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UK LABOUR STANDARDS ASSURANCE SYSTEM (LSAS) FAQ525 Coventry Road

Ottawa, ON, K1K 2C5Canada

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ABOUT

1. WHAT IS THE LABOUR STANDARDS ASSURANCE SYSTEM (LSAS)?

The LSAS is a system developed in collaboration between NHS Supply Chain and the UK Department of Health, in conjunction with other industry bodies. The system was developed to help rectify the prevalent issue of unfair labor practices in global supply chains by providing companies with a means to measure the standard under which their supplies are produced. In short, NHS Supply Chain created the LSAS to ensure the products, goods and services coming from their suppliers are produced using fair labor practices.

2. WHAT IS THE SCOPE OF THE LABOUR STANDARDS ASSURANCE SYSTEM?

NHS Supply Chain recognizes individual organizations are at different stages with regards to understanding and managing fair labor issues. The LSAS consists of four levels of compli-ance and each company is expected to strive for continuous improvement by working through the levels over specified periods of time.

3. IS LSAS DIFFERENT FROM OTHER ETHICAL PERFORMANCE STANDARDS?

Standards such as the Ethical Trading Initiative (ETI) Base Code, SMETA Guidance or SA8000 are standards of ethical performance. The LSAS is different from these standards as it is actu-ally a system. The LSAS specifies the range of ethical labor policies, procedures and practices a supplier must use in order to be awarded a contract with the NHS. The supplier organization must use the LSAS to identify labor issues, mitigate risks and drive continuous improvement. The LSAS allows each company to create a tailored approach to their labor standards assurance programs.

UK LABOUR STANDARDS ASSURANCE SYSTEM (LSAS) FAQFAIR LABOR COMPLIANCE SOLUTION

INTRODUCTIONThe Labour Standards Assurance System (LSAS) was developed by National Health Service (NHS) Supply Chain alongside the UK Department of Health. Compliance with the system ensures your company produces goods and services using fair labor practices. This document contains answers to some of the most frequently asked questions about the LSAS and how it affects medical device companies who supply to, or intend to supply to, the UK NHS.





COMPLIANCE & AUDITING

4. AM I OBLIGATED TO COMPLY WITH THE LSAS?

The NHS must ensure due diligence is performed across all contracts and has extended this due diligence to include supply chain labor practices. It has become a contractual requirement and all Framework Agreements must meet a specified level of compliance. The change is particularly important for NHS suppliers sourcing goods, products and services from areas where there are known issues with labor standards. The responsibility falls on NHS suppliers to provide evidence they have operational processes and procedures established to ensure fair labor practices are in place.

5. WHAT DOES COMPLIANCE WITH THE LSAS ENTAIL?

You will be notified by NHS Supply Chain of the level of LSAS compliance your organization needs to achieve. There are four levels of compliance:

» Level 1 – Foundation

» Level 2 – Initiating Implementation

» Level 3 – Established Implementation

» Level 4 – Progressive

On new tenders with the NHS, the requirements become more specific. Level 1 compliance must be achieved within six months from the contract start date, and Level 2 within 18 months. Companies must commit to upholding an ongoing goal of continuous improvement. Next, a compliance system should be established and put into practice. Following this, an external auditor should be hired to audit the organization against the required LSAS level. Finally, the organization then informs NHS Supply Chain when the compliance level has been reached, and the process is repeated as additional levels of compliance are required.

6. AM I REQUIRED TO PAY FOR LSAS AUDITS?

Paying for the audit to measure your performance in accordance with the LSAS system is part of the cost of doing business with NHS Supply Chain. Audits can result in additional benefits, including providing transparency for other customers who are concerned with fair labor issues or satisfying similar systems and standards.

7. HOW WILL THE AUDIT BODIES ASSESS THE COMPETENCE OF MY MANAGEMENT REPRESENTATIVE?

A designated management-level individual helps to ensure LSAS obligations are met. The auditor will determine the competence of your management representative. You will need to demonstrate that labor standards training has taken place as well as the appropriate level of awareness raised. The training is not required to be formal, but you will need to demonstrate the level of understanding that corresponds with the appropriate LSAS level. A compliance partner like Assent Compliance can offer training and learning management for internal employees and suppliers. Defined roles and responsibilities around LSAS compliance helps to ensure competency in your labor standards assurance program.





SUPPLIERS

10. HOW CAN I ENSURE MY SUPPLIERS ARE PERFORMING DUE DILIGENCE ON THEIR SUPPLY CHAINS?

There are several steps you can take to ensure your suppliers are conducting the appropriate due diligence on their own supply chains. Thorough supplier education and training, easily accessible through your supply chain data management platform’s educational resources, ensures your suppli-ers understand the LSAS system. This also extends to other directives and regulations, and what is required of them to ensure compliance. Frequent and efficient communication with your supply chain results in a more comprehensive understanding of your requirements as a customer and prevents potential problems before they arise or worsen.

11. MY SUPPLIER(S) ARE NOT RESPONDING TO MY REQUESTS TO SIGN MY POLICY. WHAT SHOULD I DO?

If your supplier(s) fail to sign your policy, it is recommended to open a line of communication with them. Efficient communication and visibility into your supply chain can help to reduce and eliminate such issues. It is possible your supplier is already compliant, or working towards compliance, with an existing policy similar to yours.

8. DO ANY OTHER REGULATIONS EXIST IN THE UK THAT ADDRESS SUPPLY CHAIN LABOR STANDARDS?

The UK Modern Slavery Act, which came into effect on March 26, 2015, is designed to address modern day slavery in the United Kingdom. The Transparency in Supply Chains Provision in the Modern Slavery Act requires certain businesses to provide a statement that confirms steps have been taken to ensure fair labor practices exist in the supply chain, or to confirm that no such steps have been taken. It is important to note there are no legally binding requirements requiring supply chain due diligence practices. Companies who desire to enforce due diligence practices in their compliance programs are encouraged to contact a compliance software provider, such as Assent Compliance, who can help automate and track supply chain communication processes and streamline compliance.

9. HOW CAN I ENSURE MY COMPANY WILL ACHIEVE A RETURN ON INVESTMENT (ROI)?

Taking steps to comply with the Labour Standards Assurance System benefits your company in a number of ways. Compliance ensures you are meeting your current and future contractual obligations to NHS Supply Chain. This compliance may also extend to similar standards and require-ments. Labour Standards Assurance System compliance can also result in indirect benefits as the global concern for combatting modern day slavery and ensuring fair labor practices increases. These practices directly affect your company’s Corporate Social Responsibility initiatives and mitigate reputational risk.





12. HOW DO I VERIFY THE INFORMATION MY SUPPLIERS SEND IS FACTUALLY CORRECT?

Increasing your supply chain engagement, education and fostering open communication can help to ensure the information you receive is factually correct. As your company strives to comply with higher levels of the LSAS, asking for additional verification of their claims might become a requirement.

13. WHAT FORM OF EVIDENCE SHOULD I ASK MY SUPPLIERS TO SEND ME?

Depending on the level of LSAS compliance required from you, you will not need to request, or you will need to request various forms of evidence from your suppliers. Beginning with Level 1 and the least onerous information, the level of evidence you need to gather will increase as you strive for compliance with higher levels in the LSAS. A supply chain data management solution can help by offering the ability to collect various forms of verification through an automated platform.

14. HOW CAN I STORE AND MAXIMIZE THE USEFULNESS OF THE DATA MY SUPPLIERS SEND ME?

Storing supplier information in an easily accessible manner is a way to maximize its usefulness. A supply chain data management solution such as the Assent Compliance Platform takes large amounts of supplier data and stores it in a format that ensures it is clear, organized and available for reporting. It also provides evidence of contact with your suppliers. Alternatively, another way to store supplier information would be to integrate detailed fields into your existing spreadsheets, database or management system.

15. WHAT SHOULD I DO WITH A SUPPLIER WHO I HAVE DETERMINED TO BE HIGH RISK?

If a supplier is determined to be high risk, it is recommended you communicate with them on the commercial implications of this disregard. A supply chain data management solution provider, like Assent, has the capability to provide risk mitigation activities for the supplier to undertake and a comprehensive learning management system to help educate the supplier. Should these activities not provide an effective solution, disengagement with the supplier can be considered as a last resort, providing you utilize a responsible disengagement process.

16. WHAT IF MY SUPPLIER SPEAKS A DIFFERENT LANGUAGE?

If you find your suppliers cannot read your policy, communicate with you effectively or take advan-tage of educational resources due to a language barrier, it is recommended you attempt to meet their needs by providing resources in their preferred language. It is always a best practice to develop your policy in the language the majority of your suppliers understand. While cumbersome to undertake internally, data management solution providers often have translated materials and communication tools available to assist in effective communication.

UK LABOUR STANDARDS ASSURANCE SYSTEM (LSAS) FAQ

525 Coventry RoadOttawa, ON, K1K 2C5

Canada



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TURNKEY COMPLIANCE SOLUTION BENEFITS

17. HOW DOES MY COMPANY BENEFIT FROM UTILIZING A SUPPLY CHAIN DATA MANAGEMENT SOLUTION TO SATISFY THE LSAS REQUIREMENTS?

A supply chain data management platform benefits your company in many ways. Compliance with systems such as the LSAS, and a variety of other regulations and directives, is automated and streamlined. By utilizing a solution provider like Assent Compliance, your company is able to take advantage of a world-class cloud-based SaaS solution, unmatched compliance expertise, data and seamless turnkey services.

Assent’s LSAS Compliance Solution includes:

» Increased efficiency in your supply chain communications

» Supply chain management and data collection

» Increased supply chain visibility

» Learning management tools for your internal staff and suppliers

» Performance measurement and monitoring

» Real-time reporting

» Policy creation and guidance

» Corrective action plan development

» ...and more

To learn more about your obligations under the UK Labour Standards Assurance System, contact our regulatory experts at [email protected].

uk labour standards assurance system (lsas) faq€¦ · labour standards assurance system...

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