A.J.

Textiles:
Jhumra Road; Faisalabad

Pre Assessment Audit Report

On

Social Compliances
Held on April 10, 2009
At

A.J. Textile
Jhumra Road Nishatabad-Faisalabad

Prepared By: Aftab Ahmed GM (Operations)

A.J. Textiles:
Jhumra Road; Faisalabad
CONTENTS
1 AUDIT INFORMATION..................................................................................................................................................3 2 CHILD LABOUR..............................................................................................................................................................6 3 FORCED/PRISON LABOUR..........................................................................................................................................7 4 HEALTH AND SAFETY..................................................................................................................................................9 5 FIRE INSPECTION........................................................................................................................................................11 6 MEDICAL CARE............................................................................................................................................................12 7 DORMITORY FACILITIES..........................................................................................................................................13 8 FREEDOM OF ASSOCIATION AND THE RIGHT TO COLLECTIVE BARGAINING....................................14 9 DISCRIMINATION ......................................................................................................................................................15 10 DISCIPLINARY PRACTICES...................................................................................................................................16 11 WORKING HOURS.....................................................................................................................................................17 12 COMPENSATION........................................................................................................................................................18 13 MANAGEMENT SYSTEMS........................................................................................................................................19 14 GENERATORS.............................................................................................................................................................20 15 PRODUCTION RECORD............................................................................................................................................21 16 MAIN STORE................................................................................................................................................................22 17 WASH ROOM...............................................................................................................................................................23

Audit Information
Audit Information Client

Production type Audit Date: Auditor Auditee: Audit Type Audit Standard:

A.J Textile; Jhumra Road-Opp. Crescent Sugar Mills Nishatabad-Faisalabad Tel: 041-8754720; Fax:041 8754721 E-mail: info@ajtextiles.com Stitching Unit April 10, 2009 Aftab Ahmed Complete Unit Pre Assessment Audit SA 8000

Pre Assessment Audit Summary

Main Findings;

The Pre Assessment Audit was conducted at the Stitching facility of the A.J.Textiles. The Staff was informed about the Pre Assessment Audit a week prior the audit. The Audit was conducted in line with SAI requirements: Main Findings 1. Employment contracts of Piece Rate Workers were not prepared. Forced labor policy was not established. 2. PPE were not provided to workers for processes. 3. There was no warning sign on electric control panels. 4. Evacuation plan was not drawn and workers were not trained how to evacuate in case of emergency. 5. Evacuation Plans and Emergency Lights were not found in the Cutting & Stitching. Fire Safety requirement in dormitory is the same as factory. Management should take corrective action as soon as possible in this concern to minimize the fire hazard in dormitory area. 6. Calibration, Drinking Water, Building Fitness, Internal Audit, Noise, Light, Fire Safety, Fire Drill, Hygiene Cards were not available. 7. Rates of the Contract Labour were not displayed in the Stitching Hall;

2 Child Labour Conclusion

Child Labour

Other Remarks

International requirements regarding child labour: The ILO conventions covering Child Labour are 138 & 182 Recommendation s 146 & 190) National requirements regarding child labour: Employment of Children Act, 1991; 1995

Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding. Definition of a child: any person less than 15 years of age - unless local minimum age law stipulates a higher age for work or mandatory schooling and if local minimum age law is set at 14 years in accordance with developing country exceptions under ILO convention 138, the lower age will apply. Definition of young worker: any worker over the age of a child as defined above and under the age of 18.

Basic Child labour policy Documentation Request Understanding of minimum age requirements/ratified ILO conventions (if then available Recruitment records -checked) Wage Records (if then not Age Records available) Summary Findings Main Audit During factory visit and interview of workers it was Findings approved that all workers age was above 18 years. regarding Child Major NC Minor NC Observation Labour

Forced/Prison Labour Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding. The UN Declaration on Human Rights declares that no one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms. No type of forced labour shall be used. Compulsory or unpaid labour must not be used. No one may be held and forced to work against his/her free will. Definition of forced labour: all work or service that is extracted from any person under the menace of any penalty and not offered voluntarily. Personnel shall not be required to lodge deposits or identity papers upon commencing employment.
Employment contracts Security staff contracts Records of cash deposits paid ID papers held upon commencing employment Forced Labour policy Forced Labour Procedure

Forced Labour

International requirements regarding forced labour

SA8000 requirements regarding forced labour Covered in ILO convention 29 and 105
Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Forced Labour

Employment contracts were not prepared. Management not so understood the definition of forced/prison labor. Forced labor policy, procedure, related Forms & Formats were not established. However, forced labor was not found during the interview of employees. Other Remarks

Conclusion Pass

No evidence was found that the factory used forced/prison

Fail

labour. Forced Labour Procedure, Forced Labour Policy were not found

Health and Safety

Health and Safety International requirements regarding Health and Safety

Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding.

The UN Declaration on Human Rights declares the right to personal safety and security (article 3). Company shall provide a safe and healthy working environment in International respect to prevailing knowledge of the industry and of any specific requirements regarding health and hazards. And take adequate steps to prevent and minimise accidents and injury to health.

safety ILO Convention 155 & Recommendation 164

Senior manager shall be responsible and accountable for implementing the standard Personnel shall receive regular and recorded HS training. Establish systems for detection of potential threats to HS Provide appropriate sanitary facilities, access to clean bathrooms and potable water, and if appropriate sanitary facilities for food storage. Provide, if applicable, clean and safe dormitory facilities that meet the basic needs of the personnel. Handled in next section H&S Policy Hazardous materials logs (MSDS) Environmental discharge certificates (waste water, air etc.) Health Records Injury and accident logs and reports Permits/certifications (health, sanitation) Training procedures/records (Chemical safety) Facility Inspection records Programme that addresses fire hazards, emergency actions and emergency plans Emergency evacuation plan

Basic Documentation Request (if then available -checked) (if then not available)

Summary Findings Main Audit Findings regarding Health and Safety

1. PPE were not provided to workers for different processes like Weaving, washing/repair of machines. 2. Training certificates of electrician and dispenser were not available. 3. Log of accidents was not maintained. 4. There was no warning sign on electric control panels. 5. Evacuation plan was not drawn and workers were not trained how

Conclusion Pass Fail

to evacuate in case of emergency. 6. Test results of drinking water were not available as per WHO requirements. Other Remarks Policy, Procedure and relevant Safety document should be set-up. Safety training should be provided to operators who were operating significant machines. Display of WI of all Significant Machines was not available Use of PPEs was not observed. Proper health facilities should be provided like potable drinking water. Proper monitoring of Health & Safety requirements should be established. Proper use of Personal Protective Equipments @ slippery areas like Colour Kitchen & Kier Tanks should be ensured. Protective Guard Railings should be provided @ the Pulleys & Gears in the Process House. No record was found regarding awareness among all employee/ workers about evacuation routs/Assembly areas No Record of Emergency drills (evacuations-at least once in six months) was found. Evacuation Routes in the Folding Section were found blocked. It indicates the lack of awareness about significance of Evacuation Routes.

Fire Inspection

Fire Inspection International requirements regarding fire inspection International requirements regarding fire inspection

Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding. Company shall provide a safe and healthy working environment in respect to prevailing knowledge of the industry and of any specific hazards. Emergency actions and plans are important part of a safe working environment.

Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Fire Inspection Conclusion Pass

EHS Policy Training procedures Factory Inspection records Programme that addresses fire hazards, emergency actions and emergency plans

1. Fire alarm system was not established. Other Remarks

Medical Care Medical Care International requirements regarding medical care SA8000 requirements regarding medical care

Refer to SA8000 and local laws.

The employer is responsible for the health, safety and well being of the employees. First Aid equipment must be available in every production unit and at least one person in every department should be trained to provide First Aid. Medical assistance, a doctor or nurse, should be available on short notice in the event of an incident.

Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Medical Care Conclusion Pass

Medical records

1. First aid box was not available in the production halls. 2. Bi annual medical check-up of worker was not carried out. 3. Training certificate of dispenser was not available.

Other Remarks

Dormitory Facilities Dormitory Facilities International requirements regarding dormitory facilities SA 8000 requirements regarding dormitory facilities

Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding. If dormitory facilities are provided for Employees, they should be clean, safe and meet basic needs of the personnel

Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Dormitory Facilities Other Remarks Conclusion Fail No evidence was found that Mill Employees use Dormitory Facility; Pass
Not Applicable

Freedom of Association and the Right to Collective Bargaining

Freedom of Association International requirements regarding freedom of association and right to collective bargaining

Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding. The Universal Declaration of Human Rights declares that everyone has the right to freedom of peaceful assembly and association and that no one may be compelled to belong to an association (article 20), further article 23 states that everyone has the right to form and join trade unions for the protection of his/her interests. In several countries the freedom of association is restricted despite adoption of the Universal Declaration of Human Rights, and/or unions strictly controlled parallel means should be implemented and grievance procedures. The company shall respect the right of all personnel to form and join trade unions and other organisations, and to bargain collectively.

SA8000 requirements regarding freedom of association ILO Conventions 87 If these rights are restricted under law the company must (Freedom of Association) facilitate parallel means of independent and free association and 98 (Right to collective and bargaining. Bargaining) The company must ensure no discrimination of trade union
representatives and that they have access to their members.

Basic Documentation Request (if then available -checked) (if then not available)
Summary Findings Conditional Acceptance

Trade Union/Workers Council Selection Procedure Trade Union/Workers Council Selection Procedure Photos as Objective Evidence Trade Union/Collective Labour Agreements Minutes from management/employee meetings As per management interview, there is no formed union body at the factory. As per workers interview, management has no intention to resist the forming of a union body or CBA at the factory. Other Remarks Create workers welfare Council as per procedure. Maintain Record of Worker Coucil Meetings

Conclusion Fail

Pass

Discrimination

Discrimination International requirements regarding discrimination

Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding. The UN Declaration of Human Rights assures individuals the right to freedom from discrimination (article 2)

SA8000 requirements regarding discrimination ILO Convention 100 (Equal remuneration for male/female for work of equal value) 111 (Discrimination) 159 (Vocational Rehabilitation & Employment /Disabled Persons) Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Discrimination Conclusion Pass Fail

The company shall not engage in or support discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, veteran status or the age of older employees. No interference with individual rights to observe tenets or practices Not allow behaviour of harassment that is sexually coercive, threatening, abusive or exploitative.

Discrimination Policy which includes freedom from mental and physical abuse. Recruitment records Promotion records Wage records compare Employment Contracts (to be compared with wage records) Employee applications Ensure that no personal file reflects any discrimination under the preview of cast, religion, physical disability political influence / opinion. Other Remarks There is no evidence related to violation of discrimination requirements of SA 8000. Display of Employment Policy in native language on compliance boards (Size 4x4) located at Time office & Production Halls.

10

Disciplinary Practices

Disciplinary Practices International requirements regarding disciplinary

Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding. The UN Declaration of Human Rights assures that no one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.

SA8000 requirements regarding disciplinary practices ILO Convention 111 (Discrimination)

The company shall not engage in or support the use of corporal punishment, mental or physical coercion, and verbal abuse. No physical punishment No pay deductions for sickness or failure to work excessive hours No threats of dismissal

Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Disciplinary Practices Conclusion Pass Fail

Discrimination Policy which should include freedom from mental and physical abuse. Recruitment records Wage records to look at deductions

Other Remarks There is no evidence related to violation of disciplinary practices requirements of SA8000. Display Disciplinary Policies in native language on compliance boards (Size 4x4) located at Time Office & Production Halls. Ensure availability of suggestion boxes at different locations. (Shall not be placed near managers offices). Display Suggestion boxes usage instructions in Urdu language on boxes. Create awareness, by providing Trainings, among workers by their supervisors on usage of suggestion boxes Create awareness among HODs & supervisors about disciplinary practices to create lawful environment.

11

Working Hours

Working Hours International requirements regarding working hours

Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding.

The Universal Declaration of Human Rights state that everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay. SA8000 requirements The company shall comply with industry standards and applicable regarding working hours laws on working hours but no more than 48 hours per week. Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Working Hours Conclusion Pass Fail Personnel shall not be required to work on a regular basis more than 48 hours/week Overtime shall not exceed more than 12 hours per employee/week, and only in exceptional and short-term business circumstances Overtime is remunerated at premium rate 1 day off for every seven day period at least Working hours and overtime policy Understanding of legal limits overtime authorisation documents Hours worked adequately documented, time cards Wage records for checking overtime payment 1 No overtime policy is available

Other Remarks Overtime should not be allowed more than 48 hours/month and should be paid at premium rate. Staff should be given Overtime Slips with complete Over Time Record

12

Compensation

Compensation International requirements regarding compensation

Local laws and regulations related to social and environmental issues is the basis of compliance audits. The guiding documents are the ILO conventions ratified by the particular country. In the absence of local laws covering international requirements, international standards such as SA8000 and the ISO14001 are guiding. The article 23 in the Universal Declaration of Human Rights state that everyone, without discrimination, has the right to equal pay for equal work. Also the right to just and favourable remuneration, ensuring for him/herself and family an existence worthy of human dignity.

SA8000 requirements regarding compensation ILO convention 100

Company must ensure that wages meet legal or industry minimum standards are rendered in full compliance with all applicable laws must meet basic needs and provide discretionary income Deductions from wages are not allowed for disciplinary purposes The composition of wage and benefits must be clear, detailed and given regularly No false apprentice schemes to avoid fulfilling social obligations to worker The compensation policy should address, at a minimum, fines, and formal warning procedures, grounds for contract termination, guidance on unacceptable behaviour, appropriate disciplinary actions for unacceptable behaviour, and complaint procedure including method of investigation and resultant actions.

Basic Documentation Request (if then available -checked) (if then not available)

Legal minimum standards Payroll journals Wage slip records Compensation policy Deduction policy

Summary Findings Main Audit Findings regarding Compensation Conclusion Other Remarks Pass Salary and overtime are paid as per law and other benefits like social security, EOBI and gratuity are also provided to workers Fail No Employees Hand Book in Native Language is available which mentions the Compensations & Benefits given to the Employees. No Record was found that Workers are given Salary Slip

13

Management Systems

Management Systems International requirements regarding management systems SA 8000 requirements regarding management systems

No specific international requirements.

Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Management Systems Pass Fail

1. Policy for social accountability and labour conditions 2. Management Review (periodic) of policy, procedures and performance results with system amendments and continuous improvement. 3. Company Representatives Both management representative and non-management elected employee to facilitate communication and implementation of this standards 4. Planning and Implementation of policy in the organisation - clear definition of roles, responsibility, training & awareness, monitoring 5. Control of suppliers - establish procedures to evaluate and select suppliers on their ability to meet the requirements of this standard. 6. Addressing concerns and taking corrective action -respond to employee concern without discrimination with regard to conformance/non- conformance, implement remedial and corrective action 7. Outside communication communicate to relevant parties performance, monitoring 8. Access for verification the company shall provide reasonable access to information 9. Records maintain appropriate records to demonstrate commitment to policy Social Policy, Employment Policy, Discrimination Policy, Sexual Harassment Policy Annual performance/report (monthly safety and 5S audit report) Relevant legal requirements and documents Existing certifications (ISO 9001:2000 Copies of exemptions from legal requirements The Company is ISO 900:2000 certified but lacks effective implementation The management system was not set-up.

14

Generators

Management Systems International requirements regarding management systems SA 8000 requirements regarding management systems Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Management Systems Conclusion Pass Fail

No specific international requirements.

PPEs were available but without proper record/documentation /File maintenance. Other Remarks No Noise & Stack emissions tests. No Hearing Test of Employees

15

Production Record

Management Systems International requirements regarding management systems SA 8000 requirements regarding management systems Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Management Systems Conclusion Pass Fail

No specific international requirements.

All records, which are showing shift timing, name of the person, dates, must tally with Time office attendance & time cards. Auditor usually picks the production, maintenance, & shift wise reports / registers which are maintained by the departments personally. Further these records usually have differences with time cards so in this situation always be care full.

Other Remarks The area need improvement

16

Main Store

Management Systems International requirements regarding management systems SA 8000 requirements

No specific international requirements.

Store Staff should have awareness about Chemicals, Use of PPEs, Chemical Handling, Ventilation, Stacking, Load Management (Use of Waist Belt) SA 8000 Approved Suppliers List On Site Audits of Suppliers for SA requirements Verifications Material Safety Data Sheet Display of Work Instructions regarding Chemicals Handling Proper File Management Leakage Collecting Trays Use of Wooden Racks beneath Dry Chemicals Use of PPEs

Basic Documentation Request (if then available -checked) (if then not available)

Summary Findings Main Audit Findings regarding Management Systems Conclusion Pass Fail

Extremely Weak Area Other Remarks The area need improvement

17

Wash Room

Management Systems International requirements regarding management systems SA 8000 requirements

Where no of workers does not exceed from 25, One Latrine and One Urinal is required. Where no of workers does not exceed from 100, then One Latrine / Urinal each for 25 workers. Where no of workers does not exceed from 1500, then One latrine / urinal for every 25 workers up to first 100 workers, then One latrine / urinal for every 40 workers. Where the no. of workers exceeds from 1500, then One latrine / urinal for every 25 workers up to first 100, then one latrine / urinal for every 60 workers. Wash Room Cleaning List

Basic Documentation Request (if then available -checked) (if then not available) Summary Findings Main Audit Findings regarding Management Systems Conclusion Pass Fail

Extremely Weak Area Other Remarks The area need improvement