided
  • No harsh or inhumane treatment is allowed

SMETA Scope

  • Site scope: The scope covered in the business license (production area, warehouse, dormitory, canteen, etc.)
  • Personnel scope: All the full time employees, including workers, management, security, kitchen worker, as well as dispatch workers.

SMETA 2-pillar Audit Checklist

  • Labor Standards
  • Health and Safety
  • Management Systems
  • Entitlement to Work
  • Subcontracting and Homeworking
  • Environmental assessment (simplified)

SMETA 4-pillar Audit Checklist

  • Labor Standards
  • Health and Safety
  • Management Systems
  • Entitlement to Work
  • Subcontracting and Homeworking
  • Environmental assessment (complex)
  • Business Ethics


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


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

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

10 Steps to take when you have an audit scheduled:

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

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

9 Steps to take when auditing a new client:

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

SMETA FAQ

What is the difference between Sedex and SMETA?

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

Is it possible to conduct SMETA audits remotely?

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

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

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

  • There are three types of Follow-up Audit:

  • Full Follow-up Audit: a full audit as initial audit but take into account previous audit findings
  • Partial Follow-up Audit: only checks progress against issues found during a previous audit
  • Desktop Follow-up Audit: can be used for certain corrective actions for which a factory visit is not required and can instead be verified remotely e.g. through photograph evidence or documents provided via e-mail.

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

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

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

  • Business as a minimum must meet the requirements of local and national laws related to environmental standards.
  • Where it is a legal requirement, businesses must be able to demonstrate that they have the relevant valid permits including for use and disposal of resources e.g. water, waste etc.
  • Businesses shall be aware of their end client’s environmental standards/code requirements
  • Suppliers should have an environmental policy, covering their environmental impact, which is communicated to all appropriate parties, including its own suppliers.
  • Suppliers shall be aware of the significant environmental impact of their site and its processes.
  • The site should measure its impacts, including continuous recording and regular reviews of use and discharge of natural resources e.g. energy use, water use (download 4–pillar audit report for details)
  • Businesses shall make continuous improvements in their environmental performance.

How are the results of SMETA audit classified?

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

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

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

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

  • Announced audit: audit date is agreed with, or disclosed to, the audited factory.
  • Semi-announced: audit date will fall within an agreed ‘window’. Audit window can range between 2 weeks to 2 months. It’s recommended a 3-weeks window to optimize the result.
  • Unannounced audit: no prior notice is given to the audited factory

What are the changes and improvements in SMETA 6.1?

  • Some of the news features in SMETA 6.1 include:

  • Amending the definition of migrant worker and adding the option to record worker nationalities
  • Adding an option to add a site’s co-ordinates/GPS location
  • Updating the data protection to reference GDPR
  • Enabling auditors to track nationalities of workers from UN sanctioned countries – under ‘entitlement to work’
  • Adding a section for the Worker Wellbeing Assessment

How much does a SMETA Audit cost?

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

V-Trust’s Advantages

  • 16+ years’ experience with SA8000, ISO9001, and CoC of worldwide brands.
  • Only full-time inspectors and auditors hired.
  • Most Trusted Inspection Company by China Business Awards 2017.
  • Full accreditation & guarantee (IFIA, AQSIQ, ISO/IEC17020, ILAC, ISO9001, ASI Official Partner and AAFA Member).
  • Rapid coverage network growth over its near-20-year history.
  • All-inclusive flat rate of USD 498/audit (no hidden fees or extra charges for travel, accommodation, or weekend inspections) anywhere in manufacturing regions of China, India, Vietnam, and Malaysia.
  • 310+ full-time inspectors and auditors, 6200+ inspections and audits per month, 3000+ overseas clients/brands
    (customer list).
  • In-house labs accredited by ISO/IEC17025.
  • Dedicated account managers and customer service teams, reachable 24/7 in multiple languages.
  • Over 90 QA engineers in our headquarters to review the most updated regulations and give technical support.

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