icti ethical toy program program updates · better lives for workers and a stronger industry...

IETP is passionate about toys and the people who make them. We work with the toy supply chain to build better lives for workers and a stronger industry through the ethical production of toys.

ICTI Ethical Toy Program

Program Updates 5 Oct, 2018

• This training is aimed to interpret IETP requirements. While every endeavor has been made to ensure the accuracy of the information in this training, IETP will not accept any responsibility for any loss or consequence howsoever caused by any reliance placed on such information.

• The provisions of this IETP constitute minimum and not maximum standards. The interpretation in this training shall not be used to prevent international labor standards or national and/or local laws and regulations from being exceeded.

Disclaimer

2018 ICTI Ethical Toy Program. All rights reserved. No unauthorized reproduction. 2

Ethical Toy Program 2017

factories in the program

1,100+ workers covered

630,000+

Countries & regions

12

factory-brand links in Connect Platform

3,000+

14 year’s experience

China Vietnam Thailand Indonesia India Malaysia

Sri Lanka Taiwan Tunisia

Korea Singapore

Japan

Certified factories:

Countries for future expansion of the program:

Mexico Czech Republic

Myanmar Brazil

Where we operate

Our offices:

Hong Kong SAR, China, India, UK & USA

Buyer membership


Save time with all your suppliers audit data in one place

Mitigate risk with advanced monitoring and real time updates the moment anything changes at your supplier

Pledge your support to raise ethical standards and improve the lives of workers in the toy industry supply chain and have your commitment publically recognized

Pre-screen potential suppliers with access to our database

Tools and support you need

Tackle root causes using our expert special investigation team, working on-the-ground to solve problems and engaging factory management (incident report)

Strengthen stakeholder engagement, with support on how to address the increasing requests from NGOs, investors, and the media

Instant Access to Status, Audit Reports, CAPs & notification, increasing the efficiency of your compliance program with the Connect Platform

Monitor, manage and improve the ethical performance of your manufacturers + look for potential ones with our online platform

Build capability with support programs to increase ethical knowledge, skills, and commitment amongst those you source from

Benefits for brands & retailers

Global community of Ethical Toy Program Members …

Some of the Retailers we work with…

1. PA to PV

2. Changes to Certification

3. Implementation

4. Updates to the Audit Checklist

5. New Checkpoints to the Audit Checklist


Agenda

to the Audit Checklist 6. On-Site Corrections 7. Preparation for Changes 8. Audit Report Formats 9. Factory Programs

1. PA to PV Progress Audit (PA) will be replaced with Progress Visit (PV) 2. New Certification Status Added a new status – Progressing. 3. Policy updates 5/6 day work week – 40 hours / 6+ working days in China is not accepted by IETP effective Jan 1,19 4. Enhanced Audit Checklist

a) Clearer categorization (14 sections) and requirements – simpler and more accessible; b) Introduced non-compliance rating – zero tolerance, critical, major, minor c) Reduced allowable working hours to 72 hours standard d) New checkpoints

5. On-Site Corrections 6. Remediation Actions Recommendation Based on factory’s input client list, IETP may recommend different remediation (FU/DR) differ from IETP normal practice


Program Change Highlights

1. From Progress Audit (PA) to Progress Visit (PV)


IETP – Certification Flow


Old

IETP – Certification Flow


New

Factory is always suggested to apply for IAA 135 days prior to existing certification expiry.

Progress Audit (existing)


Time 2-6 months after Seal issued

(All factories) 2-4 months after Certified (All factories)

Type Unannounced audit Announced 2-way visit Sr. mgt. involvement mandatory

Checklist: Working hours, wages, selected EHS Scope

Checklist: Working hours, wages, selected EHS “Best practices” or “nice to have” items Open discussion, Q&A

Conducted by Accredited auditor from 1 of 4 accredited

audit firm

IETP accredited visitors IETP staffs

Possible outcomes

Termination (zero tolerance) Probation Seal (maintain, up-/down-grade)

Termination (zero tolerance) Certification (maintain) Submit CAP for remediation and records

Progress Visit (new)

How will factories be affected? What we want to achieve with factory in PV


This is NOT AN AUDIT

1. Encourage transparency, open communication and discussion

2. Top, senior management engagement, commitment

3. Status update to factory compliance level

4. Sustainability to current certification

5. Support for future assessments

6. Improvement opportunities via enhanced Root Cause Analysis

7. Practices sharing among industry

8. Determine future training, support opportunities

Progress Visit - Routine


How will factories be affected?

1. Pre-engagement prior to visit , seeking for factory's concerns and questions. 2. Q&A on factory’s inquiries. 3. Review wages, compensations for systematic improvement opportunities. 4. Factory tour for potential and high-risk EHS areas. 5. Root Cause Analysis and discussions for CAP preparation

• IETP requirements, (On-site CAP required for closure monitoring) • Observations (CAP recommended)

6. On-site CAP posted on Connect for monitoring and update.

Enhanced Root Cause Analysis- Typical CAP received


Item 条款

PV Finding 违反项目 Cause of Non-Compliance 违反原因

Corrective Action Plan and Completion Date 整改计划和完成日期

Preventive Action and Completion Date 预防措施和日期

Audit Finding and CAP

Evacuation aisle at the warehouse and assembly workshop was partially blocked by materials.

It was caused by workers' carelessness

During audit date, the findings had been corrected before auditor leaving and all materials had been moved. Completion Date: Immediately

The factory will assign a safety officer or security guard to inspect all major areas including evacuation aisles on a regular basis. Completion Date: Immediately

Evacuation aisle partially blocked

Worker’s carelessness

Regular inspections

Removed immediately

Item 条款

PV Finding 违反项目 Cause of Non-Compliance 违反原因

Corrective Action Plan and Completion Date 整改计划和完成日期

Preventive Action and Completion Date 预防措施和日期

PV Finding and CAP

Several secondary evacuation aisles were partially blocked by materials.

1.The factory did not have a comprehensive evaluation to the layout on the fire safety before moving machines and work stations into the workshop 2.When placed new machines or new production lines, the fire safety conditions were not re-considered.

1.Immediate remove all materials that caused blockage. 2.Redesign the layout of workshops base on fire safety requirement, and the passage between each work station and aisle is reasonable. Completion Date: within 10 working day

1.Relocation of any work stations/machines must follow the fire safety requirements. 2.Any changes to the layout in future must be approved by EHS officer before implementing and monitored during implementing. 3.Assign a safety officer to conduct regular inspection after redesigning to ensure all aisles and work stations are kept clearly in case of emergency evacuation. Completion Date: within 10 working day


Evacuation aisle partially blocked

1. Lack revisit and consultation with EHS for layout change

1. Layout Change SOP update , enforcement

2. EHS involvement and approval 3. Regular Inspections

1. Removed immediately

2. Layout, fixture re-design

Enhanced Root Cause Analysis- Example CAP received from PV

Practices Sharing


2. Changes to the Certification

21 2018 ICTI Ethical Toy Program. All rights reserved. No unauthorized reproduction.

Current ICA/IAA process

Seal A60 Seal A Seal B Seal C


IAA/ICA

Desktop

Follow-up

Existing

Full Compliance

NC Remediation

Audit Status: Audited Seal

Certified


New

New ICA/IAA process

Audit Status: Assessed Certified

IAA/ICA

Desktop

Follow-up

NC Remediation

Full Compliance


Seals are no longer determined only by weekly working hours

A pioneering, objective, comprehensive way to assess

factories’ social responsibility

Highlights of the changes

All procedures and timeframes remain unchanged

Time needed to get certified remains unchanged

Terms for probation and termination remain unchanged

Correction actions needed post-audit remain unchanged

Follow-Up & Desktop Review mostly remain unchanged – we work to

strike a balance within the industry, helping factories meet the

requirements of most buyers to avoid duplicated audits


Highlights of the changes Highlights of the changes

Certified


New

Introduce another audit status - Progressing

Audit Status: Progressing

IAA/ICA

Desktop

Follow-up

NC Remediation

Full Compliance

Certified

No Critical violations

Less than 30% Major violations in each section

Accepted CAP

Progressing • A status in the system • Not Certification • Valid for 6 months from audit date • Factory will become Certified when

achieve Full Compliance

A ‘Progressing’ factory means

no critical NC

moving to Certification in a short period of time (e.g. remediation timeline on Major/Minor is typically 2 months or less)

limited Major findings, with acceptable CAP submitted


For a ‘Progressing’ factory, consider

• earlier engagement with these factories?

• conditional PO placement?


3. Implementation


Checklist V2.0 with minor updates Replace PA with PV Launch new Audit Checklist


Before Oct 15

1st October

1st November

Arrangement at Launch

1. IAA/ICA:

a）Audits conducted on or after 1st November will be using the new Audit Checklist.

b）If an audit is previously conducted before 1st November and follow-up is needed, the follow-up audits will still use the existing Audit Checklist.


4. Updates to the Audit Checklist


Changes made to the Audit Checklist

2018 ICTI Ethical Toy Program. All rights reserved. No unauthorized reproduction.

33

1. Clearer guidance: the checkpoints are now grouped into relevant sections, more logical and easier to understand

2. Non-compliance are now graded to show its severity:（Zero Tolerance/Critical/Major new /Minor new), less severe non-compliance will be identify as Major or Minor

3. Adjusted the weekly working hours: reducing upper limits to 72 hours per week 4. Added checkpoints (Total 270 from current 205)

1. New Requirements - 27 2. Existing requirements to new checklist - 4 3. Current checkpoints expansion - 34


1 Audit Process (4) 3 Employment Practices (15) 4 Special Protections (5)

1.1Transparency (2) 3.1 Policy (2) 4.1 Young Workers (2)

1.2Interference (2) 3.2 Training (1) 4.2 Pregnant Workers (3)

3.3 Underage Workers (2)

2. Business Ethics 3.4 Documentation (2) 5 Working Hours (11)

2.1 Policy (2) 3.5 Contracts (3) 5.1 Policy (2)

2.2 Training (1) 3.6 Homework and Cottage Work (1) 5.2 Documentation (3)

3.7 Recruitment Fees (2) 5.3 Working Hours (1)

3.8 Foreign Migrant Workers (2) 5.4 Breaks (5)

Sections of the New Audit Checklist


6 Compensation (13) 8.2 Training (1)

6.1 Policy (2) 8.3 Implementation (9) 6.2 Wages and Benefits (3) 8.4 Human Trafficking (1) 6.3 Withholdings and Deductions (5) 6.4 Payroll and Pay slips (3) 9 Discrimination (4)

9.1 Policy (2) 7 Disciplinary Practices (9) 9.2 Implementation (1) 7.1 Policy (2) 9.3 Reporting Mechanism (1) 7.2 Training (1) 7.3 Implementation (6) 10 Grievance Mechanisms (12) 10.1 Policy (2) 8 Forced and Prison Labor (13) 10.2 Employee Representation (7) 8.1 Policy (2) 10.3 Freedom of Association (1)

10.4 Worker Helpline (2)


11 Facilities (29) 12 Fire and Emergency (46) 11.1 Policy (2) 12.1 Policy (3) 11.2 Emergency Communication (1) 12.2 Emergency Response Personnel (1) 11.3 Factory Security (2) 12.3 Fire Acceptance Certificate (1) 11.4 Building Safety (2) 12.4 Exit and Evacuation (8) 11.5 Housekeeping (5) 12.5 Fire Fighting System (10) 11.6 Working Conditions (5) 12.6 Alert System (3) 11.7 Drinking Water (2) 12.7 Emergency Drills (2) 11.8 Sanitation (3) 12.8 Electrics (4) 11.9 Medical Safeguards (5) 12.9 Flammable and Combustible Hazards (9) 11.10 Vehicles (2) 12.10 Smoking Rules (2)

12.11 Lightning Protection (1) 12.12 Emergency Investigation and Reporting (2)




13 Environmental, Health and Safety (EHS) (70) 13.10 Chemical Safety (12) 13.1 EHS Program (3) 13.11 Incident Investigation and Reporting (4) 13.2 Training (2) 13.12 Environmental (9) 13.3 EHS Committee (3) 13.4 Occupational Health (4) 14 Dormitory and Canteen (36) 13.5 Personal Protective Equipment (PPE) (5) 14.1 Facility (10) 13.6 Workplace Safety (7) 14.2 Emergency Preparedness Policy (3) 13.7 Machinery Safety (9) 14.3 Exit and Evacuation (7) 13.8 Equipment Safety (6) 14.4 Fire Fighting System (8) 13.9 Hot-Work and Gas Cylinders (6) 14.5 Emergency Alert System (3)

14.6 Canteen (5)



Non-Compliance Current Checklist New Checklist

• Forced Labor • Child Labor • Access Deny • Bribery Attempt

Zero Tolerance Termination

• IAA – Record Inconsistency, on-site transparent

• Inaccurate Overtime payment • Working Hours • Serious Safety Issue

Critical, No Seal,

Remediation Needed

Comparison: Current & New Checklist

Zero Tolerance Termination

Probation Probation

Critical, No certification,

Remediation Needed


Non-Compliance Current Checklist New Checklist

Comparison: Current & New Checklist

• Did not provide EHS training to workers

• Did not conduct regular inspection and test

• Lack of written policy of the training for the security guard

No Certification, Remediation Needed

* Major Status: Progressing No Certification, Remediation Needed

No Certification, Remediation Needed

* Minor Status: Progressing No Certification, Remediation Needed

How to read the New Checklist?


Checkpoint no.

Checkpoint Question Compliance Guidance Text

5.2 Documentation

5.2.2 Are all hours worked documented? > 20% sampled records

are incomplete of with errors

Yes

Critical

Major

N/A

≤ 20% sampled records are incomplete of with errors

1. Example of acceptable time records: a. Time clock system ( worker’s signature

confirmation is needed once per month), b. Piece rare records (worker’s signature

confirmation is needed once per month), c. Manual time recording system (worker’s

signature confirmation is needed once per week(, or

d. Computer recording system. 2. Time records must be completed and include, but are not limited to: a. Information about the worker, and b. Signature confirmation where required. 3. Time records must be provided for the required audit period (e.g.: 12 months) 4. Time records must cover all workers in the factory

Current Checklist 2.7, 2.8 Case Study


42

New Audit Checklist -5.4 Breaks Case Study Checkpoint

no. Checklist Question Compliance Level

5.4.1 Do workers receive 1 day off in a pre-defined week?

Yes Critical

Major

N/A

> 20% of sampled workers are not given day off/ 1 samples

worker has worked more than 13 days consecutively ≤ 20% of sampled workers are not given the day off

5.4.2 Do workers receive meal breaks of at least 20 minutes?

Yes Critical

Major N/A

> 20% of samples workers do not receive such breaks ≤ 20% of sampled workers do not receive such breaks

5.4.3 Do workers receive breaks of at least 15 minutes after 6 consecutive hours worked?

Yes Critical Major N/A

> 20% of samples workers do not receive such breaks ≤ 20% of sampled workers do not receive such breaks

5.4.4 Are workers provided with at least 10 consecutive hour rest in a predefined 24-hour cycle?

Yes Critical

Major N/A

> 20% of sampled workers are not provided with such rest/ 1

samples worker has less than 8 hours rest ≤ 20% of sampled workers are not provided with such rest

5.4.5 Are workers allowed toilet and water breaks?

Yes Critical Major N/A

> 20% of samples workers are restricted in taking these breaks ≤ 20%of samples workers are restricted in taking these breaks

Current Checkpoint 2.7, 2.8 to New Checkpoint 5.4.1 – 5.4.5, an expansion of 3 checkpoints

Scenario Current Checklist New Checklist

1) 5 out of 20 workers didn’t receive 1 day off in a pre-defined week?

NC to 2.7 Status: Audited No Seal. – Seal will be issued after remediation

Critical to 5.4.1 Status: Accessed No Cert. – Cert. will be issued after remediation

2) 2 out of 20 workers were working for 6 consecutive hours without 15 mins break


Major to 5.4.3 Status: Progressing No Cert. – Cert. will be issued after remediation

3) 1 worker did not receive 30 mins lunch break


Major to 5.4.2 Status: Progressing No Cert. – Cert. will be issued after remediation

• Same process for the Remediation • Guidance text for non-compliance is clearer

• More specific on the areas of improvement needed


5. New Checkpoints


Major Changes of New Checklist

45

Added checkpoints (Total 270 from current 205)

1. New Requirements - 27 2. Existing requirements to new checklist - 4 3. Current checkpoints expansion – 34





Section CP No. Checkpoints Grading

Audit Process

1.1.1 Has the factory allowed the audit to be conducted without denial of access? ZT 1

1.1.2 Has the factory allowed the audit to be conducted without intentional concealment or hidden audit scope?

ZT 2

1.2.1 Is the whole assessment process free from bribery attempts? ZT 3

1.2.2 Is the coaching of workers prohibited? Critical 4

Business

Ethics

2.1.1 Does the factory have a Business Integrity policy? Minor 5

2.1.2 Is there a designated staff member responsible for implementing the Business

Integrity policy?

Minor 6

2.2.1 Are supervisory staff, who may be exposed to unethical behavior, trained on the

Business Integrity policy?

Minor 7

Employment

Practices

3.3.2 The factory has no cases of historical underage workers? Major 8

3.7.1 Does the factory have a policy which prohibits charging recruitment fees to workers? Minor 9

3.7.2 Has the factory verified that recruitment brokers and agents used adhere to legal hiring

practices?

Major 10

3.8.1 Does the employment of foreign migrant workers comply with legal requirements? ZT 11

3.8.2 Does the factory prohibit charging foreign migrant workers recruitment related fees? Major 12

New IETP Requirement

Existing added to checklist


47


Special

Protection

4.2.1 Are pregnant workers assigned appropriate job tasks? Major 13

4.2.2 Are pregnant workers given additional necessary and reasonable breaks? Major 14

4.2.3 Are female workers with breastfeeding needs provided with appropriate space and

breaks?

Major 15

Working Hours 5.3.1 Are maximum weekly working hours within IETP requirements? Are maximum weekly working hours within IETP requirements? > 78hrs / week，Critical； 72hrs< WH≤ 78hrs，Major

Critical

Major

16

Compensation 6.3.1 Does the factory have a written policy for replacement items in the case of loss or

damage by workers?

Minor 17

Forced and Prison Labor

8.4.1 Is human trafficking activity prohibited? ZT 18

Grievance Mechanisms

10.3.1 Are union activities free from unreasonable management intervention or punishment? Critical 19

10.4.2 Is it prohibited to modify the information on the Helpline Cards and Posters? ZT 20



48


Facilities

11.3.2 Are children prohibited from entering factory production areas and warehouses? ZT 21

11.6.5 Any citations or penalties for violations of laws on working conditions in the past 12 months have been reported to IETP within 48 hours?

Major 22

Fire &

Emergency

12.1.2 Does factory have a written fire prevention policy? Major 23

12.3.1 Does the factory have an official Fire Acceptance Certificate? Critical 24

12.4.1 Are emergency exits and evacuation paths built in line with legal requirements? Critical 25

12.6.2 Is the installed alarm system inspected and tested monthly? Major 26

12.7.2 Does the factory plan additional fire drills where required? Major 27

12.12.2 Are major factory incidents and emergencies reported to IETP within 48 hours? Major 28

EHS 13.4.1 Are occupational health checks provided to applicable workers? Major 29

Dorm &

Canteen

14.1.6 Are dormitories kept clean and maintained in good condition? Major 30

14.2.2 Does dormitory have a written fire prevention policy? Major 31


6. On-Site Corrections


On-Site Corrections


How will factories be affected?

1. Identify occasional errors, mistakes in selected areas

2. Immediate correction 3. CAP for system enhancement 4. Record in Remarks in audit report 5. Systematic issues will not be considered

On-Site Correction Examples


51

7. Preparation for Changes


How will factories be affected? Buyers Preparation


53

1. Understand there are no changes to the Audit Process, timeline, remediation standards

2. Review the Checklist 3. Determine engagement policy with factories with audit status

“Progressing”

4. IETP will have one full audit report annually (IAA/ICA). PA report

will now be replaced with a PV on-site CAP

8. Audit Reports Formats



55


57

9. Factory Programs


Family-Friendly Spaces (FFS)


Summer program to reunite migrant workers with their left-behind children

• Allowing children to connect with their parents during summer school breaks

• Strengthening the parent-child link that lies at the heart of the toy industry


2016

2017

2018

2 factories implemented a pilot program.

18 factories joined FFS program, 9 of them implemented again.

11 factories joined FFS program, 2 of them implemented again.

500 Children 691 Children 85 Children

Family-Friendly Spaces (FFS)


Q&A

Thank you

[email protected] @ethicaltoy

@ICTI_EthicalToy

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icti ethical toy program program updates · better lives for workers and a stronger industry...

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