Supply chain audits at risk of becoming 'Frankenstein monsters', experts warn

Supply chain audits are in danger of compromising working conditions and creating unnecessary costs unless a new model is introduced, industry experts have cautioned.

Arguments have been made that audits are causing too much duplication and costs too much money

Arguments have been made that audits are causing too much duplication and costs too much money

Speaking at a ‘Future of Auditing’ debate hosted by Sedex last week, Ian Spaulding who heads auditing firm Elevate, said that more innovation was needed to make audits fit for purpose.

“As an industry, we put too much emphasis on auditing, and not enough on what happens before or after an audit,” Spaulding said.

“We must move from an audit-only model to an audit-plus model. One that puts workers at the centre of what we do, that listens to workers more, that introduces new ways of learning, and helps employers become better employers – whether it be through capacity building or management systems or training. Let’s do better, fewer audits.”

Spaulding said that although much progress had been made in recent years with regards to child labour, fair wages and health and safety, events such as the collapse of the Bangladesh Rana Plaza garment factory in 2013 were a “wake up call” for auditors. 

“What came out of those tragedies was a recognition that we needed to mature the auditing industry. We needed to make it more professional, we needed better trained auditors, we needed more oversight and control. We learned that auditing wasn’t the only solution – we needed to do much more before the audit and after the audit.”

Echoing this, Louise Nicholls, head of responsible sourcing at Marks & Spencer, said that audits can’t be seen in isolation and that done in the correct manner, could act as catalysts for a sustained change.

“They have to be part of a continuous improvement process, they have to be clearly aligned to supply chain strategy and purchasing practices,” Nicholls said. “We really do see audits as being a way of getting some objective measurement to start a conversation … this is about fostering some dialogue, starting a conversation.

“We’ve all been to sites where they’ve convinced themselves that they’re great employers – because maybe they are in their local context. But the audit can help find that they don’t clearly meet national or international law.”

Frankenstein monster

Rachel Wilshaw, ethical trade manager at Oxfam, said the emergence of the UN Guiding Principles on Business and Human Rights presented a clear opportunity to rethink the auditing agenda. “Is this tool really reaching to the root causes of the problems we are seeing in supply chains today, or has it become a Frankenstein monster and it’s time to stop this and start afresh?” Wilshaw said.

“Governments ought to be ensuring regulation with their own labour laws, they should be enforcing them, it’s the reason that they weren’t that audits came about in the first place. It’s time there were sanctions for non-compliance, fines and prosecutions as necessary.”

“These audits are measuring the same things. They are adding massive cost to a supply chain where workers are working in extreme poverty, this is unethical.”

Nicholls agreed that there was “way too much duplication” of audits, but argued that they were making a difference. “If we go back to last year, 120,000 audits [and] 200, 000 corrective actions, you can see the clear evidence that they do make a change to 24 million workers.”

Speaking exclusively with edie, Nestlé’s responsible sourcing manager Robin Sundaram explained the extensive projects the company has introduced to create truly sustainable and traceable supply chains.

Maxine Perella


| supply chain | training | CSR reporting | ethics


CSR & ethics
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