1. The document discusses social compliance audits and codes of conduct audits, outlining key concepts such as the purpose of audits, auditor roles and responsibilities, and audit types and strategies. 2. It explains that social compliance audits systematically and independently assess facilities against standards to determine if requirements are being met. 3. Effective audits are planned, independent, have management cooperation, and have a compliance orientation to evaluate implementation of standards.

1. Bangladesh Institute of Management
Welcome To
Social Compliance/Code of Conduct Auditing System
Team spirit & co-operation = Successful Audit

2. Auditing Concept
And
Auditor and Auditee's Attitude
PART-I

3. Compliance and Audit
Compliance is an affirmative indication or judgment that the supplier of product or
service has met the requirements of the relevant specifications, contract, or
regulation, also meeting the requirements. On the other hand, in ISO terms,
‘Compliance to regulations, compare with conformance’. So,
enterprises/facilities/industries of all sizes can ensure supplier, operational and
regulatory compliance to down risk, increase opportunity and realize the full
potential of agreements, transactions and contracts. Three criteria are essential in
compliance: -
 Effective Corporate Controls
 Transparent Processes and Efficient Audits
 Timely Disclosures
An audit is a systematic and independent examination to determine whether
Standard compliance activities and related results comply with planned
arrangements and whether these arrangements are implemented effectively and are
suitable to achieve objectives.
The above definition has some important characteristics of an audits. The following
characteristics will be built into a social compliance/COC audits to maximize audit
credibility and effectively:

4. 1.Planned: Audits must be planned in accordance to a defined objective. To be effective, auditors should
prepare for an audit by considering questions such as:
 What is the purpose of this audit? -Define what needs to be accomplished.
What is the scope of this audit? -Define what/who will be audited
Who will perform the audit? -Define which person(s) will carry out activities
When will the audit be performed? -Define the day(s) and time(s) for the audit
What information sources will be utilized? -Define a strategy for investigation by identifying
what information is available/appropriate for review.
2. Independent: Audits must be performed by persons who are independent of the functions audited in
order to eliminate potential bias.
3. Management Co-operation: The success of any audit program depends on the support of
management
4.Compliance Orientation: Social compliance/COC audits is to a specific standards are conducted which
the auditors look for compliance to the requirements set forth by the standards. This means that Social
compliance/COC audits will review documentation for intent to comply with the applicable standard, as
well as records and processes to determine implementation of the document system and how effective
the Social compliance/COC is working at the facility.
Preparation Before Social Compliance Audit

5. Necessity of Social Compliance Audit
Identification of opportunities for improvement.
Implementation status check.
Effectiveness check.
Improve communications and motivation.
To check level of standard with any brands,ILO,SA8000,WRAP etc
To ensure customer requirements
To ensure local labour law at the workplace
Enhance management and workers communication
 and to enhance profit through productivity increase

6. Factory Management’s Role in Audit
Management has an active role in both an internal & external audit program, and is
charged with the responsibility of:
•Initiation of the audit program: The audit program must be initiated and
supported by management .
•Assurance of auditor independence: Provisions must be made to ensure that
auditors have no responsibilities in the areas audited so as to eliminate the
possibility of any bias with respect to audit findings.
•Provide resources: Managers must ensure that there are an adequate number of
available auditees to administer the audit program,with available documents and
that employees are made available during audits.
•Assure corrective action: Managers must consider and take actions necessary
when the results of an audit show that corrective action is required.

7. Concept of Social Compliance /CoC Audit
A social compliance /COC audit is a systematic and independent external assessment
administered by a trained social/COC auditor or certified Lead Auditor of SA
8000/WRAP/ISO against a specific standard (for example SA8000,BSCI and WRAP)
etc. to determine whether an entity is meeting those standards and complying with
established policies, operating procedures and national and local laws, ILO
Conventions and international best practices .
So, in any Social Compliance/COC audit five criteria are essential. These are as
follows-
[
A proper system ( ISO 9001:20015)
 An independent external assessment ( any 3rd party or individual)
 Trained social/COC auditor or certified SA 8000/WRAP/ISO Lead Auditor
 Specific Standard (any brands COC/ SA 8000/WRAP/ ISO 9001)
 and a Facility
Remember: Results of a social compliance audit are not usually public

8. Role of a Social Compliance/COC Auditor
• An assurance of engagement
• Reliability of the information contained in the report
• Perform only customer requirements not other tasks e.g. CSR
• Gather evidence for all significant assertions in the report
• Assess the report’s conformance to particular standards
• Know the specific references –
-Labour Code’2006
- Labour Rules 2015
-The Factories Act 1965
-The Factories Rules 1979
-Industrial Relations 1969
-The Environmental Act 1995
- The Environmental Rules 1997
-Bangladesh National Building Code 2006
-Maternity Benefit Act 1953 &1959
-BEPZA Instruction
-ILO
- International Standard like-WRAP,SA 8000, ISO,OHSAS18001
-International Codes of Conduct like-BSCI,FLA,ETI
-Brand Buyers Code of Conduct

9. Codes of Conduct and Standards DifferenceCOC Standard
1.A code of conduct is a set of rules outlining the
responsibilities of the proper practices for an
individual, organization, industry or any
organization in light of law and regulations.
2. Principles, values, standards, or rules of
behavior that guide the decisions, procedures
and systems of an organization in a way that: (a)
contributes to the welfare of its key stakeholders,
and (b) respects the rights of all constituents
affected by its operations.“
3. obey the law,
4. Full, fair, accurate, timely and understandable
disclosure in reports and documents that a
company files with or submits to the
5. insider trading,
6. preserving confidential information, bribery,
7. corporate opportunities, competition and fair
dealing among business, customer and
stakeholder
8. Compliance with applicable governmental
laws, rules and regulations
1.It’s a voluntary initiative
2. It’s a management system to maintain
standards way to set of procedures
3. All over the world is the same policies,
procedure s and implementation system
4. Standards basic purpose of setting out
agreed principles or criteria so that their users
can make reliable assumptions about a
particular product, service or practice.
5. the type of agreement,
6. the number of people, organizations or
countries who were involved in making the
agreement.
7. Different types of standard like-ISO, OHSAS,
EMS, WRAP and SA 8000 etc.

10. Types of Audit
1. 1st Party Audit: This is the technical term used when conformity
audit/assessment to a standard, specification or regulation is carried out by the
supplier organization itself. In other words, it is a self-audit/assessment. In a word
it is called “In house-internal”
2. 2nd Party Audit: This indicates that the conformity audit/assessment is carried
out by a customer of the supplier organization. An audit driven by a customer with
the primary goal of satisfying itself that a supplier is in compliance with a given
standard. “Out house-customer”
3. 3rd Party Audit: The conformity audit/assessment is performed by a body that is
independent of both supplier and customer organization. An external audit that is
conducted by an independent organization upon another organization.
Powerhouse-registrar/certification
4. Internal and External Audit: Internal audits are audits that are carried out by
an organization on itself to confirm to management that the compliance
implementation system is in good working order. external audits: 2nd party and
3rd party

11. Close System Audit
1st Party Audit
Vendor or Supplier
Audits itself
Supplier
2nd Party Audit
Brand ConsultantContract
Brand audits supplier
directly or indirectly

12. Open System Audit
Certification
Body
Supplier
On request
Of Brand
3rd Party Audit

13. Good Audit Management
In any audit the audit team leader has overall responsibility for the audit. Audit
team members assist the team leader. Good Audit Management requires the below
four criteria are as follows:
Planning and preparation: Objective, Scope, Team and Leader, Audit Duration,
Contact Company/Department(s), Established date & time, Checklist, Team Briefing
Proper Communication: Client, Auditees and Auditors
Ensure Parties involvement: opening & closing meeting
Accurate and actual fact findings: Reporting and follow-up

14. Good Audit Management
Auditee Facilities
Provides access, documents
and others information
Auditor/Clients Determines objectives, scope,
criteria and method of Audit
1st, 2nd & 3rd Party
Auditing
Organization
Lead Auditor/
Team Leader
Auditor Team
(Includes auditors, experts i.e. SA 8000,
BSCI,WRAP, ISO and auditors in training)
Audit
Performance
Audit Report

15. Audit Methods/Strategy
1. Vertical: Auditors using this method follow a trail of specific records through
relevant departments. Vertical audits can be performed upstream (with the normal
flow of business) or downstream (backwards from the normal flow of business).
Example of upstream vertical auditing & Example of downstream vertical auditing:
2. Horizontal: Auditors using this method review the processes within a particular
department and how the department interfaces with other departments. Example of
horizontal auditing: Compliance how related to admin, HR, Accounts, Production etc.

16. Preliminary contacts and
formalities
Examination of documents
and records
General observation of the
work premises
Information analysis and
verification
Preparing for the inspection
visit
Reporting and follow-up
The closing meeting
Workers’ interview
Overall Audit Process

17. • For worker interviews
• For internal discussions among auditor (s)
Private space
• Photos are taken to keep accurate records and for providing
examples to the factory
Freedom to take
photos
• Request the name(s) of the persons in charge and their contact
information
• Ensure that team has access to all facilities
• Ask for factory map identifying emergency exits, fire
extinguisher locations, toilets, departments etc.
Accessibility
and practical
support
• Ask for access to all requested documents and recordsDocuments
• Request that workers participating in interviews will have no
repercussions
Repercussion
policy
Overall Audit Process

18. Alignment of the process
 Preparation
 Gaining Entry
 Opening Meeting
 Observation/Factory Tour
 Document Check and Management Interviews
 Worker Interviews
 Union Interviews
 Pre-Closing and Closing Meeting
 Overall Process
 Attitude
 Additional Remarks/Training Needs
Overall Audit Process

19. Opening & Closing Meetings
 Be prepared
 Be on time
 Have agenda ready
 Take note of attendees
 Seating plan
 Entire team participates
 Auditees senior management (minimum dept. Manager)
 Team Leader/Lead Auditor chairs these meetings
 Unity with Team leader/Lead Auditor
 No over talking with Team Leader/ Lead Auditor

20. Opening Meeting Agenda
The opening meeting is conducted by the Lead auditor. The format of the opening meeting
should include the following:
-Introduce the team
-Reason, scope & criteria
-Review audit plan and methods
-Explain about sampling
-Workers and management interview
-Confidentiality
-Method of reporting (on site/outside)
-Confirm staff aware & available
-Confirm logistics
-Confirm guides
-Safety requirements
-Questions

21. Performing the Audit
Effective auditors are those people who become good at formulating
questions and researching the answers through either reviewing
documentation or interviewing employees. This means that you thoroughly
research the compliance to see that the requirements of the standard are
being fulfilled.
•Document review
•On site visit
•Taking notes on any violations on safety and health
•Workers interview
•Management interview
•Non-conformity /Non-Compliant document collecting
•Observations and non-compliance/non-conformities
•Photo clipping if it is needed
Remember: Always give the auditee the benefit of the doubt

22. Records and Documents
Objective
Evidence
Control of
suppliers
Health and
safety
Internal
Audit
report
Business
Licenses
Personal
file
Time
Card
ID
Card
Complaint
procedure
Policies
Wages
& OT
Production
records
Inspection
report
Accident
register
Management
review
Working
hours
All
register

23. Qualification of Good Auditor
Education: Auditor should demonstrate competence in clear and fluent oral and
in written concepts and ideas
Training: (1) knowledge and understanding of the standards, systems and/or
procedures audited (2) Assessment of techniques of questioning, evaluating and
reporting (3) Audit management audit skills such as planning, organizing,
communicating and directing.
Experience: Auditors should have at least four years full-time workplace
experience
Proficiency
Competency
Communication
Conducted by: Md. Motaher Hossain ,Lead Auditor SA8000/WRAP /ISO 9001/OHSAS 18001/ISO 14001 and Master
Trainer GIZ/ILO/EU/DIFE and Alliance for Bangladesh Workers Safety E-mail:
training.compliancebd@gmail.com, Mob:01713481942

24. Time Management
Time is a most critical factor in any audit.
• Reach the facility on time
• Arrange opening meeting on time
• Set man days audit
• Complete the audit within 8hrs
• Don’t loose the time for unnecessary work
• Choose appropriate sample size

25. Time Distribution to Perform Audit
Initiating the audit
Conducting document review
Preparing for on-site activities
Conducting on-site audit
Workers Interview
Audit reporting
15 %
Closing Meeting
40 %
30%
Time
Note: SA 8000 & ISO 19011 ,ISO 17021 and ISO 17024
Group & Individual
15 %

26. Team Leader/Lead Auditor Responsibility
•Gather all information required for planning
•Assist in selecting team
•Prepare overall plan
•Assign individual tasks
•Ensure working documents are prepared
•Documentation review
•Represent audit team
•Chair opening and closing meetings
•Ensure audit progress as per plan
•Ensure liaison meetings are held regularly
•Ensure audit results are reported clearly, conclusively and without undue
delay

27. 2nd Auditor’s Responsibility
Impartial
Watcher
Listener
Timekeeper
Note taker
Corroborate
Special Expertise
Training

28. Auditor Attitude
Key success Factor: Auditor Attitude to be Diplomatic and must be
positive/Value-Add:
• I really am here to help
• I am not here to find fault
• We are on the same team
• Together we can find opportunities
• This benefits the business
Remember: The Audit MUST BE OPEN, HONEST AND CONSTRUCTIVE. The person
or activity being audited always gets the Benefit of the Doubt

29. Auditees Responsibility
(Auditees, guides and management)
Auditee
• Assist auditor by providing evidence/document
• Co-operate with audit process
• Be open and honest
Guides
• Assist in making arrangements
• Guide auditors to records, documents, people, process etc
• Health and Safety
• Witness for the Auditee
Management
• Liaison with auditors to arrange audit
• Co-operate with auditor to facilitate audit
• Direct employees to participate
• Act on audit findings
• Provide resources for corrective action plans

30. Good Auditing Practices
 Ask the right person
 Speak clearly and simply. Use “Local” language
 Look at the person-in the eyes
 Rephrase your question if the auditee doesn’t seem to know what you
‘re asking
 Don’t talk down to anyone
 Smile and be relaxed. We ‘re all friends
 Be unemotional and impartial. Don’t get excited or fix “blame”
 Avoid interrupting an auditee
 Don’t look for trouble-find the facts
 Say thank you

31. Observation System: Floor Visit
PART II
“YOU SEE, BUT YOU DO NOT OBSERVE.” Sherlock Holmes

32. • Physical actions
• Verbal behavior
• Expressive behavior
• Spatial relations and locations
• Temporal patterns
• Response Latency is the amount of time necessary to make a
choice between two alternatives; used as a measure of the
strength of preference.
• Physical Objects
• Verbal and pictorial records
Facility Observation System

33. Phenomena Example
Human behavior or physical Workers movement action
pattern in a store
Verbal behavior Statements made by management
Supervisor and workers
Expressive behavior Facial expressions, tone of
voice, and other form of
body language
What Can Be Observed

34. Phenomena Example
Spatial relations How close management and workers at factory
Temporal patterns How long workers wait for their wages to be served
Physical objects What brand name and items are working in the factory
Verbal and Pictorial Bar codes on product packages Records
What Can Be Observed

35. Observation / factory tour
all areas as per the lay-out plan)
Any areas not indicated on the lay-out plan (including areas that were locked)
took a good overview of each area before focusing on detail
double checked information with workers on the way round
checked production /broken needle /canteen /security / other records on the way
round for evidence of undeclared overview
checked notice boards on the way round
ensured that s/he was leading the way (not the management)
On-the-job observations

36. Document Review, Workers interview,
Report Writing and CAPs
PART-III

37. Resources:
 Child labour free policy
 Birth certificate
 Age certificate
 Fitness certificate
 Recruitment policy
 Voter ID card
 Young workers register
 Floor observation
 Workers interview
 Child labour remedial policy
Major Auditing Areas: Child Labour

38. Resources:
 Appointment letter
 Medical /treatment register
 Security guard contract
 Salary sheet
 Deduction of wages
 Deposit part of wages
 Production plan
 Production target
 Working hours (OT)
 Recruiting policy
 Hiring and termination documents
 Workers interview
Forced Labour

39. Resources:
 Policy
 Management review
 Complaints
 Payment records
 Grade observation
 Training observation
 Workers interview
 Maternity benefit records
 Pregnancy test records
Discrimination

40. Resources:
• Policy
• Hiring and promotion records
• Personal file
• Payment records
• Termination register
• Workers interview
• Floor visit
• Training
Harassment

41. Resources:
Payment records
Production records
Stock register
Shipment register
Security guards register
Purchase register
Time cards
OT register
Workers interview
Final inspection report
Broken needle register
Machine maintenance register
Accessories Register
Working Hours

42. Resources:
 Policy
 Pay roll records
 Pay slip
 OT records
 Time cards
 OT calculations
 Bonus records
 Increment records
 Workers interview
 Production records
 Piece records
 Payment date
Wages

43. Welfare Facilities
Resources:
• First-aid
• Lunch room
• Day care
• Toilets
• Drinking water
• Transport
• Canteen
• Health care
• Free lunch
• Free education for children
• others

44. Documents:
Observation
Workers interview
Accident register
Broken needle register
First-aid boxes and kits
Fire drill record
Health and safety analysis report
Previous audit report
PPEs
Toilets
Chemicals records
Fire Extinguisher and Equipments
Doctor’s register
Training register
Drinking water test report
Machine maintenance register
Health and Safety

45. Resources:
 Policy
 Workers interview
 Participation Committee members interview
 Management review
 Meeting minutes
 Trade Union representative
Freedom of Association

46. Audit process – interviews
Workers Interview Technique

47. • Explain the situation and purpose of your presence
• Create rapport building
• Ask permission to take note
• Create rapport
• Minimize threats from management side
• Maintain control of the interview and overall process
• Maintain perspective
• Assure anonymity
• Limit each interview to 30 minute maximum
• Ensure workers know that auditors will return to verify compliance
Close Circle Theory

48. selected worker(s) appropriately ensuring maximum protection for workers (e.g.
avoiding if possible asking management to call workers or providing lists of
worker numbers)
used both walkthrough and document review to select workers to interview (not
only one or the other)
arranged the interview space in the best way (i.e. avoiding a formal interview
arrangement across a boardroom table
interviewed workers in a private space away from the management office or staff
Close Circle Theory

49. put workers at their ease
was a good listener and encouraged all interviewees to talk (even in group interviews)
with no one dominating
asked open questions to avoid pre-empting workers answers
probed appropriately where workers indicated a potential issue
avoided highly technical language
managed the time well
interviewed Participation Committee / OSH members
provided an opportunity for interviewees to ask questions
informed workers who they were, what they were doing and advised workers on next
steps and confidentiality
Close Circle Theory

50. Interviews – Trade Unions/Participation Committee
was thorough in establishing the position/role of the Union Chair
was thorough in establishing how the union representatives are elected, process of
election, who organises them etc
probed sufficiently on how the CBA was negotiated and what
consultation/negotiation had taken place with workers etc
interviewed members from different unions where multiple unions are present

51. Auditors have the right to confidential interviews:
 Private space
 Selecting the right samples
 Right environment
 Confidentiality
 Time management
Manage worker’s expectations
Audit process – interviews

52.  Thank the Auditee and re-introduce the team
 Recap reason, scope and criteria
 Review audit plan and methods
 Report the observation, positive & negative
 Disclaimer
 Overall summary
 Questions & answers
 Corrective actions & time-scale
 Recommendation
 Follow-up
Closing Meeting and Agenda

53. Report Writing & CAPs
System
PART IV

54. Be specific
Be correct-check your facts
Informative
Reference use ( law related, ILO,WRAP, SA 8000, BSCI, ISO)
Factual
Complete
Accurate & precise
Tips on Writing Report:
• Use simple words
• Precise wording
• Avoid passive voice
• Use reported speech
• Avoid abbreviations
• Avoid acronyms
Audit Report Preparation
Write the Report on the basis of C.I.A
C-Clarification of contents
I-Integration of information
A-Attribution of clauses

55. ●The Corrective Action Plan (CAP) should not exceed 12 months and is
based on the findings of an audit.
●It is set by the auditor within a defined timeframe.
●It describes the implementation of measures required to improve the social
performance in a production facility and is accompanied by qualification if
needed.
●Crucial points like child labour and forced labour are to be remedied
immediately.
●The improvement of social performance of suppliers worldwide is the goal
of the Customer which develops in this respect a qualification framework
also based on international, national and local stakeholder round tables in
the supplier countries.
Write the CAPs on basis of virtual factory tour
Corrective Action Plans (CAPs)

56. Conducted by: Md. Motaher Hossain ,Lead Auditor SA8000/WRAP /ISO 9001/OHSAS 18001/ISO 14001 and Master
Trainer GIZ/ILO/EU/DIFE and Alliance for Bangladesh Workers Safety E-mail:
training.compliancebd@gmail.com, Mob:01713481942

57. Conducted by: Md. Motaher Hossain ,Lead Auditor SA8000/WRAP /ISO 9001/OHSAS 18001/ISO 14001 and Master
Trainer GIZ/ILO/EU/DIFE and Alliance for Bangladesh Workers Safety E-mail:
training.compliancebd@gmail.com, Mob:01713481942