supplier name: eligul corap san. ve tic. site country...

Audit company: Intertek Report reference: AU117703 Date: 23.10.2014

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Supplier name: ELIGUL CORAP SAN. VE TIC.

Site country: TURKEY

Site name: ELIGUL CORAP SAN. VE TIC.

SMETA Audit Type: 2-Pillar 4-Pillar


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Audit Company Name:

Intertek

Report Owner (payee):

ELIGUL CORAP SAN. VE TIC.

Sedex Company Reference: S 371972324744

Sedex Site Reference: P 000000035298

Audit Conducted By

Commercial Purchaser

NGO Retailer

Trade Union Brand Owner

Multi-stakeholder Combined Audit (select all that apply)

Auditor Reference Number: (If applicable) Not applicable

SMETA Declaration

I declare that the audit underpinning the following report was conducted in accordance with SMETA best practice guidance.


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Any exceptions to this must be recorded here (e.g. different sample size): It was noted that there were inconsistencies between the time records and employee interviews. The management has stated that one out of selected employees has worked overtime alone at the recent months but the records of this work has not been kept. Therefore the overtime payments could not be verified through the records. Because of the inconsistency, 8 employees were interviewed individually and 2 employees interviewed in a group. Auditor Name(s): Elcin YILDIRIM & Sevan CIMEN Role: Lead Auditor & Auditor Date: 23.10.2014


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Audit Details

Audit Details

A: Report #: AU117703

B: Date of audit: 23.10.2014

C: Time in and time out: Time in: 09:00 Time out: 17:00

D: Number of Auditor Days Used: 2 Auditors x 1 Day

E: Audit type:

Full Initial Periodic Full Follow-up Audit Partial Follow-Up Partial Other - Define

F: Was the audit announced?

Announced Semi – announced Unannounced

G: Was the Sedex SAQ available for review?

Yes No

If no, why not? NA

I: Auditor name(s) and role(s): ELCIN YILDIRIM – LEAD AUDITOR SEVAN CIMEN – AUDITOR

J: Report written by: ELCIN YILDIRIM

K: Report reviewed by: SEVAN CIMEN

L: Report issue date: 30.10.2014

M: Supplier name: ELIGUL CORAP SAN. VE TIC.

N: Site name: ELIGUL CORAP SAN. VE TIC.

O: Site country: TURKEY

P: Site contact and job title: ERHAN ELIGUL – MARKETING MANAGER

Q: Site address: MALTEPE MAH. LITROS YOLU YOL SOK NO:6/1 & 6/4 DAVUTPASA ZEYTINBURNU / ISTANBUL

Site phone: 0090 212 565 18 57

Site fax: 0090 212 577 69 73


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Site e-mail: [email protected]

R: Applicable business and other legally required licence numbers: for example, business license no, and liability insurance

OPENING AND OPERATING PERMIT No: 2014/RG50, 2014/RG/51

S: Products/Activities at site, for example, garment manufacture, electricals, toys, grower

SOCKS

T: Audit results reviewed with site management?

YES

U: Who signed and agreed CAPR (Name and job title)

ERHAN ELIGUL – MARKETING & PRODUCTION MANAGER

V: Did the person who signed the CAPR have authority to implement changes?

YES

W: Previous audit date: 01.04.2014

X: Previous audit type:

SMETA 2-Pillar SMETA 4-Pillar Other

Full Initial

Periodic

Full Follow-Up Audit

Partial Follow-Up

Partial Other*

*If other, please define:

mailto:[email protected]


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Audit Scope

Local Law

A: Standard work week: 45 hours per week

B: Maximum allowed overtime hours:

11 total working hours per day (regular + overtime), 270 overtime hours per year.

C: Minimum work age: 15 years old

D: Minimum legal wage for standard hours:

1071,00 TL (Gross), 765,67 TL (Net) 1st January – 30th June, 2014 1134 TL(Gross), 810,70 TL (Net) Since July 1st, 2014

E: Minimum legal overtime wage: Legal overtime premium for weekdays and rest days: 150% Legal overtime premium for general holidays: 100%

Audit Scope

2-Pillar Audit

10B4: Environment 4-Pillar

10C: Business Practices

Note: The main focus of this ethical audit is on the ETI Base Code and local law. The additional elements will not

be audited in such depth or scope, but the audit process will still highlight any specific issues.

This report provides a summary of the findings and other applicable information found/gathered during the social

audit conducted on the above date only and does not officially confirm or certify compliance with any legal

regulations or industry standards. The social audit process requires that information be gathered and considered

from records review, worker interviews, management interviews and visual observation. More information is

gathered during the social audit process than is provided here. The audit process is a sampling exercise only and

does not guarantee that the audited site prior, during or post-audit, are in full compliance with the Code being

audited against. The provisions of this Code constitute minimum and not maximum standards and this Code should

not be used to prevent companies from exceeding these standards. Companies applying this Code are expected to

comply with national and other applicable laws and where the provisions of law and this Code address the same

subject, to apply that provision which affords the greater protection. The ownership of this report remains with the

party who has paid for the audit. Release permission must be provided by the owner prior to release to any third

parties.


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Non-Compliance Table

Issue Area of Non-Conformity Record the number

of issues by line*:

ETI Base Code Local Law Additional

Elements NC Obs GE

0 Management systems and code implementation

1 Employment Freely Chosen

2 Freedom of Association

3 Safety and Hygienic Conditions 2

4 Child Labour

5 Wages and Benefits 1 2

6 Working Hours

7 Discrimination

8 Regular Employment

8A Sub-Contracting and Homeworking

9 Harsh or Inhumane Treatment

10A Entitlement to Work

10B2 Environment 2-Pillar

10B4 Environment 4-Pillar

10C Business Practices

*Please note the table above records the total number of Non compliances (NC), Observations (Obs) and Good

Examples (GE). This gives the reviewer an indication of problem areas but does not detail severities of each issue

– Reviewers need to check audit results by clause.


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Audit Overview

Audit Overview

Management Worker Representatives

Audit attendance Senior management Worker Committee representatives

Union representatives

A: Present at the opening meeting? Yes No Yes No Yes No

B: Present at the audit? Yes No Yes No Yes No

C: Present at the closing meeting? Yes No Yes No Yes No

D: If Worker Representatives not present please explain reasons why

NA

E: If Union Representatives not present please explain reasons why:

There was no union at the facility.

F: Site description:

ELIGUL CORAP is located in Istanbul, Turkey and was established in 2001. They are producing socks and the main production processes are knitting, toe sewing and forming. There is also a small washing unit. The facility has totally 5000 square meters closed area. The facility is located in 4 storey building. The production units are located in the 1st and 4th floors. In the 2nd and 3rd floors, there are offices. Regular working hours are as below: For the knitting section (3 shifts): 08:00-16:00 / 16:00-24:00 / 24:00-08:00, including 30’ daily break, from Monday to Saturday. For other sections: 08.30 to 18.00, including 15’ x 2 tea breaks and 60’ lunch break, from Monday to Friday and 08:30 to 12:30 in Saturdays. There are totally 110 employees in the facility. Administration: 14 (male:7; female:7) Production: 96 (male: 74; female :22) Payment Period: Monthly Payment Day: 5th of each month Time record system: Digital time recording system

G: Site function: Agent Factory Processing/Manufacturer Finished Product Supplier


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Grower Homeworker Labour Provider Pack House Primary Producer Service Provider Sub-Contractor

H: Month(s) of peak season: Between June - October

I: Typical production level as a % of the total capacity by month (record below):

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

%70 %70 %70 %85 %85 %95 %100 %100 %100 %100 %100 %75

J: Process overview:

They are producing socks and the main production processes are knitting, toe sewing and forming. There is also a small washing unit. There are 290 working knitting machines, 7 toe sewing machines and 17 ironing lines.

K: Attitude of workers:

Totally 26 employees were interviewed. (6 employees were selected for the individual interview and total 20 employees in 4 groups were selected for the group interviews). Employees have stated their weekly working hours are arranged by 3 shifts for knitting section (08:00-16:00/16:00-24:00/24:00-08:00 with 30' daily break and 6 days a week) and by 1 shift for other sections (08:30-18:00 with 1,5 hours daily break 5 days a week and 08:30-12:30 in Saturdays). They have stated that they do not work overtime. They stated that they don't feel any kind of discrimination, harassment and abuse against them by any supervisor or manager. Meal is provided free of charge. They stated that they are happy to work at the facility.

L: Attitude of managers:

Management was helpful and cooperative during the audit process.

M: Summary of main findings: (positive and negative)

Audit Process: This periodic audit was conducted by Intertek Turkey Office. 2 auditors assessed / verified the factory’s operations against the ETI Base Code and local legislations on a sampling basis in one day. Overview of opening meeting, factory management responses At 09:00 am, auditors entered the facility then held an opening meeting according to the ETI Base Code; ERHAN ELIGUL – Sales Manager, DEMET CIFTCI – Audit Responsible and AYDIN ELIGUL – Facility Owner were present in the meeting. Management stated that they would be co-operative with this audit. 10 attendance records and payroll records of September 2014 (last paid month), August 2014 (peak month) and May 2014 (non-peak month) were reviewed in this audit. Additionally the time records of October 2014 were reviewed. Summary of Findings (positive and negative): In view of the findings raised, below non-compliances were found in the area of Health & Safety and Wages & Benefits. For other areas, no violations were noted.


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Negative Findings; 1- There were non – compliant points on the periodical inspection report of the lift which is conducted on 08.03.2014 2- Fire drill was last conducted on 21.08.2014. However; night shift employees were not attended into fire drill / no separate drill was conducted for night shift employees 3- Part of the wages of employees is paid through official payroll and rest of the wages are paid through unofficial payroll records and paid by cash. All payment records were provided to the auditors to review. Positive finding(s); 1- Transportation is provided free of charge to all employees. 2- Meal is provided free of charge to employees.


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Key Information

Key Information

A: Do all workers (including migrant workers) have contracts of employment?

Yes No

B: Were appropriate records available to verify hours of work and wages?

Yes No

C: Were any inconsistencies found? (if yes describe nature)

Yes Poor record keeping No Isolated incident

Repeated occurrence

D: For the lowest paid production worker, are wages paid for standard hours (excluding overtime) below or above the legal minimum?

Wages found: Please indicate the breakdown of workforce according to earnings:

Below legal min Meet Above

0 % of workforce earning under min wage 3 % of workforce earning min wage 97 % of workforce earning above min wage

E: % of piece rate workers: (if applicable)

NA

F: Combined hours (standard and overtime) over 60 per week found?

Yes No.

G: Are the correct overtime premiums paid? Yes No

H: Is there any night production work at the site?

Yes No

I: % of workers living in site provided accommodation (if applicable):

NA

J: Age of youngest worker found: 19

K: Workers under 18 subject to hazardous work assignments?

Yes 0% of under 18’s at this site (out of total workers) No

L: What form of worker representation / union is there on site?

Union (name) Worker Committee Other (specify) (Open door policy, Suggestion box, Employee

representative) None

M: Is it a legal requirement to have a union? Yes No


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N: Is It a legal requirement to have a workers committee?

Yes No

O: Is there any other form of effective worker/management communication channel?

Yes No

Suggestion box, worker representatives and open door policy.

P: Are there any External Processes? Sub-Contracting Homeworking Other External Process (detail) No external processes

Management Systems:

Q: Nationality of Management Turkish

R: Majority nationality of workers Turkish

S: Number of workers leaving in last 12 months as a % of average total number of workers on site over the year (annual worker turnover)

40 %

T: Were accurate records shown at the first request?

Yes No

If not, why not? NA

In the last 12 months, has the site been subject to any fines/prosecutions for non-compliance to any regulations?

Yes No

Please describe: NA


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Worker Analysis

Worker Analysis (Management is included)

Local Migrant Total

Permanent Temporary Agency Permanent Temporary Agency Home workers

Worker numbers – male

81 0 0 0 0 0 0 81

Worker numbers –female

29 0 0 0 0 0 0 29

Total 110 0 0 0 0 0 0 110

Number of Workers interviewed

26 0 0 0 0 0 0 26

Contractors:

A: Any contractors on site? Yes No

B: If yes, how many workers supplied by contractors N/A

C: Are all contractor workers paid according to law:

Yes No

N/A

Migrant Workers: D: Originating Locations/Countries: No migrant employee in the facility.

E: Work undertaken by migrant workers: No migrant employee in the facility.

F: Were migrant workers recruited through an agency?

No migrant employee in the facility.

If yes, is there a contract with the No migrant employee in the facility.


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agency? Provide details of agencies and contractual arrangements

G: Percentage of migrant workers in company provided accommodation:

No migrant employee in the facility.


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Audit Results by Clause

0: Management systems and code implementation:

0.1 Suppliers are expected to implement and maintain systems for delivering compliance to this Code. 0.2 Suppliers shall appoint a senior member of management who shall be responsible for compliance with the Code. 0.3 Suppliers are expected to communicate this Code to all employees. 0.4 Suppliers should communicate this code to their own suppliers and, where reasonably practicable, extend the principles of this Ethical Code through their supply chain.

Evidence of Compliance and Current Status

Documents checked & comments: 1. Factory rules 2. Management meeting records 3. Training records 4. Facility policy 5. Employee and management interview Description of Current Status: ETI Base Code was included to the policies and procedures where applicable.

Non-compliance:

Description of non-compliance: NONE NC against ETI/Additional Elements NC against Local Law

Local law or ETI requirement: NA Recommended corrective action: NA

Objective evidence observed: NA

Observation

Description of observation: NONE Local law or ETI requirement: NA Comments: NA

Objective Evidence Observed: NONE

Good Examples observed:

Description of Good Example (GE): NONE Objective Evidence


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Observed: NONE

1: Employment is Freely Chosen

ETI 1.1 There is no forced, bonded or involuntary prison labour. 1.2 Workers are not required to lodge “deposits” or their identity papers with their employer and are free to leave their employer after reasonable notice.


Documents checked & comments: Personnel files and payrolls were reviewed. Description of current status: Employment is freely chosen. No guards present during working hours. Movement of employees at the facility is not prohibited or limited. Employees have free access to toilets and drinkable water. Overtimes are always performed on voluntary basis.

Non-compliance:




Observation




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Description of Good Example (GE): NONE


2: Freedom of Association and Right to Collective Bargaining are Respected

ETI 2.1 Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively. 2.2 The employer adopts an open attitude towards the activities of trade unions and their organisational activities. 2.3 Workers’ representatives are not discriminated against and have access to carry out their representative functions in the workplace. 2.4 Where the right to freedom of association and collective bargaining is restricted under law, the employer facilitates, and does not hinder, the development of parallel means for independent and free association and bargaining.

Evidence of Compliance and Current Status:

Documents checked & comments: Personnel files, facility rules were available. Suggestion box records were checked. Description of current status: There is also an open door policy that employees can complain directly to the top management (declared by employees during interviews). Suggestion boxes were placed on site, regularly checked by the management. There were 3 worker representatives in the facility.

Non-compliance:




Observation

Description of observation: NONE

Objective Evidence Observed:


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Local law or ETI requirement: NA Comments: NA

NONE

A: Name of union and union representative, if applicable:

NA

If no union what is parallel means of consultation with workers e.g. worker committees?

Open door policy, suggestion boxes were placed on site, 3 worker representatives

B: Is there any evidence that this is effective?

Yes, no negative response was received from employee interviews.

C: Are any workers covered by Collective Bargaining Agreement (CBA)

Yes No NA

If yes what percentage by trade Union/worker representation

NA ____% workers covered by Union CBA

NA ____% workers covered by worker rep CBA

D: Does the Collective Bargaining Agreement (CBA) include rates of pay

Yes No No CBA





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3: Working Conditions are Safe and Hygienic

ETI 3.1 A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimising, so far as is reasonably practicable, the causes of hazards inherent in the working environment. 3.2 Workers shall receive regular and recorded Health & Safety training, and such training shall be repeated for new or reassigned workers. 3.3 Access to clean toilet facilities and to potable water, and, if appropriate, sanitary facilities for food storage shall be provided. 3.4 Accommodation, where provided, shall be clean, safe, and meet the basic needs of the workers. 3.5 The company observing the code shall assign responsibility for Health & Safety to a senior management representative.


Documents checked & comments: H&S Documents, H&S Training documents, fire training documents, first aid documents, periodical inspection reports and maintenance records, doctor contract are reviewed. Description of current status: Working environment was generally safe and hygienic. Access to clean toilet facilities and potable water was provided. Fire extinguishers are properly provided. Fire alarm is available. Evacuation plans are posted on the floors. Toilets are provided properly. Fire fighting training was conducted. Health inspections of employees are conducted. Potable water analysis was available. Risk analysis regarding health and safety was available. The facility has opening and operating permit.

Non-compliance:

1. Description of non-compliance: NC against ETI/Additional Elements NC against Local Law

There were non – compliant points on the periodical inspection report of the lift which is conducted on 08.03.2014 Local law or ETI requirement: Turkish Regulation about Occupational Health and Safety circumstances using work equipments (25/04/2013) No: 28628 Addition III - Related Matters for Maintenance, Repairs and Periodical Checks Art 2.2.3 Periodical check period and check criteria for lifting and transfer tools are stated on Table 2 provided that the criteria stated in Art 2.1.1 are reserved. Table 2

Objective evidence observed: 1- Document Review


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Equipment : Lift(Man lift, Goods Lift), Forklift, Transpallet, Lifting or transferring tools Check Period(Max): 1 year Art.1.9. In case when non-compliance points are detected in terms of occupational health and safety and operating of the work equipment is inappropriate if these points are not corrected; the work equipment shall not be used until these points are corrected. Recommended corrective action: Please make related improvements and provide a compliant report. 2. Description of non-compliance:

NC against ETI/Additional Elements NC against Local Law Fire drill was last conducted on 21.08.2014. However; night shift employees were not attended into fire drill / no separate drill was conducted for night shift employees Local law or ETI requirement: Regulation on Protection Of Buildings Against Fire (19.12.2007), article 129 the fire drill should be conducted at least once per year. Recommended corrective action: Please ensure that all employees are attended into fire drill at least 1 time in every year.

2- Management interview, Document Review, Employee Interviews

Observation







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4: Child Labour Shall Not Be Used

ETI 4.1 There shall be no new recruitment of child labour. 4.2 Companies shall develop or participate in and contribute to policies and programmes which provide for the transition of any child found to be performing child labour to enable her or him to attend and remain in quality education until no longer a child. 4.3 Children and young persons under 18 shall not be employed at night or in hazardous conditions. 4.4 These policies and procedures shall conform to the provisions of the relevant ILO Standards.


Documents checked & comments: ID copies of employees were available in personnel files. Description of current status: Minimum age in the facility is 19.

Non-compliance:




Observation







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5: Living Wages are Paid

ETI 5.1 Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any event wages should always be enough to meet basic needs and to provide some discretionary income. 5.2 All workers shall be provided with written and understandable information about their employment conditions in respect to wages before they enter employment and about the particulars of their wages for the pay period concerned each time that they are paid. 5.3 Deductions from wages as a disciplinary measure shall not be permitted nor shall any deductions from wages not provided for by national law be permitted without the expressed permission of the worker concerned. All disciplinary measures should be recorded.


Documents checked & comments: Payment records, time records and social insurance records of the sampled employees were reviewed. Description of current status: Wages are paid at 5th of each month. All employees were covered with social security and social security premiums were paid correctly. All employees were compensated above legal minimum wage.

Non-compliance:

3. Description of non-compliance: NC against ETI/Additional Elements NC against Local Law

Part of the wages of employees is paid through official payroll and rest of the wages are paid through unofficial payroll records and paid by cash. All payment records were provided to the auditors to review. Local law or ETI requirement: The Turkish Regulation on Overtime and Extra Work art 10, The overtime and extra works payments included with normal working hours payment that are given to employees are paid according to Turkish Labor Law .This payment has to be clearly shown on payroll documentation and on pay slips, which are given to employees according to Turkish Labor Law. In accordance with Social Insurance and General Health Insurance Law; #5510/2006, Rev: 08.05.2008, Art. 80. The social insurance premiums of the employees are calculated and paid based on gross total wage paid to the employees in the related month. In accordance with Regulation about Compensation of all kinds of rights such as Wage, Bonus, Premium through Bank Accounts; No: 27058 Date: 18.11.2008, Art. 10. If the facility has at least 10 employees, net wages of the employees should be paid through bank account after the cut of legal deductions from gross wages Recommended corrective action: It is recommended that all wages (regular + overtime) should be shown on official payroll.

Objective evidence observed: 3- Management interview, Document Review, Employee Interviews


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Observation




Description of Good Example (GE): 1- Meal is provided free of charge to employees. 2- Transportation is provided free of charge to all employees.

Objective Evidence Observed: Employee Interviews

Wages analysis:

A: Sample size: 10 payroll records of September 2014 (last paid month), August 2014 (peak month) and May 2014 (non-peak month) were reviewed in this audit.

B: Legal minimum wage for standard time:

1071,00 TL (Gross), 765,67 TL (Net) 1st January – 30th June, 2014 1134 TL(Gross), 810,70 TL (Net) Since July 1st, 2014

C: Are there different legal minimum wage grades? If yes, please specify all.

Yes No

If yes, please give details: NA

D: Where there are different legal minimum wage grades are all workers graded correctly?

NA If no, please give details: N/A

E: What deductions are required by law:

Social insurance and taxes

F: Have all of these deductions been made?

Yes

G: Industry norm for this region: 1071,00 TL (Gross), 765,67 TL (Net) 1st January – 30th June, 2014 1134 TL(Gross), 810,70 TL (Net) Since July 1st, 2014

H: Legal overtime premium for weekdays:

150 %

I: Legal overtime premium for rest days:

150 %

J: Legal overtime premium for holidays:

100 %


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Worker Type Process Operator (Highest paid)

Process Operator (Average paid)

Process Operator (Lowest paid)

A: Pay period September 2014 September 2014 September 2014

B: Anonymous Employee Reference/Dept.

Employee A Employee B Employee C

C: Employee Gender Male Female Male

D: Contracted wage(gross) 1818,41 TL /month 1468,72 TL / month 1258,91 TL /month

E: Standard working hours 225 / Month 225 / Month 225 / Month

F: Standard work pay rate 1818,41 TL /month 1468,72 TL / month 1258,91 TL /month

G: Standard day overtime – hours

0 0 0

H: Standard day overtime – wage

0 0 0

I: Rest day overtime – hours

0 0 0

J: Rest day overtime – wage

0 0 0

K: Statutory Holiday overtime – hours

0 0 0

L: Statutory holiday OT - wages

0 0 0

M: Total overtime hours 0 0 0

N: Incentives/Bonus/ Allowances etc.

0 0 0

O: Gross wages 1818,41 TL /month 1468,72 TL / month 1258,91 TL /month

P: Social insurance and other deductions

437,35 TL / month 338,42 TL / month 278,58 TL / month

Q: Actual wage paid after deduction

1381,05 TL / month 1130,30 TL / month 980,33 TL/ month

Comments: (Please state here any specific reasons/circumstances that explain the lowest and highest gross wages)

* The chart above is filled regarding the official payrolls. The actual wages are higher than the noted above.


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**Minimum subsistence discount amount was deducted from “social insurance and other deductions” part and added to net wage.

R: Is there a defined living wage: Yes No

Please specify amount/time period:

S: Are workers paid in a timely manner in line with local law?

Yes No

T: Is there evidence that equal rates are being paid for equal work:

Yes No

Details:

U: How are workers paid: Cash Cheque Bank Transfer

If not explain:

Actual overtime premium paid in sample for…

V: Weekdays: Not observed

W: Rest days: Not observed

X: Holidays: Not observed


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6: Working Hours are not Excessive

ETI 6.1 Working hours comply with national laws and benchmark industry standards, whichever affords greater protection. 6.2 In any event, workers shall not on a regular basis be required to work in excess of 48 hours per week and shall be provided with at least one day off for every 7 day period on average. Overtime shall be voluntary, shall not exceed 12 hours per week, shall not be demanded on a regular basis and shall always be compensated at a premium rate.


Documents checked & comments: Time records of the sampled employees were reviewed. Description of current status: Regular working hours are as below: For the knitting section (3 shifts) : 08:00-16:00 / 16:00-24:00 / 24:00-08:00, including 30’ daily break, from Monday to Saturday For other sections: 08.30 to 18.00, including 15’ x 2 tea breaks and 60’ lunch break, from Monday to Friday and 08:30 to 12:30 in Saturdays.

Non-compliance:




Observation







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Working hours analysis

A: What timekeeping systems are used: time card etc.

Digital time recording system

B: Sample size checked (number of workers):

10 attendance records and payroll records of September 2014 (last paid month), August 2014 (peak month) and May 2014 (non-peak month) were reviewed in this audit. Additionally the time records of October 2014 were reviewed.

C: Legal standard work week (hours): 45 hours / week

D: Contracted standard work week this site (hours)

45 hours / week

E: Actual standard work week averaged over sample for full time workers:

45 hours / week

F: Lowest standard hours worked 44 hours / week

G: Highest standard hours worked 45 hours / week

H: Percentage workers on part-time contracts

0 %

I: Legal permitted overtime hours 11 total working hours per day (regular + overtime), 270 overtime hours per year.

J: Any local waivers or permission for annualised hours for this site:

No

K: Actual overtime hours: (averaged over sample)

0

L: Range of overtime hours over all workers

0

M: approx % of workers on highest overtime hours:

0

N: Peak season(s): Between June - October

Comments: (Please state here any specific reasons/circumstances that explain the highest working hours)

No overtime work was observed for the reviewed months.


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7: No Discrimination is Practiced

ETI 7.1 There is no discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, union membership or political affiliation.


Documents checked & comments: Personnel files and pay-slips of sampled employees were reviewed. No evidence against the “Discrimination” section requirements was noted. Description of current status: No evidence against discrimination requirements of the client was found during the audit processes. Employees stated that they were paid and treated equally.

Non-compliance:




Observation




Description of Good Example (GE): NONE Objective Evidence Observed: NONE


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8: Regular Employment Is Provided

ETI 8.1 To every extent possible work performed must be on the basis of recognised employment relationship established through national law and practice. 8.2 Obligations to employees under labour or social security laws and regulations arising from the regular employment relationship shall not be avoided through the use of labour-only contracting, sub-contracting, or home-working arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment, nor shall any such obligations be avoided through the excessive use of fixed-term contracts of employment.


Documents checked & comments: Employment contracts and available social insurance records were reviewed. Description of current status: Employer signature is available on all of the labour contracts. All employees are registered to social security.

Non-compliance:




Observation







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8A: Sub-Contracting and Homeworking:

8A.1. There should be no sub-contracting unless previously agreed with the main client. 8A.2. Systems and processes should be in place to manage sub-contracting, homeworking and external

processing.


Documents checked & comments: 1. Facility tour 2. Employee and management interview 3. Production records Description of current status: The facility is not using any sub-contractor.

Process Su contracted → None

Name of factory → NA Address → NA

Non-compliance:




Observation







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Summary of sub-contracting – if applicable

A: Number of sub-contractors/agents used

0

B: Is there a site policy on sub-contracting?

Yes No

If yes, summarise details: NA

C: What checks are in place to ensure no child labour is being used and work is safe?

NA

D: What processes are sub-contracted?

NONE

Summary of homeworking – if applicable

E: Number of homeworkers Male: 0 Female: 0 Total: 0

F: Are homeworkers employed direct or through agents?

Directly NA Through Agents

G: If through agents, number of agents

N/A

H: Is there a site policy on homeworking?

Yes No There is no homeworking used by the facility.

I: How does site ensure worker hours and pay meet local laws for homeworkers?

N/A

J: What processes are carried out by homeworkers?

None

K: Are written agreements in place for homeworkers that include regular employment?

Yes NA No

L: Are full records available at the site?

Yes NA No


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9: No Harsh or Inhumane Treatment is Allowed

ETI 9.1 Physical abuse or discipline, the threat of physical abuse, sexual or other harassment and verbal abuse or other forms of intimidation be prohibited.


Documents checked & comments: Disciplinary regulation of the facility and the personnel files of the sampled employees were reviewed. Description of current status: Disciplinary regulation was complaint with the legal regulations. Records of the disciplinary actions were reviewed.

Non-compliance:




Observation







33

10. Other Issue areas: 10 A: Entitlement to Work and Immigration

Additional Elements 10A1 Only workers with a legal right to work shall be employed or used by the supplier. 10A2 All workers, including employment agency staff, must be validated by the supplier for their legal right to work by reviewing original documentation. 10A3 employment agencies must only supply workers registered with them. 10A4 the supplier shall implement processes to enable adequate control over agencies with regards the above points and related legislation.


Documents checked & comments: ID copies and social security registrations of the sampled employees were reviewed. Description of current status: All workers are local. No migrant worker is employed.

Non-compliance:




Observation







34

10. Other issue areas 10 B 2: Environment 2-pillar

10B2. 1 Suppliers must comply with the requirements of local and international laws and regulations including having necessary permits. 10B2. 2 The supplier should be aware of and comply with their end clients’ environmental requirements.


Documents checked & comments: Agreement with the Municipality about the disposal of the solid wastes was reviewed. Description of current status: The facility has domestic solid wastes only. The facility is out of the scope of the environmental permit.

Non-compliance:




Observation







35

Worker Interview Summary Worker Interview Summary

A: Were workers aware of the audit? Yes No

B: Were workers aware of the code? Yes No

C: Number of group interviews: 4 group of 5 employees

D: Number of individual interviews Male: 3 Female: 3

E: Number of interviewed workers Male: 15 Female: 11

F: Interviews were done in private and the confidentiality of the interview process was communicated to the workers?

Yes No

G: In general, what was the attitude of the workers towards their workplace?

Favourable Non-favourable Indifferent

H: What was the most common worker complaint?

NONE

I: What did the workers like the most about working at this site?

Payments on time, management attitude, continuous improvement about working conditions, no overtime work

J: Any additional comment(s) regarding interviews:

NONE

Agency Workers (workers sourced from a local agent who are not directly paid by the site)

A: Number of agencies used (average):

N/A

B: Were agency workers’ age/pay/hours included within scope of this audit

Yes No

N/A


36

Other findings

Other Findings Outside the Scope of the Code

NONE

Community Benefits (Please list below any specific community benefits that the site management stated that they were involved in, for example, HIV programme, education, sports facilities)

NONE


37

Photo Form

Out view of the building Emergency exit door Potable water

Toe sewing section Knitting section Forming section


38

Knitting section Washing unit Evacuation plan

Fire alarm button & central control panel

Fire extinguisher Eye wash

Exit sign & battery operated light First aid kit Locker room


39

Suggestion box Warning signs Time recording machine

PPE Fire hose Electricity panel

Lunch hall Smoke detector


40

Your feedback on your experience of the SMETA audit you have observed is extremely valuable.

It will help to make improvements to future versions.

You can leave feedback by following the appropriate link to our questionnaire:

Click here for A & AB members:

http://www.surveymonkey.com/s.aspx?sm=riPsbE0PQ52ehCo3lnq5Iw_3d_3d

Click here for B members:

http://www.surveymonkey.com/s.aspx?sm=d3vYsCe48fre69DRgIY_2brg_3d_3d








DISCLAIMER:

"This report is for the exclusive use of the client of Intertek named in this report (“Client”) and is provided pursuant to an agreement for services

between Intertek and Client (“Client Agreement”). This report provides a summary of the findings and other applicable information

found/gathered during the audit conducted at the specified facilities on the specified date only. Therefore, this report does not cover, and

Intertek accepts no responsibility for, other locations that may be used in the supply chain of the relevant product or service. Further, as the

audit process used by Intertek is a sampling exercise only, Intertek accepts no responsibility for any non-compliant issues that may be revealed

relating to the operations of the identified facility at any other date. Intertek's responsibility and liability are also limited in accordance to the

terms and conditions of the Client Agreement. Intertek assumes no liability to any party, for any loss, expense or damage occasioned by the










41

use of this information other than to the Client and in accordance with the Client Agreement and these disclaimers. The disclaimer should be

read in conjunction with the Terms and Conditions of Intertek.”

End of report.

http://www.sedexglobal.com/

http://www.sedexglobal.com/�

Audit company: Intertek Report reference: AU117703 Date: 23.10.2014 1

Supplier name: ELIGUL CORAP SAN. VE TIC.

Site country: TÜRKİYE / TURKEY

Site name: ELIGUL CORAP SAN. VE TIC.

SMETA Audit Type: 2-Pillar 4-Pillar


Audit Company Name:

Intertek

Report Owner (payee):

ELIGUL CORAP SAN. VE TIC.

Sedex Company Reference: S 371972324744

Sedex Site Reference: P 000000035298

Audit Conducted By

Commercial Purchaser

NGO Retailer

Trade Union Brand Owner

Multi-stakeholder Combined Audit (select all that apply)

Auditor Reference Number: (If applicable) Not applicable


Audit Details

Audit Details

A: Report #: AU117703

B: Date of audit: 23.10.2014

C: Time in and time out: Time in: 09:00 Time out: 17:00

D: Number of Auditor Days Used: 2 Auditors x 1 Day

E: Audit type:

Full Initial Periodic Full Follow-up Audit Partial Follow-Up Partial Other - Define

F: Was the audit announced?

Announced Semi – announced Unannounced

G: Was the Sedex SAQ available for review?

Yes No

If no, why not? NA

I: Auditor name(s) and role(s): ELCIN YILDIRIM – BAS DENETCI / LEAD AUDITOR SEVAN CIMEN – DENETCI / AUDITOR

J: Report written by: ELCIN YILDIRIM

K: Report reviewed by: SEVAN CIMEN

L: Report issue date: 30.10.2014

M: Supplier name: ELIGUL CORAP SAN. VE TIC.

N: Site name: ELIGUL CORAP SAN. VE TIC.

O: Site country: TURKIYE / TURKEY

P: Site contact and job title: ERHAN ELIGUL – PAZARLAMA MÜDÜRÜ / MARKETING MANAGER

Q: Site address: MALTEPE MAH. LITROS YOLU YOL SOK NO:6/1 & 6/4 DAVUTPASA ZEYTINBURNU / ISTANBUL

Site phone: 0090 212 565 18 57

Site fax: 0090 212 577 69 73

Site e-mail: [email protected]

mailto:[email protected]


R: Applicable business and other legally required licence numbers: for example, business license no, and liability insurance

İŞYERİ AÇMA VE ÇALIŞMA RUHSATI (OPENING AND OPERATING PERMIT) No: 2014/RG50, 2014/RG/51

S: Products/Activities at site, for example, garment manufacture, electricals, toys, grower

CORAP / SOCKS

T: Audit results reviewed with site management?

EVET / YES

U: Who signed and agreed CAPR (Name and job title)

ERHAN ELIGUL – PAZARLAMA & ÜRETİM MÜDÜRÜ / MARKETING & PRODUCTION MANAGER

V: Did the person who signed the CAPR have authority to implement changes?

EVET / YES

W: Previous audit date: 01.04.2014

X: Previous audit type:

SMETA 2-Pillar SMETA 4-Pillar Other

Full Initial

Periodic

Full Follow-Up Audit

Partial Follow-Up

Partial Other*

*If other, please define:


Guidance: The Corrective Action Plan Report summarises the site audit findings and a corrective, and preventative action plan that both the auditor and the site manager believe is reasonable to ensure conformity with the ETI Base Code, Local Laws and additional audited requirements. After the initial audit, the form is used to re-record actions taken and to categorise the status of the non-compliances. N.B. observations and good practice examples should be pointed out at the closing meeting as well as discussing non-compliances and corrective actions. To ensure that good practice examples are highlighted to the supplier and to give a more ‘balanced’ audit a section to record these has been provided on the CAPR document (see following pages) which will remain with the supplier. They will be further confirmed on receipt of the audit report.

Root cause (see column 4) Note: it is not mandatory to complete this column at this time. Root cause refers to the specific procedure or lack of procedure which caused the issue to arise. Before a corrective action can sustainably rectify the situation it is important to find out the real cause of the non-compliance and whether a system change is necessary to ensure the issue will not arise again in the future.

See Appendix 2.5 for more explanation of “root cause’’.

Next Steps: 1. The site shall request, via Sedex, that the audit body upload the audit report, non-compliances,

observations and good examples. If you have not already received instructions on how to do this then please visit the web site www.sedexglobal.com.

2. Sites shall action its non-compliances and document its progress via Sedex.

3. Once the site has effectively progressed through its actions then it shall request via Sedex that the audit body verify its actions. Please visit www.sedexglobal.com web site for information on how to do this.

4. The audit body shall verify corrective actions taken by the site by either a "Desk-Top” review process via Sedex or by Follow-up Audit (see point 5).

5. Some non-compliances that cannot be closed off by “Desk-Top” review may need to be closed off via a “1 Day Follow Up Audit” charged at normal fee rates. If this is the case then the site will be notified after its submission of documentary evidence relating to that non-compliance. Any follow-up audit must take place within twelve months of the initial audit and the information from the initial audit must be available for sign off of corrective action.

6. For changes to wages and hours to be correctly verified it will normally require a follow up site visit. Auditors will generally require to see a minimum of two months wages and hours records, showing new rates in order to confirm changes (note some clients may ask for a longer period, if in doubt please check with the client).




Corrective Action Plan

Corrective Action Plan – non-compliances

Non-Compliance

Number The reference number of the

non-compliance

from the Audit Report,

for example, Discrimination

No.7

New or Carried Over

Is this a new non-compliance identified at the follow-up or one carried over (C)

that is still outstanding

Details of Non-Compliance

Details of Non-Compliance

Root cause (completed by the

site)

Preventative and Corrective Actions Details of actions to be

taken to clear non-compliance, and the system

change to prevent re- occurrence (agreed

between site and auditor)

Timescale (Immediate,

30, 60, 90,180,365)

Verification Method Desktop / Follow-Up

[D/F]

Agreed by Management and Name of Responsible

Person: Note if management

agree to the non-compliance, and

document name of responsible person

Verification Evidence and Comments

Details on corrective action evidence

Status Open/Closed or comment

Sağlık & Güvenlik No:3 (1) Health & Safety No:3 (1)

Isletmede bulunan asansöre ait 08.03.2014 tarihli periyodik fenni muayene raporunda uygun olmayan noktalar oldugu görülmüştür. There were non – compliant points on the periodical inspection report of the lift which is conducted on 08.03.2014

Lütfen uygunsuz noktaları düzeltip uygun raporu saglayınız. Please make related improvements and provide a compliant report.

180 gün / days

MASAUSTU DESKTOP

Evet Erhan Eligul Yes Erhan Eligul

Döküman İnceleme Document Review

ACIK OPEN

Sağlık & Güvenlik No:3 (2)

Işletmede yangın tatbikatı en son 21.08.2014 tarihinde düzenlenmiştir. Fakat; gece vardiyası çalışanları tatbikata katılmamıştır / gece vardiyası çalışanları için ayrı bir tatbikat düzenlenmemiştir.

Lütfen senede en az 1 kez tüm çalışanların tahliye tatbikatına katılmış olmalarını sağlayınız.

Hemen / Immediately

Takip Denetimi

Evet Erhan Eligul

Döküman İnceleme

ACIK


Health & Safety No:3 (2)

Fire drill was last conducted on 21.08.2014. However; night shift employees were not attended into fire drill / no separate drill was conducted for night shift employees

Please ensure that all employees are attended into fire drill at least 1 time in every year.

Follow up audit

Yes Erhan Eligul

Document Review OPEN

Odemeler & Haklar No: 5 (3) Wages & Benefits No:5 (3)

Calısanların maaslarının bir kısmı resmi bordroda gösterilip, kalan ödemeler gayri resmi bordro üzerinden nakit olarak ödenmektedir. Tüm ödeme kayıtlara denetçilere inceleme için sunulmuştur. Part of the wages of employees is paid through official payroll and rest of the wages are paid through unofficial payroll records and paid by cash. All payment records were provided to the auditors to review.

Lütfen tüm ödemelerin resmi bordro üzerinden yapılmasını saglayınız. It is recommended that all wages (regular + overtime) should be shown on official payroll.

365 gün / days

Takip Denetimi Follow up audit

Evet Erhan Eligul Yes Erhan Eligul

Yönetim Görüşmesi Doküman Incelemesi, Çalışan Görüşmesi Management interview, Document Review, Employee Interviews

Açık Open


Corrective Action Plan – Observations

Non-Compliance

Number The reference number of the observation

from the Audit Report,

for example, Discrimination

No.7

New or Carried Over

Is this a new observation

identified at the follow-up or one carried over (C)

that is still outstanding

Details of Observation Details of Observation

Root cause (completed by the

site)

Preventative and Corrective Actions Details of actions to be

taken to clear non-compliance, and the system

change to prevent re- occurrence (agreed

between site and auditor)

Timescale (Immediate,

30, 60, 90,180,365)

Verification Method Desktop / Follow-Up

[D/F]

Agreed by Management and Name of Responsible

Person: Note if management

agree to the non-compliance, and

document name of responsible person

Verification Evidence and Comments

Details on corrective action evidence

Status Open/Closed or comment

YOKTUR - NONE

Good examples

Good example Number

The reference number of the non-compliance from the Audit Report,

for example, Discrimination No.7

Details of good example noted

Any relevant Evidence and Comments

Ödemeler & Haklar No:5 (1) Wages & Benefits No:5 (1) Ödemeler & Haklar No:5 (2) Wages & Benefits No:5 (2)

Yemek çalışanlara ücretsiz sağlanmaktadır. Meal is provided free of charge to employees. Ulasım çalışanlara ücretsiz sağlanmaktadır. Transportation is provided free of charge to employees.

Çalışan Görüşmeleri, Doküman Incelemesi / Employee Interview, Document Review


Confirmation


Appendix 2.5. Guidance on Root Cause

Explanation of the Root Cause Column If a non-compliance is to be rectified by a corrective action which will also prevent the non-compliance re-occurring, it is necessary to consider whether a system change is required. Understanding the root cause of the non-compliance is essential if a site is to prevent the issue re-occurring. The root cause refers to the specific activity/ procedure or lack of activity /procedure which caused the non-compliance to arise. Before a corrective action can rectify the situation it is important to find out the real cause of the non-compliance and whether a system change is necessary to ensure the issue will not arise again in the future. Since this is a new addition, it is not a mandatory requirement to complete this column at this time. We hope to encourage auditors and sites to think about Root Causes and where they are able to agree, this column may be used to describe their discussion. Some examples of finding a “root cause“

Example 1

where excessive hours have been noted the real reason for these needs to be understood, whether due to

production planning, bottle necks in the operation, insufficient training of operators, delays in receiving trims, etc.

Example 2

A non-compliance may be found where workers are not using PPE that has been provided to them. This could be

the result of insufficient training for workers to understand the need for its use; a lack of follow-up by supervisors

aligned to a proper set of factory rules or the fact that workers feel their productivity (and thus potential earnings) is

affected by use of items such as metal gloves.

Example 3


A site uses fines to control unacceptable behaviour of workers.

International standards (and often local laws) may require that workers should not be fined for disciplinary reasons.

It may be difficult to stop fines immediately as the site rules may have been in place for some time, but to prevent

the non-compliance re- occurring it will be necessary to make a system change.

The symptom is fines, but the root cause is a management system which may break the law. To prevent the

problem re-occurring it will be necessary to make a system change for example the site could consider a system

which rewards for good behaviour

Only by understanding the underlying cause can effective corrective actions be taken to ensure continuous

compliance.

The site is encouraged to complete this section so as to indicate their understanding of the issues raised and the

actions to be taken.













Disclaimer

Any proposed Corrective Action Plan (CAP) closed utilizing a Desktop Review is limited by the evidential

documentation provided by the facility in order to correct the non conformance. The intent of this service is to

provide assurance that the facility is on the correct path with its proposed or completed corrective actions. Intertek

cannot be held responsible for the falsification of evidence or the effective implementation of the proposed

corrective actions, which in many instances may only be truly validated by an onsite Audit visit owing to the

limitations of the desktop review process. The facilities shall be wholly responsible for the correct and effective

implementation of their proposed CAP.

Intertek nor any of its affiliates shall be held liable for any direct, indirect, threatened, consequential, special,

exemplary or other damages that may result including but not limited to economic loss, injury, illness, or death

arising from the inability of a facility to implement its CAP.