"Informal Workers, Social Audits and Human Rights Due Diligence in Supply Chains", 4 February 2021

...Due diligence responsibility has been guided by voluntary ‘soft law’ but the shift to mandatory due diligence legislation is now underway. If the EU is serious about addressing the violation of supply chain workers’ human rights, legislation will have to ensure that procurement and production practices become gender-sensitive, with freedom of association and collective bargaining forming its backbone. The human and labour rights of all workers in all tiers of supply chains, including homeworkers, must be taken into account and workers need to participate in the design of grievance mechanisms. 

Thus far, corporations have approached the due diligence responsibility from a risk management perspective, protecting their reputations from consumer or shareholder backlash should labour or environmental rights violations in their supply chains come to light. They have adopted a range of practices—codes of conduct, certifications, audits by independent private firms and collaborations with multi-stakeholder bodies that include civil society organizations—as part of their due diligence. This approach has yielded limited results.

Current social audits—which measure a company’s social and ethical performance—fail to penetrate lower tiers of the supply chain, including outsourced and subcontracted work. They ignore homeworkers who are largely invisible, labour at the very bottom of supply chains and are the most vulnerable workers in these chains. They are invisible because subcontracting without written contracts occurs at multiple levels. Homeworkers have neither labour nor social protection and little opportunity to mobilize and bargain collectively to address their exploitation. Homework is an important source of income for older women and women with care responsibilities who find employment in a factory difficult. 

This is only one of the reasons why social audits have failed to protect workers’ rights. Further critiques fall into three categories. First, suppliers manipulate audits—for example, through choosing who will be interviewed and tutoring workers in preparation for the audit. Second, audits are carried out by non-professionals, are of an inconsistent quality, suffer from a lack of transparency and corruption is rife. Both Ali Enterprises in Pakistan and Rana Plaza in Bangladesh were audited by certified auditors a few weeks before catching fire/collapsing, taking the lives of hundreds of workers. Finally, audits focus on issues such as adequate lighting and clean toilets instead of monitoring compliance with critical labour rights, such as collective bargaining, compliance with minimum wages and ensuring that overtime is voluntary and paid...

...Brands need to replace professional auditors with mechanisms that triangulate the due diligence process. Active worker participation, active citizen participation and a robust engagement with trade unions and organizations of homeworkers must be the way forward...