Factory managers getting ready for social compliance audit assume that SMETA audit is an audit like any other, meaning a pass-or-fail inspection just like a certification audit. But a Sedex/SMETA audit is an observation gathering process, which documents evidence on labour standards, health and safety, environment and business ethics. Whether your factory passes the audit with a few issues or leaves the auditor’s office with critical non-conformances is entirely dependent on how prepared your factory is a week or two before the auditor comes around. This guide explains how to prepare for the Sedex/SMETA audit in order to pass it with flying colours, the first time round.
There are many factories that do not pass Sedex/SMETA audits for reasons that have nothing to do with deliberate non-compliance. What these factories lack is an effective document management system, policies written on paper but never implemented on the shop-floor and managers who have never gone through an audit drill of a whole day’s duration. Passing Sedex/SMETA audits in the first attempt requires discipline from every department manager regarding every clause of the ETI Base Code.
Understanding What It Takes to Pass a Sedex/SMETA Audit
The SMETA (Sedex Members Ethical Trade Audit) methodology is not a certification process, which means there is no certification per se that will be awarded. It is up to the buyer or brand to assess the audit results posted on the Sedex website and determine if the factory qualifies based on their own sourcing standards. For a factory to pass a Sedex/SMETA audit in the way that would make it pass a buyer’s standards, it needs well-maintained documentation, properly conducted policies, and workers who can testify in an interview about these procedures. The fact that there may be discrepancies between documentation and reality is the main reason why many factories fail to pass a Sedex/SMETA audit on the first try.
SMETA Audit Preparation Checklist for Suppliers
The SMETA audit preparatory checklist is meant to be a complete review of the business process, not a document gathering activity. The following checklist contains the aspects that auditors pay the most attention to prior to conducting their audit on site.
- Sedex membership & self-assessment questionnaire (SAQ): Check the completeness and accuracy of SAQ and its proper connection with the buyer’s Sedex profile.
- Review of management systems: Check that HR, H&S, and environmental policies are signed, dated, and in the language understood by workers.
- Worker record reconciliation: Compare attendance logs, payrolls, and overtime records from the past 12 months or longer.
- Conducting mock audit/gap analysis: Conduct an internal or external gap analysis at least four to six weeks prior to the audit date.
- Worker briefing: Brief workers on interview questions about wages, working hours, grievances, and right to associate.
- Site inspection: Inspect fire exit routes, machine guarding, chemical storage, and clean conditions in canteens and washrooms.
- CAPR preparedness: Assign internal owners for ETI Base Code clauses in order to implement corrections immediately.
ETI Base Code Compliance Checklist for Factories
SMETA audits take into account the nine clauses of the ETI Base Code. A checklist of the ETI Base Code for auditing a factory must include the following information per clause, as illustrated below.
| ETI Base Code Clause | What Auditors Check | Evidence Factories Should Keep Ready |
|---|---|---|
| Employment is freely chosen | No forced, bonded, or trafficked labour | ID documents held by workers, no retained wages or deposits |
| Freedom of association | Right to join unions or worker committees | Committee minutes, election records, no interference logs |
| Safe and hygienic working conditions | Fire safety, machine guarding, PPE use | Fire drill logs, PPE issue registers, hazard risk assessments |
| Child labour not used | Age verification for all workers | Age-proof documents, recruitment age-check procedure |
| Living wages are paid | Wage slips against minimum wage law | Payroll records, wage calculation sheets, bank transfer proof |
| Working hours are not excessive | Weekly hours and rest day compliance | Attendance biometric data, overtime authorisation forms |
| No discrimination is practised | Hiring, pay, and promotion equality | Recruitment policy, grievance register, pay-parity data |
| Regular employment is provided | Contract type and statutory benefits | Appointment letters, PF/ESI records, contract worker registers |
| No harsh or inhumane treatment | Disciplinary and grievance handling | Disciplinary policy, grievance log, worker interview alignment |
The above nine clauses make up the basis for any SMETA audit irrespective of whether the audit is a known or semi-known audit. The factory that maintains a tracker with this table being up to date on a monthly basis rather than putting the table together in the week prior to the audit always passes a Sedex/SMETA audit with minor observations.
How to Prepare Your Factory for a SMETA 2-Pillar or 4-Pillar Audit
Manufacturing plants that have queries regarding what steps they should take in order to get their factories ready for a SMETA 2-pillar or 4-pillar audit must first establish the scope as desired by the buyer.
| Audit Scope | Pillars Covered | Preparation Focus |
|---|---|---|
| SMETA 2-Pillar | Labour standards, Health & Safety | Wage and hours records, safety documentation, worker interviews |
| SMETA 4-Pillar | Labour standards, Health & Safety, Environment, Business Ethics | All 2-pillar items plus environmental permits, waste handling, anti-bribery policy |
For a 4-pillar audit, it is also necessary for the factories to develop their environmental consents, waste water and air emission test reports, waste disposal logs, and anti-bribery and corruption policies, since they are also audited together with the standard labour and safety pillars.
Some buyers may decide to upgrade their suppliers’ audit to 4-pillar audit during their relationship because the volume of orders has increased. It is therefore necessary to develop some environmental and ethical documents although initially the audit is only on labour and safety.
What Documents Are Required for a SMETA Audit
Knowing the type of documents needed for a SMETA audit beforehand will help avoid the common cause of delays that auditors experience when undertaking the audits – existing documents that cannot be found promptly.
| Category | Documents Required |
|---|---|
| Business & legal | Trade licence, factory registration, fire NOC, pollution consent |
| HR & labour | Appointment letters, wage registers, attendance records, leave records |
| Health & safety | Risk assessments, fire drill records, first-aid register, PPE logs |
| Environment | Consent to operate, waste manifests, effluent/emission reports |
| Management systems | Code of conduct, grievance policy, disciplinary policy, organogram |
| Worker welfare | Canteen and drinking water test reports, crèche records where applicable |
Digital documents are suitable in most cases, however, original documents are preferred for attendance and wages because there is a possibility of altering the digitally stored document. For a factory that needs to undergo a Sedex/SMETA audit, the best strategy would be to have both the digital copy and the original document.
Most Common Non-Conformances Found During a SMETA Audit
Often, one of the questions that buyers ask is which are the most commonly encountered non-conformances (NCs) within the SMETA audit, since typically NCs are often clustered around specific operational deficiencies.
| Area | Typical Non-Conformance |
|---|---|
| Working hours | Weekly hours exceeding 60, or missing rest-day records |
| Health & safety | Blocked fire exits, missing machine guards, expired fire extinguishers |
| Wages | Deductions not itemised, minimum wage shortfalls in piece-rate roles |
| Documentation | Attendance and payroll figures not matching each other |
| Freedom of association | No functioning worker committee or unclear election process |
| Environment | Missing or expired pollution control board consent |
| Sub-contracting | Undeclared home-workers or unauthorised sub-contracted units |
Certain issues tend to recur throughout the industry irrespective of the industry itself, which is why buyers will benchmark the factory against this model rather than considering the individual issues in isolation. When a factory takes care of working hours and wage records before the audit, two high-frequency risks are taken care of at once.
How to Fix SMETA Audit Findings and CAPR
It is the understanding of how to deal with the results of an SMETA audit and the Corrective Action Plan Report that distinguishes a successful follow-up Sedex/SMETA audit from an accumulation of repeated issues during the audit process.
- Find the root cause for each issue: Decide if the discrepancy is a single event recording problem or process issue before filling out the correction.
- Realistic CAPR deadlines: Minor issues are resolved within 30-60 days, whereas critical issues need containment and system fixing immediately.
- Clause owner: Assign an individual responsible person rather than a common department to each ETI Base Code clause finding.
- Provide evidence, not statements: Sedex CAPR fields demand photographic or documentary evidence of closure rather than an explanation of intentions.
- Reoccurrence record: Record whether the same non-conformity has been found previously in any past audit cycles because recurring issues will attract the risk signals from buyers regardless of the severity.
How Long Does a Pre-SMETA Audit Gap Analysis Take
In case of a site-level plant, a pre-SMETA audit gap assessment would generally take two to four working days at the site level, and then another three to five days to prepare the findings and remediation plan by the consultant. In case of larger plants having several production lines or a four pillar scope, there is an additional one or two days required for an environmental and business ethics assessment. Scheduling the gap analysis four to six weeks ahead of the actual audit date will allow sufficient time for the gaps to be sorted out.
How Legal4Sure Helps Factories Pass a Sedex/SMETA Audit Without Major Non-Conformances
Legal4Sure uses SMETA audit preparation checklists from the very beginning, as we start with a detailed gap analysis based on the ETI Base Code and end up with a simulated SMETA audit where our auditor follows the procedures used by a real auditor in terms of documentation review, site inspection, and interviewing workers.
- Pre-audit gap assessment: Site assessment using all relevant pillars with a written report.
- Document creation: Creation of policies, registers, and documents that are required by auditors.
- Worker interview preparation: Interview training to ensure that answers from workers match the factory records but aren’t memorized.
- CAPR: Formal planning and compilation of evidence for any issues that arise.
- Sedex platform management: SAQ completion and audit report linkage to buyers.
Key Takeaways
- An audit conducted by Sedex/SMETA audits notes observations and does not provide a pass or fail certificate, so the quality of preparation is what determines the buyer’s approval or disapproval.
- Preparing for the SMETA audit using a well-structured list of items to be checked by suppliers will take care of any shortcomings before the actual audit day.
- The issues related to wages, working hours, and fire safety remain the most common non-conformities observed during the SMETA audit process.
- The CAPR should be evidence-driven and not just an assurance in writing that the finding will be corrected.
- It would be appropriate to conduct a pre-SMETA gap analysis four to six weeks before the audit.
FAQs
How to pass SMETA audit in one go?
Do a gap assessment based on the ETI Base Code, rectify the document/site gaps beforehand and educate your workers such that answers to questions during the interview match the documents.
Can you fail a Sedex SMETA audit?
There is no failure as such, but critical or business-critical issues could make the buyer discontinue sourcing from your factory.
What are the most common non-conformances (NCs) found during a SMETA audit?
Working hours exceed, wage record discrepancies, blocked fire escapes, lack of worker committee documentation etc. are some of the common NCs.
How do I prepare my factory for a SMETA 2-pillar or 4-pillar audit?
Firstly, ascertain the requirements of the buyer and then prepare labor & safety documents for 2-pillar, while preparing environment & ethics documents along with others for 4-pillar audit.
What documents are required for a SMETA audit?
Documentations such as factory registration documents, wages/attendance sheet, safety & fire compliance certificates, environmental permits, HR manuals are required.
How long does a pre-SMETA audit gap analysis take?
The average pre-SMETA audit gap analysis requires two to four days of on-site audit, plus another three to five days for gap analysis report & roadmap.
How does Legal4Sure help factories clear SMETA audits without major non-conformances?
Legal4Sure provides a pre-SMETA audit gap analysis, documentations development, training employees, and managing CAPR closure with documentations before audit.