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social auditing tools are simply not enough

July 2005

Companies, NGOs and auditors alike need to broaden their approach to ethical supply chain management, argues Lisa Kantor

For nearly a decade, factory monitoring has been the main focus of efforts to ensure good labour practices in global supply chains. Yet tens of thousands of worksite audits later, the question remains: has this type of factory monitoring aided the improvement of workplace conditions?

The answer must be that while monitoring has driven some improvements, there is an emerging consensus that these gains are neither deep nor sustainable. In addition, many have come to sense that monitoring can lead to unintended consequences - for example, that in China it has largely served to inspire suppliers to create fictional records for the benefit of monitors.

In some ways, factory monitoring is like an annual medical examination: while the examiner can diagnose a problem, he or she cannot provide a quick cure to systemic conditions that have evolved over time. This has led to frustration among company managers and stakeholders, as well as fatigue and even deception by factories, plus cynicism among workers.
So why have we not seen a dramatic shift in - or away from - the monitoring model? A recent Business for Social Responsibility study of 17 apparel, toy and footwear companies found that internal staffing and factory monitoring costs still comprised the lion's share of company social compliance budgets. The continued reliance on monitoring likely stems from the fact that the current model is familiar, easy to communicate, and based on infrastructure investments that companies and others are reluctant to scrap.

However, even with this in mind, shifts are occurring. Companies have come to reframe expectations of the results from monitoring, and are exploring alternative or complementary models that emphasize education and training for suppliers along with performance indicators, capacity building and worker education.

What is most interesting is the growing recognition that sustainable progress depends on aligning companies' commercial goals and social goals. Until changes in buying practices are aligned with ethical supply chain aims, compliance levels will only rise haltingly.

Factory monitoring has been 'present at the creation' of efforts to ensure good labour practices in supply chains. There have been - and still are - good reasons to invest in this approach. But it should be used as a tool rather than an answer. For monitoring to bring the changes that are sought from all points of the value chain, it will have to evolve into a teaching method rather than an instrument of enforcement.

Lisa Kantor is the director of Business for Social Responsibility's consumer products practice.
A version of this article originally appeared in BSR’s quarterly Leading Perspectives.



Further Information
lkantor@bsr.org
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