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Section 6
Audit Operation Procedures
Article 6.1 – Quality Control Audits
Aim of process
6.1.1 The quality control process is a function of the Technical Advisory
Board, (TAB) which supervises the process and renders reports and recommendations
to the President/CEO.
6.1.2 The aim of Quality Control Audits is to ensure the highest level of quality,
integrity and credibility of the ICTI CARE Process by using unannounced audits
to control the quality and validity of the results of regularly-scheduled audits.
6.1.3 Any findings as a result of these targeted audits will then follow the
procedures of Section 6.3.
Selection of factory
6.1.4 The TAB selects the factory.
Appointment of audit company
6.1.5 The TAB selects the audit company and schedules the unannounced Quality
Control Audit.
6.1.6 Any of the Accredited Audit Companies can be chosen to conduct a Quality
Control Audit except the company that conducted the last audit of the factory.
6.1.7 Officers of the ICTI CARE Foundation or TAB members can alternatively
conduct the Quality Control Audit or personally supervise the audit and review
the results.
Conduct of the audit
6.1.8 The Quality Control Audit is performed in the same manner as a regular
audit using the standard audit criteria. However, QC Audits should be conducted
within a maximum of 10 weeks from the last announced audit.
6.1.9 In cases where a Quality Control Audit is scheduled due to suspicion of
concrete violations, the TAB may give special instructions to the audit firm.
6.1.10 Observers from or appointed by the TAB may be allowed to observe the
Quality Control Audit.
Audit Report
6.1.11 The appointed audit firm conducts an unannounced audit and produces the
Audit Report with a record of the findings and a conclusion as to whether the
factory complies with the standards of the ICTI CARE Process. It sends this
report to the TAB.
6.1.12 On the basis of their professional judgment, the TAB members review the
Audit Report, assess the seriousness of violations, if any, and move forward
to the remediation and/or termination procedure.
6.1.13 If no violations are found, the factory will retain its Seal of Compliance
and the next Annual Audit will not have to be conducted until 12 months after
the QC Audit took place.
6.1.14 A copy of the Audit Report, with requirements, is sent to the factory
after the TAB review.
Flowchart – Article 6.1 Quality Control Audits
Article 6.2 – Investigatory Audits
Aim of process
6.2.1 The investigatory process is a function of the Technical Advisory Board,
(TAB) which supervises the process and renders reports and recommendations to
the President/CEO.
6.2.2 Investigatory Audits are unannounced audits conducted in response to allegations
or suspicion of possible violations of ICTI CARE Process requirements.
6.2.3 The scope of the audit is typically tailored to address the specific areas
of concern, which triggered the investigatory audit. Any findings as a result
of these targeted audits will then follow the procedures of Section 6.3.
Selection of factory
6.2.4 The TAB selects the factory.
Appointment of audit company
6.2.5 The TAB selects the audit company and schedules the unannounced Investigatory
Audit.
6.2.6 Any of the Accredited Audit Companies can be chosen to conduct an Investigatory
Audit except the company that conducted the last audit of the factory.
6.2.7 Officers of the ICTI CARE Foundation or TAB members can alternatively
conduct the Investigatory Audit or personally supervise or observe the audit
and review the results.
Conduct of the audit
6.2.8 The Investigatory Audit is performed in the same manner as a regular
audit using the standard audit criteria. However, Investigatory Audits are typically
focused on specific areas of concern.
6.2.9 The TAB may give special instructions to the audit firm.
6.2.10 Observers from or appointed by the TAB may be allowed to observe the
Investigatory Audit.
Audit Report
6.2.11 The appointed audit firm conducts an unannounced audit and produces
the Audit Report with a record of the findings and a conclusion as to whether
the factory complies with the standards of the ICTI CARE Process. It sends this
report to the TAB.
6.2.12 On the basis of their professional judgment, the TAB members review the
Audit Report, assess the seriousness of violations, if any, and move forward
to the remediation and/or termination procedure.
6.2.13 If violations are found, the factory will – as outlined in the
terms and conditions of the ICTI CARE Process – pay for the Investigatory
Audit.
6.2.14 If no violations are found, the factory will retain its Seal of Compliance
and will not pay for the Investigatory Audit.
6.2.15 A copy of the Audit Report, with requirements, is sent to the factory
after the TAB review.
Flowchart – Article 6.2 Investigatory Audits
Article 6.3 – Compliance and Remediation Procedure
Aim of process
6.3.1 This procedure covers measures including termination of the Seal of
Compliance for factories that through Annual Audits, Investigatory Audits, Quality
Control Audits or other properly verified sources have been found to violate
the standards of the ICTI CARE Process.
Seriousness of violations
6.3.2 The assessment of the seriousness of violations should be conducted
according to the relevant sections of this article as well as internal interpretation
guidelines and be consistent with previous assessments. Depending on the seriousness
of the violations the below listed steps should be taken.
Minor violations
6.3.3 Minor violations are categorized as not posing an immediate risk to
the welfare of workers. Examples of minor violations include but are not limited
to:
- missing certificates for air pressure vessels; or
- missing certificates for waste sewage.
6.3.4 Upon review of the audit report, the Operations Manager of the ICTI
CARE Foundation shall inform the factory by letter of the Mandatory Requirements.
6.3.5 Within two weeks from the issuance of the letter from the Operations Manager,
the factory must confirm the acceptance of the Mandatory Requirements and provide
an acceptable Corrective Action Plan (CAP).
6.3.6 If factory is not able to comply with the approved CAP, the status shall
be escalated to a major violation.
Major violations
6.3.7 Major violations are categorized as posing a possible threat to the
welfare of workers. Examples of major violations include but are not limited
to safety systems that are not up to the standards of the ICTI CARE Process,
etc.
6.3.8 On the basis of a decision by TAB members, the TAB Chairman informs the
factory by letter of the Mandatory Requirements of the TAB.
6.3.9 Within two weeks from the issuance of the letter from the TAB Chairman,
the factory must confirm the acceptance of the Mandatory Requirements and provide
an acceptable Corrective Action Plan (CAP).
6.3.10 At the discretion of the TAB the factory can provide evidence of compliance
with the CAP or an unannounced audit can be conducted at the expense of the
factory within 1 month of the agreed date for completion of the CAP to verify
correction of the violations.
6.3.11 If the factory is not able to comply with the CAP, the status shall be
escalated to a critical violation.
The factory shall retain its seal of Compliance if the factory completes the
CAP and passes the unannounced audit, if any.
Critical violations
6.3.12 Critical violations are categorized as posing a direct threat to or abuse
of the welfare of workers. Examples of critical violations include but are not
limited to child labor, systematic inconsistent record-keeping regarding compensation,
falsified records for wages and working hours, etc.
6.3.13 Based on the decision by TAB members, the TAB Chairman makes a recommendation
to the President/CEO for a Corrective Action Plan. The recommendation may include,
but is not limited to, the following points:
- Employment of a full time Compliance Manager with support from the factory’s
top management to ensure compliance.
- Contribution by the factory of funds to be used for the benefit of the
factory workers, for example on training and education of workers.
- Repayment of any lost compensation and wages to employees from the time
that the last Seal of Compliance was granted.
- Establishment of a free of charge complaint phone hot-line serviced by
the ICTI CARE Foundation or a third party at the factory’s expense.
- Additional surveillance audits of the factory at its expense for a defined
period of time that can be extended depending on the audit results.
- Off-site meetings between factory employees and the ICTI CARE Foundation
to ascertain adherence to working hours, pay scales etc.
- Listing the factory as “On Probation” in the Seal of Compliance
Database.
- A deposit by the factory to cover costs related to the required actions.
- A combination of the above or other measures as appropriate.
6.3.14 The President/CEO will assess the recommendation from the TAB Chairman
in light of:
- the scope of the identified violations;
- the ethical expectations of all stakeholders to the ICTI CARE Process;
- the risk to the reputation and integrity of the ICTI CARE Process; and
- the willingness of the factory management to improve conditions.
Based on this assessment, the President/CEO has the choice of either withdrawing
the Seal of Compliance or starting a remediation procedure to seek to improve
the conditions in the factory.
6.3.15 If the President/CEO decides to withdraw the Seal of Compliance, the
factory shall be notified and given four weeks to reply in writing to the identified
violations. Based on the available information, the Oversight and Appeals Committee
shall act as an instance of automatic appeal. No Seal of Compliance can be withdrawn
without the express agreement of the Oversigt and Appeals Committee of the independent
Governance Board of the ICTI CARE Process.
6.3.16 If the President/CEO decides to start a remediation procedure, the factory
shall be notified in writing of the Mandatory Requirements and the conditions
for reinstating the Seal of Compliance.
6.3.17 Within two weeks from the issuance of the letter from the President/CEO,
the factory must confirm its acceptance of the Mandatory Requirements and provide
and acceptable Corrective Action Plan (CAP).
6.3.18 If the factory does not agree with the requirements of the CAP or is
found to have critical violations following the implementation of the CAP, the
following actions shall be taken
- The Seal of Compliance shall be withdrawn.
- The factory’s name/seal number shall be removed from the Seal of
Compliance Database.
- Relevant parties including Date Certain companies may be informed of the
withdrawal of the Seal of Compliance.
- The factory shall not be eligible to register for the ICTI CARE Process
for 12 months from the date of withdrawal of the Seal of Compliance.
6.3.19 If a factory has been de-listed and then subsequently re-registers
after 12 months, the TAB shall impose an unannounced quality audit during and/or
after the application process. If critical issues are identified, the factory
shall be withdrawn from the registration immediately and indefinitely.
Appeal process
6.3.20 The factory may within one month of any decision appeal said decision
in writing.
6.3.21 For decisions related to minor violations, the appeal will be handled
by the TAB, which will communicate its decision to the factory within one month
after receipt of the written appeal.
6.3.22 For decisions related to major violations, the appeal will be treated
by the President/CEO, who will communicate his decision to the factory within
one month after receipt of the written appeal.
6.3.23 For decisions related to remediation of critical violations, the appeal
will be handled by the relevant committee of the Governance Board of the ICTI
CARE Foundation, which will communicate its decision to the factory within one
month after receipt of the written appeal.
6.3.24 For decisions related to withdrawal of a Seal of Compliance as a result
of critical violations, the relevant committee of the Governance Board of the
ICTI CARE Foundation acts as an instance of automatic appeal and the decision
cannot be appealed further.
Flowchart - Article 6.2 Compliance and Remediation Procedure
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