On September 10, Sedex published the revised SMETA methodology version 7.0. The revision brings significant changes aimed at deepening the audit process and ensuring long-term improvements in supply chain management. Below we discuss the most important changes and their significance for companies and their suppliers.
Main changes in SMETA 7.0
The latest version of Sedex SMETA contains a number of significant changes that have a far-reaching impact on the audit process and the measures based on it. These changes ensure that companies not only comply with legal and ethical requirements, but can also implement long-term improvements.
1. Detailed workplace requirements
One of the biggest innovations in SMETA 7.0 is the detailed breakdown of the ETI Base Code into specific workplace requirements. These new requirements provide auditors and companies with a clear structure to check that all standards are being met. Each individual point of the Base Code is broken down precisely and provided with clear instructions on what is expected of companies.
This has the advantage that both auditors and companies can better understand which requirements apply to the individual areas of work. This makes auditing more transparent and easier to understand, which strengthens confidence in the entire audit process.
2. Introduction of the management system-based approach
Another major innovation is the introduction of a management system-based approach. Previous audits focused primarily on the situation on the day of the audit, whereas SMETA 7.0 now takes a more comprehensive approach. By systematically reviewing a company's management structures, auditors can gain deeper insights into the reasons for recurring problems. This not only helps to uncover current shortcomings, but also makes it possible to identify potential risks at an early stage and initiate long-term improvements.
The management system-based approach examines four key areas:
- Policies and procedures: Companies must demonstrate that they have implemented formalized policies and procedures to ensure that workplace requirements are met. This includes clear responsibilities and systems for monitoring and improving procedures.
- Resource allocation: A responsible manager with appropriate authority and resources must be appointed to implement these procedures. This ensures that the requirements can be met not only in theory, but also in practice.
- Communication and training: Companies must ensure that all relevant employees are informed about the policies and procedures and are trained accordingly. This promotes understanding and compliance with the requirements at all levels.
- Monitoring and documentation: Effective compliance monitoring systems are required to ensure that issues are identified and resolved at an early stage. Companies must regularly check whether their procedures are having the desired effect and adjust them if necessary.
Each of these four areas is assessed as part of the audit, with four maturity levels being used: "Not addressed", "Fundamental improvements required", "Some improvements recommended" and "Robust management system".
Supply Chain Due Diligence
In this whitepaper, we will:
- Focus on the role of standards and audits in supply chain due diligence
- Explore how to integrate supplier audits into the due diligence process
- Discuss the limitations of current audit practice and how to deal with them
3. New type of determination: "Collaborative Action Required"
Another new feature in SMETA 7.0 is the introduction of the "Collaborative Action Required" finding. The finding is raised if a site does not meet certain requirements that cannot be resolved by the supplier alone. This new type of finding concerns only four areas of the SMETA audit: Living Wages, Responsible Recruitment, Child Labor and Discrimination. Only under these workplace requirements can "Collaborative Action Required" be addressed.
In this type of determination, cooperation between supplier and buyer is crucial to finding a solution. External stakeholders such as third-party labor providers, local NGOs or trade unions can also be involved to ensure sustainable improvements. As these are complex issues, there is no set deadline for remediation, but the focus is on finding a collaborative solution.
4. Gender-differentiated data
Another advance in SMETA 7.0 is the introduction of gender-differentiated data. This innovation enables companies to collect data not only according to the categories "male" and "female", but also to take a more differentiated view of gender distribution in the workplace. This provides a valuable basis for better identifying existing inequalities and taking targeted measures to promote equal opportunities.
Changes to the SMETA report and CAPR reporting
SMETA 7.0 also introduces important changes to reporting. Audit reports now provide a more comprehensive summary of findings, with results summarized by each individual workplace requirement area. This gives companies and auditors a clear idea of the areas where action is needed.
In addition, the CAPR report (Corrective Action Plan Report) now contains specific guidance on the next steps to be taken following submission of the report. This is to ensure that companies can implement concrete measures to improve their practices.
EU Ban on Products from Forced Labour – Integrating Supplier Audits into the Due Diligence Process
While the prohibition of forced labour is already embedded in the EU Charter of Fundamental Rights and multiple other EU legislative initiatives, products made using forced labour continue to circulate on the EU market. To remediate this situation, the EU institutions are negotiating a ban on products made with forced labour on the Union market. In this article, we will explore how audits and standards can help affected companies ensure compliance with the regulation.
What hasn't changed?
Despite the extensive innovations in SMETA 7.0, some core components of the audit process remain unchanged:
- The ETI Base Code remains the foundation of the SMETA methodology.
- Audits can also be carried out as a 2-pillar audit (labor standards and health and safety) or as a 4-pillar audit (labor standards, health and safety, environment and business ethics).
- SMETA's cross-sectoral approach remains in place so that the methodology can be applied in different industries.
- The different audit types (announced, semi-announced and unannounced) are also retained.
Conclusion
With the introduction of SMETA 7.0, Sedex provides a much deeper and more systematic methodology that enables companies and suppliers to improve their ethical standards in the long term. The new measures, in particular the management system-based approach and collaborative problem solving, provide a clear path to go beyond compliance with basic standards and achieve sustainable improvements in supply chains.
Companies that implement SMETA 7.0 not only benefit from better compliance, but also from an improved reputation and increased competitiveness. The new requirements help companies to identify weaknesses at an early stage and implement continuous improvements - an important step towards promoting sustainable and ethical supply chains.
How DQS can support you
DQS is a Sedex-approved auditing company and a member of the APSCA initiative. Our auditors are experts with industry experience and insight into the local markets. We are happy to be your partner for SEDEX certification. Contact us if you have any questions or to discuss future projects.
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