Ethical trade documents appear in most large merchandise tenders, and the two names on them, Sedex and SMETA, are often treated as if they meant the same thing. They describe two different parts of the same process. Sedex, the Supplier Ethical Data Exchange, is a membership organisation with an online platform where a supplier records information about its sites and shares it with customers. SMETA, the Sedex Members Ethical Trade Audit, is the audit method used to inspect a site and produce the report that sits on that platform.
Sedex membership
Membership gives a supplier an account on the platform, where it enters details about each site and the people who work there, attaches the results of any audit, and chooses which customers can see them. A buyer who is also a member can review that record in a standard format, which saves collecting a separate questionnaire from every factory in the supply chain.
The SMETA audit
A SMETA audit is carried out at the site by an external auditor and covers four areas: labour standards, health and safety, the environment, and business ethics. The auditor speaks to workers, walks the production floor and reviews records on wages, working hours and fire safety. Anything that falls short is written up as a finding with an action to close it, and reports follow a common format, so audits carried out by different firms at different sites can be read side by side.
We are a Sedex member, and the plant in Dongguan, which the group owns and staffs, is SMETA audited. An audit describes a site on the days the auditor was there. A completed one exists as a report with a date on it, so the date matters as much as the result when a buyer reads it.
What the audit leaves out
An ethical trade audit looks at the site as a whole and says nothing about the product itself. Toy safety testing, material content and country of origin each have their own evidence, such as a test report on a finished toy. Quality control on a production run is a separate job, done by the people on the factory floor.
Documents to request
A procurement team can ask any supplier for the following, and the answers are easier to compare when they arrive together.
- The audit report and the date the audit was carried out
- The name and address of the site the audit covered, which should match the site that makes the product
- Any findings the auditor recorded, and the action taken to close each one
- Confirmation that the supplier's Sedex membership is current
Where a licensor or a large retailer sets ethical sourcing requirements, the factory audit is often one of the documents reviewed before an order is placed. Licensed work already has approvals, which are the stage that most often sets the timeline, so the report is worth having on file before a licensor asks for it.
