Tcs ICS Social complete Auditor Guideline 2020 Rev. 27ICS - Auditor Guideline Rev 27 - 2020 ICS OVERVIEW Introduction ICS was created in 1998 under the umbrella of the French Federation of Commerce and Distribution (FCD). ICS members closely collaborate to sustainably improve conditions for people at work. The ICS social audit was created as a common approach for members in assessing the social responsibility of manufacturers. The ICS joint approach is guided by the framework defined by the International Labor Organization (ILO) conventions, the universal Human rights principles and local social regulations. ICS members verify the working conditions in their supplying factories by mandating ICS-accredited audit companies to conduct ICS audits. ICS audits cannot be requested by the factory itself but are only mandated by retailers and brands members of ICS who manage the audit process. ICS Approach As outlined in the ICS Code of conduct, the objective is to promote and support continuous improvement of the performance of the facilities supplying the ICS members. The ICS Code of Conduct defines the core requirements, of the ICS members whereas their individual Codes of Conduct, which they are free to maintain, can stipulate additional or enhanced clauses. ICS provides factories and suppliers with supporting documents such as the ‘Handbook for factories’ presenting the ICS methodology, requirements and recommendations on how to achieve these objectives. ‘The results of all audits initiated by the ICS members are recorded in the ICS database and exchanged among the ICS members linked to the same factory, in order to avoid ‘audit fatigue’. The ICS database is not a sourcing platform, therefore e.g. only ICS members working with factory A can access audits conducted by other ICS members in factory A. Member Commitments ‘As specified in the Deontological Code, the ICS members promote the ICS scheme wherever it applies and follow the established rules. Basic information is shared in order to jointly monitor the audit conclusions and to initiate the continuous improvement of working conditions, Enquiries and Recommendations relating to the ICS’s scheme Requests on interpretations, clarifications and recommendations should be addressed to the ICS team for ultimate share with the ICS members. ICS Contact: ICS Office-14, rue Bassano Paris FRANCE. Initiative for Compliance and Sustainability / Fédération des Entreprises du Commerce et de la Distribution contact@ics-asso.org 0.011 Page 2 of 123ICS - Auditor Guideline Rev 27 - 2020 TABLE OF CONTENTS SOCIAL COMPLETE QUESTIONNAIRE. INTRODUCTION HOW TO USE THIS DOCUMENT... GENERAL DIRECTIONS. AUDIT PLANIFICATION AUDIT SCOPE.... AUDIT PROCESS. AUDIT DURATION...... WORKER INTERVIEW SAMPLING SIZE DOCUMENTATION SAMPLING REQUIREMENTS: AUDIT RATING SYSTEM ANSWERING METHODOLOGY... AUDIT REPORTING. ALERT NOTIFICATIONS QUESTIONS. DEPENDENT QUESTIONS... QUESTIONS WITH ANSWERS ‘Partially’ DOCUMENT REVIEW ... ACCESS DENIED NOTIFICATION. PHOTOS REPORT GUIDELINE...... AUDIT FINDINGS... AUDIT TYPES. AUDIT QUESTIONNAIRE SECTIONS AND GUIDANCE. 0, MANAGEMENT SYSTEM, TRANSPARENCY AND TRACEABILITY 1, MINIMUM AGE, CHILD LABOR AND YOUNG WORKERS 2. FORCED LABOR ... 3. DISCRIMINATION 4, DISCIPLINARY PRACTICES, HARASSMENT AND ABUSE 5. FREEDOM OF ASSOCIATION AND GRIEVANCE MECHANISMS. 6. WORKING HOURS AND OVERTIME 7. REMUNERATION AND BENEFITS. 8, HEALTH AND SAFETY... GLOSSARY... 10 10 a 2 3 v 22 23 25 28 28 30 31 32 35 35 45 49 52 35 36 59 n 82 1g Page 3 of 123,ICS - Auditor Guideline Rev 27 - 2020 SOCIAL COMPLETE QUESTIONNAIRE This guideline and the associated audit questionnaire apply: ‘+ Generally to factories employing more than 50 workers. ‘+ ICS members may choose to request a complete audit even if the factory employs 50 workers or less ‘+ If during an audit in a factory with more than 50 workers, there are temporarily less than 50 workers due to holidays or other reasons, the audit template to use should still be the complete audit questionnaire. ‘+ If, when the auditor arrives in the factory, there are more than 50 workers even though the factory profile had stated otherwise, the auditor to use the complete audit questionnaire. INTRODUCTION The Auditor Guideline provides additional clarifications and instructions for answering questions from the Audit Questionnaire as well as guidance on the audit process, ‘The Audit Questionnaire consists of the following sections: 0. Management System, Transparency and Traceability Minimum age, Child labor and Young workers Forced Labor Discrimination Disciplinary Practices, Harassment and Abuse Freedom of Association and Grievance Mechanisms Working Hours and Overtime Remuneration and Benefits Health and Safety Each section is further subdivided as follows: Unrated Informative questions on applicable local laws and facility-specific information Rated Compliance questions Best Practices to highlight the facility's practices that go beyond legal compliance. A best practice is an issue which the auditor feels is over and above the standards and applicable law against which the site was audited. Observations in this subsection do not influence the facility's overall rating, For some sections, examples of Best practices are provided to guide the auditors However auditors are required to suggest additional best practices if relevant. For questions where the law is not uniform in all the countries, auditors should check what is done by the facility and actions implemented while not requested by law have to be identified as Best Practices. If the best practices apply to a topic addressed by rated questions, auditors should identify the practices in the relevant questions comments. Rating: if not requested by law, should be rated YES + Best Practice. The Auditor Guideline is meant to give helpful pointers on what to provide as evidence / explanation, what to observe during the facility tour, or helpful questions to ask during the interviews, as well as to provide definitions and clarifications of unclear or ambiguous terms. HOW TO USE THIS DOCUMENT Auditor Guideline Components: Audit Process: Contains overview of the audit process and activities auditors should complete during the audit. Page 4 of 123,ICS - Auditor Guideline Rev 27 - 2020 Audit Duratio ‘ontains requirements on auditor man-days. Worker Interview Sampling Size: Describes sampling requirements for worker interviews to be conducted during ‘the audit Documentation Sampling Requirements: Includes instructions on documentation sampling. Audit Rating System: Provides general overview of audit rating system and specific guidance on rating of individual audit questions. Answering Methodology: Provides explanation for auditors on the ICS's answering methodology for questions which can be answered with ‘Partially’. Audit Reporting: Contains overview of audit reporting requirements and instructions on how to complete the Audit Questionnaire. Audit Follow-up: Outlines audit follow-up process on corrective actions. Audit Questionnaire Sections and Guidance: Includes auditor instructions per question as applicable, Glossary: Provides definitions / clarifications ofthe terms used in the questionnaire where applicable Instructions: ‘Auditor guidance is provided for specific questions in the audit questionnaire as applicable. For those questions which do not require instructions, the respective column cell is left blank. Refer to the glossary for a list ofall definitions. Definitions are also listed in each section of the Guideline, ‘The following icons are used in the Guideline: @ Tips or useful information [El Definitions or clarifications Aximportant note that must be followed © Guiding questions GENERAL DIRECTIONS Auditors must review the information provided in this Guideline prior to the audit Auditors should not limit assessment activities to the pointers provided in the Guideline. Auditors should use triangulation techniques (observation, documentation review, interviews), where possible to verify the facility's compliance. Auditors are required to provide a comment forall questions, even the ones that are rated as compliant This is to be done in order to describe the method used to prove compliance. The auditing body will have an open approach to accepting shadow/witness assessments at the justifiable request of relevant and appropriate organizations including ICS to evaluate the performance of the auditing body and its personnel within the terms of the applicable confidentiality rules. All rated questions in the audit questionnaire are formulated using the same logic ~ answer ‘Yes’ indicates compliance, while answer ‘No’ means non-compliance. The rating for each question is assigned automatically ‘The questionnaire contains a number of dependent questions which only appear ifthe answer is ‘Yes’ to the main question. €g. if an answer is ‘Yes’ to the question 0.25 Does the facility use homeworkers, four dependent questions related to homeworkers would appear. Devendent questions are written in italies in the guideline. Exceptions: Page 5 of 123ICS - Auditor Guideline Rev 27 - 2020 Question 1.4 “if any, are they located in the child care?” This question will appear if the answer is ‘No’ to question 1.3. Question 2.11 “Are the prisoners employed in conditions respecting ILO conventions C29 and 105 on forced labor?” This question will appear if the answer is ‘No’ to question 2.10. Question 6.14 “Please indicate the maximum number of consecutive days worked in the facility?” This question will appear if the answer is ‘No’ to question 6.13, Question 7.6 “If the time and frequency of payment is not compliant, are workers paid within the next deadline for payment?” This question will appear if the answer is ‘No’ to question 7.5. Question 8.29 “if there are less than two emergency exits on every floor, does the number of emergency exits comply with local requirements?” This question will appear if the answer is ‘No’ to question 8.28. Question 8.34 “If the emergency exit paths are inaccessible and/or obstructed, is the blockage temporary” This question will appear if the answer is ‘No’ to question 8.33. Question 8.38 “When the emergency exit doors do not comply with legal requirements, has the facility implemented measures to ensure workers’ security and ability to exit the production site in case of emergency?” This question will appear if the answer is ‘No’ or ‘Partially’ to question 8.37. Question 8.48 “If there is no fire alarm, has the facility implemented other types of alerts according to local law?” This question will appear if the answer is ‘No’ to question 8.45, Question 8.106 “If there are less than two emergency exits on every floor, does the number of emergency exits comply with local requirements?” This question will appear if the answer is ‘No’ to question 8.105, Question 8.109 Critical AN “if the emergency exit paths are inaccessible and/or obstructed, is the blockage temporary?” This question will appear if the answer is ‘No’ to question 8.108, Question 8.113 “When the emergency exit doors do not comply with legal requirements, has the facility implemented measures to ensure workers’ security and ability to exit the production site in case of emergency?” This question will appear if the answer is ‘No’ or ‘Partially’ to question 8.112. ‘+ All non-compliances and N/A rated questions require comments in the form of 2 narrative in the questionnaire. To determine a confirmed non-compliance: In order to conclude to the non-compliance, it should be provided by the auditor at least TWO pieces of evidence from the following: (a) two or more workers confirm an item through interviews; (b) documentation; (c) auditor observation (according to the chapter, auditor observations can be sufficient to raise non-compliances, e.g. child labor or fire equipment). If ‘the compliance cannot be proved, the auditor should indicate it as “non-compliance”. * Two different documentation evidences (le. wage records and time records) are considered as two evidences. = Documents evidences observed by the auditor for two months on the same record (for e.g. a wage record) for the same worker are considered as being two pieces of evidences. "This requirement is specifically applicable to the chapters 6 and 7, although for some critical and AN questions (such as child labor, forced labor, discrimination), one piece of evidence can be considered as sufficient, For each non-compliance include details - sample size, how many workers were effected, location. li f a non-compli i emergency path, auditors must report the non-compliance in the report (and in the CAP for example, auditors can indicate that the non-compliance has been immediately closed). Page 6 of 123ICS - Auditor Guideline Rev 27 - 2020 If unable to confirm full compliance, then cite as non-compliance. Provide additional narrative for a reason why unable to confirm full compliance (e.g,, denied access, incomplete documentation) Provide photo evidence with time and date stamp for every non-compliance where possible (Date template DD/MM/YYYY). AX D0 NOT PERSONALLY TEST ANY EQUIPMENT Its always expected that the auditor should not only conduct audit on documents (check of tag, register, etc.) but also ask for physical checks, which should be carried out by factory's workers, hence allowing the auditor to further assess the Health & Safety policy of the audited factory. If the wording of the question does not refer to compliance with local legal requirements, the facility's practices are evaluated against ICS requirements. However, where local law is more stringent than standards set forth by questions based on the ICS requirements, cite against local law. AUDIT PLANIFICATION Audit cabinets are to communicate on audit visit dates solely via the ICS database and by no other means of direct communication with the ICS members. Al planning requests for information (e.g. lack of contact information or update of the audit window period) should be communicated to the ICS member within 48 hours by the audit body after the latter has been notified. ‘Any audit window period change should be firstly validated by the ICS member. The audit body should notify the ICS members and ICS team in the event of two or more audits being planned in parallel by two different ICS members. The audit body should comply with the audit details requested by the ICS member mandating the audit, e.g. the announce type, the audit type, the audit window ete. Itis the responsibilty of the audit company to know about bank holidays in the country and not to go into the factory during a holiday. If the production rate is too low in the factory on a certain day included in the audit window period, the factory is responsible for informing the audit company and ICS member requesting the audit about it. AUDIT SCOPE The audit scope is defined by the business license scope. If the factory provides several business licenses, they must be reported in the audit questionnaire line 17 separated by a semicolon “The ICS member would decide to launch separate audits on additional business licenses scope. However, special cases may e In case of shared buildings, the auditors will visit the whole building and common areas (e.g. stairs of the building) and if relevant, will also visit the other factories present in the building as risks can originate from shared premises. If the business license changes and if it is the only change for the factory, the audit after an initial audit can be a follow-up audit as long as the scope of the audit is exactly the same i.e, same buildings, workers, production processes, management system (employment conditions, records) etc.. The factory should provide all details concerning these changes during scheduling to anticipate. Another case is a shared building but with two different business licenses and shared workers. In this case, risks are shared as workers are in both sites. ICS members should request one audit (cumulating man-days associated with each business license) and the audit report should be uploaded on all related factory pages on the ICS database. If, however, all factories share the exact same name, only one factory page shall be created Page 7 of 123,ICS - Auditor Guideline Rev 27 - 2020 In cases where factories have multiple production sites (different units) but under the same business license number, an exemption can be authorized of auditing only a part of the global scope of the business license only if units’ buildings are different, workers do not work across units, products are different and factory documents are different. In these cases, ICS members agree that ICS audits be mutualized between linked ICS members on the factory profiles in the ICS database. Members will also have to integrate units through a different line (unit 1/unit 2 etc.) in the database. ICS members will remain cautious regarding the name of the factory and add the unit(s) number(s) (with the product) Members should talk with other members that share a same factory as to know what number the unit, has. Members should add a comment in the shared comment section to inform other members about the audited units In the case where a factory has multiple production sites located at different addresses under the same business license number and has the same documentation for all sites; an audit must be done for each site but the documentation review can be common if the audits are done on the same day. In practice, if the factory has site A and site 8 at different locations under the seme business license and all documents are located and handled at site A; there must be two audits and two audit reports uploaded on the ICS database (one per site). However, if both audits are done on the same day by two different auditors and if asked by the ICS member, the documentation review can be done once for both audits. As for all cases, detailed comments must be indicated in the Narrative Summary of the audit reports. If the factory that was previously audited moves to another location or another building, the following, ICS audit should be an initial audit as the scope of the audit changes, thus the associated risks change. If the factory that was previously audited builds an extension (e.g. a new building, a new floor, a new section etc.), the following ICS audit should be an initial audit as the scope of the audit changes, thus the associated risks change. If the initial audit was done on a small factory audit questionnaire and before the follow up audit, the number of workers increased (hence a social complete audit is used for the follow-up}: © For the questions present in the initial audit: the auditor should audit as for all follow-up audits with Corrected/Not corrected and new findings reports and © For the questions not present in the initial audit (because not present in the small factory audit): the auditor should assess them and define the compliance or non-compliance. ‘The ICS member and audit company should obtain as much information as possible from the factory during the audit scheduling to assess the scope and audit plan, ‘AUDIT PROCESS The overall purpose of the ICS on-site audit is to evaluate the facility's compliance level with the ICS Code of Conduct and local regulations, and to identify the necessary corrective actions as well as opportunities for continuous improvement. ICS process allows either Semi-announced audits in a 2-week window (at least but can be longer) or Unannounced audits Physical areas covered under the scope of the ICS audit should include Production areas Storage areas Living and eating areas of workers if applicable All associated buildings near the site of production ICS member client can share the production processes declared by the factory to them with the auditor when. scheduling the audit as it may help the auditor to assess existing production processes. Page 8 of 123ICS - Auditor Guideline Rev 27 - 2020 ‘The ICS audit process consists of six steps: coe The actual audit may or may not follow this order. However, all steps as indicated below should be completed during the audit. If further steps or documents are needed to support a complete understanding of the facility situation, the auditor may request additional information from the facility 1. Opening Meeting with the facility management and workers’ organization representatives - introduction of auditors, presentation of the ICS scheme, review of the audit scope, audit procedures to be performed, review of the ICS Factory Profile filled in by the factory or to be filled in if not done and identification of parties to be involved as well as estimation of audit duration. The time schedule of the audit day(s) must not be shared with the facility management. Auditors should ask if any other audit, (social audit or any kind of audit that could refer to the same set of documents) is performed in parallel of the current audit. 2. Documentation Review ~ review of facility’s documentation to confirm compliance or identify non- compliances. Where feasible, auditors should take photos of sampled documentation (e.g. time records, pay slips). Refer to Documentation Sampling section and Document Checklist for a list of questions. Facilities are requested to provide the documentation before 2:00 PM the first day of the audit (for an audit to be done within 1 man/day) or before 2:00 PM the second day of the audit (in case of an audit organized in more than 1 day). In case the documentation has not been provided, auditors should rate NO to questions related to the document review. Auditors will only indicate the validity and the comments for non-compliant documents in the third sheet of the audit questionnaire named ‘Documents’. Answer only column C in the excel sheet ‘Documents’ with YES for compliant documents. The compliant documents should be reported only with YES in the column ‘Provided for review’. 3, Worker and Management Interviews ~ To obtain information on facility's policies and procedures, actual practices and work environment auditor conducts formal and informal interviews with management personnel, e.g. Human Resources Manager, EHS Manager, and workers. Interviews with workers should be conducted in private, without management staff present, to assess conditions for different categories of workers (permanent, temporary, migrant workers, contractors) including remuneration, working hours, type of contract, wage deductions and social benefits. Interviews can be conducted individually or in groups and should include different worker categories (e.g. permanent, ‘temporary, full-time, part-time, young workers, contractors, migrant workers, etc.). Inconsistencies revealed during interviews must be investigated by means of additional individual interviews and focused cross-examination of documentation. All inconsistencies identified during interviews must be detailed in the interviews template, The recommended corrective actions plan should not report that inconsistencies have been identified through interviews. This must only be mentioned in the interview template. ‘The auditors will include in the interview template not only non-compliances but also information and relevant comments expressed by the workers during the interviews. Please refer to worker interview sempling requirements, If the factory does not allow interviewing the workers, the rating of related questions should be NO according to the triangulation auditing method. The score will be highly impacted. Page 9 of 123ICS - Auditor Guideline Rev 27 - 2020 Facility Tour - To evaluate health and safety conditions and observe other practices, the auditor conducts @ walkthrough of any areas where workers may be present including, but not limited to: production floors, warehouses, chemical storage units, restrooms, clinic, canteen, and dormitories, If the factory does not allow the auditor to access some floors/buildings/areas, the rating of related questions should be NO according to the triangulation auditing method. The score will be highly impacted but other questions will still be assessed. Photos are taken during the walkthrough to capture non-compliances and the general layout of the facility (outside view of facility's gate, buildings and name), its work floors, canteen, warehouses and dormitory. If you observe that a production is ongoing for the ICS client conducting the audit, take a photo but do not upload it on the ICS database with the additional comments. The picture will be archived by the audit company and then shared, upon request with the ICS client. Photos must not show faces of persons (that can be hidden). Pre-closing meeting should be conducted among the audit team in order to prepare the closing meeting with facility management Closing meeting with the facility management and workers’ organization representatives to discuss audit results, answers questions and provide clarifications. Auditors should ask if any other audit has been performing in parallel to the current audit (if not mentioned during the opening meeting and in case the audit has been conducted during several days). During the closing meeting, a Corrective Action Plan, which outlines areas for improvement, actions and timeframes, must be agreed upon. The Corrective Action Plan must be signed by the facility management and the workers’ organization representatives. ‘The objective of the closing meeting can be summarized as: ‘to present the findings to the site; gain agreement to the factual nature of what has been observed or provide an opportunity for the facility management to present counter-arguments; ensure that the site management understands the legal or Code basis for these; a5 far as possible gain commitments from the site management that they will ake action. AUDIT DURATION ‘The audit duration for initial audits and re-audits is set between 1 to 4 man-days (without travel) according to the following sliding scale that includes the reporting: Number of facility workers and staff Number of up to 150 151-500 ‘501-1200 1 2 3 4 1201 plus, The audit duration for follow-up audits is set at 1 man-day (without travel). WORKER INTERVIEW SAMPLING SIZE Depending on the number of workers and staff at the facility audited (as state the Factory Profile), 8 to 32 workers representing the main functions and levels should be interviewed (1% of the workforce for factories with 3201 workers or more). Out of the workers interviewed, approx. 2/3 should be interviewed in focus groups of 3 to 4 workers for approx. 30 minutes and 1/3 of workers should be interviewed individually for approx. 15, minutes. The confidentiality of the information obtained during these interviews must be ensured. Page 10 of 123ICS - Auditor Guideline Rev 27 - 2020 Number of facility workers and staff ‘Number of interviews upto 150 8 151 - 500 B 501-1200 20 1201-3200 32 3201 plus 1% of the workforce (min. 32) The sampling size for follow-up audits must be defined depending on the identification process of the non- compliances during the initial audit: ‘* Follow-Up standard: 8 workers’ interviews ‘+ If previous non-compliances have been identified during interviews and if the auditor is not able to confirm full compliance by documentation and direct proofs then must be performed 8 workers’ interviews +5 workers’ interview i. a total of 13 workers’ interviews. ‘+ If previous non-compliances have been solved and if the auditor is able to confirm full compliance by documentation and direct proofs then must be performed 8 workers’ interviews. ‘+ The auditors will indicate as a comment in the interviews template for each non-compliance/issue if it was raised during collective or individual interviews. The auditor can increase the number of interviews to be conducted during the audit if he/she detects an alert or sensitive topic that should be further investigated. The auditor is asked to provide as much data in the sense of details, information on where the issue came from (not the name of the person, but rather if it was in group or individual interviews), how the point was raised ete. A important: Auditors should not report explicitly inthe non-comoliances section (an therefore inthe CAP) the exact findings of the interviews as these should not be known by the management. Auditors wil then fillin precisely the Interview template that is not shared withthe factory. ‘The interview template, questionnaire and any ICS template must not contain any personal data such as name, address of a worker. DOCUMENTATION SAMPLING REQUIREMENTS Key documents/records, such as wage records, time cards, employment contracts, security training reports, ete., must be reviewed by the auditors (preferably the original versions, but if not available, documents’ copies are also acceptable) and copies collected as appropriate. Key documents/records should allow auditors to obtain evidence in the form of documentation for detected non-compliances or best practice situations. In addition to the completion of the Factory Profile template, the facility should be required to make available the requested documentation for at least the last 12 months. Exceptions can be made for new facilities, as long as during the audit a sample of @ minimum of 3 months can be randomly selected for the review. The above sliding scale is also applicable when determining the sample size of each selected month for each document / record to be checked which should be selected from different periods such as the current/previous month, peak and low production periods, unless so requested by the ICS member. ‘The following sampling size applies for the follow-up documents review: ‘© IFnot any previous non-compliances during the initial audit about the working hours, the wages and the personal files, then 8 sets of documents have to be checked ‘+ If previous non-compliances during the initial audit about the working hours, the wages and the personal files, then 13 sets of documents have to be checked Page 11 of 123ICS - Auditor Guideline Rev 27 - 2020 AUDIT RATING SYSTEM. [> Management Sst, Tansparensy ang Traseabiy *miimom 256, Cn abou ans Young womans {6 Duleinary Prations, Harsimant ans Abuse Jean and Saat 1 1 RATING om | [>from |m|>|> | Rating principles that are applicable to all chapters of the Audit Questionnaire: ‘+ The letter (rating code) of each chapter is determined by both the percentage and the alert notification: © Ifthere is an Alert Notification (AN) in a chapter, then the chapter is E. ©The final rating code cannot be higher than € if there is an AN in chapters 0, 1, 2,3, 4,6, 7or8 (cannot be D, C, B or A irrespective of the percentage) © Final rating code cannot be higher than D if there are rating codes 0 or E in chapters 0, 1, 2, 3, 4, 7 or 8 (cannot be C, B or A irrespective of the percentage) Some questions are identified as ‘Critical’, ‘Audit Questionnaire Chapters are rated according to criticality (some are not relevant to Alert Notification). The consolidated rating contains only the rating of the facility and the percentage. The rating for each question is assigned automatically based on the answer chosen by the auditor - YES/Partially/NO/NA. ‘+ For questions where the law is not uniform in all the countries, questions must be rated N/A if the question refers to the compliance to local requirements but depending on the countries this may be not legally required (reference to local law must be specifically mentioned in the question wording or in the guideline ~ for questions not referring to local law, the requirements must be evaluated against ICS requirement).Auditors should check what is done by the facility and actions implemented while not required by law have to be identified as Best Practices. Rating: © if not requested by law and practice done, should be rated YES and can be reported in Best Practice for actions taken going beyond the ICS requirement. As stated above, if the best practices apply to a topic addressed by rated questions, auditors should identify the practices in the relevant questions comments. ©. ifnot requested by law and practice not done, should be rated N/A. Rating Thresholds: en eed > full compliance in each question > and without any Alert Notification ea eee ere eT! Page 12 of 123ICS - Auditor Guideline Rev 27 - 2020 FETE cin ines pecenage ries “om coer 70 707610 99 ‘chapters 0; 12:3; 4 6;7; 8 can only be rated , B orC (hence not D or €) and with Working hours below the downgrading {thresholds described inthe “Automatic Downgrade” column (net see column " Automatic Downgrade Rating linked to the percentage From 60% to 7436 Chapters 0:1; must not be rated or E or with working hours exceeding the thresholds described in the "Automatic Downgrade" column. (Gf n0t see column “ Automatic Downgrade *) ating linked (0 the percentage From 40% to 69% ANSWERING METHODOLOGY ICS's Audit Questionnaire allows auditors to choose the following answers to the questions while evaluating the facility's compliance level with the ICS's Code of Conduct and local legal regulations: = Yes Partially No N/A The final rating code cannot be higher then E ‘itthere Is an AN in chapters 0,1, 2,3, 4 6,7 (0r8 (cannot be D, C, Bor Ain link tothe percentage the AN prevails on the percentage) or if the working hours equal or ‘exceed 72 hours per week. Final rating code cannot be higher than Dit there ere chapters rating codes D or E for chapters 0, 1, 2,3, 4,7 or 8 (cannot be C, Bor A In link to the percentage - Chapters ‘Ratings D and E prevail on the percentage) ? a. In Chapter 6, the Alert Notiicston Is raised when the total number of hours worked (regular + overtime as identified in ‘cells 6300 and G201) equals or exceeds 84 ‘hours per week, ‘ifthe total amount of hours worked per week (regular + overtime as identifed in cells 16200 and 6301) equals or exceeds 72 hours, then Chapter 6 and the audit questionneire wil berated E, the total amount of hours worked per week (eguler + overtime as identified in cells 6300 and 6201) exceeds 56 hours and is lower then 72 hours and if the average ‘number of hours worked over three ‘consecutive weeks exceeds 56 hours (dentitied in 6303), then Chapter 6 and the ‘auatt questionnaire will not berated higher than ¢. 4. Ifthe total amount of hours worked per week (regular + overtime as identified in cells 6200 end 6201) exceeds 56 hours and is lower than 72 hours and ifthe average ‘number of hours worked over three ‘consecutive weeks is lower or equal to 56 ‘hours (identified in G303), then Chapter 6 ‘and the audit questionnaire can be rated up 108, Page 13 of 123deli Rev 27 ~ 2020 nn the case of 2 non-compliance that can easily and quickly be solved (e.g. an object on an emergency path) auditors must report the non-compliance in the report (and in the CAP for example, auditors can indicate that the non-compliance has been immediately closed) Auditors should provide the name and exact reference of the legislation/ regulation/ circular or any other legal ‘ground/ recommendation the question rating and the auditor comment are based on. Criterla for Selection of ‘Partially’ Alert Notification Based on the ICS methodology, questions which require an Alert Notification cannot be answered with Partially’. Alert Notifications are provided for critical non- (CS members. Such critical non-compliances: compliances which require the immediate attention of ‘© threaten workers’ safety, ‘© can cause the loss of life or limb due to risk of fire and non-existent or limited means of evacuation and firefighting, ‘© can influence the audit results due to fraud, + involve not be transparent about the use of homeworkers, and include cases of child labor, abuse and harassment, wage withholding, illegal and excessive disciplinary measures, not providing legal minimum wage and no payment for overtime work. Due to severity of such non-compliances, grading associated with the answer ‘Partially’ cannot be used. Other Criteria in addition, at least one of the following criteria must apply to the question to allow an answer selection of Partially’ Cer Explanation. FM erat R Tacs al) Certain questions in the questionnaire contain multiple variables in the coed wording of the question or refer to multiple attributes characterizing the issue. The answer ‘Partially’ is allowed for questions that refer to situations where, if one of the attributes is missing in the facility's practices, this will rot result in a full non-compliance. Such cases mainly occur if the facility has gaps in its existing processes and systems. ‘An example of such a question is: 0.8 Has the facility established policies in tthe areas of child labor, forced labor, discrimination, disciplinary practices, harassment, abuse, freedom of association, work hours and overtime, remuneration and benefits, health and safety and anti-bribery? You would answer ‘Partially’ if, e.g. the facility has established policies but they are missing one of the components. Pa CSTE NEC MrTSIny Certain questions are formulated in a way that in order to determine the Cw INCuNuriiscy level of compliance of the facility, the auditor needs to assess multiple variables / attribute: attributes of the facilty’s existing practices. The answer ‘Partially’ is allowed for questions which refer to the situations when if one of the attributes is missing in the facility's practices it will not result in full non- compliance. Such cases mainly occur if the facility's practice has to comply with numerous legal requirements and the facility has not followed all of them. ‘An example of such a question is: 1.8 Are working conditions (e.g., type of work, tasks, working hours) for young workers (under the age of 18) in P: £123accordance with local law? You would answer ‘Partially’ if, e.g. one of the areas of working conditions for workers under 18 years is not in accordance with legal requirements — working hours exceed legal requirements. MCS youre sie acy) Certain questions are formulated in a way that auditors should confirm the attributes associated with it existence of the main practice and then specific attributes related to it. ‘The answer ‘Partially’ is allowed for situations when the main activity is present, but one of the attributes is missing. ‘An example of such a question is: 8.82 Do workers have access to gender- specific, clean and private toilet facilities? You would answer ‘Partially’ if, e.g. the facility has provided workers with clean and private toilet facilities, but one of the required attributes is missing ~ toilets are not gender specific. Meee Sy iy Certain questions require implementation of actions during a specific time aed period or following a specific freauency. The answer ‘Partially’ is allowed to cover cases in which the facility's non-compliances are a result of non- systemic inconsistencies or occurrences of not following the established time period or frequency. ‘An example of such a question is: 8.60 If there is a fire hydrant or sprinkler system in place at the facility, is it inspected, tested and maintained every three months and according to legally required inspections (confirming they are in good working order)? You would answer ‘Partially’ if, eg. the facility inspects its fire hydrant or sprinkler system, however not every three months on one or two occasions. Please note that in exceptional cases the ICS might allow the answer ‘Partially’ for questions not corresponding to the criteria outlined above. As applicable, specific guidance on such exceptions are provided in the Auditor Guideline. Questions that are not listed with a possible ‘Partially’ answer as per the Auditor Guideline should not be answered as ‘Partially’. Only specific designated questions can be answered as ‘Partially’ Questions answered with ‘Partially’ are automatically assigned a grade C in the questionnaire highlighted in yellow For all questions answered with ‘Partially’ auditors are required to provide a detailed narrative in the Comments cell outlining the facility’s practices which determines partial compliance. Differentiation between ‘Partially’ and ‘No’ answers Auditors should comply with the following guidelines when choosing the answer ‘Partially’ vs ‘No’ to depict the facility's level of compliance: PE Cnr Cos Question refers to a required practice 25 % of sample are not in | More than 25% of sample are and the answer is based on a sample accordance with the required not in compliance chosen by the auditor. practiceICS - Auditor Guideline Rev 27 - 2020 ‘An example of such @ question is: 8.32 ‘Are emergency exit paths designated with visible path markings? Question refers to required systems and |The facility has established | The facility has not established processes, policies and procedures. systems and processes required | any required systems and An example of such a question is: 0.8 Has | for compliance, however there | processes the facility established policies in the | are gaps in those systems and areas of child labor, forced labor, | processes discrimination, disciplinary practices, harassment, abuse, freedom of association, work hours and overtime, remuneration and benefits, health and safety and anti-bribery? Question refers to provision of rights /| The facility provides workers | The facility does not provide premises to workers with rights / premises, however workers with any required ‘An example of such a question is: 8.19 Is those miss one of the required | rights / premises emergency response personnel trained, attributes at minimum, on: notification of workers in event of fire or emergency, reporting fire or emergency to local authority, use of fire extinguishers, evacuation procedures, and first aid? Question refers to a practice which needs | The facility conducts a practice | The facility does not conduct to be done during a specific time period | but inconsistently in terms of | the practice or follow a specific frequency time period or frequency when An example of such a question is: 8.64 | assessed over time Are electrical panels, wires and outlets inspected regularly by certified staff (it not defined by law, at least once per year)? Criteria for Selection of ‘N/A’ Use of 'N/A’ answer has to be commented and explained in any case The list enclosed in the below table is not exhaustive but the use of ‘N/A’ answer must be limited to accurate cases. At least one of the following criteria must apply to the question to allow an answer selection of ‘N/A’: Peed Cres Pome Choose N/A if the question refers 1.7 Are identified apprenticeship / traineeship programs in to the compliance to local accordance with local law? equirements but depending on/ 4.3 Does the disciplinary procedure comply with local law? ‘the countries this may not be 4.4 | Does management staff receive training on implementing legally required (reference to local disciplinary procedures? law must be specifically mentioned 5.2 Are workers free to form/join independent trade unions? in the question wording or in the [8.56 _| Are fire extinguishers inspected by specialized companies on guideline - for questions not Critical _a regular basis (if not defined by law, at least once per year)? referring to local law, the’ there are smoke detectors or fire detectors present at the | requirements must be evaluated | 58 facility, does the facility conduct their inspections every against ICS requirement) month and legally required inspections? 8.60 _| If there is a fire hydrant or sprinkler system in place at the Page 16 of 123ICS - Auditor Guideline Rev 27 2020 Does the facility provide a care room for workers? Is there a first aid kit available at the dormitory? ‘Are workers working overtime hours (daily, weekly, monthly, other) in accordance with local law? 7.13 Isovertime paid? Critical AN 7.15 Critical AN Is overtime paid for piece rate workers and for identified classification of workers or contractors? Does the facility have an overtime waiver? (Choose “N/A” in case of waiver not allowed by law). Rating The rating for each question is assigned automatically based on the answer chosen by auditors. Further Reference Materials + Please refer to the Audit Reporting section of the Auditor Guideline for the list of questions requiring Alert Notification in case of non-compliance. Such questions are also marked in the Audit Questionnaire with ‘AN’. ‘Please refer to the Audit Reporting section of the Auditor Guideline for the list of questions which can be answered with ‘Partially Page 17 of 123ICS - Auditor Guideline Rev 27 - 2020 AUDIT REPORTING Reporting Documents For all ICS audits, the following reporting documents must be prepared by the auditing company: ICS Factory Profile, completed by the facility prior to the audit, should be validated during the opening meeting with the facility management. The ICS Factory Profile can be revised and updated during the audit; inthis case, the audit company will upload both ICS Factory Profiles: the first version filled in by the factory and the revised version into the ICS database Document type ‘ICS Fctry Prof-V2 by audit. The Factory Profile must be uploaded on the ICS database under Excel format, Corrective Action Plan (CAP): must be issued as per instructions stated on the template. The CAP is integrated into the Audit Questionnaire (with the addition of the column "Recommended Corrective ‘Action’ column J) and automatically generated in Excel format in two versions: 2 ICS CAP template: it should serve as a basis for the audit closing meeting with the facility management. The auditor has to click the icon "Generate CAP" located at the top right of the ‘Questionnaire. This template is fully in English and will be validated by the ICS member before its communication to the factory. The ICS CAP must be uploaded on the ICS database under Excel format. © Local CAP template ~ Handwritten CAP: A template of the CAP is also automatically generated to be provided in local language to the facility during the closing meeting. This local CAP- Handwritten CAP does NOT include the SOC as the complete rating should not be communicated to the factory before its validation by the ICS member. The Handwritten CAP can be uploaded as PDF document as it signed onsite. ‘The Alert Notification must be sent to the respective ICS member within 24 hours in case of critical violations. The questions subject to Alert Notifications are identified with ‘AN’ in the Audit Questionnaire ‘The Alert Notification template is integrated into the Questionnaire and automatically generated in Excel format. The auditor has to click the icon "Generate AN" located at the right top of the questionnaire. Audit Questionnaire, including documentation review. Auditors must include comments on findings and must detail the legal sources applied, Interpreter © The audit body should indicate in the audit report if an interpreter has worked for the audit (e.g during the audit for communication and/or after the audit for report writing). The audit body will declare and submit for approval the process including the organization of the interpreter on- site to the ICS member before the audit is performed. © The interpreter shall be fluent in all of the languanes subject to translation. The interpreter shall be present on-site (and not remotely) during the whole duration of the audit, The auditors’ name, position (e.g. auditor, lead auditor) and type of contract (worker or sub-contractor) should be indicated in the audit report. The audit questionnaire must be uploaded on the ICS database under Excel format, Photo report template. Interview template must be uploaded on the ICS database under Excel format. Naming rules of the documents: Documents have to be named in the same way: ‘* Date (English standard YYYY/MM/DD) - Factory Name ~ Document Type Page 18 of 123ICS - Auditor Guideline Rev 27 - 2020 * Example : 2016/10/04 - Shanghai Toto Factory ~ ICS Audit Report * The factory name must not include special symbols such as ““/<>?] For audit firm’s internal process, an internal audit tracking # can be added at the end: * Date (YYYY/MM/DD) - Factory Name - Document Type - Internal Audit Tracking # ‘+ Example: 2016/10/04 - Shanghai Toto Factory - ICS Audit Report ~ 12345678 © The factory name must not include special symbols such as ““/<>?[] Documents types are: *# ICS Factory profile = ICS Fetry Prof.-V2 by audit’. The ICS Factory Profile can be revised and updated during the audit; in this case, the audit company will upload both ICS Factory Profiles: the first version filled in by the factory and the revised version into the ICS database - Document type ICS Fetry Prof.-V2 by audit’. # ICS Audit report + ICS CAP * ICS Alert Notification + ICS Access Denied *# ICS Handwritten CAP + ICS Interviews + ICS Photos * Others ‘Audit Questionnaire Completion Instructions © Audit questionnaire The audit questionnaire is mainly automated and some completion instructions must be followed as below: = Some questions must be answered only with numbers and not text. It is mentioned as below with the sign # x. | Regular working hours per week atthe facity (# hours) Somment ~The audit questionnaire uses excel! macros that do not have to be modified. = Its forbidden to add or remove lines columns or sheets, ~The rating is automatically calculated as soon as the YES / NO / Partially / NA is answered. Excel formulas do not have to be modified - Auditors should provide the name and exact reference of the legislation/ regulation/ circular or an other legal ground/ recommendation the question rating and the auditor comment are based on. ‘© Additional ~ narrative Summary The auditor(s) should explain in the Narrative Summary the general conditions in which the audit took place, the attitude of the management and of the workers. The auditor(s) should describe the premises Page 19 of 123ICS - Auditor Guideline Rev 27 - 2020 (number of buildings, floors per building etc.) for the reader to have clear contextual information when reading the report. If auditor(s) have to report additional comments or feelings that are not related to a specific question of the audit, it must be reported in the ‘Additional-Narrative Summary’ part. For instance: bribery attempts or unethical practices (but not necessarily illegal) such as the extensive and repetitive use of temporary agency workers, Auditors are asked to report in this section if they observe that workers might move from a factory to another, for example in the case of sister concerns or multiple factories present in the same building/area. E.g. if two factories are located at the same floor of a building and the auditor observes that workers from one factory cross the other factory or wear the other factory's uniform etc., they should report it here. If the auditor observes a non-compliance based on local law (for e.g. specific characteristics of the elevators) but this specific topic is not addressed by an ICS question or guideline, it should be reported as a comment in the “closest question” in the questionnaire in terms of scope and the auditor must always add comments in the Narrative Summary. ‘The auditor should also indicate the share of workers not employed directly by the factory with long term contracts and indicate the share of workers recruited via agencies. Neen ee ee STREET Tal 7 + Automatic generation = Once completed the audit questionnaire, the auditor should use the automatic generation in order to generate Local CAP and CAP = Click at the top right on the questionnaire first sheet Generate CAP = Local CAP template ~ Handwritten CAP: this template identifies the questions relevant to corrective action plan without any comment. It should be used by the auditor during Page 20 of 123ICS - Auditor Guideline Rev 27 - 2020 ‘the closing meeting and must be fulfilled with local language comments. It is ‘automatically generated in the file where the questionnaire is registered CAP: this template is automatically filled with the text of the question relevant to corrective action and includes the comments written in the audit questionnaire, The comments can be modified manually or can be generated again if needed. It is ‘automatically generated in the file where the questionnaire is registered. This last target CAP date should appear automatically in the CAP in cell J6. It is automatically uploaded in the ICS database. Date template : DD/MM/YYYY SOC: the automatic CAP generation includes a SOC with the summary of the factory rating chapter by chapter. ‘adit Company: 0 Dese Se Mad, We have conducted an C5 Scial uit on baal of 8 ‘Supe ° Factor ° Factory locaton: © Aust Date: sansa, 000 Refringt1CS member su scoring standards, the llowing rests hasbeen obuerved ‘Nrgement yen, resparene ana Taeabty 1. winmam ge enialabour ane Youre workers 2 Foreaiabour | Dciar races, Harssment and Abuse 6. ening hours ond overtime 5 [SSIS BUSSE = Once completed the audit questionnaire, the auditor should use the automatic generation in order to generate Alert Notification: Click at the right top on the questionnaire first sheet. _ Generate AN AN: it generates automatically the alert notification including the comments issued in the questionnaire. The comments can be modified manually or can be generated again if needed. itis automatically generated in the file where is registered the questionnaire. - Automatic generations only work as the questionnaire is answered. Page 21 of 123ICS - Auditor Guideline Rev 27 - 2020 ‘Multi-auditors working on separate files data recovery tool - The audit questionnaire may be used by several auditors at the same time. They have to previously declared who is in charge of which chapter and where is located the file. The questionnaire will synchronize data, - This macro allows you to collect information from other auditors report files as long as auditors have been working on different chapters (otherwise you'll erase data entered in the main file with data collected from the other auditor file) - Open the main audit report file and rename it: © ICS-Auditor Lis = Rename the other audit files as follow (as there is maximum of 4 man days there can only be 3 more files}: © ICS-Auditor 2.xI5 ICS-Auditor 3.xIs © ICS-Auditor 4.xIs, + Save the other file(s) in the same directory than the main file is located and select information you want to get in the main file: ‘Auditor 1 worked on Chopter 0 and 1 Auditor 2 worked on chapter 2, 3,4and 5 ‘Auditor 3 worked on Chopter 6 and 7 ‘Auditor 4 worked on Chapter 8 “Auditor 1 should click on A2 - Chop 2, A2- Chap 3, A2- Chop 4, A2- Chap 5, A3- Chap 6, A3- Chap 7, A4- Chap ALERT NOTIFICATIONS QUESTIONS OL Critical AN ‘Questions Requiring Alert Notification Have all ofthe reviewed documents been found free from any manipulation or falsification? Ts client informed of homeworker use? 0.31 ‘Are labor contracts of migrant workers in accordance with local law? critical AN ad Does the facility currently employ only workers above the age of 15 or the legal working age? Critical aN 24 Is there objective evidence that facility does not retain any document (e.g. passport, work permit, Critical AN | birth certification, official ID card, driver's license) without written agreement and without the possibility to recover them? Does the facility avoid withholding wages during the employment relationship? 2aL ‘Are the prisoners employed in conditions respecting ILO conventions C29 and Ci05 on forced Critical AN | labor? 31 ‘Are workers free from discrimination in terms of hiring, compensation, access to training, Critical AN | promotion, termination, or retirement? Page 22 of 123ICS - Auditor Guideline Rev 27 2020 ‘Are workers free from any form of harassment, mental, physical and/or verbal abuse, and corporal punishment? ‘Are disciplinary measures implemented by the facility legal and non-excessive? critical AN Chapter | 7. In Chapter 6, the Alert Notification is raised when the total number of hours worked (regular + Critical AN | overtime as identified in cells G300 and 6301) equals or exceeds 84 hours per week. bf the total amount of hours worked per week (regular + avertime as identified in cells G300 and 6301) equals or exceeds 72 hours, then Chapter 6 and the audit questionnaire wil be rated E «. the total amount of hours worked per week (regular + overtime as identified in cells G300 and (6301) exceeds 56 hours and is lower than 72 hours and if the average number of hours worked over three consecutive weeks exceeds 56 hours (identified in G303), then Chapter 6 and the aucit questionnaire will not be rated higher than C. 4. Ifthe total amount of hours worked per week (regular + overtime as identified in cells G300 and (6301) exceeds 56 hours and is lower than 72 hours and ifthe average number of hours worked ver three consecutive weeks is lower or equal to 56 hours (identified in G303), then Chapter 6 and the audit questionnaire can be rated up to 8. Is the legal minimum wage guaranteed to workers in accordance with local law? ifthe time and frequency of payment is not compliant, are workers paid within the next deadline Critical AN | for payment? 743 Critical AN TAS Is overtime paid for piece rate workers and for identified classification of workers or contractors? Critical AN 8.29 If there are less than two emergency exits on every floor, does the number of emergency exits Critical AN __|_comply with local requirements? 334 Ifthe emergency exit paths are inaccessible and/or obstructed, isthe blockage temporary? Critical AN ‘Are emergency exits unabstructed and unlocked? Is there a fire alarm present at the facility? critical AN asi ‘Are there fire extinguishers on every floor ofthe facility? Critical AN 8.103 Is the dormitory not located next to hazardous material storage or production building where Critical AN | hazardous work is performed? 8.106 IF there are less than two emergency exits on every floor, does the number of emergency exits Critical AN___| comply with local requirements? 3.109 Ifthe emergency exit paths are inaccessible and/or obstructed, is the blockage temporary? Critical AN ‘Are emergency exits unobstructed and unlocked? 3.119 Is there a fire alarm present at the dormitory? Critical AN e121 ‘Are there fire extinguishers on every floor of the dormitory? Critical AN DEPENDENT QUESTIONS cred Pa De ea ead reas os 0.9.8 0.10 Page 23 of 123ICS - Auditor Guideline Rev 27 - 2020 Systems, Transparency and 0.14 0.15 Traceability 0.25 0.26 -0.29 030 oat 1. Minimum age, 13 14 Child labor and. ‘Young workers 4s 16 240 2 2. Forced Labor ‘Are workers members Isa union representative located at the facility? 5. Freedom of | of trade union? Date of latest trade union elections ‘Association and | Are workers members| Isa representative froma workers’ organization located at the facility? Grievance | of 2 workers’ Date of latest elections of workers’ organization, Date format required Mechanisms | organization? Dp/MM/yYYY 55 35 63 64-65 6. Working Hours or Ga-6i0 ‘and Overtime 613 618 72 73 75 76 7. Wages and Benefits 7a 72 718 7.19 39 10-812 ais 16-87 825 826 B28 329 as 33a aa7 338 B45 Ba6— 8.48 Eo B52 8. Health and safety 257 58 B59 360-861 e78 879 Ts there any dormitory present in the facility? (if Ves, please complete dedicated section) Which local regulations were referenced during the assesament oF dormitories? Is the dormitory owned or managed by the facility management? Is the dormitory attached to the facility or inside the facility premises? How many workers are reported to occupy the dormitory? How many workers occupy each room/ sleeping area of the dormitory? What is the average number of sqm? per person in the dormitory rooms (sqm2 of the room/number of occupied beds in the room)? Please provide comments Page 24 of 123ICS - Auditor Guideline Rev 27 - 2020 Does every worker have his/her own assigned bed in the dormitory? Please provide comments. 8.94 ~ 8.128 2.100 8101 8.105 8.106 2108 3103 ez aia Bi2t B22 QUESTIONS WITH ANSWERS ‘Partially’ Have requested documents been provided for review? Have requested documents been found valid? Has the factory set up a mechanism to remain up-to-date with applicable and related social compliance legal requirements? Has the factory documented its objectives and action plan to address the main social impacts? Has the facility established policies in the areas of child labor, forced labor, discrimination, disciplinary practices, harassment, abuse, freedom of association, work hours and overtime, remuneration and benefits, health and safety and anti-bribery? Does the facility provide workers with a written document that outlines the employment ‘terms including occupational health and safety information in accordance with local law? Do the statements provided by the factory in the “products and the production processes” section of the Factory profile seem to be accurate and reflect the reality during the factory visit? ‘Are working conditions (e.g., type of work, tasks and working hours) for young workers (under the age of 18) in accordance with local law? ‘Are legally required medical tests before and during employment conducted for young workers (under the age of 18)? Does the facility maintain records (e.g., permits, licenses, parental consent forms, and other documents) related to the employment of apprentices, trainees and young workers (under the age of 18) in accordance with local law? Does the facility provide workers with an understandable wage slip that, at minimum, includes regular and overtime hours worked, regular and overtime pay, and deductions in accordance with local law? Is overtime paid at a legal premium rate? Is overtime paid for piece rate workers and for identified classification of workers or contractors at a legal premium rate? Do workers receive benefits (e.g. parental leave, annual leave) in accordance with local law? ‘Are workers covered by the legal social insurances? Do workers benefit from the payments done by the facility for the legal social insurances (either through public or private system)? ‘Are public holidays paid in accordance with local law? Do workers receive additional remuneration (e.g., bonuses, incentives, allowances) in Page 25 of 123ICS - Auditor Guideline Rev 27 2020 accordance with local law? Does the facility have non-expired documentation of compliance with building safety requirements issued by local authority in accordance with local law? Does the facility have non-expired fire safety documentation issued by the local fire authority in accordance with local law? Does the facility have documentation of safety inspections for the building and the machineries issued by any third-party (government and/or private third-party) in accordance with local law? Does the facility have documentation of safety inspections for the mobile equipment issued by any third-party (government and/or private third-party) according to local law? Does the facility conduct a risk assessment at least once per year to identify health and safety risks that include fire safety? Does the facility conduct health and safety training for new workers? Does the facility conduct health and safety training for existing workers? ‘Are health and safety trainings documented? Does health and safety training include, at minimum: general workplace safety, fire safety, evacuation procedures, handling of machinery and equipment, handling of hazardous, flammable and combustible materials (where applicable), use of PPE and accident prevention? Is emergency response personnel trained, at minimum, on: notification of workers in event of fire or emergency, reporting fire or emergency to local authority, use of fire extinguishers, evacuation procedures, and first aid? Does the facility conduct fire drills on a regular basis (if not defined by law, at least once by year) for all floors and shifts? ‘Are fire drills documented with, at minimum: date, announced/ unannounced, number of participants, and time it took to evacuate? Date format required : DD/MM/YYYY Does the facility document occurrence and cause of workplace accidents? Does the facility post emergency contact information on every floor? Is there an evacuation plot plan posted on every floor of the facility? ‘Are emergency exit paths designated with visible path markings? Do emergency exit doors comply with local requirements? When the emergency exit doors do not comply with legal requirements, has the facility implemented measures to ensure workers’ security and ability to exit the production site in case of emergency? ‘Are emergency exit windows in compliance with local law? Do emergency exit stairs have handrails or guards and are in compliance with local law? ‘Are emergency exit paths, exits and stairs lit? Is emergency lighting and all emergency equipment connected to a secondary power source? Are fire extinguishers present along emergency exit path? Are fire extinguishers designated, clearly visible and accessible? ‘Are fire extinguishers inspected by facility personnel according to local law? Page 26 of 123ICS - Auditor Guideline Rev 27 2020 ‘Are fire extinguishers inspected by specialized companies on a regular basis (if not defined by law, at least once per year)? ‘Are there smoke or fire detectors in the facility according to local law? If there are smoke detectors present at the facility, does the facility conduct inspections of smoke detectors every month and legally required inspections? ‘Are there fully functional fire hydrants or sprinklers in the facility according to local law? If there is a fire hydrant or sprinkler system in place at the facility, is it inspected, tested and maintained every three months and according to legally required inspections (confirming they are in good working order)? ‘Are electrical panels, wires and outlets protected? Are electrical panels labelled? ‘Are electrical panels, wires and outlets inspected regularly by certified staff (if not defined by law, at least once per year)? ‘Are production equipment and machinery safe to use? Do all production machinery have an emergency switch off button and easily accessible? Does the factory maintain a reliable and complete chemical inventory with the following, basic information: area of use, chemical name, CAS Numbers of the chemical ‘components, chemical supplier, MSDS availability and quantities stored? Does the facility maintain an inventory of the waste types and quantities generated on- site? ‘According to the local regulation for waste (including sludge) handling, storage, treatment or disposal, is a waste management procedure in place for waste collection and temporary storage? Does the facility make sure that the workers who handle wastes are aware and are trained to the requirements on waste management (segregation, storage, labelling and disposal)? Do workers have access to gender-specific, clean and private toilet facilities? ‘Are all washing and toilet areas equipped with soap? Do toilet facilities have washing installations with running water? Do workers have access to potable water? Do workers have access to gender-specific, clean and private toilet facilities at the dormitory? Does the facility conduct fire drills on a regular basis (if not defined by law, at least once per year) for al floors of the dormitory? ‘Are fire drills documented with, at minimum: date, announced/ unannounced, number of participants, and time it took to evacuate? Date format required : DD/MM/YYYY Is there an evacuation plot plan posted on every floor of the dormitory? ‘Are emergency exits designated with visible signs? Do emergency exit doors comply with local requirements? ‘Are emergency exit windows in compliance with local law? Page 27 of 123ICS - Auditor Guideline Rev 27 - 2020 Do emergency exit stairs have handrails or guards? Are emergency exit paths, exits and stairs lit? If there is a manual fire alarm present at the dormitory, is it designated or clearly visible near exits, unobstructed and audible? Are fire extinguishers present along emergency exit path? ‘Are fire extinguishers inspected by specialized companies on a regular basis (if not defined by law, atleast once per year)? DOCUMENT REVIEW - A dedicated sheet is included in the audit questionnaire to list the documents available during the audit. Validity may be answered by YES/NO/NA. NA if there is no validity date for the document. = The result of this review is inked to questions 0.1 and 0.3 in the questionnaire. = Auditors will only indicate the validity and the comments for non-compliant documents in the third sheet of the audit questionnaire named ‘Documents’. Answer only column Cin the excel sheet ‘Documents’ with YES for compliant documents. The compliant documents should be reported only with YES in the column ‘Provided for review’. Date format required DD/MM/YYYY ~The general rule is that 2 follow-up audit should be requested more than 3 months after the previous audit (e.g. initial audit done on 01.01.2020 and follow-up audit not earlier than 01.04.2020). - For documents-related non compliances observed during the initial audit (e.g. working hours, ‘wage slips), during the follow-up audit the auditor can only focus on documentation samples of the months that have passed since the previous audit (therefore at least 3 months after based on the above rule} ~ Documents review may require a larger lapse of time, while non-compliances regarding safety might need to be corrected almost immediately. When follow-up audits are set up by ICS members often relies on a case by case analysis but they can be requested after less than 3 months solely for safety related non-comoliances (this is an exception to the above rule for safety issues only) ACCESS DENIED NOTIFICATION - _ Information Gathering © Auditors team shall clearly explain the purpose of the visit and the procedure of the audit to the point of contact or facility representative If management does not allow the auditors to proceed with the audit, request the facility to contact their vendor/client to verify the validity and importance of the audit if management is not available to grant the audit, the purpose of audit should be explained to the representative the audit team meets with. Auditors should ask to redirect and communicate the purpose of visit to the person in charge via phone immediately in order to proceed with the audit. ° Page 28 of 123ICS - Auditor Guideline Rev 27 - 2020 Auditor should contact the audit firm responsible and ask the office’s help to communicate with the client to proceed with the audit. © If all of the above fails and the audit cannot be performed, auditors should notify the customer service and/or supervisor immediately for further instruction. Note Taking — Auditor should take notes of all details as appropriate regarding the situation. Prepare a summary report of the access denied: the audit questionnaire must be updated including all the information in the narrative summary of Additional. Ask for the facility representative's signature (and company seal) in the Access Denied Notification. A copy of the access denied notification must be left to the facility. Submit an Access denied notification with full details of the denied access within 8 hours. Use audit questionnaire template and CAP template. ° ‘© Access denied report writing: ‘The following information should be captured in the report and included in Additional - Narrative summary: ‘What was the reason of the denial of access? It should be clearly stated by the auditor if the access denied is due to a technical issue not linked to a factory's choice (e.g. power cut), ‘Who (name and title) denied the access? ‘When was the access denied, including date and time? What was the objective evidence of the denial of access (management statement, observation, documents, interview of available staff including workers, security guards and other available personnel)? Documents : © obtain any documents to support the access denied case (e.g, if the facility claims there is power brownout or temporary stop of operation, obtain brownout notice issued by local power supply authority) © obtain a business card from the contact person Observatioi © Describe the general situation of the facility ; any workers/staff working ; condition of the production areas Perform a walkthrough of the facility to confirm whether the facility is in operation or not (if information was granted by facility) Photo: © After obtaining consent from the facility, take photos of the front of the facility, facility signage, and overview of the facility © The auditor should not take pictures of the workers’ faces without any relevant reason. Interview © Management statement and explanation © Workers, security guards, and other staff (if interviews were granted by facility) © Provide the vendor/client’s statements and communication (if vendor/client were contacted during the access denied process) Additional information should be obtained in case of a brownout or temporary power outrage. Specifically, when the facility tells the auditors that « power off » during the audit, auditors shall verify the statement through (but not limited to) below methods before making the conclusion that it is or itis nota case of access denied: ° Page 29 of 123ICS - Auditor Guideline Rev 27 - 2020 © Onsite tour Check whether there is undergoing production, any workers in the production area, activities in the dormitory. Take photos of workshop and facility gate. = Cross check between the brownout notice (if any), management statement and onsite observation, if permitted by management. © Document review: e.g. the written statement of the facility, official notice of « limiting power consumption ». The written statement should contain details which can be used to identify the facility name and the representative who denied the access. = Ifthe facility denies any of the above request procedures, auditors shall note it in the report. ‘+ Access denied database upload: - Audit questionnaire must be updated without any rating. = Todo so, please tick the access denied box while uploading the report: > Uploadthe Excel report file _“ Access denied ® [Pee ‘+ Summary of the Access denied process: = Access denied notification signed by the factory and sent within 8 hours to the ICS member requesting the audit = Audit questionnaire without rating but including all comments in Additional - Narrative summary PHOTOS REPORT GUIDELINE ‘+ Facility Tour — During the facility tour, the auditor is required to take photos and put them in the ICS Photos report. This template will be uploaded in the database in .pdf. = During the opening meeting, the auditor shall request the facility representatives for photo- taking permission. The auditor should emphasize thet the use of the photos will be limited to the audit report and relevant clients only. Photos taken will be treated confidential. - After getting the photo-taking permission during the opening meeting, facility representatives who accompany the auditor during facility tour should also be informed in advance of any photo taking especially in sensitive area. If the facility representatives are hesitated for photo taking, the auditor should not try to persuade them. If the facility representatives refuse the photo taking, the auditor should state the reasons in the audit report under “Additional ~ Narrative Summary”. Photos should show compliances and non-compliances in each area. Each photo should be integrated in the template ‘Photo report’ including the name of the area, explaining what is important in the photo. ‘+ Photos showing non-compliances should be identified by non-compliance and linked to the question number in the audit questionnaire. All photos should have the automatic date and time stamp. © General image format like jpg is acceptable but the resolution has to be limited to 640x480. The auditor should compress photos after their insertion in the Photos Report in order to reduce the photo report file size to reasonable size ike 2-3MB. Page 30 of 123ICS - Auditor Guideline Rev 27 - 2020 ‘+ Photos have to be reported in the ICS Photos Report — V2. ‘+ Photos include non-compliance photos, general facility tour photos, best practices photos ~ Every health and safety finding ~ Facility overview with facility name - Main gate and other gate(s) ~ Fire exit(s) = Firefighting equipment such as fire extinguisher, fire hose ~ Fire safety installation/system such as fire alarm, smoke detector, packaging in a garment facility ~ Aisles (primary and non-primary) - Evacuation plan - Electrical wiring box = First aid kit and its contents ~ Chemical storage area ~ Personal protective equipment (PPE) being used - Eye wash station/shower station ~ Available drinking water and/or drinking facility - Washroom/restroom/W.C,/toilet ~ Canteen/Eating facility/Pantry - _ Kitchen such as cooking area, fridge, food storage area, food preparation area ~ General condition in dormitory such as personal storage area, personal locker, bed, bunk, toilet facility, shower facility, fire safety installation, firefighting equipment - Worker notice boards - Any abnormalities about building structure observed such as notable cracks - Any issues which are significant to the audit result and findings © If you observe that a production is ongoing for the ICS client conducting the audit, take a photo but do not upload it on the ICS database with the additional documents. The picture will be archived by the audit company and then shared, upon request with the ICS client. AUDIT FINDINGS Closing Meeting and Corrective Action Plan The closing meeting must be organized with the facility management & the workers organization representative and results should be included in writing in the Corrective Action Plan (CAP). The CAP should contain a clear description of all non-compliances identified. A specific target date should be entered for all non- compliances. The last target date (ie. the target date of the last action to be corrected) should be clearly stated in the CAP. Date format required: DD/MM/YYYY The CAP should be issued on-site in the local language, signed and agreed to by the facility management representative, the workers’ organization representative and the lead auditor. A copy will remain at the facility {An English version of the CAP should be issued later offsite. Both versions (local language and English) should be included in the full audit report and submitted to the concerned ICS member. The rating is not communicated during the closing meeting as it will be first checked and validated by the ICS member requesting the audit that will be in charge to communicate the CAP validated and the relevant SOC ~ Summary of Content ~including the rating to the factory. Deliverables All audit documents must be written in good, grammatically correct English, unless specified otherwise (e. g. local language CAP). Identified non-compliances and compliances should be described in a clear, complete and concise way by the auditors, in order to allow the reader to understand the nature and extent of each issue. Page 31 of 123ICS - Auditor Guideline Rev 27 - 2020 Local laws, international conventions and/or ICS Code of Conduct articles whose infringement has resulted in ‘non-compliance should be cited in the Comments’ box of the related item. Please provide the name and exact reference of the legislation/ regulation/ circular or any other legal ground/ recommendation the question rating and the auditor comment are based on (in case of compliance as well as non-compliance). 1. Each section has designated area requesting for legal requirements for particular section before starting the ‘questions, for example: ~ Row 122: Legal requirements on working conditions (e.g. type of work, tasks, working hours) for young ‘workers (under the age of 18) = Row 413: Which local regulations were referenced during the assessment of the following health and safety categories? + Ete. > Enter all required/applicable _legislation/regulation/circular or any other _legal ground/recommendation in such area. 2. For particular question under which non-compliance is raised, write the finding, and quote the exact law or ICS standard against which the non-compliance is called up (applicable for both CAP and questionnaire). ‘The layout of each document template or form should be followed. Auditors should not modify the formulas in Excel files (Audit Questionnaire and Factory Profile) while they are working with those documents. Submitted audit reporting documents should not be protected by passwords. Photos Photos are an essential part of the audit report. They should be relevant and easily usable by the ICS member. Blurry, vague, over and underexposed shots should be retaken in order to comply with the specifications given in the ICS Photos Report. Report Submission Deadlines '* Access Denied notifications must be sent to the concerned ICS member within the 8 hours following the signing of the Access Denied Notification ‘+ Alert Notifications must be sent to the concerned ICS member in the 24 hours following the completion. of the audit. ‘+ Full audit reports (Questionnaire, CAP, Factory Profile, Photos report) must be uploaded on the ICS website in the 10 working days following the completion of the audit. Post-audit solicitations Request for additional information from the ICS member on whose behalf an ICS audit has been conducted should be completed with due diligence and free of charge by the audit firm tasked with the audit in question AUDIT TYPES ‘The audit companies only access the ICS audit reports done in the factory they are mandated to audit only for the last two years. Initial audits Initial audits are audits carried out for the first time in the factory. The duration of the initial audit is defined according to the size of the factory. Page 32 of 123ICS - Auditor Guideline Rev 27 - 2020 Follow-up Audits and Re-audits Follow-up Audits and Re-audits are ICS audits whose goal is to monitor the effective closing of previous non- compliances, as underlined in a previous assessment (initial, follow-up or re-audits). The ICS process allows ICS members to initialize a follow-up audit or a re-audit on the basis of an initial au regardless of the audit firm that conducted the initial audit. ICS members may choose a different audit firm for the follow-up audit than from the initial audit (only ICS-accredited audit firms can perform ICS audits). This mechanism is core to the ICS process, The liability of the audit firm conducting the follow-up or re-audit does not include potential issues missed or mistakes done by another audit firm during the initial audit. ICS members may choose a different audit firm for the follow-up audit than from the initial audit (only ICS- accredited audit firms can perform ICS audits). ‘If the factory that was previously audited moves to another location or another building, the following ICS audit should be an initial audit as the scope of the audit changes, thus the associated risks change. ‘+ If the factory that was previously audited builds an extension (e.g. a new building, anew floor, a new section etc.), the following ICS audit should be an initial audit as the scope of the audit changes, thus the associated risks change. Follow-up audits Follow-up audits should take place no later than 12 months (and extended by 4 weeks worked to plan the audit with the factory) after the completion of the initial ICS audit undergone by the assessed facility. The duration of the follow-up ausit is 1 man/day, regardless ofthe size of the assessed facility, The organization of the follow-up audit must allow the audit team to review all the non-compliances that were previously identified, in order to assess whether the facility has improved its social performance and whether the said non-compliances have been closed. However, this should not prevent auditors to investigate other fields beyond the previously identified non-conformities, and all new findings should be duly reported. Follow-up audits should be done at least 3 months after the initial audit to give reasonable time to the factory to implement the corrective actions (especially related to working hours and management system). If the lapse between the two audits is 3 months; the first month will be taken into account for documents review, but if the lapse is at least 4 months, the month of the initial audit will not be considered by the auditor for documents review. ~The general rule is that a follow-up audit should be requested more than 3 months after the previous audit (e.g, initial audit done on 01.01.2020 and follow-up audit not earlier than 01.04.2020) = For documents-related non compliances observed during the initial audit (e.g. working hours, wage slips), during the follow-up audit the auditor can only focus on documentation samples of the months that have passed since the previous audit (therefore at least 3 months after based on the above rule). = Documents review may require a larger lapse of time, while non-compliances regarding safety might need to be corrected almost immediately. When follow-up audits are set up by ICS members often relies on a case by case analysis but they can be requested after less than 3 months solely for safety related rnon-compliances (this is an exception to the above rule for safety issues only}. Re-audits Re-audits shall be organized and conducted as initial audits, but special attention must be given by the auditors to the non-compliances identified during previous assessments. Even if an audit takes place more than 2 years after the initial audit, itis a re-audit (and not an initial. Re-audits should take into consideration previous non-compliances, but since you will not have direct access to previous audits done more than 2 years before: either the ICS member shares the previous report with you, or you do not consider previous findings if these are older than 2 years ago. ‘The Audit Duration table shall be used in order to determine the duration of a re-audit. Page 33 of 123