Nordtex ETI 2011

8/3/2019 Nordtex ETI 2011

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Audit Company: SGS LANKA (PVT) LTD Report reference: CTS20110437 Date: 29/08/2011 1

Supplier name: Hirdaramani Mercury Apparel (Pvt.) Ltd.

Site country: Sri Lanka

Site name: Nordtex (Pvt) Ltd.


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Audit Company Name:Client:

Nordtex (Pvt) Ltd.

Sedex Company Reference: S000000043198

Sedex Site Reference: P 000000043198

Audit Conducted By

Commercial Purchaser

NGO Retailer

Trade Union Brand Owner

Multi-stakeholder Combined Audit (delete all that dont apply)

Auditor Reference Number:(If applicable)

CTS20110437

SMETA Declaration

I declare that the audit underpinning the following report was conducted in accordance withSMETA best practice guidance.

Any exceptions to this are recorded here: No.

Auditor Name: Chamila Peiris and Kanthi Gamage

Role: Lead auditor and team member

Date: 29th August 2011


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Audit Details

Audit Details

Report #: CTS 20110437

Date of audit: 29t

August 2011

Time in and time out: Time in: 10.00 a.m.Time out:6.30 p.m.

Number of Auditor Days Used 2 days (2 auditors in one day)

Audit type: Full Initial

Full Re-auditPartial Follow-UpPartial Other Define

Was the audit announced? AnnouncedSemi announcedUnannounced

Was the Sedex SAQ reviewed? YesNo

If no, why not? Facility has not Registered the day of auditing

Previous audit date: N/A

Previous audit type: Full InitialFull Re-auditPartial Follow-UpPartial Other Define

Auditor name(s) and role(s): Chamila Peiris and Kanthi Gamage Lead auditor, team member

Report written by: Chamila Peiris

Report reviewed by: Wasantha Nihal

Report issue date: 7t

Sep 2011

Supplier name: Hirdaramani Mercury Apparel (Pvt.) Ltd.

Site country: Sri Lanka

Site name: Nordtex (Pvt.) Ltd.

Site contact and job title: Ms. Nilanthi Jayawickrama HR and Admin Manager

Site address: No.117, Tissa mawatha, Ambaraluwa North, Weliweriya


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Applicable business and other legallyrequired licence numbers:

for example, liability insurance

Business Registration PV 3608 and BOI registration2349/24/04/2001

Site phone: 0094 34670462-07

Site fax: 0094 332258360

Site e-mail: [email protected]

Products/Activities at site, for example,garment manufacture, electricals, toys,grower

Garments

Audit results reviewed with site

management?

Yes

Who signed and agreed CAPR (Nameand job title)

Ms. Nilanthi Jayawickrama HR and Admin Manager
mailto:[email protected]:[email protected]:[email protected]


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Audit Scope

Local Law(Please state legal requirement)

Standard work week (total hours): 45.5 hours per week

Maximum allowed overtime hours (perday, week, month):

3hrs overtime per day, 14.5 hours per week and 60 hours per month.Note that this will be applied only for female workers. For youngworkers 50 hours per month.

Minimum work age: 14 years

Minimum wage for standard hours: LKR. 5830.00

Minimum overtime wage: 150% for normal week days, 200% for weekly holiday, 300% forMercantile holiday.

Audit Scope(Please select the code and additional requirements that were audited against during this audit)

ETI Base Code (if partial audit, pleasedetail which base code items wereused):

A: Entitlement to Work and Immigration

Additional Requirements

B: Environment

Note: The main focus of this ethical audit is on the ETI Base Code and local law. The additional elements A,B,C,Dwill not be audited in such depth or scope, but the audit process will still highlight any specific issues.

This report provides a summary of the findings and other applicable information found/gathered during the socialaudit conducted on the above date only and does not officially confirm or certify compliance with any legalregulations or industry standards. The social audit process requires that information be gathered and consideredfrom records review, worker interviews, management interviews and visual observation. More information isgathered during the social audit process than is provided here. The audit process is a sampling exercise only anddoes not guarantee that the audited site prior, during or post-audit, are in full compliance with the Code beingaudited against. The provisions of this Code constitute minimum and not maximum standards and this Code shouldnot be used to prevent companies from exceeding these standards. Companies applying this Code are expected tocomply with national and other applicable laws and where the provisions of law and this Code address the samesubject, to apply that provision which affords the greater protection. The ownership of this report remains with theparty who has paid for the audit. Release permission must be provided by the owner prior to release to any thirdparties.


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Non-Compliance Table

Issue

Area of Non-Conformity(Only check box when there is a non-

conformity)

Rating(Currently only to be

completed as aspecific clientrequirement)

ETI BaseCode

Local LawAdditionalElements

0 Management systems and codeimplementation

Acceptable

1 Employment Freely Chosen Acceptable

2 Freedom of Association Acceptable

3 Safety and Hygienic Conditions Need improvements

4 Child Labour Acceptable

5 Wages and Benefits Acceptable

6 Working Hours Need improvements

7 Discrimination Acceptable

8 Regular Employment Acceptable

8A Sub-Contracting andHome working

Acceptable

9 Harsh or Inhumane Treatment Acceptable

A Entitlement to Work Acceptable

B Environment Acceptable


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Audit Overview

Audit Overview

Audit attendance Senior management Worker representatives/Union representatives

Present at the opening meeting? Yes No Yes No

Present at the audit? Yes No Yes No

Present at the closing meeting? Yes No Yes No

If Worker/Union Representatives not

present please explain reasons why

The factory does not have a Union. Factory welfare Society

representative were participated during the audit.

Site description:(Include size, location, age, structure,number of buildings)

The factory is16170 sq.feet in size and located at Weliweriya inGampaha District of Western Province in Sri Lanka. It is one hour driveaway from Colombo city.

The factory production has been commenced in July 2001.

The factory has been registered under BOI of Sri Lanka.

The factory consists of Two main buildings and 1st

building consists ofwhere house Administrative Office, Cutting section, Sewing Floor,Packing section,

2nd

building consists of Canteen, first aid room, Training line and male& female Toilets, fabric store and acesseries stores.

Steam boiler, Compressor and power generator room are adjoining tothe main building.

Factory minimum hiring age is 16 years.

Site function: AgentFactory Processing/ManufacturerFinished Product SupplierGrower

HomeworkerLabour ProviderPack HousePrimary ProducerService ProviderSub-Contractor

Month(s) of peak season: (if applicable) N/A

Process overview:(Include products being produced, main operations, number of production lines, main equipment used)


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The factory produces ladies pants.

The main manufacturing operations are Cutting, Sewing, Finishing, and Packaging.

There are 3 production lines in the factory.

Main equipment;Single needle, double needle, Over lock, Flat lock machines, button hole machines, Button attaching machines, Bartaking lockstitch, Side cutter machine, Kansai Special Machine, Single Bed Single Needle, Iron & Iron TableBand knife, Cutter machines, Fusing Machine, Metal DetectorGeneral - Boilers, Generator and compressor.

Attitude of workers:(Include their attitude to management, workplace and the interview process. Both positive and negative informationshould be included) Note: Do not document any information that could put workers at risk

The workers interviews were conducted on the sample basis and the sample size was 26 of which there were 6individual interviews and 4 group interviews, each group having 5 workers. All the interviews were conducted inconfidential manner and free from factory management and supervisors. No negative comments highlighted duringthe workers interviews. Workers like to work in the factory due to the factory located in a village and most of theworkers are coming to the work from their home.

Attitude of managers:(Include attitude to audit, and audit process. Both positive and negative information should be included)

The factory management participated to open and closing meeting and gave their extended support to complete theaudit. CAP report was reviewed and signed by the factory manager.

The total number of employees is 191 of which 156 belong to worker category and 35 belong to the staff category.

Summary of main findings: (positive and negative)

Positive

1. With regard to child labour and confirming the hiring age, the workers confirmed that the factory checked theiroriginal ID cards, Birth certificates, school leaving certificates and village headman certificates to verify their ageduring recruitment and the copies of those documents are kept in personal files. Confirmed at the day of audit that

the factory employ workers only higher than 16 years old.

2. Regarding forced labour, the workers confirmed that no any type of deposit was required and their originaldocuments such as ID cards or any original certificates were not retained with the company.

3. Regarding discrimination, the workers wages were paid based on their positions, outputs and abilities. Allinterviewees confirmed that no discrimination occurred in the factory.

4. Regarding disciplinary practice, the interviewees said they would be warned in writing, if they break the factoryrules. No fine was identified in the factory.

5. Regarding Health & safety, the workers were satisfied with the working condition. Workers confirmed that the


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employees toilets are cleaned every day. The factory has a good medical room with a trained nurse.

6. The factory works on 5 days per week. Regular working hours for this industry is 45.5 hours per week and thefactory works as same as local law. Overtime is voluntary confirmed by the employees during the workersinterviews.

7. Workers confirmed that there is no any delay of paying the salary. Factory pays salary on monthly basis.

8. Regarding no inhuman treatment, the workers confirmed that no harsh or inhumane treatment has occurred andthe management is kind and fair for all workers.

9. Workers can directly complain any issues to the management and there are suggestion boxes.

Negative1. It was noted that facility has not monitored third party records. Noted Security and Food supplier.

Corrective Action:Facility has collected and monitored third party record. Including Security & Food suppliersNC StatusClosed2. Facility has not updated young worker register.Corrective Action:Facility has updated the Young worker register and reviewed on 7

thSeptember 2011

NC StatusClosed

3. It was noted that facility has not obtained Medical certificate for food handlers and PHI certificate for foodpreparation premises.

4. It was noted that facility has employed female workers for night work without obtaining night work approvalfrom labour department.

Corrective ActionFacility has obtained the Night work approval from the labour department and reviewed on 7

thSeptember 2011

NC StatusClosed

5. It was noted that factory has employed workers more than 12 over time hours per week. Noted 2 out of 26in July 2011and 3 out of 26 in June 2011.

6. It was noted that facility has employed female workers more than 12hrs per day. Noted 2 out of 26 in July2011and 2 out of 26 in June 201.


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Key Information

Key Information

Do all workers (including migrantworkers) have contracts ofemployment?

YesNo

Were appropriate records available toverify hours of work and wages?

YesNo

Were any inconsistencies found?(if yes describe nature)

Yes Poor record keepingNo Isolated incident

Repeated occurrence

For the lowest paid production worker,are wages paid for standard hoursbelow or above the legal minimum?

Below legal minimum %Meet %Above 100 %

% of piece rate workers:(if applicable)

N/A

Combined hours (regular andovertime) over 60 per week found?

YesNo

Are the correct overtime premiumspaid?

YesNo

Is there any night production work atthe site?

YesNo

% of workers living in site providedaccommodation (if applicable):

Accommodation is not provided.

Age of youngest worker found: 16 years, 1 months

Workers under 18 subject to hazardouswork assignments?

YesNo

What form of worker representation is

there on site?

Union (name)

Worker CommitteeOther (specify)

Are there any External Processes? Sub-ContractingHomeworkingOther External Process (detail) No. NA


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Worker Analysis

Worker Analysis

Local Migrant

Permanent Temporary Agency Permanent Temporary Agency Homeworkers

WorkernumbersMale

67Nil

Security 1 Nil Nil Nil Nil

Workernumbersfemale

124 Nil Nil Nil Nil Nil Nil

Total 191 Nil 01 Nil Nil Nil Nil

Total Workers at this Site: 191

Number ofWorkersinterviewed

26 Nil Nil Nil Nil Nil Nil

Migrant Workers:

Originating Locations/Countries: N/A

Work undertaken by migrant workers: N/A

Were migrant workers recruited throughan agency? N/A

If yes, is there a contract with the

agency? Provide details of agencies andcontractual arrangements N/A

Percentage of migrant workers incompany provided accommodation: N/A


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Audit Results by Clause

0: Management systems and code implementation:

0.1 Suppliers are expected to implement and maintain systems for delivering compliance to this Code.0.2 Suppliers shall appoint a senior member of management who shall be responsible for compliance with the

Code.0.3 Suppliers are expected to communicate this Code to all employees and to their suppliers.

0.4 Suppliers should, where reasonably practicable, extend the principles of this ethical code through their supplychain.

Evidence of Compliance and Current Status

1. There is a manager appointed for Social Compliance and system implementation.

2. Factory has updated Laws and regulations.3. Factory has displayed code of conducts and has communicated to all the employees; confirmed during

employees interview.4. Factory has implemented and maintained system that compliance to this code of conducts.

Non-compliance:

Description of non-compliance: 011. It was noted that facility has not monitored the third party records. Noted with

Security and Food supplier.

Local law or ETI requirement:According to the ETI 0.4 Suppliers should, where reasonably practicable, extend theprinciples of this ethical code through their supply chain.

Recommended corrective action:Facility shall monitor third party records.

Corrective Action:Facility has collected and monitored third party record. Including Security &Food suppliers

NC StatusClosed

Objective evidenceobserved: Document

review

Observation

Description of observation: NilObjective evidenceobserved:Nil


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Good Examples observed:

Nil

1: Employment is Freely Chosen

ETI1.1 There is no forced, bonded or involuntary prison labour.

1.2 Workers are not required to lodge deposits or their identity papers with their employer and are free to leavetheir employer after reasonable notice.


1. The factory has prohibited use of any type of forced labour and factory management respects local andinternational laws regarding this issue.

2. Noted during the employees interviews that the employees are working at the facility voluntarily and thefactory had not withheld any amount of money or original certificates (educational certificate, Birthcertificate).

3. Facility has communicated their policy to all the supervisors, security personnel and managers regarding

that the facility prohibits form of coercing employees in any way.4. The factory does not provide loan for workers.5. No physical or verbal abuse identified, confirmed through the employee interviews.6. The employment contract complies with local laws and no force labour statement in the contract.7. Workers can leave the factory after working hours and overtime is voluntary.8. Facility recruits workers directly and they do not use any labour brokers/agents.9. The factory does not use the prison labour confirmed through the workers and management interviewed.10. Verified and confirmed that employees are free to leave from the company after giving reasonable notice to

the management.

Non-compliance:

Description of non-compliance: Nil

Local law or ETI requirement: N/A

Recommended corrective action: N/A

Objective evidenceobserved: Nil


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Observation

Description of observation: Nil Objective evidenceobserved: Nil


Description of Good Example ( GE) : N/A Objective evidenceobserved: Nil


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2: Freedom of Association and Right to Collective Bargaining are Respected

ETI2.1 Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain

collectively.2.2 The employer adopts an open attitude towards the activities of trade unions and their organisational activities.

2.3 Workers representatives are not discriminated against and have access to carry out their representativefunctions in the workplace.

2.4 Where the right to freedom of association and collective bargaining is restricted under law, the employerfacilitates, and does not hinder, the development of parallel means for independent and free association and

bargaining.


1 Verified and found that the facility recognizes and respects the rights of employees to exercise their lawful rightsof free association.

2 There is no trade union in the facility but facility has the Welfare Society, verified with the representatives, butno meeting minutes are available for the latest meeting.

3 The employees interviewed confirmed that the facility management respects the employees rights to collectivebargaining.

4 Verified and confirmed through records review and interview process that, the facility does not discriminate anyof the employees.

Non-compliance:




Objective evidenceobserved: Record review

Observation

Description of observation N/AObjective evidenceobserved: Nil


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Name of union and unionrepresentative, if applicable:

No any Trade Union.

If no union what is parallel meansof consultation with workers?

Workers Welfare Society.

The percentage of workers at thesite covered by collectivebargaining with one or morerecognised trade unions

N/A

The percentage of workers at thesite covered by negotiation withworkers representatives who areNOT members of one or morerecognised trade unions

N/A

Does the Collective BargainingAgreement (CBA) include rates ofpay

YesNo N/A


Description of Good Example ( GE) N/A Objective evidence observed: Nil


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3: Working Conditions are Safe and Hygienic

ETI3.1 A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the

industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arisingout of, associated with, or occurring in the course of work, by minimising, so far as is reasonably practicable, the

causes of hazards inherent in the working environment.3.2 Workers shall receive regular and recorded health and safety training, and such training shall be repeated for

new or reassigned workers.3.3 Access to clean toilet facilities and to potable water, and, if appropriate, sanitary facilities for food storage shall

be provided.3.4 Accommodation, where provided, shall be clean, safe and meet the basic needs of the workers.

3.5 The company observing the code shall assign responsibility for health and safety to a senior managementrepresentative.


1. Verified during the factory tour, workers interview and document reviewed that the facility has providednecessary safety guards such as needle guard, belt covering, and eye protection equipments. Also verified thatthe facility replaced the unsuitable safety guards.

2. The employees interviewed confirmed that the facility has provided personal protective equipment for employeesfree of charge and no any deposit from the workers.

3. The facility maintains the machines on a regular basis confirmed through the document reviewed and factorytour.

4. The factory has a trained fire fighting team, also noted that all the fire extinguishers have been inspected andrenewed for the current period. The factory has installed adequate emergency lights in each section of the

factory.5 The factory has displayed the evacuation plan and adequate fire alarmsand operating switches have been

installed.6 The factory conducts fire evacuation drills for all employees at least once in every 6 months.7 The factory has obtained certificate for boilers and boiler operator competence certificate.8 There is a medical centre withtrained nurse, as well as there are first aid boxes in each section of the factory.9 The facility has conducted the first aid training program and employees from every section had represented in

that program confirmed through the employees interviews and document reviewed. 10 Confirmed through the employees interviewed that they understood the procedures and what to do in an

emergency situation, since they have received adequate training.11 Confirmed through the factory tour that canteen is clean and hygienic.12 Confirmed through the employees interviewed and factory tour that the employees wash rooms are adequate,

clean and hygienic.

13 Factory has marked pathways, exit signs and arrows in every section which shows direction to evacuation.


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Non-compliance:

Description of non-compliance: 01

1. It was noted that facility has not obtained the Medical certificates for food handlersand PHI certificate for food preparation premises.

Local law or ETI requirement:3.3 Access to clean toilet facilities and to potable water, and, if appropriate, sanitary

facilities for food storage shall be provided.

Recommended corrective action:The factory shall obtained Medical certificate for food handlers and PHI certificate forfood preparation premises.

Objective evidenceobserved:

Factory tour andworkers interview

Observation



Description of Good Example ( GE)

Free medical facility and free breakfast is provided by the factory.

Objective EvidenceObserved:During employeesinterview.


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4: Child Labour Shall Not Be Used

ETI4.1 There shall be no new recruitment of child labour.

4.2 Companies shall develop or participate in and contribute to policies and programmes which provide for thetransition of any child found to be performing child labour to enable her or him to attend and remain in quality

education until no longer a child.4.3 Children and young persons under 18 shall not be employed at night or in hazardous conditions.

4.4 These policies and procedures shall conform to the provisions of the relevant ILO Standards.


1 Verified that the facility properly checked the applicants age through the valid documents such as Birth

Certificate, National Identity Card, School leaving certificates and Village headmen documents.2 Confirmed through reviewed of last 12 months hiring and termination records that there are young workers

within the facility.3 Reviewed the Facilitys communications made to all facility employees regarding child labour policies and

procedures and communication address on each of the following facility requirements:a. Obtain proof of age documentation from all potential workers prior to hiring.b. Critically examine the authenticity of age documentation.c. Question the authenticity of age documentation which not conforming to facility practices.d. Age documentation retained in employee personnel files.e. Interviews with all prospective employees.

4 The factory does not employ workers below the age of 16 years. This was confirmed through 26 age recordsreviewed and employee interviews. Also noted each personal file has equipped with the age verification

documents such as copy of birth certificate or national identity card.

Non-compliance:

Description of non-compliance: 01Facility has not updated young worker register up to the day of auditing.

Local law or ETI requirement:

According to the Employment of Women, Young persons and children Act, No. 47 0f1956The employer in a public and private industrial undertaking shall keep a register of thenames and dates of birth of all women and young persons employed in theundertaking.

Recommended corrective action:

Facility shall have and update young worker register as per the law.

Corrective Action:Facility has updated the Young worker register and reviewed on 7

thSeptember

2011.NC StatusClosed

Objective evidenceobserved: Documentreview.


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Observation

Description of observation : N/A Objective evidenceobserved: Nil


Description of Good Example ( GE) N/A Objective Evidence

Observed: Nil


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5: Living Wages are Paid

ETI5.1 Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industrybenchmark standards, whichever is higher. In any event wages should always be enough to meet basic needs and

to provide some discretionary income.5.2 All workers shall be provided with written and understandable information about their employment conditions in

respect of wages before they enter employment and about the particulars of their wages for the pay periodconcerned each time that they are paid.

5.3 Deductions from wages as a disciplinary measure shall not be permitted nor shall any deductions from wagesnot provided for by national law be permitted without the expressed permission of the worker concerned. All

disciplinary measures should be recorded.


1. Wages are paid directly on time and the pay sheets are in English, but employees can understand it.2. The factory had displayed legal minimum wages on factory notice board and workers had been educated for

wages calculations methods such as overtime calculations, holiday earning calculations.

Non-compliance:




Objective evidenceobserved:

Observation

Description of observation: N/AObjective evidenceobserved: Nil


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Description of Good Example ( GE)

Free Breakfast and transport facility has given to the all employees.Light works are given to pregnant employees.

Objective EvidenceObserved:Employees interview

Wages analysis:

Sample size (number of wageschecked and which weeks ormonths):

Total number of sample 26.Wage records for 20 employees in, December 2010 and January to July2011.Wage records for 6 employees in December 2010 and February, March,April, June and July 2011.

Legal minimum wage for standardtime:

LKR. 5830.00 per month

What deductions are required bylaw, and have all of these beenmade:

Social Insurance such as Employee Provident Fund. - 8% from employeetotal earning.Yes

Industry norm for this region: LKR. 5830.00

Legal overtime premium forweekdays:

150%

Legal overtime premium for restdays:

200%

Legal overtime premium for

holidays:

300%

Were collective bargainingagreements reached on the wagesstated below?

YesNo

No collective bargaining agreement.


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Worker TypeProcess Operator

(Highest paid)

Process Operator

(Average paid)

Process Operator

(Lowest paid)

This is not so relevant in farms where most workers are paid the same, or are of the same Worker type. Also manyfarms in SA use a combination of piece and hourly rate which is impossible to capture on this form.

Select one workers records from each Worker Type and populate the boxes:

Pay period (pm/week) Month Juy 2011 Month Juy 2011 Month Juy 2011

Employee identification/Staff ID#/Dept

Ms.Anoma/MO/538 Ms.Lalani /MO /22 Ms.sriyani/MO/1722

Employee Gender Female Female Female

Contract monthly/daily Monthly Monthly Monthly

Regular working hours 187.5 179.5 179.5

Regular work pay rate LKR. 42.5 LKR. 44.75 LKR. 39.25

Regular day overtime(hour)

57 hours 71.5 hours 66 hours

Regular day overtime(wage)

LKR.63.75 LKR.67.12 LKR.58.87

Rest day overtime (hour) 0.0hrs 0.0hrs 0.0hrs

Rest day overtime(wage)

LKR. 85.00 LKR. 89.5 LKR. 78.50

Statutory Holidayovertime (hour)

00 00 00

Statutory holiday OT(wage)

LKR.127.50 LKR.134.75 LKR.117.75

Total overtime hours 57 hours 71.5 hours 66 hours

Incentives/Bonus/Allowances etc.

LKR.5563.67 LKR.3000.0 LKR.2795.00

Gross wages LKR. 17701.38 LKR. 17553.44 LKR. 14530.75

Social insurance andother deductions

LKR. 810.00 LKR.1082.59 LKR. 1071.15

Actual wage paid afterdeduction

LKR. 16891.38 LKR. 16470.75 LKR. 13459.60

Comments: Actual wage paid difference due to over time amount, Basic Salary and insentives


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(Please state here any specific reasons/circumstances that explain the lowest and highest gross wages)

Is there a defined living wage: YesNo (add notes into guidance for auditors)

Please specify amount/time period: Minimum wage/month: LKR 5830.00 forunskilled trainees, Governed by the Law.

Is there evidence that equal ratesare being paid for equal work:

YesNo

Details: All the unskilled workers are recruited for the same wage and thenincrements are based on their skill, performance and efficiency.

How are workers paid: Cash

ChequeBACS

If not explain:

1. Contracted overtime premiumfor

Weekdays: 150%

Rest days: 200%

Holidays: 300%

2. Actual overtime premium paid insample for

Weekdays: 150%

Rest days: 200%

Holidays: 300%

3. Average wage paid to operators: LKR 15607.24


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6: Working Hours are not Excessive

ETI6.1 Working hours comply with national laws and benchmark industry standards, whichever affords greater

protection.6.2 In any event, workers shall not on a regular basis be required to work in excess of 48 hours per week and shallbe provided with at least one day off for every seven day period on average. Overtime shall be voluntary, shall not

exceed 12 hours per week, shall not be demanded on a regular basis and shall always be compensated at apremium rate.


1. Factory has a Punching card system to mark attendance.

2. Factory has retained the time records for 5 years.3. Factory has complied with weekly and monthly over time hours.4. Factory provides one day off in every 7 days.

Non-compliance:

Description of non-compliance: 01

It was noted that factory has employed workers more than 12 overtime hours perweek. Noted 2 out of 26 in July 2011and 3 out of 26 in June 2011.

Local law or ETI requirement:According to the ETI 6.2 In any event, workers shall not on a regular basis be requiredto work in excess of 48 hours per week and shall be provided with at least one day offfor every seven day period on average. Overtime shall be voluntary, shall not exceed12 hours per week, shall not be demanded on a regular basis and shall always becompensated at a premium rate. .

Recommended corrective action:Facility shall not exceed 12over time hours per weeky.

Description of non-compliance: 02It was noted that facility has employed female workers more than 12hrs per day. Noted2 out of 26 in July 2011and 2 out of 26 in June 201.


Accordance the Employment of Women, Young Persons and Children, The

factories and The shop and office Employees (Amendment) Act, No. 32 of1984.

Recommended corrective action:Factory shall not employee female workers more than 12hs. Per day.

Objective evidenceobserved:Workers interview anddocument review.

Workers interview anddocument review.


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Description of non-compliance: 03It was noted that facility has employed female workers for night work without obtainingnight work approval from labour department.


Accordance the Employment of Women, Young Persons and Children, Thefactories and The shop and office Employees (Amendment) Act, No. 32 of

1984.

Recommended corrective action:Female workers shall not employee night work without having night work approval.

Corrective ActionFacility has obtained the Night work approval from the labour department andreviewed on 7

thSeptember 2011

NC StatusClosed

Workers interview and

document review.

Observation

Description of observation : N/AObjective evidenceobserved: Nil


Description of Good Example ( GE) Objective EvidenceObserved:

Working hours analysis

What timekeeping systems areused: time card etc.

Punching card system

Sample size checked (number ofworkers):

26

Legal standard work week (hours): 45.5


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1. Contracted standard work weekthis site (hours):

45.5hrs

2. Actual standard work weekaveraged over sample (hours):

36.0hrs

3. Lowest basic hours worked: 0.0hrs ( whole one week leave)

4. Highest basic hours worked: 45.5hrs

Legal permitted overtime hours:

14.5 hours per week for female and young workers, 60 over time hours forfemale and 50 over time hours for young workers per month. Daily andmonthly over time condition for adult male workers have not beenmentioned in the Law.

Any local waivers for this site: N/A

Comments:(Please state here any specific reasons/circumstances that explain the highest working hours)

1. Actual overtime hours:(averaged over sample)

45.17hours

2. Range of overtime hours overall workers: (quote highest andlowest)

Highest : 18 hours per weekLowest : 0 hours

3. Peak seasons: Not provided


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7: No Discrimination is Practiced

ETI7.1 There is no discrimination in hiring, compensation, access to training, promotion, termination or retirementbased on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, union

membership or political affiliation.


Current status:1. The facilitys hiring procedure does not violate this principle.2. The facility is located in an area where the main communities are Muslims and Sinhalese. Therefore, majority ofemployees are Muslims and Sinhalese. Also the documents reviewed and employees interviewed confirmed that

the facility does not consider the applicant s ethnic, social group, gender, cast and positioning when hiring theemployees. There are Tamil employees also working in the facility.3. The factory does not do any pregnancy or blood test before the recruitment; confirmed by the workers during theworkers interviews.4. Workers can complain any matter directly to the management, confirmed through the workers interviewed.5. Factory management respects the human rights confirmed by the management interviewed.6. Facility provides all the legal benefits to the employees properly. Verified through the employees interviewed anddocuments reviewed. (e.g. Mercantile Holidays, special religious holidays, and payable three month leaves formothers with newly born child.)7. The facility has no experience with related issues of discrimination for last ten months verified through theemployee interviews.8. Also, it was confirmed during the employees interviews, that the factory does not treat workers in discriminatemanner. According to the factory hiring and promotional procedure, all workers have equal opportunity for

employment and the promotion and employee grading is based on employee skills and experience.

Non-compliance:





Observation

Description of observation :N/AObjective evidenceobserved: Nil


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Description of Good Example ( GE) N/A Objective EvidenceObserved: Nil


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8: Regular Employment Is Provided

ETI8.1 To every extent possible work performed must be on the basis of recognised employment relationship

established through national law and practice.8.2 Obligations to employees under labour or social security laws and regulations arising from the regular

employment relationship shall not be avoided through the use of labour-only contracting, sub-contracting, orhomeworking arrangements, or through apprenticeship schemes where there is no real intent to impart skills orprovide regular employment, nor shall any such obligations be avoided through the excessive use of fixed-term

contracts of employment.


Current status:1. Verified through the employees interviewed that every employee has the original contract letter and they have aclear understanding about the contract letter; confirmed trough the workers interviewed.2. After probation period, factory provides a letter of confirmation for workers those who completed the probationperiod.3. No workers layoff system, confirmed through the employee interviews.

Non-compliance:





Observation



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8A: Sub-Contracting and Homeworking:

8a.1 There should be no sub-contracting unless previously agreed with the main client.8a.2 Home-working should be properly managed.

Note to auditor on homeworking:Report on whether it is direct or via agents. How many workers, relationship with site and what control systems are

in place.


The factory does not practice sub-contracting and home working processes as confirmed through management

interviews.

Non-compliance:

Description of non-compliance: N/A



Objective evidenceobserved: N/A

Observation

Description of observation N/A

Objective evidence

observed: N/A


Description of Good Example ( GE) N/A Objective EvidenceObserved: N/A


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Summary of sub-contracting

1. Number of sub-contractors/agents used

NA

2. Is there a site policy on sub-contracting?

YesNo

If yes, summarise details: NA

3. What checks are in place toensure no child labour is beingused and work is safe?

N/A

4. What processes are sub-contracted?

N/A

Summary of homeworking

1. Number of homeworkers Male: N/A Female: N/A Total: N/A

2. Are homeworkers employeddirect or through agents?

YesNo N/A

3. If through agents, number ofagents

N/A

4. Is there a site policy onhomeworking?

YesNo N/A

5. How does site ensure workerhours and pay meet local laws forhomeworkers? N/A

6. What processes are carried outby homeworkers? N/A

7. Are written agreements in placefor homeworkers that includeregular employment?

YesNo N/A

8. Are full records available at thesite?

YesNo N/A


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9: No Harsh or Inhumane Treatment is Allowed

ETI9.1 Physical abuse or discipline, the threat of physical abuse, sexual or other harassment and verbal abuse or other

forms of intimidation shall be prohibited.


1. It was noted that the factory does not practice any form of psychological or verbal harassment or abuse.2. Verified that the facility disciplinary action and procedures comply with the local laws and regulations.3. Verified through the employees interviewed that the employees understood about the disciplinary action.4. Verified through the employees interviewed and document reviewed that no any complaints are made for the

last one year about the inappropriate disciplinary action.

Non-compliance:





Observation





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Other Issue areas: A: Entitlement to Work and Immigration

Additional Retailer Specific ElementsA1 Only workers with a legal right to work shall be employed or used by the supplier.

A2 All workers, including employment agency staff, must be validated by the supplier for their legal right to work byreviewing original documentation.

A3 Employment agencies must only supply workers registered with them.A4 The supplier shall implement processes to enable adequate control over agencies with regards to the above

points and related legislation.


1. No any migrant worker in the facility, confirmed through employee interviews and factory tour.

Non-compliance:

Description of non-compliance: N/A




Observation

Description of observation N/AObjective evidenceobserved: N/A

Good examples observed:


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Description of Good Example ( GE) N/A Objective EvidenceObserved: N/A

Other issue areas B : Environment

B.1 Suppliers shall seek to make continuous improvements in their environmental performance and, as a minimum,comply with the requirements of local and international laws and regulations.

B.2 The supplier shall be aware of and comply with their end clients environmental requirements.


1. Factory does not produce hazardous industrial waste.2. No official complaints or legal recommendations found for the past years.3. The factory has obtained Environment Protection License from the Central Environment Authority for the current

period.4. Waste water discharge from the canteen is collected to a pit.

Non-compliance:


Local law or ETI requirement: Nil

Recommended corrective action: Nil


Observation



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Good examples observed:



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Worker Interview Summary

Worker Interview Summary

Were workers aware of the audit? YesNo

Were workers aware of the code? YesNo

Number of group interviews 4 (Each group consists of 5 members)

Number of individual interviews Male: 2 Female: 4

Number of interviewed workers Male: 4 Female: 22

Interviews were done in privateand the confidentiality of theinterview process wascommunicated to the workers?

YesNo

In general, what was the attitude ofthe workers towards theirworkplace?

FavourableNon-favourableIndifferent

What was the most common

worker complaint?

There were no any negative complaints

What did the workers like the mostabout working at this site?

This factory is located in a rural area and employees are coming to workfrom their home. Factory is well established and salaries are complying withlocal law.

Any additional comment(s)regarding interviews:

No

Agency Workers(workers sourced from a local agent who are not directly paid by the site)

Number of agencies used(average): 01 Security

Were agency workersage/pay/hours included withinscope of this audit

YesNo

N/A


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Other findings

Other Findings Outside the Scope of the Audit

N/A

Community Benefits(Please list below any specific community benefits that the site management stated that they were involved in, for

example, HIV programme, education, sports facilities)


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Photo Form

Adding Images To help keep the size of the Report as small as possible for ease of sending andsaving the document we recommend that you use Microsoft Paint to resize your photos. To do so pleasefollow these instructions:1) To start Microsoft Paint, click 'Start', 'Programs', 'Accessories', then 'Paint'.2) Open the image file you wish to edit.3) Click the 'Image' Menu at the top and select "Stretch/Skew Image.4) Choose a percentage figure to resize the image: to avoid distortion, choose the same percentage for

horizontal and vertical stretch. Click OK.5) Once you have the desired size, click File > Save As(to prevent overwriting the original image).

Save As jpeg (this provides compression to make the file smaller).

Factory name board Factory View Ladder in Stores

Cutting section Using metal gloves End Cutter


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Sewing Floor Finger guard Eye Guard

Using Safety Belt Guard Ironing area

Packing Area Ironers using rubber carpet Finish goods stores


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Fire Assembly Point Exit Direction Fire Extinguisher

Emergency Light Evacuation Map Fire Alarm

Electrical Safety Notice Board Time Recorder


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Canteen Drinking water Medicine in First Aid Room

First Aid Box Medical Room Locker Facility

Female Toilet Washing facility Compressor


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END OF REPORT

Documents

Nordtex ETI 2011