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Code of Conduct Assessment Checklist

Audited Facility: Zhumadian City Kangmao Arts & Crafts Co., Ltd Revision: 04.1 Page: 1of 33 SGS Job No.: JCSZ09C10131 Control No. : CSRS-CN-F-OPS-50

Code of Conduct

Assessment Checklist



Contents

I. Factory Information

II. Auditor Team

III. Auditee Representatives

IV. Assessment Checklist

1) Child Labour / Young Labour

2) Forced Labour

3) Health & Safety

4) Freedom of Association

5) Discrimination

6) Disciplinary Practices

7) Working Hours

8) Compensation

9) Environment



I: FACTORY INFORMATION

Factory Name Zhumadian City Kangmao Arts & Crafts Co., Ltd

Western Xuesong Road, Zhumadian City, Henan Province, China Address

Contact Person Mr.Wang Xuexin

Tel 0396-2930369

Fax 0396-2911744

E-mail

Factory Operations

Products Manufactured

Hand Bags

Production Capacity

50, 000,000 pcs/year

Manufacturing Floors 20,000 S.Q. Meters

Dormitory Area 10,000 S.Q. Meters

Kitchen and Canteen 5,900 S.Q. Meters

Production Process Flow Fabric Cutting→Sewing→Ironing→Trimming→Finnal Check→Packing

Equipment used

The Maining equipments as below :

Cutting Machine : 20 pcs

Sewing Machine : 680 pcs

Ironing Machine : 83 pcs

Subcontractor Factory Name(s) if any

The printing process were sub-contracted to Kanghua New Packing Materials Co.,Ltd

Other Brands in Factory

Employees Details

Male Female Sub-total

Supervisors/Managers 16 12 28

Administration Staff 32 18 50

Quality Control Staff 3 21 24

Engineering Staff 0 6 6

Permanent Workers 158 634 792

Temporary/contract workers

0 0 0

Grand Totals 209 691 900



II.AUDITOR TEAM

Auditor name Auditing company Role in the team Audit date

Larry Lee

SGS-CSTC Standards Technical Services Co., Ltd

Lead Auditor April 20~21,2009

III.AUDITEE REPRESENTATIVES

Name Position/Department

Mr.Chen Hao Administration Supervisor

Ms.Cao Li HR Supervisor

Overall Assessment:

Zhumadian City Arts & Crafts Co., Ltd was found on Oct 14, 1996, it was specialized on the handbags manufacturing, there were one office building (2 floors) and two production buildings (one floor) with 10,000 S.Q Meters for each, total production area 20,000 S.Q meter. The factory provided dormitory (6-storeys with area 10,000 S.) and canteen/kitchen (Area: 5,900 S.Q meters) to the workers.

There were 100 staffs and 800 workers in the factory. All the workers had one shift; the factory arranged the shift as:

Morning: 8:00~12:00

Afternoon: 14:00~18:00

OT: 19:30~21:30(20:00~22:00) if need.

The workers would have OT on Saturday if need, Sunday was be fixed for rest day.

There were peak seasons (from April to June) for the production, so the factory obtained the approval to implement consolidate working hour’s system from the local bureau.

All the workers were paid by hourly rate; the workers were paid on 20th of every month for last month

wage.

20 workers from different workshop (10 from sewing workshop, 3 from inspection position, 5 from packing workshop, 2 from cutting workshop) were selected for the interview at private room, the workers had cooperative attitude for the interview. Based on the workers interview, all the workers were satisfied with the working environment and wage & benefits, no negative complaint was informed.

There were two company with business license in the Kaomao Industrial Zone: Kangmao Arts & Crafts Co.,Ltd and Kanghua New Packing Material Co.,Ltd , this audit scope just covered the Kangmao Arts & Crafts Co.,Ltd.



IV. Assessment Checklist

1. Child Labour / Young Labour

Item no

Requirement Yes/No/NA

Comments

1.1 Does the factory have a copy of valid laws and regulations on child labour OR understand its requirements?

Yes Based on the management interview, they understood the legal requirements well.

1.2 What is the legal youngest (minimum) age of workers?

16 years old

1.3 Does the factory have a copy of valid regulations and laws on young worker protection OR understand its requirements?


1.4 Does the factory have effective procedures to verify the age of worker at the time of recruitment?

Yes Based on the review, the factory documented effective procedure to verify the age of worker at the time of recruitment.

1.5 Does the factory keep adequate age documents of workers such as ID copies and personnel records?

Yes Based on the document review, all the workers’ personal file kept with the ID copies.

1.6 Is a separate register required by law for young workers?

Yes

1.7 Is separate register maintained for young workers? N/A No young workers were identified in the factory during the audit.

1.8 Is there any evidence identified that child labour is now or has been employed in the past at the factory?

No No child labor was identified in the factory during the audit.

1.9 Does the youngest age of workers at the factory comply with local legal requirements?

Yes The youngest worker in the factory was 18 years old.

1.10 Are suspected young worker age records such as age certificate, local records or certificate from surgeon verified by the factory?

No No such negative evidence was identified during the audit.

1.11 Are young workers engaged in hazardous work? N/A No young worker was identified during the audit.

1.12 Are or young workers employed at night shift? N/A No young worker was identified during the audit.

1.13 What time is night shift as defined by local law? N/A No such legal definition



Item no


Comments

1.14 Are above findings confirmed through interview with workers?

Yes All the above information was confirmed with workers interview.

Section Rating : Child Labor

Legal /Code

Nonconformance

Observations

(Need Improvement)

Fully

Acceptable

Legal/Code Non-conformance : Nil

Observation (Need Improvement) : Nil

Best Practices in Factory (if any): Nil

Additional Comments :

The factory conducted a good practice on the child labor prohibition.

Responsibility Deadlines

Corrective Actions confirmed by factory / Agent :

Nil

Nil



2. Forced Labor

Item no


Comments

2.1 Does the factory have a copy of valid laws and regulations on forced labour or understand its requirements?


2.2 Are all workers present voluntarily at the factory? Yes Based on the workers interview and management interview, all the workers were voluntary in the factory.

2.3 Are workers free to leave after working hours? Yes The workers could leave the factory freely after working hours.

2.4 Is any restriction placed on leaving after working hours?

No Based on the workers interview and management interview, no such restriction was placed on leaving after working hours.

2.5 Where dormitories are present, are workers required to live in the dormitories without freedom of choice to live outside the factory?

No Based on the workers interview and management interview, no such requirements.

2.6 When workers are in dormitories, is there any restriction placed on workers’ freedom of movement.

No Based on the workers interview and management interview, no such restriction.

2.7 Are workers permitted time-off with doctor’s certificate or note when sick or for maternity?

Yes Based on the workers interview and management interview, the workers could ask sick leave easily just notify the supervisor, no need the doctor’s certificate.

2.8 Is any evidence of physical or verbal abuse identified?


2.9 Are workers forced to work overtime? No Based on the workers interview, all the workers have OT voluntarily.

2.10 Are employment contracts required by local law? Yes The China Labor law had this requirement about the employment contracts.

2.11 If employment contracts are required by law, does the law require that they be signed by both the factory AND the worker

Yes



Item no


Comments

2.12 Do all workers sign employment contracts with the factory?

Yes Based on the document review and workers interview, all the workers signed the labor contract according to the legal requirements.

2.13 Are employment contracts unfair or illegal? No Based on the document review, all the items in the labor contract were fair and legal.

2.14 Is any evidence identified that security guards were used to coerce workers?

No Based on the workers interview, no such negative evidence was identified during the audit.

2.15 Are workers required to lodge deposits such as illegal withholding of salary, training fee, employment broker fee, fee for tools, fee for uniforms, or original documents such as ID papers?

No Based on the workers interview and management interview, no any deposit or withholding of salary was required by the factory.

2.16 Is any physical method used to limit freedom of workers during working hours such as surveillance cameras or locked exit(s)?


2.17 Is any evidence identified on the use of forced labour / prison labour?


Section Rating : Forced Labor

Legal /Code

Nonconformance

Observations

(Need Improvement)

Fully

Acceptable



Best Practices in Factory (if any) : Nil

Additional Comments : Nil



Nil

Nil



3. Health and Safety

Item no


Comments

3.1

Does the factory have a copy of valid laws and regulation on health and safety or understand its requirements?

Yes Based on the document review and management interview, the factory kept the copy of valid laws and regulation on healthy and safety and understood the requirement well.

3.2 Is written health and safety policy posted and signed by top management?

Yes Based on the onsite observation, the related health and safety policy posted and signed by top management at the workshop.

3.3 Is safety committee established with members representing the various shifts, functions and levels?

Yes Based on the document review and management interview, the safety committee was established with all function dept members.

3.4 Is a senior management representative for health & safety appointed?

Yes The production manager Mr. Li Junfeng was appointed to responsible for health& safety.

3.5 Does the factory arrange health and safety training for new workers?

Yes The factory conducted the health and safety training for the new workers at the recruitment.

3.6 Are training and awareness programs on health and safety arranged regularly for all workers?

Yes Based on the document review, the factory conduct regular training for all workers on health and safety.

3.7 Are accidents reported and recorded? Yes Based on the factory management interview, they would report and record the accident, but till the audit day, there was no accident occurred.

3.8 Does the factory keep injury / illness records such as daily injury and illness log, clinic records, injury statistics, illnesses report or any other safety statistics?

Yes Based on the document review, the factory kept the illness records and the injury records.

3.9 Are corrective actions taken to prevent recurrence of work related accidents?

N/A No accident occurred till the audit day.



Item no


Comments

3.10 Does the factory have valid fire inspection certificates issued by local fire service authority?

Yes Based on the document review, the factory obtained valid fire inspection certificates issued by local fire service authority.

3.11 Does the factory have adequate number of fire extinguishers at each factory floor?

Yes Based on the onsite observation, the extinguisher number was adequate.

3.12 Does the number of fire extinguishers meet local legal requirements?

Yes Based on the onsite observation, it could meet the legal requirement.

3.13 Are all fire extinguishers inspected and tested regularly and ready to use at all times?

Yes Based on the onsite observation and management interview, the fire extinguishers were inspected once per month, all the extinguishers were in good condition.

3.14 Is an effective fire extinguishing system i.e. fire hydrant/fire hose or sprinkler installed at each factory floor and maintained properly?

Yes Based on the onsite observation, the fire hydrant was available for all the factory areas.

3.15 Are all fire extinguishing systems inspected and maintained properly?

Yes Based on the onsite observation and management interview, the fire extinguishing systems were inspected once per month, all the fire hydrants were in good condition.

3.16 Is fire and hazard early warning system such as smoke detector installed and regularly tested?

No Based on the onsite observation, there was no smoke detector was installed in the raw material warehouse and finished good warehouse.

3.17 Are documented fire drills conducted regularly at least twice a year?

Yes Based on the management interview and documents review, the factory conducted fire drill once every year, the latest fire drill was conducted on Nov 11, 2008.

3.18 Are fire exits and escape routes adequate at each factory floor?

Yes Based on the onsite observation, there were at least two exits at each floor.



Item no


Comments

3.19 Is any fire exit and escape route blocked or locked? No During the onsite audit, all the fire exit and escape routine were opened.

3.20 Are any slide doors used at the factory? No No slide doors were used at the factory.

3.21 Are exits and fire exits identified with sign or indicator lamps?

Yes Based on the onsite observation, all the exits were marked with exit sign and equipped with the emergency light.

3.22 Are adequate emergency lights installed at each factory floor?

Yes Based on the onsite observation, all the exits were marked with exit sign and equipped with the emergency light.

3.23 Is the factory no more than 5 minutes away by fire engine from nearest fire station?

Yes Based on the management interview, there was only 3 minute away from the factory to the nearest fire station.

3.24 Did any fire accident take place in the past 12 months at the factory?

No Based on the management interview, no fire accident took place in the past 12 months.

3.25 Does the factory have valid inspection certificates for boilers, elevators, pressure vessels and other equipment per local regulation?

N/A Based on the onsite observation and management interview, no boilers, elevator and pressure vessels were used in the factory.

3.26 Are the operators of above-mentioned equipment trained and qualified per local regulation?

N/A Based on the onsite observation and management interview, no boilers, elevator and pressure vessels were used in the factory.

3.27 Are adequate guarding or devices installed for moving/rotating parts of machine, pulleys and belts or any other dangerous parts of machines?

No Based on the onsite observation, about 1 out of 3 sewing machines were lack of pulley guards.

3.28 Is any instruction emphasized to prohibit loose clothing, jewellery or long hair near moving machinery?

Yes Based on the onsite observation, the operation safety instruction was posted in the workshop and warning note was available.

3.29 Are all electricians, welding operators and forklift drivers trained and qualified per local regulations?

Yes There were 12 qualified electricians with certificate in the factory.



Item no


Comments

3.30 Are electrical safety procedures implemented effectively to ensure safety precautions such as grounding, discharging, and testing to be taken?

Yes Based on the document review and management interview, electrical safety procedures were implemented effectively.

3.31 Are all the electrical wires installed in fully acceptable condition and adequately protected?

Yes Based on the interview with the electrician and onsite observation, the electrician would conduct regular inspection for the electrical wire condition and the electrical wire was in good condition.

3.32 Are electrical installations are checked periodically and repairs carried out by competent electrician?

Yes Based on the interview with the electrician and onsite observation, the electrician would conduct regular inspection for the electrical wire condition and the electrical wire was in good condition.

3.33 Is hot work permit procedure implemented for welding, cutting and open flame operation at the factory?

N/A No hot work was available in the factory.

3.34 Are all site buildings maintained in good condition in both physical surface and structure?

Yes Based on the document review and onsite observation, the factory obtained building construction safety certificate and the building was in good condition.

3.35 Are dangerous/hazardous substances used or stored at the factory?

Yes The oil-remover was used in the factory.

3.36 Are these substances safely and securely stored? Yes The oil-remover was stored in the special area and MSDS was posted onsite.

3.37 Are administration and engineering controls (reduced shift hours, ventilation fans and exhaust fans) introduced to reduce personal exposure?

Yes Based on the onsite observation, the working environment was comfortable.

3.38 Are appropriate personal protective equipment (PPE) such as goggles, glasses, gloves, earplug / muff, boots, or protective clothing provided at factory cost and in fully acceptable condition?

Yes Based on the onsite observation, it was full acceptable.

3.39 Is an air quality test done? N/A It was no need to conduct air quality test for this factory.



Item no


Comments

3.40 Is air quality test required by law? Yes But it was no need to conduct air quality test for this factory.

3.41 Does the factory have a suitable working environment in respect of ventilation, temperature, lighting, cleanliness, and tidiness?

Yes Based on the onsite observation, the working environment was comfortable.

3.42 Does the factory arrange regular health examination for workers exposed to hazardous environment?

Yes The factory arranged regular health examination for workers exposed to hazardous environment and kept the examination report.

3.43 Are there adequate evidences confirming that the workers’ health is not affected by hazardous factors?

Yes The health examination report indicated that the workers health condition were good.

3.44 Does the factory have any occupational health inspection certificate issued by local government authority?

N/A No such certificate was required by the local government.

3.45 Are adequate first aid kits located at each factory floor and marked with signs?

Yes Based on the onsite observation, there was one first aid kit at each workshop,

3.46 Are adequate workers trained on first aid? Yes There were 10 trained first aid people in the factory.

3.47 How many trained first aiders are at the factory? Yes There were 10 trained first aid people in the factory.

3.48 Is an in-house clinic/first aid station established with competent doctor/first aider employed at the factory?

No There were 10 trained first aid people and the nearest hospital was just 5 minute away.

3.49 Is a nearby medical centre/hospital/clinic available to factory?

Yes The Yicheng Hospital was just 5 minute away from the factory.

3.50 Is potable water accessible and adequate at each factory floor?

Yes Based on the onsite observation, the potable water was available in the factory.

3.51 Are lavatory facilities accessible, clean and reasonable in number at each factory floor?

Yes Based on the onsite observation, the lavatory facilities were accessible, clean and reasonable in number.

3.52 Do lavatory facilities meet or exceed local requirements?

Yes Based on the onsite observation, it could meet the legal requirements.



Item no


Comments

3.53 Are toilets private and segregated for men and women?

Yes Based on the onsite observation, the toilets were private and segregated for men and women.

3.54 Are washbasins and water taps available AND adequate?

Yes Based on the onsite observation, it was acceptable.

3.55 Are the factory kitchen and canteen clean and hygienic with adequate facilities?

Yes Based on the onsite observation, the factory kitchen and canteen was clean and hygienic with adequate facilities.

3.56 Are kitchen and canteen subject to local government licensing?

Yes

3.57 If yes to 3.56, does the factory have such a permit or license?

No The factory did not obtain the hygiene license.

3.58 Are adequate evidences identified (such as health examination) that workers working in kitchen are suitable to food service?

Yes All workers in the kitchen obtained the healthy certificate.

3.59 Is there any food safety program established to ensure all the food and stuffs purchased from reliable sources?

Yes Based on the management interview, the factory had a food safety program established to ensure all the food and stuffs purchased from reliable sources.

3.60 Is any pest control program established and implemented effectively?

Yes The factory would have internal pest control for the food safety.

3.61 What is the average dormitory space per worker? Does it meet with local norms and standards?

Yes The room space was 25 S.Q meters, 2.5~3 S.Q meters/worker, it could meet legal requirements.

3.62 How many workers per room? 8~10 worker/room

3.63 Does the space per worker meet local laws or prevailing industry standards IF no local laws apply?

Yes 2.5~3 S.Q Meter/worker, it could meet legal requirements.

3.64 Is there adequate living space for each worker and meet the requirements of relevant local regulations?

Yes 2.5~3 S.Q Meter/worker, it could meet legal requirements.

3.65 Are recreation areas available at the dormitory? Yes There were recreation areas at the dormitory.

3.66 Are kitchen facilities available in dormitory? Yes The kitchen facilities were available in dormitory



Item no


Comments

3.67 Are laundry facilities available in dormitory? Yes The laundry facilities were available in dormitory

3.68 Is there an adequate supply of sanitary drinking water available to workers at adequate distance at dormitory?

Yes Based on the onsite observation, there was an adequate supply of sanitary drinking water available to workers at adequate distance at dormitory.

3.69

Are there adequate toilets with hand basins available to workers at adequate distance at dormitory?

Yes There were adequate toilets with hand basins available to workers at adequate distance at dormitory.

3.70 Are there adequate bathrooms available to workers at dormitory?

Yes There were adequate bathroom available to workers at dormitory.

3.71 Are sanitary areas clean and hygienic with available washing facilities?

Yes Based on the onsite observation, the sanitary areas were clean and hygienic with available washing facilities.

3.72

Are the dormitories clean, safe and well lit? Yes Based on the onsite observation, the dormitories were clean, safe and well lit.

3.73 Are workers free to exit & re-enter dormitory freely? Yes Based on the workers interview, the workers were free to exit and re-enter dormitory freely.

3.74 Are any curfew hours set? Yes 24:00 were set for curfew.

3.75 What are the curfew hours? Yes 24:00 were set for curfew.

3.76

Are adequate security measures provided to protect workers at dormitory?

Yes The security guards would conduct patrol around the dormitory.

3.77 Does the dormitory buildings appear structurally sound and in acceptable repair?

Yes Based on the onsite observation, the dormitory building condition was good and the factory obtained the construction safety certificate for the dormitory building.

3.78 Are dormitory exits unblocked and unlocked for emergency evacuation?

Yes Based on the onsite observation, the dormitory exits were unblocked and unlocked for emergency evacuation.



Item no


Comments

3.79 Are written dormitory rules posted? Yes Based on the onsite observation, written dormitory rules posted with national language at the factory.

3.80 Are the rules written in the language(s) the employees understand?

Yes Based on the onsite observation, written dormitory rules posted with national language at the factory.

3.81

Are fire emergency evacuations plans posted at dormitory and understood by all workers?

Yes Based on the onsite observation and workers interview, the fire emergency evacuations plans were posted at dormitory and understood by all workers.

3.82 Is any workers’ dormitory located in the building of production and/or warehouse?

No Based on the onsite observation, the dormitory was separated from any production area or warehouse.

Section Rating : Health & Safety

Legal /Code

Nonconformance

Observations

(Need Improvement)

Fully

Acceptable



Legal/Code Non-conformance :

Finding 1:

Based on the onsite observation, about 1/3 sewing machines were lack of pulley guards.

It violated General rules for designing the production facilities in accordance with safety and health requirements 3.1.2 & 3.1.6

３．１．２ Safeguards should be installed, where it is necessary for the operator to approach the

moving part of the operating machine.

３．１．６ While the height of any below device is within 2M from the horizontal surface of operator,

any transmission belt, rotating shaft, driving chain, couplings, pulleys, gear wheel, flywheel, chain wheel, electric saw and other dangerous parts should be equipped with protective device.

Finding 2:

The factory did not obtain the hygiene license. It violated Food Hygiene Law of the People's Republic of China, Article 27. Enterprises engaged in food production or marketing as well as street food peddlers must obtain a hygiene license issued by the administrative department for health before they shall be permitted to apply for registration with the administrative departments for industry and commerce. Any person without a hygiene license may not be engaged in food production or marketing.

Observation (Need Improvement) :

Based on the onsite observation, there was no smoke detector was installed for the raw material warehouse and finished good warehouse.

Additional Comments :Nil




1. The factory should install the pulley guards for all the sewing machines.

2. The factory should obtain the hygiene license from the local bureau. 1. 7 days / Mr. Chen

Hao

2. 30 days/ Mr. Chen Hao



4. Freedom of Association

Item no Requirement Yes/No/NA

Comments

4.1 Does the factory have a copy of valid laws and regulations on trade union and freedom of association or understand its requirements?

Yes Based on the management interview, the management understood the legal requirements well.

4.2 Is workers’ right to form and join free trade unions and workers’ associations acknowledged by the management and workers?

Yes Based on the management interview and workers interview, they understood the association right well.

4.3 Is there a trade union formed at the factory? Yes There was a trade union: Zhumadian Kangmao Arts & Crafts Co., Ltd Trade Union.

4.4 If yes to 4.3, is union membership voluntary? Yes Based on the management interview and workers interview, union membership was voluntary.

4.5 If yes to 4.3, do workers elect their own representatives / spokesperson(s)?

Yes Based on the management interview and workers interview, the workers elected their own representatives.

4.6 If Yes to 4.5, specify name and title. ---- Wu Jing, Han Xinfeng

4.7 Is there a workers’ association formed in the factory? Yes The Health & safety association was available.

4.8 If Yes to 4.7 do workers elect their own representatives / spokesperson?

Yes Based on the management interview and workers interview, the workers elected their own representatives.

4.9 If Yes to 4.8, specify name and title Mr. Li Junfeng

4.10 Do worker representatives have access to members at workplace?

Yes Based on the management interview and workers interview, worker representatives have access to members at workplace.

4.11 Is any evidence identified on disparate treatment between union/non-union workers?

No No such evidence was identified during the audit.

4.12 Does the factory have a written policy and procedure to protect worker committee members, union supporters and/or Union representatives from retaliation?

Yes Based on the document review, the factory have a written policy and procedure to protect worker committee members, union supporters and/or Union representatives from retaliation



Item no Requirement Yes/No/NA

Comments

4.13 If restricted by law or if there is no formal workers union / association, does the factory facilitate parallel means such as worker committee?

N/A There was trade union and healthy & safety association in the factory.

4.14 For non-unionised factory, are fair and effective mechanisms to ventilate and resolve grievances of workers in place?

N/A There was trade union and healthy & safety association in the factory.

4.15 Does the factory allow/permit workers to choose a representative from their own group to facilitate communication with senior manager?

Yes Based on the management interview and workers interview, the factory allow/permit workers to choose a representative from their own group to facilitate communication with senior manager.

4.16 Does the factory encourage workers to formally join and carry out activities like complaints & resolutions of workers’ grievances, health & safety related activities, worker – management activities on productivity, etc.?

Yes Based on the management interview and workers interview, the factory encourage workers to formally join and carry out activities like complaints & resolutions of workers’ grievances, health & safety related activities, worker – management activities on productivity, etc.

4.17 Has the factory experienced a strike, walkout, demonstration, or other significant conflict with employees within the last 12 months?

No Based on the management interview and workers interview, no such case happen within the last 12 months.

4.18 Do interviews with workers and representative(s) confirm the above findings?

Yes The above findings were confirmed with workers and representatives.



Section Rating :Freedom of Association

Legal /Code

Nonconformance

Observations

(Need Improvement)

Fully

Acceptable


Observation (Need Improvement) :Nil


Best Practices in Factory (if any) :Nil



Nil

Nil



5. Discrimination

Item no


Comments

5.1 Does the factory have a copy of valid laws and regulations on non-discrimination or understand its requirements?


5.2 Is any evidence identified on discrimination in employment, promotion, compensation, welfare, dismissal and retirement, etc.?


5.3 Does the worker employment reflect local ethnic/religious breakdown – no domination by one group?

Yes No such negative case was identified during the audit.

5.4 Do the supervisors in the facility reflect the ethnic/religious breakdown of the worker population?

Yes No such negative case was identified during the audit.

5.5 Do employment records show any evidence of discrimination – patterns of dismissal?

No No such negative case was identified during the audit.

5.6 Do workers have access to and are familiar with procedures for filing complaints about discrimination?

Yes Based on the management interview and workers interview, the workers have access to and are familiar with procedures for filing complaints about discrimination.

5.7 Is equal salary for equal work for male and female workers implemented at the factory?

Yes Based on the management interview and workers interview, equal salary was for equal work for male and female workers implemented at the factory.

5.8 Is there any evidence of sexual harassment, especially of young female workers?


5.9 Is any evidence identified on discrimination through interview with workers, individual and collective?




Section Rating : Discrimination

Legal /Code

Nonconformance

Observations

(Need Improvement)

Fully

Acceptable







Nil

Nil



6. Disciplinary Practices

Item no


Comments

6.1 Does the factory have a copy of valid laws and regulations on disciplinary practices or understand its requirements?


6.2 Does the factory have documented disciplinary rules? Yes Based on the document review, the factory had documented disciplinary rules.

6.3 Are the disciplinary rules communicated to all workers?

Yes Based on the workers interview, all the workers knew the disciplinary rules.

6.4 Are the disciplinary rules fair, reasonable and legal or validated by local government authority?

Yes Based on the document review, the disciplinary rules are fair, reasonable and legal.

6.5 Does any evidence exist for mental / physical coercion?


6.6 Is there any evidence of deductions from pay for non-fulfilling production target or sickness with doctor’s certificate or note?


6.7 Are the worker’s disciplinary actions recorded? Yes Confirmed by document review

6.8 Do workers have access to appeal in case of infractions / breaking of rules?

Yes Based on the workers interview, they could appeal to the senior management in case of infractions/breaking of rules.

6.9 Are deductions made from pay for infractions / breaking of rules?

No Based on the workers interview and management interview, no such deduction was made.

6.10 If deductions are made from pay for infractions / breaking of rules, do they reduce pay to less than minimum wage?

N/A Based on the workers interview and management interview, no such deduction was made.

6.11 Are deductions from pay for infractions / breaking of rules legal?




Item no


Comments

6.12 If deductions from pay for infractions / breaking of rules are made, how is the money used?


6.13 Is the factory free of any citation, penalty from violation of laws and regulations in past 12 month?


6.14 Do interviews with workers confirm above findings? Yes The above findings were confirmed with workers and representatives.

Section Rating : Disciplinary Practics

Legal /Code

Nonconformance

Observations

(Need Improvement)

Fully

Acceptable







Nil

Nil



7. Working Hours

Item no


Comments

7.1 Does the factory have a copy of valid laws and regulations on working hours or understand its requirements?


7.2 How many regular hours are permitted by local law per day? (This does NOT include overtime)

--- 8 hour/day

7.3 How many regular hours are permitted by local law per week? (This does NOT include overtime)

--- 40 hours/week

7.4 How many regular hours are permitted by local law per month? (This does NOT include overtime)

--- No such definition by legal law.

7.5 How many overtime hours are permitted by local law per day?

--- 3 hours maximum per day

7.6 How many overtime hours are permitted by local law per week?

- No such definition by legal law.

7.7 How many overtime hours are permitted by local law per month?

- 36 hours maximum per month

7.8 Does the factory have a written policy on working hours, rest and vacations?

Yes Confirmed by document review.

7.9 Does the factory communicate the policy on working hours, rest and vacations to all workers?

Yes Based on the workers interview, all the workers knew the working hour’s policy.

7.10 Does the working hours policy meet local laws and regulations?

Yes Confirmed by document review.

7.11 Are the working hours of individual workers recorded by time card or attendance record?

Yes The working hours of individual workers were recorded by swiping cards.

7.12 What are the factory’s official scheduled working hours per week?

Yes The factory’s scheduled working hours is:

8 hours /day, 5 days (40 hours) /week.

7.13 Do the factory’s official scheduled working hours per week meet local legal requirements?

Yes It was compliance with the legal requirements.

7.14 What is the factory’s official scheduled working hours per month?

N/A No such definition was need.



7.15 Do the factory’s official scheduled working hours per month meet local legal requirements?

N/A No such definition was need.

7.16 Do the workers have at least one day (24 consecutive hours) off in seven days?

Yes Based on the cross check with working hours records, production records and workers interview, the factory had at least one day rest per 7 days.

7.17 What is the maximum number of working hours (including overtime) of individual workers per day?

- 10 hours

7.18 Does the daily maximum number of working hours (including overtime) of individual workers meet local legal requirements

Yes It was compliance with the legal requirements.

7.19 What is the maximum number of working hours (including overtime) of individual workers per week?

- The maximum number of working hour was 60 hours /week.

7.20 Does the weekly maximum number of working hours (including overtime) of individual workers meet local legal requirements?

N/A No such legal requirements.

7.21 What is the maximum number of working hours (including overtime) of individual workers per month?

- The maximum number of working hour was 232 hours /month.

7.22 Does the monthly maximum number of working hours (including overtime) of individual workers meet local legal requirements?


7.23 What is the average number of working hours (including overtime) of individual workers per day?

- 9.69 hours

7.24 Does the average number of working hours (including overtime) per day of individual workers meet local legal requirements?

Yes It was compliance to the legal requirements.

7.25 What is the average number of working hours (including overtime) per week of individual workers?

- 49 hours

7.26 Does the average number of working hours of individual workers (including overtime) per week meet local legal requirements?


7.27 What is the average number of working hours (including overtime) per month of individual workers?

- 202 hours

7.28 Does the average number of working hours of individual workers (including overtime) per month meet local legal requirements?


7.29 What is the average number of overtime hours worked by individual workers per day?

- 1.69 hours

7.30 What is the maximum number of overtime hours worked by individual workers per day?

- 2 hours



7.31 What is the average number of overtime hours worked by individual workers per week?

- 9 hours

7.32 What is the maximum number of overtime hours worked by individual workers per week?

- 20 hours

7.33 What is the average number of overtime hours worked by individual workers per month?

- 36 hours

7.34 What is the maximum number of overtime hours worked by individual workers per month?

- 64 hours

7.35 Do workers have time for meal breaks? Yes 2 hours for meal break

7.36 Do workers have time for rest breaks? Yes 15 minutes for rest break

7.37 Are there local legal requirements for meal breaks? No No such legal requirements.

7.38 Does the factory provide the legally required meal breaks?


7.39 Are there local legal requirements for rest breaks? No No such legal requirements.

7.40 Does the factory provide the legally required rest breaks?


7.41 Do local legal requirements regarding extra overtime hours require approval or permit?

Yes

7.42 Does the factory have any valid written approval or permit on extra overtime hours from local labour authority?

Yes The factory obtained the legal approval to implement consolidate working hours system ( Effective from Jan 01,2008 to Dec 31,2008 and Jan 01 ,2009 to Dec 31,2009)

7.43 Do workers work overtime voluntarily? Yes Based on the workers interview, all the workers had overtime voluntarily.

7.44 Is any disciplinary action taken if workers refuse overtime?




Section Rating : Working Hours

Legal /Code

Nonconformance

Observations

(Need Improvement)

Fully

Acceptable



Additional Comments :

Best practices in factory : Nil



Nil

Nil



8. Compensation

Item no

Requirement Yes/No /NA

Comments

8.1 Does the factory have a copy of valid laws and regulations on compensation and benefits or understand its requirements?


8.2 Does the factory have written policy on compensation and benefits and communicate to all workers?

Yes Based on the workers interview and document review, the factory had written policy on compensation and benefits and communicate to all workers, all the workers were known with the policy.

8.3 Does the compensation and benefits policy meet local laws and regulations on working hours?

Yes Based on the document review, it was compliance to the legal requirement.

8.4 What are the paid minimum wages at the factory? RMB 550/month

8.5 Do all workers’ wages meet local minimum wages?(including trainees / apprentices / workers in probation period)

Yes Based on the cross check with payroll records, production records and workers interview, the factory provided the legal minimum wage to the workers.

8.6 Is the compensation calculation method communicated to all workers and understood by them clearly?

Yes Based on the workers interview, the workers were familiar with the wage calculation method.

8.7 Are the workers paid the legally required overtime rates and wages?

Yes Based on the cross check with payroll records, production records and workers interview, the factory paid legal OT premium to the workers.

The workers were paid with the OT rate as below:

150 of the basic wage for regular day OT

200% of basic wage for rest day OT



Item no

Requirement Yes/No /NA

Comments

8.8 Is all compensation paid to workers themselves in cash/cheque/direct to bank or any other method convenient to workers?

Yes All the workers were paid by cash.

8.9 Do workers receive correctly calculated wages per local legal requirements?

Yes Refer to 8.5 & 8.7

8.10 Are wage slips given to workers and they understand the wage-break up?

Yes Confirmed with the workers interview, they would receive the wage slip with the clear wage calculation items.

8.11 Is there a sufficient system to let workers check/ verify their wages?

Yes Based on the workers interview and management interview, the workers could check their wage with the finance within one month if there were any doubts.

8.12 Are workers’ wages deducted for any reason other than tax, social security?

No The workers wage would not be deducted for any reason other than tax, social insurance.

8.13 Are these deductions fair, reasonable and legal? N/A The workers wage would not be deducted for any reason other than tax, social insurance.

8.14 Is the payment frequency legal? Yes The factory issued the wage on 20

th of every

month for last month wage.

8.15 Does the factory withhold workers’ wages for any reason other than usual government requirements?


8.16 Is extra work to fulfill production target demanded without payment?

No All the workers were paid by hourly rate.

8.17 Is rework paid? Yes All the workers were paid by hourly rate.

8.18 Is any evidence identified on payment in kind, e.g. food or products?


8.19 Are all workers provided with social insurance per local legal requirements?

Yes The factory obtained the waiver from the local bureau about the social insurance.



Section Rating : Compensation

Legal /Code

Nonconformance

Observations

(Need Improvement)

Fully

Acceptable




Best practices in factory : Nil



Nil

Nil



9. Environment

Item No

Requirement Yes/No/NA Comments

9.1 Does the factory have all permits and licenses required by local laws or regulations?

Yes The factory had the permits and licenses required by local laws or regulations

9.2 Does the factory generate wastewater? No No wastewater was generated by the factory.

9.3 Where is wastewater discharged? N/A No wastewater was generated by the factory.

9.4 Is wastewater treated by the factory before discharge?

N/A No wastewater was generated by the factory.

9.5 Is the factory in compliance with local law or regulation regarding wastewater discharge?

N/A No wastewater was generated by the factory.

9.6 Does the factory have a Waste Management Plan?

Yes Based on the management interview, the factory had an environment management Plan.

9.7 Does the factory keep records of waste handling and disposal?

N/A No waste was needed to handling and disposal.

9.8 How does the facility dispose of waste? There was just living waste generated and was handled by the local environment bureau; the factory had signed the contract with the bureau.

9.9 Are dangerous/hazardous substances used or stored at the factory?

Yes The oil-remover was used in the factory.

9.10 Are these substances safely and securely stored?

Yes The oil-remover was stored in the special area and MSDS was posted onsite.

9.11 Does the factory maintain a written record of all use and movement of hazardous materials?

Yes The factory would record movement of the oil-remover.

9.12 How are hazardous materials disposed of after use?

Yes The factory signed with the oil-remover supplier which conducted the container recycles and the recycle records were kept.



9.13 Are relevant employees trained in the safe use, handling, and disposal of hazardous materials?

Yes

9.14 When did the last training take place? The last training was conducted on Dec 20, 2008.

9.15 Is the factory compliant with local/national law? Yes No illegal case was identified during the audit.

9.16 Have there been any notices of deficiencies issued by government agencies in the past year?

If, Yes, explain


Section Rating : Environment

Legal /Code

Non-conformance

Observations

(Need Improvement)

Fully

Acceptable




Best practices in factory: Nil

Responsibility Deadlines Corrective Actions confirmed by factory / Agent :

Nil

Nil

END OF CHECKLIST

Documents

Code of Conduct Assessment Checklist - tuecohandle.com · Code of Conduct Assessment Checklist Audited Facility: Zhumadian City Kangmao Arts & Crafts Co ., ... nes Corrective Actions