Packaging Compliance Program provides peace of mind and lowers risk for brands manufacturing in Asia

In recognition of rising global concerns for labour equity and sustainable business practices, many corporations are incorporating Codes of Conduct that direct employees to develop and implement ethical business practices.To ensure that production partners share this vision, corporations frequently enforce compliance programs to confirm that their production partners are incorporating socially responsible, ethical, and sustainable business practices into on-going business processes.

Brands benefit by working with packaging suppliers that maintain strict compliance standards and have the resources to pre-vet each new packaging partner. Working with packaging suppliers that have in-depth regional knowledge of local labour laws can benefit brands and provide peace of mind knowing that their packaging networks are subjected to strong compliance oversight.

Consequences of Working with Non-Compliant Packaging Subcontractors

Southeast Asia (SEA) product factories might use packaging subcontractors that:

• Do not adhere to local laws
• Lack a social compliance management system
• Have unsafe working conditions

Working with unethical subcontractors could allow unethical business practices to proliferate and adversely affect the socially responsible, moral, and sustainable business practices that brands seek to promote.

Supplier Code of Conduct

To promote ethical business practices, Billerud created Corporate Social Responsibility (CSR) guidelines to articulate expectations of suppliers to engage in fair and sustainable business practices. Our Supplier Code of Conduct provides a framework for suppliers and sub-suppliers to comply with CSR guidelines. The structure of the Supplier Code of Conduct helps suppliers deploy CSR business practices into their extended supply chains in the following areas:

• General compliance
• Business integrity
• Human rights and labour rights
• Health and safety
• Environment
• Non-compliance, reporting and audit

Billerud developed a compliance program to ensure that suppliers adhere to the Supplier Code of Conduct.

What is Billerud’s Managed Packaging Compliance Program?

Billerud’s Managed Packaging compliance program ensures that packaging suppliers provide a safe and sustainable work environment for employees. The compliance program uses a standardized process to ensure that each packaging partner in Billerud’s packaging network is compliant to the established standards that are highlighted above in the Supplier Code of Conduct. 

Billerud has a strong track record driving compliance initiatives throughout our SEA packaging network. Our packaging partners know that adherence to the compliance program is mandatory. 

Compliance Audit Process

Audits are an integral part of our compliance process. By visiting suppliers on-site, we are able to validate whether they comply with each of the checkpoints that we include in our audit. These audits consist of opening meetings, workplace walkthroughs, review of documents, employee and management interviews, and closing meetings.

Worker interviews are an important part of the audit process to validate that workers are actually provided with a safe working environment, fair wages, and socially compliant treatment by co-workers and supervisors.

By capturing the direct experiences of workers during the audit process, Billerud’s can confirm that the information provided by management accurately reflects the day-to-day work experiences of production workers.

Corrective Action and Preventive Action (CAPA)

If an audit reveals non-compliance, a customised corrective action plan and corresponding preventative action plan will be developed to mitigate the root causes of non-compliance. Our Corrective Action and Preventive Action (CAPA) program provides a standardized template for developing corrective action plans. 

Billerud’s Compliance Grading Standards

Companies need a satisfactory grade to become a packaging supplier. If non-compliance findings are identified, we work with production partners to help them implement systemic improvements. There are four grades a company may receive after their audit:

Satisfactory

This is the optimal result indicating that a production partner is in complete compliance. 

Accepted

There are a few non-compliant findings and a CAPA process is initiated to help the production partner achieve compliance.

Accepted with Condition

There are a significant number of non-compliant findings. A CAPA program is implemented to bring the production partner into compliance.

Zero Tolerance

A zero tolerance grade is the most serious non-compliance grade given to production partners. A single incidence of egregious non-complaince can trigger a zero tolerance rating.  

Severe non-compliance findings may include:

• Child labor
• Forced labor
• Withholding of workers salary
• Insufficient minimum wage
• Exceeding 84 hours of work during a single week
• Unsafe building conditions
• Insufficient safety exits
• Serious environmental accidents
• Unethical business practices
• Non-transparent business policies

If a zero tolerance grade is given, new business initiatives are halted and a customized CAPA program is developed to provide an opportunity for the production partner to change business practices and achieve compliance with our Supplier Code of Conduct. 

Collaborating with Brands on Grading Systems

In some instances, a brand may have a different grading system than the one we use. In those instances, we collaborate with the brand as needed to meet collective audit requirements.

Conclusion

Billerud’s compliance program sets clear expectations for socially responsible, ethical, and sustainable business practices for members of their packaging network. Billerud has a structured process to audit production partners to make sure that they are compliant with Billerud’s and brand’s requirements.

Using the audit process to ensure packaging partners are compliant promotes socially responsible, ethical, and sustainable business practices and generates goodwill among brand team members and the public. Most importantly, compliance provides safer work environments for packaging production workers.