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DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS

Valid for all brands in H&M Group

DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS


A Supplement to “Introduction to SIPP” to assist you in understanding in greater detail the minimum
requirements associated with the Sustainable Impact Partnership program (SIPP).

Area Requirement - MUST HAVE Explanations to WHAT & HOW

Business The Supplier and Production unit should be There is no indication that fake records or misleading information was provided
practices Transparent in their reporting during the facility visit. The facility has provided all information and all supportive
documents.
How: There is no fake or misleading document provided to H&M staff during facility
All Business visit
practice Data Source (Where?): Payroll, attendance records, workers lists, training records
requirements etc.
need to be
secured in the The Supplier/Production Unit should not use No undeclared unit has been used for H&M production
sourcing stage. Undeclared Unit How: Facility need to ensure necessary routines to secure no production is
subcontracted without informing H&M
Data Source (Where?): Relevant routines

No Supplier or Production Unit should work There is no sand blasting equipment in the facility
on Sandblasting How: No sand blasting equipment in the facility
Data Source (Where?): Facility workshop

The supplier/Production unit should not No child labor allowed. The facility shall have an application screening process with a
employ children (any person(s) under the documentation system that can capture applicants’ basic information and prevent
age of 14 years, or local minimum age, non-compliant recruitment practice (e.g. child labor, forced labor and inappropriate
whichever is higher ) use of student workers). The facility should have a procedure in place to monitor the
recruitment process of any third-party labor agencies/brokers used. No underage
workers should be allowed into the facility by the security guard at the gate.
How: No underage workers in the facility.
Data Source (Where?): Recruitment documents.

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DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
Valid for all brands in H&M Group

All Facilities/ Production Unit approved for Facility need to have legal licenses according to local requirements, including 1
H&M should have Legal Licences, as part of license to operate, business license, trade license etc. 2 license for building safety,
the legislation of each country building construction license, fire safety license, etc. this should also include
dormitory, 3 environmental license, countries with out legal licenses could use third
party certification for example building safety.
How: Facility need to secure they have all required licenses
Data Source (Where?): Licenses kept by management

Recruitment Facility/Production Unit should have a anti- Policy of Anti-harassment and Anti -discriminatory recruitment practices:
and Hiring harassment and anti-discriminatory Harassment definition: Any improper and unwelcome conduct that might reasonably
recruitment policy be expected or be perceived to cause offence or humiliation to another. Harassment
includes - but is not limited to - words, gestures or actions which tend to annoy,
alarm, abuse, demean, intimidate, belittle or cause personal humiliation or
embarrassment to another; or that cause an intimidating, hostile or offensive work
environment. It includes harassment based on any grounds such as race, religion,
color, creed, ethnic origin, physical attributes, gender or sexual orientation. It can
include a one-off incident or a series of incidents. Harassment may be deliberate,
unsolicited and coercive.
Discrimination definition: unfair treatment regarding salary, position, benefits etc.
based on gender, age, religion, nationality etc.
Policy is a written statement of will and commitment set by the Top
Management.The policy should be documented and approved by Top Management.
Policy should include management commitment to establish a system to avoid
harassment and discriminated during recruitment process. The policy should not
contradict legal requirements.
How: The facility should ensure the policy includes all the above mentioned
requirements.
Data Source (Where?): Relevant policy

All workers should have a copy of "All workers" (includes probation and contract workers) are provided with a legally
Employment Contract recognized, written contract that are signed by the workers.
How: Facility should ensure all workers have contract, including new workers,
workers on probation, and workers with contracts that have expired
Data Source (Where?): Signed contracts

Facility/Production unit should not Facility is not allowed to subcontract any part of production to prison labor even if it
subcontract to prison is not H&M production
How: Facility need to ensure necessary routines to secure no production is

Sustainability Department 2(11)


June 2015 Version 1.0
DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
Valid for all brands in H&M Group

subcontracted to prison labor.


Data Source (Where?): Subcontracted production records or actual subcontracted
production to prison

Facility/Production Unit should have a Policy regarding anti-forced labor - Policy is a written statement of will and
Forced Labour policy and facility/ Production commitment set by the Top Management. The policy should be documented and
unit does not engage in any form of forced approved by Top Management. Policy should include management commitment to
labour establish a system to avoid any kind of forced labor in the facility. The policy should
not contradict legal requirements.

1. Workers must be employed voluntarily and without threat of penalty of any kind.
Debt-bondage, indentured labor, trafficked labor and the use of prison labor are all
forms of forced labor.

2. "Forced labor" is bonded, indentured, trafficked or prison labor regardless of the


local law. All work or service that a person has not offered to do voluntarily and is
made to do under the threat of punishment or retaliation, or is demanded as a
means of repayment of debt are considered as forced labor. Some examples of
forced labor also include:
a) Sumangali scheme
b) Worker indebtedness due to excessive recruitment fees and other charges
c) Withholding wages until the end of the contract period
d) Withholding wages until return from a holiday
d) Not being paid on time
e) Forced savings
f) Inability to leave employment upon giving reasonable notice with no financial
penalty
g) Demand deposits for tools used during work

How: The facility should ensure the policy includes all the above mentioned
requirements.
Data Source (Where?): Relevant policy

Facility/Production Unit should have a Child Policy of anti-child labor recruitment practices - Policy is a written statement of will
Labor policy and commitment set by the Top Management the policy should be documented and
approved by Top Management. Policy should include management commitment to
establish a system to avoid child labor during recruitment process. Minimum age of
workers should be clearly mentioned in anti-child labor & recruitment policies. The

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DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
Valid for all brands in H&M Group

policy should not contradict legal requirements.


How: The facility should ensure the policy includes all the above mentioned
requirements.
Data Source (Where?): Relevant policy

Facility/Production Unit should not employ No child labor allowed. The facility shall have an application screening process with a
any person(s) under the age of 14 years, or documentation system that can capture applicants’ basic information and prevent
local minimum age, whichever is higher non-compliant recruitment practice (e.g. child labor, forced labor and inappropriate
use of student workers). The facility should have a procedure in place to monitor the
recruitment process of any third-party labor agencies/brokers used. No underage
workers should be allowed into the facility by the security guard at the gate.
How: No underage workers in the facility.
Data Source (Where?): Recruitment documents

Facility/Production Unit should not conduct If required by law, factory should have clear policy for this. Example for this is
medical testing in order to determine workers that handle chemicals or other hazardous materials. In some countries there
pregnancy when not legally required to do is a legal requirement to test and ensure that no woman is pregnant before working
so with these hazardous materials. This is acceptable as this is an issue of health and
safety and not discrimination due to pregnancy.
How: Facility need to secure that if pregnancy test is done they need to be supported
by legal documents and/or the test has the unique purpose to protect pregnant
women from hazardous process during pregnancy.
Data Source (Where?): Relevant policy

Compensation Facility/ Production Unit should ensure that Legal minimum wage refers to the minimum amount of wages per
at least the legal minimum wage for all hour/week/month/piece* the worker is legally entitled to receive as per applicable
regular hours worked, is paid to all workers laws excluding overtime hours compensation. In countries where wages are defined
by skill, legal minimum wage refers to the minimum wage for each particular skill
category. The Facility should have a system to calculate workers minimum wages.
How: Facility need to ensure at least minimum wage for all workers according to local
legal requirements.
Data Source (Where?): Payroll records and wage calculation records
* Piece rate is determined by the factory and piece rate hourly/daily(ordinary hours)
earnings should not be less than the legal hourly/daily wage for that skill category.

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DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
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Facility/ Production Unit should ensure that Overtime premium should be compensation according to the law. Compensation for
all workers, including foreign workers and overtime hours at the appropriate overtime rate as per applicable laws and
homeworkers, receive wage premiums for regulations. Include all workers, including dispatched workers, student workers,
overtime and work performed on weekends interns, part-time workers and workers who are hired for temporary purpose.
How: Facility need to secure that overtime is given for all overtime hours and
and holidays, as required by law
correctly calculated.
Data Source (Where?): Payroll records and wage calculation records

Worker Facility/ Production Unit should have a The right to organize is an inviolable right that Top Management should defend and
involvement & written policy on Freedom of Association(If support by conviction. That should be expressed in a policy that must be documented
in writing and approved by signature of the Top Management.
communication applicable) and violation to freedom of The policy shall include the employer’s commitment to support freedom of
association is not acceptable
association according to the ILO Convention C.087. The policy shall without any
distinction guarantee all employees the right to join and form a trade union of their
own choosing.
Both workers' and employers' organizations shall have the right to draw up their
constitutions and rules, to elect their representatives in full freedom, to fulfil their
daily work, to organize their administration and activities and to formulate their own
programs.
Workers representatives are not discriminated and must have the ability to carry out
all their representative functions inside and outside the workplace. If workers have
joined a trade union federation outside the workplace, representatives from the
federation should have reasonable access to the workplace.
Where the right to freedom of association is restricted under the law, the employer
should support and encourage the development of parallel means for independent
free association. Employers should never in any way hinder workers from free
association.
How: The facility should ensure the policy includes the above mentioned
requirements.
Data Source (Where?): Relevant policy

Facility/ Production Unit should have a Policy is a written statement of will and commitment set by the Top Management.
written grievance policy Grievance policy should include management commitment to establish a system to
get and evaluate all individual feedbacks, grievance, complaints and suggestions from
workers.
The policy should be documented and approved by Top Management.
Grievance definition: Workers’ dissatisfaction regarding any measures or situation
considered contrary to the provisions of laws and regulations, work rules, individual

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DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
Valid for all brands in H&M Group

employment contracts or Code of Conduct.


Complaint definition: Dissatisfaction regarding any measure or situation that the
worker believes or feels is unfair or unjust but may or may not entail any violation of
any provisions of laws and regulations, work rules, individual employment contracts
or Code of Conduct.
Suggestion: An idea, possible plan, or action that is mentioned for other people to
consider.

How: The facility should ensure the policy includes all the above mentioned
requirements.
Data Source (Where?): Relevant policy

Worker Facility/ Production Unit should have a Policy of Anti-harassment and Anti -abuse practices - Policy is a written statement of
treatment written anti-harassment and anti-abuse will and commitment set by the Top Management. The policy should be documented
and approved by Top Management. Policy should include management commitment
& development policies and procedures for the workplace. to establish a system to avoid harassment and abuse in the workplace. The policy
should not contradict legal requirements.
Harassment definition: Any improper and unwelcome conduct that might reasonably
be expected or be perceived to cause offence or humiliation to another. Harassment
includes - but is not limited to - words, gestures or actions which tend to annoy,
alarm, abuse, demean, intimidate, belittle or cause personal humiliation or
embarrassment to another; or that cause an intimidating, hostile or offensive work
environment. It includes harassment based on any grounds such as race, religion,
color, creed, ethnic origin, physical attributes, gender or sexual orientation. It can
include a one-off incident or a series of incidents. Harassment may be deliberate,
unsolicited and coercive.
Abuse definition: The improper use of a position of influence, power or authority by
an individual against another colleague or group of colleagues. It may also include
misuse of power that creates a hostile or offensive work environment, which includes
- but is not limited to - the use of intimidation, threats, blackmail or coercion.
How: The facility should ensure the policy includes all the above mentioned
requirements and define what procedures should be developed to follow that policy
is communicated to all parts of the organization. And identify routines to detect the
harassment and discrimination in place. Some examples of setting routines will be to
conduct unannounced factory tour, conduct internal worker and supervisor
interviews to get feedback and conduct workers survey etc.
Data Source (Where?): Relevant policy

Sustainability Department 6(11)


June 2015 Version 1.0
DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
Valid for all brands in H&M Group

Emergency Facility/Production Unit should have a Fire Functional fire alarm with audible and visual warnings should be available in each
Planning & Fire alarm (audible and visual) that is maintained place/floor. Fire alarm should be checked regularly.
and fully functioning ( including dormitory) How: The facility should ensure necessary routine to secure that fire alarms in
Safety installed, functional and regularly checked.
Data Source (Where?): Fire alarms in workshop and dormitory

Facility/Production Unit should have at least Each floor should be provided with at least two unlocked, unblocked exits.(including
2 unlocked exits on every floor ( including dormitory, lunch hall etc.)
dormitory) How: The facility should ensure necessary routines to secure the there is at least two
fire exists per floor and these are unblocked.
Data Source (Where?): Two unlocked emergency exits in workshop, dormitory, lunch
place etc.

Facility/Production Unit should have aisles The emergency exit should be clear of obstructions, fabrics, machines, etc.
that are clearly marked with emergency exit How: The facility should ensure necessary routines to secure the there the
routes and maintained clear of obstructions emergency exits are clear of obstruction
( including dormitory) Data Source (Where?): Clear emergency exits in the workshop, dormitory, lunch hall
etc.

Facility/Production Unit should have fire Number of fire extinguisher should be sufficient according to legal requirements.
extinguishers that are of the type and Type of fire extinguisher should be proper according to process and type of working
quantity suitable for the fire hazards that area (A,B,C class etc..)
exist (documented by extinguisher servicing How: The facility should ensure necessary routines to secure correct number and
correct type of fire extinguisher are in use
company or local officials) ( including
Data Source (Where?): Correct number and correct type of fire extinguisher
dormitory) workshop, dormitory, lunch hall etc.

Chemical Facility/Production Unit should have a Updated Chemical Inventory List (CIL) should be maintained by responsible person
Hazards maintained/updated chemical inventory list. whenever chemicals are purchased or used. Revision date should be clearly marked
Chemical Inventory list is a list of all in the inventory.
chemical substances kept or used in the Chemical commerical name definition: Product name of chemicals, it can be a trade
name or chemical susbtances name
facility. The content of chemical inventory
Indentification number definition: internatially recoginzied number to identify
should include the chemical commercial chemicals, such as CAS no (Chemical Abstract Service) or EINECS (European inventory
name, identification numbers (CAS no.) , of Existing Commercial Chemical Substances) numbers
hazard information, amount of storage or Hazard Information definition: hazard data of chemicals, includes Physical, Health &
amount of consumption and storage Environmental concern.
location. A "best" chemical inventory can also include the use of chemical substance, quality

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DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
Valid for all brands in H&M Group

check of chemicals and SDS availablility, etc. For details, please refer to Best Chemical
Management Practice (BCMP) manual.
How: The facility should ensure that the chemical list include all the information
mentioned above
Data Source (Where?): Chemical inventory list

Facility/Production Unit should have Purchasing policy should be established in factory to ensure legal, safety and
documented chemical purchasing regulatory requirements to prevent the purchase of hazardous chemicals, and to
procedures to prevent the purchase of ensure purchase of appropriate amount of chemicals.
Restricted/Banned substances How: The facility should ensure the written policy includes all the above mentioned
requirements.
Data Source (Where?): Relevant Policy

Chemical Facility/Production Unit should not use Refer to H&M Chemical restrictions. Substances are not allowed to be found in H&M
Management H&M banned organic solvents in any production sites and used fin H&M production.
production processes. How: The facility should ensure no restricted chemicals are used in production
Data Source (Where?): Relevant routines & practice

Energy use & Facility/Production Unit should track and Purchased electricity definition: Electricity drawn from the national/regional
GHG emissions measure purchased electricity and electricity grid, i.e. not electricity generated on site. Main unit level is facility level,
purchased natural gas with METERs on a this is only applicable for energy based electricity.
unit level (for grid based electricity) Purchased natural gas definition: Natural gas drawn from the national/regional gas
pipeline i.e. not methane generated on site. Main unit level is facility level.
Measuring with meters definition: Capture and track energy consumption via data
metering system, i.e. utility bills, monthly meter readings, monthly reading checked
output to produce a specific normalized energy consumption figure, monthly
monitoring system based on sub-meters, automated real-time monitoring and
management, etc.
Main unit level definition: The main production area on site, where majority of the
production activities are taken place at and the main source of energy consumption
is from.
How: Check whether your facility keeps record of historical consumption of
purchased electricity and/or natural gas historical data. If your facility has more than
one meter for electricity and gas, identify what level (main unit, workshop, process)
those meters are connected to.
Data Source (Where?):Factory electrical drawing plan, meter locations, advice from
facility maintenance team, etc.
Additional definitions.

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DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
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Workshop: A defined part of a facility - it can be a whole building or part of a building


- where a defined number of machines and processes are in operation.
Process: A defined activity within a workshop it can be carried out by a single
machine or a combination of machines.

Water Use Facility/Production Unit should have water Water meters definition: Metering devices or systems that record the volume of
METERs tracking and measuring water usage water consumed over time for the entire facility and different levels of process if any
installed at all water inlets (only industrial sub-meters. Some common types of water meters are ultrasonic meters,
water use) electromagnetic flow meter, compound meters, etc.
Industrial water inlets definition: Industrial wastewater generated from industrial
Minimum requirement for all Industrial
operations includes process wastewater, wastewater from utility operations, runoff
water /wet process only from process and materials staging areas, and miscellaneous activities including
wastewater from laboratories, equipment maintenance shops, etc., which is
measured from the source of supply (e.g. inflow of water from municipal water
supply pipeline).
Processing inlets / purposes definition: Water consumed for industrial purposes, such
as laundry, finishing or feed-in water for boiler, and is measured from the source of
supply (e.g. inflow of water from municipal water supply pipeline).
How: Check whether your facility has functioning meters installed at each inlets to
track and measure water usage.
Data Source (Where?): Factory plumbing system drawing plan, meter locations,
advice from facility maintenance team, etc.
Additional definitions.
Domestic water inlets / purpose: Water consumed for non-industrial purposes within
the facility, such as drinking water, flush water, which is measured from the source of
supply (e.g. inflow of water from municipal water supply pipeline)

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DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
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Facility/Production Unit should have water Water meters definition: Metering devices or systems that record the volume of
METERs installed at all industrial effluent water consumed over time for the entire facility and different levels of process if any
discharge points (applicable for all units with sub-meters. Some common types of water meters are ultrasonic meters,
internal/onsite ETP) electromagnetic flow meter, compound meters, etc.
Wastewater / effluent discharge points definition: Water effluents discharged to
discharge Points- means where the water to
subsurface waters, surface waters, or sewers that lead to rivers, oceans, lakes,
external water body or municipal or external wetlands, treatment facilities, and groundwater either through:
wastewater piping network. 1) a defined discharge point (point-source discharge);
2) over land in a dispersed or undefined manner (non-point-source discharge);
or, 3) wastewater removed from the organization via truck. Discharge of collected
rainwater and domestic sewage is not regarded as water discharge.
How: Check whether your facility has functioning meters installed at each discharge
points to measure waste water discharge.
Data Source (Where?): Factory plumbing system drawing plan, meter locations,
advice from facility maintenance team, etc.

Facility/Production Unit wastewater quality BSR wastewater standard definition: Business for Social Responsibility (BSR) sets
meets BSR /legal water quality standards, some wastewater quality parameters for textile mills and laundries: temperature ≤
whichever is stricter. 37C⁰; pH 6.0 - 9.0; TSS ≤ 30ppm; BOD ≤ 30ppm; COD ≤ 200ppm. BSR guidelines also
Water quality parameters will be followed recommend facilities to maintain the following equipment onsite: pH meter, imhoff
cone, thermometer, flow meter with wastewater treatment activities managed by
on BOD, COD and TSS
certified engineer.
Incoming pollution load: The total volume of pollutant streaming into water
discharge.
How: Check if the wastewater quality parameters at your ETP complies with BSR
wastewater standard or legal requirement on BOD, COD, and TSS. Please refer to the
Tool Kit "H&M water requirements" for details. These parameters could be
measured using various tools (e.g. pH meter, thermometer) or tested by third party
laboratory. For 4.1.1.8, describe calculation steps, sampling method and references
for flow rate and incoming pollution load calculation. If your parameters is measured
by third party laboratory, consult them for procedures taken for testing at your
facility.
Data Source (Where?): Wastewater quality testing reports and records conducted
internally or by third party (e.g. laboratory), ETP operation log, etc.

Sustainability Department 10(11)


June 2015 Version 1.0
DETAILED EXPLANATION OF SIPP MINIMUM REQUIREMENTS
Valid for all brands in H&M Group

Waste water/ Facility/Production Unit's all wastewater Wastewater must be treated before discharged to a natural receiving water body. It
Effluent that is produced is being treated with can be treated either by an internal or an external ETP (effluent treatment plant)
primary or secondary treatment or both Primary: Removal of suspended solids & portion of organic matter from the
whatever is needed wastewater typically accomplished by chemical addition.
Secondary: Removal of biodegradable organic matter and suspended solids.

If the wastewater treatment is occurring off- Off-site treatment definition: The treatment here refers to processes outside of
site, facility/ production unit should have an facility's premises through which the quality of the wastewater discharged from the
evidence of the treatment service site conveyed using a sewerage system must meet applicable regulatory
agreement requirements or WQGs and be at a level that does not adversely affect the
environment or the receiving infrastructure (drains, treatment plant, vehicle, etc.) as
dictated by regulations or receiving facility limits. Off-site treatment often offers
process at larger scale such as activated sludge, trickling filtration, lagoons, etc.
managed by third party or municipality via wastewater treatment service agreement.
Wastewater treatment service agreement definition: A official contractual document
with an approved treatment facility indicating details of agreed wastewater
treatment, such as outlining current and expected treatment capacity to confirm the
treatment availability for facility discharge, commitment to receive, treat and
discharge wastewater from facility in compliance with legal requirement,
transmission details, etc. Example documents could be utility contract with
treatment facility, discharge report, legal permit binding with specific treatment
facility, etc.
How: Locate wastewater treatment service agreement between your facility and the
off-site treatment facility, which must confirm the off-site treatment facility has
sufficient capacity and capability to process effluent from your facility and may also
include other information, e.g. the agreed volume of effluent discharge from your
facility, the treatment capacity of the off-site treatment facility (e.g. design flow rate
and processing volume, type of treatment, etc.
Data Source (Where?): A contract or invoice for services rendered by the off-site
wastewater treatment facility, or legal permit of wastewater discharge to that
specific off-site treatment facility (e.g. municipal wastewater treatment plant or
sewage system).

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