Reports on social audit failings are all too common, with dangerous factory conditions and widespread abuse well documented in workplaces which have compliance statements from social audit firms.

The social audit industry must be held legally accountable for human rights harm linked to audit failings in supply chains, fresh analysis has urged. The briefing published today (8 September 2021) by Business & Human Rights Resource Centre identifies possible legal avenues which could be used to hold social audit firms accountable under existing laws and makes a strong case for social audits to be rejected as proof of human rights due diligence.

With an EU Mandatory Human Rights and Environmental Due Diligence law on the horizon, the briefing looked at legal and contractual reforms needed in order for workers to hold social audit firms liable for harm sustained by social audit failings.

Key findings:

• Bringing legal claims against social audit firms is an emerging strategy to create legal accountability for the industry.
• Social auditing firms must be subject to mandatory Human Rights and Environmental Due Diligence (mHREDD) legislation.
• New laws and regulations must not equate social audits with human rights due diligence, or see them as a plausible substitute.

Published ahead of the anniversary of the fatal fire at the Ali Enterprises factory in Pakistan (11 September 2012), the analysis is a timely and necessary avenue to secure victims’ rights to effective remedy for corporate abuse. Ali Enterprises had recently passed a social audit when the fire broke out, killing more than 250 people.

Chara de Lacey, Project Manager for Social Audit Accountability at Business & Human Rights Resource Centre, said: "The social audit system has systematically failed to improve labour conditions with misleading social audits and certifications providing a smokescreen for corporate abuse. We have seen industrial disasters and labour exploitation occur at factories reportedly cleared by social audit firms – including the Rana Plaza building collapse in Bangladesh which killed more than 1,000 people in 2013. As companies, social audit firms are covered by the UNGPs and have a clear responsibility to prevent, mitigate, account for and redress human rights harm. Holding social audit firms liable for harm is a crucial step towards ensuring victims can claims redress and ending impunity for corporate abuse.”

Maysa Zorob, Corporate Legal Accountability Program Manager at Business & Human Rights Resource Centre, said: "Although there remain significant legal and contractual challenges in holding social audit firms liable, there is growing appetite for reform, including the introduction of mandatory Human Rights and Environmental Due Diligence (mHREDD) legislation which offers an opportunity to address barriers to justice. We must ensure social audit firms, as companies, are subject to mHREDD, which would require them, by law, to identify, prevent, mitigate, account for adverse human rights impacts and be held liable for harm. This could provide a new basis for social audit liability, even when existing national law does not.”

//ENDS

Note to editors:

• The Business & Human Rights Resource Centre is an international NGO that tracks the human rights impacts (positive and negative) of more than 10,000 companies across nearly 200 countries. We seek responses from companies when concerns are raised by civil society.
• The Resource Centre’s Corporate Legal Accountability Portal explores the legal responsibility of companies for human rights abuses, including through legislation and litigation. This hub provides latest news, analysis, resources, and cases on CLA to help advocates end corporate impunity for human rights abuses.
• In its 2019 report “Fig leaf for Fashion”, the NGO Clean Clothes Campaign details it has tracked over 200 cases of human rights abuses linked to social audit failings.

Media contact: Priyanka Mogul (London-based), Media Officer, Business & Human Rights Resource Centre, +44 (0) 7880 956239, [email protected]

COVERAGE

Social audit firms 'must be held to account' – EcoTextile, 8 September 2021