Risk assessment tool methodology · methodology and functionality of Radar are the responsibility...
Transcript of Risk assessment tool methodology · methodology and functionality of Radar are the responsibility...
![Page 1: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/1.jpg)
Risk assessment tool methodology
Briefing note for Radar users Version 1.0, March 2020
![Page 2: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/2.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
Sedex risk assessment tool methodology briefing note
This briefing note details the methodology used to produce risk scores within Radar, the Sedex risk
assessment tool. Users may also find our Frequently asked questions (FAQs), Radar Guidance, and
Guide to risk assessment in supply chains documents helpful.
About Radar
Radar is an online tool designed to help Sedex members globally to identify key and relative labour,
human rights, governance and environmental risks across their business and supply chains. It does
this by combining inherent country and industry sector risk information with the data collected from
members within the Sedex platform. Sedex members can use the information available in Radar to
help identify and ultimately mitigate risk by engaging with the sites within their own business
operations and supply chains that are most likely to be exposed to labour, human rights,
governance and environmental risks.
Acknowledgments
Radar and the risk assessment methodology was developed by Anthesis, with support1 from Ergon
Associates and Dr. Alexandra Channer. We would also like to acknowledge the contributions of the
Sedex members and AACs who contributed to our Project Advisory Group.
1 Disclaimer: While other organisations and individuals have supported the development process, the final outputs,
methodology and functionality of Radar are the responsibility of Sedex and Anthesis.
![Page 3: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/3.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
About Anthesis
Anthesis seeks to make a significant contribution to a world which is more resilient and productive,
by working with cities, companies, and other organisations to drive sustainable performance.
Anthesis develops financially driven sustainability strategies, underpinned by technical expertise
and delivered by innovative collaborative teams across the world.
Their services include risk assessments and financial due diligence, supply chain mapping,
responsible procurement policies and strategy development, supplier engagement, assurance and
verification, sustainable packaging and plastics and ICT tools for sustainability.
Anthesis works across industries as varied as food and drink, agriculture, financial services,
packaging, chemicals, and clothing and apparel. They bring together 500+ experts operating in 40
countries around the world with offices in the UK, Germany, France, Ireland, Italy, Spain, Sweden,
Finland, the USA, Canada, China, South America, the Philippines and the Middle East.
www.anthesisgroup.com
About Ergon Associates
Ergon is a specialist consultancy in the field of labour and human rights, gender, employment and
development. It undertakes strategic consultancy, diagnostic analysis, risk assessments, policy
research and training for a diverse range of clients including international companies, international
organisations, development finance institutions (DFIs), and multi-stakeholder initiatives.
www.ergonassociates.net
About Dr. Alexandra Channer
Alex is a consultant in labour and human rights, with a background in political communications. She
specialises in risk assessments, analysis and research, and regularly delivers anti-slavery training for
UK businesses. Alex’s clients include companies, international organisations, multi-stakeholder
initiatives and certification schemes.
www.alexandrachanner.co.uk
![Page 4: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/4.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
Contents 1. Inherent risk ................................................................................................................................................................................................... 5
1.1 Country risk ........................................................................................................................................................................................ 5
1.2 Sector weights ................................................................................................................................................................................ 8
1.3 Combined inherent risk scores ..................................................................................................................................... 10
2. Site characteristics scores ...................................................................................................................................................................... 11
2.1 Site characteristic scores ..................................................................................................................................................... 11
3. Combined risk scores ............................................................................................................................................................................ 12
4. Topic risk indicators .................................................................................................................................................................................. 12
5. Vulnerable workers ..................................................................................................................................................................................13
6. Management Controls ........................................................................................................................................................................13
7. Limitations ........................................................................................................................................................................................................ 15
8. Supplementary documents ........................................................................................................................................................... 16
Appendix 1: Country Indicators by topic .....................................................................................................................................17
Appendix 2 – Sectors ....................................................................................................................................................................................... 22
Primary production – ISIC codes .................................................................................................................................................... 22
![Page 5: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/5.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
1. Inherent risk Inherent Risk Scores, produced on a scale of 0-10, where 10 is high risk, are a combination of
Country, Sector and ‘High Risk Goods’ scores.
1.1 Country risk
The country risk indicators are drawn from publicly available sources. They are chosen according to
the following attributes:
• Coverage – they must cover the majority of the countries and include coverage for each
region;
• Reliability – they must be from reliable sources;
• Comparability – the numbers for each country must be generated in a comparable way;
• Relevance – they must be relevant to the Sedex risk topics (i.e. ETI base code clauses,
Business Ethics and the Environment).
Assignment
Indicators are assigned to the relevant risk topic (e.g. working hours, regular employment etc.). See
Appendix 1 for the list of indicators used.
Normalising
The original indicators are on a variety of scales. The indicators are therefore normalised on a 1 to 6
scale, 6 being high risk. For each individual indicator the following process is followed:
• The indicator is inverted if needed so that a high score is high risk;
• The scores are re-scaled to a 1 to 6 scale, maintaining the original distribution.
Custom indicators
Where there were no suitable indicators to address a particular topic, custom indicators were
produced based on data sources that met the selection criteria above. See Appendix 1 for more
details.
Forced Labour Index
There were no public indicators that adequately covered the risk of forced labour in supply chains
so Sedex commissioned Ergon Associates to develop a Forced Labour Index.
The Forced Labour Index provides an assessment of forced labour risks for four broad economic
sectors (agriculture, food processing, manufacturing and logistics) for each country in the overall
risk assessment tool. The final assessment has two components: a country context risk score based
![Page 6: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/6.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
on third party data sources and a sector-specific score based on focused desk research. See the
Forced labour index methodology briefing note.
Filling Gaps
While all indicators have good coverage, there are some indicators that do not cover all countries.
Values are generated for these missing countries as follows:
• Countries are grouped geographically using the UN geographic regions
• The average (arithmetic mean) value for the country group is calculated
• The average is assigned to the countries with missing scores
Summary of topics
The risk scores cover topics derived from the Sedex / SMETA clauses. These are organised by
overarching pillar.
Topic Description Country risks
Pillar: Labour standards & rights
Wages Wages to meet a workers' basic living
needs and provide some discretionary
income. Workers should be provided
written information about their wages
before entering employment and each
time they are paid.
Does the country have a minimum wage, is
it above the poverty line and is it
enforced? What percentage of the
population lives below the poverty line?
Children &
young Workers
There shall be no new recruitment of child
labour, children should be enabled to
attend and remain in quality education.
No children or young persons under 18
shall be employed at night or in
hazardous conditions.
Does the legal framework adequately
protect children and does the state have
the capacity to enforce it? How prevalent
and serious are adverse impacts and
infringements in the country?
Forced labour Workers should work voluntarily and
without threat of penalty of any kind.
Debt-bondage, indentured labour and
the use of prison labour are all forms of
forced labour.
Where countries receive migrants, do they
come through high-risk recruitment
channels? How well is the rule of law
enforced? What is the overall level of
poverty? How large is the informal
workforce? How vulnerable are minorities?
What anti-trafficking measures are in
place?
Regular
employment
Regular employment means that all
workers are provided with a legally
recognised employment relationship and
that every effort is made to ensure that
employment is continuous, and that
employers obligations shall not be
avoided through use of alternative
contracting arrangements.
What proportion of those in employment
receive wages or salaries?
Gender Workers should face no distinction,
exclusion or preference based on their
gender. Despite progress over the last
To what extent are there gender
inequalities in reproductive health,
empowerment, and economic status?
![Page 7: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/7.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
century, women remain
disproportionately exposed to the most
vulnerable situations in a workforce.
What disparities are there in labour force
participation and pay? Does the law
mandate equal remuneration, non-
discrimination? Does the government
support child-care and maternity leave?
Can a woman pursue similar jobs to men?
Discrimination Workers should face no distinction,
exclusion or preference based on a
personal or physical characteristic which
deprives a person access to equal
opportunity or treatment in any area of
employment. Excludes gender-based
discrimination (covered by the Gender
topic).
To what extent are minorities accepted in
a country? Are individuals free to practice
and express their beliefs? Do laws, policies,
and practices guarantee equal
treatment?
Freedom of
association and
collective
bargaining
Freedom of Association means allowing
workers to form and join trade unions,
worker associations and worker councils
or committees of their own choosing. The
purpose is to have good two-way
communication between management
and workers.
How much equality of opportunity and
freedom from economic exploitation is
there? Are trade unions recognised and
active? How cooperative are labour-
employer relations?
Working hours Working hours must meet legal
requirements and comply with collective
agreements to provide workers sufficient
rest periods and include at least one day
off each week on average. Working hours
in any 7-day period should not exceed 60
hours unless in exceptional circumstances.
What are average hours worked in the
country?
Pillar: Health & safety
Health, safety &
hygiene
Workers should be provided a working
environment safe from hazards, and
measures are in place to prevent
accidents and injury whilst at work.
Workers receive regular recorded health
and safety training and have access to
clean and safe facilities and
accommodation, where provided.
To what extent are regulatory mechanisms
in place to protect workers? How
prevalent are workplace injuries?
Pillar: Business Ethics
Business Ethics The Business Ethics index demonstrates the
prevalence of ethical business
management, for the benefit of workers.
How common is bribery of public
institutions by firms?
Pillar: Environment
Energy &
emissions
Energy and emissions tracks vulnerability
to the physical and transitional risks
associated with climate change.
How large are a nation’s emissions of
climate-forcing gases and particles?
Biodiversity Biodiversity tracks the protection afforded
to conserve biodiversity and the extent of
recent deforestation.
To what extent is a country’s biodiversity
protected by law? How much tree cover
loss has there been?
Waste &
pollution
Waste & pollution tracks air quality,
treatment of wastewater and heavy
metal contamination.
How bad is pollution in the form of air
quality, heavy metals and wastewater?
Water Water measures the observed water stress
of a region.
What is the ratio of total withdrawals to
total renewable supply of water?
![Page 8: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/8.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
The pillars and topics above are included in the main inherent risk scores. The following indicators
are also used within Radar:
Index Description
Migrant
Risk Index
This index represents an assessment of the likelihood that migrant workers, both internal and
international, in a given country will be more vulnerable to conditions of labour exploitation.
The first component provides an indication of vulnerability for international migration, based on
an assessment of labour and governance conditions in both the origin and destination country
that would increase the risk of labour exploitation for migrants. The second component
represents the likelihood of internal migrants being more at risk of labour exploitation. See
‘Briefing note: Migration risk index scoring methodology’.
1.2 Sector weights
The country risk ratings (as described above) are weighted at the topic level by sector to generate
sector-weighted country risk scores – to highlight risks specific to each sector. The sector weighting
is applied first at an ISIC “section” level (21 sections) and then at an ISIC “division” level (99 divisions)
where risks vary within the sector.
Initial sector weights
The sector risk scores derive from independent, original research and also draw on existing sources
of information including Eurostat, Kepler Cheuvreux, UNICEF Children’s Rights Atlas, United Nations
Environment Programme Finance Initiative and US Sustainability Accounting Standards Board,
which were selected according to the following attributes:
• Coverage – across the majority of sectors;
• Reliability – from reliable sources;
• Comparability – to enable the sector rating to be generated in a comparable way;
Sector scores assess the degree to which negative impacts on people or the environment are
considered likely in a specific sector. Each variable represents a qualitative assessment of the risks
within the sector.
Sectors are assessed based on the following factors:
• Organisations’ size as an indicator of the degree of due diligence likely to occur and
sophistication of processes and management
• Workforce skill level as an indicator of worker vulnerability to exploitation
• Labour intensity as an indicator of number of workers that the organisation manages
• Type of work as an indicator of skill level required and hazards faced
• Risks observed as an indicator of evidence of risk to people or environment in the sector
The measures range from a value of 0, which indicates no additional risk, to a value of 4, which
indicates extreme risk. The table below shows how these scores were derived, with incidental
scoring 0 and extreme scoring 4.
Risk level Sector
organisations
Workforce profile Labour
intensity
Type of work Risks observed in
majority of
![Page 9: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/9.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
countries / across
sector
Extreme Most
operations are
smaller scale,
including
family and
artisanal
activities, or
subcontracting
Most workers are low-
skilled and may
include seasonal,
temporary or migrant
workers
High labour
intensity
Most
operations
require low-
skilled manual
labour
Evidence of
severe negative
impacts typical
across sector
and/or major
sourcing countries
Major Most
operations are
smaller scale,
including
family and
artisanal
activities, or
subcontracting
Most workers are low-
skilled and may
include seasonal,
temporary or migrant
workers
High labour
intensity
Most
operations
require low-
skilled workers
Evidence of
severe negative
impacts observed
in some parts of
the sector and/or
in some sourcing
countries
Moderate Most
operations are
large scale,
but there are
small-scale
elements or
subcontracting
Most workers are high
skilled, but the
business may also rely
on some lower skilled
workers, including
seasonal, temporary
or migrant workers
Mostly low
labour
intensity,
but some
elements
may require
higher
labour
intensity
Most
operations are
mechanised or
automated
but some
elements
require low-
skilled manual
labour
Evidence of
severe negative
impacts observed
in isolated cases in
the sector and/or
in particular
sourcing countries
Minor Large scale
sophisticated
operations,
corporate
multinational
operations
Most workers are high
skilled, including
temporary or migrant
workers
Low labour
intensity
common
across
sector
Most
operations
mechanised or
automated
Evidence of minor
negative impacts
observed in
isolated cases
across the sector
and/or major
sourcing countries
Incidental Large scale
sophisticated
operations,
corporate
multinational
operations
Most workers are high
skilled, including
temporary or migrant
workers
Low labour
intensity
common
across
sector
Most
operations
mechanised or
automated
Evidence of minor
negative impacts
observed in
isolated cases in
some parts of the
sector and/or
some sourcing
countries
See the supplementary ‘Sector and division scores’ document for explanations of the sectors based
on the scoring criteria.
Forced Labour Index
The Forced Labour Index includes a sector (division-level) risk for a selection of key sectors as
follows:
• Primary agriculture;
• Food and agri-processing;
• Light manufacturing (textiles & garments, shoes, electronics, home furniture and toys);
• Transport and logistics.
![Page 10: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/10.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
Anthesis’s sector weights (as above) are used for those divisions not covered by the Forced Labour
Index. See Annex 3 of the Forced labour index methodology briefing note for details of the specific
ISIC divisions included within the Forced labour index.
Primary sectors
Users of the tool can filter suppliers to only show producers of primary materials such as agricultural
sites and mining sites. This is based on the site’s ISIC code. ISIC codes associated with primary
production are listed in Appendix 2.
High Risk Goods
A list of ‘High Risk Goods’ by country of production was produced according to the table below:
Risk Topic Author and source
Forced Labour Forced labour List of Goods Produced by Child Labor or Forced Labor
(ILAB, US Department of Labor)
https://www.dol.gov/agencies/ilab/reports/child-
labor/list-of-goods Child Labour Children & young workers
Deforestation Biodiversity Forest 500 (Global Canopy Project)2
forest500.org
Seafood Slavery Forced labour Seafood Slavery Risk Tool (Monterey Bay Aquarium
Seafood Watch Program, Liberty Asia, Sustainable
Fisheries Partnership) http://www.seafoodslaveryrisk.org/
Where the combination of country and site activity (ISIC class) indicates the presence of a high risk
good then an additional score of 2 is given. This is reduced to 1 for Forced Labour for those classes
covered by the Forced Labour Index as this already includes a scoring element for this risk.
1.3 Combined inherent risk scores
Final inherent scores are on a scale of 1 to 10.
Country score (1 to 6) + Sector score (1 to 4) + ‘High Risk Good’ score (0 to 2)
If the score exceeds 10 due to the presence of a ‘High Risk Good’ then it is limited to 10.
The combined inherent risk score is equal to the average (mean) of the underlying topics.
Averaging is by topic rather than pillar to avoid giving undue weighting to the indicators underlying
the pillars with only one topic (Health and Safety, and Business Ethics).
2 This data was obtained under licence from Forest 500 (forest500.org), a project of Global Canopy
(www.globalcanopy.org). They were obtained on 13/02/2020, at which point they were last updated on
12/02/2020. More up-to-date data may be available from Forest 500.
![Page 11: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/11.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
2. Site characteristics scores The site profile (from Sedex Advance – e.g. worker numbers) and site characteristics data (from the
SAQ) are used to produce additional risk scores: Site Characteristics scores and Management
Controls scores.
2.1 Site characteristic scores
SAQ and Site profile information provides data on physical characteristics of the sites and the types
of workers present. In this sense, it is used for enhancing the understanding of the likelihood of
particularly vulnerable workers. Focusing on worker vulnerability brings certain code clause into
focus too (e.g. gender discrimination, forced labour, regular employment).
Within Radar, a subset of the questions asked to a site are used to produce “hard data” about the
type of workers, how they are hired and employed, use of hazardous chemicals, and other key
characteristics of a site. This subset of questions is assigned to the relevant pillars. Scores are given
each answer according to their contribution to the pillar risk.
The combined site characteristic risk score is the average of the pillar scores.
There is no positive scoring for answers that might mitigate a risk within the Site Characteristic risk
score – management controls are scored in the management controls section. This is to maintain
the robustness of the score; to minimise the likelihood of incorrectly answered questions altering
scores, and to maintain a clear distinction between risks and (potential) mitigation of those risks.
Definitions
The following table provides an overview of what each topic means in the context of site
characteristics.
Pillar Description of risk
The descriptions provide an overview of the types of issues and questions considered – the list of issues and
questions considered is not exhaustive.
Labour
standards &
rights
This covers the following topics.
• Forced labour: people are forced to work or are unable to leave their
employment. This is assessed by the presence of particularly vulnerable workers
and whether they are employed under unfavourable or exploitative employment
terms. It also takes into account the use of labour providers and the payment of
any fees.
• Freedom of association: are workers represented by a trade union or collective
bargaining and have there been any recent strikes?
• Wages: workers are not fairly remunerated for the work that they provide. The risk is
assessed on payment method and payments of overtime premiums.
• Children & young workers: children & young workers are employed and / or likely
to be exploited or abused. This is assessed on self-reporting of children and young
people being employed and on the presence of family accommodation.
• Regular employment: workers are employed under potentially exploitative terms.
The score is determined by the types of contracts used and the use of
subcontracting that reduces visibility of employment terms.
![Page 12: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/12.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
• Discrimination: The mix of workers, including women and migrant workers, is likely
to give rise to discrimination.
Note that the following topics are not given a score as they are not easily assessed
through self-reported answers:
• Working hours
• Business ethics
Health and
safety
• Are there off-site or young workers?
• Do workers have access to hazardous chemicals or machinery?
• Are workers provided with accommodation?
• Does the nature of the building present a high risk?
Environment This covers the following topics:
• Energy & emissions: Does the site use particularly polluting energy sources or use a
lot of energy?
• Biodiversity: Are business operations likely to impact on local flora and fauna? This
is determined by the types of pollution the site creates and self-reported identified
impacts.
• Water, waste & pollution: Is the site likely to be particularly polluting at a local
level? This uses answers relating to the types of pollution produced and energy
sources used.
Normalisation
According to the answers given, each site ends up with a “raw” score for each pillar. These scores
are then normalised 1 to 10 based on the maximum possible score for each pillar.
The site characteristics scores are not normalised by supplier type, so business types who are asked
relatively few questions (and present relatively low risks), such as agents, may not be able to score
the maximum score of 10 against some topics. This is to ensure comparability between all supplier
types – only those that have the highest risks will get the highest scores.
3. Combined risk scores The final scores are on a scale of 0-10, where 10 is high risk. They are a combination of:
• Country, sector and ‘High Risk Goods’ scores (“Inherent risk”)
• Site profile & SAQ scores (“Site characteristics risk”)
The combined total risk score is the average of the inherent risk score and the overall site
characteristics score.
These are categorised into High, Medium and Low risk according to the underlying scores out of 10.
4. Topic risk indicators
In order to brings certain code clause into focus too (e.g. gender discrimination, forced labour,
regular employment) the detailed site question and answer tables available within the tool contain
a list of all topics associated with a particular question. These are given a risk rating of minor, major
and critical based on expert knowledge. If a site gives an answer to a particular question that gives
rise to a risk then the topics that are potentially at-risk are displayed with their risk rating.
These may be used as follows:
• Minor: the answer to the question may have a minor impact on this risk issue. It may be
helpful to check how the reporting business is addressing related risks.
![Page 13: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/13.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
• Major: the answer to the question may have a moderate impact on this risk issue. It may be
necessary to check how the reporting business is addressing related risks.
• Critical: the answer to the question may have a significant impact on this risk issue. It is
essential to check how the reporting business is addressing related risks.
5. Vulnerable workers
The UN Guiding Principles on Business and Human Rights (UNGPs) - a set of guidelines for companies
to prevent, address and remedy human rights abuses - highlight the need for businesses to pay
particular attention to those that may be at heightened risk of becoming vulnerable or
marginalised, and with due regard to the different risks that may be faced by women and men.
The following indicators are used to determine the prevalence of particularly vulnerable workers
using the supplier data available from the Site Profile and SAQ in Sedex.
Women
• What proportion of total workers are female?
• What proportion of female workers are migrant?
• What proportion of female workers are temporary or agency?
• Does the site employ young females?
Migrant Workers
• What proportion of workers are migrant?
• What proportion of migrant workers are temporary and/or agency?
Off-site workers
• What proportion of total workers are off-site workers?
• What proportion of off-site workers are homeworkers?
Non-permanent employment
• What proportion of total workers are temporary and agency workers?
• What proportion of total workers are seasonal workers?
• Does the Site employ Young Workers or apprentices, trainees or interns?
The supplementary guidance document ‘Risks associated with Vulnerable Worker categories’
details the risks faced by the four categories of worker across the topics covered by the tool (e.g.
forced labour, wages etc.).
6. Management Controls Summary
The methodology for scoring the Management Controls question set distinguishes between different
parts of the management system. This approach aims to reflect the practical journey that many
businesses take as they build a mature system to manage their impacts. The goal is to reward
businesses that are striving to develop a fully integrated management system.
At the highest level, each site receives a score of 0 to 5 (where 5 is the highest and best score) for
the management controls they have in place for each of five pillars. The pillars are:
• Labour
• Health and safety
• Environment
![Page 14: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/14.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
• Business ethics
• Supply chain management
Scoring framework
The management control section in the risk tool is organised in three parts and the scoring system
follows this framework:
1. Management system controls
2. Management system sub-controls
3. Management system question set
The table below shows these controls:
Management system controls
Sub-controls Policy &
Resources
Processes
Monitoring
Training &
improvement
Tier 1 - Basic Relevant
policies
HR processes,
communication,
structures
Auditing, other
checks
Training
Tier 2 - Enhanced Staff resources
applied
Certification KPIs and data
collection
Improvement
in relation to
suppliers or
others
1. Controls: A different weight or significance is given the different controls of the management
system. As developing a mature system takes time and most businesses begin with policy
commitments, the scoring reflects this approach. Thus, greater weight is given to Monitoring
and Data Capture than to Policy and Resources (see following section “Scoring in more
detail”).
2. Sub-controls: Different scores are given to the sub-controls within each management system
control. At each stage, these sub-controls are divided between those that are ‘basic’ or Tier
1, and those that are ‘enhanced’ or Tier 2. A ‘basic’ sub-control receives a lower score than
an ‘enhanced’ sub-control.
A ‘basic’ sub-control is essential as it creates a foundation for a healthy management system
(e.g. a policy commitment, training, auditing); however, it requires fewer resources (people,
finance) and less time, leadership and commitment, than an ‘enhanced’ sub-control (e.g.
certification, KPIs, supplier relations).
‘Basic’ sub-controls are not sufficient alone to assure that reasonable due diligence is taking
place; a combination of ‘basic’ and ‘enhanced’ sub-controls is required.
3. Questions: Different scores are given to the questions which assess how a business is
performing against each management system control and sub-control. Questions are scored
according to the following framework:
![Page 15: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/15.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
Basic: Represents a response that is a necessary, first step, or an essential building block of due
diligence, but not sufficient alone to constitute reasonable due diligence. A business providing
positive answers to a majority of ‘basic’ questions is developing a solid foundation for risk
management.
Good: Represents a response that is considered good practice, when combined with other actions
to constitute reasonable due diligence. A business, providing positive answers to a majority of
‘good’ questions is striving hard to meet standards and improve its performance.
Advanced: Represents good practice, when combined with other actions to constitute reasonable
due diligence. A business, providing positive answers to a majority of ‘advanced’ questions is
forecasting ahead, taking preventative action, listening to workers and supporting suppliers.
Scoring in more detail
Each control in place contributes points towards the final score for the combination of pillar and
control type. The number of points awarded is determined according to the framework above, with
more advanced controls scoring more points. For some types of control, such as certification, the
total number of points that can be awarded is limited e.g. a company with five certifications in
place relating to a particular pillar will score the same as one that has two in place. This is to avoid
giving too much weight to particular controls.
The final scores (0 to 5) are determined by normalising the scores against the maximum possible
score achievable given that site’s worker profile and other characteristics as some controls (e.g.
review of labour provider practices) may not be relevant.
When combining individual control scores into one pillar score the following weightings are applied
to represent the relative difficulty in implementing the controls:
Total pillar
score
Policy &
resources
Training &
improvement
Processes Monitoring &
data capture
100% 20% 20% 25% 35%
7. Limitations 7.1 Data sources
While we consider that the data sources used are credible and have been compiled by experts,
there may be distortions or incompleteness in the data sources used, some of which are collected
sporadically, or which incorporate judgements by the expert agencies concerned. Countries scores
do not contain a desk research component except where the underlying indicator included a desk
research. The desk research carried out for sector scores does not claim to be exhaustive and may
be limited based on the availability of publicly available information about risks in a specific sector.
While the list of potential High Risk Goods and the associated risks is collected from key, credible
sources including the List of Goods Produced by Child Labor or Forced Labor (US DOL) and Forest
500 (Global Canopy) it is by no means exhaustive. The absence of a High Risk product flag should
not be interpreted as confirmation that the product is not associated with a key risk.
![Page 16: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/16.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
7.2 Inherent risk scores
In the tool, inherent risk scores are presented as the sum of country and sector risks. These two risk
scores are considered separately to allow for the swift processing of weighted risk scores. However
please note that a limitation to this approach is that it loses the ability to consider specific reports
and circumstances that affect a specific known country/sector risks. The Forced Labour index is the
only index used within the tool that considers specific sectoral in-country combinations. Where
country / sector combinations suggest high risk scores, users should carry out additional research to
confirm the country situation.
7.3 Site Profile and SAQ information:
The Site characteristics and Management Controls scores, as well as information displayed in the
reports that show data relating to vulnerable workers, relies on self-declared information entered by
the supplier to their Site Profile and SAQ within the Sedex platform. This information is not verified as
being accurate and should be considered in conjunction with other sources of information, such as
data from audit reports and known industry norms.
7.4 Interpreting and using findings
The tool is designed to provide an indication of where risk can be highest within countries and
different sectors generally, but this should not be equated with certainty. Risk scores should be
regarded as a preliminary exercise. Country scores do not factor in regional variations. Where
countries and sectors are associated with a higher risk, there is a need for further due diligence to
verify risks and investigate the particular circumstances on the ground.
8. Supplementary documents
The following documents expand on specific areas within this methodology document:
1. Briefing note: Forced Labour index methodology, available at
https://www.sedexglobal.com/wp-content/uploads/2020/02/Briefing-note-Forced-labour-
Index-methodology.pdf
2. Briefing note: Migration risk index scoring methodology, available at
https://www.sedexglobal.com/wp-content/uploads/2020/02/Briefing-note-Migrant-labour-
index-methodology.pdf
3. Sector and division risk scores, available at https://www.sedexglobal.com/wp-
content/uploads/2020/02/Sector-and-division-risk-scores.pdf
4. Risks associated with ‘Vulnerable Worker’ categories, available at
www.sedexglobal.com/vwreport
![Page 17: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/17.jpg)
Appendix 1: Country Indicators by topic
Topic Indicator Indicator Description Source Data
(publication)
year
Gender Gender
inequality Index
The GII measures gender inequalities in reproductive health,
measured by maternal mortality ratio and adolescent birth rates;
empowerment, measured by proportion of parliamentary seats
occupied by females and proportion of adult females and males
aged 25 years and older with at least some secondary education;
and economic status, expressed as labour market participation
and measured by labour force participation rate of female and
male populations aged 15 years and older. It measures the human
development costs of gender inequality. Thus the higher the GII
value the more disparities between females and males and the
more loss to human development.
UN 2018
(2019)
Gender Global Gender
Gap
Economic Participation and Opportunity. Measures:
+ Ratio Female labour force participation: male
+ Wage equality for similar work
+ Ratio Female estimated earned income over male
+ Ratio - female legislators, senior officials and managers over male
+ Ratio - Female professional and technical workers over male
World Economic
Forum
2018
(Dec 2018)
Gender Women,
Business and
the Law
Custom subset
Does the law mandate equal remuneration, non-discrimination?
Does the government support child-care and maternity leave?
Can a woman pursue similar jobs to men?
World Bank 2019
(Feb 2020)
Forced
Labour
Forced Labour
Index
Custom indicator: Ergon Forced Labour Index. The score represents
the risk of forced labour in a given country based on a composite
of indicators related to rule of law, poverty, informality, anti-
trafficking regulation, treatment of minorities and risks to migrants.
This was enhanced by desk research on known instances of forced
labour conducted for four economic sectors (agriculture, food
processing, manufacturing and logistics) for each country.
Ergon Associates Various
(2019)
Freedom of
Association
and
Collective
Bargaining
G4 Personal
Autonomy and
Individual
Rights
Measures individuals’ equality of opportunity and freedom from
economic exploitation. Index used in FH indicator. 4 greatest
degree of freedom.
Freedom House 2018
(2019)
![Page 18: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/18.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
Freedom of
Association
and
Collective
Bargaining
Trade Union
Activities (ITUC
Global Rights
Index)
Ranks 139 countries against 97 internationally recognised indicators
to assess where workers' rights are best protected, in law and in
practice. Trade Union Activities is one of the composite indicators.
Questionnaires are sent to 331 national unions in 163 countries to
report violations of workers’ rights by indicating relevant details.
Regional meetings with human and trade union rights experts are
held where the questionnaire is disseminated, explained and
completed. The ITUC contacts unions directly by phone and email
when it becomes aware of violations to confirm relevant facts.
Legal researchers analyse national legislation and identify sections
which are not adequately protecting internationally recognised
collective labour rights.
ITUC Global Rights
Index, Geneva,
Switzerland: The
International
Trade Union
Confederation
(ITUC).
2019
(Jun 2019)
Freedom of
Association
and
Collective
Bargaining
Cooperation in
labour-
employer
relations
Assessment of how labour-employer relations are characterised [1
= generally confrontational; 7 = generally cooperative]
Global
Competitiveness
Index 2017-2018
2019
(Sep 2019)
Health, safety
& hygiene
OSH indicator Addresses the extent to which a nation has implemented the
legislative and regulatory mechanisms necessary to ensure the
proper protection of its workforce from the hazards arising out of
work
The UL Safety
Index
2018
(2018)
Health, safety
& hygiene
Fire, Heat, and
Hot Substances
Fires heat hot substances rating. unintentional injuries resulting from
fires, smoke, and several other hazards
The UL Safety
Index
2018
(2018)
Health, safety
& hygiene
Exposure To
Mechanical
Forces
Exposure to mechanical forces rating. measures injuries and
fatalities caused by thrown, projected, or falling objects; a person
striking against objects; and being caught, crushed, jammed, or
pinched in or between objects
The UL Safety
Index
2018
(2018)
Health, safety
& hygiene
Poisoning
Indicator
Poisonings rating. classifies injuries due to ingesting drugs, food, or
toxic chemicals
The UL Safety
Index
2018
(2018)
Children &
Young
Workers
Children's
Rights in the
Workplace:
Legal
framework
The Children’s Rights in the Workplace Index measures the extent
to which countries eliminate child labour and provide decent work
for young workers, parents and caregivers. Legal framework
indicators measure the measure the state's commitment to
implement its obligations to protect children.
Global Child
Forum and
UNICEF
Various
(2018)
Children &
Young
Workers
Children's
Rights in the
Workplace:
enforcement
Enforcement indicators measure the state's capacity to implement
its obligations.
Global Child
Forum and
UNICEF
Various
(2018)
![Page 19: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/19.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
Children &
Young
Workers
Children's
Rights in the
Workplace:
outcomes
Outcome indicators capture adverse impacts and infringements
by both state and non-state actors.
Global Child
Forum and
UNICEF
Various
(2018)
Wages Whether the
country has a
minimum
wage, whether
that wage is
above the
poverty line,
and whether it
is enforced.
Custom indicator: This uses information from the US Bureau of
Democracy, Human Rights and Labor. Countries are scored
according to whether they have a minimum wage, whether it is
above the poverty line and whether it is enforced.
US Bureau of
Democracy,
Human Rights and
Labor
2018
(2018)
Wages This reflects the
% of the
population
living below the
poverty line
($5.50) for
upper-middle
income
countries
Custom indicator: The World Bank provides data on the %
(headcount) of population with an income below various poverty
levels. $5.50 was chosen as it is the poverty line for upper-middle
income countries, is well above the $1.90 absolute poverty line and
is more approaching a "living wage"
World Bank 2017
(2019)
Working
Hours
Mean weekly
working hours
actually
worked per
employee
Mean weekly hours actually worked per employee by sex and
economic activity
ILO 2017, 2018 and
2019
Discrimination Group
Grievance
This focuses on divisions and schisms between different groups in
society – particularly divisions based on social or political
characteristics – and their role in access to services or resources,
and inclusion in the political process. This is part of the Fragile States
Index.
Fund for Peace 2019
(Apr 2019)
Discrimination GSI Factor 4:
Disenfranchised
groups
Same sex rights, Acceptance of immigrants, acceptance of
minorities
GSI 2018
(Jul 2018)
Discrimination D2. Are
individuals free
to practice and
express their
religious faith or
Are registration requirements employed to impede the free
functioning of religious institutions? Are members of religious
groups, including minority faiths and movements, harassed, fined,
arrested, or beaten by the authorities for engaging in their religious
practices? Is state monitoring of peaceful religious activity so
Freedom House 2018
(2019)
![Page 20: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/20.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
non-belief in
public and
private?
indiscriminate, pervasive, or intrusive that it amounts to harassment
or intimidation? Are religious practice and expression impeded by
violence or harassment by nonstate actors? Does the government
appoint or otherwise influence the appointment of religious
leaders? Does the government control or restrict the production
and distribution of religious writings or materials? Is the construction
of religious buildings banned or restricted? Does the government
place undue restrictions on religious education? Does the
government require religious education? Are individuals free to
eschew religious beliefs and practices in general?
Discrimination F4. Do laws,
policies, and
practices
guarantee
equal
treatment of
various
segments of
the
population?
Are members of various distinct groups—including ethnic, religious,
gender, LGBT, and other relevant groups—able to effectively
exercise their human rights with full equality before the law? Is
violence against such groups considered a crime, is it widespread,
and are perpetrators brought to justice? Do members of such
groups face legal and/or de facto discrimination in areas including
employment, education, and housing because of their
identification with a particular group? Do noncitizens—including
migrant workers and noncitizen immigrants—enjoy basic
internationally recognized human rights, including the right not to
be subjected to torture or other forms of ill-treatment, the right to
due process of law, and the freedoms of association, expression,
and religion? Do the country’s laws provide for the granting of
asylum or refugee status in accordance with the 1951 UN
Convention Relating to the Status of Refugees, its 1967 Protocol,
and other regional treaties regarding refugees? Has the
government established a system for providing protection to
refugees, including against refoulement (the return of persons to a
country where there is reason to believe they would face
persecution)?
Freedom House 2018
(2019)
Regular
employment
Wage and
salaried
workers, total
(% of total
employment)
Wage and salaried workers (employees) are those workers who
hold the type of jobs defined as "paid employment jobs," where
the incumbents hold explicit (written or oral) or implicit
employment contracts that give them a basic remuneration that is
not directly dependent upon the revenue of the unit for which they
work.
World
Development
Indicators
World Bank / ILO
2019
Business
Ethics
Irregular
payments and
bribes
Average score across the five components of the following
Executive Opinion Survey question: In your country, how common is
it for firms to make undocumented extra payments or bribes
connected with (a) imports and exports; (b) public utilities; (c)
Global
Competitiveness
Index 2017-2018
2017/18
(Sep 2017)
![Page 21: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/21.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
annual tax payments; (d) awarding of public contracts and
licenses; (e) obtaining favourable judicial decisions? In each case,
the answer ranges from 1 [very common] to 7 [never occurs]
Biodiversity BDH -
Biodiversity &
Habitat (EPI)
Marine protected areas, biome protection, species protection
index.
Yale EPI 2018
(Jan 2018)
Biodiversity TCL – Forests
(EPI)
The total area of tree loss in areas with greater than 30% tree
canopy cover divided by the forest cover in the year 2000.
Yale EPI 2018
(Jan 2018)
Energy &
Emissions
CCE - Climate
& Energy (EPI)
CO2 total (50%), CO2 power (20%) , methane (20%), N20, Black
carbon
Yale EPI 2018
(Jan 2018)
Water Water Stress
Index
A measure of the extent to which the raw material and source
location are subject to observed water stress.
World Resources
Institute
2017
Waste and
pollution
AIR - Air Quality Air quality indicator at country level. three indicators of exposure
to air pollution, measuring PM2.5 exposure, PM2.5 exceedance
and HAP. These indicators capture a substantial portion of the
global variation in health impacts due to air quality, either because
of the direct threat posed by these pollutants or because they are
correlated with threats posed by other pollutants (World Health
Organization, 2016b).
Yale EPI 2018
(Jan 2018)
Waste and
pollution
HMT_Heavy
Metals
lead is a major environmental threat because of its severe human
health effects, and because of its global prevalence in air, water,
dust and soil, and various manmade products. We measure lead
exposure using the number of age-standardized disability-adjusted
life years (DALYs) lost per 100,000 persons due to this risk. The data
on lead exposure DALY rates come from the Institute for Health
Metrics and Evaluation’s Global Burden of Disease Study (GBD),
which is the most comprehensive worldwide epidemiological study
of lead exposure to date.
Yale EPI 2018
(Jan 2018)
Waste and
pollution
WRS - Waste
water
treatment (EPI)
Measures wastewater treated weighted by connection rate. Yale EPI 2018
(Jan 2018)
![Page 22: Risk assessment tool methodology · methodology and functionality of Radar are the responsibility of Sedex and Anthesis. Version 1.0, March 2020 ... research and training for a diverse](https://reader034.fdocuments.in/reader034/viewer/2022042403/5f1824bb8a763328d76d2047/html5/thumbnails/22.jpg)
Version 1.0, March 2020
Gurugram | London | Santiago | Shanghai | Sydney | Tokyo
Appendix 2 – Sectors The ISIC section headings are:
A - Agriculture, forestry and fishing L - Real estate activities
B -Mining and quarrying M - Professional, scientific and technical activities
C - Manufacturing N - Administrative and support service activities
D - Electricity, gas, steam and air conditioning
supply
O - Public administration and defence; compulsory social security
E - Water supply; sewerage, waste
management and remediation activities
P - Education
F - Construction Q - Human health and social work activities
G - Wholesale and retail trade; repair of motor
vehicles and motorcycles
R - Arts, entertainment and recreation
H - Transportation and storage S - Other service activities
I - Accommodation and food service activities T - Activities of households as employers; undifferentiated goods- and
services-producing activities of households for own use
J - Information and communication U - Activities of extraterritorial organizations and bodies
K - Financial and insurance activities
Primary production – ISIC codes
011 Growing of Non-
Perennial Crops
012 Growing of Perennial
Crops
013 Plant Propagation
014 Animal production
015 Mixed farming
016 Support activities to agriculture and post-
harvest crop activities
02x Forestry and logging
03x Fishing and Aquaculture
05x Mining of coal and lignite
06x Extraction of crude petroleum
and natural gas
07x Mining of metal ores
08x Other mining and quarrying