Workplace Conditions
Bangladesh ... Why?

Factory and Fire Safety in Bangladesh: Do Audits Help At All? ... WRAP CEO Avedis Seferian discusses social auditing in light of the Rana Plaza building collapse.

Burgess COMMENTARY
My comment on this post;

I used to be a corporate CFO ... we had accounting and we had audit. There are huge differences between the two functions. And social audit in the context it is used here is different again.

When it comes to brands and their supply chain everyone is in the dark except the corporate owners and their managers, and the social audit methodology sheds but a very small light into this darkness.

I start from the basic question: who needs to know about supply chain issues? My answer to this question is that it is people: people who buy the products and people who work at all the stages of the supply chain. The data needs to be obtained in a manner that is low cost but also delivers valid information that is understandable, sufficiently granular for specific action, and very easily accessible.

This seems to be what Fair Factories Clearing House is all about ... but maybe it really is not. I have tried to find something on their website that would help me make a decision and I don't think they are going there. It would be nice if they were. Maybe I am mistaken, and I will follow up to see if I have misunderstood.

This is an important subject. I am glad it is being written about.

Peter Burgess TrueValueMetrics

Rule of law should be a good thing ... but is used in many situations to avoid liability rather than to deliver accountability and to take responsibility. What some call natural law is a more important idea than statutory rule of law that has been obtained by those who have power and influence but little legitimacy.
Peter Burgess

Factory and Fire Safety in Bangladesh: Do Audits Help At All? ... WRAP CEO Avedis Seferian discusses social auditing in light of the Rana Plaza building collapse.

Anyone who keeps up with current events in the corporate social responsibility world is well aware of the tragedies that continue to affect the four million garment workers in Bangladesh.

In the last year, the fires at the Hameem, Tazreen, and Tung Hai factories have all resulted in the loss of many lives. With 26 deaths in Hameem, 117 deaths in Tazreen, and eight deaths in Tung Hai, Bangladesh’s people are calling for change.

Brands Held Accountable

As cries for change erupt, it is the overwhelming loss of life in the collapse of the eight-story Rana Plaza building in Dhaka though that is sending shockwaves through the local community and industries abroad. Over 1,100 people are dead and more potentially lost forever in the rubble. Search and rescue is over and negotiations for death payments and work loss have begun.

From all that has been written, we know brands are being held accountable. Factories are blaming brands and the Bangladesh government is doing too little, too late, while the Bangladesh people suffer and mourn.

How could such a tragedy have been prevented? For how long did such risk exist? Were there any tools, processes, or mechanisms in place that could have forewarned of the tragedies?

The Role of Audits in Preventing Disaster

And what about the audits that were done at these sites? Audits are being discounted as useless and as a waste of time by anyone willing to speak publicly. Knowing that audits have a crucial role in creating a baseline for measurement and future indicators, I decided it was time to interview one of the people in the heat of the debate.

Below is an excerpt from an interview with Avedis Seferian, CEO of WRAP (Worldwide Responsible Accredited Production), an independent, objective, non-profit team of global social compliance experts dedicated to promoting safe, lawful, humane, and ethical manufacturing around the world through certification and education.

Kelly Eisenhardt: As you know, this is a complex problem and many out there want to hold the brands almost solely responsible. What are your thoughts on that?

Avedis Seferian: Well, there’s a natural human inclination to try and assign blame to a specific factor to simplify things. There are a lot of stakeholders in this and it’s unfair to place all the blame on the brands. But looking at the brands, it’s fair to say there are ramifications to their approach.

One thing that has clearly emerged is the need for them to ensure greater visibility into their supply chain. When you are so far down, the brand doesn’t always have control over where the order goes or how the requirements get met. As things stand, contractors may be the ones with the authority and decision-making power over a subcontractor. I think this will need to be evaluated more in the future.

Is it all bad auditing practices and are auditors to blame?

Audits are valuable and play a role but all stakeholders need to understand the limits of the role. Too many people expect more out of social audits than what they are meant to do. Audits are information-gathering mechanisms. You can only gather information within the scope of the audit. So blaming social auditors for some of these things is unfair.

Social auditors are not structural engineers, so social audits do not cover structural integrity checks on a building from an engineering perspective. Those who think poorly about social auditing practices are quarreling about desired outcomes and not about the audits themselves.

Audits are meant to set baselines and gather information against those. They are not, by themselves, tools for social advocacy. Nonetheless, they have certainly had an impact in raising awareness about those baselines. In fact, even the most ardent critics of social audits will have to recognize that, just as an example, incidences of child labor have declined within the global garment sector as the social audit industry has grown.

Re-evaluating How Audits Are Done

Do you see less audits being performed in the future or more? Should auditors be expanding the parameters of what is collected?

I certainly don’t see the audits becoming less important in the light of these tragedies, but there will be a necessary reevaluation of how they’re done.

It’s easy to draw a parallel with what happened to financial auditing in the wake of Enron. That auditing industry is not dead as a result, nor is it seen as a farce. It’s an important part of our economies and capitalist system. The fact that there were audit failures in Enron did not render the entire audit exercise moot.

Similarly, factories with problems do not render the social audit exercise itself useless. As I said earlier, an audit is an information gathering effort. In the past, the building’s structural integrity had not been part of the social audit; maybe in the future that will add another area of expertise to auditing.

From Audits To Action

But regardless of what information is gathered, the audit itself doesn’t change the factory; it’s what is done with the audit that matters. When brands get the audit results, they need to ask, “What are we going to do about it?” We all know factories are dynamic places; they will never be perfect environments. Good audits ask the question, “Is this the kind of factory that, when problems arise, has enough knowledge and capacity to solve the issue?”

That is what WRAP does.

We ask who manages social compliance, who is responsible, how are the plans executed, what is the process side? Thousands of things happen in a factory. You have to try and be satisfied that after you leave, the factory has to be able to take care of itself. That’s when an audit can be most useful – when it gives you insight into the facility’s management systems.

Collaborating On Audits

How can brands collaborate and share audits in the future regarding safety and social audit data?

We are seeing a growing trend in this director, but there are challenges to collaborating, with real questions and apprehensions remaining about who owns the information in the first place and some lingering concerns about where sharing information may cross the line into collusion and antitrust governance issues.

WRAP audit reports do not include pricing information or data that veer toward such violations. We strictly talk about health and safety, worker issues, and pre-competitive data. It is getting harder and harder to sustain a case against sharing, when the benefits of doing so are so evident: reduced audit burdens and, more importantly, reduced risk of tragic events happening. So we are certainly seeing a steady march toward more sharing.

In practice, it comes down to establishing trust.

Companies that share audits usually do not do so merely on an assessment of each other’s system; rather, they do so based on personally knowing each other. They know each other’s compliance teams, share factories, rub elbows at conferences and form relationships that allow trust to build.

No business worth its salt will simply take someone’s word and will always need to do its own verification. In reality, they won’t share simply due to similar systems, but by seeing such systems in action and knowing the personalities behind them. Obviously, it takes time to create a strong level of trust.

Kelly Eisenhardt is executive director of environmental programs for Fair Factories Clearinghouse (FFC), a New York-based non-profit that uses technology to enable cost-effective, well-informed, ethical business transactions and continuous improvements in global workplaces. For more information, email her at kellyeisenhardt@gmail.com or visit www.fairfactories.org.

- See more at: http://www.csrwire.com/blog/posts/909-factory-and-fire-safety-in-bangladesh-do-audits-help-at-all?goback=%2Egde_145633_member_253595985#sthash.El9yRO9A.dpuf

Thanks so much for taking the time to express your thoughts on the topic. This interview is part of a series I am working on for CSRwire regarding Bangladesh and the key stakeholders. The objective is to give visibility to the many vantage points from which to describe the problems and potential solutions. Each interview is meant to express and share what the interviewee sees out in the field. The goal is to generate dialogue to share what works and doesn't work, to share potential means for change. Thank you for sharing your experiences!

Yes, there are many audit platforms and although this isn't a review of platforms, it's a chance to share experiences from those on the front lines.

From the folks I've talked to it appears auditors come in all different shapes and sizes, some ethical, some not, some stick to their defined scope, others will immediately raise any risk they find to their client. As you state, maybe it is time to reevaluate the purpose of audits and their respective standards. Standards however, seem to be created frequently when different organizations don't align on the the existing purpose and agenda. How do we get the whole world to conform on audits when there are so many variables affecting why certain information is collected?

Bangladesh is a complex mix of fire and factory safety, worker rights, fair labor practices, environmental hazards, zoning and enforcement issues, corruption, infrastructure, and cultural diversity, just to name a few challenges. Helping the people of Bangladesh is not a short-term problem but a long-term initiative that will take generations before its changed on a mass scale. Brands, factories, auditors, governments, labor organizations, and the people of Bangladesh are all responsible for the solution. It involves commitment and alignment from many parties in order to affect positive change.

I did find your organic farming example fascinating. If you have time, please reach out to me. I would love to discuss how we might take the transparency in the supply chain processes for organic farming and map that to other industries like electronics, automotive, or retail.

All the Best, Kelly •Reply•Share ›

I am not sure what to make of this article. Is this a promotion for WRAP? Would have liked to see other auditing organizations mentioned. As for independent and objective auditing organizations, they do not exist. Many have a conflict of interest based on the mere fact that they get paid by the audited party.

And all are biased on the basis of the select criteria contained in their standard. Avedis says so himself, social auditors are not structural engineers - and yet, when you do a social audit and spend time in a facility, you speak with the employees and you pick up on more issues that are contained in the standards. I have done audits for over 30 years and I have seen the good, the bad and the ugly.

To say that 'social audits do not cover structural integrity checks on a building from an engineering perspective' is formally correct, but humanely inexcusable. The equivalent would be an organic farm which has been exposed for using slave labor and the auditor saying that this is not part of their standards. These issues demonstrate the shortcomings of audits against pre-established standards.

It also underscores that standards are not objective, but subjective, i.e. selective in scope, based on somebody's or some organization's perspective.

If audits are indeed, as Avedis says, 'meant to set baselines and gather information against those', how can they improve situations in factories. Instead of stimulating a race-to-the-top, they are more likely to reflect a sliding to the bottom.

I also find the analogy with Enron interesting. Not a good argument in my book. If audits are indeed done to give companies a clean bill of health or act as an insurance policy, then it's time to re-evaluate their purpose and what they can contribute to organizational development in terms of their respective standards.

The best audits can do is diagnose an organization's performance in the context of particular standards. The results depend on whether an organization is diagnosed against baseline standards or best practices. The former is about qualifying for the Olympics, the latter is about winning medals. The fundamental question is: 'What are you satisfied with.'