“Social Accountability”- conformance to SA8000 Standards to effectively compete in the global market.

What is SA8000? Social accountability standards SA8000 is an internationally recognized measure of compliance with reference to good practice in human resource management and focuses mainly on following areas for compliance.

1.      Child labour

2.      Wages and compensation

3.      Disciplinary action

4.      Discrimination

5.      Forced labour

6.      Freedom of association

7.      Health and  safety

8.      Working hours

9.      Corporate responsibility

On one hand, finding labour resources, developing required skills, maintaining good labour relations and retaining manpower are essential resource management requirements to meet productivity demands in any organization. On the other hand, satisfying market demand for environmentally responsible methods of manufacture while maintaining lower production and labour costs, timely delivery and social accountability have become operational requirements needed in order to remain competitive in a global market.

Today, many leading organizations have realized that conformance to SA8000 standards as a means to managing good labour relations as well as meeting international market demands. In labour intensive manufacturing organizations, absenteeism and labour turnover are two of the critical issues faced resulting in lower productivity.

To-date, over 650 organizations from 44 countries are certified to SA8000 standards, of which 190 are from Italy, 94 from China, 93 from India, 74 from Brazil, 45 from Pakistan and 32 from Vietnam.  From the total number of organizations, apparel and textile sector is the single largest sectors amounting to 25% of the share. Over 50% of the organizations certified, each have less than 250 workers employed.

Unlike any other management resource, it is universally accepted that no organization or entity could claim “ownership” of any individual or person. With today’s extensive exposure to media, workers are more aware of what’s on offer in return for productive and loyal service.

How can conformance help? Conformance to SA8000 means satisfying both the international customer demands as well as maintaining good labour relations at the same time. It is now evident that neither does employing Child labour, forced labour, poor working conditions, or exploiting poverty allow organizations to develop and grow, nor does it encourage the build up of long term good labour relations and loyalty with customers or with the employees. 

Why is certification by a recognized body important? Recently, well over 50 major Indian garment exporters have obtained SA8000 conformance certification through leading organizations such as BVQI. Some of these exporters enjoy higher margins where the international buyer is willing to pay an additional premium price per item for SA8000 compliance.

Why are buyers willing to pay better prices to manufactures with SA8000 certification? Why do organizations such as Walmart, JC Penny, Disney and Gap, etc prefer to give orders to factories with SA8000 certification?

When it comes to brand image, customer perception offers a major competitive advantage and maintaining a global image of social responsibility is essential. Therefore, managing, protecting and enhancing the value of a valuable corporate asset are corporate and social responsibilities and should not be considered a burden.

In any organization, the most valuable corporate asset is its people. Organizations that involve people whether using labour skills to manufacture and supply goods, or knowledge skills to offer services, or rely on customers to sell its products or services to, form part of a larger social community and are accountable for its actions and its impact on the community.

Therefore being certified for conformance by a recognized international body is an independent statement of added value and worldwide recognition of the quality of certification.

When operating within a global economy, can any organization remain in isolation with regards to its local community and wider global interests? Do low wages lead to competitive advantage?  Can organizations expect higher productivity, good quality service and loyalty from employees, while providing poor working conditions?

Today, many leading organizations have recognized the value of having good labour relations through providing proper working condition. Proper working conditions include, job security, equality, respecting individual rights, as well as providing secure and reasonable working conditions. These also give the buyers of confidence of continued quality service.

These organizations have also realized strategic advantages of being recognized as socially responsible organizations, resulting in higher investment, valuable contracts, licensing and subcontracting opportunities.

As a result of the spread of the global open economy, organizations are forced to think globally and spread corporate business activities overseas. Therefore organizations look for ways of making internationally recognizable statements towards corporate responsibility and social accountability.

How can organizations change to conform to international standards? Most Sri Lankan organizations will find that they already practice and operate to required standards. The organization should have stated policies with reference to good practices and ensure that such policies are practiced.

Since SA8000 is an internationally recognized standard relating to corporate social accountability and employee health and safety and working conditions that organizations can adapt to, the overall purpose of adopting codes of conduct from SA8000 is “To improve and secure the working conditions and welfare of employees”.

Codes of conduct from SA8000 address issues relating to areas such as labour working hours, discrimination, disciplinary practices, freedom of association and collective bargaining, health and safety, forced labour and child labour. 

 For example, a policy on non – employment of child labour should be adopted and where change is necessary, it must be implemented in a corporate responsible manner. For example supporting the community to help make the change from child labour to absorb minors into the education system.

While SA8000 deals mainly with social accountability with regards to employee welfare, OHSAS –ISO18000 deals with occupational health and safety covering all aspects of employee health and safety and is in-line with other standards such as ISO9000 and ISO14000 series. Such ISO standards, do not offer an organization a set of rules to follow, but gives a framework to Plan, implement, monitor and to take corrective action.

Conformance and certification to such internationally recognizable standards ensures that organizations commit themselves to a process of continual improvement and all interested parties such as investors, buyers, potential employees have a measurable reference when dealing with such organizations. It also ensures that all levels of management become aware of the various activities, actions and measures of continual improvement taking place within the organization.   

Conformance to such standards also make organizations become aware of the legal requirements in terms of International conventions and regulatory requirements that are to be fulfilled.