Shenzhen Vstarcam Technology Co., Ltd. BSCI Audit Report

Performance Area 1: Social Management System and Cascade Effect (Score: D)

Good Practices:

The auditee has established the management system in accordance with the laws and regulations and the amfori BSCI code of conduct to ensure that the factory complies with the relevant requirements. The auditee have also established the mechanism for collecting and updating laws and regulations, and timely collected the laws on labor, business ethics, health and safety and the environment etc. Ms. Yan Lin/ Sales Manager was appointed as the management representative of the social responsibility to implement the amfori BSCI system. Ms. Qunhua Lu/ HR Manager assisted management representative in building social responsibility system. The annual social responsibility internal audit and management review mechanism has been established. The factory asked some major suppliers to sign the social compliance commitment letters and annual social performance assessment to major suppliers were conducted. However, gaps were still noted in implementation.

Areas of Improvement:

• 1.1: The factory has established the social responsibility management procedure and has promised to implement it in accordance with the procedure. However, some procedures have not been effectively implemented. Deficiencies were noted in PA2 (amfori BSCI implementation), PA5 (social insurance coverage not meeting legal requirements, with voluntary purchase policy making compliance difficult), PA6 (workers exceeding monthly overtime limit of 36 hours without an overtime control plan), PA7 (Occupational Health and Safety non-conformities), and PA12 (environmental non-conformities). These deficiencies are attributed to management negligence and cost control during operation.
• 1.4: The factory has a capacity planning process, but attendance records and interviews indicate systematic violation of the 36-hour monthly overtime limit. Management has not established a pre-warning system for working hours or an overtime management and control plan. Overtime is voluntary, with workers seeking to earn more.

Remarks from Auditee:

Performance Area 2: Workers Involvement and Protection (Score: C)

Good Practices:

The auditee has established procedures for employee participation and protection, including training on grievance mechanisms. Employees can appeal through suggestion boxes, workers' representatives, or supervisors. Workers' representatives were elected in October 2018, and quarterly communication meetings are held with management. However, gaps were still noted in implementation.

Areas of Improvement:

• 2.1: While worker representatives exist, about 80% of interviewed employees did not know who they were, as the factory had not publicized this information to new workers.
• 2.2: Workers and worker representatives were not involved in the formulation of the factory's long-term worker protection goals.
• 2.4: Although the amfori BSCI code of conduct and training records were posted, about 60% of interviewed workers were unaware of amfori BSCI or its basic content (e.g., fair remuneration). The factory had not evaluated training effectiveness.

Remarks from Auditee:

Performance Area 3: The rights of Freedom of Association and Collective Bargaining (Score: A)

Good Practices:

The auditee does not restrict workers' right to free association and collective bargaining. Workers' representatives are not discriminated against and can communicate with employees freely. The factory has not prevented employees from negotiating.

Areas of Improvement:

There is no collective bargaining agreement between the auditee and employees.

Remarks from Auditee:

Performance Area 4: No Discrimination (Score: A)

Good Practices:

The auditee has an anti-discrimination policy prohibiting differential treatment based on race, gender, age, or other reasons. Employees can make real name or anonymous complaints through the factory's complaint mechanism if their rights are infringed.

Areas of Improvement:

Remarks from Auditee:

Performance Area 5: Fair Remuneration (Score: A)

Good Practices:

The auditee has established policies and procedures for wages and benefits. The minimum monthly wage of RMB 2350 (hourly rate RMB 13.51) is higher than the local minimum wage. Wages are paid by bank transfer before the 12th of each month. Wage records from Feb 2018 to Jan 2019 were provided, showing no unreasonable deductions or late payments.

Areas of Improvement:

• 5.5: Out of 231 workers, only 179 joined social insurance as of February 2019. 50 workers did not participate, with management citing voluntary purchase and some workers preferring hometown insurance. The factory did not track how many workers had hometown insurance. The factory provides group accident insurance for those not participating in social insurance.

Remarks from Auditee:

Performance Area 6: Decent Working Hours (Score: D)

Good Practices:

The factory has policies and procedures for working hours, with regular hours from Monday to Friday (8:30-12:00, 13:20-17:50). Night overtime is typically 18:30-20:30, about five times a week. Saturday overtime is usually 10 hours, four to five times a month. Sundays are rest days. Attendance records from Feb 2018 to Feb 27, 2019, were provided.

Areas of Improvement:

• 6.2: Time records show that all 20 sampled employees in March 2018, November 2018, and January 2019 exceeded the 36-hour monthly overtime limit (up to 94 hours in March 2018). The factory lacks a pre-warning system for working hours and an overtime management plan. Overtime is voluntary, and workers seek to earn more. February 2019 (up to Feb 27) showed maximum monthly overtime of 42 hours.

Remarks from Auditee:

Performance Area 7: Occupational Health and Safety (Score: A)

Good Practices:

The factory has established health and safety policies and procedures, an EHS Committee, and appointed a Health and Safety representative. Risk assessments for workplaces, equipment, special populations, and infectious diseases have been conducted. Effective measures are in place to prevent injuries. Regular health and safety training is provided. Workshops have sufficient safety exits and fire fighting equipment, which are properly maintained. The factory has six qualified first aid workers and provides first aid kits. Clean drinking water is available, and toilets are in good condition and accessible.

Areas of Improvement:

• 7.1: Workers exposed to occupational hazards (e.g., soldering, pad printing) are not provided with pre-job, in-service, and post-service occupational disease examinations.
• 7.6: Soldering workers are provided with standard disposable face masks instead of anti-dust masks.
• 7.7: Chemical containers (e.g., alcohol) in the assembly workshop only have content labels, not safety labels. Soldering processes generate smoke dust, and local exhaust dust removal equipment is not installed.
• 7.16: Packing materials and finished goods are stored against walls in Building F, with less than the legal requirement of 0.5 meters distance.

Remarks from Auditee:

Performance Area 8: No Child Labour (Score: A)

Good Practices:

Appropriate recruitment procedures are in place, requiring original identity cards for verification. Age verification is conducted through skilled interviews if doubts arise. Remedial measures for child labor are formulated. During the audit, no child labor was found through personnel records, site inspection, and interviews.

Areas of Improvement:

Remarks from Auditee:

Performance Area 9: Special protection for young workers (Score: A)

Good Practices:

Management procedures for young workers are in place, ensuring protection according to regulations. Young workers are not assigned to jobs with occupational hazards like soldering and pad printing. Risk assessments for young employees have been conducted. No young workers were found during the audit.

Areas of Improvement:

Remarks from Auditee:

Performance Area 10: No Precarious Employment (Score: A)

Good Practices:

All workers are recruited directly and sign labor contracts on entry, keeping a copy. Employment relationships do not cause worker insecurity, and there is no evidence of unfair employment methods to reduce obligations. However, gaps were still noted in implementation.

Areas of Improvement:

• 10.2: Labor contracts reviewed and interviews indicate a lack of occupational hazard notification for operators in hazardous roles (e.g., soldering, pad printing workers exposed to dust and chemicals).

Remarks from Auditee:

Performance Area 11: No Bonded Labour (Score: A)

Good Practices:

The auditee has formulated an anti-forced labor procedure. Disciplinary policies comply with laws and regulations. No forced labor, humiliation, or inhuman treatment was observed. Employees can resign without wage deduction and leave freely.

Areas of Improvement:

Remarks from Auditee:

Performance Area 12: Protection of the Environment (Score: B)

Good Practices:

The auditee has established environmental protection policies and regularly updates environmental laws and regulations. The factory has obtained EIA reports and approvals. No production wastewater is generated. Soldering and pad printing processes produce organic waste gases, which are regularly monitored, along with boundary noise. Hazardous wastes like empty chemical barrels and contaminated rags are produced. The factory does not require a pollution discharge permit.

Areas of Improvement:

• 12.1: The EIA report covers Building G (4-5F) but not Building F (5F), which was rented later. The factory provided EIA and approval documents but not the completion acceptance document for environmental protection facilities.
• 12.4: Empty chemical containers (e.g., lubricating oil, glue) are stored in the open air on the roof. There is no evidence of entrusting a qualified third party for hazardous waste recycling, nor records of hazardous waste disposal and transfer for the past year.

Remarks from Auditee:

Performance Area 13: Ethical Business Behaviour (Score: A)

Good Practices:

Anti-bribery and anti-corruption procedures are in place, including risk assessments and regular ethics training. No inconsistent or false information was found through cross-validation of production records, attendance records, and interviews.

Areas of Improvement:

Remarks from Auditee: