A.M. Labor Management System

Code 8.0 Management Systems Preamble

Participants shall adopt or establish a management system with a scope that is related to the content of this Code. The management system shall be designed to ensure: (a) compliance with applicable laws, regulations and customer requirements related to the participant's operations and products; (b) conformance with this Code; and (c) identification and mitigation of operational risks related to this Code. It shall also facilitate continual improvement.

A.M.1 Risk Assessment

Elements to Demonstrate Compliance to RBA Code

A.M.1.1 An adequate and effective labor compliance process is established to monitor, identify, understand, and ensure compliance with applicable laws, regulations, and customer requirements.

1. Process, Practices, Controls:

Establish a quarterly process to update and maintain a current understanding of and compliance to all applicable legal and customer requirements. The process should include:

• a. Identification of requirements which apply to the company; be sure to look for emerging and new requirements. This can be done via a legal department with an understanding of the RBA Code, subscriptions to 3rd party reports on regulations, sales & marketing who agree to customer terms, etc.
• b. A means to track these requirements, staying current as
  • i. The requirements may change (including the RBA code of conduct).
  • ii. Your operations may change and bring the facility in scope of requirements or create a gap.
• c. Assess facility operations against these requirements to identify gaps.
• d. Develop updated policy, procedure, training, communication, recording and reporting to close the gaps.
• e. Implement the changes and test them for compliance.

NOTE: Ensure the company adds any new and changed permitting, licensing, testing, reporting and disclosure requirements to the compliance register noting sufficient time to renew or published before they expire or are due.

2. Records are maintained including:

• a. A compliance calendar with owner, reminders, calendar appointments via e-mail.
• b. Summaries of applicable laws and regulations and requirements and how they apply to facility's operations.
• c. Review of the key customer requirements that apply to or impact on facility's operations.
• d. Analysis of recent RBA code of conduct changes.
• e. Minutes from meetings or other that demonstrate the process is conducted quarterly.

A.M.1.2 An adequate and effective due diligence process is established to identify and assess the most significant actual and potential labor risks where the facility caused or contributed to adverse labor impacts (including applicable requirements).

1. Process, Practices, Controls:

• a. A due diligence process focused on human rights. It should be designed to identify and assess the most significant actual and potential labor risks where the facility could cause or contribute to adverse human rights impacts of internal and external rights holders.
• b. The risk assessment is updated when there is a significant change
• c. Ensure the scope of the risk assessment is broad including:
  • iii. Every site operation/process producing products and supplying the services offered by the company.
  • iv. All identified internal and external stakeholders, including at a minimum:
    1. Direct and indirect workers
    2. Young workers, Learners
    3. Foreign and internal migrant workers
    4. Worker representatives
    5. Staff functions
    6. On-site service providers, Suppliers
    7. Customers
    8. Stakeholders in the community next to or near the facility which may be impacted.

2. Records are maintained including:

• a. Stakeholder identification reports.
• b. Risk assessment reports.
• c. Mitigation plans.

A.M.2 Control Process Labor

Elements to Demonstrate Compliance to RBA Code

A.M.2.1 Labor responsibilities and authorities are adequately and effectively defined and assigned for all employee levels (senior managers to workers) for the implementation of management systems, and for compliance with laws, regulations, and codes.

1. Process, Practices, Controls:

1. Have a senior representative assigned responsibility for implementing social responsibility programs in the facility and supply chain. Their scope should include:

   • a. Understanding and assessing facility's compliance with laws and regulations, customer requirements and the RBA Code of Conduct.
   • b. Developing and implementing (likely with other subject matter experts) necessary changes to policies, programs, processes, training, reporting and disclosure as needed to be in legal and customer compliance and RBA Code of Conduct conformance.

2. Responsibilities and authority of each organizational level are recorded in position plans, job descriptions and/or the facility's management system documentation.

   • a. For normal situations.
   • b. For emergency situations which would include where serious adverse impact has been identified.

A.M.2.2 Adequate and effective labor policies and control processes are established.

1. Process, Practices, Controls:

Policies: Aligned with law, the RBA Code of Conduct and facility policy statements are in place

Effective Control processes:

• a. Each of the policy requirements has an effective implementation control process.
• b. Mitigating processes are in place for all significant actual and potential risks identified, tracking implementation, and resulting adverse impact reduction identified in the risk assessment.

2. Records are maintained including:

• a. Current and past policies and procedures, specifications.
• b. Results and reports from review and control steps.
• c. Corrective action plans, plans for improvement.

A.M.2.3 An adequate and effective training process is established for all managers/workers on all policy/process/job-related aspects and performance targets.

1. Policy, Practices, Controls:

An adequate and effective training program for workers/managers:

• a. New employee orientation plan
• b. Training needs analysis
• c. Training plan with frequency
• d. Training material
• e. Training records with effectiveness evaluation or verification

NOTE: Ensure these minimum training topics are included: risk, policy, process, controls, responsibilities, grievance are covered.

2. Records are maintained including:

• a. Training records include a verification of training effectiveness.
• b. Educational materials. are not trained within 30 days of the hire date.

A.M.3 Communications Labor

Elements to Demonstrate Compliance to RBA Code

A.M.3.1 An adequate and effective ongoing two-way communication process with workers and internal and external stakeholders, where relevant or necessary, is established to obtain feedback on operational labor practices and conditions and to foster continuous improvement.

1. Policy, Practices, Controls:

A healthy and effective ongoing two-way communication process with workers, other internal and external stakeholders, where relevant or necessary, to obtain their feedback on operational labor practices and conditions and to foster continuous improvement.

• a. Examples of worker participation mechanisms: worker surveys, suggestions boxes, worker focus groups, joint worker-management committees, worker/union representatives, process improvement teams.
• b. Examples of two-way communication: face-to-face meetings, town halls, worker focus groups, joint worker-management committees, process improvement team, message groups (WhatsApp, Line, WeChat, etc.), brown bag lunches
• c. Examples of stakeholder engagement mechanisms: newsletters with request for feedback, message groups (WhatsApp, Line, WeChat, etc.), social media, neighborhood or community meetings, drop-in sessions, focus groups, feedback, and impact discussions (data/study driven)

NOTE: Ensure the following topics are included or asked about to promote comprehensive dialogue: risk, policy, process, controls, responsibilities, grievance are covered.

• d. Minimum internal and external stakeholders should include:
  • i. Direct and indirect workers
  • ii. Young workers, Learners
  • iii. (Foreign and internal) migrant workers
  • iv. Worker representatives
  • v. Staff functions
  • vi. On-site service providers, Suppliers
  • vii. Customers: to whom the facility should share detailed recruitment practices and performance (including freely chosen employment, e.g., Demographics of labor and list of labor agents/ contractors with the percentage of the workforce, costs to workers (in total absolute numbers and per contract base), and labor agent/contractor fees).

NOTE: Submitting SAQ to customers does not qualify as communication with customers

2. Records are maintained including:

• a. Communications records include a verification of communication effectiveness.
• b. Input/feedback records.
• c. Written information to workers on how to provide input/feedback for improvement.
• d. Correspondence to supplier management.
• e. Communications/Presentations to internal and external stakeholders.

A.M.3.2 An adequate and effective process is established to anonymously report grievances confidentially without fear of reprisal or intimidation.

1. Policy, Practices, Controls:

1. Process:

• a. Comprehensive functioning process to anonymously report grievances without fear of reprisal, which is internal (for workers and staff) and external (for workers of suppliers, local community, or interested actors and Whistleblowers).
• b. Clear grievance channels so anyone is comfortable reporting grievances and so that reporting is encouraged.

2. Investigation and actions:

• a. Promptly investigate the validity of any grievance.
• b. Ensure the investigation and remediation is impartial, non-discriminatory, and where applicable, consistent with previous actions.
• c. Communicate back to those involved, where possible, the outcome of the investigation and next steps, while maintaining appropriate privacy for those involved.
• d. Remind participants that there is to be no retribution for making the grievance.

3. Records are maintained including:

• a. Grievance records
• b. Investigation records
• c. Workers are provided with written information on how to report grievances.

2. Serious conditions that will result in a severe finding:

• Grievances not being investigated and addressed within 3 months of being received.
• Not putting in place and actioning a corrective action plan after confirming a grievance.

A.M.4 Performance Review and Continuous Improvement Labor

Elements to Demonstrate Compliance to RBA Code

A.M.4.1 An adequate and effective labor management performance review and continuous improvement process is established.

1. Policy, Practices, Controls:

1. Process elements should include:

• a. Annual or more frequent review of objectives and systems.
  • i. Management system review
  • ii. Performance review
• b. Formal and communicated goals, indicators, objectives, and targets.
• c. Goals shall clearly define the period considered; each goal shall include:
  • i. Time Period: (between base date and target date) shall be forward-looking.
  • iii. Base date: Date from which the goal is being measured.
  • iv. Target date: Date in the future when the goal is intended to be achieved.
  • v. Baseline: the value of what is being measured at the start
  • vi. Targeted improvement value: The quantitative value of the goal (numeric and greater than 0)
• d. Assignment of owners, implementation plans with completion dates.
• e. Additional action plans if goal, indicator, objective, or target is off track.
• f. Communication of the goals and progress to workers (as appropriate).

2. Evaluation:

• a. Regularly not exceeding 2 years but earlier if there is a Significant Change.
• b. Effectiveness of controls (including control processes)
• c. Should include every related program whose scope include:
  • i. Consideration of risk assessment results
  • ii. Legal and regulatory requirements
  • iii. Company standards/requirements.
  • iv. Achieving continual improvement

2. Records are maintained including:

• a. System review meetings
• b. Management review meeting presentation materials/analysis/data. Be sure to include:
  • i. Date, agenda, attendees (including senior manager)
  • ii. Presentation material (references)
  • iii. Progress towards objectives
  • iv. Results of assessments
  • v. Completion of corrective/preventive actions
  • vi. Risks/issues
  • vii. Other information that was used to determine the effectiveness of the management system and identify improvement opportunities.
  • viii. Agreed preventive/corrective actions.
• a. Formal target, indicator, and objective tracking
• b. Regular progress reporting
• c. Evaluation reports for (at least)
  • i. Control effectiveness
  • ii. Training and Communication
  • iii. Grievances related to labor concerns
  • iv. HR practices (hiring, compensation, promotion, nondiscrimination and harassment, humane treatment, …)

A.M.4.2 An adequate and effective labor self-assessment process is established to assess conformance with the RBA Code and customer requirements periodically.

1. Policy, Practices, Controls:

1. An adequate and effective self-assessment process to periodically assess conformance with:

   • a. Applicable legal regulatory requirements.
   • b. Customer requirements.
   • c. RBA Code requirements.
   • d. Own policies, standards, management system, requirements to which the facility subscribes to.

2. The assessment scope should include:

   • a. All areas of the facility.
   • b. All policies, processes, physical conditions, and work practices.
   • c. Review of records.
   • d. Interviews with individuals responsible for compliance and conformance
     • i. Workers (direct and indirect)
     • ii. Staff and management
     • iii. Supplier management

3. Assessment findings should be reviewed by senior management.

2. Records are maintained including:

• a. Self-assessment reports
• b. Results of management reviews
• c. Corrective action plans

A.M.4.3 An adequate and effective labor corrective action process is established to rectify and close non-conformances.

1. Policy, Practices, controls:

Ensure there is a Corrective Action Process (CAP) in place, which contains the following:

• a. Core elements of root cause analysis, specific corrective actions, owners, due dates, tracking process.
• b. Additional actions when a corrective action is off-track.
• c. A link demonstrated between the CAP and the performance management objectives and targets.
• d. Review action items by management representative after verification by the appropriate person.
• e. Any issues/concerns noted in the insurance inspection report regarding people, fire, or facility have an agreed corrective action plan.

2. Records are maintained including:

• a. Original non-conformance.
• b. CAP for each non-conformance.
• c. Progress reports.
• d. Closure verification reports (with management confirmation)
• e. Copies of any regulatory citations/violation notices received in the past three years, including any communications with the agencies, and follow-up review or inspection.

1.0.0 (2024-01-01)

Initial release.