Compliance in the apparel industry

In this era of globalized economies, the garment industry in especially required to provide lowest possible costs with fastest possible supply chains to survive. In this race, more often than not, factories tend to put their social responsibility or social compliance on the back burner.

Compliance means fulfilling/conforming to certain standards, rules, regulations, policies, SOP’s or goals set out by the organization. It can be:

National legal requirement
International legal requirement
Customer Requirement
Certification requirements
Internal Policies, procedures, guidelines

Social compliance is how a business treats its workers, and the environment it operates in. It is simply the minimal code of conduct that guides the business in regards to how its workers and environment should be treated, in regards to the employee wages, working hours, conditions, and environmental laws. Social compliance basically intends to protect both labor and environment interests.

Social accountability standards or social compliance have been developed by many international organizations like Fair Labor Association (FLA), Worldwide Responsible Apparel Production (WRAP), Ethical Trading Initiative (ETI), Business for Social Responsibility (BSDR), and Council on Economic Priorities Accreditation Agency (CEPAA). The guidelines from these organizations are widely being used by big brands to form their own social compliance standards.

The basic core areas that social compliance should include are policies on child labor, health and safety, forced labor, compensation, discrimination, working hours, discipline, management systems and right to free association and collective bargaining. In addition to these core areas, local culture and government regulations also become a part of social compliance in the industry.

Categories of Compliance

There are different types of compliance that are required from a garment unit to fulfill. Types of compliance with their brief introduction are as follows:

Social /Labor Compliance

This is the type of compliance where you are required to fulfill labor law requirements as required by National labor Law or ILO and some best practice requirements by customers. It covers:

Payment issues
Working Hours
Working Environment
Disciplinary practices
Labor Practices

OHS Compliance

In this type of compliance, you are asked to fulfill Occupation, health, and safety requirements. It can be Standards set out by local authorities or standards made by customers. Customers can also ask you to fulfill different international standards e.g. OSHAS etc. It covers:

Fire Safety
Machine Safety
Electrical Safety
Physical/biological Hazards

Environmental Compliance

Here a factory has to comply with Environmental requirements that can be local or international or requirements set out by the customer. Environmental Compliance covers:

How you manage waste of your facility?
You have environment permit or not?
What is the impact of your activities / processes?
How you manage your processes/activities to make it environment friendly

Product Quality Compliance

Product quality is a very important compliance area. This is where there is zero tolerance. If a product is not a quality product then you won’t get the customer. In Product quality compliance, we consider:

How a company manages its products?
How a quality product is ensured?
What are the faults?
How the defects are removed?
How material is handled?

Security Compliance

This compliance is mostly applicable to export oriented industries. This compliance arises due to terrorism and customer data protection issues. It will include:

Who have access to certain areas?
Who have access to data/files?
How products are packed?
How some areas are accesses restricted?
How site security is ensured?
How product design security is ensured?

Structural / Building Compliance

After the collapse of Rana Plaza in Bangladesh, international brands have now been trying to make sure that this does not happen again. Brands are conducting building assessments.

What is the strength of building?
What is the load capacity of the building?
What are defect in the building?
How building can be made safe?

Certification Compliances

There can be different types of certification e.g. Management system certification, social, environmental, quality, safety certification against different standards e.g ISO standards, BSCI, SMETA, etc. there might be some special requirements of these certifications depending on standards e.g. how documents are managed, etc.

Compliance Audit in the Apparel Industry

A compliance audit is one kind of audit that is specially designed for auditing the compliance issues related to the apparel industry. Different regulatory authorities set different types of regulatory issues. And buyers of garments ask from the company whether they are following their required compliance or not. These issues are checked by the auditing process which is known as compliance audit. After a compliance audit, they provide/ issue certificates. From the Compliance Audit Checklist in Apparel Industry a garments maker will be able to know what the things buyers may ask from the company are.

Licenses, Permits and Facility Information

Factory profile
Architectural & Structural Drawing Approval
Soil Test Report Approval
Trade license
Factory license
Fire license
Boiler license
Generator permission
Electrical permission/ Sub-station permission
TIN certificate
Export registration certificate and Import registration certificate
Export promotion bureau certificate
Bond license
Rent agreement

Child and under-aged worker

Child labor remediation process
Recruitment policy
Personal file
Agreement with the service provider/sub-contract

Forced labor and Discrimination

Any harassment or discrimination issues
Policy on a prohibition of forced labor
Awareness/Training register
The job responsibility of security guard

Freedom of Association and Collective Bargaining

Policy on freedom association
Awareness/Training register
Formation procedure of worker association/trade union
Meeting minutes of worker participatory committee
Register for complain /Suggestion
Grievance handling procedure

Right of Worker

Personal file of worker
Service book
Employee ID card

Disciplinary Practice

Policy on disciplinary practice or rules
Leave Record
Orientation training on factory code of conduct & legal requirement
All kind of policy
Disciplinary action log & record
Awareness/training register
Final settlement
Others legal facilities

Working Hours

Working hour Approval
Working hour record for all section
Overtime hour record
Attendance Register
Declared holiday list
Manpower list

Wages, Benefits & Compensation

Wages/payroll sheet (last 1 year)
Overtime wages sheet (last six months)
Pay slips (last 1 year)
Wages Increment record
Maternity Benefit register & Record
Group Insurance with manpower update list
Policy on wages, overtime, payment date, calculation method, leaves & holidays, etc.

Workplace Safety

Sub-soil/Geological investigation report
Building structural plan/approval
3rd party assessment report
Firefighting training record
Fire drill record
Firefighting team
Firefighting equipment list
Fire safety plan
Personal file of Fire Officer
Electrical & Mechanical Equipment periodical checklist
Competency certificate of Electrician
Competency certificate of Boiler Operator
Chemical Handling Training
Health checkup record
Chemical list
Safely machine operating training register
Needle stock register, Broken & Missing Register
Sharp tool policy
Emergency evacuation diagrams
Emergency exit doors
Building structure safety
PPE (personal protective equipment) use
Aisle or Stairway

Occupational Health & Welfare

Personal file of Welfare officer
Drinking water test report
First aid training & List of the first aider
Medical agreement
Competency certificate of Doctor
Competency certificate of Nurse
Personal file of care governance
Childcare register
Canteen committee

Environment Management

Environmental risk assessment as per section
Emergency procedure to reduce risk
Environmental clearance certificate
Waste disposal agreement /procedure
Wastewater test report in-house and outside
Energy survey/ Assessment record

Management Practice & Sub-contractor /Supplier Control

Awareness training record for new & old workers
Mid Management training record
Internal Audit record
Policy on Sub-contract control
Sub-contract control procedure & record

Training Records

Emergency evacuation & fire drill record
List of firefighters trained by fire service/BGMEA
Disciplinary Rules communication
First Aid training record
Chemical Training record
Machinery safety training record
Health and safety training record
Training on KIABI compliance

Company Policies

Child Labor Policy
Child labor Remediation Policy
Disciplinary Rules/Policy
CSR Policy
Anti-Corruption/Bribery policy
Sub-contractor/Supplier Monitoring
Grievance Procedure
Environmental Policy
Energy efficiency plan
Environment emergency procedure
Deduction for late/after lunch assentation