Companies have been urged to stop using third party social auditing
firms to do their ethical supply chain monitoring because many of them
are not up to the job.
The hard-hitting advice comes from corporate and civil society members
of the Ethical Trading Initiative, whose thoughts have been gathered in
a paper looking at what the ETI calls the ‘growing crisis’ in supply
chain auditing.
The document says ETI members are concerned at the ‘limited
effectiveness’ of most ethical trade audits, which they blame in large
part on ‘the particularly questionable quality of the majority of
audits conducted by third party commercial auditing companies’.
They complain that audits tend to be ineffective at identifying many of
the most serious labour problems and are poor value for money. Members
have also identified an ‘alarming rise’ in audit fraud, whereby
suppliers hide the truth about labour practices, sometimes with auditor
collusion. The paper concludes that companies would be better off
employing in-house auditing teams, over which they have more control
and which have produced better results.
Louise Etheridge, a senior consultant at auditing firm Bureau Veritas,
said the issues raised by ETI ‘are serious but will not be resolved by
any one single party’. She added: ‘We urge the ETI to open up
dialogue with all parties to ensure a more balanced debate to develop
international standards.’
See also analysis.
