I. Core Definition and Value of SEDEX Certification
SEDEX certification, also known as SMETA audit, was developed by the SEDEX Association (now part of the SMETA system). It is based on international standards such as ILO conventions and ETI benchmarks, aiming to assess a company’s compliance performance in four major areas: labor rights, health and safety, environmental protection, and business ethics. Although it is not a mandatory certification, it has become a “must-have” for export-oriented enterprises due to the admission requirements of global giants such as Walmart, H&M, Disney, and Coca-Cola.
The core value of certification is reflected in three aspects: First, it reduces supply chain risks by avoiding compliance crises such as child labor, forced labor, and environmental pollution through transparent audits. Second, it enhances market competitiveness. Certification reports can be shared on the SEDEX platform, avoiding duplicate audits and saving enterprise costs. Third, it strengthens brand trust, conveying a responsible corporate image to customers and consumers and promoting sustainable development. Currently, SEDEX covers 180 countries and regions, with over 85,000 members, and is applicable to multiple industries including manufacturing, agriculture, and services.
II. The core audit modules of the SEDEX certification
The SEDEX audit is divided into 2Pillar (the basic module) and 4Pillar (the extended module). Enterprises need to select the audit scope according to the client’s requirements. Among them, the 4Pillar report has a higher level of recognition:
- Labour rights: Prohibit child labour (aged 15 or above or the local legal age) and forced labour. Ensure freedom of association and anti-discrimination. Limit working hours to no more than 60 hours per week and provide at least one day of rest. Wages and benefits must be no less than the legal standards. The signing rate of labour contracts is 100%.
- Health and Safety: The workplace must be equipped with complete fire-fighting facilities, ventilation and lighting systems. Fire drills should be conducted regularly (at least once every six months). Comprehensive safety training for new employees should be provided. Employees in special positions should hold relevant certificates. Living facilities such as dormitories and canteens should meet hygiene standards.
- Environmental management: It is necessary to obtain legal documents such as environmental impact assessment and pollutant discharge permits to ensure that wastewater, waste gas, and noise are discharged in accordance with standards. Hazardous waste should be entrusted to qualified units for disposal. At the same time, efforts should be made to promote energy conservation, emission reduction, and resource recycling.
- Business Ethics: Prohibit bribery and corrupt practices, establish anti-bribery policies and reporting mechanisms, abide by the principle of fair competition, protect customer business information and intellectual property rights, and avoid risks of conflicts of interest.
III. The Audit Process and Key Preparations for SEDEX Certification
The SEDEX audit is divided into notification-based audits (where advance notice is given) and semi-notification-based audits (where an unscheduled audit is conducted, with 1-2 days’ notice in advance). The latter is more favored by the brand owners, and the process mainly consists of three stages:
Application and Preparation Phase
The enterprise needs to select authorized third-party institutions such as SGS and Intertek that are members of SEDEX, clearly define the scope and type of the audit (2/4 Pillars), sign a contract and pay the fees (1-3 ten thousand yuan, depending on the size of the enterprise). The core preparations include: document organization (employee files, salary and attendance records, fire inspection certificates, social security payment certificates, etc.), and on-site rectification (eliminating issues such as blocked fire passages, child labor risks, overtime exceeding limits, etc.).
On-site Audit Phase
The auditor clarified the procedures through the opening meeting, and then conducted document reviews (to verify qualifications and the authenticity of records), employee interviews (randomly selecting 10-20 employees from different positions), on-site inspections (to check the compliance of areas such as workshops, warehouses, and dormitories), and recorded non-conformities.
Reporting and Rectification Phase
Within 1-2 weeks after the review is completed, the institution will issue a review report, indicating the main non-compliance items (such as child labor, major fire hazards) and the secondary non-compliance items. The enterprise needs to formulate a rectification plan based on the report. After the rectification is completed, it can apply for a follow-up review. The validity period of the report is 1 year.
IV. Applicable and Avoidance Scenarios for SEDEX Certification
Priority-certified enterprise types
- Export-oriented manufacturing: such as textile factories, electronics factories, toy factories, etc. that supply products to brands in Europe and the United States;
- Labor-intensive enterprises: factories with a large number of employees and complex work hour management, requiring the standardization of labor rights;
- Brand contract factories: factories that undertake production for giants such as Nike, Disney, Nestlé, etc., and need to meet supply chain compliance requirements.
Situations that can be deferred for certification
- Domestic-only enterprises: Regional small and medium-sized enterprises without social responsibility requirements for customers;
- Non-labor-intensive industries: Such as high-end equipment manufacturing, software development, etc., enterprises with few employees and strict environmental regulations;
- Short-term business goals: Enterprises planning to transform or exit the international market within 1-2 years.