Supply chain audits lack impact needed to improve human rights violations

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Dive Brief:

  • A report by the University of Sheffield in the UK states that audits of supply chains merely skim the surface, achieving little to no effect for those at risk, Forbes reported Monday.
  • Audits frequently fit a pre-determined narrative that is shaped by the company, which means that any information revealed through the audit will likely minimize any form of non-compliance and fail to identify weaknesses.
  • Investigative journalism has proven to be one of the most effective ways of uncovering supply chain abuses. Journalists who can and will take the time to observe and uncover violations without the need to serve the corporation or adhere to any of the inconsistent audit standards.

Dive Insight:

Audits usually fail to achieve change for the same reasons, with or without a company’s tacit approval.

Auditing firms go only as far as the company that pays them requests. Often this means that only the practices of healthy Tier 1 suppliers are examined, leaving a trail of countless sub or sub-sub contractors thriving in the dark. For example, a recent audit at REI involved only Tier 1 suppliers, which made up a mere 27% of the supply chain, leaving the rest of the chain unobserved, which is often the place where the true violations, including forced labor and child laborers, exist.

Furthermore, pre-announced audits that allow workers to receive coaching on what to or not so say, strict confidentiality rules between the company and its auditor and unverifiable discoveries of wrongdoing all are part of the faulty current process of auditing. Lastly, auditors merely advise companies on how to make improvements, regardless of what they discover, but have no actual impact on forcing those companies to take action.

Audits are supposed to be one part of solving the problem, but are useless if not coupled with other measures. Standardization of rules and regulations, involvement and empowerment by local law enforcement, and most importantly, enforcement and impartiality need to become part of the process.

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Filed Under: Regulation

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