Audits ‘not enough to uncover ethical issues’

14 January 2010

14 January 2010 | Amy Rowe

Buyers should not rely on traditional supplier audits to ensure corporate social responsibility standards are met, according to speakers at a CIPS/Traidcraft conference in London yesterday.

Instead, the advice at the sustainable procurement event was to take a more thorough and sensitive approach to identify poor labour practices.

Speaking at a discussion on responsible purchasing in developing countries, Oxfam’s ethical purchasing manager, Rachel Wilshaw, told delegates that an in-depth, evidence-based process examining purchasing from many different angles works best.

For high-risk suppliers, including those with known labour and environmental issues, Oxfam sends its officials to conduct face-to-face interviews with factory workers. These officials also help the charity understand the cultural context of a vendor.

“Traditional audits often miss significant wage issues, and our approach has already highlighted problems with child labour and minimum wage in factories we’ve used.”

In addition, Oxfam gets vendors to sign up to databases such as Sedex, which enables organisations to share ethical data on supply chains. It also holds workshops for suppliers, where they can discuss how they have overcome problems.

Fair trade organisation Traidcraft - which produces food, craft and textile products using suppliers in Asia, Africa and South America - said it works both ways and buyers should encourage suppliers to scrutinise their ethical procedures in return.

“It’s a two-way process,” said Alastair Leadbetter, business services coordinator at Traidcraft. “Every three years we have a supplier support team that asks our suppliers for feedback, asking questions such as ‘Are we paying enough?’ and ‘Are we doing enough for disadvantaged workers?’”

He said this improves vendor communication and mitigates risks such as suppliers being unable to complete orders.

Leadbetter also advised buyers to obtain more realistic feedback from suppliers during audits, taking into consideration that cultural differences may influence responses.

“It’s not enough to simply ask your supplier ‘Can you deliver 10,000 shirts by next week, and will you have enough time?’” he told SM at the event.

“We had a situation with suppliers in India where it was common for them to say ‘yes’ even if there was no way they could deliver. You’ve got to ask more careful, in depth questions, such as ‘How are you going to manage to complete the order?'"

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