Can audits build confidence in company supply chains?

We’ve recently been thinking about audits. There’s a lot of people out there who wonder if they're worth the paper they’re written on. Here’s our opinion.

ETI understands that at a basic level companies need to have confidence in the working conditions of the people who produce the goods they sell. We recognise that audits are one way of doing this and that they have their uses.

But here’s what’s important to understand about them: their scope is limited. We strongly believe their very real limitations must be factored into company processes

It’s why we’ve updated our audit webpage to recommend that if companies are serious about improving labour standards, they must invest in human rights due diligence supplemented by high quality, well run audits.

And not the other way round.

Ensuring decent work

Audits are just one step on the road to ensuring people have decent work.

As we point out, ‘audits can be a useful tool in the responsible business toolkit if used skillfully and appropriately. But … there needs to be other tools appropriate for other tasks.’

Companies need to develop more robust ways of understanding conditions in the workplace as well as the steps that can be taken to prevent labour abuses from occurring in the first place.

That means understanding, prioritising, mitigating and reporting against risk – i.e. undertaking human rights due diligence.

It also means understanding that when issues are endemic (such as caste discrimination in India or the abuse of migrant labourers in many agricultural supply chains) a clean bill of health from an audit may well be a 'false positive', to quote ETI board member Rachel Wilshaw.

The bigger picture

When brands are serious about improving labour standards, they think about the bigger picture, engage with workers directly and understand the labour rights issues that are common within a country and region.

Crucially, committed companies also accept that they are in partnership with their suppliers.

That involves acknowledging their obligation to engage with supply chains responsibly – and to avoid the adoption of a compliance mentality which can breed audit fatigue and fraud.

Here’s three useful links:

Read our new webpage: Audits and beyond.