Supply chain auditing companies focused on protecting companies, not workers

A recent investigation by The Guardian into international supply-chain auditing companies found a lack of independence and transparency in their auditing processes. On top of failing to protect workers, the investigation also highlighted that audit companies are part of a system that prioritizes protecting the image and bottom line of manufacturers over safeguarding workers’ rights. 

Audit reports dropped in “corporate black hole” 

Aruna Kashyap, associate director on corporate accountability at Human Rights Watch, interviewed 20 auditors and industry experts as part of the investigation. She found that many international brands, in addition to pressuring suppliers to save money, require them to hire and pay for supply-chain audits themselves. Not only did this lead to rushed assessments, but workers were often interviewed at their workplace within earshot of management.  

The worst part is that even if audits were more diligent, there is almost no legal requirement for companies to act on any of their findings, so what’s the point? 

Aruna Kashyap says,  

“It’s a report that’s dropped into a corporate blackhole and no one knows what’s in it or how these reports improve workers’ lives,”

Analysis of more than 40,000 social audit reports across multiple countries done in 2021 by Sarosh Kuruvilla, a professor at Cornell University, found that almost a third of the audits were falsified and contained fake data about working hours and pay. 

Everybody wants money; nobody is there for the sake of the workers 

The anonymous Indian auditor stated: 

“US buyers focus more on pricing and money; they are never really bothered about what is going on in the industry; they just want a showcase report to be published on their website. They are not really interested in resolving the problems.”

There are laws in the US, Europe, and Australia aimed at addressing abuses in companies’ overseas operations, usually requiring them to publicly disclose what they are doing to stop trafficking, including information about any audits done by their suppliers. But globally, existing laws are watered down, have too many loopholes, and don’t require any actions to be taken even if they DO find exploitation and trafficking in their supply chain.  

Current laws designed to fail  

Experts and advocates on labor trafficking say most efforts to combat forced labor, like auditing, “are failing because they are designed to fail,” it’s baked into the systems. 

Elena Shih, an assistant professor at Brown University, said: 

“It is scandalous how much power has been afforded to multinational corporations…to dictate the terms of their own complicity because they have lawyers to say they checked all the boxes and are human trafficking compliant,”   

There is hope on the horizon, though; a new European Union proposal, The Corporate Sustainability Due Diligence Directive, will require companies to identify risks of human rights abuses in their supply chains AND, if found in violation, will subject companies to sanctions such as fines. Even better, victims of labor abuse can seek compensation from the company.  

Call on companies to change! 

Call on companies to eliminate forced labor and exploitation from their supply chain by signing your name to any or all of the actions Freedom United has as part of our push to end forced labor globally. Write directly to Tim Cook, CEO of Apple Inc., as several current Apple suppliers operating in China have been implicated in the Uyghur forced labor system. Through garment supply chains, the entire fashion industry is potentially tainted by forced labor; write to Nike, Uniqlo, and Zara and tell companies that falsified audits and fancy reports won’t cut it.