SEDEX

1. SEDEX Introduction

SEDEX stands for Supplier Ethical Data Exchange. It is an online database system designed to help companies store labor standard information within their business scope, which can also be shared with their clients. Today, Sedex has gained favor with many large retailers and manufacturers. Numerous retailers, supermarkets, brand owners, suppliers, and other organizations require their partnered farms, factories, and manufacturers to undergo the SEDEX Members Ethical Trade Audit (SMETA) to ensure compliance with relevant ethical standards. The audit results are recognized and shared by all SEDEX members, allowing suppliers to avoid repetitive audits from multiple clients by undergoing a single SEDEX audit.

2. Certification Benefits

1. Meet mandatory client requirements;

2. Obtain ETI (Ethical Trading Initiative, a UK-based organization aimed at improving global working conditions through forums on corporate social responsibility in developing countries, enhancing systems by comparing different worker welfare improvement schemes) certification, reducing the need for additional Code of Conduct (COC) audits;

3. Respect employees' lives and enhance corporate image;

4. Improve existing social responsibility management;

5. Enhance corporate competitiveness;

6. Strengthen corporate cohesion and achieve a win-win situation for both labor and management;

7. Improve relationships with trade unions and relevant stakeholders;

8. Develop cost-effective preventive measures for accidents and losses;

9. Mitigate workplace hazards;

10. Align with international trends and pursue sustainable business operations;

11. Integrate quality, environmental, and social responsibility management systems comprehensively.

3. Audit Process

1. Opening Meeting: Requires attendance of factory management. Introduces the purpose, methods, and schedule of the audit; understands basic factory information, including factory area, number of employees, and shift schedules; presents a list of required documents; explains the method for worker interviews and selection criteria; answers questions from the factory;

2. On-site Inspection: Photos may be taken if necessary. Inspects production areas, warehouses, dormitories, canteens, toilets, shower rooms, security rooms, and medical facilities—essentially all areas indicated on the layout plan. Observes production operations, reviews on-site records, and notes any worker activities or unusual changes;

3. Document Review: Includes business licenses, personnel records, labor contracts, factory rules and regulations, working hour records, wage systems, payrolls, welfare policies, safety systems, and training/meeting/hazardous tool and equipment maintenance/drill records. Requires review of all personnel records and at least one year of working hour and wage records;

4. Worker Interviews: Workers are selected by the auditor, not assigned by the factory, considering factors such as age, department, and length of employment. Sources for selecting workers: ① Work site; ② Personnel registration forms; ③ Payrolls. Interviews are conducted in a separate room without factory management presence. Interview results are not disclosed to factory management. The atmosphere should be relaxed, interactive, and facilitate two-way communication, focusing on workers' feelings, experiences, and opinions, with assurances of anonymity;

5. Copying of relevant documents and completion of the audit report without factory personnel involvement;

6. Closing Meeting: Thanks the factory for their support, cooperation, and collaboration. Companies that pass SEDEX certification can perform self-assessments on the official website, and clients can share the company's labor standards.

4. SEDEX Audit Results

1. Green: Excellent factory with well-established policies and systems to protect workers.

2. Orange: Good social responsibility performance, with most policies and systems in place to protect workers.

3. Red: Serious non-compliances, unacceptable. The company requires a follow-up audit.

4. Black: Critical non-compliances, unacceptable. The company requires a follow-up audit or may be disqualified as a supplier by the buyer.

Among these, an orange result is generally acceptable to clients, while a green result is rarely achieved. The final decision rests with the client. If the on-site report issued at the end of the audit has no FOLLOW-UP items, the SEDEX audit is essentially passed.