Understanding the Difference Between BSCI and SMETA
When it comes to maintaining ethical standards in your supply chain, two frameworks stand out: BSCI (Business Social Compliance Initiative) and SMETA (Supplier Ethical Data Exchange). These frameworks provide tools to assess and monitor social compliance, ensuring fair working conditions and upholding international labor standards.
To make informed decisions and establish responsible supply chains, it’s important to understand the similarities and differences between BSCI and SMETA. In this article, we’ll explore the benefits of both frameworks, helping you navigate ethical auditing standards with ease.
Table of Contents
- What is BSCI?
- What is SMETA
- Comparing BSCI & SMETA
- Benefits of BSCI and SMETA Audited Suppliers
- Start Connecting with BSCI & SMETA Audited Manufacturers
What is BSCI?
The Business Social Compliance Initiative (BSCI) is a leading supply chain management system designed to drive social compliance and improvements within factories and farms in global supply chains.
BSCI provides companies with a comprehensive framework and a Code of Conduct that supports the assessment and monitoring of social standards.
Key components of BSCI:
- Worker’s Rights: BSCI emphasizes the importance of workers’ rights, including the rights to freedom of association and collective bargaining. This means respecting workers’ freedom to form unions, avoiding discrimination based on trade union membership, and supporting collective bargaining processes.
- No Discrimination: BSCI requires companies to prohibit discrimination in any form, ensuring equal treatment for workers irrespective of gender, age, religion, race, social background, disability, and other factors. Discrimination based on factors such as political affiliation, sexual orientation, or family responsibilities is also strictly prohibited.
- Fair Remuneration: BSCI sets standards for fair remuneration, ensuring that workers receive wages in accordance with government-mandated minimum wage legislation or industry-approved standards negotiated through collective bargaining. Wages should be paid in a timely manner and in legal tender.
- Decent Working Hours: BSCI promotes decent working hours, limiting regular working hours to a maximum of 48 hours per week. Overtime should be exceptional, voluntary, compensated at a premium rate, and not pose a higher risk of occupational hazards. Workers should have adequate rest breaks and at least one day off every seven days.
- Occupational Health and Safety: BSCI requires companies to prioritize workers’ health and safety by providing a safe and healthy working environment. This includes systems for hazard identification and response, access to medical assistance, clean water, personal protective equipment, and adherence to safety regulations.
- No Child Labor: BSCI strictly prohibits the use of child labor. Companies must not employ children below the minimum age for completing compulsory schooling, which is typically not less than 15 years unless exceptions recognized by the International Labour Organization (ILO) apply.
The Process of BSCI Auditing
Let’s explore the detailed process of BSCI auditing and understand how it ensures social compliance and responsible sourcing.
The BSCI auditing process typically involves the following five key steps:
Step 1: Opening Meeting
The auditor begins by arranging an opening meeting with the management team. During this meeting, the purpose of the audit is clarified, and the auditor presents the amfori code of conduct against which the audit will be conducted. Local laws and regulations relevant to the code requirements are also explained.
Step 2: Site Tour
After the opening meeting, the auditor conducts a site tour to observe the physical conditions and compare them to the applicable standards. The tour provides insight into health and safety issues and allows the auditor to have personal conversations with management and employees. Production and operations continue as normal during the visit to provide an accurate view of daily working conditions.
Step 3: Interviews
The auditor conducts interviews with managers and workers. Interviews with managers shed light on the site’s procedures and policies and their effective implementation. Worker interviews, both individual and group-based, provide firsthand experiences and personal views on working conditions at the site.
Step 4: Review of Records
The auditor reviews all requested documentation to ensure compliance. This includes documentation of social management systems and processes, labor contracts, company policies, chemical usage records, training records, permits, operating licenses, time and payroll records, and more. The review of records confirms information obtained from other steps of the audit.
Step 5: Closing Meeting
Once the auditor completes all fieldwork, a draft corrective action plan (CAP) is prepared. During the closing meeting, the auditor discusses the findings of the audit with management and verifies their agreement by signing off on the CAP and proposed timeframes for corrective actions. The meeting covers non-compliance, root causes, potential corrective actions, and proposed timelines for addressing issues.
How BSCI Ensures Social Compliance and Responsible Sourcing
BSCI ensures social compliance and responsible sourcing by providing a set of standards and a comprehensive code of conduct for suppliers to follow. Regular audits conducted by BSCI help assess and monitor compliance with these standards.
By adhering to BSCI’s code of conduct, suppliers are encouraged to promote fair labor practices, protect workers’ rights, ensure safe and healthy working conditions, and manage environmental impact within the global supply chain.
In the next section, we will delve into the details of SMETA (Supplier Ethical Data Exchange) and explore its distinctive features in comparison to BSCI.
What is SMETA?
SMETA (Sedex Members Ethical Trade Audit) is a widely used audit methodology that enables businesses to assess working conditions within their supply chains. SMETA audits can be conducted against two or four auditing pillars, providing a comprehensive evaluation of social compliance.
Key components of SMETA:
- Labor Standards: SMETA audits assess compliance with local labor laws and regulations. This includes evaluating factors such as employment contracts, working hours, child labor, forced labor, discrimination, harassment, freedom of association, and collective bargaining.
- Health and Safety: SMETA audits focus on health and safety practices within the supply chain. This involves assessing risk assessments, hazard identification, training, emergency preparedness, occupational health and safety management systems, and the provision of personal protective equipment.
- Environment: SMETA audits also cover environmental standards. This includes evaluating waste management, energy and water usage, hazardous substance management, air and water emissions, and the implementation of environmental management systems.
- Business Ethics: SMETA audits assess ethical business practices. This encompasses anti-bribery and corruption measures, conflicts of interest, protection of confidential information, fair competition, and effective supply chain management.
By conducting SMETA audits, businesses can gain valuable insights into their supply chain’s labor standards, health and safety practices, environmental impact, and adherence to ethical business conduct.
Understanding the distinctions between BSCI and SMETA is essential for choosing the most suitable framework for your responsible sourcing initiatives. In the next section, we will explore the key differences between BSCI and SMETA, helping you make informed decisions for your sourcing needs.
The Process of SMETA Auditing
Let’s explore the detailed process of SMETA auditing, understand how it ensures ethical trade and responsible sourcing, and examine its relevance and influence in Asian manufacturers, particularly in China.
The process of conducting a SMETA audit typically involves the following steps:
Step 1: Preparation
Prior to the on-site audit, companies receive a pre-audit information pack that contains a Self-Assessment Questionnaire (SAQ) and relevant details for conducting an efficient audit. The SAQ allows companies to assess their own compliance with SMETA standards.
Step 2: Opening Meeting
Once the auditor arrives on-site, an opening meeting is arranged with the management team. During this meeting, the purpose of the audit, the standard or code against which the audit will be conducted (such as the ETI Base Code), and any applicable local laws or regulations are clarified. The necessary documents for review are confirmed, floor plans for the site tour are obtained, and arrangements for employee interviews are made.
Step 3: Site Tour
After the opening meeting, the auditor conducts a tour of the site to observe the physical conditions and compare them to the applicable standards. The tour provides insights into health and safety issues and allows for personal conversations with management and employees. The auditor should have access to all areas of the site and determine the pace of the tour.
Step 4: Interviews
The auditor conducts interviews with managers to gain an understanding of the procedures and policies in place and evaluate their implementation. Subsequently, workers are interviewed individually and in groups to gather their experiences and personal views on working conditions. Interviewees are encouraged to speak freely, and no managers or representatives should be present during worker interviews to ensure openness.
Step 5: Review of Records
The auditor reviews all requested documentation to ensure compliance. This includes documentation of relevant management systems and processes, labor contracts, company policies, chemical usage records, training records, permits, operating licenses, emergency action procedures, time and payroll records, among others. The review confirms the information obtained from other audit elements.
Step 6: Closing Meeting
Once all fieldwork is completed, a corrective action plan report (CAPR) is prepared. During the closing meeting, the findings of the audit are discussed with management, and the CAPR and agreed-upon timescales for corrective actions are signed off. The closing meeting covers non-compliance, root causes, potential corrective actions, and proposed timeframes for addressing issues.
How SMETA Ensures Ethical Trade and Responsible Sourcing
SMETA ensures ethical trade and responsible sourcing by increasing transparency through objectively monitoring and evaluating suppliers’ activities.
SMETA audit standards focus on essential factors such as ensuring employee labor rights, safety, and health, as well as protecting the environment. Through SMETA audits, companies can identify areas for improvement and work towards implementing responsible and ethical practices in their supply chains.
In the next section, we will compare BSCI and SMETA, highlighting their key differences and helping you make informed decisions regarding their adoption in your sourcing efforts.
What to Choose Between BSCI and SMETA
1. BSCI and SMETA Auditing Process
The BSCI audit and the SMETA audit have some notable differences in their processes and focus. BSCI audits consist of 13 audit performance areas, and each section is graded to provide an overall grading.
On the other hand, SMETA audits can be conducted in two versions: a 2-pillar audit covering labor and human rights, and health and safety; and a 4-pillar audit that includes additional modules on environment and business ethics. SMETA audits do not involve report scoring or grading.
2. Differences in Focus and Outcomes
BSCI audits primarily focus on issues such as compliance with the law, freedom of association, collective bargaining, prohibition of discrimination, compensation, and working hours.
SMETA audits fall under the category of social responsibility inspections and cover labor, health and safety, and environmental aspects of suppliers. SMETA audits also have their own unique features, such as the requirement for maximum working hours per week.
3. Recognition and Influence
For BSCI, Amfori organized 2,400 members from more than 40 countries. It is relevant to various industries, including general merchandise, garments, textiles, household goods, food and beverage, electronics, and accessories. Major companies utilizing BSCI standards include Aldi, Amazon, Carrefour, Target, Triumph, Everlast, and Halti.
SMETA is utilized by over 60,000 companies following the Sedex SMETA methodology. It is one of the most widely used social compliance audits globally and includes environmental principles among its audit principles. Companies adhering to SMETA principles include Walmart, The Body Shop, Procter & Gamble, Pepsi, KFC, and Nestle.
4. Certification Benefits
BSCI certification demonstrates a company’s commitment to social compliance and improves brand reputation and competitiveness. It helps mitigate social and reputational risks, strengthens relationships with stakeholders, supports legal compliance and due diligence, enhances supply chain management, meets customer expectations and requirements, and fosters responsible business practices.
SMETA certification benefits businesses by improving brand position, minimizing the risk of legal violations, promoting employee dedication, and increasing product value, leading to sales growth.
5. Relevance and Influence in Asian Manufacturers, Focusing on China
Both BSCI certification and SMETA, commonly known as Sedex certification, have relevance and influence in Asian manufacturers, including those in China. BSCI is widely recognized and requested by brands as a requirement for suppliers. SMETA audits can be requested directly by sites, allowing businesses to proactively improve standards within their operations.
Manufacturers in China recognize the importance of aligning with these standards to demonstrate their commitment to responsible sourcing, attract socially conscious customers, and enhance their reputation in the market.
Check our blog for more information on what to consider when finding a manufacturer in China.
By understanding the differences and similarities between BSCI and SMETA, businesses can make informed decisions about which audit methodology aligns best with their ethical sourcing goals and supply chain requirements.
Top 5 Benefits of BSCI and SMETA Audited Suppliers
BSCI and SMETA certifications play a crucial role in building brand reputation, ensuring social compliance, and fostering strong business relationships. Let’s explore the importance of these certifications to businesses.
- Increased Brand Reputation
By demonstrating concern for sustainability throughout the supply chain, businesses can enhance their corporate reputation and strengthen their brand. Consumers increasingly prefer to engage with socially responsible companies, which can lead to increased profits and customer loyalty.
- Reduced Exposure & Risk
Complying with social compliance standards such as BSCI and SMETA is essential for businesses. Noncompliance with these standards can result in greater costs, legal problems, and damage to the public image. Conversely, social compliance practices can improve public image, increase profit margins, and contribute to long-term business sustainability.
- Improved Supplier Relationships
For businesses sourcing from manufacturers, social audits, such as BSCI and SMETA, create transparency and compel suppliers to disclose critical information. These audits build trust between business partners, enable informed decision-making, and mitigate risks associated with product quality and fair working conditions. Social audits often make business relationships possible by ensuring compliance and creating a foundation of trust.
- Simplify Supplier Selection
BSCI and SMETA certifications are particularly significant when sourcing from Asian manufacturers. Some retailers refuse to buy products from importers that cannot provide evidence of their manufacturers’ compliance with social responsibility protocols. Having valid BSCI or SMETA audit reports becomes crucial for survival in the market. These certifications help businesses limit their supplier selection to those who can provide valid audit reports, ensuring sourcing from socially compliant suppliers.
- Confidence in Ethics of Supplier Workforce
Socially compliant companies prioritize the well-being of their workforce, leading to a happier and more efficient workforce that produces high-quality deliverables. BSCI and SMETA audits provide valuable information that helps companies address critics, improve worker conditions, and articulate their commitment to continuous improvement.
By obtaining BSCI and SMETA certifications, businesses demonstrate their commitment to ethical practices, establish trust with stakeholders, mitigate risks, and enhance their brand reputation in the market. These certifications ensure compliance, improve supply chain transparency, and contribute to sustainable business operations, which is key to successful sourcing partnerships.
Connect with BSCI & SMETA Audited Manufacturers
Sphere Resources is committed to responsible sourcing and helping businesses navigate the complexities of ethical supply chains. We have established relationships with a network of certified suppliers, enabling us to match your specific sourcing requirements with trusted and compliant manufacturers.
We provide comprehensive trade services that can be tailored to your business needs including product sourcing, supplier identification and qualification, supplier audits, factory inspections, quality control, logistics solutions, and more. Our team of experienced professionals ensures that your sourcing journey aligns with your ethical sourcing goals, while maintaining high standards of quality and compliance.
Contact us today to discuss your sourcing needs and explore how our services can support your business. Together, let’s build a responsible and sustainable supply chain that meets the highest ethical standards while driving business success.