Presentation on theme: "Adoption of Social Compliance Standards to boost MSME Exports"— Presentation transcript:
1 Adoption of Social Compliance Standards to boost MSME Exports By Dr. Dietrich KebschullChairman IGEP
2 International buyers and brands source a variety of products from India ranging from textiles and garments, home furnishing, carpets, gems and jewellery, handicrafts, bicycles, auto parts, electronics, machines tools, etc.The US and the EU are the biggest markets for these products made to a large extent by MSMEs.For Indian MSMEs, supplying to foreign buyers is important. Their contribution to Indian merchandise exports is immense.
3 The Indian MSME exporters have to be aware that their buyers are always under pressure. Consumers, importers, activists, NGOs, etc. are always taking a closer look at the impact which their sourcing has on workers in the exporting countries and on the environment.In former times competitiveness depended on : prices, quality and delivery on time. Today there is a growing influence of:Working conditionsEnvironmentHuman rightsBuyers must be “clean” with regard to these factors. Otherwise : no market chances.
4 Influence of protectionists: They use these arguments e.g.Political prisoners used as labour in ChinaChild labour in India (including bonded labour)Safety problems in Bangladesh and PakistanTherefore we have a growing world wide demand for:the protection of workers by labour standardssafer and higher quality productsindustries that are environmentally sustainable
5 What are the benefits and challenges of implementing social compliance standards ? As global competition increases, countries like India need to find ways to protect and develop their markets. The objective should be to improve the image of Indian goods (“Made in India”, “Buy in India” must be without any problems)This is a relatively new business challenge for Indian industry. However, just like the Indian carpet industry successfully overcame the issue of child labour, other sectors can also succeed in putting social compliance into practice and benefit in the long run.
6 Important Social Compliance Parameters Employment PracticesWages and BenefitsWorking HoursChild LabourForced (Bonded) LabourNon-discrimination / Human RightsFreedom of AssociationWorking Conditions
7 The Business Social Compliance Initiative (BSCI) IGEP has been actively working with the Foreign Trade Association of German Retailers (AVE), with the Foreign Trade Association (FTA) to help the Indian companies to achieve social and environmental compliance. These companies mainly supply to BSCI participants such as: Karstadt, Metro Group, C&A, Otto, P&C, H&M, KIK and Deichmann among others.The Business Social Compliance Initiative is today a leading business-driven initiative for companies committed to improving working conditions in factories and farms worldwide. BSCI unites more than 1,400 buyers and importers in a development-oriented system applicable to all sectors and sourcing countries. It has its headquarters in Brussels, Belgium.There is a growing demand today for such a comprehensive system for social compliance among Indian MSMEs.
8 The Business Social Compliance Initiative (BSCI) In the context of globalization and international competition, many companies source labour intensive goods from developing and newly industrialized countries. However, working conditions in these countries often do not comply with labour standards such as those established by the International Labour Organization (ILO). To address this issue, many companies and associations have created individual codes of conduct and monitoring systems. Parallel to BSCI (+ISES) are SAI 8000 and many others.The proliferation of individual codes, varying audit procedures and diverging approaches, has resulted in audit duplications within the same factories. This leads to unnecessary efforts, confusion about requirements, lack of transparency, lack of accountability, and higher costs for companies and their producers in risk countries.
9 The Business Social Compliance Initiative (BSCI) BSCI works to tackle these challenges by offering a broad platform for cooperation.BSCI cultivates the involvement of relevant stakeholders in Europe and sourcing countries.The ultimate goal of BSCI is to provide companies with the best system to improve working conditions in the supply chain of buyers. This goal can only be achieved through a strong commitment from participants to implement the system.BSCI audit is valid for all BSCI members. In addition BSCI also accepts SA 8000 as equivalent (best practice).
10 Role of IGEP: To Promote Social Compliance with Indian MSMEs IGEP developed ISES BSCI and offers social and environmental consultancy and auditing services. IGEP has been actively working with the Foreign Trade Association of German Retailers (AVE), with the Foreign Trade Association (FTA) and Business Social Compliance Initiative (BSCI) to help the Indian companies to achieve social and environmental compliance. These companies mainly supply to BSCI affiliated companies such as: Karstadt, Metro Group, C&A, Otto, P&C, H&M and Deichmann among others. The demand is growing for such a comprehensive system for social compliance among Indian MSME's.
11 IGEP functions as the contact point, information centre and service provider for all questions and activities related to social compliance and auditing procedures. A major advantage of BSCI audits is that members save both time and money. All BSCI participating companies accept audits on their factories if already carried out by another participating company. Additional individual audits are not necessary.
12 BSCI Activities within IGEP Participant support: Information about BSCI standards, possibilities for self-assessment, carrying out pre-audits for the companies that need guidance and advice on how to plan and implement necessary changes before going for BSCI audits.Monitoring of supply chain:Dissemination of the Code of Conduct in regional languages. This is now one single code that is designed to fit both food and non-food products.Facilitating workers’ complaints through printing and distribution of complaint cards to the Indian auditing companies. Any worker can report a complaint regarding the supplier and it will be dealt with on case by case basis.Engaging with local stakeholders: Regular Round Tables in India for dissemination of information and investigating issues related to social compliance.
13 BSCI Support for Indian MSMEs IGEP functions as information centre and service provider for all questions and activities related to BSCI social compliance and auditing procedures. A major advantage of BSCI audits is that members save both time and money. All BSCI participating companies can accept audits on their factories if already carried out by another participating company. Additional individual audits are not necessary.IGEP's main objective is to make companies working for the domestic market also socially compliant too. This is being carried out by systematically spreading information, providing services and strengthening cooperation with members, suppliers and all important stakeholders.