THE AUDIT PROCESS

The TfS Audit Program facilitates improvement of the sustainability performance within the supply chains of the chemical industry. Audit reports generated within the TfS Audit Program create transparency through in-depth examinations of suppliers’ sites and operations. A TfS Audit can neither be passed nor failed, but it highlights areas of improvement, thus, enabling interaction between customers and suppliers in an efficient and effective way. Efficiency is increased by sharing TfS Audit reports and other recognized audit schemes among TfS Members. Effectiveness is ensured by maintaining a questionnaire that is covering all relevant CSR topics.

The audit program is based on good practices and builds on reference frameworks such as the United Nations Global Compact, the Responsible Care Charter, and the Conventions of the International Labor Organization. Please have a look at the online training tools in different languages provided on the webpage.

Suppliers are requested to meet certain standards and continuously improve in the following areas:

• Management: Management in charge, policies, continuous improvement, management systems,  risk assessment training

• Environment: Environmental compliance, waste, air emissions, climate change, water and roundwater, wastewater, energy, nuisance (noise & odor), land use & biodiversity, soil, hazardous chemicals

• Health & Safety: health & safety compliance, product safety, transport safety, process safety & storage, occupational health & safety, emergency preparedness, medical care, security, hygienic facilities

• Labor & Human Rights: labor & human rights compliance, child labor, forced & compulsory labor, working hours, minimum wages, freedom of association, discrimination, special work contracts

• Ethics and Governance: supplier standards, memberships, business integrity, privacy & intellectual property, fair completion, disciplinary & compliant procedures

Only pre-approved audit firms are allowed to perform a TfS audit. Audit firms should meet specific criteria such as quality management, adequate auditor trainings and availability of auditors in key markets. Only auditors with an appropriate level of industry knowledge, audit experience as well as technical and language skills are pre-approved to perform TfS audits.

There are several quality assurance mechanisms that assure consistent and high quality audits, for example, witness auditors evaluate the audit process against pre-defined criteria. That means, experts of TfS members accompany auditors on a sample basis and evaluate the auditor’s competence and the audit process.

There will only be announced audits.

The auditor will finalize the audit report and provide it to the supplier no later than ten working days after completion of the audit.

The supplier may formally comment on the audit observations and findings within a ten-day working day period.
After  the  comment  period, the  auditor  will  send  the  audit  report  to  the  TfS Office for quality review before it is shared among TfS members.

The validity of a TfS audit depends on the audit results:
• No or minor findings: TfS audit report is valid for 36 months
• Minor findings: expected to be closed within twelve months
• Minor / major / critical findings: set-up of a Corrective Action Plan required
• Major / critical findings: Follow-up audit within 12 months required

Depending on the results of the follow-up audit, a re-audit may be required. The re-Audit shall be conducted after twelve months unless specified differently in the CAP.

All our audit companies (Intertek, SGS, DQS and ERM) can perform remote audits. The request has to be done with the international audit contact though.

If auditors see that accessing the site is not possible due to Covid19 or other circumstances, they can suggest performing a remote audit. The supplier needs to agree with this approach.

Not all sites can do remote audits instead of on-site. Based on previous experience auditors recommend avoiding remote audits in the following situations:

• Sites that are based in high-risk areas or part of an industry that is known for certain risks. The audit company can help you define risk factors in the industry or region.
• If an auditor should be aware of site environmental conditions or risk factors related to change in temperature or smell which require a physical onsite presence
• If electronics (eg a camera/smart phone) cannot enter an area to be audited
• If the audited area does not have good Wi-Fi or 4G coverage
• If it is difficult to find employees for worker interview, or samples are too small
• If the audited site is too large

The audit itself costs as much as an on-site audit. The auditor travel costs are deducted though. Still, more energy and work time will go into audit preparation.

In order not to spend more audit hours than necessary, it is important to prepare optimally:

• Provide the auditor with blueprints, site maps, P&IDs… up front
• Make sure that all managers who take part in the audit have a well-defined role
• Discuss with the auditor the agenda and site tour in advance
• Test the communication systems and check the Internet reach throughout the facility
• Make sure you have all paperwork or electronic documents ready during the Document Review part

During the pilot phase that runs until June 2022 there is no limit on remote audits. TfS requests that each member does at least three remote audits. All remote audits are counted toward the members’ annual KPIs at least until June 2022.

That is what we will be measuring during this pilot. SMETA have already performed hundreds of remote audits and they could not find significant differences. This and our own sample study helped us to shape this pilot.

Partly, yes. When an audit is followed up by an auditor, there has always been an option to perform this remotely.