What is Social Compliance Audit?
How can you ensure your supply chain is free of issues like child labor, forced labor, and safety hazards? How do you know that your suppliers are compliant with all applicable labor laws?
It is social compliance that many importers are rightfully concerned about.
A Social Compliance Audit enable businesses to assess their suppliers, monitor health and safety, working hours, wages and compensation for workers, and signal zero tolerance of human rights abuses such as child and forced labor. It also encompasses environmental issues and perspective on social responsibility.
By complying with international social compliance standards, you can improve your brand’s reputation among consumers and competitors, boost productivity and reduce health hazards in the workplace. To get started, conduct a social compliance audit to find out where you stand against global compliance standards.
A social audit is one of the best ways to understand the working conditions at a supplier site. Many retailers like Walmart, Tesco, Decathlon, COSTCO, Zara, Disney, Guess, and others actually require them in order to put your products on their shelves.
There are different sets of International standards for social compliance audits:
Demonstrate your commitment to humane working environments. Address any potential ethical breaches in your complex supply chains. It is applicable across all brands regardless of industry, location and scale.
-SMETA (Sedex Members Ethical Trade Audit)
Commit to ethical trade, down to your supply chain. SMETA covers ETI Base Code and additionally reviews performance against key criterion such as management systems implementation, environment, and business ethics.
A key audit for corporate social responsibility, it addresses legal compliance, employee rights, pay and conditions, health & safety, discrimination, child labor and environmental concerns.
-WRAP (Worldwide Responsible Accredited Production)
The world’s largest factory-based certification programme for manufacturers of clothing, footwear and other sewn products to assure safe, legal and ethical manufacturing processes.
-RBA (Responsible Business Alliance)
As the world’s largest corporate social responsibility coalition mainly for the electronics industry, RBA members can be confident that their supply chain adheres to the highest ethical standards for your employees and suppliers alike.
What Issues Will Result in a Failed Audit for Social Compliance?
A failed audit means that unacceptable conditions have been discovered at the factory. There are five key violations which would definitely fail the audit:
Various countries have different definitions of the minimum age for working. However, in some instances, unscrupulous factory operators might completely ignore even the local labor laws and employ children considered underage by any standards.
Even if the staff work in less than savory conditions, or receive a low wage for their labor, a standard agreement between the employer and the employee means that the employee has freely chosen to work at the factory, and is free to terminate their employment.
But basically, you want to know that the employees are working there because they want to be there and not because they can't leave or because a piece of ID cards or passports is behind held by factory management. If employees do not have the freedom to quit, this is forced labor and would fail a social compliance audit.
In many countries, workers face high risks of injuries from dangerous machinery, cramped conditions, and the lack of safety precautions and procedures in case of an emergency. The factory should have a railing there to prevent you from falling in.
Evidence that the manufacturer abuses or physically punishes employees may come to light when auditors interview employees.
A supplier that offers the auditors money in order to pass the audit and, in most cases, that's probably result in the supplier failing the audit.
It is crucial for importers to be concerned about what is happening in their supply chains, and have processes in place to manage social responsibility risks. Social responsibility is a key element of the business value proposition, and failure in this regard can severely impact financial results and brand image.