Summary of Social Accountability 8000 (SA-8000)

4 September 2002

Note: This report is for general guidance purposes only. It should not be relied on as a
substitute for professional advice. Mekong Capital accepts no responsibility for the
accuracy of the information contained herein.

1. Definition of SA-8000
“SA-8000 is a standard that defines a set of auditable criteria and an independent auditing process
for the protection of workers’ rights and of ethical production of all goods, made in companies of any
size, anywhere in the world”.1

SA-8000 was developed and issued by Social Accountability International (SAI), established by the
Council on Economic Priorities Accreditation Agency (CEPAA), an American public interest group,
who’s mission is to provide accurate and impartial analysis to evaluate corporate social performance
and to promote excellence in corporate citizenship.

There are about 124 facilities which have been granted SA-8000 at the moment. All granted
facilities are listed on SAI’s website2. This means that if any company granted SA-8000, they will be
listed on SAI’s website.

2. Scope of Application
Companies may want to get SA-8000 due to preferences by customers who prefer to work with
suppliers with SA-8000 certification or high labor practice standards in general. One of the
requirements of SA-8000 is companies have to ensure that their suppliers/subcontractors meet the
requirements of SA-8000. This does not necessarily mean that their suppliers/subcontractors must
have SA-8000 certification.

Normally, SA-8000 is applied to manufacturing companies with intensive labor such as garment,
textile, furniture or toy production companies. In Viet Nam, companies/contractors that produce
goods for U.S and European companies often have to get SA-8000 certification or commit to meet
SA-8000’s requirements. SA-8000 also applies to the agriculture sector but not the oil and mining
sector.

Companies have the choice to get all of their factories certified or only some factories.

3. Benefits of Having SA-8000

It is expected that a company who has SA-8000 certification will benefit in the long run through:
a. a more highly motivated workforce resulting from better labor conditions;
b. ability to attract more customers due to the preference of some customers to work with
companies with high labor standards in general or SA-8000 in particular. For example AEDT,
representing 500,000 European clothing retailers, is adopting SA-8000 as its recommended
standard for suppliers; and
c. more loyalty and commitment from the workers themselves which will result in lower employee
turnover and the associated costs (recruiting, training, lower productivity for newer employees,
etc.).

4. Benefits of SA-8000 Signatory Membership

1
Extracted from “SA-8000” page 1 on http://www.dnv.com/certification/Services/Info_pages/info_sa.htm
2
http://www.cepaa.org./certification.htm

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4.1 SA-8000 Signatory Membership
An organization that does not have production facilities, focuses on selling goods or combines
production and selling can become an SA-8000 Signatory Member, which requires that it issue a
plan for moving its own and supplier facilities to SA-8000 certification over time and report publicly
on progress against this plan.

4.2 Benefits of being a SA -8000 signatory member

Signatory benefits include the right to use the SA-8000 Signatory logo, technical assistance in
implementing SA-8000 from SAI staff and other SA-8000 signatories.

European Association of National Organizations of Textile Retailers3 (“AEDT”), an association

representing more than 500,000 European textile retailers, is expected to recommend SA-8000 to
its members as their guiding standard for suppliers and their own social accountability.

5. Costs Involved in Obtaining SA-8000

There are four types of costs associated with SA-8000. These costs include:
• Pre-Audit Corrective Actions - Costs associated with corrective and preventive actions in
order to qualify for compliance. These might include costs incurred to improve working
conditions, health and safety systems, costs of increasing quality of meals for workers,
upgrading sanitary support facilities, etc.
• Audit Preparation - Cost of preparing for the audit. These would include the consulting fees
which are presented in section 7.3.1.
• Independent Audit - Cost of getting an independent audit. This is presented later in section
7.5.6 of this report.
• Post-Audit Corrective Actions - Subsequent to the independent audit, if any non-conforming
issues are found, the company has to incur cost of taking corrective actions in order to resolve
problems identified by the auditors. This might include the cost of maintaining health and safety
systems, provision of training programs for health and safety, cost of maintaining clean eating
facilities, cost of electricity to maintain comfortable temperature and lighting to prevent injury,
etc.

6. Requirements of SA-8000
The complete SA-8000 Guidance Document is available on http://www.sa intl.org/orderform.asp at
a cost of US$100.

6.1 Child Labor and Young Workers

a. The company should not engage in or support the use of child labor. A Child is defined as: “Any
person less than 15 years of age, unless local minimum age law stipulates a higher age for work
or mandatory schooling, in which case the higher age would apply. If, however, local minimum
age law is set at 14 years of age in accordance with developing-country exceptions under ILO
Convention 138, the lower age will apply”4;
b. In case child laborers are found, the company shall support the child laborer to enable them to
attend and remain in school until they are no longer a child;
c. The company shall not employ “young Worker”5 during school hours and work time may not
exceed 10 hours a day. A “Young Worker” is defined as: “Any worker over the age of a child as
defined above and under the age of 18”.6; and
d. The company shall not expose children or young workers to situations in or outside of the
workplace that are hazardous, unsafe, or unhealthy.

3
http://www.aedt.org/
4
page 4, SA-8000 on http://www.dnv.com/certification/Services/Info_pages/info_sa.htm
5
As defined SA-8000 on http://www.dnv.com/certification/Services/Info_pages/info_sa.htm
6
page 5, SA-8000 on http://www.dnv.com/certification/Services/Info_pages/info_sa.htm

Summary of Social Accountability 8000 (SA-8000) -2-

6.2 Forced Labor
a. The company shall not engage in or support the use of forced labor. Also, company shall not
require any form of deposits, either of identify papers or money.
b. Forced labor are all work or services that is extracted by any person under the menace of any
penalty for which said person has not offered him/herself voluntarily.

6.3 Health and Safety

The Company shall:
a. ensure a healthy and safe working environment and shall take adequate steps to prevent
accidents and injury arising or occurring in the course of work;
b. appoint a senior representative who is responsible for the health and safety of all personnel;
c. provide regular health and safety training to all personnel; the term “regular” is defined as at
least once per year.
d. establish systems to detect, avoid and respond to potential threats to the health and safety of
all personnel;
e. provide clean and sanitary support facilities.

6.4 Freedom of Association and Right to Collective Bargaining

a. The company shall respect the right of all personnel to form and join trade unions of their choice
and to bargain collectively;
b. In those situations which are restricted under law, the company shall facilitate parallel means of
independent and free association for all such personnel;
c. The company shall ensure that representatives of such personnel are not subject to
discrimination and have access to their members in the workplace.

6.5 Discrimination
Discrimination is not permitted on basis of race, caste, national origin, religion, disability, gender,
sexual orientation, union membership or political affiliation.

6.6 Disciplinary Practices

The company shall not engage in or support the use of physical punishment, mental or physical
coercion and verbal abuse:
a. physical beatings/punishment;
b. arbitrary pay deductions, e.g. for sickness or failure to work exercise hours;
c. threats of dismissal or personal harm.

6.7 Working Hours

a. Working hours must be in accordance with applicable local law;
b. Working hours should not exceed 60 hours per week. Personnel shall not on a regular basis, be
required to work in excess of 48 hours per week. Overtime work should not exceed 12 hours per
employee per week and should occur only in exceptional and short-term circumstances.
Overtime work should be paid at a premium rate;
c. Overtime work should be voluntary;
d. There should be at least one day–off per week for all staff.

6.8 Compensation
a. The company shall ensure that the wages paid meet at least legal or industry minimum
standards and shall meet basic needs of staff plus discretionary income.
b. Deductions from wages may not be made for disciplinary purposes.
c. Wages and benefits should be rendered in full compliance with all applicable laws and in a
manner convenient to workers.
d. The company shall not exploit the labour by using contracting arrangements and false
apprenticeship schemes to avoid fulfilling its obligations to personnel.

Summary of Social Accountability 8000 (SA-8000) -3-

6.9 Management Systems
6.9.1 Company’s Internal Polices
The company shall define the company’s policy for social accountability and labour conditions to
ensure that it:
a. complies with SA-8000, national and other applicable law, international requirements;
b. includes a commitment to continual improvement;
c. is effectively documented, implemented, maintained, communicated and is accessible in a
Comprehensible form to all personnel, including, directors, executives, management,
supervisors, and staff, whether directly employed, contracted or otherwise representing the
company;
d. is publicly available.

6.9.2 Company Representatives

a. The company should appoint a senior management representative whose responsibility is to
ensure the requirements of SA-8000 are met.
b. The company shall provide for non-management personnel to choose a representative from their
own group to facilitate communication with senior management on matters related to this
standard.

6.9.3 Management Review

Top management shall periodically review how the real practice meets the requirements of SA-8000
other requirements to which the company subscribes. System amendments and improvements shall
be implemented where appropriate.

6.9.4 Planning and Implementation

The company shall ensure that the requirements of SA-8000 are understood and implemented at all
levels of the organization.

6.9.5 Control of Suppliers and Subcontractors

a. The company shall establish and maintain appropriate procedures to evaluate and select
suppliers/subcontractors who maintain appropriate records and provide reasonable evidence of
meeting the requirements of SA-8000.
b. The company shall maintain appropriate records of suppliers’ commitment to social
accountability.
c. The company shall maintain reasonable evidence that the requirements of this standard are
being met by suppliers and subcontractors.

6.9.6 Addressing Concerns and Taking Corrective Action

a. The company shall investigate, address, and respond to the concerns of employees and other
interested parties with regard to conformance/non-conformance with the company’s policy
and/or the requirements of this standard; the company shall refrain from disciplining, dismissing
or otherwise discriminating against any employee for providing information concerning
observance of the standard.
b. The company shall take remedial and necessary action to correct any noncompliance with the
requirements of SA-8000.

6.9.7 Outside communication

The company shall establish and maintain procedures to communicate regularly to all interested
parties data and other information regarding compliance with the requirements of this document
including the results of management reviews and monitoring activities.

6.9.8 Access for Verification

The company shall provide reasonable information and access to interested parties who seek to
verify conformance to the requirements of this standard.

6.9.9 Records
The Company shall maintain records to demonstrate compliance to the requirements of SA-8000

Summary of Social Accountability 8000 (SA-8000) -4-

7. Steps to Achieving SA-8000 Certification
7.1 Summary of steps to obtain SA-8000

Document Review
and Application

Internal Assessment Pre-Audit assessment

Certification Audit Periodic Audit

Certification Extension

7.2 How to obtain “Applicant” status

7.2.1 Document Review
Review the SA-8000 standards and Guidance Documents. This can be obtained from
http://www.cepaa.org.

7.2.2 Attend training courses of SA-8000

For training on SA-8000, the company can take an accredited SA-8000 four day Auditor Training
Course7 or an SA-8000 two-day Supplier Training Course8. The four day Auditor Training Course
may be helpful for the company in doing its internal assessment. This is normally provided by local
accredited SA-8000 certification bodies.

7.2.3 Contacting SA-8000 Certification Auditors

The company must contact an accredited SA-8000 Certification Auditor to get an application and
initiate the process9. The company can contact one of the following accredited SA-8000 auditors in
Vietnam: TUV, DNV, BVQI, ITS and SGS.

7.2.4 Submitting Application

SA-8000 Applicant status may be obtained by submitting an application to a Certification Auditor
showing that the company will make the commitment to apply for a certification audit within one
year.

7.3 Internal Assessment of SA-8000

After reviewing the SA-8000 guidelines and obtaining an SA-8000 applicant status, internal
assessment can be made by the company themselves or with help from an independent SA-8000
consulting company.

7.3.1 Consultant fee estimation

The consultant fee is normally calculated based on number of working days of the consultant’s
auditors and the fee per day is around $300 per day. The assessment period with the consulting
company ranges from 3-8 months. During this period, the consulting company only visits the
company from time to time. Below is an indicative quotation:

Table 1: Indicative Consulting fees for SA-8000

No Company Number of Scope of Business Cost/USD Cost/USD
employees (For SA 8000 (For SA 8000 and
only) ISO9001:2000)
1 A 500 Manufacture and $3,900 $5,200

7
information on this course can be obtain from http://www.cepaa.org./events/auditor_course.htm
8
http://www.cepaa.org./events/supplier_courses.htm
9
A list of accredited auditing firms is available at this site: http://www.cepaa.org./certification_to_SA-8000.htm

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 supply of shoes
2 B 200 Manufacture and $3,100 $4,400
supply of wooden
products
3 C 100 Manufacture and $2,900 $4,200
supply of garment

7.3.2 Consultant fee for double certification

For those companies that want to concurrently obtain certifications for both SA-8000 and ISO
9001:2000, if they use one consulting company the consulting fee may be significantly cheaper than
receiving consulting services for each certification individually. For those companies that already
have ISO certification, they may obtain a cheaper consulting price for SA-8000 since less work is
required.

7.4 Pre-Audit Assessment

Once an internal assessment of compliance to SA-8000 has been made and the company has
addressed the issues identified, the company should arrange for an assessment audit by one of the
accredited auditing firms (initial visit).

7.5 Certification Audit

7.5.1 Contact Certification Auditor
After all changes identified by the pre-audit have been made, the company contacts its Certification
Auditor to make arrangements for a full certification audit.

7.5.2 Assignment of local audit team to the company

A specially-trained local audit team will be assigned to the company.

7.5.3 Assessment
The Certification auditor will ask the company to provide them with full access to their records as
well the freedom to interview the company’s employees. Possible corrective actions must be
implemented by the company.

7.5.4 Issuance of SA-8000 certificate

When the auditors ascertain that the company’s facility fully complies with SA-8000, it will be issued
an SA-8000 Certificate.

7.5.5 Time required for Certification Audit period

The certification audit period normally takes up to a week

7.5.6 Cost of obtaining an SA-8000 Certification Audit

Normally, the cost to obtain an SA-8000 audit depends on the number of employees, locations, the
company’s activities and other factors. The accredited auditor will estimate how many days will it
take them to examine the company and typically estimate a fee based on the total number of days
work involved. The fee per day ranges from $350-$600. The cheaper price is due to some auditing
companies employing local collaborators. Collaborators are normally heads of technical departments
of companies that have received trainee auditor certification for SA-8000. Auditor certifications are
provided by SAI (old name is CEPAA). They work on a part-time basis and typically get paid around
$50-$70 per day. Because collaborators do not work as full time SA-8000 auditors they are
sometimes considered less effective than the more expensive full-time auditors. The total costs
involved typically range from $3,000 to $6,000.

However, those cost that presented above is only cost paid to auditors. In addition, company has to
incur the expenses occurring from changes implemented to meet the requirements of the SA-8000.
This amount of cost could be high or low depending on the present situation of the company. If the
company already has a good social accountability system, they will not have to invest much more to
improve their system.

7.5.7 Registration Fees

Registration Fees: after finishing internal assessment and certification audit, all the documents
related are sent to their certification body with an average administrative cost of $500 to $650.

Summary of Social Accountability 8000 (SA-8000) -6-

7.5.8 Sample quotation for an SA-8000 Audit
Below is a sample quotation for the certification audit for the 3 companies, A, B and C, which were
defined in the table 1 of section 3.3.1.

Table 2: Certification fee structure

Company A B C
No Items Cost/USD Cost/USD Cost/USD
1 Certification Audit Service including: $2,650 $1,690 $1,520
• Document Review
• Initial visit
• Initial Audit
• Reporting
2 Certification registration fee $650 $650 $650
Total fee for Certification Audit $3,300 $2,340 $2,170
3 Surveillance Audit (every 6 months)
Five surveillance audits over three years $2,480 $1,980 $1,650
4 Total fee for Certification Services and $5,780 $4,320 $3,820
Annual Surveillances for 3 years: This cost
includes Auditor’s expenses such as
transportation, Hotel, and subsistence but
excluded any tax.

7.6 Maintaining Certification Status

7.6.1 General compliance
If the company is discovered by its SA-8000 auditor to violate any of the requirements of SA-8000,
either prior to certification or after it has been certified, it is required to correct such mistakes within
a specific period of time to gain or retain its certificate.

7.6.2 Validation of Certification

The company’s original certificate is valid for 3 years.

7.6.3 Semi-annual audit

There must be a semi-annual audit to ensure ongoing compliance. Similar to the other costs
associated with SA-8000, fees are usually calculated based on the number of days required by the
auditor. Semi-annual audit normally takes 1/3 amount of initial assessment time. The costs involved
take from about 20% to around 30% of initial assessment cost. Normally, the company’s auditor will
randomly select some departments of the company to audit whereas in the renewal audit period,
the auditor has to audit all the company’s departments.

7.6.4 Renewal Audit

There must be a renewal audit every 3 years. This is more comprehensive than a semi-annual audit.
The renewal period usually takes 2/3 of the initial assessment time required for the original audit
but depends on the situation of the company at that time. Similar to the other costs associated with
SA-8000, fees are usually calculated based on the number of days required by the auditor.

For more information please contact:

Mekong Capital Ltd

Capital Place, 8th Floor
6 Thai Van Lung St., District 1
HCMC, Viet Nam
Tel. (84 8) 827 3161
Fax: (84 8) 827 3161
e-mail: info@mekongcapital.com
web: www.mekongcapital.com

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