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Processes of the ICTI CARE Foundation

Article 5.1 – Date Certain

Aim of the process

5.1.1 The aim of the Date Certain process is to ensure the maximum number of toy factories enter the ICTI CARE Process by requiring their toy brand and retailer clients to commit to a date after which they will only contract product manufactured by factories that are in the ICTI CARE Process as outlined below.

Application procedure

5.1.2 To apply for participation in the Date Certain program, a senior officer of the toy brand or retailer needs to fill out a pledge form declaring that it will require that all its suppliers comply with the ICTI Code of Business Practices and the ICTI CARE Process by a specific date.
5.1.3 The pledge must specify:

• the full name of the company;
• the selected Date Certain, citing day, month and year;
• full name, title and signature of signing officer of the company.

5.1.4 Application for a Date Certain is covered by the general terms and conditions of the ICTI CARE Foundation¹. A clear reference to these terms and conditions must be a part of the pledge form.
5.1.5 Subsidiaries of Date Certain committed companies in other countries are encouraged to apply to join the program separately as it is important to the process to have as much support as possible at national level. The parent company can sign up for all subsidiaries, but needs to list them individually.
5.1.6 The pledge form should be sent to the national toy association with a copy to the ICTI CARE Foundation. In case subsidiaries are signed up by the parent company, the ICTI CARE Secretariat is responsible for informing the national toy association, if any, of the country where the company or subsidiary is located.

Date Certain Database

5.1.7 Upon receipt of a correctly completed pledge form, the ICTI CARE Secretariat will add the company or subsidiary to the Date Certain Database on the ICTI CARE website. This listing is mandatory.

Use of ICTI CARE Seal of Commitment

5.1.8 Subject to a separate licensing agreement² between the company and the ICTI CARE Foundation, the company is then entitled to use the ICTI CARE Seal of Commitment in its promotional material including stationary, reports, brochures and websites. This licensing agreement must be signed by both parties before the Seal of Commitment can be used.
5.1.9 The ICTI CARE Foundation may charge a fee for accepting Date Certain commitments, listing companies on the ICTI CARE Website and giving permission to use the ICTI CARE Seal of Commitment.

Scope of commitment

5.1.10 Date Certain companies commit themselves to buy only from factories that are in the ICTI CARE Process and either have a Seal of Compliance or have completed the first audit and have agreed to a Corrective Action Plan to address the identified violations identified, if any. The sourcing commitment naturally applies to countries where the ICTI CARE Process is active. At the same time, the ICTI CARE Foundation encourages all toy brands to make their suppliers in other countries comply with the standards of the ICTI CARE Process.
5.1.11 Date Certain committed companies will make it a condition for doing business that factories are covered by the ICTI CARE Process at the beginning of the business relationship.

Remediation procedure

5.1.12 Should the ICTI CARE Foundation becomes aware of a Date Certain committed company that is contracting products from a factory that does not have a Seal of Compliance and is not in the ICTI CARE Process, the ICTI CARE Secretariat will contact the Date Certain committed company and request an explanation and its proposal on how it will remedy the situation.
5.1.13 Within 60 days from the initial request of the ICTI CARE Foundation,

• the factory must have submitted a valid application to enter the ICTI CARE Process; or
• the Date Certain committed company must terminate the contract with the particular factory coincident with delivery of any pre-existing orders, and must not place any new orders.

If either of these conditions are not met, the ICTI CARE Foundation reserves the right to remove the Date Certain committed company from the Date Certain Database and request that the company immediately cease using the ICTI CARE Seal of Commitment in any of its public or private materials.

Quality Control

5.1.14 The ICTI CARE Foundation will survey all Date Certain companies at least once a year to monitor how these companies are implementing their commitment. The results of the survey will be made available to the Governance Board and may serve as the basis for a Remediation Procedure as outlined above.

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Article 5.2 – Convergence Process

Aim of the process

E2.1 The aim of the Convergence Process is to seek formal recognition of the ICTI CARE Process by retailers and other social compliance systems. The use of a unified standard benefits factories, brands, manufacturers, and retailers alike by requiring fewer audits at factory level and fewer sets of rules and procedures to comply with.

Types of recognition

E2.2 The ICTI CARE Foundation recognizes that one size doesn’t fit all and is open towards different types of recognition of the ICTI CARE Process. In general, such recognition can fall into one of four categories.

• Complete recognition – a retailer or external system fully recognizes the ICTI CARE Process as equal to their own certification program. Factories that can provide a valid ICTI CARE Seal of Compliance will not be audited by the recognizing retailer or other system and can enter into business relationships without meeting any further requirements.
• Partial recognition – a retailer or external system recognizes the ICTI CARE Process even if there are discrepancies between the ICTI Code of Business Practice and the company’s own code. Factories that can provide a valid ICTI CARE Seal of Compliance can be made subject to audits or asked to provide documentation that demonstrates that the gaps, if any, are bridged.
• Risk assessment recognition – a retailer or external system recognizes the ICTI CARE Process as a key criterion for assessing the risk related to particular factories. Typically, factories that can provide a valid ICTI CARE Seal of Compliance will be recognized as posing a low risk and, as such, fall into a bracket of factories that will not be subject to frequent auditing, if any.
• Audit result recognition – a retailer or external system recognizes the ICTI CARE Process audit results but not the ICTI CARE Seal of Compliance. Factories that can provide an ICTI CARE Audit Report will in most cases be treated as if the company or system had performed an initial audit of the facilities. While factories may still have to undergo a Corrective Action Plan (CAP) and a re-audit by the company or external system, they will not have to go through the initial audit procedure.

E2.3 While different types of recognition may lead to different results, they all represent some degree of convergence and reap some benefits for factories in the ICTI CARE Process. The ICTI CARE Foundation looks for the best possible recognition agreement with retailers and external systems as possible.

Legal documentation of recognition agreements

E2.4 To the extent possible, the Convergence Process must be documented in order to be able to demonstrate the achieved benefits to factories and manufacturers in the ICTI CARE Process. It is the responsibility of the Director of Operations in whose area the retailer or external system is headquartered, or who has been conducting or supervising the convergence process to pursue this written agreement.
E2.5 As with the recognition itself, the ICTI CARE Foundation takes a pragmatic approach towards written documentation of the process. There are three different ways an agreement within the convergence process can be documented.

• Formal Memorandum of Understanding between the ICTI CARE Foundation and the recognizing retailer or external system. A Memorandum of Understanding represents the highest level of legal documentation of this process. Both parties should sign the Memorandum of Understanding, which will set out:
  • company name, branch/headquarters, contact details for both the recognizing system and the ICTI CARE Foundation;
  • description of the scope, nature, and characteristics of the agreed recognition;
  • if possible, a description of how a factory with an ICTI CARE Seal of Compliance will be treated.
• Formal or informal exchange of letters between the ICTI CARE Foundation and the recognizing retailer or external system. Such an exchange of letters typically includes a letter from the recognizing retailer or system and a thank-you letter from the ICTI CARE Foundation.
  
  The letters should include:
  • reference to any meeting or conversation that has taken place between the recognizing system and the ICTI CARE Foundation;
  • the scope, nature, and characteristics of the agreed recognition;
  • an indication of how a factory with an ICTI CARE Seal of Compliance will be treated. This has usually been discussed as a part of the negotiation.
    
• Summary record of meetings between retailer or system and the ICTI CARE Foundation. It is important to document the progress made or simply the fact that a meeting or discussion has taken place. Such summary is typically an internal document that is used internally by the staff of the ICTI CARE Foundation to document what was discussed and to make it easier to follow up on the outcome of a meeting. In some cases, the summary record can be sent to the retailer or system after the meeting, as a meeting report. However, its legal binding effect as a means to document an agreement should not be overestimated, and a formal exchange of letters or Memorandum of Understanding should always be used where possible.

Publication of legal documentation

E2.6 Convergence Process agreements should be listed on the ICTI CARE website as a part of the Convergence Database³.
E2.7 To the extent possible, the Database should detail the content of the agreement, which type of category the recognition falls into and, in particular, information about how factories with a valid Seal of Compliance will be treated.

Pilot projects

E2.8 In some cases and, in particular, with larger retailers or external systems, the President/CEO of the ICTI CARE Foundation can decide to enter into a pilot project with that particular retailer or system to explore the possibility of convergence.
E2.9 The aim of such pilot projects is to analyze the practical implications of convergence and to map and document the real-life differences, if any, between the recognizing system and the ICTI CARE Process, thus enabling the recognizing system to make a decision based on concrete facts.
E2.10 The pilot project should include a schedule with agreed details about the:

• number and description of factories;
• agreed methodology to be used;
• timeline and milestones of the project;
• contact persons;
• division of responsibility on both sides;
• any possible financial obligations or commitments.

E2.11 Throughout the pilot project, the responsible contact person of the ICTI CARE Foundation should maintain as close contact as possible with the other party.
E2.12 At the end of the pilot project, a formal meeting should be convened to discuss the findings and seek to reach agreement on the level of recognition.
E2.13 The outcome of a pilot project should be documented and published as appropriate.

Disputes

E2.14 Should disputes between factories and the recognizing retailer or system arise that cannot be solved simply on the basis of the legal documentation, the relevant ICTI CARE Foundation Director of Operations or the President/CEO will contact the parties and try to work out an amicable solution.
E2.15 However, if the dispute arises over issues other other than the recognition of an ICTI CARE Seal of Compliance, it is not the responsibility of the ICTI CARE Foundation to actively engage in settling it. The role of the ICTI CARE Foundation is solely to clarify any ambiguities or interpretations of the convergence agreement between the recognizing system and the ICTI CARE Foundation.
E2.16 The Terms and Conditions of the ICTI CARE Process and the ICTI CARE Foundation are absolutely clear about the role and responsibility of the ICTI CARE Foundation in relationships between external retailers and systems and their suppliers. Legal responsibility should be limited as far as possible. Suppliers should not be able to hold the ICTI CARE Foundation legally responsible for missed orders or lost business due to disputes based on any convergence agreement.

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Article 5.3 – Fundraising

Aim of the process

E3.1 The aims of the Fundraising Process are to raise seed financing for the operation of the ICTI CARE Foundation until the process becomes self-sustaining and to ensure buy-in by companies that are a part of the ICTI CARE Process.

Use of fundraising

E3.2 Fundraising is intended only as an interim solution to cover costs of the operation until the process is self-sustainable based on its own revenue model. As the ICTI CARE Process expands into new markets, fundraising may be used during the initial phase to cover the costs of setting up the system in new markets. This does not change, however, the fundamental principle that the process should be able to pay its own way.

Donation levels

E3.3 Donations are categorized in the following levels.

Recognition of donations

E3.4 It is an important part of the Fundraising process to give appropriate recognition to donors. Different levels of donations will receive different levels of recognition.
E3.5 The ICTI CARE Website should at all times contain an updated list of sponsors detailing level and identity of sponsor. No amounts, nor the above listed donation levels will be detailed on the website. The respective donor should be consulted before listing and given the choice of remaining anonymous.
E3.6 Donors may also be recognized as part of events, conferences, publications, etc. developed by the ICTI CARE Foundation.

Legal status of the ICTI CARE Foundation

E3.7 The ICTI CARE Foundation is registered as a not-for-profit organization (tax status 501 C3) under the laws of the United States of America, which governs any issue related to tax deductions, contributions and whatever documentation is required from the American authorities.

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Article 5.4 – Budget

Aim of the process

E4.1 The aim of the budget process is to ensure that the ICTI CARE Foundation has a solid financial underpinning, which enables it to fulfill its mission.
E4.2 Any revenue generated will be used for providing education and training for factory employees.

Article 5.5 – Governance Board meetings

Aim of the process

E5.1 The Governance Board meets bi-annually to decide on issues of strategy and vision to keep the work of the ICTI CARE Foundation and the ICTI CARE Process moving forward.

Article 5.6 – TAB meetings

Aim of the process

E6.1 The Technical Advisory Boards are entrusted with ensuring the technical integrity of the ICTI CARE Process, cover special cases, add/change procedures, etc., including simple day-to-day issues. It serves as a forum for dialogue for the members.

Article 5.7 – Revisions of the ICTI Code of Business Practices

Aim of the process

E7.1 The aim of the review and revision processes is to ensure that the ICTI Code reflects business realities and continues to provide a sound basis for the ICTI CARE Process.

Initiation of the process

E7.2 The authority to revise the ICTI Code of Business Practices lies with the ICTI Board or its Executive Committees. The authority to alter elements of the ICTI CARE Process that implements the Code lies with the ICTI CARE Foundation Governance Board. The ICTI Executive Committee can, on recommendation from the Technical Advisory Boards, decide to initiate one of two processes, namely a
a) a code review; or
b) a code revision.
The aim of a code review is to examine how the current Code deals with identified issues or developments.
The aim of a code revision is to make changes to the text of the Code.
A review can be - but is not necessarily - a prerequisite for undertaking a revision of the Code.
E7.3 The Code shall be reviewed at least every five years to make sure it reflects current best practice.

Organization of the work

E7.4 The Technical Advisory Boards will among themselves organize the work related to the review or revision as they see fit. A working committee with representatives from all TAB’s should be appointed.
E7.5 The ICTI Secretariat, with assistance from the ICTI CARE Secretariat, manages the overall process and is responsible for circulation of drafts and implementation of comments in cooperation with the members of the Technical Advisory Groups.

Consensus building process

E7.6 The outcome of a code review or a code revision needs to go through a global consensus-building process, which includes:

• circulation of the draft for review and comments by all members of the Technical Advisory Boards;
• consultations with the President/CEO and Directors and Managers of Operations;
• consultation with the relevant Board committees of the ICTI CARE Foundation;
• checking of the draft should be checked by the ICTI Executive Committee;
• circulation of the revised draft for review and comments by all ICTI member associations;
• submission of final draft for formal adoption by all ICTI member associations.

Decisions are made on a consensus basis.

Each step in the process must have a reasonable comment period of no less than four weeks.

Communicating the revised code

E7.7 The revised code must be posted on the ICTI Website and the ICTI CARE Website.
E7.8 The revised code must be translated at least into the following languages in addition to English:

• Chinese (Mandarin)
• French
• Spanish

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Article 5.8 – Revisions of ICTI CARE Code Framework

Aim of the process

E8.1 The aim of this process is to make sure that the ICTI CARE Code Framework (i.e. the documentation that surrounds the ICTI Code of Business Practices) remains updated to reflect the provisions of the Code and the current practices in the marketplace.

Article 5.9 – Complaint handling procedures

Aim of the process

The ICTI CARE Foundation is committed to handling complaints in an open, transparent, and professional manner. To that effect, procedures have been put in place for handling three different types of complaints.

• Seal of Compliance complaints including complaints about auditors.
• Seal of Commitment complaints.
• External complaints.

¹NOTE: Needs to be developed as part of legal documentation – important to keep separate from the terms and conditions of ICTI Asia Ltd.
²NOTE: Needs to be developed as part of legal documentation
³NOTE: To be created as a part of this process

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