Overseas factory audit

1、 Background of Factory Inspection in Thailand

1.1 What is Thai factory inspection

Thai factory inspection is a comprehensive supply chain compliance audit conducted by third-party organizations such as SGS, BV, Intertek, and European, American, Japanese, and Korean purchasers for local textile, electronics, automotive parts, furniture, and food processing factories in Thailand. It verifies the five dimensions of labor rights, fire safety, environmental protection, quality, and counter-terrorism. Thailand's manufacturing industry undertakes large orders in the automotive, electronics, and ready to wear industries, with well-established labor regulations and strict control over foreign workers (Burmese and Cambodian). At the same time, there are mandatory industrial licenses, TISI industrial standards, and Better Work ready to wear special audits locally, which are the hard barriers to entering the global supply chain. Compared with Cambodia and Vietnam, trade union management in Thailand is relaxed, but foreign employment, environmental permits, and occupational health in high temperatures are the focus of the review.

1.2 Two major audit criteria

Local laws and regulations in Thailand: Labor Protection Law, Social Insurance Law, Industrial Law, Environmental Quality Law, Fire Safety Regulations. All documents must be bilingual in Thai/Thai English, and pure Chinese documents are not recognized;

International general supply chain standards: BSCI, SMETA (SEDEX), RBA electronic factory standards, C-TPAT anti-terrorism, brand exclusive inspection plants (Wal Mart, Uniqlo, Nike), Better Work in the garment industry, and TISI compulsory certification of industrial products.

1.3 Mainstream Factory Inspection Types in Thailand

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The type of factory inspection is applicable to the core audit direction of the industry

BSCI/SMOTA social responsibility factory inspection is universally applicable across the industry, including European supermarket customers' working hours and wages, child labor, labor unions, dormitories and canteens, anti discrimination measures, and employee complaints

Better Work (ILO): Labor management communication, overtime control, foreign labor, and continuous labor improvement in garment, textile, shoe and hat export factories

RBA electronic factory inspection of circuit boards, household appliances, chemical control of hardware and electronic factories, LOTO equipment locks, hazardous wastewater, and compliance of foreign workers

TISI Thailand's mandatory industrial inspection includes product safety, production quality control, equipment calibration, and local industrial licensing for household appliances, building materials, and auto parts

C-TPAT anti-terrorism factory inspection for export to the United States, high-value full container cargo access control monitoring, cargo sealing, personnel and vehicle separation, and container supervision

Brand customer exclusive factory inspection for Nike, IKEA VF、 Decathlon and others superimpose customers' low-carbon and zero defect quality control requirements on the basis of general standards

2、 Thailand factory inspection full set of six core modules for verification (local exclusive requirements)

Module 1: Verification of Enterprise Qualification Documents (First Entry Verification Item)

The auditor first verifies the complete set of Thai language documents for legitimate business operations, and if there are any missing documents, it is directly judged as a serious non-compliance:

Business registration certificate, tax registration, import and export business license of the company;

Industrial plant permit (divided into three categories: exemption, filing, and permit based on equipment horsepower/number of employees, with an industrial permit required for 75 horsepower/75 people or more);

Annual fire inspection report and building safety inspection certificate from the fire department;

Environmental Impact Assessment (EIA), Wastewater Discharge Permit, Quarterly Pollutant Third Party Monitoring Report;

Factory leasing contract, factory layout plan, and cooperation agreement with hazardous waste disposal institutions;

Special program for foreign workers: a complete set of files for work permits, labor bureau registration, and entry visas for Burmese/Cambodian workers;

Previous factory inspection reports, rectification of closed-loop materials, TISI product certification certificate (mandatory for industrial products).

Module 2: Labor and Human Rights Compliance Verification (Core Deduction Section in Thailand)

Strictly implement the Labor Protection Law and differentiate between local employees and foreign workers for dual verification:

The minimum legal entry age for child and underage workers is 15 years old, and child labor under the age of 15 is strictly prohibited; Underage workers aged 15-18 are prohibited from working night shifts, in high-risk positions such as chemical and stamping work. The labor bureau will file a separate record and conduct a semi annual physical examination, and overtime cannot be arranged.

Sign a Thai language labor contract with foreign employees within 30 days of their employment; Foreign workers must hold a valid work permit and are prohibited from working illegally without a permit; It is strictly prohibited to withhold identity cards, passports, collect entry deposits, and pay for work uniforms and training fees.

The mandatory standard for working hours (different from Cambodia and Vietnam) is 48 hours per week; The total working hours including overtime are ≤ 60 hours per week, with a monthly overtime limit of 36 hours; Overtime not exceeding 4 hours per day; Every 7 days, one full day of rest must be taken; The standard weekly working hours for high-temperature workshops and high-risk chemical positions are only 42 hours.

The calculation of salary and overtime pay follows the daily minimum wage standard of the Thai branch; Overtime on weekdays is 1.5 times the salary, on weekends it is 2 times the salary, and on statutory holidays it is 3 times the salary; Salary will be paid by bank transfer on a fixed date every month, with a 12-month salary slip and bank statements retained; Prohibition of cash distribution without records, arbitrary fines and salary deductions; An additional 15% annual interest shall be paid to compensate employees for wage arrears.

Compulsory payment of social security, vacation and welfare for factories with more than 10 employees; Fully enjoy paid annual leave, sick leave, maternity leave, and Thai Buddhist statutory holidays; Provide heatstroke prevention and cooling subsidies (mandatory in tropical regions); Dormitories are prohibited from locking doors, with a standard per capita area and equipped with drinking water, ventilation, and cooling facilities.

Trade unions and anti discrimination and complaint channels do not force factories to establish trade unions, but cannot obstruct employees from voluntarily forming them; Prohibit discrimination based on gender, religion, and foreign employees; Establish a bilingual anonymous complaint box and hotline in Thai and English, and keep complete records of complaint handling.

Module 3: Occupational Health and Safety and Fire Protection Verification (mandatory on-site visual inspection)

3.1 Workshop General Safety

Stamping, injection molding, and cutting equipment are equipped with grating protection and emergency stop buttons, and LOTO lock and tag procedures are implemented for equipment maintenance;

Conduct occupational hazard testing for dust, noise, and chemical positions every six months, provide sufficient PPE masks, earplugs, and protective gloves, and keep records of their use;

Independent medical room in the factory area, certified first aid personnel, complete set of first aid drugs, complete registration and rectification of work-related accidents;

Thailand mandates the installation of workshop fans, cooling equipment, and heatstroke prevention drugs in high-temperature environments, with complete records of heatstroke prevention training.

3.2 Fire Protection Special Project (Thailand Audit Hard Indicators)

At least 2 safety exits shall be provided on each floor, with an evacuation passage width of ≥ 1.1 meters and no blockages or locks throughout the entire process;

One 75 ㎡ fire extinguisher is equipped, with monthly inspections and annual inspections; The water pressure of the fire hydrant meets the standard, and the emergency indicator light is powered on 24 hours a day;

At least once a year, conduct a factory wide fire drill and keep attendance records, photos, and drill summaries;

It is strictly prohibited to use a three in one factory for production, storage, and accommodation, and separate building partitions for dormitories.

3.3 Control of Hazardous Chemicals

Ink, cleaning agents, and coatings are equipped with bilingual MSDS in Thai and English;

Independent ventilated warehouse for hazardous chemicals, partitioned isolation, and secondary leak proof pallets; Two person registration for sending and receiving;

Waste solvents, waste oil and other hazardous waste shall be handed over to the PCD certification agency of the Thai Ministry of Environmental Protection for recycling, and complete five copies of the recycling documents shall be retained.

Module 4: Environmental Compliance Verification (PCD High Frequency Assault by the Thai Ministry of Environmental Protection)

Wastewater: Production wastewater is accompanied by a sewage treatment plant, with COD and BOD emissions meeting standards. Daily equipment operation records and quarterly third-party water quality reports are indispensable, and direct discharge into rivers is strictly prohibited;

Exhaust gas collection and purification for spray painting, welding, and injection molding, with no pungent odor, in compliance with Thai atmospheric emission standards;

Solid waste classification: domestic waste, general industrial waste, and hazardous waste are stored separately in three zones, with traceable records throughout the process;

Energy consumption and low-carbon: Install sub item water and electricity meters, calculate energy consumption, and cooperate with overseas customers' ESG and carbon footprint verification;

Industries with high pollution such as chemical and electroplating must hold a special pollutant discharge permit, and without a permit, major non-compliance will be directly determined.

Module 5: Verification of Production Quality System (including TISI Special)

System documents: equipped with ISO9001 quality manual and full process Thai SOP operation manual; Industrial products need to match TISI Thai industrial standard documents;

Incoming material control: supplier qualification review, incoming AQL inspection records, identification of defective raw materials for isolation;

Process control: scheduled inspection of production lines, registration of rework and repair, and zoning management of defective products;

Finished product control: factory inspection, product retention, size/function testing reports, calipers and testers calibrated annually;

Traceability system: Raw material batches, production teams, and shipment orders are bound one by one to meet the requirements of brand product recall.

Module 6: Counter terrorism Security and Business Ethics Verification

6.1 C-TPAT Counter Terrorism Verification (Essential for Exporting to the United States)

The factory area is fully enclosed with walls, fully covered with surveillance, and the video recording is kept for at least 90 days;

Employees, visitors, and freight vehicles are subject to separate access control, and all external personnel and trucks are required to undergo open box inspection and real name registration;

A dedicated person will supervise the entire process of container loading, unify high security seals, and keep seal numbers in the ledger.

6.2 Business Ethics Anti Bribery

Establish an anti-corruption system that prohibits gift giving and bribery to auditors, brand procurement, and Thai public officials;

Zero tolerance for falsifying attendance, salary, fire safety, and environmental records, and directly revoking audit qualifications for data falsification;

Upstream and downstream suppliers sign clean cooperation agreements and file them in full.

3、 Complete audit process for factory inspection in Thailand (1-2 days, Better Work annual continuous audit)

First meeting: The review team will explain the standards and scope of verification, with a focus on informing foreign workers and employees of the interview rules;

4-8 hours for document review: retrieve the complete set of attendance, salary, social security, fire safety, environmental impact assessment, and foreign labor files from the past 12 months; Additional verification of TISI production control documents for industrial products;

On site inspection of the entire factory: covering workshops, hazardous chemical warehouses, sewage treatment plants, dormitories, and canteens for photography and evidence collection; Focus on inspecting high-temperature ventilation, fire exits, and hazardous waste storage;

One on one anonymous interview with employees (core part): Randomly select 10% -20% of local and foreign employees for individual interviews, and management personnel are not allowed to approach; The auditor shall give priority to the oral testimony of employees;

Final meeting: Provide a list of non conformities, classify serious, major, and minor issues, clarify the rectification deadline, and issue a preliminary audit report on site.

4、 Grading of audit results and rectification requirements

Satisfactory approval (zero/minor discrepancies): No need for re examination, 12-month validity period, normal order acceptance;

Conditional approval (mainly non compliant): Submit evidence of rectification within 30-45 days, closed-loop document review, no need for on-site review;

Not approved (serious red line issue): unlicensed foreign workers, child labor, direct sewage discharge, major fire hazards, false information, all customer orders will be suspended and can only be reviewed after 3 months;

Better Work rating: 1-5 stars, European and American ready to wear customers generally require ≥ 3 stars, with continuous supervision and review every year.

5、 High frequency failure points during factory inspections in Thailand

Foreign workers without legal work permits and expired visas (the largest serious non-compliance in Thailand);

Overtime exceeding 36 hours per month without a fixed weekly rest day;

The quarterly environmental monitoring report is missing, and the hazardous waste recycling documents are incomplete;

The high-temperature workshop lacks cooling facilities and there is a blank record of heatstroke prevention training;

Insufficient frequency of fire drills and blockage of goods at safety exits;

During employee interviews, foreign workers were unclear about overtime pay and vacation policies, which conflicted with the records.

6、 Thailand vs Vietnam vs Cambodia Factory Inspection Core Differences

Working hours in Thailand: monthly overtime limit of 36 hours; in Vietnam, monthly overtime is 30 hours; in Cambodia, weekly overtime is only 10 hours, with the strictest control measures;

A large number of foreign workers from Myanmar/Cambodia working in Thailand must verify their work permits; Vietnam and Cambodia have relaxed foreign employment audits;

Compulsory TISI certification for Thai industrial products, a mandatory local standard; Cambodia mandates better work for ready to wear clothing; Vietnam does not have mandatory local factory inspections;

Trade union policies in Cambodia mandate the protection of trade union rights; Thailand and Vietnam do not mandate the establishment of labor unions within factories;

The document language is Thai English bilingual; Vietnam, Vietnam, and Britain; Cambodia Khmer+English;

The environmental supervision of Thailand's Ministry of Environmental Protection conducts regular surprise inspections, and the punishment is higher than that of Vietnam and Cambodia.