The term “ethical sourcing” is in fashion these days. And it seems to be a step in the good direction, since it puts responsibility on the sourcer (for example, Wal-Mart and the importer/middleman, if any).

“Social compliance” implicitly placed responsibility on the manufacturer. I think it is clear to everyone that compliance to international standards is not going to happen on a voluntary basis in China or in Bangladesh…

Is ethical sourcing something positive, like “fair trade”? I don’t think so. Too much hypocrisy. The best comparison would be the organization of the Tour de France race. (I am serious… bear with me!)

1. Demands for ever higher performance

The Tour de France takes riders through harder and harder journeys… but expects all competitors to refrain from using illegal performance-enhancing chemicals.

Similarly, big-box retailers try to get prices as low as possible and don’t hesitate to switch suppliers to save a few pennies. And yet they expect manufacturers to cut no corner when it comes to worker safety and compliance with local regulations. Good luck with that.

2. Double standards

Do these large retailers treat all their suppliers the same? Of course not. When they buy directly from an Asian company, they request lots of audits. When they buy through a company that is incorporated in their own country, they know that company will take some of the heat in case of a disaster, so they are more tolerant.

For example, I heard about a case where a Chinese manufacturer was banned from doing direct business with Wal-Mart… But they made products sold to Wal-Mart through an importer!

Similarly, many suspect that the “favorites” in the Tour de France are given a bit more leeway. I am not sure that’s true, though.

3. A very dirty industry

If only one rider took illegal substances, wouldn’t he be 15-20% faster than the others? This proves that doping is not a problem isolated to only a few competitors.

In a similar fashion, about 50% of social auditors get bribes regularly. There is just too much money at stake (“if we pass it, we get orders in the millions”). And it is easy to miss a few non-compliances in a social audit…

Accounting firms used to preform most social audits in China 15 years ago. Was it a good idea to give these jobs to the quality control firms, who are already challenged with bribery issues in their inspection activity? Not sure.

4. Inadequate testing policy

After a social compliance audit, a manufacturer gets a rating – typically, all the criteria of the SA 8000 standard and local laws are weighted about the same. But I think it should be different:

• Some criteria should be critical, and should be a cause for failure of the audit — for example, a worker cutting fabric without protective gloves, instances of child labor, insufficient safety exits in case of a fire…
• Some others should be considered as “nice to have” — for example, respect of local regulations regarding working hours (what is the problem, really, if the workers can easily quit a factory and join another one?)

In the Tour de France, competitors are encouraged to get dope, and then to do a blood transfusion just before tests. This is the same as manufacturers fabricating a double set of books in order to fool auditors about the number of hours worked. Ridiculous.

5. The pressure mounts after “Lance Armstrong admits” moments…

… but actually nothing changes on the ground.

In this video (shot more than a year ago), the CEO of a major garment company (owner of Tommy Hilfiger and Calvin Klein brands) says that a 2012 fire in Bangladesh would be “a catalyst for dramatic changes”.

And what happened 8 months after that video? Another fire in Bangladesh that killed 112 people. But now it is different, isn’t it? Wal-Mart and the others are really taking measures, and it won’t happen again? Who believes that?