Jan A. Eggert Foreign Trade Association ILO Geneva, 9 June 2004

1. Jan A. Eggert Foreign Trade Association ILO Geneva, 9 June 2004 Foreign Trade Association

2. Why a European Initiative? • Companies for Corporate Social Responsibility • Variety of company codes, monitoring activities and national sector initiatives for CSR • Companies respond to stakeholders interest in CSR • National legislation (e.g. social label in Belgium) • Communication of the European Commission + European Multi-Stakeholder Forum Foreign Trade Association

3. The Goal A European platform for monitoring social standards • in all supplier countries • for all consumer goods No issue of competition between countries, suppliers, retailers Foreign Trade Association

4. BSCI Organisation • Founded in March 2003 by the Foreign Trade Association • Non-profit, based in Brussels • Sector solution: open for retail, industry, importers - EU and Non-EU • Membership: regular – associated • Members have to commit themselves Foreign Trade Association

5. Objectives of the BSCI • Improve social standards in supplier countries • Interlocutor vis-a-vis employees representations, NGOs, civil society • Provide a predictable monitoring system • Realise economic advantages for suppliers + retailers • Forum for the exchange of knowledge and views • Cooperation with any other equivalent system Foreign Trade Association

6. BSCI Structure Representative Committee Advisory Council Foreign Trade Association

7. Cornerstones of BSCI • Voluntary joint initiative   • Internationally applicable social standard suitable for practical use • Flexible vis-à-vis companies’ strategies + philosophies • Dialogue with stakeholders (e.g. trade unions and NGOs) • Transparency and independence through outside audit companies (to be accredited by SAI) • Synergy and acceleration effects for all actors involved • Development of social performance of suppliers Foreign Trade Association

8. Criteria to be examined Based on ILO Conventions for core labour standards: • Prohibition of abusive forms of child labour • Prohibition of forced and bonded labour • Hours of work • Wages (so far only statutory minimum wage) • Prohibition of discrimination (race, sex etc.) • Safety and health of the employees • Rights to freedom of association and collective bargaining Foreign Trade Association

9. Overview of the steps of the BSCI 1. Standarda) “Social and ecological minimum requirements” b) “Best practices” 2. Audit BSCI 5. Certification (voluntary) 3. Qualificationmeasures 4. Re-Audit Foreign Trade Association

10. Process of BSCI Social Audits • BSCI Members Suppliers • Audit Companies Awareness raising phase (optional) Self-Ass./ Audit Corrective Action Plan BSCI Social Requirements Best Practice (mandatory) (voluntary) Qualification measures (Controlling/coaching/training) Correction Phase Re-Audit BSCI Social Requirements Best Practice (mandatory) (optional) Notsuccessful Notsuccessful Successful Decision of supplierfor certification or not Successful Repetition after3 years Definitely not successful Decision by participating BSCI member company Foreign Trade Association

11. The Social Audit Questionnaire – the “heart” of the audit • Records the requirements for the supplier companies to be audited • Creates transparency and thus credibility in dialogue with interest groups • Has a modular structure • Offers orientation aid for all players • Is the basis of uniform assessment of social performance • Is also the basis of the self-assessments of suppliers Foreign Trade Association

12. Part A: Master dataRecording of supplier master data Part B:BSCI Social RequirementsAssessment and Corrective Action Plan – mandatory Part C:“Best practices”Assessment - mandatory Corrective Action Plan Preparation – mandatory Implementation - optional Modular structure of the questionnaire Foreign Trade Association

13. 2 “Good“ No deviation from requirements or minor deviations: Requirements are met in all points. 1 “Improvements Needed“ Deviations in the minority of requirements and no crucial criteria. The requirements are not fulfilled in the majority of criteria, and/or not fulfilled in crucial points 0 „Critical“ Assessment of individual question complexes Foreign Trade Association

14. Criteria for Audit Companies • Accreditation by Social Accountability International • Sufficient experience in social auditing • Infrastructure in several supplier countries • High level quality of auditors • Willingness to apply the BSCI System (Contract) • Reasonable prices – but no fixed prices • Willingness to cooperate with local NGOs and Trade Unions Foreign Trade Association

15. BSCI Database • Minimum data to be filled in: name, address • Update by retailer or audit companies • Audit data limited: only status of audit process (audit ordered – conducted – in qualification process – no improvements needed, valid certification etc.) • Selected access prevents disclosure of confidential data • Access only via IDs and passwords • Internal web server • Retailers can only search for specific suppliers Foreign Trade Association

16. For a sustainable improvement process • Monitoring – coaching - qualification in the supplier markets • Training – coaching - consulting within the retail companies • Involve local business associations + other local stakeholders • Support for development of local structures • Encourage government action, bilateral development aid and international organisations Foreign Trade Association

17. Major supplier countries to be included • China (incl. offshore production from Korea and Taiwan) • Vietnam • Indonesia • Philippines • Malaysia • Cambodia • Thailand • Laos • Turkey • Romania • Bulgaria • Morocco • Tunisia • Israel • India • Bangladesh • Nepal • Pakistan • Sri Lanka Foreign Trade Association

18. Companies and Associations involved Foreign Trade Association

19. Thank you very much! Foreign Trade Association