E12. Supplier Responsibility

Code 7.0

Process to communicate Code requirements to Suppliers and to monitor Supplier compliance to the Code.

Elements to Demonstrate Compliance to RBA Code

1. Foundation: Supply chain management responsibility framework

• a. If responsibility for supply chain management (in particular, supply chain Responsibility) is at the Corporate-level then a Corporate-level implementation should exist which includes:
  • i. Documented corporate policy.
  • ii. Documented corporate goal.
  • iii. Documented corporate process.
  • iv. Assigned responsibility.
  • v. Proof of implementation.
• b. If there is no Corporate-level implementation, then there should be a full Facility-level implementation.

2. Policy

Ensure company's supplier responsibility policy has the following elements:

• a. The RBA Code requirements have been communicated to the next tier major Suppliers.
• b. A supplier program is in place (identification of Major Suppliers, definition of what is major).
• c. Adequate and effective communication process with its Major Suppliers on the Code and its requirements, or the requirements of the Code and its provisions are inserted into the contract it has with Major Suppliers.
• d. An adequate and effective process is established to ensure that the Suppliers implement the RBA Code.

3. Procedures & Practices

Procedures & Practices are in place (regardless of Supply Chain Management Responsibility Framework) such that:

• a. Contracts are in place for all Suppliers.
  • i. Suppliers: Enforcement language on the implementation of the RBA Code.
  • ii. Labor Agents and Contractors: Enforcement language on the implementation of the RBA Code regarding Labor and Ethics CA; Compliance with legal requirements in both home and sending country; Workers can resign without penalty; Conform with all AC regarding workers in their operations.
• b. Suppliers have been identified.
• c. Major Suppliers have been identified and expectations set:
  • i. Establish and utilize a definition of what is a Major Supplier.

NOTE: labor agents/contractors and on-site service providers are always considered as Major next-tier supplier.

• d. An adequate and effective RBA code implementation process for Suppliers is established such that:
  • i. A risk assessment. If a self-reported risk assessment is used such as an SAQ then information needs to be validated and/or an Audit (VAP or CMA) or an AMA performed to verify risk information (if done by a third-party Qualified Audit Firm is accepted).
  • ii. Applies to all labor agents and contractors AND On-site service providers.
• e. An obligation to go through the CAP process with the Supplier if non-conformances are detected, with a commitment to not immediately de-source at a priority non-conformance discovery state but only at the non-implementation of the CAP process.

4. Controls & Monitoring

Controls & Monitoring shall include:

• a. Enforcement notification is issued to Suppliers and Labor Agents and Contractors if the reviewee becomes aware of a contract violation, including a violation of the RBA Code provisions.
• b. Report plans and progress to management on due diligence of Major Suppliers.

5. Records

Records are maintained including:

• a. Contract with Suppliers and Labor Agents and Contractors.
• b. Communication materials to Suppliers and Labor Agents and Contractors.

NOTE: this may be a combination of Corporate and Facility level effort. Evidence of the entire effort regardless of where it occurs will be required to be shown in an RBA VAP.

• c. Review or assessment of agent and on-site supplier worker records as support that an assessment occurred:
  • i. Review of records related to A3 for on-site service provider workers as appropriate
  • ii. Review of records related to A4 for on-site service provider workers as appropriate
• d. A corrective action plan for non-conformance areas identified.
• e. A verification mechanism that corrective actions are implemented.

6. Leading Practices

Leading Practices include:

• a. Use tools which follow the OECD Due Diligence Guidance.
• b. Use of remote / desk-audit or focused audit processes and guidelines on smaller, specialized facilities or service providers where a full RBA audit is not appropriate.
• c. Maintain records from review of labor agents and on-site suppliers
  • i. Fees, passports, contract terms and resignation clause (Code provision A1)
  • ii. Working hours, consecutive workdays (Code provision A3)
  • iii. Wages and benefits (Code provision A4).

7. Serious conditions that will result in a severe finding

• The percentage of workers working through Labor Agents and Contractors that cannot state how their employment terms and conditions meet the relevant labor requirements of the RBA code is greater than 20% (Major); greater than 5% and not more than 20% is also rated Major.
• For indirect full-time assigned workers of on-site service providers, a priority non-conformance is confirmed on provision A3 (Working Hours) or A4 (Wages and Benefits).
• Two or more of the minimum requirement elements are missing or ineffective (Major).
• No CAP in place for the majority of Suppliers, where applicable (Major).

1.0.0 (2021-01-01)

Changed

• Initial historical baseline — Supplier Responsibility (RBA Code of Conduct 7.0): Earliest imported version of the criterion. Requirements for participants to communicate RBA Code requirements to suppliers and monitor supplier compliance: supplier identification, contract requirements, risk assessment, auditing, corrective action plan development, and ongoing monitoring of next-tier suppliers including labor agents, contractors, and on-site service providers. Rated under 7.0.0 E12.2, with a Priority trigger for a confirmed priority non-conformance on on-site-service-provider workers.