The SEDEX system (which stands for Supplier Ethical Data Exchange), which helps companies share information regarding responsible sourcing and ethical trading between manufacturers and international buyers, has gained wide popularity among such businesses. Nowadays, Indian manufacturing companies exporting to the United Kingdom or other European nations, or multinational retail organizations, need to get certified through SEDEX by undergoing a SMETA audit prior to receiving any orders. In this guide, you will be provided with detailed instructions on applying for SEDEX certification of an Indian manufacturing company in a simple, sequential manner.
What Is SEDEX and Why Manufacturers Apply for SEDEX Certification
SEDEX cannot be considered a certifying authority, at least in a conventional sense. It is a non-profit organisation of members and data exchange system that enables manufacturers, suppliers and buyers to keep and exchange their information concerning labor standards, health and safety practices, environment-related activities, as well as business ethics. When talking about applying for SEDEX certification, it typically means being registered with SEDEX and undergoing SMETA (SEDEX Members Ethical Trade Audit) to get a report certifying compliance with all the requirements that could then be shared with buyers on the website.
There are several reasons why manufacturing units of India seek SEDEX certification. International giants and retail chains in industries like apparel, food processing, FMCG and engineering goods require SEDEX registration from suppliers as a precondition for becoming one of them. Getting the SMETA audit report implies that a manufacturing unit complies with certain established standards with respect to labor, safety, and ethics, thus eliminating the necessity of having another set of audits conducted. Nowadays SEDEX registration and an updated SMETA report are the basic requirements of getting orders from buyers of organized retail in the UK and the EU markets.
SEDEX registration is typically required in industries that include textiles & garments, leather products, food/agro processing, electronics assembly, and engineering parts. Companies in these industries have a lot of business dealings with major retail firms and FMCGs that usually mandate SEDEX membership when signing up suppliers, along with other certifications like fire safety clearance.
SEDEX Registration: Step-by-Step Process to Apply for SEDEX Certification
There is a standard procedure to be followed in applying for SEDEX membership and certification. The procedure is outlined below for a manufacturing unit in India, from creating the account until the completion of the audit report sharing stage.
- Determine the correct membership type (A, AB, or B) depending on whether the company is only a buyer, a supplier, or both.
- Go to the SEDEX website and create a new account by using the company name, address, and contact person.
- Choose the membership option based on the type of membership selected earlier and fill the registration form online using business identifiers such as CIN, GST, or PAN.
- Make payment of the annual membership fee using the SEDEX platform.
- Complete the SAQ which involves answering questions related to Labour Practices, Health and Safety, Environment, and Business Ethics.
- Approach an audit firm affiliated with APSCA to conduct SMETA audit at the manufacturing unit.
- Conduct the SMETA audit on the manufacturing unit and have the report uploaded automatically on the SEDEX account.
- Share the SEDEX ID and audit report to the buyers using the self-service reporting module of SEDEX.
Below is an estimated time frame for the SEDEX registration process.
Documents Required to Apply for SEDEX Certification in India
Prior to making an application for SEDEX membership and preparing for a SMETA audit, the following documents will be required from the manufacturing unit:
- Certificate of business registration, including CIN, PAN, GST number, and factory license
- Documentation regarding labour compliance, such as PF, ESI registration, and contributions
- Wages record book, attendance records, and employment agreement
- Documentation regarding health and safety, including fire safety NOC and first aid facilities
- Environmental clearance or consent to operate, if any
- Organization chart with information about management responsible for compliance
- Documents on worker grievance system and ethical policies of the organization
The presence of these documents makes the process shorter at both the self-assessment questionnaire level and the SMETA audit level.
SEDEX Membership Types: Choosing the Right Option to Apply for SEDEX Certification
Prior to an application for SEDEX certification, the manufacturing unit should first select the proper membership type. This is because each membership type in SEDEX dictates what kind of information the firm may upload or share.
The majority of factories and manufacturing plants in India fall into the B Membership because their main purpose is to report on compliance to their purchasers as opposed to sourcing from other suppliers.
SEDEX Certification Cost: What It Takes to Apply for SEDEX Certification
Manufacturers seeking information on how to obtain SEDEX certification are also likely to inquire about whether obtaining this certification costs anything. In this case, they would be told that SEDEX membership is a paid annual service, while the cost of the SMETA audit is paid for separately by the audit firm. Thus, there is no such thing as free SEDEX certification.
The total cost involved in obtaining SEDEX certification for a manufacturing unit based in India varies depending on several factors, including membership category and the number of pillars in the SMETA audit. These are listed in the table below.
As the auditing fees for each APSCA-associated auditor are not determined on a standardized basis, it is important for manufacturers to ask for quotations from at least two or three different firms before undertaking the SMETA audit.
The expenses may differ according to various factors such as factory location, staff strength, and distance traveled by the auditor from his or her office. Taking into consideration the cost required for initial and annual renewal of SEDEX certification is essential for manufacturing units to plan ahead.
How to Check SEDEX Membership Online After You Apply for SEDEX Certification
After successful registration, it is easy to check the membership status of the company at SEDEX website. Accessing the SEDEX account, one only needs to navigate through the Organisation tab to know the membership status, type of membership, and the unique SEDEX code. Purchasing companies having accounts connected to that particular company will be able to see this membership information themselves to verify whether the company’s SEDEX membership and its audit report are still valid.
SEDEX Audit (SMETA): What Happens After You Apply for SEDEX Certification
Once a manufacturing unit goes through the registration process and fills out the Self-Assessment Questionnaire, the next step is conducting a SMETA audit. The authorized persons for conducting a SMETA audit must belong to APSCA, which stands for the Association of Professional Social Compliance Auditors. It is not SEDEX that conducts SMETA audits; rather, it receives the results only after the audit company uploads its report.
SMETA audits may either be announced, semi-announced, or unannounced, depending on the requirement of the buyer. A typical SMETA audit usually consists of walking through the factory, reviewing documentation, and conducting private interviews with workers. In case of any nonconformities detected during the audit process, a factory is presented with a plan to make necessary corrections within a certain timeframe.
The validity period of a SMETA report is usually one year from the date when the audit was carried out. For those manufacturing units that are SEDEX members and would like to retain their status relevant for buyers, one SMETA audit annually in addition to the annual SEDEX membership fee, must be taken into account.
Key Takeaways
SEDEX itself is a sharing tool rather than a certification organization; hence, the term “SEDEX certification” means SEDEX membership and the SMETA audit.
- The majority of manufacturing factories in India need to register for SEDEX certification as members belonging to category B because this category targets suppliers.
- SEDEX does not have a free certification service; you need to pay the annual membership fees and the SMETA audit fees too.
- APSCA-accredited audit organizations are the only ones authorized to conduct a SMETA audit for SEDEX.
- Status of membership and SEDEX ID can be checked at any time through your SEDEX account under the tab Organizations.
Frequently Asked Questions
Is SEDEX free?
SEDEX membership comes at a cost as there will be yearly fees for membership, while the SMETA audit charges separately. In reality, there is no such thing as free SEDEX certification.
What is the cost of SEDEX certification?
The SEDEX certification price will cover the cost of membership each year as well as the SMETA audit charges. These charges will vary depending on the type of audit performed and also on the size of the manufacturing site. The typical cost will vary between INR 25,000 and more than INR 90,000.
Is SEDEX certification worth it?
Yes, SEDEX certification is definitely worth it for those manufacturers who export their products to retailers overseas because most of them ask for SEDEX certification first before buying anything.
Who can do a SEDEX audit?
It must be noted that only the audit companies, which are part of APSCA, The Association of Professional Social Compliance Auditors, can undertake a SMETA audit. SEDEX is just an audit repository and it does not conduct any audits.
How can I check SEDEX membership online?
One can check whether the account belongs to SEDEX members or not by logging into the SEDEX account and checking the details in the Organisation tab where SEDEX membership and SEDEX ID are shown. This detail is also visible to linked buyers in their SEDEX profile.
What are the different SEDEX membership types?
There are three types of SEDEX memberships – A (Buyer), B (Supplier/Manufacturer) & AB (Both). Most of the manufacturing units in India opt for B membership.
How long does it take to apply for SEDEX certification in India?
While account approval is done in just a few days’ time, the entire process from applying for SEDEX membership to certification application through SAQ/SMETA audit will take four to eight weeks.
