When an investigation team visited textile manufacturer Hempel (China) Co Ltd, its entire operation came under scrutiny. The team examined its workshops, production lines, safety system, accommodation, canteen and recreation facilities - even its bathrooms were inspected.
Professionals, researchers and government officials went through Hempel's files - its financial documents, employment contracts and social provisions. And face-to-face interviews were conducted with employees.
The garment original equipment manufacturer is part of the first batch of Chinese companies to be assessed against the CSC9000T (China Social Compliance for the Textile and Apparel Industry), the nation's first industrial corporate social responsibility (CSR) management system.
The China National Textile and Apparel Council (CNTAC) issued the CSR management system in May 2005. Its principles and guidelines are based on China's situation, laws and regulations, international conventions and standards, says Sun Ruizhe, vice-president of the CNTAC and director of its CSR office.
The textile industry is traditionally labor-intensive. The CSR system covers 10 areas - management system, employment contracts, child labor, forced or compulsory labor, working hours, wages and welfare, discrimination, trade unions and collective bargaining, harassment and abuse, and health and safety.
CSR trial
The CNTAC has selected 10 major companies to begin implementing the CSC9000T on a trial basis since last May, including Hempel.
The companies have taken a "plan-do-check-action" approach to enable gradual integration of CSR principles into their routine management and corporate culture.
The 10 companies participating in the trial go through three phases: initial evaluation, training in CSR, and re-evaluation. Hempel has passed the re-evaluation stage to become one of nine firms to have implemented the system this year.
And the CNTAC is taking the program further, with its 10+100+1,000 initiative. The council will select 1,000 key companies in 10 textile industry clusters to establish an industrial CSR management system. It will provide CSR awareness training to about 1,000 small and medium-sized enterprises in those clusters.
"Promoting the CSC9000T is a long-term undertaking. The trial is just the first step. There are tens of thousands of textile firms in this country, the majority of which are SMEs still operating under the traditional workshop-style manufacturing system,"says Sun.
China's first industrial CSR report, published by the CNTAC last year, shows that overwork and delayed payments are still common in textile companies.
Workers at some companies put in 13 hours a day, sometimes working four or five hours of overtime, and in some cases employees can take only one day off for every three months worked, according to the report.
Laborers are often not paid extra for overtime, and some companies don't record their employees' extra hours, making it impossible to trace overtime worked.
"The CSC9000T takes into account the current situation in China and attaches great importance to protecting workers' rights and interests," says Sun.
But insiders say promoting the CSR management system in China's textile industry is not just about helping companies upgrade their management systems, but about easing trade frictions between China and the United States and Europe.
Manufacturers benefit
Although the CSR system will come at a cost for manufacturers, it will help lift employee morale and increase productivity, says Ou Xinqian, vice-minister of the National Development and Reform Commission. Ou says creating a skilled and stable workforce will give the labor-intensive textile industry an edge.
"Factories may also get an edge in luring business from Western companies that require contractors to adhere to specific guidelines."
And for some of the trial companies, the benefit of a CSR management system is already apparent.
Beijing Aimer Lingerie Co Ltd has reduced staff turnover to zero since it reformed its payment system and increased salaries. In fact, after this year's Spring Festival in February it acquired 20 extra employees - friends and relatives of existing workers.
Hempel has had a similar experience since it increased the monthly salary to an average of 1,700 yuan, provided comfortable accommodation and banned overtime.
Hempel supplies finished products to big brands like H&M, Ann Taylor, Guess, Max Mara and Zara. It expects production to reach 1.4 million and sales to hit 150 million yuan this year, up 30 percent and 20 percent on 2006.
