How can context fool an audit report?
Your Corporate Social responsibility Partner
We always try to incorporate the big picture in our audits and outline such in our newsletters. The reason is clear enough. Putting all pieces of information into context ensures the accuracy in the interpretation of results. Let's take an example with a typical factory that subcontracts a significant portion of its orders to other factories. Even if the audit results for the main factory are good, it does not mean the goods have been produced in good working conditions. And it certainly does not mean workers have been properly paid or that there is no child labor. None of these risky elements are assessed because these subcontracted factories are usually never made known to the companies.
A famous sportswear brand encountered this problem again. This Chinese media report found on this website denounced subcontracted factories for paying wages 50% lower than the legal minimum wage. Although the original supplier was an approved factory, one that was regularly audited, its subcontracting practice, however, was not known to the sportswear brand. Lack of awareness such a practice was further condemned on the part of the sportswear brand . How could frequent audits with the brand representatives to check quality never turned up any clues about the subcontracting? This only begs the question how much was known and how much was deliberately kept hidden.
By taking the context into account, we can point out not only on the rightness of the audit report itself, but also the rightness according the production conditions that can be different from the working conditions in the audited factory. Ensuring the factory’s production process is transparent should be strongly factored in the factory assessment process. The extent of the subcontracting practice is quite difficult to measure with a standard audit procedure, but would not escape the notice of an extensive audit conducted by a well-trained auditor.
This would certainly be difficult to uncover without the full cooperation of the main factory in disclosing such practices. The factories that allowed us to look at some of their subcontractors have explained clearly the type of relationship with them. In such cases, even if working conditions are not perfect, at the very least the production process becomes fully transparent. With such valuable information, better decisions to adequately manage the risks are possible. Without full transparency of every part of the supply chain, the results from audits are limited in its true impact.
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Release date: 2009-12-07
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