SMETA Training Series

Session 1 :
Workplace Requirements &
Collaborative Action Required

May 2024
Who is presenting & housekeeping

We appreciate your participation:

• Please submit your text questions and comments using
the Q&A tab in your Zoom toolbar.

• We’ll answer your questions towards the end of the

presentation.

Charlotte Chik • Questions not answered during this webinar will be

answered in a follow-up email if possible
Senior Learning &
Development Executive
Note: Today’s presentation is being recorded and will be
London shared along with the slides after the session.
Agenda
Introduction
• Learning journey – New SMETA Training Series
• The goal of the new SMETA
• Summary of the key changes of the new SMETA
• What will happen with the previous audit

Key changes of the new SMETA

• Workplace requirements
• Changes made to audit findings
• 'Collaborative action required’ finding

Conclusion
• Useful resources

Q&A
SMETA Training Programs for Buyers and Suppliers
Sedex will deliver a combination of training events and guidance documentation on the new SMETA :

Live webinars E-Learning courses Guidance

Estimated timeline to launch:

June July August September

2024

Live training webinars

Digital Audit Tool

New SMETA
training webinars launch
We’re aiming
Launch of
Guidance for Q3.
E-Learning courses
Learning Journey : Digital audit tool
training

SMETA Training Series for buyers and

suppliers

In July

Session 3 (June 20) Introduction to the

updates to the digital
• Management System
Session 2 (June 5) audit tool that reflect the
Assessment
new methodology and
• Changes in the key process
audit data points and
how they facilitate
better analysis of
supply chain risks in
Sedex’s reporting tools.

We’re here!
Session 1 (May22)
Session 4 (July 7)
• Workplace requirements
• Changes made to audit findings • Collaboration between buyers
• ‘Collaborative action required’ and suppliers & continuous
finding improvement of supply chain
Mission

Increase consistency of audits,

improve detection of critical issues and
help suppliers sustain improvements,
to increase trust in SMETA.
Rebuilding the foundations of SMETA – the drivers for changes:
Problem
ETI Base Code is broad rather
than specific.
SMETA 6.1 is a snapshot of the site
on the day of audit.
• No assurance that code level
compliance is sustainable.
• Lack of clear direction for
suppliers to sustain
compliance.
Solution
Introduction of ‘Workplace Requirements’
• Breakdown of Code into Workplace
Requirements. It explicitly lists what an
auditor should assess against the ETI
Base Code.
• Enables supplier/auditor to be 100%
clear on what will be audited
Introduction of a ‘Management Systems’
assessment against each ETI Base Code
• 4 key elements of a management
system are assessed
• Maturity grading shows where to focus
effort
Key changes in the new SMETA methodology
The focus of today’s session

3 4
Collaborative New Data
Action Required Points

New type of finding Introducing new data

points to provide
with no mandated
additional context on
closure time.
supplier sites. These
Recognizes certain
data points facilitate
specific issues cannot
better analysis of
be resolved within a
supply chain risks
short timeframe and
and help identify next
without additional
steps for improved
stakeholder input.
due diligence.
Many aspects of the SMETA methodology remain the same:

For further details,

• SMETA is an assessment against the ETI Base Code and local law. please check the
• Audit Structure: Audits can be upcoming SMETA
guidance.
-a 2-pillar audit (Labour Standards & Health and Safety) or
(Buyer / Supplier
-a 4-pillar audit (Labour Standards, Health and Safety, Environment, Manual)
and Business Ethics).
• SMETA still aims to be sector agnostic (i.e., used across all sectors).
• Audit types: Announced, Semi-announced, and Unannounced.
• Approach to audit – triangulation.
• Timelines for the site to add Corrective Actions.
 Audit Sequence
Audit Sequence refers to the stages at which a SMETA Audit is undertaken and for what purpose.
The classification of SMETA audits follows the below recognised audit sequence:

FOLLOW-UP
INITIAL AUDIT AUDIT:
A follow-up audit may be
PERIODIC AUDIT: required, depending on
INITIAL AUDIT: the outcome of
A full audit is used to the initial/periodic audit.
The first time a site monitor supplier sites (Parent audit of the
of employment is on an ongoing basis. follow-up audit).
audited by that The intervals between
specific audit periodic audits may The nature of the follow-up
company. vary depending on the audit is determined by the
individual member. findings raised on-site.
They may be either
PERIODIC AUDIT
desktop or on-site
FOLLOW-UP AUDIT follow-up audits.
How audit will be scheduled by auditors
After the launch of the new SMETA :

INITIAL AUDIT PERIODIC AUDIT FOLLOW-UP AUDIT

SMETA 6.1 6.1

SMETA ✘ Unavailable If the parent audit is SMETA
6.1, the follow-up will be
SMETA 6.1.

SMETA 7.0 ✓ Default If the parent audit is the

New SMETA
new SMETA, the follow-up
will be the new SMETA.
How audit will be scheduled by auditors
After the launch of the new SMETA :

For initial/periodic audits, the new SMETA will be the default methodology when the auditors schedule the
audits.

INITIAL PERIODIC
New SMETA New SMETA
AUDIT AUDIT

For follow-up audits, the audit methodology used will depend on the parent audit.

SMETA 6.1 SMETA 6.1

FOLLOW-UP
INITIAL PERIODIC
AUDIT
AUDIT AUDIT
New SMETA New SMETA

Depending on
parent audits the parent audits
What happened with the previous audit –
Non-Compliances (NCs)

carry over
New SMETA
SMETA 6.1 NCs NCs

Sedex Map the findings to

Workplace Requirements.

If not, auditors will update them manually, as is currently done.

Handling Scheduled Audits: Moving from SMETA 6.1 to the New SMETA

If it has not started yet, buyers can

communicate with the auditor to
reschedule it to after the launch then the
audit can be conducted with the new
INITIAL SMETA.
AUDIT
SMETA 6.1
PERIODIC
If already started, continue as SMETA 6.1
AUDIT

INITIAL PERIODIC FOLLOW-UP

SMETA 6.1 SMETA 6.1
AUDIT AUDIT AUDIT
Workplace Requirements
Workplace requirement:
breaking down the base code into auditable clause

SMETA 6.1 New SMETA

7.1 There is no
discrimination in hiring,
compensation, access to
training, promotion,
termination or retirement
based onBEFORE
race, caste,
national origin, religion,
age, disability, gender,
marital status, sexual
orientation, union
membership or political
affiliation.

• If the site is found not to meet the Workplace Requirements, the auditor will raise a
finding (non-conformance/compliance).
Structure of the Workplace Requirements by Code Area
The structure of the Workplace
Requirements by Code Area is
presented in the table.
Each Code Area has a different
number of Workplace
Requirements.
Code Area
0: Enabling accurate assessment
1: Employment is freely chosen
1.A: Responsible Recruitment and Entitlement to Work
2: Freedom of Association and Right to Collective
Bargaining are Respected
3: Working Conditions are Safe and Hygienic
4: Child Labour Shall Not Be Used
5: Legal Wages are Paid
5.A: Living wages are paid
6: Working Hours are not Excessive
7: No Discrimination is Practiced
8: Regular Employment is Provided
8.A: Sub-contracting and homeworkers
9: No Harsh or Inhumane Treatment is Allowed
10.A: Environment 2-Pillar
10.B: Environment 4-Pillar
10.C: Business Ethics
What will auditors audit against using the new SMETA

Auditors will assess site's compliance against the Workplace Requirements

The Workplace Requirements (WR) break down the Base Code into clear auditable requirements.
They provide clear instructions on the items that an auditor must check during an audit.

The Workplace Requirements are governed by:

• ETI Base Code: based on international standards and International Labour Organisation (ILO)
conventions
• Local Law
Note:
Sedex understands that laws and regulations vary across regions and will change over time. Please note the
following:
• SMETA methodology is a live methodology → Sedex will keep reviewing the Code and adapt it to evolving
needs and pressing concerns.

• SMETA will continue to be applicable across regions, countries, sectors, businesses, and site sizes.
Using the Issue Titles

The Issue Titles defined have undergone a limited review to ensure they accommodate the
new methodology and have the least impact on other reporting tools.

Some Issue Titles have been

All the Workplace removed, mainly those now
Issue Titles have been
Requirements have at least covered by Sedex’s
allocated against the
one Issue Title against it. Management System
Workplace Requirements.
Assessment (MSA).
Key Summary
• Findings will be raised against the Workplace Requirements

- SMETA continues to measure a site against the ETI Base Code and local law.

• Issue Titles largely remain the same. They have been mapped to the Workplace
Requirements to fit the new methodology

- Some Issue Titles have been removed and others have been added.

- Changes are designed to disrupt existing reporting tools as little as possible (to be
covered in session 2 of the training series)
Changes made to audit findings
The process of reporting findings in the new SMETA
Types of findings that auditors will raise via the Workplace Requirements

Non-Compliances/ Non-conformances Good Examples

The site does not meet one of the workplace They can be raised against any Workplace
requirements Requirement. They are no longer limited to
specific issues titles.

Collaborative Action Required

When the site does not meet certain and
limited Workplace Requirements, auditors Note:
will only be able to raise a finding called Observations will be
‘Collaborative Action Required’.
removed from the new
They are non-conformances without
prescriptive closure time. SMETA.
Observations have been removed from the new SMETA

• Observations have been removed from the new SMETA methodology

• Auditors will not raise ‘Observations’ findings as we know them in SMETA 6.1.

Why?

The introduction of a Management Systems assessment provides concrete

next steps for a site to reduce the risk of issues occurring in the future.
The improvement of our SMETA methodology will likely lead to an increase in NCs

New SMETA Methodology

Introduction of ‘Workplace Requirements’
• Breakdown of Code into Workplace Requirements. It explicitly lists what an auditor should assess against the
ETI Base Code.
• Provides clear compliance direction for suppliers and satisfies buyers’ needs for adherence to the Code.

Audit practice
• The same evidence on site can indicate non-conformance with more than one Workplace Requirement.

• In previous versions of SMETA, auditors could consolidate related issues into one finding.

• In the new SMETA, auditors will typically raise a non-conformance against each Workplace Requirement not
met.

Expected Behavior

• Suppliers are likely to experience an increase in NCs under the new SMETA methodology.
Case Study: The same evidence on site can indicate
non-conformance with more than one Workplace Requirement

A site that engages a third-party labour provider for a proportion of its workers is unable to demonstrate
evidence of legal wages and right to work of those agency workers during an audit.

New SMETA : will raise NCs under the following WRs

In SMETA 6.1:

A NC would be 1.A.A Review original photographic

raised under 1. A.E Have systems in place to
verify that all workers are
“No/inadequate recruited legally and fairly,
systems to including conducting appropriate
due diligence to verify that any
monitor labour third-party employment agencies
providers” or other recruitment brokers are
following ethical practices.
identification to validate that all
workers (including non-directly
5.A Ensure that all workers
hired workers) have the legal right
(including non-employee
workers) are paid at least the
to work, or require any agency or
labour broker to do the same, and
legal minimum wage or legally
assess these systems rigorously
recognised collective bargaining
agreement (CBA) where one
via sampling on a regular basis
(in accordance with SMETA
exists, whichever is higher.
guidance).
Increase in NCs under the new SMETA:
Buyer and Supplier Preparation
\\\

Suppliers
Buyers

• Aware that this potential increase

• Aware that they may be able
in NCs does not necessarily
An increase in NCs to close multiple NCs with the
reflect a decline in supply chain
performance but rather a more is likely to result same corrective actions.
rigorous evaluation process, and from changes made
the technical changes relating to to the methodology.
the introduction of the Workplace
Requirements

• Re-evaluate or be prepared to
re-evaluate any internal scoring
methodologies that rely on NC
count in light of this. Increase transparency and result in
more consistent tracking of issues.

Ultimately an increase in issues found enables more issues to be remediated.

‘Collaborative Action Required’
(CAR)
 ‘Collaborative Action Required’ – a new finding category
• New SMETA includes a new type of finding under a limited number of Workplace Requirements for certain
Code Areas: Collaborative Action Required (CAR).

• They are non-compliances without prescriptive closure time.

For example:

Repayment of
Payment of Remediating
Recruitment
Living Wage Fees Child Labour

If the site does not meet specific Workplace Requirements for certain Code Areas, the auditor will raise a finding
known as ‘COLLABORATIVE ACTION REQUIRED’.

• A ‘COLLABORATIVE ACTION REQUIRED’ will be raised when the site fails to demonstrate compliance with those
specific Workplace Requirements.

• A ‘COLLABORATIVE ACTION REQUIRED’ encourages Supplier-Buyer collaboration to meet those Workplace

Requirements.
‘Collaborative Action Required’ – a new finding category
Living wages are paid
The Supplier shall…
5A.A: CAR: Review workers' total pay
including benefits and compare it with a
credible 'living wage’ to calculate a 'living
wage gap', and understand what proportion
of the workforce has a gap.
5A.B: CAR: Put in place a wage improvement
plan that aims to pay workers a living wage
within a stated timeframe.
These are just some examples from the
Code Areas ‘Living wage are paid’ and
‘Responsible recruitment and entitlement
to work’ where, in case the site fails to
demonstrate its conformance, the auditor
will only be able to raise a ‘Collaborative
Action required’.
Responsible recruitment and
entitlement to work
The Supplier shall…
CARs can only be raised 1.A.H: CAR: Include provisions within service
against the Workplace agreements that hold employment agencies
Requirements identified and other recruitment partners contractually
as ‘CAR’.
responsible to ensure no recruitment fees or
related costs are incurred or charged to
workers, and specifies the responsible party
for reimbursing workers accordingly if they
incur fees or costs.
1.A.I: CAR: Verify that workers who are found
to pay recruitment fees or related costs
(legal or otherwise,
as defined by the ILO and including travel
and visa costs), are fully reimbursed in a
timely manner.
Workflow to close Collaborative Action Required findings
• For example, an auditor raises a CAR under the WR 5A.B "Put in place a wage
improvement plan that aims to pay workers a living wage within a stated
timeframe"
AUDITOR SUPPLIER BUYER

Auditor raises a
During the Collaborative
audit: Action Required
(CAR) finding
Collaboration between the buyers, suppliers,
The Supplier
acknowledges the
and other stakeholders
Auditor mentions (more details to be covered in the session 4 of
During the to the Supplier difference
that the plan to between an NC the training series)
closing and a CAR and
close the CAR will
meeting: be between them how they must be
and the Buyer closed

The Buyer
After the audit The Supplier works works with the
is published: with the Buyer to Supplier to
close the CAR
close the CAR
Handling of the CAR responsibilities
AUDITORS
Responsibility Identify and record the
CAR, but there is no need
to assign a mandated
closure time for this
finding.
Communication Not permitted to assess.
on action plans
Follow-up for CAR is 'superceded' at next
improvement full periodic audit. Auditors
and closure of the should assess the WR anew
CAR and raise a CAR in follow-up
audits until no further
findings are identified.
SUPPLIERS BUYERS
Share the action plan to the Management and
Sedex platform and the assessment of the
status will change from action plan- prioritize
“open” to “in progress”. resolution of the issues
based on a salient risk
approach.
Supplier needs to have Buyer needs to
conversation with the buyer communicate with
to agree on the action plan. the supplier to agree
on the action plan.
The action plan should contain the relevant
stakeholders and the key KPI to monitor improvements
and closure of the CARs.
Key Summary
• Some non-compliances have been identified where the ability to effect closure may not
fall within the direct control of the supplier site. For example:

- Repayment of Recruitment Fees

- Payment of Living Wage
- Remediating Child Labour

• These requirements need a long-term approach to closure, often involving collaboration

between buyers, suppliers, and multiple stakeholders.

• The new SMETA standard has introduced a new category of non-compliance to address
these specific areas called Collaborative Action Required

• These non-compliances have no prescribed closure time and can be assigned an ‘in
progress’ status to monitor improvement.
Support and resources
e-Learning Courses

This e-Learning course provides guidance to the new

SMETA audit methodology, including the list of Workplace
Requirements.
• New SMETA Resources

The following e-Learning courses will be updated

with the new SMETA methodology by the launch.
• Having a SMETA audit (Suppliers)
• Audit your supplier sites with SMETA (Buyers )
• SMETA for suppliers

Manual and guidance

The following guidance will be published soon.
Please keep an eye out for it, as it will provide
valuable resources to help you stay informed.
• Suppliers Manual
• Buyers Manual
Q&A
Next session :
SMETA Training Series Session 2 (English):
Changes in the key audit data points and reporting

Date: 5th of June

Time: 8 am (UK time) and 3 pm (UK time)

• Changes in the key audit data points

• How they facilitate better analysis of supply chain risks in
Sedex’s reporting tools.
Thank you
The training recording and slides will be shared in a follow-up email.