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Compliance is all about the quality of products from the factory which must meet the audits and inspections and to give a proper
environment for working. The demand for compliance is growing rapidly in todays business scenario as the buyers from the global
markets are insisting on ethically manufactured products. As the export of garment products from India has increased, the demand
for social compliance has also risen in the Indian garment Industry.
Social Compliance
Social compliance refers to how a business treats its employees, the environment and their perspective on social responsibility. It
refers to a minimal code of conduct that directs how employees are treated with regards to wages, working hours and work
conditions. To ensure that the company meets standards of various environmental laws, it may be necessary to conduct a
compliance audit.
Compliance Audit
Audits and assessments provide vital management control for Process Safety Management, Process Security Management, and
Risk Management Programs. Audits focus on the policies and procedures to verify compliance with regulatory requirements and
industry standards. They help to ensure programs are properly designed and implemented. Further, audits also identify program
deficiencies so that recommendations can be developed for corrective action.
Compliance audit in India includes an examination of rules, regulations, orders and instructions for their legality, adequacy,
transparency and prudence. Auditors gather information through visual observation at the site, document reviews and interviews of
staff. This data is then compared to the applicable permits and regulations to evaluate how well the operation is conforming to the
applicable legal requirements.
Phases of Audit
There are three main phases of compliance audit in India:
Pre-audit: It includes planning and organising the audit; establishing the audit objectives, scope and etiquette; and
reviewing the design of the program by inspecting documentation
On-site audit: It includes conducting personnel interviews, reviewing records, and making observations to assess
program implementation
Post-audit: It includes briefing the management on audit findings, and preparing a final report
Therefore, Indian apparel manufacturers need to follow Government guidelines, and social compliance standards not only within
their sphere of operations, but also insist their vendors, distributors, and other collaborators involved in the supply chain to do the
same.
Core labour standards
Apparel industry players would now make sure that labour contractors dont engage forced or child labour and get the supply chain
of the suppliers audited. Apparel Export Promotion Council (AEPC), an apex body of Indian apparel exporters, has designed a
garment factory compliance program Disha (Driving Industry towards Sustainable Human Capital Advancement) to make India a
global benchmark for social compliance in apparel manufacturing and export. This Common Compliance Code project will prepare
the Indian apparel industry on a common platform towards a more social and environmentally compliant industrial environment.
India adopting Universal Standards on Child Labour
The level of garment factory compliance is very high for Indian exporters. Large global firms, conscious of their image, often set up
their own compliance standards for the exporters to ensure that all standards are being complied with. Many U.S. companies have
included child labour in their code of conduct, due to persistent evidence of child exploitation in the industry.
This common compliance code will not only give the opportunity for the industry to negate international claims against child labour
promotion in the garment industry, but will also help to improve the image of the industry and win more international businesses,
as per Premal Udani, Chairman, Apparel Export Promotion Council (AEPC).
The Indian garment industry is well established and enjoying considerable demand in both domestic as well as global markets.
Further, the increased pressure from international apparel buyers to comply with labour standards and workers rights in Indian
garment factories has led to a vast number of labels and code of conduct policies entering the markets.
Corporate social responsibility (CSR) essentially means that the organisation should work in an ethical manner and work in the best
interest of the various parties associated with it. The concept of social responsibility in Indian garment industry is gaining popularity
in todays times. More and more companies are trying to work in a way to protect the interests of the employees, customers,
suppliers and the society at large.
Just like the firms in other industries, garment firms also have social responsibility associated with employees and the environment.
Social responsibility in the global apparel industry provides an in-depth examination of labour practices and standards. However,
the ways by which different organisations choose to fulfill their social responsibility might be different. A garment factory can fulfill its
social responsibility in the following manner:
The Indian apparel industry is working with an objective of reaching 7.5 billion by the end of 2012, a figure that is almost double the
size of the last profit calculated by the Indian Chamber of Commerce (ICC).
With the increasing globalisation, a lot of importance has been placed on internationally recognised compliance standards in the
garment industry. Factories involved in the international trade must keep a proper check of the garment factory compliance at
regular intervals. Therefore, every apparel export business needs to have adequate understanding of compliance guidelines for
foreign trade.
The code of ethics is all about the quality of the products from the factory and the working environment that should meet the
requirements of audits and inspections. An individual running an export business needs to follow these ethics sincerely. These
ethics are required for:
Some of the compliance codes in Indian garment industry are listed below.
Garment factory must ensure that employees should get atleast minimum wages according to the domestic law and as per
the time spent by them in the industry
Employer should pay equal wages to both men and women employees, for performing the same work or work of a similar
nature
Worker employed for more than nine hours on any day or for more than 48 hours in any week, shall be entitled to wages
at premium legal rates for such overtime work
Every worker should be given one holiday (for a period of 24 consecutive hours) in a week. Whenever a worker is required
to work on a weekly holiday, he is to be allowed a compensatory holiday for each holiday so lost
Every worker is to be allowed at least half an hour rest interval after a maximum working of 5 hours at a stretch
Organisations should ensure proper ventilation, sufficient light and air to provide the employees with standard work
environment
Indian garment industries should provide the workers with comfortable sitting chair with back support and proper leg space
Non-discrimination compliance
Organisations should not discriminate employees on the basis of physical characteristics, beliefs and cultural
characteristics. All the terms and conditions of employment should be based on an individuals ability to do the job. They
should provide equal employment opportunities for all employees and associates irrespective of the employees race,
color, religion, age, sex, creed, national origin, marital status, etc.
The demand for social compliance is increasing day-by-day. However, we can attain a robust compliance system only when the
workers are provided with an equal platform to voice their concern and have consultative mechanism at the workplace.
The Apparel Export Promotion Council of India (AEPC), an apex body of Indian apparel exporters, provides all social compliance
services to meet international global standards. The council also trains and guides factories to upgrade the workplace conditions
and labour standards.
Health and Safety Compliance in Indian Garment Industry
Importance of compliance in garment industry
Garment industry is getting increased attention from consumers, social workers, welfare organisations and branded international
buyers. Many international buyers are demanding for factories to comply with their code of conduct before placing any order.
Nowadays, continuous adherence to quality standards and employee satisfaction have become important parameters for
measuring the companys performance. Enterprises undertake business compliance, not necessarily out of a need to act
generously, but more so for survival in a globally competitive and legally complex modern environment.
In the context of growing competition among exporting countries and increasing demand for products that meet internationally
recognised standards, it is essential for the suppliers to improve safety and health compliance code and provide proper working
environment in their factories.
Several foreign countries have also developed various international compliance standards on health and safety compliance.
Exporters should follow these compliance codes to survive in the global market. Moreover, regular practice of compliance codes of
conduct can bring higher price of products, less employee turnover rate, smooth industrial relation as well as global image &
reputation.
Need for compliance codes
There is a direct impact of social compliance on companys financial results, especially for organisations in consumer market where
brand name and reputation are most critical assets. Companies should adopt compliance code to protect their goodwill in the
market. The Indian garment industry needs to be tough on compliance rather than competing with other developing countries
manufacturing inexpensive garments.
Garment factory should consider the following guidelines while complying with safety and health compliance codestandards:
Industries should comply with international standard code, such as ISO or importing countries standard code to become
competitive in international markets
Young persons (between 15 to 18 years) are not supposed to work on any dangerous machine without adequate training
and supervision
Wiring should be in good condition with no broken junctions or wires sticking out at the ends of the conduit
Eyewear and face shields should be provided in areas with danger of flying objects, sparks, glare, hazardous liquids and
excessive dust
Ear plugs or muffs should be given in places with excessive noise such as generator rooms and embroidery rooms
Hard hats and protective shoes are necessary for workers involved in loading and unloading operations
Factories should have effective fire extinguisher with proper usage instructions
With the growing efforts of media, buyers in the US and the EU have increasingly become very conscious towards global standards
particularly related to women and children. Therefore, Indian manufacturers need to provide customers with ethically manufactured
products in order to survive in the international markets.
Codes of conduct have become increasingly common in recent years, particularly in the apparel sector. Corporations voluntarily
develop such codes to inform consumers about the principles that they follow in the production of the goods and services they
manufacture or sell. These codes usually address many workplace issues such as child labour, health and safety issues, etc.
The apparel export promotion council of India (AEPC), an apex body of Indian apparel exporters under the textiles ministry is
helping domestic textile industry to adhere to global norms through development and implementation of tools to help factories
certify, monitor and improve universal standards.
Further, the council has designed a garment factory compliance program Disha (Driving Industry towards Sustainable Human
Capital Advancement) that aims to spread awareness regarding the importance of social compliance amongst textile exporters. The
programme will encourage members to follow better social practices, which will give them a competitive edge in the international
market where social compliance is gradually becoming an important buying decision.
We will develop intensive training on legal requirements on core issues like child labor, trafficked labor, wages amongst others and
enable accreditation by international agencies like the International Labor Organization to ensure global acceptance of the
program, as per Lakshmi Bhatia, Director, Free Labor Association.
Compliance auditing has become an important task to ensure if the company meets standards of various environmental laws. It is
needed to check the welfare of the people working within the boundaries of the garment factory if they are getting wages at the
right time, check on working hours and health and safety of the work force.
In order to measure the companys performance, it is important to continuously adhere to quality standards and employee
satisfaction in garment industry. Thecompliance program team with regular auditing can bring the desired change in the code of
conduct, ethics and other issues based on compliance. Further, they provide training on the code of business conduct, violence in
the work place, different competition laws, prevention of drug abuse and several other important matters.
The trend of increasing accountability for corporate social responsibility is promoting companies to develop more socially conscious
compliance codes so that they remain viable in global markets. It relates to the steps companies take to ensure that their goods
have been produced under acceptable conditions, which includes lawful production under fair and honest dealings.
CSR has come into public awareness more recently as result of globalisation, advancement in communication technology, media
coverage and ethical investment opportunities. It is already established in a global context with various international standards set
by the United Nations. Some of the international organisations that provide CSR standards for Multi-national corporations are
following:
In Indian apparel industry, the role of corporate social responsibility has been a topic of increasing concern for at least a decade.
India is a sourcing destination for many international brands for garment products. As the export of garment products from India has
increased, the demand for corporate social compliancehas also risen. CSR activities in Indian garment industry include the
following:
Fair remuneration
Proper working conditions
Training and staff development
Equal opportunities and diversity
Employee participation in business decisions
No child or bonded labour
Freedom of association
When business complianceis taken into consideration, it gives immense benefits to both employees and the organisation. CSR
can positively influence enterprise competitiveness in many ways such as:
Cost savings and increased profitability due to a more efficient deployment of human and production resources
Improved products / production processes result in better customer satisfaction
Higher motivation and loyalty of employees
Enhanced corporate or brand reputation, image and value
Improved culture within the organisation
Enhanced word-of-the-mouth communication
Increased turnover due to competitive advantage
Better access to public funds due to a better corporate image
Enterprises undertake business compliance, not necessarily out of a need to act generously, but more so for survival in a globally
competitive and legally complex modern environment. The Indian garment industry needs to be tough on compliance rather than
competing with other developing countries manufacturing inexpensive garments. Every export business needs an adequate
understanding of the compliance guidelines for the foreign trade.
The Apparel Export Promotion Council of India (AEPC), the apex industrial body that promotes apparel exports, aims at making
India the global benchmark forcorporate social compliance in apparel manufacturing and export. With this objective, the Council
has embarked on a project - Driving the Industry towards Sustainable Human Capital Advancement (Disha). This programme will
encourage members to follow better social practices, which will give them a competitive edge in the global market.
Some of the common Indian Garment industry compliance code guidelines are:
Exporters must not be involved in unfair labour practices including but not limited to interferences in matters concerning freedom of
association
There shall be no differences in workers remuneration for work of equal value on the basis of gender, race, religion, age,
disability, sexual orientation, nationality, political opinion, or social or ethnic origin
Exporters shall not threaten female workers with dismissal or any other employment decision that negatively affects their
employment status in order to prevent them from getting married or becoming pregnant
Exporters shall ensure that proper ventilation systems are installed within their premises to prevent airborne exposures
which may affect the health of workers
Members shall not use any form of physical or psychological violence, threats, harassment, or abuse against workers
seeking to form organisations or participating in union activities, including strikes
Workers shall be entitled to at least 24 consecutive hours of rest in every seven-day period. If workers must work on a rest
day, an alternative consecutive 24 hours rest day must be provided
Exporters shall provide workers with paid annual leaves as required under local laws, regulations and procedures.
Exporters shall not impose any undue restrictions on workers use of annual leave or taking any type of sick or maternity
leave
Exporters shall pay workers at least the legal minimum wage or the prevailing industry wage, whichever is higher. In
todays scenario, it is the most essential code of compliance for Indian Industry
Exporters shall compensate workers for all hours worked. Workers on a piece rate payment scheme or any other incentive
scheme should be paid accordingly
Exporters shall not unreasonably restrain the freedom of movement of workers, including movement in canteen during
breaks, using toilets, accessing water, or to access necessary medical attention, as a means to maintain work discipline
Garment exporters must ensure that the minimum age requirement to non-hazardous employment shall not be less than
14 years. This is the most important concern in India nowadays. Further, each worker has the right to enter into and to
terminate their employment freely
Indian apparel makers need to follow all the compliance guidelines to comply with global standards. Often companies
adopt industry compliance codes to project a positive image and protect their goodwill in the market. The Indian garment industry
needs to be strong on compliance rather than competing with other developing countries manufacturing inexpensive garments.