Social Audits in Chinese Factories: Reasons for non-compliance

In the past, we discussed the basics of Social Audits in brief, and several instances of poor social standards, here, here and here. But have you ever considered the reasons why factories may be non compliant? Every time we conduct a Social Audit, we find a gap between social standards, like SA8000, and supplier operations. This seems to indicate that promoting and monitoring these standards has so far been ineffective. But there are two sides to this story, because while suppliers sometimes don’t try their best to comply with social standards, sometimes monitoring can be lackluster as well. There are several explanations for why suppliers don’t always meet social standards.

1. Decoupling Explanation – The suppliers can show inspectors a different picture than the reality, for example, by showing only parts of the factory. This means no one will ever find out that the factory is actually non-compliant. Therefore it is important that we also interview the workers, and don’t blindly trust what the management is saying.
2. Trade-off Explanation – The suppliers weigh their chances of getting business. If they don’t comply and still get business, then why would they make an effort to improve? Many buyers still don’t require factories to adhere to social standards. Suppliers can still find clients even though their working conditions are terrible.
3. Time-lag Explanation – If a factory is found to be non-compliant, it will take some time before it can make changes. Therefore an instance could occur where another audit will find the factory non-compliant again, even though the factory is working on improvements. One thing about the audits is that a factory can only pass a section if it can show the proper documents. When in the process of application, such documents cannot be shown and thus the section is failed again.
4. Bargaining Explanation – Social audits deal with social issues, which are different to every individual. Because there is room for bargaining on definitions, there is room for non-compliance. Some auditing companies don’t have a strict ethical code and the suppliers eagerly make use of the auditors’ loose standards.
5. Information Explanation – Even though the general manager might be willing to comply with social standards, this doesn’t mean everyone in the factory is willing to do the same. If there is no management system to disperse information, workers will not have enough information in order to comply with social standards. And even if there is a management system, this does not mean that the information reaches every level of the company in the way that a Western company might want to see.

As an auditing company, AQF is very aware of these issues. Some of them can be prevented by proper training of our auditors. Others, however, lay in the hands of the buyers that fail to set a norm where social standards matter. Therefore it is important to keep on promoting the standards and monitoring the suppliers.