ENVIRONMENT AND BUSINESS INTEGRITY MODULES FOR SEDEX

Audit company: Audit company Report reference: Report reference Date: 00/00/00

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Guidance For Auditors For Extended Environment And Business Ethics Assessments

1. INTRODUCTION Reflecting the widening nature of Corporate Social Responsibility, and following requests from Sedex members the scope of the SMETA audit has now be increased to include Environment and Business Ethics.

When the additional 2-Pillars are included it is known as a SMETA 4-Pillar audit and the procedure for this is covered in the SMETA Best practice Guidance Version 4.0, May 2012. This is available on the public section of the Sedex website, along with the equivalent report formats.

The original 2-Pillar SMETA covering Labour Standards and Health & Safety will continue to include a short Environmental assessment, whilst the 4-Pillar audit contains a more detailed (extended) Environmental assessment along with Business Ethics as the 4th pillar.

The additional modules may not be required by all Sedex members, and it is important that suppliers and customers are clear when these supplementary modules are required additions. They have been designed so that customers/suppliers may choose whether to add one or both and together they are designed to take a total of 0.5 auditor days when added to a SMETA procedure.

Including the extra modules will incur and additional audit cost, and it is important that members are clear when these are necessary.

Note: These assessments may not meet the level of a complete Environment and/or Business Ethics audit and this will depend on individual members and how they define those terms.

At the request of members the AAG has created extra member guidance to support implementation of Environment and Business Ethics and these comprise

Guide for Auditors (this document); which will inform the auditors of what checks they should be making.

Guide for Suppliers: which gives suppliers details of what the auditor will be checking and how the supplier can prepare themselves for the

assessment process.

This document is not intended as the only reference but it should be used alongside the auditor’s own internal rules and procedures.


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2. METHODOLOGY Environment and Business Ethics assessments are proposed to take 0.25 auditor days each and therefore do not represent full audits.

They are intended as validations of the SAQ and the main requirement for Environment is to establish whether a site is meeting applicable laws, and has any certifications and/or appropriate management systems.

For Business Ethics where laws are less clear the process will capture findings as observations only and the objective is for the membership to define appropriate standards over time.

The process should enable the reader to decide whether or not full audits are required as a follow up. Any further audit requirements will depend on the customer’s/supplier’s judgment of the level of risk following this assessment process.

Where the audit requestor /customer agree that a ‘top up ‘ of Environment and Business Ethics is required e.g. where a 2-Pillar audit of Labour Standards and Health & Safety has been recently carried out, it is up to the audit requestor to negotiate how this might be conducted. A suggestion is to carry out the ‘top up’ as part of a follow up audit.

Sedex issue titles have been created to allow Environment and Business Ethics to be uploaded onto the Sedex data base.

3. OVERVIEW AND AUDIT EXECUTION 3.1. AUDIT PREPARATION

Once the auditors and the audit requestor have agreed that an audit requires the inclusion of Environment and Business Ethics, the auditor(s) should:

Be aware of the Environmental and Business Ethics laws in the site’s area of operation.

Be aware of any customer’s policies /procedures which cover Environment and Business Ethics.

Have knowledge of the major environmental aspects and the likely Business Ethics issues in the geographical location and industry of the site of employment.

Check that the site has completed the appropriate sections of the SAQ and shared it with the auditor.

Ensure that the site has the appropriate pre-audit information, including but not limited to:

o Appropriate sections of the ‘Guide to Pre-Audit Information Pack’

o Has access to the supplement for Environment and Business Ethics ‘Guide for Suppliers’


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3.2. SELECTION OF AUDITORS

For detailed guidance see SMETA Best Practice Guidance (BPG) version 4, May 2012, Section 6.2.2. When a 4-Pillar audit is required it is recommended that in an audit team, at least one member has experience of environmental and business practice issues. Where the size of the team does not allow this, the minimum requirement is that the auditor(s) are appropriately briefed/trained. It is expected that as a minimum auditors conducting a 4-Pillar audit are able:

To assess the site’s performance against the appropriate legal requirements for Environment and Business Ethics

Give good practice examples and fully explain the requirements for environmental and Business Ethics policies and procedures.

To assist in the awareness raising of Business Ethics, the AAG has produced a briefing framework available in the member’s resources section

3.3. AUDIT EXECUTION

These assessments are not full audits and the main requirement is to check whether the site is meeting local and national regulations as well as record whether the site has certifications (e.g. ISO 14001, or any appropriate management systems).

Non-compliances should only be raised where the site is failing to meet legal requirements and all other findings should be recorded as observations in summary auditors should:

Review the SAQ and record the site’s performance against the completed SAQ

Be aware of the appropriate local and national laws and check the sites performance against these, as well as the presence of required permits

AUDIT CHECKS AND EVIDENCE GATHERING

Document review and system checks including management interview

o The auditor checks documentary evidence by reviewing appropriate records or documents in conjunction with the relevant managers. In this section the auditor checks whether the site knows and is up to date with the relevant local and national laws and the standards required. See SMETA BPG pg. 74 for Guidance by Clause.

o Choice of the relevant personnel is at the discretion of the auditor but as a minimum the auditor should cross check information by interview with the individual(s) identified by the site as responsible for Environmental and/or Business Ethics performance.

WORKER INTERVIEWS


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o The auditor seeks to establish that policies and procedures are carried out in practice. Critical points will include areas of legal compliance such as for Environment contents of waste water discharge. Interviews with workers responsible for checking these contents will be evidence of procedures correctly implemented.

o Assess whether the site has a system in place to monitor their performance against any client or legal requirements.

For Business Ethics, interviews should focus on personnel where Business Ethics is most relevant, e.g. sales, service management, logistics departments.

Note: it is important that the appropriate personnel are present on the day and the auditor should confirm this with the site prior to the visit.

3.4. RECORDING FINDINGS

Environmental law and standards are clear and established in most countries and meeting local and national laws is the compliance standard to be used by auditors

In some cases customers have clear and well communicated policies on both Environment and Business Ethics, which may extend beyond local law and it, may be appropriate to record non-compliance where the site is not meeting these. Please see section 3.1. AUDIT PREPARATION. If in doubt the auditor should check with the customer’s requirements.

All other findings should be recorded as observations.

For Business Ethics, standards and laws are much less clear; therefore auditors should record all information as observations only rather than non-compliances. Over time the data collected will be used by the membership to establish appropriate standards.

Definitions of non-compliances /observations/ good examples are as follows:

For Environment non-compliances should be recorded:

Where a site fails to meet local and national regulatory requirements. This is in line with Global Social Compliance Programme (GSCP) Environmental Module Level 1, which proposes that “a minimum requirement is to be compliant with applicable legal standards. “GSCP is a business driven programme for companies who wish to harmonise their efforts to improve working conditions and Environmental performance in their supply chains.

For more information on GSCP see: http://www.ciesnet.com/2-wwedo/2.2-programmes/2.2.gscp.background.asp

For Environment observations should be raised e.g.:

Where a site is unaware of any customer’s requirements on Environment standards.

http://www.ciesnet.com/2-wwedo/2.2-programmes/2.2.gscp.background.asp


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Where a site is unaware of its major Environmental impacts.

Where there are customer requirements/codes covering Environment and the site does not have a system in place to monitor their performance against these.

Where there are practices which fail to meet a good practice standard but which do not contravene laws or client’s requirements.

For Environment good examples should be raised:

Where a supplier is exhibiting exceptionally good performance, in excess of requirements in these areas.

Note: where a supplier is monitoring Environmental and Business Ethics standards of its own suppliers/subcontractors, this can be viewed as a “good example”.

For Business Ethics only observations and good examples should be recorded

All findings will be recorded as Observations or Good examples.

The group recommends that since standards on Business Ethics are less clear than those on Environment all issues should be “observations” rather than non-compliances, until standards can be defined over time.

For more information on Business Ethics see http: http://www.transparency.org


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4. AUDIT REPORTING AND FORMS

Extended Environment and Business Ethics are now part of the publicly available SMETA report version 4.0 May 2012. Auditors should select the appropriate sections of the report format, 10B2 for the shortened Environment assessment of a 2-Pillar audit and 10B4. extended Environment assessment for a 4-Pillar audit, which will also include 10C Business Ethics.

The auditor must make it clear on the front page of the SMETA audit report whether a 2-Pillar or 4-Pillar audit has been conducted.

Where 10B4 (extended Environment) has been selected the auditor should aim to complete the Environmental analysis table in the appropriate section of the SMETA report.

5. SEDEX UPLOADING Appropriate issue titles exist within the Sedex system to support the upload of Environment and Business Ethics assessments.

6. CHECKLIST FOR AUDITORS The following check list may be used by auditors to support the additional modules

The Assessment Check Profile taken from Global Social Compliance Programme (GSCP) “Reference Checks” document published October 2009 and available on the GSCP web site.

Note: where Environmental and /or Business Ethics policies and practices are not well developed the auditor may use this information to raise awareness of these issues.


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10B4. Extended Environment Note for auditors. This Environment section is intended to take not more than 0.25 auditor days. It is an assessment not an audit and the main requirements are to check that the site is meeting local and national regulations with regard to Environmental standards and to establish whether a site has any certifications or an Environmental management system. Non-compliances should only be recorded where a site is not meeting local legal requirements all other findings should be recorded as observations.

Following this assessment the customer/supplier may decide a full Environmental audit is required.

CODE REQUIREMENTS

Assessment Criteria (these are measures and not absolute standards. Non-compliances should be raised only when a site fails to meet the law or contravenes a client requirement).

Compliance Requirements

10B4.1 Suppliers as a minimum should meet the requirements of local and national laws related to environmental standards. 10B4.2.Where it is a legal requirement suppliers must be able to demonstrate that they have the relevant valid permits including for use and disposal of resources e.g. water, waste etc. 10.B4.3. The supplier shall be aware of their end client’s environmental standards / code requirements and have a system in place to monitor their performance against these.

Guide for observations:

10B4.4. Suppliers should have completed the appropriate section of the SAQ and made it available to the auditor. 10B4.5. Suppliers should have an environmental policy, covering their environmental impact, which is communicated to all appropriate parties, including its own suppliers. 10B4.6. Suppliers shall be aware of the significant environmental impact of their site and its processes. 10B4.7. 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 (see 4-Pillar audit report and audit checks for details). 10B4.8. Suppliers shall seek to make continuous improvements in their environmental performance. 10B4.9. Suppliers shall have available for review any environmental certifications or any environmental management systems documentation. 10B4.10. Suppliers should have a nominated individual responsible for co-ordinating the site’s efforts to improve environmental performance. 10B.4.11. Has the site recently been subject to (or pending) any fines / prosecutions for non-compliance to environmental regulations.

This is not a full environmental audit, but an assessment process over a recommended 0.25 auditor days, which will support the reviewer in


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deciding if a full environmental audit is necessary.

0.1 MANAGEMENT PROCESSES


0.1.Document and system checks including management interview

Comments

0.1.1. SAQ completed by site - available for checking.

0.1.2. Site is aware of /has access to copies of any local/ national regulations ref. Environmental standards and Environmental codes from its clients.

0.1.3. The site has written and implemented procedures for meeting the relevant Environmental regulations and client’s standards, and is meeting those standards.

0.1.4. Site has an Environmental policy, covering its Environmental impacts and clearly communicated to relevant parties e.g. employees, suppliers, and agents. Please state which Environmental topics are covered by any policy (and upload/link to copies).

0.1.5. The site has been certified to an internationally recognized Environmental standard e.g. ISO 14001. Please record certification date and who by.

0.1.6. The site is aware of its main Environmental impacts, please list what they are.

The list includes energy use, water use, water discharge, waste and emissions to air.


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0.1.7. The site has all relevant permits in place for all legal requirements related to its Environmental impacts, e.g. a permit for waste disposal.

0.1.8. Site has assigned responsibility for Environmental issues to an appropriate individual(s). Please record name(s) and job title(s).

0.1.9. Any local inspections by government or similar are recorded and acted upon. Please record details of any Environmental prosecutions, complaints or recommendations and whether these have been acted on.

0.1.10. Site is aware of client requirements ref. chemicals used in manufacture and is meeting them.

0.1.11. The site reviews the Environmental performance of its suppliers.

0.1.12. The assigned responsible manager understands the Environmental regulations applicable to the site and the client’s Environmental standards

0.1.13. The responsible manager has a clear understanding of the Environmental impacts of the site. Please record what the site believes they are.

0.1.14. The responsible manager ensures an action plan is in place to improve the site’s Environmental performance - regularly reviewed and updated.

0.1.15.the site measures its Environmental


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performance[ the auditor should complete the Environmental analysis table in the SMETA report]

0.2. Worker interview

0.2.1. Workers from the relevant sections especially those involved with legal compliance e.g. checking contents of effluent, are aware of standards required and their work procedures ensure they are met.

0.2.2. Workers are aware of what action to take when regulations are not met.

0.2.3. Workers have been trained on the Environmental policies and procedures of the site.

0.2.4. workers have been trained on how to save resources such as switch off lights and machinery when not in use.

SPECIFIC TOPICS FOR ENVIRONMENTAL ASSESSMENT

For each significant Environmental impact identified in 0.1.6. above the auditor should use this guidance to record the site’s performance.

Examples of significant Environmental impacts include, (but are not limited to) energy usage; water usage; water discharge; waste; emissions to air.

Assessment Criteria (these are measures and not absolute standards. Non-compliances should be raised only when a site fails to meet the law or a client requirement).

1. The site is aware of the local and national regulations covering its specific Environmental impacts (e.g. energy use, water usage and disposal, waste and emissions to air) and is meeting those requirements.

2. The site is aware of any client requirements/codes for each specific impact and has procedures in place for measuring their performance against these.

3. The site is measuring & recording its use of resources e.g. how much energy or water it uses and is taking steps to reduce this.


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4. The site is measuring & recording resources disposed of e.g. how much waste water (effluent), waste materials, air emissions etc.

5. The site has any appropriate legally required permits in place for all of its Environmental impacts e.g. permits for water extraction, waste disposal, and energy usage.

6. The site is making use of renewable energy sources where available, e.g. solar, hydropower, wind turbines, geothermals or energy from biomass, such as wood, animal manure, crop residues and waste.

1,2,3, SPECIFIC IMPACTS: the following checklist should be used to assess the site’s procedures in managing each of its Environmental impacts such as use of energy , water, disposal of water , waste, etc.


1.1.Document and system checks including management interview

Comments

1.1.1. The site is aware of, and has copies of any local or national regulations referring to use of resources such as water, energy etc.

1.1.2. The site has written and implemented procedures for meeting of local and national regulations appropriate to their resources usage and is meeting those standards.

1.1.3. The site is measuring its use and disposal of resources including the use of electricity and/or gas meters, quantity of fuel used, amount of water used.

1.1.4. The site is recording its resources usage and disposal and is linking it to site outputs. The auditor must record these measurements in the appropriate section of the audit report


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1.1.5. The site is taking steps to reduce its resources usage and disposal as measured as a proportion of goods produced i.e. for energy .to reduce its KWh per measure of finished goods produced, by e.g. more efficient energy usage or use of renewable energy.

1.1.6. The site has copies of required permits for use and disposal of resources e.g. water, energy etc.

1.1.7. The site has appropriate facilities for treating incoming water where necessary.

1.1.8. The site has identified all sources of waste output and is managing associated risks e.g. water discharge to drains, soak aways and any potential spillages.

1.1.9. The site has maintenance/cleaning programme for any critical control points e.g. emission control equipment.

1.1.10. Any local inspections by government or similar are documented and acted upon (include details of complaints/prosecutions/recommendations).

1.1.11. The assigned responsible manager understands the regulations applicable to the site’s resources usage and disposal and is meeting those standards.

1.1.12. The assigned responsible manager ensures there is an action plan in place to reduce the site’s resources usage and disposal and this is regularly


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reviewed and updated.

1.1.13 The site has joined an internationally recognized initiative to reduce resources usage and reduce its emissions e.g. transparent measurements listed on the carbon disclosure project (CDP).

1.2. Worker interviews

1.2.1 Workers who have a responsibility for minimizing resources usage or disposal are aware of their roles and are taking appropriate action.

1.2.2. Workers have been trained/instructed to minimize wasteful use of resources such as switching off lights or machinery when not needed.

1.2.3. Workers who have been trained to ensure that all disposals e.g. waste water, waste , emissions ,meet the legal requirements, are aware of their roles and what action to take if disposal products fail to meet legal requirements.

The above is a guide only and it can be used for all Environmental topics judged to be significant by the site and the auditor. Assessment may not require all of the above prompts. The process allows the auditor to use those they feel are most appropriate.

The likely Environmental impacts include but are not limited to: energy usage; water usage; water discharge; waste; emissions to air.

Notes on Environment section:

Specific details taken from Global Social Compliance programme (GSCP) Environmental Reference tools. Please see: http://www.gscpnet.com/.

Assessment check profile taken from GSCP Reference Checks document published October 2009 and available at: http://www.gscpnet.com/.

For more information on GSCP see: http://www.gscpnet.com/

http://www.gscpnet.com/




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10C. Business Ethics Note to audit companies: It is expected that the company employing the auditor(s)/auditor has its own code of conduct and integrity policy, which should include the prohibition of accepting or soliciting bribes.

The policy should be discussed with each site prior to and at audit to inform the site of the ethical business standards of the audit company/auditor.

Note for auditors. This Business Ethics section is intended to take not more than 0.25 auditor days. It is an assessment not an audit. The assessment may not meet the level of a complete Business Ethics audit and this will depend on individual members and how they define those terms.

At this time the AAG recommends that any issues found during a Business Ethics assessment are recorded as “Observations“. Presently the limited existence of national standards or legislation on this topic do not allow for more prescriptive guidance. This position will be reviewed as part of the regular review process.

CODE REQUIREMENTS

Assessment Criteria (any findings will be recorded as “observations” not “non-compliances”.

Code Requirements (no non-compliances)observations only

Note; the aim of the Business Ethics Assessment is to give a better understanding of these issues in global supply chains and by gathering information on observations and not non-compliances it is hoped that over time appropriate standards will be agreed.

10C.1. Suppliers should have completed the appropriate section of the SAQ and have made it available to the auditor. 10C.2. The supplier should have received and acknowledged- preferably in writing – the Business Ethics policy of the auditor / audit company. 10C.3. Suppliers shall seek to conduct their business ethically without bribery, corruption, or any type of fraudulent Business Practice. 10C.4. Suppliers shall be aware of any applicable laws, their end client’s Business Ethics standards / code requirements and have a system in place to monitor their performance against these. 10C.5. Supplier should have a Business Ethics policy concerning bribery, corruption, or unethical Business Practice. This should be clearly communicated to all relevant parties. 10C.6. Suppliers should have a designated person responsible for implementing standards concerning Business Ethics 10C.7. Suppliers should have a transparent system in place for confidentially reporting, and dealing with unethical Business Ethics without fear of reprisals towards the reporter 10C.8. Suppliers should ensure that the staff whose job roles carry a higher level of risk in the area of ethical Business Practice e.g. sales, purchasing, logistics are trained on what action to take in the event of an issue arising in their area.

This is not a full Business Ethics audit, but an assessment process over a recommended 0.25 auditor days, which will support the reviewer in deciding if a full Business Ethics audit is necessary.


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0.MANAGEMENT PROCESSES


0.1.Document and system checks including management interview Comments

0.1.1. SAQ has been completed by the site and made available to the auditor for pre review.

0.1.2. are there any local and national regulations/laws concerning Business Ethics standards and is the site aware of them. Please note details of any topics covered.

0.1.3. The site has a Business Ethics policy and/or copy of client’s policy.

0.1.4. Any site policy has been communicated to appropriate parties e.g. employees, suppliers, and agents.

0.1.5. The policy of the site covers specific areas of potential risk within the area of business with integrity. Please list the topics covered (and upload/link to, any relevant policies).

Examples include (but are not limited to).

1.1.5.1. Bribery gifts and entertainment; (where there is a deliberate intention to gain business advantage).

1.1.5.2. Conflict of interests (when a personal interest or relationship is put before the interests of the business).

1.1.5.3. Charitable contributions (where this might influence a business deal).

1.1.5.4. Facilitation payments (e.g. payment made to speed up a service which is a legal entitlement such as customs clearance).

1.1.5.5. Political contributions (must be made with the agreement of the business).


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1.1.5.6. Reporting procedures (for Business Ethics issues).

1.1.5.7. Disciplinary procedures (for dealing with Business Ethics issues).

1.1.5.8. Non-retaliation for raising compliance issues in good-faith.

0.1.6. The site is aware of any Business Ethics standards of its customers.

0.1.7. The site has assigned responsibility for Business Ethics issues to an appropriate individual(s). Please record name(s) and job title(s).

0.1.8. There is a documented system for dealing with Business Ethics issues including no retaliation for reporters.

0.1.9. Any policy is communicated to appropriate parties e.g. employees, customers, and suppliers.

0.1.10. Any local inspections by government or similar are recorded and acted upon. This should include any local prosecutions, complaints or recommendations (please detail).

0.21.11. Responsible manager understands local/ national regulations/ client requirements covering Business Ethics.

0.1.12 Assigned responsible manager checks there are clear procedures in place to measure performance in the area of Business Ethics.

0.1.13 The assigned responsible manager ensures there is a clear communication procedure of the sites and clients Business Ethics policies.

0.2. Employee discussion.

0.2.1. Appropriate employees are aware of the site’s Business Ethics policies/procedures and how to report concerns on Business Ethics issues (from e.g. poster/web site information).


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0.2.2. Employees understand the reporting process for their concerns and are aware there will be no reprisals following reporting.

0.2.3. Employees know/understand penalties for being involved in unethical business practice as an example offering or receiving bribes.

SPECIFIC TOPICS FOR BUSINESS ETHICS ASSESSMENT

For the relevant topics selected from the list identified in 0.1.5. Above the auditor should use the guidance below to record the site’s performance.

The findings will be recorded as “observations” not “non-compliances” and the data gathered will allow the membership to agree standards over time.

To assist in this process examples chosen are:

BRIBERY AND CORRUPT BUSINESS PRACTICE and

REPORTING /INTERNAL CONTROLS/MONITORING

1. BRIBERY/CORRUPT BUSINESS PRACTICE

Definition (from Business Principles for Countering Bribery, SME Edition; Transparency International http://www.transparency.org).

Bribery is the giving or receiving of money, a gift or other advantage as an inducement to the receiver to do something that is dishonest, illegal, or a breach of trust in the course of business.

Assessment Criteria: assessments on bribery /corrupt business practice will concentrate on data collection and any findings will be recorded as “observations” not “non-compliances” The information gathered plus recording local context will allow for all types of members to agree appropriate standards over time , based on “observations “ collected.

The site is aware of any client codes and /or legal requirements governing bribery and corrupt business practice and is measuring its performance against them.

The site has a policy, which covers bribery and corrupt business practice and has communicated the policy to all appropriate parties including employees, customers, suppliers, agents, etc.

The site has checks in place to ensure its bribery and corrupt business practice policy and procedures are working.

AUDIT CHECKS QND EVIDENCE GATHERING


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1.1.1. Are there any local or national regulations’ covering bribery and corrupt business practice standards, and is the site aware of them.

1.1.2. Has the site acknowledged receipt of the audit company’s Business Ethics policy

1.1.3. The site has a policy or statement, which covers bribery and corrupt business practice issues. Please state what topics the policy covers. This may include (but not be limited to) gifts and entertainment, facilitation payments, reporting procedures, disciplinary procedures.

1.1.4. The site is aware of any anti-bribery policies/corrupt business practice standards of its clients.

1.1.5 The site has documented procedures to measure its performance against it customer’s requirements/codes on bribery and corrupt business practice.

1.1.6. The site has documented procedures to prevent and deal with bribery and corrupt business practice including no reprisals for reporters.

11.7. The assigned responsible manager understands the local and national laws and customer requirements covering bribery and corrupt business practice. Please note the manager’s name and position.

11.8. The assigned responsible manager checks that clear procedures are in place to ensure all local and national laws covering bribery and corrupt business practice are met.

1.1.9. The assigned responsible manager ensures there is a clear communication procedure of the sites and their customer’s policies on bribery and corrupt business practice issues.


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1.1.10. The assigned responsible manager ensures there is a clear procedure for reporting and dealing with bribery and corrupt business practice issues, both for business employees and other business partners e.g. suppliers, agents, customers etc.

1.2. Employee discussion

1.2.1. Appropriate employees are aware of the site’s bribery and corrupt business practice policies/procedures and how to report their concerns about any bribery and corrupt business practice issues.

1.2.2. Appropriate employees are trained in how to deal with bribery and corrupt business practice issues when confronted with it at work.

1.2.3. Employees are aware of the disciplinary procedures if they are found to be involved in bribery.

1.2.4. Employees are aware of how to report concerns of bribery and corrupt business practice and know there will be no reprisals against reporters.

2. REPORTING AND INTERNAL CONTROLS /MONITORING

Any programme, needs to have controls and records. These are the checks and balances which will show the programme is working

Recommendation (from Business Principles for Countering Bribery, SME Edition; Transparency International http://www.transparency.org).

There needs to be a clearly communicated reporting procedure in which concerns about any Business Ethics issues can be reported without any fear of reprisals to the reporter. Advice should also be available on how to handle incidents before they become a problem.

Assessment Criteria will concentrate on data collection and any findings will be recorded as “observations “ not “non-compliances ‘

1. The site has a clearly communicated procedure for reporting Business Ethics issues without any reprisals towards the reporter.

2. There is a clearly communicated procedure for dealing with individuals who are found to be breaking the business policies/rules on Business Ethics including disciplinary measures.


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3. The site has a system for checking that their processes for controlling Business Ethics issues are working.

4. Any internal monitoring or checking of processes is recorded and used as a basis for improvement as necessary.



2.1.1. The site has a clearly documented and communicated procedure (e.g. by posters or web site) for reporting on Business Ethics issues including no reprisals for reporters.

2.1.2. Records are kept of any internal reports, investigation and subsequent action taken.

2.1.3. The site has clearly documented and communicated procedures for dealing with individual(s) found to be involved in Business Ethics violations, including clearly communicated disciplinary actions.

2.1.4. The site has documented reviews of its procedures covering Business Ethics issues and records any improvement action taken as a result of the reviews.

21.5. The assigned responsible manager(s) is aware of the procedures for reporting on Business Ethics issues.

2.1.6. The assigned responsible manager checks that all reporting procedures are being clearly communicated and understood by all relevant parties.

2.1.7. The assigned responsible manager is aware of the procedures for dealing with individual(s) found to be involved in Business Ethics violations, including disciplinary actions, and checks they are being followed.

2.2. Employee discussion


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2.2.1. Appropriate employees are aware of the site’s reporting procedures on Business Ethics issues and that there are no reprisals for reporting.

22.2. Employees are aware of the disciplinary procedures if they are found to be involved in Business Ethics issues.

The above is a guide only and it can be used for all Business Ethics topics judged to be significant by the site and the auditor. Assessment may not require all of the above prompts. The process allows the auditor to use those they feel are most appropriate.

The likely Business Ethics topics include but are not limited to: bribery; conflict of interests; charitable contributions; facilitation payments; political contributions; reporting procedures; disciplinary procedures; no reprisals for reporting.

Notes on Business Ethics section:

Details taken from:

1. Business Principles for Countering Bribery, Small and Medium Size Enterprise (SME) version, from Transparency International http://www.transparency.org

2. Global Compact working group draft document on the 10th principle.


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ENVIRONMENT AND BUSINESS INTEGRITY MODULES FOR SEDEX

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