An upgraded ethical supply chain auditing process now in use by the
clothing retailer H&M has uncovered more serious breaches of
workplace standards than its old methods – especially in Europe.
The
Swedish multinational says its Full Audit Programme (FAP), which
involves less frequent but more detailed audits than its previous
monitoring regime and includes more worker interviews, has identified
‘more complicated and sometimes serious non-compliance issues’.
The
company will not be able to compare results fully between the old and
new systems until next year, but says the statistics it has gathered to
date indicate that non-compliance is often greater in supplier
factories in Europe than in Asia. H&M stresses the figures, which
cover only 170 facilities on both continents, are preliminary and are
not representative of its entire supply base.
Nevertheless, it
has been ‘quite surprised’ by the results in Europe – particularly on
health and safety, where performance across 89 audits in Bulgaria,
Italy, Lithuania, Morocco, Romania and Turkey was often worse than in
the 81 audits of factories in Bangladesh, Cambodia, China, India and
Indonesia.
Three-quarters of European facilities covered by
the new audits had inadequate first aid training and equipment,
compared with only a fifth in Asia, while almost half in Europe failed
to provide protective equipment for workers, compared with a fifth in
Asia.
European facilities also often performed no better than
those in Asia on workers rights, with three-quarters having
unsatisfactory grievance procedures and/or poor performance on overtime
pay – roughly the same levels as in Asia. The company’s 40 fulltime
auditors check more than 300 items and conduct off- and onsite worker
interviews.
H&M is moving from a ‘policing’ approach that
identifies infractions in an effort to ‘dig deeper’ into the underlying
causes and work more closely with suppliers. One advantage of the new
regime is that fewer audits are now needed, which has been welcomed by
suppliers.
H&M, which says the new programme represents a
‘major shift’ in how the retailer audits its supply chain, has around
700 suppliers, two-thirds in Asia and the rest mainly in Europe, which
together employ 700,000 people, including subcontractors. It sells
clothes and cosmetics in 1196 stores in 22 countries.
In 2004
H&M carried out 2715 audits under its former monitoring regime, but
this fell to 2670 when the company brought in the FAP last year. By the
end of this year, with the new monitoring system rolled out fully, the
number of inspections is expected to drop significantly.
