German Ministry of Economic Affairs acknowledges need for reform of social audits in textile industry in final statement on OECD complaint against TÜV Rheinland; incl. co response

In May 2016, ECCHR and several partner organisations filed an OECD complaint against TÜV Rheinland for its alleged failure to notice the presence of child labour, lack of freedom of association, risks of building safety, and disciplinary measures against the workers in its audit report for a factory in the Rana Plaza complex. On 2 July 2018, the German National Contact Point (Ministry of Economic Affairs) issued its final statement. In its statement the German Ministry of Economic Affairs acknowledges that there is a need to reform the process of factory auditing in the textile industry. Although no agreement could be reached with TÜV Rheinland, ECCHR and its partners have welcomed the Ministry's recognition of the shortcomings of the current auditing system. Business & Human Rights Resource Center invited TÜV Rheinland to comment on the NCP's final statement. Their response is avaialble below.

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Autor/in: Aruna Kashyap, Human Rights Watch

"Germany Paved the Way for Revamping “Social Audits,” Italy Should Follow", 8 Oct 2018

Pakistani worker representatives and European rights groups filed a complaint with Italian authorities against RINA. RINA, an auditing firm, issued a report certifying the Ali Enterprises factory. Weeks after they issued an SA8000 certificate [...] the factory burned down killing more than 250 workers...

The German authorities’ findings in a June 26 report came at the end of a two-year process in response to complaints about a social audit conducted by TUV India and its parent company, TUV Rhineland, in a factory in Bangladesh...

German authorities have identified numerous concerns with the auditing industry. These include auditors’ technical expertise, the methodology for audits, and how the audits are paid for. The authorities also expressed concerns about whether factories actually fix the problems and what brands do to monitor the process, and whether workers have ways of raising grievances after the auditors leave the premises...

Germany [...] is well placed to lead a dialogue that would fundamentally alter the social audits business. Italian authorities too should come out strongly pushing for a rehaul of the system...

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Autor/in: TÜV Rheinland

We invited TÜV Rheinland to respond the press release by ECCHR and in particular the concern that TÜV Rheinland broke off the negotiations. TÜV Rheinland responded and referred us to a statement on their website available here.

The national contact point [...] issued a final statement [...] in which it ruled out the alleged joint responsibility on the part of TÜV Rheinland... Immediately after the collapse, TÜV Rheinland had publicly stated: “The claim that TÜV Rheinland did not detect any construction defects during inspections of the collapsed textile factory and carried out inadequate audits is misleading.. [T]he examination of construction defects was not the subject of the audits... [T]he tragic disaster in Bangladesh rather underscores the need for extended independent controls by third-party testing service providers.“ ... TÜV Rheinland’s participation in the NCP procedure was voluntary, and its goal was to achieve a common understanding with the complainants... TÜV Rheinland has welcomed the critical and forward-looking discussions of the disaster in Bangladesh... TÜV Rheinland will continue to assume its responsibility which consists in constantly scrutinizing its own work [...] and will continue to make suggestions for the further development of standards. This is part of TÜV Rheinland’s identity and core values... 

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Autor/in: European Center for Constitutional and Human Rights

It is long overdue to overhaul audit procedures. Today’s Final Statement of the German National Contact Point (NCP) on the OECD Guidelines for Multinational Enterprises in the Rana Plaza proceeding against the auditing company TÜV Rheinland should pave the way to fundamental reforms. The NCP recommends a dialogue with audit companies, standard setting organizations, brands, factories and trade unions. This dialogue should address transparency of audit reports and whether factory owners should pay for audits. Besides, the NCP takes a clear stance on the measures audit firms could already implement, such as the stronger involvement of worker representatives.

ECCHR and its partners [...] welcome the Final Statement. In May 2016, ECCHR and its partners filed an OECD complaint against TÜV Rheinland for its failure to notice the presence of child labor, lack of freedom of association, risks of building safety, and disciplinary measures against the workers in its audit report for a factory in the Rana Plaza complex... TÜV Rheinland broke off the negotiations...

Overall the handling of the NCP procedure has improved since 2010, when ECCHR first filed an OECD complaint in Germany. However, the organizations stressed the serious obstacles for the affected in Bangladesh to be part of the negotiations...

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Autor/in: German Ministry of Economic Affairs

The NCP regards the outcome of the mediation procedure as [having] helped spark a constructive discussion on how social audits could be conducted and possibly improved... The NCP is convinced that picking up on the dialogue on how to conduct and enhance the social audits, which was started by the Parties as part of the mediation procedure, would certainly help further the implementation of the OECD Guidelines. This is irrespective of the fact that – during the mediation procedure – the Parties could not be convinced to take part in a joint multi-stakeholder forum to discuss these matters... The NCP believes that [...] Complainants and Respondents could in their discussions on how to enhance social auditing discuss additional points including the following:

• The question as to whether a social audit should be paid for by the company purchasing goods manufactured in the factory that is being audited rather than by the owner of the factory, and how the social audits could thus be enhanced...

• The question as to whether, and if necessary as to how, from a due-diligence angle, the scope of social audits across the value chain should be expanded to include aspects related to structural building analysis and building safety...

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