SA8000 Standard Requirement: External Verification and Stakeholder Engagement

The provision: In the case of announced and unannounced audits for the purpose of certifying compliance
with the requirements of this Standard, the organization shall fully cooperate with external auditors to
determine the severity and frequency of any problems that arise in meeting the SA8000 Standard.
The organization shall participate in stakeholder engagement in order to attain sustainable compliance
with the SA8000 Standard.

Q: What terms of cooperation is a certified organization expected to provide for the external
auditors?
A: The certified organization shall ensure that it provides access to the external auditors to audit the entire
facility during both announced and unannounced audits. Whereas all organizations extend their
cooperation during announced audits, there are some situations where auditors find that information and
access during unannounced audits are not forthcoming. In addition to the mandatory "unannounced
audit' in the audit cycle, unannounced audits are possible in order to investigate any complaints against
the certified organization. Under all of these situations, it is required that the organization shall cooperate
by providing all information and assistance to the certification body to carry out the audit.
Q: What constitutes the organization's participation in stakeholder engagement to attain
sustainable compliance with the SA 8000 Standard.
A: The most important facet of this element is to understand the distinctive aspect between 'stakeholder
participation' and 'stakeholder engagement'. A good preliminary step is to identify the broad spectrum of
relevant stakeholders in the area and engage with them in a proactive manner. In some countries and
regions, there may not be mainstream stakeholders like trade unions and NGO's/GRO's (Grass root
organizations) actively working. In such cases, it is prudent to extend the stakeholder engagement to local
administration/civil society organizations/labor advocates/projects run by multilateral agencies/cultural
organizations etc. This provides for a comprehensive perspective of chronic labor problems in the area
and can identify potential areas of collaboration and knowledge sharing with the stakeholders. Many
organizations have used the stakeholder engagement platform to leverage and sustain their SA8000
compliance.
Q: More often than not, we continue to address the rights and concerns of the workers. Are the
rights and concerns of the supervisors and managers within the scope of the Standard?

A: This is a common and typical question that continues to crop up during the training sessions. The spirit
and intent of the SA8000 Standard is to address the human rights of all personnel and the terminology
'Personnel' has been clearly defined to include all within the scope of the organization's activities. While
the definition of the 'worker' in the Standard has been indicated as 'all non-management personnel' the
definitive aspect that distinguishes the worker relates to that persons roles and responsibilities. While
everyone in the organization has roles and responsibilities, the worker is the only one who lacks authority.
Anyone above the worker, be it the supervisor, manager, or top management, has roles, responsibilities
and authority depending on their level in the organization. Consistent with the spirit and intent of the
Standard, the rights of the workers have to be addressed as a priority as they are most at risk and
generally receive the lowest compensation and benefits. As an SA8000 auditor, one has to look at the
larger picture during the audits to deliver value.
Q: In the case of unannounced audits, what if the companys senior management and the
management representative are not present in the company or are busy with other audits?
Should they still provide access to its premises?
A: The intent of the unannounced audits is to ensure that the company provides reasonable access to the
auditors to conduct the audit. If the senior managers and the SA8000 management representative are not
present on the day of the unannounced audit, the company still has the responsibility to provide access to
the auditors to conduct the audit. It is required that the auditors be allowed all possible access to relevant
documents, records and interviewing staff who are available.

Living Wage
Work to mainstream a groundbreaking methodology to advance the payment of the living wage
SAI's shared vision is for workers to achieve wages at a level that will help them escape poverty.
The concept of a living wage is central to the SA8000 Standard, and in fact, SA8000 was the first
standard to integrate the concept. Issues with the living wage are well known:

lack of a globally accepted definition hinders mainstream adoption;

lack of transparent data on calculations of living wages accessible by stakeholders willing

to work toward implementation of a living wage also halts uptake;

stakeholders have so far hardly been able to create sufficient insights in the differences
and complementarity between living wages and national minimum wages and collective
bargained wages.

SAI is currently working to address these issues as a member of the Global Living Wage Coalition,
partnering with Dr. Richard Anker (former Senior Economist at the International Labour Organisation) and
Martha Anker (former Senior Statistician at the World Health Organisation), Fairtrade International, Forest
Stewardship Council (FSC), GoodWeave, ISEAL Alliance, Sustainable Agriculture Network/Rainforest
Alliance (SAN/RA), and UTZ Certified. The goal is to work on the methodology, promotion and
implementation of a living wage for the workers that are protected by our respective labor standards. The
long term goal and shared mission of our organizations is to see improvements in workers' conditions,
including wage levels, in the farms, factories and supply chains participating in our respective certification
systems and beyond.
Long Term Vision
We see the living wage definition and development of the methodology for calculation as first steps of a
long-term process. This process will include the development of an open source database to host living
wage benchmarks for wider usage and also capacity building efforts, which will allow others to replicate
our work.
We share the view that these living wage benchmarks will not supplant collective bargaining rights, but
serve as a replicable tool to support social dialogue between workers and employers. For many
developing country producers, wages form an important part of the costs of production. As such, it is
important to introduce wage requirements in our standards only in combination with dialogue and
involvement of actors at all levels of the supply chain. Wage issues are issues of fairness in the
distribution of gains accrued across the value chain in the process of trade.

Including a definition and methodology for calculating living wage in our certification standards is only a
first but necessary step towards achieving wages at a level that will help workers escape poverty and is
instrumental to collaborative efforts of retailers, buyers, producers and trade unions to make a living wage
a reality. Our organizations are firmly committed to this process.
What do we commit to?
We commit to adopt a common definition of living wage and to apply a common methodology for
estimating living wage levels and for evaluating wages and other forms of remuneration against those
levels.
We commit to using a wide range of strategies to work towards the long term goal of improving wages.
We commit to seeking support from brands, buyers, and retailers to make wage growth at the primary
production level possible.
We commit to working together and working with the relevant stakeholders in these processes.
Why focus on Living Wage?
The concept of a living wage has been around for many centuries. Adam Smith wrote about it in the 18th
century, and it is referred to in the Constitution of the International Labour Organization (ILO) of 1919. The
United Nations Universal Declaration of Human Rights (1948), the Council of Europes European Social
Charter (1961) and the UN International Covenant on Economic and Social Cultural Rights (1966) all
recognize the need for workers to receive a (decent) living wage. Hence, a living wage is considered a
fundamental human right.
Reports by civil society organizations, including Oxfam, have highlighted the issue of low wages and
excessive working hours in the supply chains of a range of commodities and manufactured items. While
statutory minimum wages are established in ninety per cent of countries, in many cases wages paid to
workers fail to comply with these. Where there is compliance, minimum wages do not often permit a
decent standard of living for workers and their families.

At present, attention to the topic of a Living Wage is growing due to declining wage shares worldwide,
widening wage and income inequalities and growing interest in corporate social responsibility. As a
standard-setting organization, we, along with our other standards partners, are responding to this call to
examine how we can most effectively address wage levels through our standards and other operations
and through collaborative work with our wide stakeholder networks.
What is a Living Wage?
In order to work together on living wage, it is important for us share an understanding of what a living
wage is. A recent ILO review revealed that there is a general consensus on the definition of living wage
(R. Anker, Estimating a Living Wage: A Methodological Review, ILO 2011). Drawing on this report and in
consultation with experts, we have adopted the following common definition for living wage. A living wage
is:
The remuneration received for a standard work week by a worker in a particular place sufficient to
afford a decent standard of living for the worker and her or his family. Elements of a decent
standard of living include food, water, housing, education, health care, transport, clothing, and
other essential needs including provision for unexpected events.
Towards a Common Methodology
With Dr. Richard Anker, we aim to design and test a common methodology to estimate living wage levels
for the areas in which we work. The methodology draws on lessons from pilot projects in various
countries. In a nutshell, the living wage is estimated by adding up: the cost of a low cost nutritious diet
that is appropriate for food preferences and development level of a country, plus the cost of decent
housing in the area, plus other costs for essential needs, which are assessed through a method of
extrapolation. A small margin above the total cost is then added to help provide for unforeseen events
such as illnesses and accidents to help ensure that these events do not easily throw workers into poverty.
This total per capita cost is scaled up to arrive at the cost of a decent standard of living for a typical family
and then defrayed over a typical number of full-time equivalent workers per household.
We at SAI intend to make any Living Wage estimates we participate in fully available to the public.
Current Work with Corporate Partners

SAI is currently working with a global brand on a rigorous research process to help the brand to assess
and benchmark the wages and benefits in its supply chain. The research includes field validation, worker
interviews and stakeholder engagement. This work is being aligned with the methodology mentioned
above and is part of an ongoing process to assist companies in understanding and achieving the living
wage.

Living Wage Reports

The following are living wage reports written by Dr. Richard Anker and Martha Anker. SAI is proud to
publish these reports that explain the Ankers methodology for calculating the living wage.
Guidance for SA8000 certification bodies and certified organizations: By the end of 2016, the Global
Living Wage Coalition (GLWC) will be releasing living wage benchmarks for various countries. SAI
recognizes that SA8000 certification bodies and currently certified organisations have been using a
different methodology to calculate living wage benchmarks in those countries based on the SA8000
Guidance Document. Therefore, the GLWC benchmarks are not yet the official living wage requirement
for SA8000 certification. SAI will complete a gap analysis of the current living wage calculations and the
benchmarks and then provide specific guidance for certification bodies and certified organisations on how
to use the benchmark for certification.
Living Wage: Making it a Reality
SAI has designed the webinar, Living Wage: Making it a Reality, to teach interested individuals about the
living wage and the methodology. After taking this webinar and the interactive quizzes, participants will be
familiar with the concept of the living wage and understand the need for and implications of it. They will
also understand the methodology and how it is used in the field. Finally, by listening to different
stakeholders voices, participants will be able to understand how the living wage is relevant to them and
explain their own role in supporting and implementing the living wage.