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):
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:
- 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).
- Operators can be trained to tell lies when asked the most common questions. This is frequent in large Chinese factories.
- Top managers make sure fake payroll & attendance records are prepared. Again, this is quite common in China.
- 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.