"Bangladesh: Social Audits Shortchange Workers", 14 September 2023

The social audits and certifications that brands and retailers use are totally inadequate to monitor and respond to threats to workers trying to organize independent unions, Human Rights Watch said today in releasing an analysis of standard social audit reports of garment factories in Bangladesh.

Most audit reports either barely addressed the issue of freedom of association, or in some cases, recycled stock language as part of auditor findings on freedom of association from other factories’ audit reports. Previous Human Rights Watch research has shown that standard social audits present greater risks for labor abuses being under detected or undetected, especially for issues like discrimination and harassment, forced labor, child labor, and freedom of association.

The seriousness of these shortcomings assumes more importance in the aftermath of the June 2023 killing of Shahidul Islam in Bangladesh. Islam, an independent labor union leader, was killed as he was leaving a factory operated by Prince Jacquard Sweater Ltd. after trying to mediate on behalf of garment workers over nonpayment of wages and Eid bonus. The factory had undergone audits under two commonly used social audit systems...

People interviewed by Human Rights Watch said that a few “goons” involved with the so-called yellow unions operating in the areas where the attack occurred were among those arrested. One experienced activist said that a few of the names had come up on other occasions since December 2020, when workers had reported intimidation and harassment...

Prince Jacquard Sweater Ltd. had undergone social audits by two well-known third-party social audit programs, amfori and Sedex. In June, Human Rights Watch wrote to amfori and Sedex. Both confirmed that the factory had in the past been audited using their programs. A Sedex representative said they could not share a summary of the audit findings owing to the confidentiality of “specific details” of audits; amfori also cited confidentiality but provided a brief summary stating that the audits had detected some wage-related problems. Prince Jacquard Sweated Ltd. did not respond to Human Rights Watch.

Sedex and amfori should publish the social audit reports of Prince Jacquard Sweater Ltd. and commit to revising their policies to publish all social audit reports in a searchable database, Human Rights Watch said.

More broadly, all social audit and certification programs should require the publication of their audit reports. Transparency is critical to learn more about what these reports say, and the confidence levels audit firms or audit programs have in the information they generate. A Human Rights Watch review of unpublished Sedex Members’ Ethical Trading Audit (SMETA) reports, including from 2022, for example, found that Sedex audit reports carry a standard disclaimer that a Sedex audit “does not confirm … compliance with any legal regulations or industry standards.” In its letter to Human Rights Watch, Sedex did not commit to making this disclaimer public on its website and other marketing materials...

As mandatory human rights due diligence laws are being developed around the world, policymakers should acknowledge the limitations of third-party auditing and certification programs. They should hold auditing firms and auditing programs accountable as service providers for the quality and credibility of the social auditing services they offer along with holding brands accountable for their risk-based due diligence tools.

Governments need to closely scrutinize the social auditing industry and, at a minimum, require brands to publish all social audit reports when they opt to use such audits or certifications as part of their human rights and environmental due diligence.

Laws requiring brands and retailers to conduct human rights and environmental due diligence should not permit social audits and certifications alone to be sufficient evidence of due diligence...

Relying on social audits or certifications is not the proper way to address issues around freedom of association and collective bargaining. Instead, brands should support the creation of a monitoring and grievance redress system in consultation with independent labor unions and labor rights organizations operating in Bangladesh. Such a mechanism should be aligned with the effectiveness criteria outlined in the UN Guiding Principles on Business and Human Rights, and at a minimum, ensure independent labor unions equal power as businesses in the governance of such a monitoring and grievance mechanism...

Brands should also review and adopt fair purchasing practices, including fair prices and responsible contracts to prevent and mitigate the risk of causing or contributing to labor abuses, including through unauthorized subcontracting...

...in 2018, a European brand provided 50 standard social audit reports to Human Rights Watch...Forty of those 50 reports were from Bangladesh...

In Bangladesh, 26 of the 40 audits were “full audits,” in which auditors had assessed all aspects of the Code of Conduct, including workers’ freedom of association, and 14 were “follow-up audits.”

...a reading of the audit reports based on what the auditors were expected to assess raises several concerns about how auditors evaluated risks to freedom of association. Six out of the 26 full audits found “none” or “no findings” when expected to outline what they found. In another report, the freedom of association section was blank. In 10 of the 14 follow-up audits, auditors had skipped assessments of workers’ freedom of association stating that no previous findings existed; noted they had no finding; or left the section blank.

Human Rights Watch analysis of two reports that noted the presence of a union raised additional concerns. In one factory, auditors from Audit Firm-4 had noted that there were more than 1,800 male and 2,100 female permanent workers, all unionized. In the other, auditors from Audit Firm-2 had noted that the factory had over 2,300 male and over 3,000 female workers, all unionized. However, neither factory had a collective bargaining agreement, which would be expected with a fully unionized workforce.

Audit Firm-2 had wrongly claimed that workers were “free to join or form the trade union” in a factory housed in an export processing zone where the law does not allow workers to form unions, and instead only allows the formation of worker welfare associations...

Human Rights Watch also found that a number of audit reports of different factories had identical or very similar language when describing audit findings related to freedom of association...