What is a social compliance audit and how does it help you?

Social compliance is a continuing process in which organizations endeavour to protect the health, safety, and rights of their employees, the community and environment in which they operate, and the lives and communities of workers in their supply and distribution chains. Social compliance and social responsibility may address concerns about labour rights for workers, fair labour laws, harvesting and the use of conflict minerals, and general environmental and sustainability questions. This is where social compliance audit companies may be of immense help for organizations. 

How is a Social Compliance Audit Conducted?

To ensure transparency, social compliance audits are usually performed by independent auditors who follow a set of international standards. These standards may vary depending on the location of the facility and the type of audit required.

International standards for social compliance audits include:

• SA 8000 – the leading social certification standard for factories and organizations worldwide
• Sedex Members Ethical Trade Audit (SMETA)
• amfori BSCI – a Business Social Compliance Initiative for social compliance and improvements within the factories and farms
• ILO Ethical Trading Initiative
• Responsible Jewellery Council (RJC)
• Initiative for Compliance and Sustainability (ICS) – French Federation of Commerce and Distribution (FCD)

The latest Risk Index Report by the British Standards Institution (BSI) says at-risk countries account for 48% of worldwide apparel production, 53% of the world’s apparel exports, and 26% of total electronics exports.

China, India, Vietnam, Bangladesh, and Myanmar are considered the five highest-risk countries for human rights violations, according to Forbes. Other high-risk countries include Syria, Egypt, Libya, Mali, and Guinea-Bissau.

The BSI report also warns that efforts by Asian governments to boost their economies are resulting in a greater prevalence of child labour abuses in supply chains.

As a result, all large companies now have to disclose what they are doing to stop slavery and human trafficking in their supply chains, as part of their obligations under the Modern Slavery Act.

Corporate Social Responsibility in the Headlines

The ability to demonstrate or prove that your organization is serious about corporate social responsibility (CSR) is essential for large brands that come under the spotlight, especially given the ease with which bad news can spread in today’s world that has easy access to information.

Here’s an example of a headline that caused negative long-term effects:

“Textile workers still unsafe years after Bangladesh, Pakistan factory disasters”

Several years after two fatal factory disasters in Bangladesh and Pakistan killed more than 1,300 workers, the European garment brands, whose products were made at the factory, are still facing pressure from human rights campaigners as well as legal action and compensation claims, despite already paying out millions of dollars.

When news like this breaks, the damage to the brand’s reputation can be catastrophic and sales can plummet, resulting in the need for extensive damage control to get back on track.

Corporate Social Responsibility Audits 

The right social compliance audit companies conduct a Social Audit to evaluate a Chinese supplier’s compliance with international standards, focusing on issues like child labour, forced labour, health, safety, and management systems, highlighting the importance of social accountability in procurement.