Being a member of SEDEX and getting a SMETA audit has now become a necessary thing for Indian companies that supply goods to retailers in the UK, Europe, US, and Australia. The majority of companies who go through their first SEDEX audit do not have their own team of experts in compliance, and that is why they need to invite external consultants to prepare all necessary documents and interview employees as well as make improvements where it is needed. This article will provide the information on what consulting firms are the best for SEDEX compliance in India, list all consulting firms for SEDEX compliance in India separated according to the type, SEDEX certification cost in India at the moment, and compare the best consulting firms for SEDEX compliance with regard to services and response rate. In conclusion, the most common questions asked by exporters before inviting a consulting firm will be answered.
Why Indian Exporters Work With the Best Consulting Firms for SEDEX Compliance
Almost all UK, EU, and US retailers require SEDEX membership and an active SMETA audit as a mandatory criteria of the onboarding process of a supplier, irrespective of the factory’s capacity. In case of a new entrant in the market, the audit checklist would include aspects related to labor, health and safety, environment, and business ethics. However, there may be certain gaps in wage records, working hours calculations, and fire safety. Failure to bridge these gaps before the audit would lead to the identification of many non-conformances and a slow Corrective Action Plan. Textile, food processing, pharmaceutical, and packaging export companies generally get many demands from buyers for SEDEX membership, which could lead to delaying the shipment approval for weeks, in case even one audit slot is missed. This is the reason why most exporters hire the best SEDEX consultants before scheduling an audit.
What Do the Best Consulting Firms for SEDEX Compliance Do
The consulting firms which are competent in conducting SEDEX audits do not conduct SMETA audits directly themselves. As per SEDEX regulations, the only firm authorized to conduct a proper SMETA audit and to load the audit report onto the SEDEX system is a SEDEX approved Affiliate Audit Company (AAC). The role of the consulting firm is to prepare the client factory or supplier for the audit so that it results in minimum non-conformances for the AAC visit. The activities involved in the preparation include:
- Registration of SEDEX members and setting up SAQ on the SEDEX platform
- Gap Analysis according to ETI Base Code, ILO conventions, and Indian labor law
- Review of documents like wage register, attendance record, employment contract, fire safety certificate, environmental consent
- Mock audit and worker interview preparations for floor-level employees and supervisory levels
- Creation and closure of CAPA report after the actual audit
- Co-ordination with AAC regarding audit schedule, scope (2-Pillar/4-Pillar) and language
Hiring the services of an experienced consultant before the audit date usually helps reduce the number of non-conformances reported by the AAC, as all document and process gaps are rectified well in advance instead of during the audit.
Documents to Keep Ready Before Contacting Consulting Firms for SEDEX Compliance
- The following documents, when shared beforehand, would speed up the initial consultation call and assist the consultant in scoping the engagement more accurately:
- Monthly wage registers and monthly salary slips for the past 12 months
- Attendance register and overtime register
- Employment contract and appointment letters
- Fire safety certificate and fire drill register
- Factory license and pollution control board consent
- Organisational structure chart and number of workers in each department
List of Consulting Firms for SEDEX Compliance in India
Consulting firms for the SEDEX certification in India can be grouped under three main categories, and the choice will depend on the size of the factory, financial capacity, and number of customers requesting the audit.
Global TIC-Led Consulting Divisions
Each of the firms SGS, Bureau Veritas, Intertek, TUV SUD, TUV Nord, Eurofins, and QIMA offers a pre-audit consultation service in addition to their SEDEX AAC services. The companies are suited for bigger exporters seeking a reputable brand name and a single contact person for all the factories, but most keep their consulting and auditing departments separate to prevent any conflicts of interests.
Independent Indian Compliance Consultancies
These companies cater to smaller, India-based clients and provide consultancy services limited to documentation, training and closing of CAPA’s. Being more cost-effective, they are used for single-site SMEs and are very popular within export clusters such as Tirupur, Surat, Ludhiana, and Delhi NCR.
Freelance APSCA-Trained Consultants
Single APSCA-certified consultants work with a single factory at a time, normally together with the factory’s HR or compliance manager.
Most exporters will select one of the above for their preparation stage and use an independent AAC for the actual audit stage. This ensures impartiality of the process and is becoming more and more preferred practice among the buyers of goods.
Top Consulting Firms for SEDEX Compliance Compared
The table below compares the top consulting firms for SEDEX compliance that also hold SEDEX AAC status, based on publicly listed service descriptions. Independent Indian consultancies are listed separately since they prepare a site but do not conduct the audit themselves.
Turnaround time is determined to a great extent by the audit-readiness level of the plant. An organized plant that already keeps track of its employees’ wages and attendance levels will be able to prepare twice as quickly compared to one that does not.
Apart from turnaround time, each company usually specializes in a certain industry sector. SGS and Bureau Veritas are present in both general manufacturing and food exports industries. Intertek is popular among companies dealing in consumer goods and electronics. TUV SUD and TUV Nord are commonly chosen by industrial and pharmaceutical exporters. QIMA stands out with a quick, Asia-based auditor network, which helps in preparing quickly when there is a need to export within a strict shipping timeframe. Eurofins has gained prominence in food and agriculture auditing due to its experience in operating testing laboratories. This does not affect the core of the SMETA process as all AACs audit according to ETI Base Code.
SEDEX Certification Cost in India
The costs of SEDEX certification in India consist of four distinct elements, and companies are usually taken aback to find out that the audit cost accounts for just one element of the overall expenditure. The following statistics reflect average market prices for one manufacturing unit.
The audit fees are per man day based, and they increase depending on the number of labor force, number of shifts, and audit scope selected. In case of exporters who have renewed their SEDEX membership, they end up paying only membership and audit fees in subsequent years due to pre-existing documentations from previous cycles.
In case of exporters who have more than one factory, they can get reduced per location consultancy fee through bundling of the process at different locations. In addition, some consultancy firms provide package fees that include gap analysis, documentation assistance, and mock audit as a single price, which is cheaper compared to purchasing individual services.
How to Choose the Best Consulting Firms for SEDEX Compliance
- Choosing from among the best consulting firms for SEDEX compliance comes down to a small set of criteria that apply irrespective of the size of the business and the industry sector involved. These criteria are more important than just choosing the most famous company, as even a well-established company may put an untrained junior consultant on a small project if there is no mention of needing a trained auditor.
- Find out if the consultant’s training is certified by APSCA or has real experience in SMETA projects
- Request two or three previous projects from your industry, such as textiles, food manufacturing, or pharma
- Find out if they provide support only for the 2-Pillar project or the 4-Pillar audit, which includes environment and business ethics
- Find out the timeframe for CAPA closure in writing and whether they include any support for re-audit in the quote
- Take quotes from at least two firms, since consulting charges can differ greatly between India-based consulting firms
- Find out if the consultant is independent of the AAC conducting your audit
Key Takeaways
- Only SEDEX approved agencies like SGS, Bureau Veritas, and Intertek can perform a SMETA audit. A consulting firm prepares the site for an official SMETA audit and not performs an SMETA audit.
- The cost of SEDEX certification in India would be around ₹1,50,000 to ₹3,00,000 for the first year in India.
- There is no passing or failing grade for a SMETA audit. Any issues are handled via a Corrective Action Plan.
- It is suggested that SEDEX performs an audit on medium risk suppliers every two years and high risk supplier every year.
- Selection of a consulting firm for SEDEX compliance includes checking APSCA registration, sector experience, and CAPA.
FAQs
Who Are the Best Consulting Firms for SEDEX Compliance?
Consulting firms that are affiliated with SEDEX-approved AACs, such as SGS, Bureau Veritas, and Intertek, or independent consultancies in India are recommended for smaller budgets.
Which Companies Are Not Required to Be Audited?
Those companies that are not part of a SEDEX member’s supply chain and do not have buyers demanding an audit of their ethical performance are not required to undergo a SEDEX audit.
Can You Fail a SEDEX Audit?
The SMETA audit does not have any passing or failing grades, although any critical non-conformities can prevent buyers from accepting the report before correcting them.
Why Is 100% Checking Not Possible in Audit Work?
Since auditing is based on risk assessment, it is impossible to check all documents and employees within the time allotted for auditing.
What Is the Penalty for Failing an Audit?
No penalty is set, but some findings may result in the loss of buyer orders, removal from the approved supplier list, or a mandatory follow-up audit.
What Is the 2-Year Rule for Audit?
According to SEDEX, the audit data should remain valid for up to two years in the case of medium risk locations, and high-risk suppliers have to be audited annually.
Who Are the Top 10 Audit Firms?
The top 10 SEDEX approved auditing organizations include Intertek, SGS, Eurofins, Bureau Veritas, TUV Nord, BSI Group, QIMA, LRQA, Kiwa, and TUV SUD.