Report says supply chain audits fail to detect abuse & preserve the status quo

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15 January 2016

Supply chain audits fail to detect abuses, says report

Author: Tansy Hoskins, Guardian (UK)

The clothes you are wearing, the food you ate for dinner last night, and the component parts of your mobile phone – who made them, and how? Maybe they have a sticker or stamp that guarantees the environment wasn’t harmed, that any animals were treated humanely, or that workers were treated well. What if those claims aren’t true? And what’s more, what if the audits that produce those stamps make labour conditions and environmental standards worse by preventing governments from regulating and legislating? That is the claim in a new report (pdf) released today from the Sheffield Political Economy Research Institute, part of Sheffield University. The report, based on interviews with business executives, NGOs, supplier firms and auditors, is blunt in its condemnation: “ultimately the audit regime is ‘working’ for corporations, but failing workers and the planet. Audits are ineffective tools for detecting, reporting, or correcting environmental and labour problems in supply chains. They reinforce existing business models and preserve the global status quo.”

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14 January 2016

Ethical Audits and the Supply Chains of Global Corporations

Author: Genevieve LeBaron & Jane Lister, Sheffield Political Economy Research Institute, Univ. of Sheffield

The increasing use of private audits to monitor supply chains is serving to restructure the global regulatory system to privilege the private interests of business growth, profit and market advantage over the public interest and social goods of improving labour standards, general wellbeing and ecological protection. In a nutshell, the audit regime is ‘working’ for corporations, but failing workers and the planet.

The increasing use of audits as a tool of governance is bolstering corporate interests and influence over consumers and policymakers and, ultimately, deepens corporations’ power to make their own rules and norms and evaluate and report on their own performance.

Whilst audits give the impression of active supply-chain monitoring and ‘continuous improvement’, the regime actually reinforces endemic problems in supply chains. It deflects pressure for stricter, state-based regulation and legitimises unsustainable global production models – in particular, a retail economy that promotes consumption and environmental degradation.

Through voluntary certification programmes, and with state support, the structural problems within the audit regime – deception, failing to detect or ignoring problems within supply chains, and a compliance mentality – are being swiftly institutionalised within global governance mechanisms. [refers to Primark (part of Associated British Foods), Coca-Cola, Unilever, Waitrose (part of John Lewis Partnership), Walmart, Lipton (part of Unilever), Starbucks, Nike, Ikea] 

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