Guidebook to RBIS Suppliers Avery Dennison Supplier Standards. Version 1 - October 2013

Transcription

1 Guidebook to RBIS Suppliers Avery Dennison Supplier Standards Version 1 - October 2013

2 Table of Contents Introduction... 3 Laws, Regulations and Industry Standards...4 Employment Standards 1. Compensation Hours of Labor Forced Labor Child Labor Discrimination/Human Rights Freedom of Association Disciplinary Process Environmental, Health and Safety...20 Confidentiality...25 Conflict of Interest, Bribes and Kickbacks Right to Access...28 Appendix A. Avery Dennison Supplier Standards...29 B. Definitions C. Shared Facilities 36 D. Subcontracting..37 Page 2 of 37

3 Introduction Avery Dennison is committed to conducting its business in accordance with a high standard of business ethics, a regard for human rights, and in compliance with all applicable laws governing issues such as child labor, wages, benefits, working hours, harassment and health and safety. We expect our suppliers to share our high standards of conduct, as outlined in Avery Dennison Supplier Standards. Avery Dennison Supplier Standards include minimum requirements and expectations that all suppliers and sub-contractors (collectively Suppliers ) must comply with as a condition of doing business with Avery. Please note that it does not replace the local laws of each country where Suppliers operate. At a minimum, Suppliers should always be familiar with and comply with all relevant laws and regulations. Avery Dennison Standards should be followed where there is no law or where Avery Dennison Standards is stricter. How to use this Guidebook The purpose of the Guidebook is to provide additional guidance and clarification to suppliers on Avery Dennison Standards. We expect suppliers to use it as a reference tool to help identify what workplace practices and working conditions are acceptable when doing business with our company. Avery Dennison is committed to working with suppliers by providing continuous education and support. In turn, it is our expectation that suppliers are honest and transparent in their dealings with us and committed to making continuous improvements. Page 3 of 37

4 Guide to Avery Dennison RBIS Standards I. Laws, Regulations and Industry Standards Suppliers and sub-contractors must comply with all applicable local laws and regulations. In situations where there is a conflict between local laws and regulations and the standards described in the Avery Dennison Supplier Standards, suppliers will be required to meet the higher standards. KEY REQUIREMENTS: Comply with local laws and regulations of the country of manufacture. Operate in compliance with the law and the requirements of Avery Dennison RBIS s requirements. Avery Dennison Standards should be followed where there is no law or where Avery Dennison Standards are stricter. Track legal and regulatory changes made to the local labor laws (e.g. minimum wage, working hours, benefits, child labor, forced labor, health and safety, freedom of association, etc.). Keep business licenses and other documents required by law in order and up-to-date. All employees are provided a copy of their signed employment agreement (written in their native language) that describes the nature of their worker arrangement, terms and duration of their employment contract, starting wages and overtime wages, work hours and holidays, benefits and deductions, resignation and termination conditions. Home-based workers are not allowed. INDICATORS OF NONCOMPLIANCE: Violations of the law or requirements of Avery Dennison s Supplier Standards. Unfamiliarity with legal requirements or Avery Dennison RBIS requirements. Workers are not trained and unaware of their legal rights. Lack of internal controls to monitor the labor law and internal audit to ensure compliance with the law. BEST PRACTICES: Keep written procedures in place, with a designated responsible management representative, to ensure Supplier is aware of and understands changes that are made to the local labor laws. Changes are communicated to all relevant personnel, and necessary adjustments are made by the Supplier in a timely manner to ensure compliance with the law. Maintain copies or summaries of all applicable laws. Periodically review Supplier work rules and employment handbook to ensure it is aligned with the current law at a minimum. Supplier does not have exemptions from legal requirements, e.g., working hours, wages. Page 4 of 37

5 Supplier periodically monitors its compliance with the law and Avery Dennison Standards RBIS s requirements. Questions and Answers A supplier manager claims he was unaware of the legal provision requiring payment of a premium for all hours worked in excess of the legally prescribed workweek. Is it acceptable? No, all factories should, at a minimum, understand and comply with all applicable legal requirements. Page 5 of 37

6 II. Employment Standards 1. Compensation Suppliers and sub-contractors shall compensate all employees in compliance with all applicable local laws pertaining to wages, including overtime and benefits. Suppliers and sub-contractors may not make deductions from pay for disciplinary infractions. KEY REQUIREMENTS: Legal minimum wage is guaranteed to all employees, including trainees, temporary workers and employees paid on piece rate. If a worker is paid by piece instead of hour, the worker must receive a wage equal to or above minimum wage. In addition to wages for the standard workweek, all workers must be compensated for overtime hours at the legal or contracted mandated premium rates (if applicable). Employees must be paid on time, in accordance with the law, and in the form of the local currency. Employees must be provided all employee legally required benefits, including vacation, insurance, and retirement benefits, etc. Employees must be informed of wages, withholdings and other legal deductions prior to commencement of employment via a labor contract (if required by law) or other means (e.g., a written summary) prior to the start of employment. Employees are provided pay slips that include their personal information (name, address, etc.) and a detailed explanation of payment, including regular and overtime hours, regular and overtime wage rates or piece rates earned per day, bonuses, allowances and a description of all deductions. Pay slips should be written in employees native language and provided in accordance with the local law. This same information should also be available for subcontractors who work on-site. Legal deductions for housing, food, transportation, etc. should be reasonable, as defined by applicable local laws and regulations or, in the absence of the law, industry best practice. Also deductions should not effectively lower an employee s pay below the legal minimum wage. Fines that are not permitted by law, such as disciplinary fines, are prohibited. Employees must not be fined for production mistakes, for failure to meet production targets, or as a form of discipline, Legally required withholdings are withheld correctly and paid to the proper agency(ies). Employees who leave the factory or are dismissed must receive termination pay-outs and outstanding wages as required by law. Supplier must keep complete and accurate working hour and payroll records for all workers (showing base pay, overtime pay by type, and all deductions). Payroll and working hour records are maintained on site for at least one year. Supplier has a written policy on wage and compensation awards based on legal requirements. Page 6 of 37

7 INDICATORS OF NONCOMPLIANCE: Incomplete pay records Inconsistencies between pay records and other factory records. Late payment or miscalculation of wages. Not paying legally required wages including, where required, holiday pay. Compensation not paid directly to employees. Employees are not provided legally required benefits. Illegal or unfair deductions, including deductions for disciplinary infractions or protective equipment. Failure to pay worker mandated withholdings to the proper agency. No pay slips provided to employees or, if provided, are inadequate. Supplier pays market wages which are less than legally required wages. BEST PRACTICES: Employees understand their benefits, including paid leave, and how their wages are calculated. Supplier posts a simple written description of how pay is calculated. Supplier has time clocks or other automated methods for tracking working time and calculating pay. Supplier has an established pay schedule that is strictly adhered to. Provide items such as uniforms, equipment or special protective gear free of charge. Questions and Answers What is the definition of legal minimum wage? The legal minimum wage is the standard that all employees wages, including those who are in probationary, training or internship periods, should meet or exceed during normal working hours or regular working hours as agreed to in labor contracts, if applicable. Is it acceptable if a Supplier offers boarding and lodging allowances to its workers, and they calculate both items as part of the minimum wage? This is not acceptable. Payment for services, such as food and dormitory, should not result in the net wages being below the minimum wage. Moreover, the following items cannot be counted as part of minimum wage: overtime wage and the allowance associated with mid and night shifts. Page 7 of 37

8 2. Hours of Labor Except in extraordinary business circumstances, Suppliers and sub-contractors shall limit the number of hours worked in any seven (7) day work week to no more than sixty (60) hours, and employees must be given a minimum of one (1) day off in every seven (7) day work period. Where local standards differ, the requirements that provide for fewer hours per work week shall apply. KEY REQUIREMENTS: Complies with legal requirements and limitations on regular and overtime hours. Where the law permits working hours beyond 60 in a week, Avery Dennison RBIS requests that factories work no more than 60 hours per week on a regularly-scheduled basis and are provided with at least one day off in seven days. Avery Dennison RBIS recognizes that excessive overtime is a challenge based on various supplier requirements. Our goal is to work with Suppliers who are committed to a continuous improvement plan with a target of legal compliance or Avery Dennison Standards, whichever is stricter. Ensure all overtime is strictly voluntary. Employees are educated on the standard workweek and the Supplier seeks their willingness to work overtime. Employees must know they have the right to refuse overtime without incurring fines, penalties or retributions. Suppliers must be supportive of employees decision to accept or refuse overtime and cannot force or coerce them to work. Employees are provided with the proper time for rest. Suppliers shall offer vacation time leave periods, and holidays consistent with applicable laws and regulations. Supplier uses a reliable time recording system, all hours are tracked, and time cards accurately reflect the real working hour situation in the factory. Workers punch in and out for themselves and have access to their own attendance records upon request. Legal working hours and factory working hours/schedules are made available to all workers. Attendance records are maintained on site for at least one year. INDICATORS OF NONCOMPLIANCE: Inconsistent or incomplete time records. Total working hours exceed 60 hours in a week (except in extraordinary business circumstances). Employees work more than 7 consecutive days. Denial of legally required holidays, rest days and vacation leave. Unreliable or incomplete working hour system. Non-payment for actual time worked (work done off the clock). Any policy that indicates that employees must participate in overtime work or face punishment. Page 8 of 37

9 BEST PRACTICES: Use a more reliable, automated time recording system, such as mechanical time clocks (punch card time records), electronic or magnetic card time keeping, or a hand or thumb print scanner system. The automated time recording system is directly linked to payroll and has the capacity to distinguish between regular and overtime hours. If this is not possible, the payroll and personnel departments have systems in place for calculating and doublechecking the regular and overtime hours worked by employee. Workers are given advance notice that overtime hours may be necessary. To clarify for workers and supervisors, mandatory breaks and rest periods, including paid holidays, are outlined in the worker manual/work rules. At a minimum, breaks should include sufficient time for lunch and dinner. A weekly working hour warning system is implemented that alerts the applicable department supervisors and their managers when working hours are approaching the legal limit. HR and Production communicate regularly to ensure the production plan is aligned with the working hour policy. One system exists to track all employee work hours. Questions and Answers Several of the slower workers in a factory often do not take their daily breaks and work through lunch to maintain their productivity levels. Supplier says the workers want to work and their total working hours do not exceed local legal limits. Is this OK? No. Supplier should provide workers with the proper time for rest in accordance with the local law. To clarify for workers and supervisors, it is recommended that mandatory breaks and rest periods, including paid holidays, are outlined in the worker manual/work rules. At a minimum, breaks should include sufficient time for lunch and dinner. To help ensure employees use their breaks properly, Supplier may want to consider shutting down the electricity in production areas, close production room doors and provide alternative rest and recreation areas for workers. What type of attendance system is acceptable to Avery Dennison RBIS? While Avery Dennison RBIS will accept a manual attendance record and timekeeping system, to avoid human error and ease in reporting (especially for larger factories), it is recommended that Suppliers adopt an automated time recording system, such as mechanical time clocks (punch card time records), electronic or magnetic card time keeping, or a hand or thumb print scanner system. Page 9 of 37

10 3. Forced Labor Suppliers and sub-contractors shall not use forced labor under any circumstances, including prison labor, indentured labor or debt bondage. KEY REQUIREMENTS: All forms of indentured, bonded and prison labor are strictly prohibited. This includes the transportation, harboring, recruitment, transfer, or receipt of persons by means of threat, force, coercion, abduction, fraud, or payments to any person having control over another person for the purpose of exploitation. Any subcontracting arrangement with prisons is prohibited. Employees must be able to leave work freely and voluntarily end their employment. Suppliers shall pay all wages fully and promptly and not employ tactics to prevent employees from leaving at will, such as withholding salary as a year-end bonus, charging a penalty when employees terminate their contract or requiring excessive notice periods. Employees are not forced to work against their will, ability, or in a manner outside the provisions of the labor contract. This includes tasks that the worker believes to be hazardous. Employees must be allowed to freely move within the facility (to use toilets or take designated breaks), and leave the facility at the end of their shift or under reasonable circumstances, such as personal or family emergencies, without disciplinary penalty. In cases where there is machinery or equipment that cannot be left unattended during operation, Suppliers should have a way to ensure other employees are available to operate the equipment, if the operator must leave. Suppliers must never prevent or delay employees from leaving the facility or its grounds. Suppliers must never require or allow employment agents to withhold any monetary deposits or control any original identification documents that restrict the movement of its employees. Suppliers shall only retain original employee identification documents or work permits issued by government with the worker s written permission, and shall return such materials to the worker at the worker s request. Security personnel, including supervisors, must not be allowed to intimidate or restrict the movement of employees. If security personnel are inside the factory, they should not be armed. Supplier has a written policy concerning forced labor which meets the requirements of the Avery Dennison supplier standards. Policy is effectively communicated to all employees and subcontractors. INDICATORS OF NONCOMPLIANCE: Involuntary labor. Employees are locked in the factory. Use of bonded, indentured or prison laborers. Page 10 of 37

11 Withholding an employee s original government-issued identification, passport or work permit without the employee s written consent. Required and excessive overtime hours. Withholding employees wages until completion of their contract. Supervisors intimidate or threaten employees so they stay and work. Unethical labor brokers Undocumented, vulnerable migrant workers (poor, illiterate, under aged) BEST PRACTICES: Only subcontract work to suppliers whose facilities Avery Dennison RBIS have visited and which guarantee that no indentured, bonded or prison labor is used. No locked doors or gates are used, which prevent employees from exiting. Suppliers pay for all costs related to hiring migrant workers, including recruitment and travel fees. Questions and Answers Workers are allowed to use the toilet once an hour. Otherwise, they need to inform their section leader in advance. Is this OK? This is not acceptable. Workers must be allowed to freely move within the factory to use the toilets, drink water, etc. Employees are required to have lunch on site in the factory s canteen. Is this acceptable? This is not acceptable. Employees should be able to leave the factory during rest periods or after normal or regular work hours. Also, Suppliers must allow employees to leave the factory under reasonable circumstances, such as personal or family emergencies, without fear of disciplinary action, discrimination or termination. Employees who live in the supplier-provided dormitories must complete a form, for approval by the security guard, before they can leave the factory before or after regular working hours. The Supplier explains this is for the worker s safety. Is this OK? This is not acceptable. Supplier must ensure workers have freedom of movement during and after regular working hours. There should be no locked gates or doors preventing workers from exiting. Also, security guards should not intimidate, threaten or restrict the movement of employees. Page 11 of 37

12 4. Child Labor Suppliers and sub-contractors shall not use child labor. The term child refers to a person younger than 15 or the local legal minimum age for employment, whichever is higher. KEY REQUIREMENTS: Supplier must comply with all applicable laws governing minimum working age. If set below 15, then no one under the age of 15 is permitted to work. If set at 15, then no one under 15 is permitted to work. If set above 15, then no one under the age established by the law may work in the factory. Must comply with all legal restrictions placed on young or juvenile workers. This includes the number of overtime hours, hazardous and/or night work, annual medical checkups, and taking all necessary precautions to ensure juvenile workers are protected from working conditions likely to endanger their health, safety or welfare. Required documentation is maintained for juvenile workers, as required by law, including registration, school completion certificates, doctor certificates, and permission from parents. No children are allowed in the facility, even if they are not working. Supplier has hiring procedures in place to verify age documentation. To verify age and thereby compliance with legal age limitations, proof of age documentation must be maintained in personnel files for all employees in the form of birth certificates, government identification cards, or other official documents. Photocopy all documentation, which establishes proof of age. Supplier has implemented a written policy stating its commitment not to engage or support child labor. The policy should comply with national law and the Avery Dennison Standards, and detail the following: minimum hiring age, description of hiring procedures, required age verification document, and reporting procedures for cases when unexpected child labor is found. Policy is effectively communicated to all employees and subcontractors. INDICATORS OF NONCOMPLIANCE: Young looking employees in the factory without age verification documentation. Minors or young workers are working in hazardous positions, past legal limits or in violation of applicable laws. Lack of human resource management systems, such as an age verification system and controls for minors. Historical child labor. Peak season/ insufficient applicants. BEST PRACTICES: Page 12 of 37

13 Supplier has implemented a policy and procedures that do not allow the employment of under-aged workers and guarantees the protection of young workers. Supplier has a hiring process that effectively confirms all age documents. All staff with hiring responsibility is properly trained on the operations associated with child labor and young worker management. Training is provided to young workers on their legal protections, including working hours and conditions. Supplier maintains one personnel file for each worker, ID copy and recent photo included. Supplier uses reliable methods and equipment to verify IDs are legitimate. Supplier maintains a name list for young workers with the associated workstations Track and comply with local laws regarding protection of juvenile workers in the factories. Assign juvenile workers to safe production areas that are away from chemicals and other harmful substances, heavy or dangerous machinery and equipment. Use a visual reference to identify juvenile workers, such as a color coded ID tag. Questions and Answers How do I prevent child labor? Effective written policies and procedures are an effective tool in preventing the hiring of child labor. This includes age verification procedures that are strictly followed by all staff with hiring responsibility and checked periodically to ensure the procedures are being properly implemented and are aligned with the local law. Valid proof of age documentation includes a national identity card. A copy of this documentation must be kept in employee personnel files to demonstrate compliance. What s in a child labor policy and procedures? Policies should include at a minimum: A commitment to not employ any child labor. The age definition of child labor should also be clearly defined in the policy. How to avoid employing child labor (e.g., method to check the authenticity of identity cards) The acceptable proof of age, the national identity card. Transition policy and procedure if child labor is discovered (see above) Procedures should include (at a minimum) clearly-defined steps/methodologies for the implementation of the policies by responsible position/department. What is historical child labor? Historical child labor is when a worker is found to have been underage when hired, but is now above the legal working age. This is a good indicator of inadequate policies and procedures related to child labor, e.g., age verification procedures. Page 13 of 37

14 5. Discrimination / Human Rights Suppliers and sub-contractors shall not discriminate against any person or employee based on race, color, religion, sex, pregnancy, national origin, ancestry, citizenship, age, marital status, physical disability, mental disability, medical condition, sexual orientation or veteran status. KEY REQUIREMENTS: Different treatment is not given to employees based on race, color, religion, sex, pregnancy, national origin, ancestry, citizenship, age, marital status, physical disability, mental disability, medical condition, sexual orientation or veteran status. This includes denial of work and promotions, and differing pay rates, benefits and disciplinary practices. Discrimination based on employees associations is prohibited. This includes refusing to hire employees because of their associations, as well as threatening, disciplining, punishing or firing employees because they exercise this right. Must not question prospective employees about their pregnancy status and pregnancy tests are not conducted before hiring or as a pre-condition to employment. Women returning from maternity leave must be given an equivalent position to her prematernity position and equal pay. Suppliers must also meet all legal conditions regarding working conditions for all women, including accommodation for the needs of pregnant women within reason such as job reassignments to non-hazardous or lighter work, extended breaks, etc. Suppliers have a written policy against discrimination in the workplace based on gender, ethnic origin, religion, and/or personal beliefs, etc. Policy is effectively communicated to all employees and subcontractors. The use of medical examinations, to prevent a worker from being hired or firing a worker who becomes ill or injured, is not allowed. Religious observance, prayer breaks and religious holidays should not be prohibited. Supplier policies do not favor one group of employees over another. Hiring notices do not specify discriminatory factors, such as gender or race. Contracted agencies are reviewed to ensure they do not have discriminatory practices. INDICATORS OF NONCOMPLIANCE: Hiring practices that require applicants to disclose maternity status. Termination or disciplinary procedures taken against employees for personal characteristics. Targeting groups for certain types of jobs. Supplier management has a biased view of workers, based on personal characteristics or beliefs, which results in variations in pay, benefits or advancement. Page 14 of 37

15 BEST PRACTICES: Recruitment policies and procedures should focus on employees ability to do the job, job specifications, extended performance levels and employment terms and conditions, rather than personal characteristics. Application forms and recruitment notices should only contain information, which is relevant to the job position and specifications. Ongoing communication of the non-discrimination policy is provided to all staff and workers, is well documented, and guarantees that management and workers have a full understanding of the policies. Supplier promotes anti-discriminatory practices in the workplace to combat prejudice, eradicate discrimination and promote equality. Contracted agencies are reviewed to ensure they do not have discriminatory practices. Supplier creates written job descriptions that focus solely on occupational qualifications, not personal characteristics. Questions and Answers Two of three factories, under the same management, have two-thirds women workers and one has more than 90% women, with an exclusively male managerial staff. Is this an issue? Possibly. If the third factory has fewer men because men are discouraged from applying, a violation exists. Women workers who are pregnant have been denied employment at one factory. The Supplier indicated that every factory does this to ensure they do not lose workers for the months they are out on maternity leave. Is this acceptable? No. Supplier should not question prospective workers about their pregnancy status, and pregnancy tests are not allowed before hiring or as a pre-condition to employment. Reduction in wages or pay for workers who return after maternity leave is also prohibited. A Supplier implemented a policy that requires job candidates and current workers to be tested for Hepatitis B. Supplier said they were doing this to protect other workers from catching the disease. Is this acceptable? This is not acceptable. The use of medical examinations, to prevent a worker from being hired or firing a worker who becomes ill or injured, is not allowed. Supplier should cease this practice immediately and implement a policy to ensure there is no discrimination based on medical test results. Page 15 of 37

16 6. Freedom of Association Suppliers and sub-contractors shall respect the rights of workers to freely associate, form and join organizations of their own choice and bargain collectively. KEY REQUIREMENTS: Supplier must respect employees right to freely associate; they must not impose any punitive actions against employees who support unions or interfere with employees ability to exercise their right to associate or join legal organizations of their choosing, seek representation or bargain collectively. Suppliers must not threaten, fine, suspend or fire employees exercising such rights. Any action, which suppresses freedom of association is prohibited and may be deemed illegal in some countries. Employees should have the ability to approach management on issues of concern, on their own or through a worker representative, regarding working conditions without fear of reprisal, intimidation, harassment or discrimination. Supplier has a policy and procedures on freedom of association and educates their employees and supervisors to ensure they understand their rights. Supplier does not prohibit representatives of the trade union from interacting with workers. If a collective bargaining agreement exists, Supplier complies with all contractual provisions. INDICATORS OF NONCOMPLIANCE: Actively interfering with worker attempts to organize. Policy of refusing employment to union members. Does not provide employees with an effective grievance mechanism, where employees can freely communicate their concerns to management without risk of retaliation. BEST PRACTICES: Develop worker-management committees which can deal with specific issues, such as health and safety, supervisor- worker relations, setting of production targets, and social activities. The functions of the representatives should be formally written and established. Supplier management should not refuse to meet with worker representatives and should treat such representatives respectfully and as leaders. They must be allowed to operate lawfully and free from obstruction and discrimination. A formal communication/grievance system is established, properly implemented and communicated at all levels, allowing for anonymity. Employees should not be required to give their names or other identifying information; and no employee will be penalized for making a suggestion, i.e. "nonretaliation" policy. Page 16 of 37

17 Suppliers should provide information to all employees regarding the local laws related to freedom of association and collective bargaining, and about the Supplier grievance system. Any meetings, including informal discussions, which are held between management and union or worker representatives, should be recorded and meeting minutes should be provided to the participants. Invest in programs which improve communication between management and employees, such as on the job training, worker development programs, job performance assessments, and social activities. Questions and Answers What should a grievance/communication system include? A good system includes easily understood procedures, including a procedure: To allow an employee to report a grievance against a supervisor to someone other than the supervisor (e.g., a human resource representative), with anonymity; o For management to follow-up on reported grievances that are communicated to all employees; o For employees to monitor the status of complaints and appeal to unfavorably resolved complaints or disciplinary actions. A worker representative is transferred to a lower-paying job because of poor performance. Other workers with similar performance records are not disciplined. This is a potential concern. More investigation is needed to determine if the worker was discriminated against as a result of her role as a worker representative. How should a Supplier handle an unreasonable demand from a worker? All issues/suggestions should go through the communication/grievance committee. Explain your concerns and identify a compromise, if possible, with the committee. The worker representative should then explain to the worker who made the request that their suggestion was seriously considered and share what was decided and why. The worker should also understand that not all suggestions will be implemented, and the Supplier improvement plan (to be posted on the factory bulletin board) does show good will by the Supplier to improve. Page 17 of 37

18 7. Disciplinary Process Suppliers and sub-contractors will not utilize any form of physical or mental disciplinary practices such as coercion, harassment (including sexual harassment), threats or corporal punishment. All workers must be treated with dignity and respect. KEY REQUIREMENTS: Management must not tolerate any type of harassment or abuse. This includes, but is not limited to: - Any form of physical contact intended to hurt or harm a worker; - Any form of sexual harassment, including touching employees in any way that could be considered to have sexual implications; making inappropriate sexual comments to employees; or requiring any form of sexual favor in exchange for beneficial treatment in employment or as a condition of maintaining employment; - Illegal methods of discipline, as well as withholding access to food, water, toilets, medical care or other basic necessities; - Threats of behaviour to harm a worker physically or psychologically; and - Comments or behaviour which is reasonably understood by the worker to be threatening, demeaning or coercive. Management will take corrective actions and discipline anyone who exhibits the abovementioned behavior. Discipline could include combinations of counseling, warnings, demotions, and termination. Illegal methods of discipline, as well as monetary wage deductions and the withdrawal of basic physical comforts provided to other workers, are prohibited. Body searches, if necessary, must be gender appropriate. Supplier ensures the confidentiality of the grievance process to protect employees from retaliation for reporting harassment or abusive behavior. Workers should be able to report inappropriate or discriminatory behavior to someone other than their supervisors. Supplier has a written policy and procedures prohibiting acts of harassment or abuse in connection with employees employment. The procedures must include an escalating series of verbal and written warnings prior to suspension or dismissal. Disciplinary measures taken must be documented in the employee s file and a copy of such warnings should be provided to the employee. Policy is effectively communicated to all employees. INDICATORS OF NONCOMPLIANCE: Verbal harassment such as yelling at a worker in front of their peers. Employees are threatened or intimidated. Employees are given monetary fines as punishment. Grievance process does not allow for anonymity, leading to fear of reprisal and a lack in reporting Page 18 of 37

19 Vulnerable workers employed, e.g., illegal migrants who fear deportation or law enforcement. Security personnel administer disciplinary action against employees. BEST PRACTICES: Supplier establishes and implements a progressive disciplinary system that includes verbal and written warnings, suspension, and finally, termination as a way of disciplining workers. All disciplinary actions are clearly documented and properly recorded. Clearly define, post and monitor use of objective criteria for bonuses, promotions and job assignments. Supervisors and line leaders receive training on how to best communicate with workers and effective motivational techniques. Provide ongoing communication of policies to workers to guarantee that all employees, including management, understand. Supplier has a well-functioning grievance system for workers to make complaints; workers are not fearful of reprisal. Supplier employs supervisors that speak the native language of major migrant groups including promoted line workers. Page 19 of 37

20 8. Environmental, Health and Safety The health and safety of employees is paramount to Avery Dennison. Suppliers and sub-contractors will provide their employees with a safe and healthy work place, and operate their facilities in compliance with all local environmental, health and safety laws. KEY REQUIREMENTS: Health and Safety Supplier knows of and complies with all local legal regulations on health and safety. Supplier is aware of industry best practices and has a Policy and plan to achieve higher standards on a continuous improvement basis. Policy is effectively communicated to all employees. Suppliers shall eliminate physical hazards where possible. Where physical hazards cannot be eliminated, Suppliers shall provide appropriate engineering controls such as physical guards, interlocks, and barriers. Where appropriate engineering controls are not possible, Suppliers shall establish appropriate administrative controls such as safe work procedures. Supplier appoints a management representative to govern health and safety in the workplace. An EHS Committee chaired by this person should be established and the committee should meet on a regular basis. Regular monitoring / inspection of EHS activities is conducted to ensure health and safety procedures are being followed. Employees are appropriately supervised and trained to perform their jobs safely and receive formal training on safety procedures in general. All new employees must have an initial orientation program covering all areas of EHS. Regular refresher training must be conducted for critical safety programs. Supplier is kept clean and hygienic, in accordance with the law. This includes regular and systematic refuse collection. Periodic testing is conducted on all drinking water to ensure it is safe. There are a reasonable number of operating toilets that are clean, offer privacy (i.e., ability to lock doors) and a good ventilation system to provide good air circulation to reduce odors. Supplier has identified all risk areas, such as toxic substances and dangerous machinery, and is effectively managing risks by providing training and ensuring chemicals are properly stored and labeled with Material Safety Data Sheets (MSDS), which are available to employees in the local language. Chemicals are stored in a separate area, which is equipped with the fire extinguishers, safety signs, ventilation, instructions on handling and disposal, and protective equipment for employees. Supplier has a system in place to bring in new chemicals, store the chemicals properly, provide appropriate MSDS and labels as legally required. Where chemical hazards cannot be eliminated, Suppliers shall provide appropriate engineering controls such as closed systems and ventilation. Where appropriate engineering controls are not possible, Suppliers shall establish appropriate administrative controls such as safe work procedures. In all cases, Suppliers shall provide workers with appropriate personal protective equipment. Page 20 of 37

21 Emergency eyewash stations and/or showers are provided where corrosive chemicals or high volumes of solvents are handled and used. Adequate ventilation is provided where paints, chemicals, sprays (solvents, solder, dust) are used to prevent accumulation of flammable vapors. Supplier has a system in place to evaluate the PPE needs, provides appropriate personal protective equipment (PPE)/clothing for employees and ensures employees are trained on how to use PPE and why it is required. Machinery, equipment and fixtures are checked regularly to ensure they are in safe working condition. Documentation is maintained to demonstrate compliance. All rotating machinery and machinery where nip points / pich points exist, are evaluated for appropriate machine guarding to prevent injury to personnel according to local law Railings guard all stairs, platforms, and elevated floors. Confined spaces are secured and identified with the proper signage as appropriate Supplier has systems in place to manage open flame works, working at heights, forklift management, electrical work etc as required by local regulations. Emergency/Fire Preparedness and Response: Suppliers shall anticipate, identify, and assess emergency situations and events and minimize their impact by implementing emergency plans and response procedures. Supplier communicates fire and emergency evacuation plans and posts diagrams in the local language in various locations around the facility. The plan illustrates critical information such as emergency evacuation routes, you are here mark, correct layout direction, location of fire extinguishers and hydrants, and instructions in the local language of what to do in the event of an evacuation. Fire escape routes must lead to safe assembly points without any obstructions. Assembly points must be designated and marked as such and must be kept clear at all times. Quarterly joint fire drills including all floors of the building to be overseen by an external party, such as the fire authority, for timely and effective personnel evacuation. Documentation of these drills must be retained by the facility and available for review during any visit to the facility. Exit routes are not obstructed (inside and outside) by equipment, materials, production, etc. and are regularly checked. No locked doors. Doors should have push bar operation for easy exit in case of emergency. Barred windows must have an internal mechanism for emergency release or removal to allow for worker escape and must remain unlocked. All floors and buildings, including dormitories, must have a secondary exit, and preferably an external fire escape route. Proper access for fire department vehicles and other fire-fighting equipment in the factory premises. Adequate water supply for sprinkler and fire hydrant systems. Page 21 of 37

22 Number of emergency exits is in accordance with the local law and exits are unlocked, clearly marked, and lead to the outside. External doors that are not exits are labeled as such, i.e., NOT AN EXIT. Supplier has a system to evaluate fire prevention requirement for the facility, to install appropriate fire prevention systems such as fire hydrants, hose reels, and sprinkler systems and to meet local regulatory requirements. Audible, visible and operable smoke alarms placed appropriately throughout the building with at least the minimum number required by law. Fire alarm system is audible throughout the entire facility. Audible and operable fire alarms that can be heard in all parts of the building, that operate as one system amongst all floors and areas of the building. The system is inspected regularly and tested in coordination with fire drills. Fire equipment, including fire extinguishers, are easily accessible, clearly marked, and routinely inspected to ensure they remain operational. Supplier has emergency lighting for all stairways and where needed on exit routes. The lighting is inspected periodically. Marked and lighted exit routes for all floors and areas of the building, including stairwells. Emergency lights to be fire grade industrial emergency lights for use in smoke and fire environments. Designated personnel (employees and supervisors) are trained at regularly on fire safety, the use of fire extinguishers, and how to administer the fire prevention procedures and emergency evacuation plan. Fire safety training conducted for all personnel every 6 months. Personnel onboarding process should include fire safety training upon hiring. There is an appropriate number of trained firefighters for the facility. Valid fire license where required by law. Valid construction approval where required by law. Hazardous/flammable chemicals must be kept away from ignition sources. Crèche/childcare facilities (if any) must comply with local law for creche Sufficient first-aid supplies are maintained on work floors with adequate personnel trained in First Aid to assist in an emergency. Supplier has a system to prevent chemical spills, provides secondary containment where necessary, system to manage chemical spills, provides necessary equipment and materials to manage spills and provide adequate training to all employees. Floors are kept clean from hazardous spills and materials. Emergency and other hazardous signage is adequate. Electrical equipment and wiring is properly maintained, covered/insulated to prevent exposure of wires. Gas cylinders are properly marked, used, inspected, stored and secured. Unauthorized subcontracting: no subcontracting is allowed without prior written approval from RBIS (cf. Appendix D) Page 22 of 37

23 Accommodations In addition to the following, all health and safety guidelines listed above are also implemented in Supplier sponsored dormitory buildings. Accommodations and food service area are kept clean, provide a safe, hygienic living environment for employees, and comply with all legal regulations regarding residential facilities. Dormitories are not attached to any production or warehouse building. Separate accommodations exist for males and females. In employees sleeping rooms, the ILO recommends the floor area not be less than 7.5 square meters in rooms accommodating 2 persons; 11.5 square meters in rooms accommodating 3 persons; or 14.5 square meters in rooms accommodating 4 persons. If a room accommodates more than 4 persons, the floor area should be at least 3.6 square meters per person. Residents should have their own bed, an area for personal items and the ability to secure belongings. There are a reasonable number of operating toilets and showers that are clean and separated by gender. The ILO recommends a minimum of 1 toilet, 1 wash basin and 1 bathtub or shower for every six persons. Toilets offer privacy (i.e., ability to lock doors) and a good ventilation system to provide good air circulation to reduce odors. Environment Suppliers shall comply with any applicable laws and regulations prohibiting or restricting the use or handling of specific substances. To ensure safe handling, movement, storage, recycling, reuse, and disposal, Suppliers shall identify and manage substances that pose a hazard if released to the environment and comply with applicable labeling laws and regulations for recycling and disposal. Supplier has a written policy and procedures on environmental protection based on the national environmental protection laws. Where required by law, Supplier maintains environmental records and certificates and disposes of hazardous materials and chemicals according to the law so that these materials are not discharged and do not pollute the environment. Suppliers must obtain, maintain, and keep current all required environmental permits (for example, discharge monitoring) and registrations and follow the operational and reporting requirements of such permits. Suppliers should be aware of international environment protection standards and have a plan to achieve these standards on a continuous improvement basis. INDICATORS OF NONCOMPLIANCE: Any of the following indicators can lead to accidents and injuries: Page 23 of 37

24 - Long working hours/lack of sleep. - Workers are not trained properly or sufficiently on the hazards of their jobs. - Lack of awareness of potential health and environment hazards and how to store/handle chemicals. - Working on a machinery without adequate isolation of energy sources A lack of a safety committee means violations are not identified and corrected. BEST PRACTICES: Supplier has a safety committee that meets regularly to address safety concerns in the factory and, if applicable, Supplier-sponsored dormitory. The committee is organized by the senior management representative appointed to govern health and safety and includes representatives from Supplier management and workers. The intent is for the committee to create and implement a plan that includes what steps the Supplier is taking to ensure health and safety risk areas are being identified and addressed. Launch an employee assistance program (EAP), providing workers with access to free psychological counseling, including a 24-hour hotline, to get advice on their personal and professional concerns. EAP programs can be customized to meet the needs of the workers. Workers are well trained in how to use machinery and protection equipment. Safety committee members receive ongoing training to periodically update their health and safety knowledge. Safety appointed associate receives additional training to help him/her effectively lead this effort. Workplace accident and injury handling policy and procedures are established to clearly state the responsible person(s), reporting procedures and handling methods for workplace accidents and injuries. Supplier is aware of international environment protection standards and has a plan to achieve these standards. Supplier has a written environmental management plan that details how these issues are addressed. The plan includes items such as description of worker responsible for implementing, a description of the environmental impact of the production processes, governmental permits and records necessary, and responsible government agencies. One trained fire fighter per floor (excluding storage floor). Supplier has a system in place to conduct Job Safety Analysis for every job tasks that deal with chemicals and machinery, has systems in place to manage recommendations and to manage any changes, provide appropriate engineering controls as the first level of priority, identify the administrative controls such as procedures, training and PPE. Injury records are properly maintained and all incidents and near misses are reported, investigated, and corrective action is performed to eliminate/minimize re-occurrence. Page 24 of 37