Complaint #006: Certification Improper because of Major Non-conformance 

Details of Facility:
-PT Paberik Tekstil Kasrie
-Design and manufacturer towels, cloths and napkins
-Indonesia
-Certified: June 1, 2001
-Certification Body: SGS

Details of Complaint:	Element of SA8000 Standard:
Rights to freedom of association and collective bargaining violated.	Freedom of Association and Right to Collective Bargaining 4.1, 4.3

Actions Taken:
December 10, 2001: An NGO sent a letter of complaint to SAI and the Certification Body stating that a certified factory in Indonesia was not in conformance with the freedom of association and right to collective bargaining requirements of SA8000 due to ongoing violations. Such alleged violations included having improperly fired and failed to properly rehire trade union organizers.

January 2002: The certification body initiated correspondence with the complainant and conducted an investigation audit at the facility. As another source of information, the CB also reviewed the report from a customer company audit in September 2001, which raised no concerns on this issue.

The CB reported to SAI that it continued to find the factory in compliance, based on its own investigations and the customer reports.

March 2002: At an accreditation surveillance audit conducted by SAI, SAI’s auditor reviewed the records of the audit and complaint investigation and found them to be inadequate to make a determination on the situation and the sufficiency of the investigation.

April 2002: SAI requested from the Certification Body additional information on legal proceedings related to the factory. The certifier informed both SAI and the complainant that it found the factory compliant with both SA8000 and with court orders/decisions in Indonesia dealing with the re-hiring of workers.

The complainant subsequently raised questions about the fairness and reliability of the local courts and SAI continued to investigate whether there was evidence of compliance with the SA8000 freedom of association and right to collective bargaining provisions.

October 2002: SAI chose to undertake its own investigation of the complaint for background field knowledge and coordinated an on-site investigation of the facility in conjunction with a surveillance audit of the certification body.

January 2003: SAI’s team, consisting of a lead auditor and expert on freedom of association, conducted the audit to provide an independent assessment of the complaint, and an investigation into the handling of the complaint by the certification body. The SAI audit team found:
1. The factory was not in compliance with element 4 of SA8000 at the time of the initial certification and certification should not have been granted while a court case was pending;
2. The factory was not currently in compliance with element 4 of SA8000, as the union in place was not democratically elected;
3. The certification body did not do a sufficiently thorough investigation and did not follow its own procedures for complaint resolution.

SAI recommended to allow the factory to keep its certification if it implemented corrective actions to comply with the requirements of element 4 of SA8000. By having an open and democratic union election, the largest customer of the factory took a lead position in working with factory management to facilitate agreement and allow this to occur. An independent NGO, Friedrich Ebert Stiftung (FES), was contacted to oversee this process.

As a result of the surveillance audit, SAI issued several corrective action requests to the certification body in the handling of this complaint, the issuance of the original certificate, and inadequate training of its auditors.

March 2003: A new election took place at the factory, of the leader of the SPSI union. No other union participated. There was no independent organization observing the election.

May 2003: The reelection process was not accepted by the certification body and a major corrective action was raised with a 2 week response time to agree to an open election (with other unions), if not, certification was to be suspended. The existing union disagreed with this decision and a meeting was organized in May to further discuss the issue.

May 29, 2003: A follow up meeting was held in which it was agreed that the upcoming election would be held pending registration of the union with the provincial manpower department and a new election was scheduled to be held in July 2003.

August 22, 2003: SAI received a report from the CB regarding the status of the unions. The unregistered union was given until July to register with the regional office for trade unions – they apparently failed to do so and representatives from this union did not show up at subsequent meetings. The conclusion of the meeting was that SPSI is the only legally registered union at the facility and that 675 employees are members while 100 are non-union members.

Thus, at that time, SPSI was considered the union representing the workers at the factory level. Facility management stated again specifically that, if in the future, there would be sufficient interest in forming another labor union, they will allow this to happen.

The allegations that the facility violated SA 8000 requirements regarding Freedom of Association have thus been determined to be unfounded by the CB. It was agreed that the CB would continue to monitor the issue of Freedom of Association through its surveillance audits.

August 12, 2004: The facility was recertified by the CB.

July 2005: SAI conducted a surveillance audit of the CB in Indonesia to confirm the proper handling and closing of this complaint.

October 2005: Complainant confirmed that the complaint was considered closed, though acknowledged that the outcome in regards to the rehiring of fired workers was not satisfactory due to the difficulties in communicating with the fired workers and court actions, and the process of negotiations between the two contesting parties and further mediators failed and no compromise could be found.

As a result of this complaint, SAI identified and addressed the need to strengthen its oversight of the certification bodies in the areas of stakeholder engagement, freedom of association, complaints handling and auditor training, and continues to work to monitor and improve these areas.