QualityInspection.org

Quality Assurance, Product Development, and Purchasing Strategies in China

  • Home
  • Articles
    • How To Manufacture A Product In China (without losing your shirt)? [Importer’s Guide]
  • Best Of
  • About Us
  • Contact us
X

Don't miss a post

It's easy to subscribe to our newsletter where you'll receive weekly updates for professional importers and manufacturers on better understanding, controlling, and improving manufacturing & supply chain in China, India, Vietnam, and beyond.

You are here: Home / Ethical Sourcing / The rise in popularity of social compliance audits in Asian countries

The rise in popularity of social compliance audits in Asian countries

April 5, 2013 by Renaud Anjoran

Because of the bad publicity earned by importers such as Wal Mart and C&A after the recent factory fire in Bangladesh, more and more importers are considering social audits as a normal part of their supplier monitoring process.

In practice, I guess there are two factors at work:

  • Some retailers are pushing for tougher standards, and the importers that sell into those channels need to satisfy this new demand.
  • Some purchasers feel the need to cover their a** by ordering reassuring reports from well-known auditing agencies.

And, naturally, providers of social audits try to take advantage of these fears. Here is an example (link to source):

Asia Inspection slides

As professionals of this field know, a social audit report usually looks better than the true situation in the factory. There are four reasons for this:

  1. Many violations are hidden on the audit day, since the auditor’s coming is announced. For example, in that now famous Bangladeshi factory, exit doors were locked every day but were open during audits (by the way, I don’t think barred windows are considered a violation).
  2. Operators can be trained to tell lies when asked the most common questions. This is frequent in large Chinese factories.
  3. Top managers make sure fake payroll & attendance records are prepared. Again, this is quite common in China.
  4. Many auditors routinely get bribed.

I described all this before in social compliance audits: perverse effects. It has been going on for many years.

And the situation is probably worse in China, because of a fundamental contradiction:

  • The law stipulates a legal working time and a maximum overtime per month (and it automatically becomes one of the requirements for the audit to pass).
  • Most of the factory workers want to work a lot of overtime — well above the legal limit — to earn more money. If this is denied, they will switch to another employer.

It means 99% of manufacturers do not respect the law, and need to cheat to pass an audit!

Are there better solutions? Yes, I think so. Here are two ways a big buyer can improve working conditions without resorting to social audits:

  • Push manufacturers to open a dialogue between management and workers, as Tchibo has been doing (read about their program).
  • Push manufacturers to improve their productivity, so that workers can earn their target salary while respecting the legal working time limit. I heard a few cases where this is happening.

The main constraint for importers comes from their customers’s requirements. If they are free from these constraints, there ARE alternatives to social compliance audits.

Filed Under: Ethical Sourcing

Comments

  1. Traveling Gypsy says

    April 9, 2013 at 11:30 PM

    I agree, Renaud! I have coined the phrase “The Broken System”
    for the contradiction that occurs between what is takes to obtain business and what
    it takes to sustain business. Everything the customer (retailer) requires to
    obtain business, (cheaper, cheapest prices and faster, often unachievable
    delivery dates) is the driving force for the lack of social compliance; i.e. falsified
    records, workers coached to lie, bribery, all to receive a passing audit score
    to sustain business. For a retailer, audits are nothing more than checks and
    balances; a publicity safety net so that if and when a “Bangladesh” occurs, they
    can pull out their trail of papers to cover their A$$ and blame the third party
    inspection company or manufacturer. Anyone who has done an ounce of business in
    China or any other third-world country knows that real changes come from
    transparency, which takes time to develop, and by setting reasonable goals achievable
    over time, not a CAP returned within 3 days. Part II of “The Broken System”,
    which of course is all based on my opinion and experience, is damn PRC Law.
    Again, anyone who has spent an ounce of time in China and is at all familiar
    with China’s Labour Laws, would be completely validated to ask, “ Who wrote
    this for China? Are we talking the same country?!” Talk about totally disjointed-
    40hour work weeks with a maximum OT of 9hours?!?! Has the person, who wrote this,
    ever been to China? I exchanged 4 emails yesterday with a retailer over locks
    on the bathroom doors, “Per PRC Law”. Wait, bathroom doors, in China?! I should
    add that this is after the factory was required to segregate the bathrooms…then
    add male/female signage, can’t forget those!…then install privacy walls between
    the toilets…wait…. doors would be nice, don’t you think?! yes! let’s add those!…
    now, we’re at locks…Don’t get me wrong, I am all for developing a country, (and
    having a better bathroom accommodations when I am there) but THAT + Cheaper
    Prices, hell, even the same prices do not ≠. So, that’s where China screws themselves. In all
    fairness, a US retailer can’t go into China and break the laws, pick and choose
    what’s applicable and what’s not. China is the one not implementing and mandating
    their own laws, because business and growth, even at the expense of their own,
    is more important. I just wish everyone would get on the same page! We’re all
    stepping over one another to get nowhere!

    • Renaud Anjoran says

      April 9, 2013 at 11:49 PM

      Absolutely true.
      The analogy I would use is that of the Tour de France. Every insider knows that every rider takes illegal substances to boost their performance. The Tour’s organizers need to show that, from time to time, they take strong measures (kicking a few riders out). All the teams try to out-smart the testers, for as long as they can. The public tries to convince itself that it’s all clean.
      And, from time to time, you have a Lance Armstrong case. Tests get tighter for a while because there is more public scrutiny. That’s what’s happening right now after the fires in Bangladesh and Pakistan.


Weekly updates for professional importers on better understanding, controlling, and improving manufacturing & supply chain in China.

This is the official blog of Sofeast.com.

This blog is written by Renaud Anjoran, an ASQ Certified Quality Engineer who has been involved in chinese manufacturing since 2005.

Hit the button below to get in touch:

Contact Us!

Subscribe to our email newsletter

Connect with us

  • Email
  • Facebook
  • LinkedIn
  • RSS
  • Twitter
  • YouTube
sofeast
sofeast
sofeast

Latest Articles

  • Looming EU Sustainability Requirements Will Force You To Get Visibility Into Your Supply Chain
  • The ISO Certification Industry’s Dark Side
  • 5-Step Process Reliability Engineers Follow To Fix Product Returns
  • Product Recall Program: How to do it in case of a Safety Issue?
  • Environmentally Conscious Product Design Strategies

Categories

  • Quality Control Tips
  • Sourcing New Suppliers
  • Supplier Management
  • New Product Development
  • Process Improvement
  • Ethical Sourcing

Archives

© 2023 QualityInspection.org